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Investment bankers are pinning their hopes on a big rise in future mainland merger and acquisition deals to come to the rescue of a sharp slowdown in Asian M&A activity. Tagalder is positioned in these big upcoming events.

Most of the larger Japanese manufacturers look at China as the most important place for their future investments, the Nikkei Keizai Shimbun reports on Sunday. The paper surveyed 32 major manufacturers and 25 of them see China as the most important option for future investments.

The companies also try to tap into the large consumer market, companies expect to boom now China has entered the World Trade Organization (WTO). But the majority sees China rather as a production base. Most expectations for sales in China are expected from the Japanese firms working in China.

The production of chemical products for the Japanese market tops the list, an industry where companies like Asahi Kasei Corp. and Mitsui Chemicals Ltd are expanding their activities in China.

Food producers also move to China, as the domestic economic crisis in Japan forces them to look for more cost-effective ways of production.

Japan is already China's largest trade partner, followed by the United States.

Deregulation and the opening up of the domestic capital market is rapidly evolving. A handful of foreign companies are awaiting approval to sell shares to mainland investors. Meanwhile national brokers will for the first time be allowed to set their own commission fees starting from May.

Among the first foreign companies expected to get official approval to issue China's first depositary receipts are Hong Kong listed China Mobile (H.K.), China Resources Enterprises Ltd., Shanghai Holdings Ltd. and Beijing Enterprise Ltd., Bloomberg reported on Thursday. With the depositary receipts investors on the mainland can use the local Renminbi currency to buy shares of the companies, currently traded in Hong Kong dollars.

The upcoming possibility is seen as the first step to give the mainland's 60 million investors access to Hong Kong's stock market, the news agency writes. The breakthrough is also regarded as a boost for the depressed financial sector in Hong Kong.

The introduction of the receipts are part of China's measures to further open up its US$550 billion capital market, in line with its commitments made to the World Trade Organization (WTO).

In another effort to increase investment in the domestic capital market, the China Securities Regulatory Commission (CSRC) announced the nation's 121 brokerages companies can set their individual commission fees within a certain range from May 1 on, contrary to the current fixed commission rates, Bloomberg reports on Friday.

The top rate possible to charge on Class A shares reserved for domestic investors will decrease from 0.35 to 0.30 percent. The top rate for Class B shares open to domestic and foreign investors remains 0.43 percent.

Unconfirmed stories from other sources suggest China wants to speed up its financial industries faster for foreign investors than agreed under the WTO protocols. The insurance sector is said to open 18 months ahead of the agreed three years. Also the banking sector is expected to open up faster, but no details are known yet.

China has become world's largest consumer of stainless steel, overtaking the United States and Japan, according to professor Li Cheng, executive vice president of the China Stainless Steel Council.

Li said that China's conspicuous consumption of stainless steel in 2001 was about 2.25 million tons, while conspicuous consumption in the US was 2 million tons and in Japan 1.5 to 1.6 million tons.

China's consumption of stainless steel has been growing at an average rate of 17 percent for the past 10 years, while the world' s average growth rate has been 4 percent to 7 percent. In 2000 however China's per capita stainless steel consumption was only 1. 4 kg, while the world's per head consumption was 4 kg.

Li said China's stainless steel output had been hovering around 300 thousand tons a year for several years since 1990.

The output in 2001 was about 700 thousand tons, but at the same time 1.6 million tons worth 2.2 billion U.S. dollars was imported.

China is expanding its stainless steel production capacity, which will reach 3 million tons per year in 5 years. The stainless steel industry will by then be 80 percent self-sufficient.

Li says China Stainless Steel Council has been and would be devoted to the promotion of the utilization of stainless steel, as well as to services to and the supervision of stainless steel producers.

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