IN BRIEF

Data

Net profits of central SOEs up 14.2%

China's State-owned enterprises (SOEs) that are administered by the central government, or central SOEs, collectively posted a net profit increase of 14.2 percent year-on-year in the first five months of 2011.

This increase was 4 percentage points lower than that of the first four months. The combined net profits of the 121 central SOEs totaled 369.51 billion yuan (39.45 million euros) during the period.

The State-owned Assets Supervision and Administration Commission said revenues for central SOEs rose 24.7 percent year-on-year to hit 7.82 trillion yuan from January to May.

CPI set to reach new high in June

Inflation in June may reach a new high after it hit a 34-month high of 5.5 percent in May, the National Development and Reform Commission (NDRC) said.

However, in the second half of the year the consumer price index (CPI) is likely to taper off from its peak, despite concern over rising pork prices and a drop in grain production following drought and flooding, the commission said.

According to the NDRC, the high inflation rate is mainly due to the rapid increase in consumer prices in the second half of 2000.

Policy

New rules open fund sector to more players

China's securities watchdog loosened restrictions on the country's fund industry to allow more players to sell fund products while domestic mutual funds are struggling to issue new shares in a sluggish market.

Companies with limited or unlimited partnerships that have a registered capital of 200 million yuan (21.48 million euros) and at least 10 fund professionals will be allowed to sell fund products, according to the China Securities Regulatory Commission.

Fund sales in China used to be restricted to fund companies, commercial banks and securities brokerages. Independent fund sales companies have long been barred from the market.

Aviation

Comac seals deal with engine maker

Commercial Aircraft Corporation of China Ltd (Comac) signed a contract on June 20 with CFM International, making the engine maker the sole overseas supplier for its C919 passenger plane's propulsion system.

The LEAP-X1C engine, under development by CFM International, is a joint venture between Snecma - a subsidiary of Safran Group of France - and General Electric. The engine was designated as the only powerplant for the C919, the first Chinese-made trunk liner.

Comac also inked a memorandum of understanding with Ryanair, an Irish budget airline, on working together in research and development, airworthiness and customer services on the C919 project, which aims to test-fly the airliner in 2014.

According to its plan, Comac would complete contract-signing with aerostructure and airborne system suppliers for the C919 aircraft this year.

Construction

COVEC stops Polish highway construction

China Overseas Engineering Group (COVEC) is withdrawing from a $447 million (310 million euros) highway construction project in Poland after incurring heavy losses.

The cancellation comes just two years after the company became the first Chinese enterprise to win a large European highway contract.

The Beijing-based COVEC, a subsidiary of China Railway Engineering Corp, won the bid in 2009 to build two sections of Poland's A2 highway, stretching 49 km from Warsaw to the German border.

The total cost of the A2 highway construction is expected to reach $786 million, 76 percent higher than the original estimate. Its Polish partner imposed a higher construction standard and the price of building materials soared unexpectedly, the company said.

Energy

Vestas inks wind turbine deal with Datang

Wind turbine manufacturer Vestas signed a large contract with the China Datang Corp Renewable Power C Ltd on the delivery, installation and commissioning of 58 V60-model 850-kilowatt wind turbines.

The turbines, to be delivered in the third quarter of this year, will be installed on the Dayuanshan wind farm, located in Wuchuan County in the Inner Mongolia autonomous region, according to a Vestas press release.

The contract also includes a two-year service and maintenance agreement as well as other business-related services provided by Vestas.

Nation to build new hydro power plants

China will invest 400 billion yuan (43 billion euros) in the construction of four hydroelectric dams to help the government boost the share of non-fossil fuels in national energy consumption.

The country will increase the share of non-fossil sources to 20 percent of the national energy consumption by 2030 and to one-third by 2050, said Han Wenke, director of the Energy Research Center at the National Development and Reform Commission.

China Three Gorges Corp will be in charge of the four hydroelectric dams, named Xiluodu, Xiangjiaba, Wudongde and Baihetan, on the Jinsha River, a tributary of the Yangtze River.

The total capacity of the four dams will be 43 million kW, double that of the Three Gorges Dam, according to the company.

Banking

Foreign banks make up 1.83% of the market

Consulting firm PricewaterhouseCoopers (PwC) said foreign-invested lenders make up 1.83 percent of the Chinese banking market.

Total assets of the 127 foreign-invested lenders in China jumped 29 percent year-on-year to 1.7 trillion yuan last year, the consultancy said in a report.

Twenty-two lenders expected a 20 percent to 50 percent rise in revenues this year, while another five banks are likely to see their revenues almost double from last year, the report said.

With the internationalization of the renminbi, foreign lenders will have more business opportunities and their earnings are expected to keep growing over the next three years, said Raymond Yung, PwC's financial services leader for the Chinese market.

ING looks to expand banking business

The Dutch bancassurer ING Group NV plans to pin the growth of its Chinese banking business on servicing the accelerating expansion of Chinese companies overseas and European companies in China.

Robert Scholten, the China manager of ING's banking division, said the company's banking business in China will focus on the corporate side, using its strong foothold in Europe to provide one-stop financial services to corporate expansion across China and Europe.

It will focus on both commercial and investment banking, including lending, cash management, commodity financing, mergers and acquisitions advice, bond issuance and trade settlements, including those in the yuan, for which ING has just been granted a license by the regulators, said Scholten.

industry

Bayer plans to double China sales by 2015

The German pharmaceutical and chemical producer Bayer AG plans to double its sales in the Chinese market by 2015, Bayer AG's Management Board Chairman Marijn Dekkers said on June 22.

"We have very ambitious growth targets for China. Overall, Bayer aims to double its sales in the country from less than 3 billion euros to 6 billion by 2015," he said.

China is Bayer's largest market in the Asia-Pacific region, and its third-largest single market globally. China contributes almost 8.3 percent to its global sales. In 2010, Bayer generated sales of 2.9 billion euros in China, an increase of almost 40 percent from 2009.

China Daily-Agencies