China Market Intelligence

August 1st, 2007

As the first session of the 110th Congress approaches its August recess, members of Congress have intensified their focus on China. When the session began in January, the Democratic majority made addressing international trade imbalances a priority. As a result, members of both the Senate and House have introduced legislation aimed at China. Most of these bills reflect approaches introduced in previous congressional sessions and focus primarily on China's exchange rate and government...

August 1st, 2007

The PRC Ministry of Commerce (MOFCOM) and General Administration of Customs on July 23 jointly issued Announcement 44, adding 1,853 commodity categories to the Catalogue on Restricted Processing Trade Commodities. Products in the catalogue, which include plastics, textiles, and furniture, face import and export restrictions. The catalogue, which takes effect August 23, is meant to help reduce China's growing trade surplus and ease trade frictions and to shift the country's economy away from...

August 1st, 2007

The PRC National Development and Reform Commission in July officially released a comprehensive plan for the development of China's high-tech industries through 2010. The 11th Five-Year Plan (FYP, 2006-10) on the Development of High-Tech Industries, which is identical to the public draft circulated in May, identifies eight key sectors for development and sets specific growth targets for the high-tech industry.

Some of the goals in the FYP include doubling the number of patents...

August 1st, 2007
Food-service chains

China's food-service chain stores, which also include cafés and tea houses, generated total revenue of RMB 55.2 billion ($7.3 billion) in 2006, up 21.4 percent over 2005, according to the PRC National Bureau of Statistics (NBS). The number of food-service chain stores rose by 16.5 percent in 2006, from 9,748 to 11,360, and the sector added roughly 57,000 employees to reach 557,080 in 2006. The NBS data include both direct vendors and franchises.

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July 25th, 2007

Driven by surging exports and fixed-asset investment, China's economy roared ahead in the first half of 2007, growing 11.5 percent--the fastest rate since 1994 (see Table). Rising food prices, particularly for pork, pushed inflation to 3.2 percent in the first half. In response to these numbers, the People's Bank of China (PBOC) raised interest rates on Saturday, and the State Council announced it would cut the tax on earned interest as of mid-August.

Despite its rapid growth, the...

July 25th, 2007

The Financial Action Task Force (FATF), a Paris-based intergovernmental body focused on combating money laundering, on June 28 voted to elevate China from observer to member status, a move that followed the recent release of PRC regulations to prevent money laundering (see below). China's FATF membership, backed strongly by the United States during May's Strategic Economic Dialogue (SED), is an indication that the country's banking system is becoming better equipped to operate...

July 25th, 2007

The PRC State Food and Drug Administration (SFDA) on July 10 released the revised Administrative Measures for Drug Registration after twice soliciting comments from industry and the public in spring 2007. The revised measures, which replace the original 2005 measures and take effect on October 1, seek to increase transparency in drug registration and evaluation and tighten the approval process for new drugs. Although some areas of the revised measures remain unchanged, certain revisions are...

July 25th, 2007

US government officials have been ramping up their preparations for the upcoming annual US-China Joint Commission on Commerce and Trade (JCCT), which will take place this fall in Beijing. Ira Kasoff, deputy assistant secretary for Asia, US Department of Commerce (DOC), recently traveled to China to meet with PRC officials to initiate JCCT agenda discussions. The US side, which also includes the Office of the US Trade Representative (USTR), plans to submit the list of issues it would like to...

July 18th, 2007

Last week, CMI reported on the widespread media coverage of unsafe products in the United States and other markets that originated from China. Both the PRC and US governments appear to be ramping up their responses to this issue and have begun to propose measures to improve their respective regulatory systems for product safety.

China takes action

PRC officials and inspectors should have a strong interest in combating poor product quality not only because of the...

July 18th, 2007

Changes in China's value-added tax (VAT) rebate regime for exports have had a significant impact on processing trade companies and companies located in export-processing zones (EPZs), according to US-China Business Council (USCBC) sources. In particular, the reduction or removal of VAT rebates on exports of various inputs and raw materials used by processing companies has effectively imposed a heavier tax burden on them.

Processing companies located in EPZs generally source low-tech...

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