Tianjin Davos Forum Upbeat, 2009 growth rate expected to be 8.5 percent

Sept. 28 - China has passed many difficult tests during 2008 and now has full confidence and the capability to overcome various difficulties to ensure sound and fast economic growth for an even longer period of time, said Premier Wen Jiabao yesterday at the Tianjin Summer Davos Forum, according to China Daily.

Those comments are borne out by a survey conducted by China Briefing amongst international and Chinese financial institutions that indicated that China’s grow was likely to fall to 8.5 percent during 2009, a full percentage point lower than 2008. However, it was noted that infrastructure development, particularly in Beijing prior to and during the Olympics may have added a one percent growth for this years figures, meaning that China’s true growth was on course for a consistent 8.5% performance and that next year, despite severe uncertainties in the United States and Europe, would be one of similar performance to 2008. (more…)

Sept. 28 - The on-going development of the Chinese melamine scandal has reached into international brand products with several multinational food manufacturers now also having to recall product after tests showed them to contain traces of melamine, the substance initially discovered in Sanlu baby milk powder.

The South China Morning Post has reported the following brands are now affected and have been recalled pending further tests:

Chinese
Four Seas cake (strawberry flavor)
Mengnui high-calcium low fat milk
Silang House of Steamed Potato wasabi crackers
Sanlu baby milk powder
Yili ice yoghurt bar, fruit bar and eight other Yili products from frozen foods to milk
White Rabbit milk cream candy (more…)

Sept. 28 - China’s traditional week long national holiday begins on Monday, September 29 and extends until Sunday, October 5, taking in all of next week.Most mainland China offices are closed during this period. Hong Kong and Macau however have just one day off, the National Day itself, Wednesday October 1. Taiwan does not celebrate the national holiday at this time, but instead has its celebrations on the “Double Ten,” October 10.

China Briefing will continue to post news daily all next week, including a new series on China’s third-tier cities.

Influential magazine founded by Chairman Mao has overseen dramatic moments of Chinese history

BEIJING, Sept. 27 - Beijing Review, China’s only national English weekly news magazine celebrated its 50th anniversary last night in a prestigious anniversary party held at the Grand Millennium Hotel ballroom. Attendees included several vice-ministerial members of the Politburo of the CPC Central Committee and from the State Council information office, in addition to many foreign embassy officials and of course the publication’s staff and writers.

The magazine is politically important and highly influential—it was founded by Chairman Mao in March 1958 (first issue pictured on the right) and has subsequently been supported by successive Chinese leaders. The magazine reports and comments on China’s social, political, economic and cultural affairs. The senior partner of Dezan Shira & Associates, and publisher of China Briefing, Chris Devonshire-Ellis, has written the magazine’s “Legal Ease” column, outlining changes in China’s foreign direct investment laws, for the past six years. (more…)

By Chris Devonshire-Ellis

Sept. 26 - The recent scandal over tainted milk products in China has raised much commentary and opinion in the media, mainly related to the pointing of fingers and assessing who is to blame. Yet it actually highlights a deeper problem in China’s society that could be even more damaging.

First though, to recap on the chain of events, the New Zealand-based Fonterra dairy business operates a joint venture with the Shijiazhuang-based Sanlu business, with Fonterra as minority partners. Contaminants were discovered in various batches of baby milk powder, specifically melamine, an ingredient that makes the formula appear to be richer in proteins than it actually is. It can, accordingly, also be used to adulterate low quality, or even ‘bad’ milk. As it causes serious medical side effects in infants—stomach problems, malnourishment and even kidney stones in 3-6 month old babies—the use of melamine for such purposes is illegal. (more…)

Sept. 26 - China recently implemented several incentive programs to attract talent to the Chinese financial services sector. Local authorities in Beijing, Shanghai and Shenzhen have introduced new measures to attract financial institutions to set up in their jurisdictions.

In Shanghai, financial institutions based in Pudong will benefit from a new incentive program. Security houses, banks and insurance companies as well as qualified individuals such as senior executives, individuals with managerial roles, and professionals with extended experience (three years or more) working for a financial institution also stand to benefit from the incentives.

These incentives include: (more…)

Sept. 25 - China will carry out its second economic census between October and December state media reports.

The census, which has been conducted every five years since 2004, helps Beijing form the basis for the nation’s social and economic development blueprint during the 12th Five-Year Plan period (2011-2015).

The National Bureau of Statistics announced that their office would survey all enterprises from the secondary and tertiary sectors, including the smaller ones that had earlier been left out in annual statistics.

Economists say the census will prove particularly important this year as the figures will shed more light on how local enterprises are faring amid the subprime crisis. (more…)

By Cathy Gao

SHANGHAI, Sept. 24 - More than eight months after the Labor Contract Law came into effect, China’s State Council has released implementation regulations to clarify certain aspects of the new law. While the labor law was hailed as a landmark step in protecting employee’s rights, many complained it only served to increase a company’s operational cost.

A brief rundown of the new regulations: (more…)

Sept. 23 - The autumn issue of India Briefing is out now and available for download (click on the image – subscription required however this is complimentary).

In this issue we take a good look at the scenario for establishing a manufacturing business in India, including comments on the types of legal entities, labor law, special economic zones, and the tax implications. As manufacturing for both the growing domestic market and for export overseas increases, this is a timely moment to demonstrate the lay of the land and provide a corporate overview of the playing field for entering this bullish market.

Included in this issue:

Establishing a manufacturing business in India
Incorporation
Application procedure
Approvals
Tax implications
Special economic zones
Compliance and labor law issues
Market entry case studies of Auto components, electronic products
Structure of FDI, regulatory and operating approvals

Sept. 21 - China Investment Corp, China’s State investment fund, is in discussions to purchase up to 49 percent of the prestigious Wall Street investment bank Morgan Stanley.

The bank has been battered over the past few weeks as its shares have dived during the financial storm that has emerged in the United States. Its survival has been cast in doubt, and a merger with U.S. banking lender Wachovia has also been proposed; however it is believed that a tie-in with CIC is preferred by Morgan Stanley’s senior executives.

CIC previously purchased 9.9 percent of Morgan Stanley last December. (more…)