TODAY'S BRIEFS 14 July, 2008

TODAY'S BRIEFS

RBS won't sell BOC stake
Royal Bank of Scotland (RBS) said it will hold on to its 5% stake in Bank of China (BOC) and pursue a Chinese expansion strategy despite capital difficulties, the Financial Times reported. RBS Chairman of Regional Markets Gordon Pell cited RBS's commitment to its relationship with BOC, which includes formal cooperation agreements in credit cards and wealth management. BOC and RBS currently operate two wealth-management branches in China, but it is thought unlikely that the banks will reach their target of six branches. BOC has plans to operate its own wealth-management branches, while RBS inherited a network of 13 branches when it acquired Dutch bank ABN Amro last year.

Mainland tourists spent US$1.3m in Taiwan
Tourists visiting Taiwan from mainland China have spent US$1.3 million during their trips so far, according to one "conservative estimate," Reuters reported, citing Taiwan media. The 762 tourists visited Taiwan for eight days after arriving on the first direct weekend chartered flights between the mainland and Taiwan. The tourists favored made-in-Taiwan souvenirs, Louis Vuitton handbags and other luxury merchandise. Last week, Taiwan's top negotiator with the mainland said improved ties with Beijing could lessen the impact on Taiwan's economy of a global slowdown.

China's agricultural trade deficit up 14-fold
China's agricultural trade deficit increased more than 14-fold in the first five months of 2008 over the same period last year, AFP reported, citing state media. The deficit of US$7.57 billion came as China imported US$23.75 billion of agricultural products during the period, a 59% year-on-year increase. Agriculture exports increased by 12% to US$16.18 billion. Rising global food prices have prompted Beijing to increase agricultural export taxes and crack down on grain being smuggled out of the country. China is self-sufficient in most staple crops, but relies on imports of some agricultural products, such as soybeans, to meet rising domestic demand.

Zinc smelters cut production to raise prices
Small and medium-sized zinc smelters in China agreed to cut production by 10% in an attempt to lift local prices, Reuters reported. The smelters, which account for 30-40% of China's zinc output, made the move as low prices have pushed some producers to run at less than full capacity. Zinc smelters have also faced power supply issues that led China's largest aluminum producers to cut output by up to 10% last week. Reuters quoted a source as saying that zinc smelters, including Yuguang Gold and Lead, and Hongda, are calling on Beijing to establish a strategic zinc reserve to help stabilize prices. China produces about one-third of the world's refined zinc, used to galvanize steel.

Venture capital up over 70% in 2Q
Venture capital investment in China grew by 73.5% in the second quarter of the year, state media reported. A total of 159 companies received a total of US$1.2 billion in venture capital in the April-June period. Of the enterprises receiving investment, 42.1% were IT firms, accounting for 45.9% of the total investment. So-called traditional sectors made up 22% of the companies receiving investment and 19.9% of total investment.

China Harbour Engineering signs $1bn Nigerian contract
China Harbour Engineering Co signed a US$1 billion contract with the African Finance Corporation to build a road around the Nigerian city of Port Harcourt, Reuters reported. The agreement by one of China's leading engineering firms will create a 125-km, six-lane ring road around the city, the hub of Nigeria's oil industry. State Grid Corporation of China is also expected to be involved in the project, and will upgrade power generation, transimission and distribution systems in the area. In a report issued last week, the World Bank estimated that China's funding for infrastructure in Africa reached US$7 billion in 2006, up from $1 billion in 2003.

Two executed, 15 jailed for 'terrorist and separatist' activities
Two Uighur Muslims convicted of terrorist and separatist activities were executed in Kashgar, Xinjiang, and 15 others were jailed for similar crimes, AFP reported, citing a report by US-based Radio Free Asia. AFP noted that the report could not be immediately verified. Those jailed were given sentences of between 10 years and life imprisonment. All 17 Uighurs were convicted of being members of the East Turkestan Islamic Movement, which Beijing considers a terrorist organization. Last week, Beijing announced that it had detained 82 people who it said had been planning terrorist attacks on the Beijing Olympics.