Oct. 22 – China’s Ministry of Finance said tax rebates on selected export products will be raised beginning November 1; to ease pressure on businesses affected by slowing export demand.

This is the second time in three months that China has increased tax rebates for the export industry. Last August 1, tax rebates were increased by 2 percentage points to 13 percent.

The new tax rebate rates will range from between 9 percent and 13 percent and cover 3,486 types of products, or an estimated one-quarter of all exports listed by customs authorities.

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Oct. 21 - Chinese exporters are looking into the domestic market to cope with slowing demand brought about by the global credit crisis, reports Xinhua.

During the Canton Fair, the board chairman of the Jiangsu Hotwind Sauna Equipment, Qiao Guan, told Xinhua that his company was planning to divert some of the business from abroad to the domestic market.

He said that company sales to the United States, which accounted for about 30 percent of its total exports, had dropped by more than 20 percent this year. “We have completed research on the domestic market, which shows some exported goods are affordable and have good sales prospects in the local market,” he added.

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Oct. 17 - China’s National Development and Reform Commission said that growth in the Yangtze River Delta region will be prioritized with the aim of making it a world-class urban cooperative by 2020.

The region includes Shanghai, Zhejiang and Jiangsu spanning only 2.1 percent of China’s territory but producing 22.5 percent of the country’s gross domestic product. The area’s business output contributes 31.5 percent to the national fiscal income and attracts 35 percent of total foreign investment to the country.

The development of the Yangtze River Delta region is seen as vital as the domestic economy matures amid the global economic downturn. It also serves as a role model for other regions in the nation to follow.

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By Chris Devonshire-Ellis

Oct. 15 – The inevitable has happened; a day or so after the United Kingdom and Europe partially nationalized their banking systems and injected trillions of dollars of taxpayer money in financial institutions, the United States has followed suit with a US$125 billion partial acquisition of nine major American banks. So much, at least for now, for the theory of free market economics.

It’s ironic, because just a little over ten years ago, the Hong Kong government was lambasted by the United States for injecting hundreds of millions of dollars into the Hang Seng index to preserve the US dollar-Hong Kong dollar peg during the Asian financial crisis. Hong Kong’s housing market also went into negative equity at that time. So the idea for government intervention in the face of crashing stock markets, and a declining dollar has already been visited by China during the Asian financial crisis of 1997.

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Oct. 14 - According to China’s General Administration of Customs, trade surplus for the first nine months of the year declined by 2.6 percent to US$180.9 billion compared to last year’s figure.

In September, import restrictions made to accommodate the Beijing Olympics and Paralympics boosted trade surplus by 23.1 percent to US$29.3 billion, a monthly all-time high. Exports increased by 21.5 percent to US$136.4 billion. Import growth in September slowed to 21.3 percent from August’s 23.1 percent and July’s 33.7 percent.

The European Union maintained its position as China’s top trading partner with bilateral trade increasing by 25.9 percent to US$322.5 billion. Following the EU, the United States was at second place with trade worth US$251.5 billion, although growth decreased by 1.8 percent.

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BEIJING, Oct. 10 – The China Securities Regulatory Commission has requested unofficial ‘audits’ of all foreign financial institutions operating in the country, amid concerns that an overseas bank failure could lead to the global credit crisis spilling over the mainland.

The decision also includes Hong Kong banks as well as international entities. CSRC has ordered that all joint-venture fund management groups to report on the financial stability of their foreign partners and provide details of how the global banking crisis could affect operations in China.

According to an e-mail sent by the CSRC and obtained by Reuters, “Recently, the international capital markets are hugely affected by the subprime crisis.”

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Oct. 9 – The world’s central banks cut short-term interest rates almost simultaneously in an effort to deal with the worsening global financial crisis.

The central banks in the United States, the Euro zone, Britain, Brazil, Canada, Australia, Sweden and Switzerland cut short-term interest rates by a half percentage point, noting that “the recent intensification of the financial crisis has augmented the downside risks to growth,” reports the Wall Street Journal.

The Bank of England cut its rate by half a point to 4.5 percent and the European Central Bank’s 21-member Governing Council agreed to slice its rate by half a point to 3.75 percent from 4.25 percent.

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Oct. 8 – According to an official from the All-China Federation of Trade Unions (ACFTU), ninety percent of foreign-funded companies in China will be unionized by the end of this year; eventually all foreign-funded companies will have trade unions by 2009.

Wang Ying, a division chief of the grassroots organizations and capacity for ACFTU told China Daily that currently 82 percent of foreign-funded companies have trade unions.

In July, only less than 50 percent of the Fortune 500 firms in country had trade unions. There are more than 4,100 major foreign companies run by the Fortune 500 doing business in the country.

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Oct. 7 – Although its name is obscure, Manzhouli is an important gateway for business in Inner Mongolia and receives 60 percent of all of China’s trade to and from Russia and the rest of Eastern Europe.

It is the country’s largest inland port of entry.

Manzhouli borders the Russian city of Zabaykalsk with a free trade zone that allows residents from both sides to cross visa free.

Many Russian citizens have actually purchased property and live on the Chinese side because houses are cheaper and considered to be better made.

The combined population of the two cities is about 400,000, with 250,000 of them living on the Chinese side. Manzhouli, while small in terms of population, is an important gateway to Russia and is fast developing as a trading city.

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By Chris Devonshire-Ellis

Oct. 6 - The extensive plans to develop trade links between Xinjiang and Central Asia have led Middle Eastern investors to become interested in assisting China in opening up the region to global trade.

The stakes seem to be more than just about money. Moderate Islam has been under threat from insurgents in the region, preying largely on poverty and creating divisions within the Muslim Diaspora. To correct this, and at the same time lift millions of Muslims within the Central Asian regions out of poverty, are becoming a priority for governments from Ankara to the Middle East.

This suits China’s plans too since a stable Xinjiang Province will no longer be an issue for mainstream Muslim thinkers. Instead, there is the prospect of increased trade with China as road and rail links running into the region become convenient and increasingly attractive for all.

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