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Tagalder Affiliate Program
2003/10/13

Tagalder has implemented an affiliate program for its Corporate Web System (TCWS) and Real Estate Broker Web System (TWBS). With these web building tools, there is no need for any special technical skill or additional software to build a professional web site. All can be done with Internet browser and simple typing skill.

To subscribe to use TCWS or TBWS, you must first purchase the web host package from Tagalder.  If you purchase the subscription to use TCWS or TBWS, you will have the site name, userid and password setup after registration.

The system is now available through the online shopping. Just click here for details.

Affiliate Program

Tagalder will work with distributors in various region to promote this business in a profit sharing basis. There is no significant investment required from the distributors.

Any interested party, please email to tcws@tagalder.com

Tagalder Corporate Web System
2003/10/13

Tagalder Corporate Web System (TCWS) is designed to build a web site for small business and professionals in a cost effective manner. There is no need for any special technical skill or additional software. All can be done with Internet browser and simple typing skill.

To subscribe to use TCWS, you must first purchase the web host package from Tagalder.  If you purchase the subscription to use TCWS, you will have the site name, userid and password setup after registration.

The system is now available through the online shopping. Just click here for details.

Tagalder Real Estate Broker Web System
2003/07/07

Tagalder Real Estate Broker Web System (TBWS) is designed to build a web site for real estate professional in a cost effective manner. There is no need for any special technical skill or additional software. All can be done with Internet browser and simple typing skill.

To subscribe to use TBWS, you must first purchase the web host package from Tagalder.  If you purchase the subscription to use TBWS, you will have the site name, userid and password setup after registration.

The system is now available through the online shopping. Just click here for details.

Tagalder and Inno Biotech Inc.
2003/01/23

Tagalder's President, Roger Lam, announced that Tagalder is working in partnership with Inno Biotech Inc. of Canada to develop the business in biotech industry.

Inno Biotech Inc. registered under Ontario business act, is a privately owned partnership venture. IBI has established close relationship with many research institutes including University of Toronto and its teaching hospitals. IBI has recruited a number of part time scientists from different scientific areas with many famous leading scientists on board. This establishment enables it having a complete access to majority facilities of these institutions such as animal facility and large instruments laboratories. It also offers   a chance for its clients to contact directly to an experienced staff of highly skilled molecular biologists, geneticists, biochemists, and chemists to respond to questions about protocols, results, or pricing. IBI is prepared to take a project from start to finish by offering technical expertise and a complete array of analytical and synthetic chemistries to support any research efforts.

Dr. Duan, a doctor of  Veterinary Medicine, was an Associate professor; Lanzhou Veterinary Research Institute, Chinese Academy of Agricultural Sciences. He then completed his Ph.D, in 1998 from Gent University, Gent, Belgium and jointed as a researcher and project manager in biotech of Skye Pharmatech Inc., Mississauga, Ontario and Head of Antibody Development, Arius Research Inc., Toronto, Ontario.

He is now the CEO of Inno Biotech Inc. of Toronto. He is a specialist in immunology, biotechnology, oncology, molecular biology and virology.

With his knowledge and practical experience in bringing biotech product from lab work to commercialization, he will head this project and management the technical aspect of the company

Inno Biotech's web site at http://www.innobiotechservice.com is hosted by Tagalder Technology Corporation.

Tagalder's Press Release
2003/01/22

Tagalder and Its high-tech business
2003/01/01

Tagalder's President, Roger Lam, is announcing that Tagalder has started talks of partnership with several high-tech companies to further develop Tagalder's high-tech business.

Tagalder has been working on a Gamma ray scanning technology, which can be developed into container cargo scanning system and other security system. Gamma ray container scanning system can replace the current X-ray system in the market place and can be more efficient, accurate and cost effective. For details, click the image.

Tagalder thorough its associated companies have been working with Medical Services Inc. and Niumanchiang Bioengineering Incubator Co., Ltd. in the biotech development. Tagalder also adds another new partner, Inno Biotech Inc. to this list.

Tagalder technology Corporation has added the following products into its distribution list:

• A patented U-Touch cell hand free set
• Cell accessories
• Energy Saving Light Bulb
• Fire extinguisher equipment and powder

China to Sell Mining Rights to Foreign Investors
2002/11/03

The Chinese government has approved the establishment of China Mining Lianfa Auction Company, the first state-level company that gives foreign investors access to the mining rights to the country's abundant mineral resources.

The Chinese government has approved the establishment of China Mining Lianfa Auction Company, the first state-level company that gives foreign investors access to the mining rights to the country's abundant mineral resources.

The company will begin business with investors from at home and abroad for the surveying and exploitation of mineral resources in China later this year, a company executive said Wednesday.

The China Mining Association (CMA) will be the principal shareholder of the new company which has a total registered capital of 10 million yuan (1.2 million US dollars).

Foreign investors can bid for the mining rights through their branch companies registered in China or joint ventures, said Wang Yanguo, president of the auction company.

"It is time for foreign investors to have full access to China's mining market now," said Wang, who is also secretary-general of CMA.

Wang said the company would take charge of the evaluation of mineral resources, the release of authoritative information and the examination of the bidders' qualifications.

In the past, the Chinese government awarded most of the mining rights for free to designated domestic mining companies, and it was very difficult for foreign investors to gain those rights.

With its entry into the World Trade Organization last year, China decided to open its mining market to foreign investors.

Deputy Minister of Land and Resources Shou Jiahua said last week China would replace the administrative examination and approval of mining rights with public bidding and auctioning.

In August, China auctioned the mining rights to a gold mine for the first time in eastern Jiangxi Province.

In March, Australia's Griffin Mining Company, through its joint venture in Hebei Province, got the first mining license to solid minerals exploration in China.

Currently, foreign capital has access to the exploitation of mineral resources including gold and rare earth. However, the government still controls the mining rights to strategic mineral resources like uranium.

Industry sources said opening the mining market to foreign investors will benefit the mining industry that is in great need of capital and advanced technology.

Tagalder's Annual General Meeting On November 8, 2002
2002/10/03

Canada's Ivanhoe to explore gas in Sichuan
2002/09/20

A Canadian company, Ivanhoe Energy sealed a 30-year deal with PetroChina to tap into China's largest gas producing region in Sichuan, media report.

Under the deal, Ivanhoe's subsidiaries Sunwing Energy Ltd and Pan China Resources will take about 80 percent of the revenues to develop the 364,000 hectares area until costs are recovered and 45 percent after that, Reuters reported on September 19.

The Canadian company will also shoulder all exploration risks. PetroChina, which is the country's largest oil and gas producer, will take a 51 percent stake in any fields that are discovered, China Daily reported.

According to Ivanhoe, the Zitong base in Sichuan province, where the companies will explore, has a gross natural gas resource potential of five trillion cubic feet, Canadian News Wire (CNW) wrote.

Sichuan also accounts for 30 percent of the national total of gas consumption, China Daily reported.

"The demand for clean burning natural gas in China is expected to grow dramatically over the next decade. Ivanhoe will be clearly positioned to benefit from this trend," Ivanhoe's Chairman David Martin is quoted in CNW.

Approximately 120 million people live in the Sichuan basin and an existing transportation grid within the Zitong block is connected to many industrial and populated areas, CNW stated. In addition, a major trunk line is also being built to ship gas to users in Eastern China via Wuhan.

"This is the first of two very significant production sharing contracts we expect to sign to exploit natural gas in the Sichuan Basin," a statement by Martin on the Ivanhoe's website said.

The company has the right to negotiate another agreement for the one million acre Yudong Block in neighboring Chongqing municipality, the statement said. The negotiations are expected to begin before the end of next year.

China's oil and gas resources are largely untapped by foreigners and multi-billion dollar supply deals, Reuters reported on September 20.

Officials have been worried over foreign nations or companies endangering China's economy by jeopardizing its fuel supply, according to an article in the Wall Street Journal on July 29.

However, foreign contracts and the investments of domestic oil and gas producers have been growing, as China realizes the need to build its oil reserves and use more natural gas to offset its reliance on dirty oil, Reuters reports on September 20.

In August, China awarded a US$13 billion contract to Australia's LNG Pty. Ltd. to supply gas to a terminal in Guangdong province, Reuters writes.

Earlier this month domestic giant Panva Gas Holdings Ltd., which has exclusive rights to supply gas three cities in central China, obtained a 6 billion Renminbi (US$ 725 million) loan from the Bank of China for more pipelines, Bloomberg reported on September 13. The company plans to invest 10 billion Renminbi on gas projects in the next three to five years.

According to CNW, the Chinese government is looking to convert to a market driven price system for residential and commercial gas-use over the next few years

China now able to invest overseas
2002/09/08

As China's economy continues its rapid and healthy growth, China has possessed the capabilities of launching overseas investment, said Shi Guangsheng, Minister of Foreign Trade and Economic Cooperation, here Sunday.

Shit told the 2002 China Investment Forum in this city of Fujian Province that after China's entry into the World Trade Organization, as the Chinese market has gradually been opened, other members of the WTO will in turn provide China with more access to their markets and facilitate China's trade and investment overseas.

All this will result in favorable conditions for Chinese enterprises to "go out" for transnational operations, he said.

Presently, China's economy and foreign trade rank the sixth in the world. In 2001, total imports and exports of China's foreign trade were valued at 510 billion US dollars; as of the end of this July, China's foreign exchange reserves have reached 246.5 billion US dollars.

China has already had a significant number of enterprises possessing strong technological and economic resources, familiar with internationalized operations and management, and adapted to the heated competition in the international market, Shi said.

The minister stressed that the promotion of the "going-out" of these enterprises will not only expand the space for the development of China's economy, but also facilitate and enrich economic cooperation between China and other nations and regions, and inject new vitality into the multilateral and bilateral economic and trade relations.

As of the end of June 2002, China has set up 6,758 non- financial businesses abroad, the contractual investment has totaled 13.2 billion US dollars, and the Chinese side has contributed a total investment of 10 billion US dollars; the cumulative values of oversea construction contracts have reached 105.3 billion US dollars, business volumes completed have totaled 75.2 billion US dollars; the cumulative values of overseas labor supply contracts have reached 28.1 billion US dollars, business volumes completed have totaled 22 billion US dollars, and the number of labor supplied to overseas has topped 2.6 million person- times.

Projects of joint development of overseas resources have achieved significant results; cooperation projects in developing overseas resources such as oil, gas, minerals, forestry and fishery are currently running smoothly and their economic benefits have become apparent.

Chinese enterprises have also had certain stride in establishing overseas research and development centers and launching agricultural cooperation, the official said.

Tokyo and Shanghai bourses in talks
2002/08/24

The Tokyo Stock Exchange (TSE) and the Shanghai Stock Exchange (SSE) are in talks to form an alliance that could eventually result in possibilities for Japanese and Chinese companies to list on the other country's market, Financial Times (FT) reports on Friday.

TSE-director Eisuke Nagatomo stated on Thursday that the talks concentrated initially on non-controversial areas such as information and technology sharing, FT writes. Though if the talks proceeded as planned, the relationship should deepen to allow joint listings, he added.

SSE vice-president Wu Yalun is expected to visit Tokyo in September to promote its bourse to Japanese firms expanding their presences in China, Reuters reported on Thursday, citing the Nihon Keizai Shimbun newspaper.

A formal announcement of the alliance is expected by the end of this year, according to FT. After the possible agreement, the bourses would need to seek approval for it from the China Securities and Regulatory Commission (CSRC), which in the past slowed moves by the two exchanged to get together, the newspaper writes.

Shanghai so far always has given more attention to creating links with the Hong Kong and New York stock exchanges, and the ones in Singapore and London. While Japan never really concentrated extensively on attracting business from the mainland, FT mentions. However, the talks seem a logical result of the growing interest in each other's markets in the past years.

The SSE's total market capitalization of listed firms is less than 20 percent of the TSE's, Reuters reports.

Stephen Lyon Joining Tagalder AS the Corporate Finance VP
2002/07/23

Peter Chun, CEO of Tagalder (2000) Inc., welcomes Mr. Stephen Lyon joining the group as the Vice President, Corporate Finance, USA.

Mr. Stephen Lyon with VIP business tycoons in Hong Kong

Stephen Lyon, has over 8 years of Investment banking experience and spent the last 2 years living in Hong Kong, working as Managing Director of Asia for an Investment Bank based in the U.S. With a strong background in High Tech, Telecommunications, the Entertainment Industry, Energy, Healthcare, biotech, consumer products, Etc., he has completed numerous transactions, both public and private.  He works with many institutional funds and focuses mainly on the US and Asian Stock Markets, doing equity financing for public companies. His concentration now is on emerging growth companies either public, or private with the potential to go public. His experience includes managing the execution of financing transactions, including initial public offerings, follow-on offerings, private placements, convertible debt offerings, reverse mergers and venture capital transactions.  His mergers and acquisitions and financial advisory transactions have included both seller and buyer representations.

Considering the recent investment activities and many other ongoing merger and acquisition projects, Mr. Lyon will strengthen Tagalder's contacts to the North American financial market.

Tagalder Technology Corporation, a co-founder of Technologies for China
2002/07/14

Mr. Roger Lam, the President of Tagalder Technology Corporation, is glad to announce that the corporation is now the co-founder of an international initiative entitled “Technologies for China Business”.

Peter Chun, CEO of Tagalder (2000) , when visiting the Faculty of Engineering Open Day (May 31, 2002) of Hong Kong Polytechnic University, was invited to become a co-founder of the initiative entitled Technologies for China Business and being an industrial collaborator of the project on combinatorial auction software development.

Peter Chun, CEO of Tagalder

and

Dr. John Sum
Assistant Professor, Dept. of Computing,
Hong Kong Polytechnic University

The collaborators of these projects are from various places across the globe, including Canada, China, Japan and Hong Kong. The broad of action member consists of experts from academic, commercial, IT industry and venture capital. The broad of action member is listed below.

Academic (Hong Kong)

• Dr. Jimmy Chan, School of Science and Technology, Open University of Hong Kong.
• Dr. Chi-sing Leung, Department of Electronic Engineering, City University of Hong Kong
• Dr. John Sum, Department of Computing, Hong Kong Polytechnic University, Hong Kong (Adjunct Associate Professor, Institute of Software, Chinese Academy of Science, China)
• Dr. Fan Zhang, Department of Computing, Hong Kong Polytechnic University, Hong Kong

Academic (International)

• Professor Ming-shu Li, Designated Director, Institute of Software, Chinese Academy of Science, China
• Professor Hong Shen, Graduate School of Information Science, Japan Advanced Institute of Science Technology, Japan
• Professor Jie Wu, Department of Computer Science, Florida Atlantic University, Boca Raton, USA
• Professor Gilbert Young, Institute of Software, Chinese Academy of Science, China

Industry

• Peter Chun, CEO, Tagalder Group, Canada
• Pi Leung, Chairman, Chung Sen Group, Hong Kong
• Gary Sum, Marketing Director, Billion Group, Hong Kong
• Ricky Wong, General Manager, United China (Guang Zhou) Apparel Limited
• Steve Wong, Managing Director, Billion Group, Hong Kong

The initiative can eventually develop useful and theoretical viable business systems fitting the future business environment for China. As all know that China will be the 3^rd biggest market in the world, in addition with China’s accession to WTO, demanding on business systems, such as procurement system and supply chain system, will increase dramatically, not to mention the forecast data provided by IDC Inc. and Gartner Group.

Tagalder and its technology companies will be willing, able and ready to jointly develop software into commercial products with all the members.

China's Fast Catching Up With India
2002/07/13

India is now the undisputed world leader in software services outsourcing but China will become the next dominant player in the same space by 2006, according to a new report by Gartner. By then, both countries will be generating more than US$27 billion each in revenue.

Said research director at Gartner, Dion Wiggins: "China is not often thought of as a center for software development but changes are afoot ..."

The Drivers
China's membership in the World Trade Organization (WTO) and the country playing host to the 2008 Olympics games will serve as major drivers for the Chinese software and application development service industries.

"China is in a unique position. Its' WTO membership and the 2008 Olympics will be significant drivers over the next seven years. But, as China reaches milestones, such as reform of its banking system required by WTO membership, growth in the software and application development services should start to slow in 2007 and reach growth rates similar to India's 35 percent by 2010," said Wiggins.

"Chinese entrepreneurs are also now returning home with the knowledge of western business and entrepreneurial skills just like when Indian entrepreneurs returned to India seven years ago. The cycle that started the Indian software industry seven years ago will therefore be replicated in China," Wiggins added.

An early market driver in China was the establishment of laws requiring software developed after March 2000 to support a Chinese national standard.

Enterprises wanting to sell their software products in China must support this standard and have to engage in the localization of their existing software. For the most part, this work will be done in China because it requires developers to read and write Chinese.

A Win-Win Situation
According to Gartner, while China may pose as a long-term competitor to India as it becomes the next major software outsourcing hub for the world, Indian software and application companies will also realize that there will actually be more opportunities for them to expand their businesses into China.

Take for instance the two leading Indian companies, Infosys and Satyam. They have taken the opportunity to expand their operations into China and are well positioned to work with large multi-nationals there.

According to Wiggins, Gartner believes that by 2004, 60 percent of the top 25 Indian software and application development service companies will have a direct presence or a joint venture in China.

"Forty percent of the software and application development service revenue generated in China will be from companies of Indian origin, with much of the profits leaving the Chinese economy and boosting the Indian economy," Wiggins commented.

As Indian software and application development service organizations expand into China, they will transfer their process and methodology across China, enabling Chinese competitors to evolve quickly over the next two years. However, they will not be in a position to challenge the majority of Indian companies until 2004.

"If Indian software and application development service companies do not fully engage in this opportunity, they will only delay the inevitable growth by another two or three years, missing significant short-term and long-term opportunities that can be derived through the Chinese market," Wiggins cautioned.

Tagalder and its technology business

Tagalder has now two companies in the technology sectors. Tagalder Technology Corporation is in the Internet, electronics and other patented technologies. Tagalder Global Innovation Inc. is in the multimedia and computerized lighting production business.

Tagalder is positioning for its business development in the Great China region.

Beijing issues Action Plan for 2008 Olympics
2002/07/12

Beijing organizers officially released a guiding document for the 2008 Olympics on Friday, one day before the first anniversary of the city's successful bid for the 2008 Olympics.

The document, titled "Beijing Olympics Action Plan", will become the guideline for the city's preparations for the Olympics.

It covers five major areas including the overall strategic concept, development of Olympic venues and related facilities, national environment and infrastructure development, social environment development, and strategic support.

The draft document, worked out by experts from different fields, was issued in March to solicit opinions from the public.

It drew great attention from all walks of life across the country, as the organizers received up to 2,000 calls and more than 300 letters from not only the host city, but also other parts of the country, including HK, Macao, and Chinese Taipei.

Opinions on the document also came from the Beijing-based commercial institutions of such countries as the United States, Japan, Spain, Italy and Canada.

The statement said that the public have shown common concern about those hard-to-handle issues closely related with people's livelihood.

"Such as the prevention and control of air pollution and water pollution, augmentation of greenery coverage in the city, lessening of traffic jams, planning and construction of Olympic venues, and improvement of urbanites' quality," said the statement.

To the delight of the organizers, some people proved to be quite professional and their advice had great feasibility.

"Their advice is also enclosed with detailed scenarios. Some even offered their works of research or invention, which they said would be free to the organizers if the organizing committee like," said the statement.

In addition, the responding public expressed great desire to get involved in the preparations for the Olympics, inquiring about the bidding process in course of the construction of Olympics venues, how to offer donations or sponsorships, and how to use the Olympic emblems.

Meanwhile, the public is also concerned about how the 2008 Games could leave a unique legacy for both China and sports and how such legacy could fully show China's national features.

With more than 50 amendments or supplementations made on the basis of the public's opinions, the final version of the action plan is more in accordance with Beijing's economic and social circumstances, becoming more practicable and more of a guideline document.

"The action plan is a vivid example of how the broad masses are concerned about the Olympics, and how they wish to get involved in and contribute to the Olympics," said the statement.

Cheung Kong, Hutchison to Buy BOC Shares
2002/07/10

Cheung Kong (Holdings) Ltd. and Hutchison Whampoa Ltd., two companies owned by billionaire Li Ka-shing, will buy shares in BOC Hong Kong (Holdings) Ltd., Li said.

The two companies will buy a ``substantial amount'' of shares in BOC Hong Kong, more than those Standard Chartered Plc has agreed to purchase, Li said at a press briefing. Standard Chartered is paying $50 million for less than 2.5 percent of BOC Hong Kong's stock being sold.

"We are confident in the Bank of China," Li said.

BOC Hong Kong, the listing company of Bank of China (Hong Kong) Ltd., a unit of China's biggest foreign-currency lender, is selling as much as $2.8 billion of shares in Hong Kong this month. The company began international marketing of the shares Monday in Singapore. The lender will price the shares July 22 and list in Hong Kong on July 25.

"It's not appropriate for us to comment during the prelisting period,'' Clarina Man, spokeswoman at Bank of China (Hong Kong), said in response to Li's purchase plans.

Spokesmen for sale arrangers Goldman Sachs Group Inc. and UBS Warburg also declined to comment.

When Everything Is Made in China
2002/06/09

During the past few months, Intel Corp. announced a $100 million investment in Shanghai to assemble Pentium 4 microprocessors. Dell Computer Corp. moved its giant PC-making facility from Kuala Lumpur to Xiamen. The provincial government of Shenzhen said it would provide $5 billion to boost its integrated-circuit industry. It's not hard to connect the dots. "China is becoming a manufacturing superpower," Kenneth Courtis, Goldman, Sachs & Co.'s vice-chairman for Asia, says, "and the momentum seems unstoppable."

The big question is whether the world economy is becoming so dependent on China as an industrial lifeline that it will soon be dangerously vulnerable to a major supply disruption caused by war, terrorism, social unrest, or a natural disaster. In other words, will China's importance to global manufacturing soon resemble Saudi Arabia's position in world oil markets?

Among developing nations, China has been the largest recipient of foreign investment, averaging about $40 billion per year during the late 1990s. Membership in the World Trade Organization will result in even higher levels. U.S. companies are shifting manufacturing from Malaysia, Thailand, Indonesia, and even Mexico to China. Toshiba Corp. is making its TVs on the mainland, and Sony Corp. is manufacturing its PlayStations there. Taiwan's companies produce half of all their information-technology products in the country.

China's advantages are numerous. Its wage rates are a third of Mexico's and Hungary's, and 5% of those in the U.S. or Japan. China's investments in education and training are attracting research facilities from companies such as IBM, Motorola, and Microsoft. The critical mass of factories, subcontractors, and specialized vendors has created a manufacturing environment with which few can compete. China is not just an export platform, either; its large and expanding domestic market is another attraction.

The mushrooming investment also reflects the obsession among global CEOs to lower production costs by outsourcing whatever they can to large-scale specialists. According to Bear, Sterns & Co., 50% of all manufacturing could be outsourced by 2010. Flextronics International Ltd. , the world's largest manufacturing subcontractor, is illustrative. It operates in 28 countries on behalf of companies selling everything from cell phones to washing machines. Its revenues have grown from $100 million in 1993 to an estimated $14 billion today. Its business in China is projected to double this year over 2001 and could reach 40% of its worldwide production in two years, up from 24% in 1998.

How worried should the U.S. be? To be sure, in the 1980s, one heard false alarms about Japanese dominance of high-tech industries. But China is far more open to foreign investment, along with greater cost advantages and more rigorous higher education.

No one would say China dominates manufacturing--yet. But in April, Congress' General Accounting Office criticized the Clinton and Bush Administrations for failing to analyze China's growing sophistication in semiconductor technology. In the June issue of Harper's, investigative journalist Barry Lynn underscores the vulnerability of the U.S. economy to global supply lines that originate in China and Taiwan and are designed for just-in-time delivery to our critical industries. Michael Marks, chairman and CEO of Flextronics, has concerns, too. "I worry that CEOs are overreacting to short-term cost considerations," he told me. "Too much concentration in China could lead to serious supply disruptions. It would be better if their manufacturing facilities were more geographically dispersed."

Unfortunately, it is no one's job to analyze the aggregate risks. Chief executives are rightfully seeking profits in a hypercompetitive world. China is admirably opening its economy to foreign investment. The national-security community is understandably focused on terrorism and weapons of mass destruction. Threats to highly complex global supply chains seem not to be the subject of any national or international group.

There isn't an easy answer for every problem, of course. But it is not too much to ask the Bush Administration to create a joint government-business task force to examine key questions. Is the approximately 90% of all foreign investment that is geographically located in China's coastal provinces a dangerous concentration? Should Washington take another look at tax and tariff incentives to make the entire Caribbean Basin--Mexico, Central America, and the islands--more attractive to foreign manufacturers? Should multinational companies be encouraged to hold larger inventories closer to home? Does China need to beef up its security around its vast industrial parks?

For a quarter of a century, Washington and Wall Street have wanted China to become an integral part of the world economy. Their wish has been granted, and now it's time to come to grips with the implications.

China to loosen control on Forex
2002/05/24

Beijing - China will gradually loosen its control on foreign exchange, People's Bank of China governor Dai Xianglong said on Thursday, without giving a detailed timetable. Institutions under the PBOC are vigorously preparing for a future with a convertible Chinese currency.

According to Dai the country will promote full convertibility of the Renminbi as its foreign exchanges reserves grow, Xinhua reports.

Forex reserves rose to US$233.8 billion at the end of April, up US$21.6 billion from the start of this year, Dai said at the 9th General Assembly of the World Savings Banks Institute (WSBI).

He said China will loosen guidelines regarding the floating interest rates and keep the Renminbi stable against other currencies.

Measures to tighten or loosen the foreign exchange control have fluctuated depending on the size of the capital flight from China.

At the end of the 1990s US$ 50 to 100 billion has left China illegally, depending on the source of information. Tough measures by the State Administration of Foreign Exchange (SAFE) brought back the outflow to around US$ 10 billion annually.

In the long run forex controls are expected to disappear as governor Dai indicated yet again. The China Foreign Exchange Trade System (CFETS) in Shanghai, a department of the PBOC responsible for the exchange of the Renminbi into foreign currencies, is expected to hold a press conference on June 3.

Currently, the CFETS is the only location where banks can trade in Renminbi and change it into US dollars, HK dollars, Yen or Euros. Under a convertible Renminbi the center would lose its function. However, in June it will announce new services in exchanging foreign currencies.

"They are hedging their own future," says a foreign banker in Shanghai. Now banks can trade in foreign currencies without any interference from the financial authorities. The new service is expected to remain a voluntarily one.

China Could Lead 21st Century Fashion, Cardin Says
2002/05/19

Pierre Cardin, who helped to change the face of fashion in the 20th century, believes Chinese designers might become the fashion leaders in the new millennium.

Coming up to his 80th birthday, the indefatigable head of a global design empire shows no signs of slowing down.

"I would like to die with my fashion," he said at a wild Saturday night party at his Riviera mansion to celebrate the 40th anniversary of the James Bond movies.

"Yves Saint Laurent stopped. He is free. He is not my cup of tea. He liked to stop, he stopped. I like work, I work," he told Reuters in a stream-of-consciousness interview, slipping from English to French and back again as he reflected on his legacy and the departure of another fashion icon from the haute couture scene.

He and James Bond have plenty in common -- style is everything, marketing is vital, the brand rules supreme.

Avant-garde inventor of the space age look, Cardin is a world leader in brand licensing. Up to 200,000 people work under the Pierre Cardin trademark with 900 licenses in 140 countries. That trademark is one of the most instantly recognizable in the world. Where he first trod, the Calvin Kleins and Tommy Hilfigers of fashion followed.

"I am an adventurer like James Bond but in a different sense," he said. "I am a Marco Polo in a different way. I like traveling round the world all my life from Sydney to Los Angeles, to China, to Brazil, to Japan and Africa."

Cardin, the first couturier to bring high fashion to the high street back in the Fifties, revels in an industry that knows no boundaries. "Today fashion is very international," said the designer whose collar-less Beatle jackets are an enduring symbol of the Swinging Sixties.

So who then does he think will lead the fashion world in the 21st century?

Cardin, who constantly travels the globe both as a designer and a peace ambassador for UNESCO, said: "I am sure Chinese fashion will become very strong.

"China has an awful lot of talent. It is a very big country and I know so much talent in China. Maybe it will become one of the leading countries in the world for couture," he said.

Cardin, who has set up operations around the globe from China to Japan and Russia, has an astonishing range in his portfolio -- from designing furniture, wallets and crockery to owning Maxim's, one of the most famous restaurant names in the world.

And for the globetrotting entrepreneur, this is what it is all about -- a shrinking globe where individual vision still counts. "Fashion is not about nationalities, it's just talent," he concluded.

Hong Kong as an Offshore Centre for the Renminbi
2002/05/12

"The trend is for the renminbi to become fully convertible. But before the renminbi is convertible, Hong Kong will be given priority to attempt any new product launches."

Dai Xianglong
Governor of People's Bank of China
18 February 2002

In February, Governor Dai Xianglong of the People's Bank of China responded favorably to the question of banks in Hong Kong accepting renminbi deposits during a visit to the Special Administrative Region (SAR). As the renminbi is yet to be freely convertible, the initiative, if realised, would make the SAR the natural choice for offshore centre for the renminbi in the interim. Already, the renminbi is increasingly accepted for payment at local retail outlets with the rise in Mainland travelers in recent years. It is a matter of time before the renminbi becomes freely convertible. An offshore centre in the SAR would not only facilitate the evolution to its full convertibility but also endorse Hong Kong's position as a leading international financial centre of China and the Asia-Pacific Region.

RMB Offshore Centre

Since the late 1970s when China opened up its economy for foreign trade and investment, capital flows in and out of China have increased rapidly. Total merchandise trade increased tenfold in US dollar terms between 1981 and 2001. Foreign direct investment (FDI) inflows totalled USD350 billion during 1993-2001, accounting for more than half of the FDI poured into Asia outside Japan during the period. China's capital outflow, albeit less noticed, has also been on the rise, making China the world's eighth largest FDI provider in the mid-1990s.

China's economic realignment with the world has given rise to demand for the renminbi and this demand will grow as the country's economic prowess becomes increasingly visible on the international stage. A World Bank report forecasts that mainland China's share of world exports would double from 3.5% in 1999 to 7.3% by 2005. China's pledge to gradually open up its services and financial sectors to foreign players upon its World Trade Organization (WTO) entry would in particular create demand for the renminbi. Participation of foreign investors in the domestic equity market as well as insurance and fund management industries is being gradually liberalized, and the renminbi business opened up to foreign banks.

China abolished all exchange control on current account transactions in 1996, in a bid to facilitate increasing external trade and investment. However, the renminbi is still not freely convertible into other currencies as China has maintained exchange control on capital account transactions. Approval is still required for changing the renminbi into foreign currencies for acquisition of foreign assets or for repatriation of funds. Travelers are allowed to carry a maximum of RMB6,000 cash when leaving the Mainland.

As is the case for most developing economies, capital control is essential to protect the Mainland financial system from excessive capital flows. Also, the unpredictable and probably erratic behavior of China's external balances in the initial years of its WTO entry would make China cautious in liberalizing its capital control.

An offshore currency market would inevitably emerge if the pace of capital account liberalization is not synchronized with the growth of external demand for a currency. For instance, the emergence of the Eurodollar market in the 1950s was the response to the reluctance of ex-Socialist countries to place their US dollars back into the United States for fear that their assets would be confiscated by the US government. US residents' shift of US dollars offshore to circumvent the interest rate ceiling imposed on domestic US dollar deposits since the 1930s also contributed to the growth of an offshore US dollar market in Europe.

The euroyen businesses transacted in overseas financial centers such as Hong Kong and Singapore are another case in point. The rapidly rising yen and Japan's huge current account surpluses in the 1970s, a result of its highly competitive manufactured products in the world market, prompted its companies to relocate their processing plants to low-cost areas in other parts of Asia. The increasing yen circulation abroad coupled with the policy of maintaining tight restrictions on Japanese residents opening offshore yen accounts or engaging in foreign exchange transactions gave rise to offshore yen transactions. China's economic development and the pace of liberalising exchange control are likely to lead to similar demands for an offshore renminbi centre.


One Country, Two Currencies

Hong Kong has been in the forefront in the renminbi's circulation outside the Mainland given the deepening economic integration between the two places. Bilateral trade between Hong Kong and mainland China climbed from HKD501 billion in 1991 to HKD1,228 billion in 2001, while cross-boundary passengers increased by 180% to over 56 million during the same period. The sizeable flows of people and goods between the two places have led to significant demand for the renminbi outside the Mainland as well as increasing circulation of renminbi notes in Hong Kong. Similarly, the Hong Kong dollar is also popular in the Mainland and a recent research work has suggested that currency substitution probably exists between the Hong Kong dollar and renminbi in South China.

Despite the reunification in 1997, Hong Kong and the Mainland have remained two distinct currency regimes. Under the principle of "one country, two systems", Hong Kong essentially acts as a special currency regime in China running on free market principles with its own currency. On the other hand, the Mainland has continued to implement capital control to maintain its currency and financial stability.

Yet there exists a delicate relationship between the renminbi and the Hong Kong dollar as both are linked to the US dollar, although in different ways. The Hong Kong dollar has been pegged to the US dollar through a currency board system since 1983, while the exchange rate of the renminbi has been kept within a tight range of the US dollar in the past eight years even in the midst of the Asian financial crisis. The tripartite relationship among the renminbi, the Hong Kong dollar and the US dollar is unique and conducive to the development of an offshore centre for the renminbi in Hong Kong.

Over the past decade, Mainland enterprises have made use of Hong Kong's eminent financial status in the country to gain access to the global capital market through Hong Kong's stock market. In the past 10 years, the bulk of Mainland enterprises' foreign equity capital has been raised through Hong Kong in the form of H-shares of state-owned enterprises or through "red-chip" companies. Thus, Hong Kong has become a major conduit for overseas investments into the Mainland.

Hong Kong -- A Natural Offshore Centre for the RMB

The proposal for banks in Hong Kong to accept renminbi deposits can pave the way for Hong Kong to become an offshore centre for the renminbi and extend its role as a key financial centre. While the initial concept appears to focus on letting local banks absorb the renminbi notes circulating outside the Mainland as deposits, a more meaningful and full-fledged business of renminbi deposits must include allowing Hong Kong dollar deposits to be switched into renminbi deposits, and vice versa.

Hong Kong's unique position makes it a natural and preferred choice for an offshore centre for the renminbi. Among the world's top 100 banks, a total of 79 have a presence in the territory. Hong Kong's currency and banking systems are separately managed from those of the Mainland, yet Hong Kong is a SAR of China. However, the main concern lies in the different pace of exchange control between Hong Kong and the Mainland, since accommodating full-fledged renminbi deposits in Hong Kong is conditional on a relaxation of China's current exchange control practices.

As the Hong Kong dollar is freely convertible into other currencies and there is no capital control in Hong Kong, an offshore centre for the renminbi in Hong Kong would in essence affect Mainland's exchange control in the capital account. The major challenge therefore is to find a means of relaxing the Mainland's capital control with respect to Hong Kong only.

Some proposed capital market reforms currently under consideration by the Mainland government virtually touch on the same issue. For instance, the Qualified Domestic Institutional Investors (QDII) scheme, which would allow Mainland investors to invest in Hong Kong's stocks in a controlled manner, and the Chinese Depository Receipts (CDR) scheme, which would enable Hong Kong-listed companies to raise funds in China's stock market, involve transactions in both the Hong Kong dollar and the renminbi. Exchange control on capital account transactions would be an unavoidable issue when China further deregulates and opens up its financial markets.

The technical complexity of the relaxation of capital control for making renminbi deposits in Hong Kong possible should not be underestimated. Such relaxation would involve managing money flows between Hong Kong and the Mainland without jeopardizing the Mainland's objective of maintaining financial and currency stability. It is unlikely that the control over capital account convertibility would be totally liberalized in the next few years, as the Mainland government has concerns about financial stability. In the circumstances, any move towards making Hong Kong an offshore renminbi centre needs to complement the development of the Mainland's financial and currency systems.

Conclusion

If an offshore centre for the renminbi were to be realized in Hong Kong, it would be probably the most unique offshore centre ever. After all, the tripartite relationship among the renminbi, Hong Kong dollar and US dollar is also distinctive. In this light, the technicalities involved should not be underestimated. As the exchange control over the capital account is unlikely to be dispensed with shortly, the challenge would be setting up an offshore renminbi centre compatible with the Mainland's capital control rules in the interim. To the Mainland, it is essential that the proposed offshore centre would not upset the timetable of liberalizing the currency, giving rise to undesirable consequences.

Online Hotel Booking For Your Next China Trip
2002/05/05

Tagalder Technology Corporation has incorporated an online hotel reservation system into its web site at http://www.index-china-travel.com.

As the travel industry becomes increasingly global in its nature so underdeveloped markets such as China are embracing the industry as a central pillar of growth. Tourism is a growth industry in China no matter how poor the level of infrastructure, accommodation, internal transportation or amenities. China holds foreigners fascinated, and also to a great extent, its own people. To look at the burgeoning Chinese tourism industry as simply one of importing foreigners is now too limited. Surely, the number of foreigners visiting China has grown annually for the last decade, yet it is the potential for domestic tourism that will propel the industry forward. Additionally, for a number of years it will inevitably be necessary to run the two sectors of the tourism industry side-by-side.

Across China people are realizing that tourism is a money-maker. Twenty-four of China’s 31 provinces, municipalities and autonomous regions have made tourism one of their pillar industries, and Hong Kong and Macau are already well-established destinations. The tourism industry directly employs a growing number of people annually in attractions, tourist sites, hotels and restaurants. But tourism naturally impinges on the fortunes of China’s airlines, car rental companies, restaurant trade and a hundred other sectors.

There is also the question of China’s outbound market. A 1999 survey by the China Consumers' Association ranked traveling third in all desired expense items among Chinese consumers. Growing annually and at present following the patterns of Chinese immigration over the years, Australia, UK, USA etc., but increasingly a section of Chinese society is traveling abroad for pleasure. Most of this is to Hong Kong and Macau but it is a growing sector. The domestic market is booming, locations such as Hainan Island, Beijing and Qingdao are evidence of this.

Ultimately the Chinese tourism market is about foreigners visiting. At the moment this is largely group-based but the prospects for independent travel grow annually. According to the World Tourism Organization 625 million tourists visited a foreign country, a 2.4% global growth, in 1998 with receipts, excluding air fares, growing 2% to US$ 445 billion.

China's tourism sector is expected to earn US$ 14 billion of foreign exchange in 2000 while domestic tourism revenue is projected to reach RMB 260 billion (US$ 31 billion). By then, tourism revenue will account for 5% of China's GDP. China's tourism revenue accounted for 4% of GDP in 1998. Tourism-related foreign exchange is projected to reach US$ 40 billion by 2010, while domestic tourism revenue will reach RMB 1.3 trillion (US$ 156 billion). At present China attracts 24 million foreign tourists annually, while the number of Chinese travelers going abroad has grown to 8.4 million.

JP Morgan bullish on China market
2002/05/04

The China Research division of JP Morgan said Friday that institutional investors have predicted that China's economy and the H-shares and Red chip markets are on the verge of a rally.

Ken Ho, head of China research of JP Morgan in the Hong Kong Special Administrative Region (HKSAR) said, "Domestic consumption would offer a strong growth potential towards the second half of this year, and sectors benefiting most from deregulatory changes include telecom, power, airlines, and oil and gas - the four pillar industries."

Ko said mixed macroeconomic numbers for recent months, rising liquidity, both internally and externally and the currently cheap valuations of shares are pointing to the bullish direction.

"On the Telecom sector, we'll see a continued increase in subscribers at a very fast rate on the introduction of competition. On the Airline industry, consolidation is the trend of development.

"On the oil and gas sector, we can see an improvement in efficiency of the companies which can expand their reserves via overseas acquisition as well as exploration and commercialization of gas reserves," Ho said.

China's carrying out of progressive reforms has been recognized by institutional investors from major financial centers, he said.

The investors expressed their confidence in the reforms at the China Conference: Roadmap to China's Industrial Reform, which took place in London, Singapore and Hong Kong SAR from April 29 and May 3, he said. The conference was organized by JP Morgan.

"Industry experts expressed satisfaction that China's reform that is on-going and progressing in a determined manner. During the conference, investors in Europe want to know more about the general direction of reform, whereas the Asian investors are more interested in the implementation details," he said.

Ho is also sanguine that the so called qualified domestic institutional investors will appear in the second half of the year, acting as catalyst for the China market. "H shares will benefit most from their emergence to be followed by the red chips," he said.

China fourth largest trading nation – WTO
2002/05/03

Geneva – China's accession into the WTO and the global economic downturn have pushed the nation into the fourth position as global trading nation, the WTO said in a report disclosed on Thursday.

"Although China's trade expansion was curtailed by the weakness of its principal export markets, it still recorded an outstanding high growth for both imports and exports," the report says. China's trade now exceeds that of the Middle East, Africa and Latin America, when Mexico is not included. The EU was seen as one entity.

China's export over 2001 was 266 billion US dollar, up 7 percent year-on-year, while its imports rose to 244 billion US dollar, up 8 percent year-on-year. "China's strong trade performance in 2001 was again outstanding in the region although it also weakened sharply in the course of 2001," the report says.

China's positive development contrasted sharply with that of other Asian countries, that were much harder hit by the global downturn. That global downturn was caused by bursting of the global IT-bubble, sluggish demand in Western Europe and – to a lesser degree according to the WTO – to the effects of the terrorist attacks on September 11 last year.

"The regions and countries with the strongest export decline in 2001 were those trading intensively in IT products — East Asia and the United States. Some of the East Asian traders that are highly dependent on IT products recorded an unprecedented export and output decline (e.g. Singapore, Chinese Taipei)," the WTO writes in a press release.

Visa International to join China UnionPay
2002/04/27

Visa International, one of the world's leading payment solutions, is considering the purchase of stakes from China UnionPay Co Ltd to share the network resources, said Xiong Anping, chief representative of Visa's Chinese affiliate in Shanghai yesterday.

The China UnionPay Co Ltd, better known as "Yinlian" in Chinese, specialized in creating a new network linking all of the country's lenders.

China UnionPay was owned by 85 financial institutions. The Industrial and Commercial Bank of China, the Bank of China, China Construction Bank, the Agricultural Bank of China and the Communications Bank of China invested 90 million yuan (US$10.8 million) each in the 1.65-billion-yuan venture.

"If all things go smoothly, Visa International will become the 86th shareholder of China Unionpay, " , Xiong said.

Visa needs to share network resources with domestic bankcard issuers, and buying shares from the China Unionpay is its first step, Xiong said.

The number of Chinese people who have traveled overseas ranked the ninth in the world, with the number reaching 12.13 million last year. However, only three percent of Chinese tourists held international bankcards and only 1.74 percent of transactions were covered with bankcards,19 percent less than that of Japan.

It doesn't mean Chinese tourists weren't willing to use bankcards, but the length of time it takes for domestic banks to handle bankcard transactions abroad deterred them, Xiong said.

The overseas spending by Chinese tourists reached US$12 billion last year, and if all the transactions were made through bankcards, domestic banks could have made US$120million of commissions, said Xiong.

Domestic banks will speed up their services soon, Xiong added.

Less foreigners made purchases with bankcards in China, so there is a need for Visa International to join hands with China Unionpay, he said.