China to raise benchmark interest rates, bank reserve requirement

The People's Bank of China (File Photo)

    China will raise one-year deposit and loan interest rates by 0.27 and 0.18 percentage points respectively, to 3.06 percent and 6.57 percent as of May 19, the People's Bank of China announced on Friday.

    The central bank will also raise the reserve requirement ratio for commercial banks by 0.5 percentage point to 11.5 percent as of June 5.

    This is the first time in 10 years that the central bank has simultaneously raised the benchmark interest rates and the bank reserve ratio.

    The move aims to "strengthen liquidity management in the banking system, rationalize the growth of lending and investment and maintaining price stability", the central bank said in a statement on its website.

    "The problems currently facing China's economy are so complex that a single adjustment cannot on its own accomplish all the objectives of macro control policy", said Wang Tongsan, a researcher with the Chinese Academy of Social Sciences (CASS).

    "Raising the interest rates and bank reserve ratio at the same time will help prevent the fast growing economy from overheating and ensure economic stability", said Wang.

    "The decision is reasonable and within people's expectations", said Yin Jianfeng, a CASS financial expert.

    "By doing so, the central bank attempts to impose curbs on excessive investment and the speculative bubble on the stock market, but it is too early to say whether the move will be effective", said Yin.

    China has raised interest rates five times since 2004 and the bank reserve ratio eight times since 2006.

    But the country's urban fixed asset investment was 2.26 trillion yuan (290 billion U.S. dollars) in the first four months of this year, up 25.5 percent from the same 2006 period, according to the National Bureau of Statistics.

    The figure compares with a 25.3 percent rise in the first quarter and last year's growth rate of 24.5 percent, suggesting there had been no fundamental changes in the overall trend in the country's investment growth.

    Meanwhile, newly-added outstanding loans surged to 1.42 trillion in the first quarter, 13 percent up from the same period last year and almost half of the quota set by the central bank for the whole year.

    "As far as the central bank is concerned, the economy is moving too quickly. There is too much lending and too much liquidity, which is why it has adopted a series of austerity measures," said Hu Yuhang, an analyst with CITIC Securities.

    As Chinese shares continuously hit new highs, the mainland's two bourses saw their market value surpassing the country's savings deposits on May 17.

    "We can wait and see whether the interest rate rise brings people's money back from the stock market into their bank accounts", said Yin.

    "That's possible, but hardly probable", he added.

More than 38% of Chinese officials are women

More than 15 million Chinese officials are women, accounting for 38.5 percent of the total, an official report said here Friday.

    The proportion of female officials above the provincial level has reached 10.3 percent, up 1.3 percentage points from 2003, according to the report, written by the National Working Committee on Children and Women under the State Council.

    The percentages of women officials at the municipal and county level have increased to 12.9 percent and 17.2 percent, up 0.7 and 0.5 percentage points respectively, the report said.

    Observers say that Chinese women's status has improved enormously since the founding of the People's Republic of China in 1949 as the country has issued a series of laws and regulations to safeguard gender equality.

    At the end of 2005, there were 241 women in ministerial posts, key provincial decision-making positions, or in equally important posts at state agencies.

    To promote women's political involvement, China's Election Law stipulates that the National People's Congress and local people's congresses should all have women deputies and the percentages of women deputies should be gradually increased.

    However, the report pointed out that women in rural areas are still reluctant to take part in political and administrative affairs.

    Despite the slight rise of female village officials in recent years, women currently only occupy 16.7 percent of the seats in village committees nationwide, the report said.

Joint press communique: China, Vietnam to finish demarcation task in 2008

Chinese President Hu Jintao (R) meets with Vietnamese President Nguyen Minh Triet in Beijing, capital of China, on May 17, 2007. (Xinhua Photo/Ma Zhancheng)

BEIJING, May 18 (Xinhua) -- China and Vietnam have agreed to finish tracing the border between the two countries in 2008, said a joint press communique issued by the two countries on Friday.

    The communique said China and Vietnam will cooperate closely to ensure partial demarcation is finished in 2007 and the demarcation of the entire border in 2008.

    The two countries will sign a new border administration system document once demarcation is complete, said the communique.

    China and Vietnam started the task of defining their 1, 300 kilometer of land border in 2002 and so far 13 rounds of government-level negotiations on border issue have been held.

    The communique also said the two countries will implement the agreement on the Beibu Gulf and fishery cooperation in the Gulf, and speed up implementation of the agreement on Beibu Gulf oil and gas cooperation.

    On the South China sea issue, the communique said the two countries agree not to take actions that might complicate the conflict and agree to negotiate peacefully in the interests of a lasting settlement accepted by both sides.

    The communique was issued during Vietnamese President Nguyen Minh Triet's state visit to China from May 15 to 18. During his stay here, Nguyen held talks with his Chinese counterpart Hu Jintao and met with top legislator Wu Bangguo, Premier Wen Jiabao and top political advisor Jia Qinglin.

BEIJING, May 17 (Xinhua) -- China and Vietnam on Thursday vowed to properly handle border issues, and maintain peace and stability in border areas.

    Meeting with Vietnamese President Nguyen Minh Triet, Chinese President Hu Jintao urged the two sides to properly handle the border issues so as to create good conditions for both countries' reform and development.

    Triet said that Vietnam was keen to develop relations between the border provinces, so as to create peace, friendship and common development in the frontier area.

    He pledged to deal with the land demarcation in a timely way and increase bilateral cooperation in the Beibu Bay area.

    As for bilateral relations, Hu said China-Vietnam relations have maintained a good momentum in recent years with frequent high-level visits and fast-growing economic and trade cooperation. The two sides also coordinate in international and regional affairs.

    Hu put forward five proposals to further promote bilateral relations -- bilateral exchanges at various levels, enhanced economic, trade and technological cooperation, more personnel exchanges between the two countries, careful management of border issues, and closer coordination and consultation in international and regional affairs, especially within multilateral frameworks.

    Hu spoke highly of Vietnam's support for the one-China policy and China's reunification.

    Triet agreed with Hu's remarks on bilateral ties, adding the two countries are facing the same development tasks, and share common strategic interests.

    Relations with China are a priority of Vietnam's foreign relations, Triet stressed.

    He said that Vietnam was keen to maintain exchanges with China at all levels, further increase mutual understanding and trust, and deepen cooperation in areas such as trade, technology, agriculture, culture and tourism.

    Triet reiterated that Vietnam would firmly adhere to the one-China policy, support China's reunification and oppose "Taiwan independence separatist activities" in any form.

China adopts global 3G standards

China's Ministry of Information Industry approved Wednesday the use of European and American standards for 3G mobile phones, Chinese news agency Xinhua reported on Thursday.

The European WCDMA (Wideband Code Division Multiple Access) and American CDMA2000 join the previously approved Chinese TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) standard as legal options for China's nascent 3G industry, with the government promising deployment in time for next year's Beijing Olympics. All four major Chinese operators--China Netcom, China Telecom, China Mobile and China Unicom--have said they are investing in 3G.


"We will let operators choose which standard they want to use. But the government will decide how many 3G licences are issued," said Xi Guohua, vice minister of information industry, according to Xinhua.


No 3G licences have been awarded as yet. Although TD-SCDMA had been approved in 2006, global manufacturers have been reluctant to produce handsets for the standard, with only Samsung and Motorola developing products.

Last year, China failed in an attempt to get international acceptance for its locally developed WAPI (WLAN Authentication and Privacy Infrastructure) wireless encryption standards, leading to accusations of conspiracy and unethical behavior within the IEEE standardization committee, and counter-claims that details of WAPI had been kept secret from standards organizations.

Chinese officials have insisted that the country will have a third-generation mobile network up and running by the 2008 Beijing Olympics.

According to the Xinhua news agency, Xu Qin of the National Development and Reform Commission's hi-tech industrial department said late last week that the country would "observe our commitment to the International Olympic Committee and provide 3G service in cities where Olympic games are held".

The country is currently trialing its own variant of 3G, a standard called TD-SCDMA, among 20,000 users across several Chinese cities. However, the most common incarnation of 3G in the rest of the world is WCDMA, and analysts say China's potential adoption of a national standard could hamper mobile users who visit the country.

"From a practical point of view, right now the big question is roaming," said Freeform Dynamics' Dale Vile on Monday. "How much roaming is there into and out of China? There's a significant amount of that around the edges but in terms of the core market it's probably less of a factor than for users in Western Europe and the USA, where people are roaming across borders on a continuous basis."

The Chinese market is so huge that it does not need to think beyond itself, Vile suggested, but handset manufacturers outside China would have to start making provisions for TD-SCDMA interoperability now if there was any chance of devices supporting the standard by 2008.

Last Wednesday, TD-SCDMA Forum secretary general Dr Jin Wang said TD-SCDMA development was "at the final preparatory stage prior to commercial deployment".

"Experiences and lessons from [the WCDMA-based UMTS standard used in Europe] will further shorten the learning curve of TD-SCDMA, enabling both technologies to address the Chinese market demand simultaneously with respective advantages after licenses are granted," Dr Jin continued, before predicting that, "as both TD-SCDMA and UMTS will evolve to the LTE (Long Term Evolution) platform, the key technologies in both standards will converge."

LTE is the upgrade path that is intended to evolve existing 3G technology into 4G, although exactly what 4G might be is not yet clearly defined.

3G is not the only technology to be corralled into a proprietary standard in China. At the end of October, the nascent mobile broadcast TV industry there was ordered by the Chinese Government to adopt the STiMi standard, developed by researchers at the State Administration of Radio, Film and Television. The rest of the world is busy developing other technologies, such as DAB-IP, DVB-H and MediaFLO.

Interestingly, Xinhua reports Xu as saying 4G would face stiff competition in the audiovisual market from mobile broadcast TV — presumably STiMi-based.

China's approach to technological standards does have several advantages. It would not have to pay out billions in royalties, and would be providing significant support to its own industries.Chinese officials have insisted that the country will have a third-generation mobile network up and running by the 2008 Beijing Olympics.

According to the Xinhua news agency, Xu Qin of the National Development and Reform Commission's hi-tech industrial department said late last week that the country would "observe our commitment to the International Olympic Committee and provide 3G service in cities where Olympic games are held".