TODAY'S BRIEFS 19 June 2008

TODAY'S BRIEFS 19 June 2008

China, Japan seal pact for undersea gas exploration
China and Japan have reached an agreement to jointly develop natural gas fields in the East China Sea, historically a major point of contention between the two countries, the Wall Street Journal reported. Under the terms of the agreement, Japanese companies will be allowed to to invest in and claim proportional profits from several Chinese-run projects at the Chunxiao oil fields, which Japan calls Shirakaba. Two Chinese companies are already drilling at Chunxiao and the area around the Longjing oil fields, both of which lie close to the median line dividing the two countries' waters. The two countries will also jointly explore the area for new sites. Japan and China held several rounds of talks concerning the oil fields since 2004. China had previously rejected Japan's proposal for joint gas exploration.

US, China sign long-term energy, environment agreement
The US and China finalized a 10-year plan to cooperate on energy and environmental goals and launched talks on a bilateral investment agreement as the fourth round of the two countries' Strategic Economic Dialogue came to a close in Annapolis Wednesday, the Wall Street Journal reported. The energy and environment agreement includes the set up of five Sino-US taskforces to develop action plans for cooperation in power distribution and energy efficiency, water and air pollution and natural resource protection. The two sides also began talks on establishing a bilateral investment agreement, which are designed to facilitate overseas investment through reciprocal rules governing basic issues such as arbitration. US officials also said there was "a reasonably good chance" for both sides to reach such an agreement in the future. The US has bilateral investment treaties with nearly 40 countries, while China has signed such agreements with more than 100 nations.

Stock market gains 5.2%, snapping 10-day skid
Mainland stocks rebounded yesterday, snapping a 10-day decline, Bloomberg reported. The CSI 300 Index, an index that tracks the performance of the 300 most representative A-share stock listings, gained 5.2% to finish at 2,991.27, its biggest advance since April 24, Bloomberg reported. Stocks gained on speculations that the government will intervene to support the market following its 10-day, 22% drop, which seen the benchmark index's price earnings ratio fall to its lowest in two years. The CSI 300 Index has lost US$1.2 trillion since its 2007 October peak.

China begins anti-monopoly probe of Microsoft
China's State Intellectual Property Office has begun an anti-monopoly investigation into Microsoft and several other global software firms, the South China Morning Post reported. The probe comes ahead of the August 1 implementation of China's Anti-Monopoly Law, which seeks to outlaw anti-competitive activity. The investigation reportedly focuses on the high price of computer operating systems and other software being sold on the mainland by multinational software suppliers. Besides Microsoft, no other technology firms were named. In February, the European Commission fined Microsoft US$1.4 billion, adding to earlier fines of US$1.2 billion, based on a March 2004 ruling that Microsoft had abused its dominant market position.

PBOC head: Weak dollar boosting commodity prices
The head of People's Bank of China expressed concern that a weakening US dollar may push up commodity prices, the South China Morning Post reported. Zhou Xiaochuan, speaking in Annapolis at the Sino-US Special Economic Dialogue, said higher commodity prices would in turn force the yuan to rise, adding pressure on inflation. Alan Holmer, the US department of the treasury's special envoy to China, declined to respond to Zhou's concern, saying, "only the secretary of the treasury speaks about the dollar, and I'm not going to break that here".

Shui On to invest $2.2bn in Dalian software hub
Shanghai-based developer Shui On Land will jointly invest US$2.2 billion with partners in the second phase of a software project in Dalian, Bloomberg reported. The project, Dalian Tiandi Software Hub, will include apartment blocks, shopping malls, IT training schools and R&D facilities. An initial part of the project to be opened by December 2009. Hong Kong-listed Shui On will control 40% of the development, while its sister company Shui On Construction and Materials will own 22%. Dalian-based Yida owns the remaining portion. Dalian Tiandi will be Shui On's second IT hub project, following the development of a similar hub in Shanghai.

Tibet leg of torch relay cut to one day
The Olympic torch relay will proceed into Tibet on Saturday, as organizers abruptly altered a schedule that was originally had torch reach Lhasa on Thursday, AFP reported. Original plans for a three-day torch tour of Tibet were cut to one day this weekend. State media reported that a firm date for the end of a ban on foreign tourism to the region would be announced after the end of the Tibet leg of the torch relay. Tourists were banned from entering the region following riots that erupted in Lhasa on March 14.