(Xinhua Photo)

    BEIJING, July 12 — China Shipbuilding Industry Corp (CSIC), one of the nation’s leading shipbuilding groups, will seek an initial public offering (IPO) in 2007, according to sources close to the State-owned Assets Supervision and Administration Commission (SASAC).

    Headquartered in Beijing, CSIC is reportedly planning a new issue of around 1.6 billion A shares to raise between 6 and 7 billion yuan, the sources said.

    CSIC is undertaking a major restructuring effort to merge its 16 subsidiaries in August to form a more integrated company, to be called China Shipbuilding Industry Co Ltd, before it applies for an IPO on the Shanghai Stock Exchange in December, said the source.

    SASAC, the highest authority on China’s most valuable State assets, has already given a green light to the listing plan, a government source, who declined to be named, told China Daily.

    ”Once the 16 companies are integrated under one umbrella, they will be members of the CSIC as a group company with around 4 billion yuan in registered capital,” the source said.

    Chen Yicong, an analyst with Southwest Securities, said “some people thought CSIC would go public by injecting its assets into its listed subsidiary Fengfan Co Ltd, but the reality will probably be different”.

    Chen said that now is the best time for a group-wide IPO for CSIC “considering the general quality of its assets and the country’s target of becoming a more important shipbuilding center in the world”.

    Total assets of the restructured CSIC would be valued at more than 130 billion yuan. In 2006 its consolidated revenue was 60 billion yuan and its net profit 2.5 billion yuan, sources said.

    Established in 1999, CSIC owns some of the nation’s biggest shipyards and ship engine manufacturers. It also builds ships for the Chinese navy.

    The company is also reportedly developing a large shipyard in Dalian, a port city in Northeast China’s Liaoning Province.

    As China bids to become the world’s largest shipbuilder by 2010, CSIC plans to enlarge its annual shipbuilding capacity to 10 million deadweight tons and generate a total revenue of 120 billion yuan.

    The company now claims to have one-third of the nation’s shipbuilding capacity and 6 percent of global capacity.

    China is already the world’s third-largest ship exporter after South Korea and Japan.

    Last year South Korea accounted for 35 percent of worldwide output, while Japan produced 25 percent and China accounted for 19 percent.

    (Source: China Daily)

    BEIJING, July 12 — In spite of the popular impression that the government is loosening its grip on population growth, the State Family Planning and Population Commission (SFPPC), denies changes in national family planning policies.

    The prudent choice of words belies a misperception that family planning is no longer relevant.

    The latest official wording is to “stabilize population policies”, instead of changing them. So if there are differences between present and past practices, let us call them modifications, if not changes.

    Despite all the complaints and finger-pointing, the family planning initiative has greatly eased the burden of overpopulation on this developing country. That is a tremendous relief to the world, too.

    There were plenty of unhappy incidents in local authorities’ execution of such policies. But most people would agree that the world’s largest population is a drag on the nation’s pursuit of prosperity. The load would have been much heavier were it not for the family planning policies inaugurated in the early 1970s.

    We agree with the SFPPC that the country’s family planning strategy has never been a blanket “one-child policy”. It has allowed too many exceptions to be addressed that way.

    The authorities have kept a very low profile about the longstanding special favors to rural households and ethnic minorities. But according to SFPPC statistics, only 35.9 percent of our population is subject to the so-called “one-child” rule. A fact not known to many citizens.

    The SFPPC spokesman made an even more astonishing revelation on Tuesday that “between 30 and 40 percent” of Chinese citizens are now permitted to have more than two children, and, with only one exception, all the country’s provinces, municipalities and autonomous regions now allow couples from single-child families to have a second child.

    The new pattern of policymaking displays more sensibilities by incorporating such factors as ethnic and regional differences, as well as practical human needs. This entails a better balance between communal needs and individual rights.

    As the SFPPC stated, the country cannot afford to forsake family planning for the time being. But we need to refine the way policies are made and implemented.

    (Source: China Daily)

    BEIJING, July 12 — State-owned commercial banks, listed on the Shanghai and Hong Kong stock exchanges, are finding it difficult to find suitable channels to invest overseas the huge capital gained from shareholders.

    The markets, which are going through a bull run, have pooled big sums of money into Industrial and Commercial Bank of China (ICBC), Bank of China (BOC) and China Construction Bank (CCB) since their initial public offerings.

    To make a better use of the funds, the banks are trying to tap overseas markets and develop international businesses. The goal of becoming an international giant is attractive to any commercial bank, but it involves also heavy pressure and competition.

    To penetrate the international market, commercial banks could acquire or merge with foreign financial institutes, create international businesses or offer localized financial services and products.

    While it could take a company many years to sell $1 billion worth of products after setting up an overseas branch, it could take a matter of months for a bank to open an overseas branch and give out $1 billion in customer loans.

    However, these loans involve various risks, some becoming bad debts not retrievable.

    Banks are distinct from other businesses in the market economy. They gain profits from the inflow and outflow of money. Their business relies on credit and risk pricing. Most bank debts can be traded, giving them more leverage to influence the economy.

    Given this uniqueness, the banking business is based on calculations about credibility and risk instead of a material substance.

    However, there have been occasions where the economy of a country has been badly hit through the bankruptcy of a lender. Hence, administrations always keep a close eye on the banking sector.

    All these factors make it tough for any bank thinking of setting foot overseas.

    The advantages, however, are also numerous for the State-owned commercial banks.

    By learning advanced management systems of foreign banks, they could sharpen their own competitive edge, find new sources of profit and grab large shares on the global market.

    They would also be able to reallocate resources more efficiently around the world, nurture more talents, and support the development of Chinese companies overseas.

    But the banks have a lot to overcome before they can make this a reality.

    The listed commercial banks have introduced international accounting standards, and a legal framework for corporate governance and services following their IPOs.

    But most remain State-owned banks in many respects. It will probably take considerable time and effort to change their enterprise culture and value into a modern, international one, without which they would be unable to integrate into the global market.

    The banks also face extra costs as newcomers in a foreign country.

    The heavy reliance on credit and risk calculations would make these banks much more vulnerable than the local veterans.

    Unfamiliar with the enterprises and clients, the banks may struggle to gain a foothold overseas amid fierce competition.

    They would have to spend more heavily to acquire accurate information about businesses, assess the credibility of clients, evaluate competitors, and study the related laws and regulations.

    Another thorny issue in the commercial banks’ efforts to tap the international market is State intervention in the banking sector. Because of the special position of banks in the economy, every government, some more some less, intervenes to ensure a sound financial industry.

    It is therefore a must to have a thorough understanding of the rules and regulations of their target markets before they take the plunge.

    It is reported that ICBC has applied to open businesses in the United States and Russia, so that it can become a multinational bank. This is probably the goal of most Chinese banks.

    But before they do that, they must ask themselves whether they have the right strategy? Do they have the right professionals?

    The banks could establish pilot projects to gain the necessary knowledge, before taking that final step.

    The author is a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences

    (Source: China Daily)

    BEIJING, July 11 (Xinhua) — China has forbidden domestic enterprises from using diethylene glycol as an ingredient in toothpaste after a number of countries banned the sale of toothpaste containing this chemical, according to the General Administration of Quality Supervision, Inspection and Quarantine.

    Imports and exports of toothpastes containing this substance known as DEG are banned starting Wednesday.

    In exceptional cases where the chemical finds its way into toothpaste mixed up with other ingredients, quantities must not exceed limits set by importing countries or regions.

    Most Chinese toothpaste firms have abandoned DEG as a production raw material.

    The administration maintained that toothpaste containing DEG would not jeopardize the health of consumers.

    Citing a report by experts from the Ministry of Health, the administration said the long-term use of toothpaste in which the DEG content was less than 15.6 percent would have no adverse affect on people’s health. None of the data suggested that toothpaste containing this substance had directly led to the human poisonings.

    Recent random inspections by domestic quality authorities found most domestically made toothpaste contained no such substance. The quantities of DEG in the few detected were less than 10 percent, it said.

    There is no definite criterion or quality limits on the use of DEG in toothpastes across the world, but the United States, Japan and Canada have all recently banned the selling of toothpaste containing this substance.

    The deaths of dozens of people in Panama who took medicine containing diethylene glycol imported from China sparked fears abroad about China-made products. The chemical — often used in antifreeze — was used as a sweetener in toothpaste.

    The safety of Chinese food and drug products has been in the news lately. Former director of China’s State Food and Drug Administration (SFDA) Zheng Xiaoyu, was executed on Tuesday for taking bribes worth more than 6.49 million yuan (about 850,000 U.S. dollars) and dereliction of duty.

    The consequences of Zheng’s dereliction of duty have proved extremely serious. Six types of medicine approved by the administration during that period were fake. Some pharmaceutical companies used false documents to apply for approvals.

    On Monday, China’s quality supervision authorities blacklisted 14 companies for planning to export substandard food products and banned them from further exports.

    A total of 34,400 cases of fake and low-quality food have been cracked by China’s industrial and commercial authorities in the first half of this year, involving goods worth 67.7 million yuan (8.9 million U.S. dollars).

The number of people opening accounts in the Chinese A-share market is dipping below 100,000 for the seventh consecutive day.(File Photo)

    BEIJING, July 11 (Xinhua) — The investor tide is starting to recede a fraction in the Chinese A-share market with the number of people opening accounts dipping below 100,000 for the seventh consecutive day.

    Statistics from China Securities Depository and Clearing Co. Ltd. show that only about 79,500 new accounts were registered on Tuesday in the A-share market, the major stock market in China.

    More than 100,000 new accounts have been opened daily on the Chinese stock market since March 12 as share prices surged in spectacular fashion. The number dropped to 99,957 on July 2 and has stayed under 100,000 since.

    The strong market has attracted more than 29.24 million new accounts to the Shanghai and Shenzhen stock markets, including 19.2 million A-share accounts.

    By Tuesday, the total accounts on both Shanghai and Shenzhen stock markets — A-share accounts, B-share accounts and managed fund accounts — had reached 107.8 million.

    China’s benchmark index — the Shanghai Composite Index — climbed from 2675.47 points at the end of last year to peak at 4544.47 points on May 29. The index has seesawed since the Chinese government, determined to rein in the runaway growth of stocks, raised the stamp tax on securities trading on May 29.

    BEIJING, July 11 (Xinhua) — China’s drug watchdog said here Wednesday it is continuing its probe into methotrexate, a drug routinely prescribed to treat acute leukemia and rheumatoid arthritis, but had eliminated production errors as a cause of the problems.

    The drug, made by Shanghai Hualian Pharmaceutical Co., was suspended from sale and use after adverse reactions were reported on July 6 in several leukemia child patients in three hospitals in Guangxi Zhuang Autonomous Region and Shanghai, according to the State Food and Drug Administration (SFDA).

    SFDA Deputy Director Wu Zhen said “the team sent to reevaluate the drug has uncovered no problems with the raw materials used to make the drug nor any violations of production procedures.”

    He added that investigators were shifting their attention to transportation, storage and administration of the drug.

    Wu said possible adverse reactions to methotrexate are clearly stated in the drug information.

    ”However, it is abnormal for so many patients to have adverse reactions in the same short period of time after being injected with batches 070403A and 070403B of the drug,” he said.

    ”We’ll keep the public informed about the state of our investigations,” he promised.

    Some children felt pain in their legs and some experienced difficulty walking after being injected with the drug.

    According to WHO statistics, there have been 12,502 reports of adverse reactions to methotrexate worldwide, including a handful of very serious cases.