Oil pricing reforms looming
China will move to a new oil pricing system based on the actual cost of crude oil and gradually lift government subsidies for refineries, the People’s Bank of China said in its first-quarter foreign exchange policy report. According to a Xinhua news report, the new pricing system would be calculated on the price of crude in Dubai, Brent and Minas, plus refinery costs and profit margins. The report said that as well as helping create an urgently needed energy-efficient society, energy pricing reform would enhance the efficiency of foreign exchange policy controls. According to the central bank, government price controls encouraged refineries to re-export processed crude in order to receive higher prices on the international market, artificially boosting exports and adding to the country’s ballooning trade surplus.

NDRC says prices still rising in April
According to a National Development and Reform Commission (NDRC) survey of the price of 46 important products and services in 36 large and mid-size cities, property, medical services, gas, water and cooking oil were all more expensive in April than month earlier, the Beijing News reported. Residential housing prices rose 1.7% in April, while prices for “affordable housing” climbed a more modest 0.2%. Medical services also cost more in April, with hospitalization, surgery and medical visit fees up 2.7%, 2.5% and 4.8% from March, respectively. Prices for peanut oil, soy oil and eggs climbed 5.7%, 0.8% and 1.9% respectively.

Shanghai calls for pay boost for frontline workers
The Shanghai Ministry of Labor and Social Security (SMLSS) issued guidelines urging Shanghai-based corporations to reduce the salary gap between management and front line personnel, the China Youth Journal reported. It also called for starting salary patterns to be used as an evaluation index for management performance and asked for companies to pay attention to frontline personnel earning less than 50% of the average Shanghai salary. The guidelines also called for companies to establish a salary review structure to ensure that increased profits would be passed on to workers in the form of wage increases.

CASS forecasts labor shortage by 2009
The China Academy of Social Sciences (CASS) said an inadequate supply of rural labor would lead to labor shortages during the 11th Five Year Plan, the Beijing Times reported. In a report on China’s employment growth and changes in the structure of the domestic workforce, the director of CASS’ Institute of Population and Labor Economics, Cai Fang, said a labor shortage could be a problem as early as 2009, leading to wage inflation. A shortage of blue collar labor, which has been a problem in coastal cities since 2004, has taken hold in central China and more remote provinces, which had long been steady sources of new labor.

Unicom uncertain of WiMax prospects
China Unicom confirmed to China Business News it was constructing a WiMax (microwave broadband technology) network but did not disclose how much it was spending. The company added the network was a trial network using the 802.16d standard. The confirmation came after recent media reports claimed the company had already begun building and testing a US$9.03 million (RMB70 million) WiMax trial network in 21 provinces across China. It was also reported it had many 16D product suppliers, including Datang and Potevia. Norson Consulting telecom analyst Dong Xiaoyang said the company hoped WiMax could connect to its existing 165 and 163 broadband networks to service high-value users. However, Dong said its investment in the WiMax network was in limbo because there was still no successful commercial model for operators to base investment decisions around.