Highlights from the EO print edition, Issue Wrap No. 476, July 5

China Likely to Introduce New Stimulus Measures
Cover
~ China's economic outlook seminar, which is usually held in the middle of July every year by the State Council, was held at an earlier date this year at the end of June. The advancement of the seminar date has negatively influenced market attitudes.
~ On June 30, a source who attended the seminar revealed its tone to the EO: "Everyone is worried about the next half of the year's economy."
~ In an interview with the EO, Yin Zhongqing, vice director of the National People's Congress Finance and Economic Committee said, "it is possible for China's macro-economy to rise drastically in 2010, but it also has the risk of decreasing drastically."
~Due to concerns over the recent decline in economic indexes such as the purchasing manager index, urban fixed-asset investment, and real estate and automobile sales numbers, China is likely to launch a new round of economic stimulus measures.
Original article: [Chinese]

NDRC Stops Approving the Issuance of Government-backed Bonds
News, Page 3
~ On July 1, an official from the National Development and Reform Commission, China's major economic planning department, told the EO that the commission will stop approving applications by local financing platforms to issue bonds. The bonds previously issued were guaranteed by local fiscal revenues.
~ The official said the move is in line with the State Council's circular issued on June 10 to require local governments to make an overall review of the debts of their financing platforms.
Original article: [Chinese]

China to Promote Biological Husbandry
News, page 3
~ China plans to promote biological husbandry, particularly the biological breeding industry, in the coming years, according the National Development and Reform Commission's project to develop the biology sector outlined in the 12th Five-year Plan.
~ This indicates that China will pay more attention to the development of the genetically modified (GM) seed industry. As of the end of last year, the central government had already invested 26 billion yuan into GM biotechnology fields.
~ In the above project, the biological breeding industry has replaced biological medicine and ranks number one among the sub-sectors of the biology industry. This project echoes the statement made by Premier Wen Jiabao last November that China would promote new medicine and the biological breeding industry in the future.
Original article: [Chinese]

Technology-based COEs to be Acquired by Industrial COEs
News, Page 6
~ Technology-based centrally-owned enterprises (COE) are launching the first round of a 2010 restructuring campaign of centrally-owned enterprises.
~ The EO learned that the General Research Institute for Nonferrous Metals, a typical technology-based COE which specializes in nonferrous metal research, will be incorporated into the China Iron and Steel Research Institute Group, also a COE which serves as a base for the research and development of metallurgy and as the authoritative agency for metallurgical analysis and testing.
~ In addition, HydroChina Corporation, a COE who specializes in the engineering and construction of water resources and hydropower projects nationwide, will be acquired by SinoHydro Corporation, China's leading dam builder.
~ The EO learned that dozens of technology-based COEs have also reported their restructuring plans to the State-Owned Assets Supervision and Administration Commission (SASAC). All of the technology-based COEs involved have chosen to be acquired by industrial COEs.
~ The SASAC promised to trim down the current number of COEs to between 80 and 100 by the end of 2010.
Original article:[Chinese]

Foxconn Moves its Plants to Henan Province
Nation, page 10
~ Foxconn, the world's biggest electronics manufacturer, has decided to move some of its factories from Shenzhen to Kaifeng, the capital city of Henan Province, and employ 100,000 local people.
~ Kaifeng's city-level human resource and social security bureau is in the process of recruiting employees for Foxconn in order to lure their business. This is the first time a local government has performed this type of job. Nanyang city, with the largest population in Henan, has been designated to recruit 6,000 people for Foxconn. This is not an easy task, so the government has promised to provide a subsidy of 600 yuan to each employee who works for Foxconn for over half a year.
~ Aside from recruitment assistance, the Henan government has also been doing its best to create a sound business environment for its potential giant taxpayer. For example, it has prohibited the local media from negatively reporting on the company, especially on the suicides of 12 Foxconn employees that occurred this past year in Shenzhen.
Original article: [Chinese]

Chinese College Graduates Desert Big-cities
Nation, page 13
~ Afraid of  inflated housing prices, employment pressure and terrible traffic in big cities like Beijing, Shanghai and Guangzhou, more and more Chinese college graduates are choosing to work in smaller cities and towns.
~ Wang Yanjun, a post graduate of Guangzhou Zhongshan University, has decided to work for a hospital located in Jiangmen, a small city in Guangdong Province. Another example is Xu Bo, a post graduate with the University of International Business and Economics, who has refused a job offer with Deloitte Touche Tohmatsu and has instead chosen to return to his hometown of Xian, the capital of Shanxi Province.
~ According to a survey conducted by Fudan University, among all the college graduates in Shanghai's universities, 80 percent are willing to work in cities around Shanghai and some of them even desire to move further away.
~ As Xiong Bingqi, a professor with the Shanghai Jiaotong University, said, though the trend of migration to medium-sized and smaller cities is mainly attributed to the high cost of living and the difficulties of finding a job in big cities, the central government's policy to promote development of the economy in central China has also ensured a stable future for "big-city deserters"
Original article: [Chinese]

China to Fix Bulk Commodity Futures Trading Industry
Market, page 22
~ At present, over 200 companies who registered as a bulk commodities ebusiness, but in fact provided an electronic platform for futures trading, have formed an influential market outside of the trading floor, similar to the three futures markets in Zhengzhou, Shanghai and Dalian.
~ Because scandals in this sector such as a company boss embezzling the maintenance margin of clients were often exposed by the media, China's State Council has organized officials from seven ministries and commissions to launch an investigation into these companies.
~ A source from China Securities Regulatory Commission said, "the investigation will involve over 100 bulk commodity electronic trading companies, 25 of which, are from Shandong Province."
Original article: [Chinese]

Why is Vanke Reducing its Property Prices?
Corporation, page 25
~ On June 4, the Shenzhen subsidiary of Vanke Group, China's largest residential real estate developer, reduced the price of its small-sized apartments from around 20,000 yuan per square meter to 9,000 yuan, triggering the spread of the rumor that Vanke is cutting the prices of all its properties.
~ However, Mao Daqing, deputy president of Vanke, has denied the rumor, claiming that what his company is doing now is merely searching for a reasonable price for its products so as to survive in an increasingly severe market.
~ Recently, Vanke has conducted a survey which shows that 90 percent of home buyers are now buying homes for themselves and their families, indicating that a market with reasonable housing prices is just around a corner. For these reasons, Beijing Vanke is changing some luxury homes into small flats and Du Lihong, a Beta Fact consulting center partner, predicted that more real estate enterprises would be forced to reduce their prices in 2011.
~ Aside from Vanke, the prices of homes in Tianyangcheng, a property project located in Hebei Province near Beijing, have also been reduced from 11,000 yuan per square meter to 7,800 yuan.
Original article: [Chinese]