Economy is powered by leading firms

ZHENGZHOU—The top 500 Chinese companies accounted for more than three-fourths of the national economy last year, but have a long way to go to catch up with the Fortune 500 in terms of competitiveness, investment in R&D and energy efficiency.
A report released by the Chinese Enterprise Confederation (CEC) on Saturday said the top players generated 14.1 trillion yuan (US$1.8 trillion) in revenues, which made up 77.6 per cent of the gross domestic product.
Oil and petrochemical giant Sinopec Corp topped the list of the Top 500 with an operating revenue of 823 billion yuan (US$102.9 billion) and a profit of 21.9 billion yuan (US$2.7 billion), up about 30 per cent and 108 per cent over 2004. The company also led the table the previous year.
The State Grid, China National Petroleum Corporation, Industrial and Commercial Bank of China and China Mobile were ranked second to fifth.
Of the top 500, 23 qualify for the Fortune Global 500 in terms of revenues, said Feng Bing, CEC's executive vice-chairman, at a high-profile forum in the capital of Central China's Henan Province. Nineteen of them applied and were listed in Fortune magazine's ranking for 2006.
The Top 500 are mainly in the petroleum, petrochemical, automobile, banking, telecom and metallurgy sectors. On average, they have 16,074 employees.
However, major indices such as size, productivity, profitability, management ability and competitiveness show a significant gap between Corporate China and Fortune 500 companies, experts said.
The combined business income of China's top 500 accounts for only 9.3 per cent of the Fortune Global 500, and 19.4 per cent of the top 500 US firms, according to Feng.
According to the report, petrochemical, natural gas extraction, banking and ferrous metal industries reaped profits of 31.4 billion yuan (US$3.9 billion) in 2005, accounting for nearly half of the total profits of the Top 500.
Most of the global top 500 companies are in competitive sectors like the automobile industry and services, experts said.
"If China does not change the current pattern of economic development, which is dominated by energy-consuming and polluting heavy industries, it would have to compete with other nations for scarce natural resources," said Liu Jisheng, a professor at Tsinghua University's school of economics.
Ma Kai, minister of the State Development and Reform Commission, said that low energy efficiency continues to bedevil Chinese companies, limiting their competitiveness and returns.
Investment in R&D by 411 of China's top 500 enterprises accounts for only 1.45 per cent of their gross sales revenue, much lower than the 5 per cent international standard, Liu said.
Unlike global majors, which make profits through technology and IPR licensing, Chinese firms mainly rely on sales of products, resources and services, said Yang Du, a professor from Renmin University of China.
Liao Xiaoqi, vice-minister of commerce, urged companies to adopt innovation as the key component of their development.
Another strategy to become more powerful is to compete internationally, said Liao.
Foreign investors paid 90 billion yuan (US$11.25 billion) in taxes last year a rise of 30 per cent over the previous year, it was announced over the weekend.
This compares to zero growth in 2004, according to the report on tax payment by foreign-invested companies, China News Service reported.
FAW-VW Automobile Co, a joint venture between First Automotive Works of Changchun, Jilin Province, and Volkswagen of Germany, tops the list, followed by Guangzhou Honda Automobile Co.
Of the top 100, 57 foreign-invested manufacturing enterprises are listed and contributed more than 50 billion yuan (US$6.25 billion) to the State coffers last year.
In the list of the top 500 taxpayers among Chinese companies, Daqing Oilfield, PetroChina and Bank of China are the top three.
There are 170 resource-based enterprises and 225 tobacco and power companies in the list, which turned in tax of 556.6 billion yuan (US$70 billion) 88 per cent of tax payments by the country's top 500 enterprises.

—The Daily Mail-China Daily news exchange item

Rural reforms entered new stage: Wen

Beijing (China)—China will press ahead with reforms to better safeguard farmers' interests and rights and develop the rural economy, Premier Wen Jiabao pledged in remarks released today.
The annulment of agricultural tax this year marks a new stage of reforms in rural areas, and the government will continue to deepen institutional reform at township level and financial reform at county and township levels, Wen told a two-day national conference on rural reform which ended on Saturday.
China's central, provincial and city governments have set aside more than 100 billion yuan (US$12.5 billion) this year to make up for lost income of grassroots governments in the tax reform aimed at easing the burden of farmers, according to official figures.
Reforms in rural areas involve not just money but also political, social and cultural aspects, the premier emphasized.
"We should strive to complete institutional reform at township level, and reform of rural compulsory education and financial reform at county and township levels in five years or so," he said.
On institutional reform at township level, Wen stressed the importance of altering the functions of government, streamlining staff, reducing expenditure and improving administrative efficiency.
By the end of next year, primary and junior high school students in rural areas will be exempted from tuition and other education expenses, so that every child can have compulsory education, he said.
Rural teachers' salary must be included in government budgets to prevent the re-emergence of random levying of fees under various guises, he said.
Self-governance for villagers and expansion of grass-roots democracy are also important tasks in building a new countryside, Wen said, stressing the importance of democratic elections, decision-making, management and supervision.

—The Daily Mail-China Daily news exchange item

China's internet vigilantes target British ex-pat cad

Beijing (China)—Chinabounder, an anonymous British expat and self-confessed wastrel in his early 30s, likes to boast on his weblog of his sexual conquests of Chinese women, including some of his students.
This has so outraged Shanghai's web citizens that they have resolved to track him down and "kick the foreign trash out of China".
The postings are also critical of Chinese male sexual prowess and contain occasional snipes at womanising and the frustrations of Chinese housewives.
The collection of juvenile if provocative musings on sexual mores in contemporary China may even be a hoax cooked up by artists to gauge the reaction in China to such unsavoury comments from a foreigner.
Access to his "Sex and Shanghai" blog - which attracted millions of readers - is currently denied as the author hides from a wave of contempt. Cyber-vigilantes, furious at his claimed seductions of married women and teenagers, have threatened him with a beating if they track him down and some comments are couched in dangerously xenophobic language.
Shanghai, China's biggest city, has tens of thousands of foreigners, many of them students and language teachers. Intimate relationships between locals and foreigners have grown more common - Mick Jagger alluded to this before the Rolling Stones' Shanghai show in March when he said a ban on certain songs in their repertoire was designed to protect expatriate bankers and their Chinese girlfriends.
There are rarely reports of racial tension. But some reactions to Chinabounder have been furious.
Zhang Jiehai, a professor of psychology at the Shanghai Academy of Social Sciences, describes the blogger as a "piece of garbage" and "an immoral foreigner". "Netizens and compatriots, if you are a Chinese man with guts and if you respect Chinese women, please join this 'internet hunt for the immoral foreigner'," he wrote. Other postings have called for Chinabounder's head and described his girlfriends as "national scum".
Jeremy Goldkorn, the publisher of the influential Danwei website, believes that most people have been measured in their response.
"A lot of the comments about Chinabounder have been fairly moderate - people saying how Chinese men are far worse than Chinabounder, for example, or pointing out that there was no question of rape or anything like that," he said. And there have even been imitators. An overseas-born ethnic Chinese woman has set up a site, ABC Chick in Shanghai, describes herself as Chinabounderess and defends Chinabounder. She then goes on to describe her own flirtations in Shanghai.

—The Daily Mail-China Daily news exchange item

China's NPC consolidates strategic alliance with Brazil

BEIJING—China's top legislator Wu Bangguo finished on Monday his six-day official visit to Brazil, which represented a step further in the consolidation of the two countries strategic alliance.
The visit marked the continuation of the process initiated in 2004, when, at the celebration of the 20th anniversary of the establishment of bilateral diplomatic relations, China's President Hu Jintao and Brazil's President Luiz Inacio Lula da Silva exchanged State visits and vowed to strengthen the friendship and cooperation between the two countries.
Wu, chairman of the Standing Committee of China's National People's Congress (NPC), visited the cities of Brasilia, Sao Paulo and Manaus. In the Brazilian capital, he was welcomed by President Lula and the top authorities of the Brazilian Congress, the President of the House of Representatives Aldo Rebelo and the President of the Senate Renan Calheiros.
On Wednesday, an agreement on the exchange of information between the House of Representatives and China's NPC was signed, the first accord of its kind China has signed with a Latin American country. When he talked about the friendly links between the two nations, Representative Rebelo stressed China's contribution to keep the balance of the world that tends towards an unilateral approach.
In Rebelos words, China and Brazil can significantly help their own people, but they can together help even more, the whole humanity.
Rebelo said he favors a broader bilateral cooperation, which must not be confined to the diplomatic field and must be extended to all levels, institutions and organizations of the society.
Wu and Calheiros had a meeting, in which they stressed the two countries cooperates with each other on major world issues.
The NPC president said both Brazil and China are advocating protecting the interests of countries in development. The two countries, he added, favor the democratization of world relations and the construction of a world with several poles, where the cultural diversity is respected.
The technical and scientific cooperation between Brazil and China, Wu said, is a bright spot of their bilateral relation. He mentioned the launching of two binational satellites and said the countries will continue their cooperate in the space program field.
On Wednesday afternoon, at a meeting with President Lula in Palacio do Planalto, the headquarters of the Brazilian government, the two countries signed an agreement under which China will buy 100 jets of Brazilian Embraer.
The deal between Embraer and Chinese group HNA amounts to some 2.7 billion U.S. dollars. The delivery of the jets will begin next year and last for five years.
Other four agreements between Brazilian and Chinese companies were also signed, relating to the aviation, telephony and infrastructure sectors. One of these deals was also signed by Embraer that extended its joint-venture with Chinese Avic II.
Wu had a meeting on Friday with Latin American Parliaments President Ney Lopes, in Sao Paulo. During the meeting, Lopes stressed the Latin American Parliament and himself favor the One China policy and oppose the independence of Taiwan.
The decision of the Latin American Parliament in 2004 to grant the NPC observer status, he said, was an important step.
From Sao Paulo, Wu traveled to the city of Manaus, capital of the Brazilian State of Amazonas, in which China has important investments.
The Amazonas state Governor Eduardo Braga expressed his hope that the visit of Wu will boost the bilateral cooperation in the electronics, lumber, petrochemical and tourist sectors.
Wu left Manaus for Uruguay for a three-day visit, and he will then go to Chile, the last leg of his South American tour.

—People’s Daily, Daily Mail news exchange item

22 diners recover after eating snails

Beijing—Twenty-two of the Beijing diners who fell ill after eating snails contaminated with parasites have been discharged from hospital after recovering, the municipal health authority said on Sunday.
The Chinese capital has reported 131 people infected by the snails, with 25 seriously ill, since June 24, said the Beijing Municipal Health Bureau.
No deaths have been reported, it said.
Examinations of 85 of the 131 patients show that 76 were aged between 20 and 40, two were under 13, and seven aged at 50 to 57, all of whom had eaten raw or under-cooked Amazonian snails before being hospitalized, the bureau said.
Earlier reports said 87 "snail" patients, who all ate raw or undercooked Amazonian snails in outlets of the Shuguo Yanyi Restaurant in Beijing, were diagnosed with a type of angiostrongyliasis, a disease caused by parasites that affects the brain and spinal cord, and can lead to meningitis.
But the bureau did not explain where the increased new cases contracted the disease.
The Shuguo Yanyi Restaurant was ordered to stop selling the snail dishes on August 8. It made an official apology to customers on August 23.
The restaurant's chief administrative official, surnamed Yue, said Shuguo Yanyi would pay the medical costs of all the patients who ate the snails in the restaurant.
By last Wednesday, two patients, who were hospitalized after eating raw or undercooked snails in the restaurant, had received compensation of 20,000 yuan (2,500 U.S. dollars) and 25,667.09 yuan (3,200 U.S. dollars).
"From now on, Beijing will ban the sale of raw or half-cooked snails reared in fresh water," said Jin Dapeng, director of the Beijing Municipal Health Bureau.

—The Daily Mail-China Daily news exchange item