BEIJING, July 5 (Xinhua) — Private equity market in China kept expanding in the second quarter, with the total value of 33 disclosed projects reaching 2.56 billion U.S. dollars, up 10.7 percent against the first quarter.

    The 33 private equity investments were made in 14 industries, among which manufacturing, energy and mining industries appeared more attractive, said a report on PE investment market in the second quarter released by China Venture.

    Seven projects were in the manufacturing industry, while energy and mining had. Investment value exceeded 250 million U.S. dollars in real estate, energy and mining, logistics and manufacturing, the report said.

    BEIJING, July 5 (Xinhua) — China Merchants Bank (CMB) said its unaudited net profit for the first half of this year would more than double compared with 6.12 billion yuan (886.96 million U.S. dollars) in the first half of 2007.

    The rise was driven by the company’s various businesses expansion, increased loans and interest spread, growth in interest and non-interest income, reduced credit cost and lower effective income tax rate, said an announcement released by the CMB.

    CMB shares rose 0.66 percent to 21.29 yuan on the last trading day this week. The bank’s positive performance estimate, together with the Industrial and Commercial Bank of China and Shanghai Pudong Bank’s forecasts of major rises in net profit on Friday, would back up investors’ confidence in bank shares, said analysts.

Special report: Reconstruction After Earthquake

    BEIJING, July 5 (Xinhua) — The state-owned enterprises (SOEs) which suffered heavy losses from the magnitude 8.0 earthquake in May in southwest China would receive capital injection from the government.

    The State-owned Assets Supervision and Administration Commission (SASAC)would use state assets budget to support reconstruction of these enterprises, Liu Nanchang, deputy director general of the bureau of performance assessment of SASAC, told Xinhua.

    The commission would also organize mutual support between SOEs and tune down the performance targets set for some state firms after evaluating quake losses, said Liu.

    Aggregate quake losses in China’s centrally-administered state-owned enterprises (SOEs) have surpassed 80 billion yuan (11.4 billion U.S. dollars), more than double the preliminary estimate of 30 billion yuan, said the SASAC.

    China currently has 150 central SOEs directly under the control of the SASAC, with a total assets of 14.6 trillion yuan by November of 2007.

    HONG KONG, July 4 (Xinhua) — Hong Kong’s building units sales remained robust in the first half of 2008 from a year earlier but dipped on the second half of 2007, revealed the Land Registry’s latest statistics here Friday.

    The amount of consideration involved in all types of building units sales agreements totaled 288.73 billion HK dollars (70.02 billion U.S. dollars), up 35.1 percent on the same period last year but down 7.4 percent on the second half of 2007, according the Land Registry.

    A total of 75,320 sale and purchase agreements for all types of building units were registered in the first half of the year, the Land Registry said, up 18.6 percent on the same period last year but down 8.4 percent on the second half of 2007.

    According to the Land Registry, 100,429 assignments of building units were lodged for registration during the first half, up 40.7 percent on the same period last year and 15.5 percent on the second half of 2007.

    BEIJING, July 4 (Xinhua) — Li Yining, one of China’s leading economists, said on Friday that China is facing a pressing challenge of preventing inflation turning into stagflation.

    He said stagflation, the co-existence of high unemployment and high inflation, might occur if improper measures were taken to fight inflation so as to disrupt market expectations, or the economy failed to survive the global slowdown.

    Improper anti-inflation measures may lead to investors shying away, widespread unemployment worries or hard times for small and medium-sized companies, resulting in frustrated consumption, Li told the Second Meeting of the Standing Committee of the 11th National Committee of the Chinese People’s Political Conference (CPPCC), the country’s political advisory body.

    The global slowdown, on the other hand, would affect the domestic production and consumption or employment by cutting exports, and it could also lead to outflows of capital, said Li, a member of the Standing Committee.

    The economist said China should continue to take a firm grip on the country’s foreign exchange flows, and be alert to problems that might occur in the context of a global slowdown given the huge forex reserves.

    He said the government should not over-reach itself in fighting inflation or be misled by the concept that only a low inflation rate would be a complete success in the anti-inflation campaign.

    ”The inflation rate, if controlled at about 60 percent of the growth rate, would be appropriate, such as keeping the rate at around six percent for a 10-percent growth in economy,” he said.

    The country’s inflation rate hit an 11-year high of 8.7 percent in February, and eased to 7.7 percent in May, still above the government-set goal of three percent for the whole year.

    He said the national economy was running on a good course, according to economic data, despite new challenges from home and abroad including the may 12 earthquake.

    However, the government needed to take the risks of stagflation into consideration when tuning the macro control policies in the next half, he added.

    BEIJING, July 4 (Xinhua) — China’s outstanding foreign debts rose by 18.97 billion U.S. dollars in the first quarter to reach 392.59 billion U.S. dollars by the end of March, the State Administration of Foreign Exchange (SAFE) said on its website on Friday.

    SAFE figures showed China incurred medium and long-term foreign debts of 7.75 billion U.S. dollars in the first three months this year, a rise of 15.04 percent over the same period last year.

    Nobody at the SAFE was immediately available for further comment on the figure.

    The outstanding medium and long-term foreign debt reached 155.86 billion U.S. dollars, an increase of 2.33 billion U.S. dollars from the end of last year.

    During the same period, short-term foreign debt stood at 236.73 billion U.S. dollars, up 16.64 billion U.S. dollars from the previous quarter.

    The SAFE has pledged to tighten oversight of the cross-border money flow, notably the outstanding short-term foreign debt, in a bid to curb rampant hot money inflow from investors speculating on rising currency and asset prices, and exacerbating excessive liquidity and worsening inflation.

    About 1.75 trillion U.S. dollars of speculative funds flowed into China over the past five years, the Chinese Academy of Social Sciences said in a report last month, a sum equal to 104 percent of China’s foreign reserve by the end of March.