The Chinese Government has ordered the full implementation of rural and agriculture policies to ensure stable agricultural development and a sound development basis for next year.

The State Council last week outlined the policies, which include subsidies for crop production, ensuring the rights of rural workers and farmers who have handed their land to the government and assisting rural students in poor families.

Water conservancy projects will be accelerated to ensure living and irrigation water supplies for next year, and sufficient supplies of seed and fertilizer will be allocated, according to an instruction issued at a State Council executive meeting presided over by Premier Wen Jiabao.

Gold-mining restrictions

China, the world's fourth-biggest gold mining country, will raise the threshold for foreign investors in the gold mining sector to improve the sustainability of the industry, a regulator says.

According to a source from the National Development and Reform Commission (NDRC), China will impose restrictions on small foreign investors in the sector while welcoming larger ones. The source declined to reveal what measures will be taken, only saying an announcement would be made before the end of the year.

The regulator also declined to define "small" versus "large" investors.

"The sector does not need many small foreign investors as there have been a large number of small Chinese gold miners," the source said on condition of anonymity. "The new policy is designed to improve the quality of foreign investment to ensure sustainable development of the sector."

Overseas investments

The National Council for Social Security Fund (SSF) last week awarded 10 foreign fund managers the intensely sought after mandates to invest more than US$1 billion into overseas stocks and bonds for the first time.

SSF currently manages around 200 billion yuan (US$25.3 billion) in the welfare fund, of which US$1 billion has been earmarked for overseas investment.

Some 84 fund managers from around the world competed for the mandates. Two of the 10 winners are asset management companies owned by Allianz, Germany's biggest insurer, and two others are part of AXA, France's top insurer.

SSF posted the names of the 10 winners on its website last Wednesday.

Xiang Huaicheng, chairman of the SSF, says the appointments mark a historic step for his fund.

China-Chile free trade

China and Chile will start negotiations for a free trade agreement (FTA) covering service trade and investment in January, the countries said last week.

"The talks are expected to be wrapped up by the end of 2008, or earlier than that, maybe the middle of 2008," says Fernando Reyes Matta, Chile's Ambassador to China.

Though the talks have been on the table since late September, they probably will not "enter into a substantive stage until January 2007," says Zhang Bing, an official of the department of international trade and economic affairs with the Ministry of Commerce.

First energy law

The draft of China's first energy law, which will shape the country's energy policies, will be completed by the end of the year, sources with the National Development and Reform Commission (NDRC) said last week.

The law will paint broad brush strokes and not delve into details of each sector in the industry, according to experts.

A team led by the NDRC and comprising 15 ministry-level departments was set up at the beginning of this year to frame the law.

It will override current industry laws such as the Electricity Law and the Coal Law, and serve as a guideline for the legislation of any future laws on a certain energy sector, according to Zhou Dadi, a researcher with the Energy Research Institute affiliated to the NDRC.

Joint economic zone

China has opened its first overseas joint economic zone in Pakistan in a bid to accelerate Chinese enterprises' overseas investment.

The joint economic zone, covering 1.03 square kilometres at Manga Mandi, 40 kilometres south of Lahore, was established by Haier, China's leading home appliance maker, and Pakistani firm Ruba.

Haier has a 55 per cent stake in the joint venture, while Ruba holds the remaining share in what will be Pakistan's largest home appliance production base and the first Sino-Pakistani joint venture of its kind.

"China attaches great importance to economic relations with Pakistan. Investment in Pakistan benefits both nations," Chinese President Hu Jintao said after inaugurating the Haier-Ruba Economic Zone.

From DVD to EVD

Nearly 20 leading Chinese manufacturers will stop making DVD players from 2008, replacing them with EVD (Enhanced Versatile Disc) players, the next-generation players based on a Chinese home-grown standard.

The companies involved, including Shinco, Amoi, Hisense and TCL, will make a joint announcement of the switch next Wednesday, according to Zhang Baoquan, chairman of Antaeus Group and secretary-general of the EVD Industry Alliance, which is dedicated to promoting the EVD standard.

All firms involved are members of the EVD Industry Alliance. Antaeus is a real estate developer that has thrown its weight behind EVD in recent years.

Shanghai financial push

Shanghai has laid down ambitious plans to strengthen its position as an international financial centre.

According to a blueprint unveiled last week for the 11th Five Year Plan period (2006-10), the city aims to capture at least 25 per cent of the nation's financial business, including stocks and bonds.

The plan highlights four main elements in the development framework. The first involves establishing a world-renowned financial market system in which both domestic and foreign investors can participate.

By the end of 2010, Shanghai's monetary market is expected to have a trading volume of 80 trillion yuan (US$10.22 trillion). At the end of October this year the figure was 46 trillion yuan (US$5.87 trillion), and last year the figure was 34 trillion yuan (US$4.34 trillion).

(China Daily 12/04/2006 page0)