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| Climbing oil prices signal
a looming energy crisis. |
Renewable Energy Fund Set up
China’s Ministry of Finance has issued its Temporary Measures
on the Administration of Renewable Energy Development Fund. The
measures stipulate detailed rules covering the application, approval,
accounting management, assessment and supervision of key projects
supported by the fund. According to the measures, the fund will
provide free financial aid or discount loans for the development
and utilization of renewable energies with promising development
potential, such as alternative fuels, power generation and heating.
A notable support project of the fund is the development of non-grain
biological energy resources. “The priority in developing
biological energy is to ensure grain safety,” said Zhu Zhigang,
vice minister of finance. “Farmlands should not be destroyed
or reduced in the process of developing or planting biological
energy crops.”
Avoid Science- tech Resources Waste
China’s Minister of Science and Technology Xu Guanhua recently
commented that science and technology resources are being wasted
through redundancy. As an example, Xu points out that just 16
satellite receivers serve the entire United States, while China
has 30, including 8 in Beijing, and plans to build another 50
in the next few years. Xu says China needs more effective science
and technology decision-making and coordination mechanisms. The
Ministry of Science and Technology has established a special organization
to draw up plans for the rational use of national science and
technology resources. According to Xu, most Chinese science institutes
pay too much attention to the technological aspects of their research
projects, and ignore market demand.
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| The State Grid Corporation
of China plans to import power. |
State Grid Corporation to Purchase Power from Abroad
The State Grid Corporation of China (SGCC), which operates about
80 percent of the country’s power grid, says its key task
for 2006 is to actively push forward international energy cooperation.
According to a company official, SGCC plans to establish three
thermal power stations in Mongolia with installed capacity of
more than 1,000kW. The plants are to serve Beijing and other areas
in North China. The first plant is expected to be operational
in 2010. To ensure an adequate sufficient power supply, SGCC is
also working on a strategy to import power from abroad. It is
currently in negotiations with some of its northern neighbors,
including Russia. SGCC hopes that Russia will supply China with
38 billion kWh of electricity annually by 2015.
Urban Dwellers Are Dissatisfied with Price Hikes
A survey carried out by the People’s Bank of China indicates
that urban residents fiercely oppose skyrocketing consumer prices
and that they don’t expect things to change in the near future.
In the second quarter of this year, 24.4 percent of respondents
said housing prices were “too high,” and the percentage
of respondents that were “satisfied” with housing prices
dropped by three percentage points. According to the National
Bureau of Statistics, the consumer price index in April and May
of 2006 increased by 1.2 and 1.4 percent respectively over the
same period of the previous year. Meanwhile, continuing increases
in gasoline and housing prices are also strongly opposed by residents.
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| Development of wind power
stations a key project. |
Two Wind Power Giants Establish Plants in China
A key point of China’s new energy strategy is the expliitation
of wind power resources. According to the State Development Plan,
China’s total installed capacity of wind power will reach
20 to 30 million kW in the next 15 years with an investment of
RMB 140 to 210 billion. Danish-based wind power equipment supplier
Vestas has the largest market share (37 percent) in China, followed
by Spain’s Gamesa (26 percent). The to wind power giants
view China as their most important overseas market, and have established
plants in the country.
Chinese Enterprises Face Difficulty in the Global Market
CEO and Chairman of the Board of Haier Group Zhang Ruimin recently
commented on the difficulties in breaking into the global market.
Zhang said that Chinese enterprises looking to expand overseas
should follow three steps: Leaving the Country, Entering the International
Market, and Making Further Progress. Many Chinese products have
no difficulty with the first step, but they usually stumble at
the second. Zhang said that Chinese enterprises are far behind
global giants, especially those from Japan, in terms of human
resources, capital and technology. To increase competitiveness
in the international market, Chinese enterprises need to increase
their development speed and react quickly to rapidly changing
global market conditions.
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| Prices of anti-cancer drugs
down. |
Prices of Anti-cancer Drugs Fall in Shanghai
Under a new medical policy, the prices of 63 anticancer drugs
will be slashed by an average of 20 percent in Shanghai. The Shanghai
Municipal Government ordered that non-profit medical organizations
should limit their profit margins to 15 percent of cost, and if
the cost is over RMB 500, the maximum profit margin should be
RMB 75. It was the first step taken by the State Development and
Reform Commission to adjust Chinese drug prices. Soaring medicine
costs have long been a major concern and complaint among Chinese
residents.
More Funds Allocated for SMEs to Explore International Market
The central government is strengthening financial backing for
small and medium-sized enterprises (SMEs) in central and northeast
China that intend to explore international markets this year.
According to a document issued by the Ministry of Commerce and
the Ministry of Finance, the percentage of SMEs receiving government
assistance in exploring international markets will be increased
from 50 to 70 percent. In addition, the application procedure
will be streamlined. China established the international market
exploration fund for SMEs in 2001 according to international practices,
to implement the SME Promotion Law and Foreign Trade Law, and
to boost Chinese SMEs’ competitiveness in the global market.
Until now, the fund has provided financial support for some 60,000
projects undertaken by more than 40,000 SMEs.
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