U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 144
The China Commercial Brief is a biweekly publication including summaries about developments in China's various commercial sectors, tips on doing business in China, and U.S. Embassy news. This publication is free of charge: please forward it to your colleagues and friends who are interested in China.
To subscribe to the China Commercial Brief,
send a blank email to subscribe-china-commercial-brief@list.xianzai.com .
For additional CS China news and events including past issues of the China Commercial Brief, visit our News & Events Archives.
Editor: Matthew Gettman
Contributors: CS Chengdu,Xu Ye, Michael Mei, Pingping Xie, Peining Zhao
News Briefs
In addition to the article summaries CS Beijing provides , our four China branch offices - Chengdu, Guangzhou, Shanghai and Shenyang - submit summaries of commercial articles from their local press to the CCB on a rotating schedule. This week we are pleased to feature a contribution from our Chengdu post.
1. Guizhou Zeroes In On High-Tech
2.China’s Human Resources Market Open to Foreign Headhunters
3.China Builds the Largest Power Grid in the World
4.Cement Industry in China
5.China Industrial Production Keeps Growing in September
6.China's Curtain is Rising for New 3G Licenses
1. Guizhou Zeroes In On High-Tech
Guizhou province has an ambitious plan to become one of the most important research and production bases for China’s high-tech industry. Senior provincial officials said recently that the province, in Southwest China, is attracting overseas talent and investors to establish three research and development (R&D) centers for hard disc drives (HDD), optical electronic (OE) chips and digital video and communications.
Six industrial bases will be established for HDD, optical electronics, digital video and communications, electronics components, biological engineering and new materials. Guizhou’s provincial government is extending preferential policies for land use, electricity prices, tax collection and introduction of talent.
Guizhou is a poor inland province. Its gross domestic product (GDP) in 2002 was RMB118 billion (USD14.2 billion), about one-tenth of East China’s Jiangsu Province’s GDP, which was RMB1063.63 (USD128.1 billion).
In early 2002, Guizhou choose a 1-inch small form-factor HDD as a pilot project for the innovative knowledge-based economy development plan. GS Magicstor, Inc. opened a HDD factory in Guiyang in August 2002, and unveiled its 4.8-GB (gigabyte), 1-inch HDD and 40-GB, 1.8-inch HDD at the conference.
Moutai Distillery Group Co. has invested RMB180 million (USD21.7 million) and Yan Kuang Guizhou Energy Chemical Co., Ltd. pumped RMB120 million (USD14.5 million) in the R&D of the HDDs.
Zhang Qunshan, Director of Guizhou’s Economy and Trade Commission stressed the importance of "treating special matters in special ways", and said "Guizhou has been known for its poor investment environment, due to its geographical location and weak industrial and business heritage. It is hard to change this situation overnight, so we have to concentrate our efforts on key projects that are pivotal to the economic growth of the province."
(Sources: China Business Weekly, 10/06/2003 - Translated by Sunny Cui)
2. China’s Human Resources Market Open to Foreign Headhunters
According to the Provisional Regulations on Management of Sino-Foreign Joint Venture Human Resources Agencies issued by the Ministry of Personnel, the Ministry of Commerce and the State Administration for Industry and Commerce, qualified overseas human resources intermediary agencies can set up joint venture intermediaries with Chinese partners. This is the first step for China to open its human resources market, and an official with the Ministry of Personnel stated that the government could further open it as circumstances allowed.
The regulations stipulate that such a joint venture should have at least USD 300,000 of registered capital, with the overseas party providing at least 25 percent and the Chinese party at least 51 percent. Permanent offices, reasonable financing, office facilities and competent full-time staff with college degrees are also necessary.
The joint ventures can collect, arrange, and issue human resources information and carry out recommendations, employment, rating and training according to scope of business approved by provincial personnel authorities.
(Source: Beijing Business Today 10/09/2003 - Translated by Xu Ye)
3. China Builds the Largest Power Grid in the World
China has set up the largest power grid in the world with a combined installed power capacity of 140 million kW, and a span of 4,600 kilometers across 14 provinces and municipalities.
China's two important power grids, the North China Power Grid and Central China Power Grid, were successfully connected on September 20 for the first time, and the interconnected grid operated smoothly. The connection was made possible by a 210-km, 500-kW transmission line, which links the Xin'an Transformer Substation of the North China Grid in Handan City, Hebei Province in north China, with the Huojia Transformer Substation of the Central China Power Grid in Xinxiang City of Henan Province, central China.
The connection of the two grids will help the power sector to optimize its electrical power resources, enable the two grids to support each other in distribution of electricity, and improve operation safety of the power grids.
(Source: China Electric Power News, 09/23/2003 - Translated by Michael Mei)
4. Cement Industry in China
Since 1985, China has been the largest producer and consumer of cement in the world. The output in 2002 reached 725 million tons. China cement industry is facing a tough task of structural adjustment. Up to 2002, the production capacity of all NSP ( New Suspension Preheater ) production lines only accounted for 17% of the total production, replacing outdated capacity with advanced NSP will be a major task of the industry in the next ten-fifteen years.
Portland Cements ( also known as silicate cements in China ) are the major cement products in China, occupying 97% of the total. There are 101 cement standards in China, including 13 compulsory national standards, 27 recommended national standards, 7 compulsory industrial standards and 54 recommended industrial standards. The standards of Portland cements are compulsory national standards.
Shaft kiln production, small production scale, outdated equipments, environmental pollution are serious problems need to be solved and improved. NSP plants of Jidong, Zhujiang, ect. imported the whole set of production equipments from overseas.
(Source: China Building Materials Industries 2003 - Translated by Pingping Xie)
5.China Industrial Production Keeps Growing in September
China reported an industrial added value of RMB 370.4 billion ( USD 44.7 billion) in September, 16.3 percent higher than the same period last year, according to the National Bureau of Statistics (NBS).
China's industrial added value for the nine months to September rose 16.5 percent on an annual basis to nearly RMB 2.9 trillion ( USD 350.7 billion), the NBS monthly report showed.
Communication equipment, computer and other electronic device production, transport production, metallurgy, electrical machine production, and the chemical industry all had growth rates above 20 percent in September and continued as the country's major driving forces in industrial production.
(Source: China Machinery and Electronic News,10/9/2003 - Translated by Peining Zhao)
6. China's Curtain is Rising for New 3G Licenses
China has taken a series of steps to push the development of 3G communication over the past few months: Lou Qinjin, vice-minister of Information Industry (MII) inspected 3G technology experiments in July and laid down detailed requirements and guidelines for the development of 3G; a seminar was held in Shenzhen on August 23 to discuss "strategy for the development of 3G communications system"under the chairmanship of Li Mofang, a member of the State Information Drive Panel and the sponsorship by Zhongxing Telecom Equipment and Huawei Technologies, with a report submitted to the government as a reference for taking policy decisions in the future. It is also reported that a "Global Summit - 3G in China" which represents the barometer of 3G progress in China, is scheduled for the end of October in Beijing.
Technically, MII has carried out two-year long Mtnet3G experiments, with the participation of dozens of well-known domestic and overseas mobile communication system and terminal manufacturers and instrument companies. The experiments, claimed to be the world’s largest ever in terms of scale, participants and technologies, cover three international 3G standards of W-CDMA, CDMA2000 and TD-SCDMA. The experiments will be finished some time at the end of the year or in early 2004, according to the Wall Street Journal.
The project will raise the curtain for the government to issue 3G licenses to telecom operators.
3G refers to the third-generation mobile communication technology following the first generation of analog communication technology (1G) and second generation of mobile communication technology (2G). To date, the 3G technologies acknowledged the world over include Europe’s W-CDMA mode basing on GSM backbone network, U.S. Qualcomm’s CDMA2000 mode basing on CDMA backbone network and China Datang Telecom’s TD-SCDMA mode.
The most prominent feature of 3G phones, said experts, is that it provides not only a "communication tool" but also multimedia services in voice, data and video and wireless Internet access, with a transmission rate 40 times that of traditional mobile phones. But 3G services in the world are flat. 3G still has some technical flaws and the technical equipment is still in the experimental stage, far from mature. 3G users of Hutchison Europe often complain about network instability, blurred image and poor voice quality. Then, the 3G terminal problems remain unsettled. Mobile phones supporting 3G technology are few and far between. No country can afford to turn a blind eye to 3G, a leader of future mobile communication technology despite its current flaws. China Mobile, which missed the development opportunities of 1G and 2G, will not let 3G development opportunity to slip. The 3G market in China is no less than RMB 1,000 billion, according to the most conservative estimate and the industries associated with telecom industry are likely to top RMB 10,000 billion. The 3G value chain also extends to cover content providers, value-added integrators and service providers.
Foreign companies have stepped up their 3G investment in China since the beginning of June this year. US Qualcomm announced a USD 100 million investment in Chinese companies that are engaged in CDMA technology development; Lucent Technologies also revealed that the company would add another USD 50 million to reinforce its 3G R&D in China; head of such multinational telecom giants as Ericsson and Siemens visited China one after another; Cornwell, CEO of Global GSM Association came to Beijing, trying to make WCDMA standards the best choice for the government to issue 3G licenses. Hewlett Packard, however, joined hands with UTStarcom to work on future-based 3G solutions.
Signs show that China is pushing its 3G progress in steady and sure steps. Overseas observers found that the government started to support the efforts to work out China’s own 3G standards a long time ago. China unveiled the allocation of 3G mobile phone frequencies last October, and people realized in amazement that Datang Telecom’s TD-SCDMA standards got more preferential arrangements than Europe’s W-CDMA standards. Insiders believe that China will probably be the first country to adopt three 3G standards, namely W-CDMA, CDMA2000 and TD-SCDMA. The market has been mature for adopting the W-CDMA standards, but the market for adopting TD-SCDMA is yet to be improved. But it is a nagging problem for the policy decision makers as to issue licenses separately or in a bundle and how to prevent TD-SCDMA standards to fall behind other standards.
Tianyang Technology CEO Zuo Hanbo told the 2003 Sept. 1 TD-SCDMA International Summit that the high-tech firm affiliated to Datang Telecom plans to release TD-SCDMA chips for mobile phones in April next year and produce sample phones in June.
(Source: China Economic Information Service (CEIS)10/16/2003)
Embassy News
Secretary of Commerce Donald L. Evans is making his second official visit to China from October 24 through October 29, 2003. The Secretary and his delegation will travel to Xian and Beijing in preparation for the 15th session of the U.S.-China Joint Commission on Commerce and Trade (JCCT) to be held in Washington, D.C. in early December 2003.
Consulate News: Chengdu
In keeping with our goal of making the CCB a more integrated publication, our four China branch offices - Chengdu, Guangzhou, Shanghai and Shenyang - submit consulate news to the CCB on a rotating schedule. This week, we are pleased to feature a contribution from CS Chengdu.
New Consul General, Mr. Moon arrived Chengdu in the end of September and started his three-year mission in Chengdu.
The 2003 USA New Products Catalog Exhibition Held In Chengdu: September 15-16, the New Products USA 2003 Catalog Exhibition was held at the Dynasty Hotel, Chengdu. CS Chengdu and the Export Promotion Service organized the event with MOFTEC Sichuan while FESCO was the underwriter. At the opening ceremony, SCO Craig Allen; and Nancy Hesser, Director of International Catalog Exhibition Program of Export Promotion Service (EPS); made opening remarks. Acting CG John Louton attended the ceremony on behalf of the Consulate. The VIP Chinese attendees at the ceremony included Vice Governor of Sichuan Mr. Huang Xiaoxiang, Vice Mayor of Chengdu Mr. He Huazhang, and Deputy Director of MOFTEC Sichuan Mr. Liu Xin.
The two-day event was a success. About 1,200 visitors representing 300 local Chinese companies visited the show. The three participating states (Illinois, Florida and Mississippi) were very satisfied with the event commenting in their feedback reports that the show was well-organized and well-attended; the visitors seemed to be satisfied; the U.S. Commercial Service staff was professional, knowledgeable and helpful; and that they probably would participate again in the program at this site. As the event coordinator, CR Rose Nickel directed the event.
U.S. Aerospace Trade Mission to Chengdu, On September 22, 2003, the U.S. Aerospace Trade Mission Delegation, led by Vicki Harrison, International Trade Specialist, Office of Aerospace, International Trade Administration, visited Chengdu. The delegation included representatives from ANPC, Boeing, Cage Inc., Lockheed Martin, Raytheon, Sensis, and Vertex. The delegation had a group meeting with Southwest CAAC, Tibet CAAC, Guizhou CAAC, Chongqing CAAC, Southwest ATMB, Chengdu Shuangliu International Airport, China Civil Aviation Flight College, Southwest Airport Construction Co., and CAAC No. 2 Design Institute. One-on-one meetings were held with all the local attendees and visits were made to Southwest ATMB and Chengdu Shuangliu International Airport. During the group meeting, Mr. Shen Zejiang, Deputy Director General of Southwest CAAC, introduced the future airport development and airport construction projects in Southwest China. By 2005, there will be 38 airports in Southwest China, and by 2010 there will be 46 airports.
For more information on CS Chengdu consular region, visit our website at http://www.buyusa.gov/china/en/Chengdu.html
DISCLAIMER: CS China does not guarantee the veracity of the original sources of our news summaries. While we do our best to report accurate and timely articles and news sources, you should always check the source for further information.
The China Commercial Brief is a free newsletter published by the U.S. Embassy- Beijing.
****************************************************
INTERNATIONAL COPYRIGHT, U.S. COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2003. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.