Investment rules

The People's Bank of China issued detailed rules last week allowing commercial banks to invest overseas on behalf of their clients.

The central bank said the move was designed to promote international balance of payments and gradually make the yuan convertible under the capital account.

Qualified commercial banks must separately apply for a licence and quota from the China Banking Regulatory Commission and the State Administration of Foreign Exchange.

The provisional rules, which took effect last Tuesday, did not specify the amount banks would be allowed to invest offshore.

Bilateral ties

Chinese President Hu Jintao said last week that business co-operation has driven the growth of Sino-US relations, and vowed to promote bilateral business ties.

"Strong business ties satisfy the fundamental interests of our two countries and will continue to play an important role in boosting and stabilizing our relations," Hu said.

He also expressed hopes of working together with the US side to enhance mutual trust, deepen co-operation and promote the growth of constructive and co-operative China-US relations in all fields.

Environmental goals

Premier Wen Jiabao called on the nation last week to view environmental protection from a strategic perspective, and warned of the worsening ecological situation in some regions.

Wen said economic growth targets had been easily met in the country's 10th Five-Year Programme (2001-05), but major environmental protection objectives set for the same period were not achieved.

The State Environmental Protection Agency had already expressed a similar message earlier, saying that eight of the 20 environmental goals set for the 10th Five-Year Programme had not been achieved.

These unfulfilled goals include the reduction of sulphur dioxide and carbon dioxide emissions, the effective handling of industrial solid waste, and improvements to wastewater treatment methods.

Share flotation

The China Securities Regulatory Commission said last week that it would allow companies to float shares on the Shanghai and Shenzhen stock exchanges, following a suspension of almost one year.

It said companies would initially be allowed to sell shares to selected investors through placements, followed by sales of additional shares, and finally the launch of initial public offerings (IPOs).

The regulator didn't offer specific dates for the plans, but commission spokesman Dai Biao said that the raising of capital would start before May 1.

IPOs have been suspended since May 2005, when the government started its securities reforms to convert about US$210 billion of non-tradable State-owned shares of domestically listed companies into stock that could be bought and sold on the market.

Legitimate software

The National Copyright Administration of China said last week that China's intellectual property rights watchdog is doing everything it can to promote the use of legitimate software.

It said licensed software is used in all government departments, and that increasing numbers of enterprises and individuals are installing it in their computers as well.

The central government has been attempting to root out pirated software in its offices by earmarking up to 150 million yuan (US$18.7 million) to foot the bill for licensed products.

Local governments have also allocated funds for the purchase of authorized software.

Multilateral trade

China is firmly committed to the multilateral trading system and will continue to actively participate in the Doha Round of trade negotiations, a senior Chinese official said last Wednesday.

Vice-Minister of Commerce Yi Xiaozhun said the multilateral trading system represented by the World Trade Organization (WTO) had played an important role in improving the stability and predictability of the international trade environment.

China is therefore firmly committed to this system and will continue to participate in all WTO undertakings in a constructive manner, he said.

(China Daily 04/24/2006 page2)

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