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The China Currency Coalition (”CCC”) today underscored its view that H.R. 6530, the Trade Enforcement Act of 2008, needs to be strengthened by the addition of language that would treat injurious currency depreciation by China or any other U.S. trading partner as a countervailable subsidy and actionable dumping. While appreciative of the efforts by the bill’s authors, House Ways and Means Committee Chairman Charles B. Rangel and Ways and Means Subcommittee on Trade Chairman Sander M. Levin, to bolster enforcement of U.S. trade laws in other ways, the CCC believes that the continuing undervaluation of China’s renminbi and of other countries’ currencies is a major, overriding trade issue that urgently requires immediate, remedial steps to be taken.

The China Currency Coalition is an alliance of industry, agriculture, services, and worker organizations whose mission is to support U.S. manufacturing and production by seeking an end to Chinese currency undervaluation. The CCC does not endorse candidates for public office. Attached is a list of the CCC’s membership. Additional information on the coalition can be found on its Web

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The Electricity Vietnam (EVN), the country’s biggest electricity producer and sole distributor, will have to pay 4.5 U.S. cents for each imported kWh of electricity, and resell it to local consumers with price of 5.6-11 cents, said EVN deputy general director Nguyen Manh Hung.

The state-owned EVN, which bought 2.67 billion KWh of electricity from China’s Yunnan province in 2007, is building 45 power plants with total capacity of 14,589 MW. The plants, mostly thermoelectric ones, are expected to come into operation in 2010.

The EVN is expected to increase its output by around 15 percent this year, while local demand is estimated to rise by 17-18 percent. In some provinces, the electricity demand increased 40 percent in the first quarter of this year.

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From January to February, China imported 62,000 motor vehicles for 2.26 billion U.S. dollars, up 82.6 percent and 93.4 percent, respectively, on the same period of last year. The growth rates were 63.9 percentage points and 80.8 percentage points higher, respectively.

In February alone, the imports were 33,000 vehicles, up 130 percent, the highest growth rate since January 2007.

Foreign-funded companies accounted for 67.4 percent, or 42,000 vehicles, of the country’s total imports in the first two months, up 70 percent. Among them, wholly-owned foreign firms imported 35,000 vehicles, up 96.5 percent. Their share in arrivals nationwide went up to 56.8 percent from 52.8 percent a year earlier.

Off-road vehicles made up for 50 percent, or 31,000 units, of the total imports, up 140 percent, while cars accounted for 39.6 percent, or 25,000 units, up 45.6 percent.

Japan surpassed the European Union to become the biggest supplier of motor vehicles to China, with a sales volume of 24,000vehicles, up 130 percent. The EU exported 21,000 vehicles to China, up 59.3 percent.

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In a written speech to the fourth annual conference of China financial experts, vice chairman Jiang Dingzhi with the China Banking Regulatory Commission (CBRC) said that guidance would be given this year to broaden investors’ access to rural financial markets.

Current restrictions on investment caps, localities and venture capital financing channels would be loosened for banking and non-banking financial institutions to merge with, acquire or strategically invest in small and medium-sized rural financial institutions, Jiang was quoted as saying by the Shanghai Security News on Monday.

Under the current regulation, any single corporation and its related companies should possess no more than ten percent of the total stakes of a rural banking institution.

He also said that the commission would continue to aid rural financial reform by “steadily” advancing shareholder reforms to diversify the ownership of rural financial institutions.

CBRC data show that by the end of 2007, combined assets of China’s small and medium-sized rural banking institutions nationwide amounted to 5.6 trillion yuan (787.6 billion U.S. dollars), up from the 2.2 trillion yuan in 2003. They issued 1.2 trillion yuan in loans to more than 300 million farmers from 78.17million households, up from 400 billion yuan in 2003.

To be eligible for listing, the rural banking institutions mustensure a capital adequacy ratio of no less than 8 percent and a non-performing loan ratio of no higher than 10 percent.

Apart from the shareholder reform, the government also resortedto what was called the “new-type” rural financial institutions toease the chronic capital shortage in rural China that has aggravated the imbalance between the rural economy and the rest ofthe economy.

Unlike the traditional collective-owned rural credit cooperatives, which has been the major financing channels for farmers, these new institutions in the form of rural and country banks, finance companies and rural mutual cooperatives are privately-owned and established with a clear-cut shareholding structure.

After a trial run in the Inner Mongolia Autonomous Region and Sichuan and four other provinces since late 2006, the experiment was broadened last year as 31 such institutions were established. This year, another 100 are to be set up across the country.

The government also hoped to activate the stagnant rural financial market by bringing in overseas investors. Last December,London-based HSBC opened its first county branch in southwestern Chengdu, becoming the first foreign bank to enter China’s rural financial market.

Previous reports said that the bank had planned to open six to ten more branches in the Chinese interior this year. Some other leading foreign banks, such as Citibank and Standard Charter, havealso shown their interest in the rural financial market.

Although rural China has been viewed as more of a potential market amidst the country’s robust economic expansion, there is still an impoverished rural population of over 20 million, even though it dropped from more than 250 million three decades ago.

According to National Bureau of Statistics data, the per-capita disposable income for China’s urban areas was 13,786 yuan (1,919 U.S. dollars) in 2007, up 17.2 percent, or 12.2 percent year-on-year in real terms. The figure for rural areas was4,140 yuan, up 15.4 percent, or 9.5 percent in real terms.

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This criterion orders refined oil product enterprises to have at least 15 days of oil reserve on the basis of last year’s average sales volume, a move to better stabilize market order.

“This practice has drawn lessons from foreign countries in a bid to enhance the government’s regulating capabilities of the market,” said an official from the Department of Commercial Reform and Development of the MOC on its website.

The government is encouraging refined oil wholesale companies to take a specialization and intensive path, he added.

Those refined oil product wholesalers’ annual sales volumes should surpass 100,000 tons, stipulated the criterion.

Oil products wholesalers must have a minimum storage capacity of 10,000 cubic meters and a one-time crude oil processing capacity of more than one million tons, it said.

In a similar development, the “Administrant and technical criterion for storage enterprise of refined oil product” set the thresholds for relevant players to get into the market, according to the official.

“Against the backdrop of diversified operating entities, different oil source channels and differentiation of services, to formulate industry standards that are in line with both national conditions and industry characteristics, is an important step to foster the healthy development of the industry,” the ministry said.

The two criterions also specified the health, safety and environmental management systems that relevant companies should obey.

As part of China’s World Trade Organization accession commitment, the country opened up its oil retail and wholesale markets to foreigners respectively on December 11, 2004 and December 11, 2006.

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Such is the pace of change, 10 years in property in China is the equivalent of 20 years anywhere else in the world. I have to pinch myself every now and again when I stop to consider the market 10, let alone 15, years ago. So for me to prepare a 20 outlook it is actually sufficient to talk only about 10 years.

Despite today’s choppy waters, and 2008 is shaping up to be a tough year for China real estate, I fully expect average across the board prices to roughly double in the next 5 years, plus or minus 15% or so. Sound like a lot? Taken at a compound rate it is not far from the current GPP growth rate. By, say, 2020 the major cities in China particularly Shanghai as a global financial centre and host to a booming local finance industry with a number of new household names will be the most expensive city in the world to live in.

China is not all about Shanghai and Beijing however. In 5 years time as we look back fondly on a brilliant 2008 Olympic games in Beijing, we will come to realize that this was a turning point for China’s place in the world. The year when all those other cities around China started to enter our consciousness. 10 years hence we can expect markets in places like Shijiazhuang to have become as familiar to investors as Chicago and even for overseas investors to have learnt to pronounce it, just as Americans and Japanese learnt (some of them anyway) to pronounce Leicester and Edinburgh. Today we hear lots about second tier cities, a decade from now I would expect them no longer to be referred to in this way, third and dare I say it fourth tier cities will be experiencing a third or even fourth cycle of investment.

Distant commentators, and others that make a living out of doomsaying, will still be talking about China’s property crash which will still be ‘just around the corner’ but the inevitable will of course be 10 years closer. What makes me so sure of this? Just as night follows day, property booms are followed by property busts, the chain of events set off by housing reform in 1998 will inevitably lead to China’s first property crash. Even today we are hearing talk of a Japanese style economic meltdown and the scenario is worthy of consideration. The important question is when. My best guess is that it lies beyond my 10 year horizon, just. China is still a long way behind where Japan was in the early 1990’s, another 10 years of feast before the famine sets in.

What are today’s far off investment sectors (holiday homes, retirement homes etc) will be considered core investments with specialist developers and operators well established. Chinese insurance companies will have pioneered a new model for pricing retirement home investment risk that will be adopted worldwide and lead to complaints about IP infringements from the Chinese pioneers who forgot to protect themselves in the US. Holiday home markets in locations as diverse as Huangshan, Beihai and Sanya will be serviced by low cost airlines, who to the relief of everyone do not serve food, and be as mainstream as Australia’s Gold Coast, Hawaii and Monte Carlo.

As for taxes, ‘Crispin’s First Law’ of China property tax suggests that property taxes can only increase. Home owners will be paying 0.25 to 1% of property value to the government annually. There will have been a spate of protests about the collection of this tax from those who see home purchase as something they only considered because of government policy, made using loans from a government owned bank and, most likely, from a government owned developer.

To put all this more succinctly, China has become a normal property market, it is mainstream. Property remains an emotive political ball that no politician dares to kick too hard. The most important thing for all this to happen of course is full convertibility of the Rmb which will surprise everyone by being announced sometime between 2010 and 2012, soon after the Chinese currency will become the favourite of souvenir vendors in a tourist spot somewhere near YOU.

Sam Crispin has China experience from 1988 and has been living in Shanghai since 1994. Contact him on samcrispin@msn.com

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Visitors at the ongoing Canton fair, China’s largest import and export exhibition, are surprised to see a booth whose only adornment is a narrow door on a huge wall and a logo of the 2008 Olympics.

A line under the logo says: “Official leather footwear supplier of the 2008 Beijing Olympic Games.” Curious foreign buyers are swarming through the narrow door to see the actual products.

“The Olympics logo says it all. From quality to style, from history to reputation, we believe we are the best,” said a man at the booth, Lu Jia, a sales manager with the Aokang Group, one of China’s biggest shoe manufacturers.

Aokong has spent heavily to tie its goods to the Games. A company must pay at least 16 million yuan (about 2.3 million U.S. dollars) to be an official supplier, according to the Beijing Olympic Committee.

The company is not the only one at the fair, which dates back half a century and usually does about 37 billion U.S. dollars in business, to use the Olympic marketing strategy to lure foreign buyers.

Although many Chinese companies are much smaller than the traditional multinational Olympic sponsors, like Volkswagen, Adidas and Coca-Cola, this year’s Games offers them hope of exporting more.

Another Olympic sponsor, Guangzhou Dayang Motorcycle Co. Ltd, put the event’s logo on a billboard. A manager of the company said more orders came in from Brazil, Venezuela and Colombia, so he believed that using the logo was a profitable decision.

Those without an official sponsorship deal have also found ways to link their products to the upcoming event.

TV giant Changhong Group put up a huge billboard with images of China’s national table tennis team, the most popular sport team in the country. Changhong began to sponsor the team last March.

A digital product manufacturer, Beijing Huaqi Information Digital Technology Co., Ltd., is promoting a designated product of the Olympic museum, a digital pen that “reads” books aloud.

“We’ve got chance to show our products to Juan Antonio Samaranch, the Honorary President for Life of the International Olympic Committee,” said Li Shenghua, the company’s overseas department chief, saying that they would not miss any chance to connect their products with the Olympics.

Olympic sponsors are divided into two categories. Top multinationals and giant Chinese companies are called “Worldwide Olympic Partners” and “Beijing 2008 Partners.” Another 41 companies, most of which are Chinese domestic companies, won the sponsorship and sole supplier title for the Beijing Olympics.

“Everyone knows that the Beijing Olympics will be a superb opportunity for foreign businessmen to enter the Chinese market. But Chinese companies have also found it a good chance to embrace the global market,” said Zhang Yansheng, director of the International Economic Research Institute under the National Development and Reform Commission.

“Aokang already has steady overseas clients. We just want a larger market share” from being an Olympic supplier,” Lu said.

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