Highlights from the Economic Observer, issue no. 379 August 4 2008

Two Government Reports Say Real Estate Save Unlikely
Cover story
Two just-published policy reports show that macro-regulators have noticed a stabilization of property prices and don't plan on saving the market, despite that calls for rescue measures have intensified over the past two months. At a meeting in early July with regulators, property developers pushed for looser credit policies. But those likely fell on deaf ears, as one source at the National Development and Reform Commission told the EO: "The tone of the NDRC has already been set, with stable growth as the goal. I don't think that policymakers will loosen things up just for the real estate market." Analysts expect real estate prices to continue to slide for the rest of 2008.
Original article: [Chinese]

Merge, But Don't Cross the Antitrust Line
News, page 3
The new Anti-monopoly Law may create an interesting conundrum for a swath of state-owned enterprises required to consolidate by 2010. Rules passed last month by the state assets watchdog called for 149 state-owned enterprises to be reduced to between 80 and 100. But the tsunami of mergers needed to fulfill that mandate could require heavy scrutiny - and thus be bottlenecked - by the Anti-monopoly Law, which came into effect on Aug 1.
Original article: [Chinese]

Opportunities and Uncertainties for Microcredit
Nation, page 9-11
Though China's banking authorities have lowered the threshold for microcreditors, which had been excluded from the official financial system since the first one was established three years ago, their fate remained unclear as they operate under various restrictions. An EO special investigates a microfinance pioneer in Pingyao, Shanxi and the 30-year old underground financial system in Wenzhou, Zhejiang.
Original articles (Chinese): [1] [2] [3]

Yuan Appreciation Loosens
Money & Investment, page 17
The Yuan presented a fluctuating appreciation curve last month, ending the unilaterally strong appreciation against the US dollar. An official from financial and economic affairs committee of National People's Congress, the top legislative body in China, said that it would likely signify changes in the Central Bank's monetary policy---that is, using the exchange rate to boost economic development.
Original article: [Chinese] 

China Postal Savings as a Micro-loan Bank?
Money & Investment, page 19
In a recent so-called experience exchange meeting, China Postal Savings (CPS) outlined its development strategy as a financial institution targeting small-and-medium enterprises and farmers. A participant in the meeting revealed to EO that in the next half of this year, the CPS would focus on expanding its individual business loans services and micro-loan services for farmers.
Original article: [Chinese] 

Hangzhou Bank Touches Down in Beijing
Money & Investment, page 19 
On August 1, the new Beijing branch of Hangzhou Bank, a commercial bank based in the capital of Zhejiang province and established in 1996, went online. The branch's president said that the bank would continue to target medium-and-small enterprises.
Original article: [Chinese]

China's SOEs Failed to Win Australian Infrastructure Contract
Corporation, page 25
Yilgarn Infrastructure Limited, a group dominated by five Chinese SOEs including China Railway Materials and Sinosteel failed to win an Australian infrastructure contract for Oakajee Port. Sources said Yilagarn failed partly due to Australian worries that its resources and infrastructures would be controlled by China, as the five SOEs are state-owned by definition and are supported by the Export and Import Bank of China. The development shows that when trying to take advantage of overseas markets, Chinese SOE's face significant hurdles in overcoming local misgivings.
Original article: [Chinese]

PetroChina to Siphon off 5% of Staff in 3 Years
Corporation, page 28
For the purpose of controlling labor costs, PetroChina board chair Jiang Jiemin said on July 18 that PetoChina planned to cut down the total number of staff by five percent in the coming three years through retirement, post-merger adjustments, contract terminations, and reduced recruitment. Furthermore, some staff with expiring contracts will not have their contracts renewed.
Original article: [Chinese]