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Before we wrap up this week's program, here is a brief review over some of the major business stories from the past week.
Sales of China's top 100 electronics companies soared nearly 17 percent year-on-year in 2006 as market demand was boosted by greater disposable incomes.
The Ministry of Information Industry says their combined sales set an all time high, surpassing 140 billion U.S. dollars last year. Television makers among the top 100 companies accounted for 85 percent of industry sales.
The World Association of Newspaper says China is now the world's biggest newspaper market. Almost 99 million newspapers a day were printed in China last year. Income based on advertisements in Chinese newspapers rose 16 percent in 2006, against the world average of less than 4 percent.
China has issued 30 billion yuan, or nearly 4 billion US dollars, of book-entry treasury bonds. The three-month T-bonds carry an annual interest rate of 2.34 percent. This is the eighth batch of book-entry T-bonds to be issued by the Ministry of Finance this year.
The Chinese government pledged earlier this year to cut the issuance of treasury bonds in 2007 by a modest amount in a bid to reduce its financial deficit and expand channels for direct financing.
In corporate news, Citigroup and HSBC are expected to become two of the first four foreign banks able to issue renminbi debit cards to account holders. The Shanghai branch of the China Banking Regulatory Commission has received applications for debit card issuance from Citigroup and Bank of East Asia, while the other two, HSBC and Standard Chartered are expected to apply soon. But the timeframe for issuance has not been confirmed yet. Anshan Iron & Steel, one of China's top steel mills, will pay about 32 and half million US dollars to buy an approximately 13 percent stake in Australian iron ore producer Gindalbie Metals.
Anshan, based in northeastern China, will be the second-biggest shareholder of the Perth-based iron ore firm through the deal. The money will be invested in the two parties' joint iron ore operations in Western Australia state. Mainland steel producer Sinosteel is reportedly planning to raise 1.2 billion US dollars from simultaneous initial public offerings in Shanghai and Hong Kong as soon as the end of the year. The listing vehicle would comprise the company's equipment manufacturing unit, which makes the machines steel producers use to make steel.
Homg Kong-listed China Cosco is returning to the mainland stock market. It has received approval to list on the Chinese mainland's stock market. The shipping firm had applied to issue up to nearly 1.8 billion A-shares, or 20 percent of its total shares, on the Shanghai Stock Exchange. It plans to raise at least 8.3 billion yuan, or a little over 1 billion US dollars, from the sale.
The mainland's No. 1 mobile carrier China Mobile will seek bids in October for over 780 million U.S. dollars worth of handsets based on a locally developed 3rd generation telecommunication standard, known as TD-SCDMA. About 20 mobile phone makers including US Motorola, South Korean Samsung，and Chinese ZTE Corp and Huawei Technologies are expected to bid to supply two million to three million handsets. China Mobile at present offers services based on the GSM standard. The market consensus is it may get a TD-SCDMA license.
Chinese leading computer maker Lenovo says it will expand its presence in rural China to maintain its competitive edge. According to figures from the research firm IDC, the average growth rate of the Chinese PC market in the next five years is expected to reach 11.7 percent. Meanwhile, the growth rate in the country's fourth-to sixth-tier cities is expected to hit 23 percent. Since 2004, Lenovo has increased its presence in China's rural areas by introducing low-end PCs, but the company didn't see much profit until last year.
And finally:
Founder and chairman of Chinese beverage giant Wahaha, Zong Qinghou, has resigned from his post as chairman of its 39 joint ventures with French partner Danone as the two companies' dispute continues. Wahaha has accused the French company of trying to force a buy-out by filing a lawsuit in the United States against two subsidiaries of Wahaha. Danone filed a lawsuit last week in the Los Angeles-based Superior Court against Ever Maple Trading and Hangzhou Hongsheng Beverage Company, and two individuals related to these companies. The Danone suit said Hangzhou Wahaha was involved in illegally selling products identical to those sold by the companies' joint ventures, and illegally using supplier and distributor resources of the joint ventures to carry out its own business operations. It said Ever Maple Trading is the controlling shareholder of Hangzhou Hongsheng Beverage, which is the parent company of Hangzhou Wahaha Food and Beverage Sales Co.,Danone's joint venture partner in China. Danone filed the lawsuit in Los Angeles because the French company said it is the location of Ever Maple's registered address.
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