Highlights from the EO print edition, issue no. 443, November 9, 2009

The Disneyland Effect
Cover
~ China's State Council recently granted approval to Walt Disney Corporation to build a Disneyland theme park in cooperation with Shanghai municipal government.
~ Residents of villages located within the project construction site are expecting generous compensation from local government when their houses are demolished.
~ Over 20 listed firms in Shanghai have claimed that their businesses are related to the Disneyland project. These firms are scattered throughout the real estate, transport, construction, retail, tourism and textile industries.
~ A source from the local municipal government said that the project would be good for the city, as after the 2010 World Expo, it would continue to provide opportunities for a broad range of industries including real estate, tourism and shopping.
Original article: [Chinese]

Regulators to Conduct Stress Tests on China's Banks
Cover
~  Under the guidance of the China Banking Regulatory Commission (CBRC), local banking regulators and commercial banks are conducting stress tests on banks in relation to the risks associated with the huge amount of loans issued before November 1.
~  The move is targeted at determining the amount of credit risk that certain over-heated industries and high risk sectors pose given the recent government moves to crack down on expansion of various industrial sectors experiencing overcapacity.
~   CBRC is afraid that some enterprises won't be able to repay their loans and may even go bankrupt as the Chinese government attempts to eliminate over capacity in certain sectors.
~ The CBRC will require commercial banks to readjust operating strategy, to timely supplement capital and strengthen their risk management systems according to the result of the test.
Original Article: [Chinese]

Centrally Owned Enterprises to Pay Less in Dividends
News, page 3
~ Chinese centrally-owned state firms will pay a smaller cumulative dividend to the government this year because their profits have fallen.
~ COEs are likely to transfer only 38.5 billion yuan in 2009, down from 54.78 billion yuan last year. They started paying dividends, at a rate of 5 percent or 10 percent of profits, only in 2007.
~ Officials had ruled out an increase in the dividend rate to compensate for the shortfall in profits.
~ "The decrease in the dividend is mainly due to the drop in enterprises profits as a result of the financial crisis," an official of the State-Owned Assets Supervision and Administration Commission (SASAC) said.
~ This year's dividends could also be used to invest in mineral resources overseas, the official told the paper.
~ Of the 54.78 billion yuan in dividends handed over to the central government last year, 49 percent went on new capital spending, 36 percent on big firms hit by natural disasters and 15 percent on structural reforms to COES or the development of new industries.
Original Article: [Chinese]

A New Stimulus
News, page 3
~ China is planning to launch a new economic stimulus plan which will be aimed at boosting the development of industries related to energy resources, new materials and bio-medicine.
~ The National Development and Reform is now busy drafting a development plan for such industries, the Economic Observer learned.
~ The plan will be unveiled before the end of this year or at the start of next year. 
Original Article: [Chinese]

Chinese Firms Line Up to Go Global
News, page 5
~ On Nov 3, the China Overseas Investment Fair opened in Beijing.
~  With an ongoing financial crisis and a weak domestic market, Chinese companies are looking to the outside world in order to survive.
~ They're attracted by the chance to upgrade their technology and of forming closer ties with their foreign customers.
~  In the past, state-owned giants have been the dominate players in the move abroad, but now, they are being replaced by private companies.
Original Article: [Chinese] 
 
Suifenhe: A Border City
Nation, page 15
~ Suifenhe, once a small city with only 20,000 registered residents located in Heilongjiang Province, is now listed as one of the "100 most-developed counties in China" with a population of 160,000 and an area of 460 square kilometers. 
~ As one of the first open cities along the Sino-Russian border, the driving force behind the city's boom has been the trade between the internal Chinese migrants and Russian traders.
~ However, since the financial crisis broke out, cross border trade has been affected by the Russian government raising the rate of tariffs imposed on export lumber.
Original Article: [Chinese]

Reform of China Eximbank
Market, page 17
~ China's State Council has recently approved a plan to reform the Export-Import Bank of China (China Eximbank), the country's policy bank tasked with providing financial support to promote the export of Chinese products and services.
~ According to the reform plan, the bank will continue to serve as a policy financial institution, but in the meanwhile, it is allowed to engage in some of the services offered by commercial banks.
~ However, the plan doesn't touch on details such as how much capital the bank can devote to expanding its commercial business.
Original Article: [Chinese]

Innovative China - The Next 60 Years
Industry, page 39
~ What will be the driving force of Chinese industry over the next sixty years?
~ At the China International Industry Fair held earlier this week, most of  the technology on display had been imported from foreign countries. This is a sign that China is now suffering from a lack of innovative technology.
~ Currently, R&D only accounts for 0.56% of Chinese companies' operating revenue. All 2,880 of China's key enterprises spent less than 3% of their revenue on developing new technology and products.
~ The only exception lies in the auto industry. As China has set developing a low emission vehicle as a national strategy and is playing a leading role in the development of the global car industry.
Original Article: [Chinese]