News

    Shanghai to be Asia's logistics center by 2010
    8% Rise in China's Foreign Investment
    China to kick off large action to save energy
   Import and Export of Shenzhen up by 40% in the first two Months
 

Shanghai to be Asia's logistics center by 2010

     By means of building a solid transportation network and logistics system, attracting foreign logistics companies to set up their Asia-Pacific headquarters in Shanghai, and reinforcing policy support in land use and taxation, Shanghai is expediting the development of its modern logistics industry. Shanghai will strive for no less than 10% of annual added value growth of its logistics industry in the next 5 years. By the year 2010, Shanghai will have basically established a modern logistics service system with an internationally competitive edge, and built itself into an important logistics nexus of the world and one of the logistics centers in Asia-Pacific.

     Statistics show that the logistics industry has become a mainstay industry for Shanghai. In 2005, its freight volume reached 678 million tons, of which port throughput was 443 million tons, making Shanghai Port the largest in the world in cargo transport. Its container throughput amounted to 18.084 million TEUs and ranked No. 3 in the world. Shanghai's logistics added value was 255 billion RMB (US$31.88 billion) in 2005, accounting for 13% of its GDP and becoming one of the top four in the service sector.

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8% Rise in China's Foreign Investment

     Foreign direct investment (FDI) into China in the first two months of this year grew by nearly 8 percent from a year ago, the Ministry of Commerce said last week. The figures show China continues to attract foreign investors. FDI flowing into China from January to February totaled US$8.6 billion--up 7.8 percent year-on-year. In the past two months the ministry have worked with 5,136 new foreign backed enterprises--down by more than 5 percent from last year. Hong Kong, the British Virgin Islands and South Korea topped China's major foreign investors.

     The ministry did not give figures for contracted investment--deals already signed but not yet in place. These figures are regarded as an indicator of future investment trends. China, despite its FDI fall in 2005, remains a sound investment location for overseas investors. China attracted US$60.3 billion in FDI last year down slightly from the record of US$60.6 billion posted in 2004. The ministry expects that FDI levels into China will remain similar to last year. But some experts predict that the total foreign investment coming into China may decline in the country's 11th Five-Year Outlines (2006-10).

     The National People's Congress, China's legislator, is expected to discuss a revision of the tax law which would introduce a unified business tax rate this year. Currently foreign firms in China enjoy an income tax rate of 15 percent while domestic firms are taxed at 33 percent. China might see a decline in FDI in the years to come but the country will play a more important role as an overseas investor. Last year, China's outward investment surged to about US$6 billion from US$620 million in 2000.

     In another development, China's trade surplus reportedly narrowed in February at the fastest pace since November 2004. The surplus fell to US$2.45 billion from US$9.49 billion in January, news agency Reuters reported. The decline in the country's trade surplus was attributed to an increase in imports. Imports jumped in February by 30 percent while exports gained 22 percent.

     Last year China's trade surplus amounted to a record of US$102 billion causing deep concern among trading partners in particular the United States which saw its trade deficit with China widen to US$100 billion. Some US politicians have even called for punitive tariffs on all China's exports to the United States.

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China to kick off large action to save energy

     China will speed up effort to build an energy efficient society in 2006, the beginning year of the eleventh five-year period. The State Development and Reform Commission (SDRC) disclosed recently that a large scale energy conservation action will be kicked off in about one thousand companies with high energy consumption. Meanwhile, China will launch an energy auditing system and a reporting system on energy consumption in relation to GDP growth.

     In the Eleventh Five-Year Development Plan, reducing energy consumption is viewed as equally important to economic growth. According to the plan, China will reduce energy consumption by about 20% in relation with GDP growth. Building an energy efficient, environmental friendly society is also one of the heated topics in this year's annual session.

 In 2006, China will strengthen its efforts in macro-economic control, reduce irrational investment and low-level redundant development projects, limit the development of companies with high energy and water consumption and companies which produce heavy pollution. The government is also considering setting up an energy conservation fund this year and promotes a market reform in the price setting scheme on resource products.

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     Import and Export of Shenzhen up by 40% in the first two Months

     According to statistics of Shenzhen Bureau of Statistics, export of Shenzhen grew quickly and domestic sales were prospering.

     In Jan and Feb, import and export of Shenzhen amounted to US$26.956 billion, up by 41.9% compared with the same period last year. Of which, export was US$14.144 billion and import was US$12.812 billion.

     Domestic sales were prospering and consumer price rose slowly. In Jan and Feb, total retail sales of Shenzhen were RMB27.146 billion, up by 14.0% compared with the same period last year. Consumer Price Index was 101.5%, up by 1.5% compared with the same period last year.

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