What's news

Food and beverages

Tighter rule on infant formula imports

A move to tighten import controls on infant formula will likely curb market growth for some smaller, sub-par foreign suppliers and benefit major leading overseas producers, industry analysts said.

Only 41 foreign producers from 13 countries were approved to import their products to China, according to the Certification and Accreditation Administration. They constitute the first suppliers who registered in advance. The list will be updated based on the progress of suppliers' registration. A second cluster of suppliers and list of approved brands are expected to be announced this month, industry analyst Song Liang said.

Song said the new procedures aim to raise the bar for imported formula sold in China and to eliminate foreign brands of smaller-sized original equipment manufacturing.

Metals

Gold bar demand dives in China

China's gold consumption in the first quarter of 2014 eased significantly from last year mainly because of reduced demand for giftrelated gold bars, experts said on May 6.

In the January-March period, gold consumption was 322.99 metric tons, rising 2.45 tons or 0.76 percent year-on-year. Gold jewelry purchases jumped 30.2 percent to 232.53 tons, while gold bar consumption slumped 43.56 percent to 67.95 tons, the China Gold Association said.

Albert Cheng, Far East managing director of the World Gold Council, told China Daily that the "slump of gold bar demand was caused by the decline of gifts" as the government tightened rules on giftgiving by officials.

He added that China's demand for gold will maintain a growth rate of 20 to 25 percent in the next four years.

Trade expectedto grow steadily

Chinese finance companies expanded much more quickly than other sectors in the first quarter, 24.22 percent year-on-year, and reaped 16.06 billion yuan ($2.61 billion) in profits, the China National Association of Finance Companies says.

The profit growth by the finance companies outpaced the 7.4-percent growth in China's gross domestic product in the first quarter and far exceeded the 3.3 percent increase for the country's state-owned enterprises, which reported combined profits of 533.7 billion yuan during the period.

However, most of the finance companies, considered part of the country's shadow banking system, are set up by SOEs such as China Mobile, Sinopec and China Huaneng, a 157-member list on the association's website.

A growing number of Chinese companies, state-owned or private, are looking to finance business for profits, as easy credit is no longer available amid the country's drive to restructure its economy.

Development bank'sbig bond sale

China Development Bank Corp will raise as much as 6 billion yuan selling one-year bonds through Industrial and Commercial Bank of China Ltd as part of a trial to expand its financing channels. The notes were to be offered on May 5 to individual and non-financial institutional investors, the Chinese government bond clearing house said.

Policy

Sales tax extendedto telecom sector

China is to replace turnover tax with value-added tax in the telecom sector, following similar changes in transport and some service sectors.

The new rules become effective on June 1, the Ministry of Finance and the State Administration of Taxation said.

Basic telecom services such as voice calls and bandwidth leasing or sales will be subject to 11 percent value-added tax, and value-added services such as messaging, data transfer and Internet access will be subject to a 6 percent rate. Telecom services for overseas clients will be exempt.

Finance

Monetary policy to remain steady

The central bank said on May 6 it would keep monetary policy steady with timely finetuning to help stabilize economic growth. The People's Bank of China will use a combination of policy tools to keep liquidity ample, it said in its firstquarter monetary policy implementation report. The PBOC also pledged to keep the yuan basically stable while pushing reforms to help introduce greater twoway flexibility in the currency.

Society

Credit database plansent for review

A plan to establish the country's first personal credit database has been submitted to the State Council for review, the Economic Information Daily reported.

The database is to be completed by 2017, with credit information on finances, tax payments, social security payments and traffic violations pooled on a single platform, according to the plan seen by the newspaper, which is a subsidiary of Xinhua News Agency.

Individuals and companies will be given a code that contains all of their credit records, and their credit ratings will be reviewed based on information on the database.

Trade

Services a priority,ministry says

China pledged to step up support measures for trade in services as the world's second-largest economy tries to shift its economic growth model toward consumption and away from heavy reliance on investment and exports, senior officials said on May 5.

"The near future will be a very important period," said Zhou Liujun, director-general of the department of trade in services and commercial services at the Ministry of Commerce.

While foreign trade in goods refers to shipment of commodities, trade in services points to the export and import of intangible products, such as tourism, financial services and telecommunications services. China was the world's biggest goods trader and third-largest trader in services last year, with goods trade accounting for 11 percent of the world's total and that of services 6 percent of the world's total. The growth of trade in services has outstripped goods trade in recent years.

China Daily-Agencies

(China Daily Africa Weekly 05/09/2014 page18)