New shopping malls outpace consumption growth
A 2007 China retail forum hosted in Shanghai this week was told the shopping mall industry was facing financial risks due to over-investment in new malls, China News reported. China General Chamber of Commerce deputy secretary Wang Yao told the forum the pace of shopping mall development had outstripped growth in retail consumption, , particularly over the last three years,. However, he said it was too early to say whether investment would ultimately boost consumption or lead to the collapse of some malls. Industry analysts said matching new development to consumption growth should be an industry priority. China is now home to seven of the world’s 20 largest shopping malls. Official data presented at the forum showed Shanghai’s shopping malls received US$4.11 billion (RMB31.826 billion) in revenues in 2006.

Offshore investment a government priority
China’s government will increase policy support to help domestic companies overcome common obstacles to overseas investment, the Economic Information Daily reported. National Development and Reform Commission (NDRC) deputy head Zhang Xiaoqiang said the support, which would conform to WTO rules, would range from diplomacy and taxation to customs, loans and insurance. It would target four key investment areas: overseas investment to relieve domestic economic and resource bottlenecks; overseas investment to support restructuring of domestic industries, boost domestic production and increase technology exports; investment in overseas R&D facilities that can provide China with access to advanced international technology, professional expertise and management experience; and investment in electronic financial information, logistics and transportation businesses to lift China’s competitiveness in the services sector. Zhang said China invested US$16.1 billion offshore in 2006, up 28% year-on-year, making it the 13th largest contributor to global overseas investment, up from 17th in 2005 .

Beijing investment will outlast Olympics: Planner
Beijing Development and Reform Commission (BDRC) deputy minister Lu Yingchuan told China Business News the end of the 2008 Beijing Olympics would not be the end of fixed-asset investment in the city. Lu said 45% of the total investment earmarked for urbanization, railways, transportation and other city infrastructure in the current 11th Five Year Plan would be spent in the two years following the games. He said Beijing had invested an average of US$42.58 billion (RMB330 billion) every year during the five years leading up to the Games, with an average year-to-year investment growth of 17.2%. Annual investment growth was set to remain unchanged, he said, driven by  growth in industrial investment, particularly high-tech industrial zones, modern manufacturing and services projects.

Sichuan cracks down on pharmaceutical cheats
The Sichuan Department of Health (SDH) said it had blacklisted seven pharmaceutical firms involved in illegal bribery and three that provided fake production certificates to gain access to a new online merchandising system as part of a crackdown on rule breakers in the industry, Economic Information Daily reported. The department introduced guidelines to punish pharmaceutical firms that used bribery or other illegal means to gain access to online merchandising, as well as those that provide fake or uncertified medicines. SDH said it would continue to investigate firms and would blacklist those found guilty of breaking the rules and force them to withdraw products from the market.

Airlines under fire over insurance commissions
Airlines have come under scrutiny following media reports that they have been passing on RMB20 air accident insurance fees to passengers despite only paying RMB2 per passenger to insurers, Guangzhou Daily reported. The commissions charged by the airlines are higher than insurance guidelines allow. Jinan University finance department associate professor Chen Lu said it was unlikely the insurance firms would take action against the airlines, despite the negative publicity, as they were traditionally reluctant to upset sales channels. However, a spokesperson for the Guangdong Insurance Regulatory Commission said it was looking closely at the issue. The regulator planned to issue new regulations governing sales and intermediary behavior and tighten auditing of insurance premiums and commission fees.

Salt sector reform imminent
The National Development and Reform Commission’s (NDRC) draft plan for salt sector reform  has reached its final stage of public consultation and industry watchers are expecting reforms to commence soon, the Information Times reported. Reforms are intended to ensure a minimum quality standard for the nation’s salt supply, including sufficient sodium content, and ensure domestic salt firms can be competitive as the market is gradually opened to competition. The reforms will address separating current salt producers into regulatory and commercial entities. Currently only Guangdong and Qihai provinces are separated in this way.

Growing passion for Hong Kong stock market
Mainland residents cannot yet invest directly in Hong Kong’s stock market, but uncertainty about domestic markets is encouraging many to look closely at H-shares, or mainland stocks traded in Hong Kong, the Shanghai Securities Journal reported. According to a manager of a Hong Kong-based securities firm, mainland residents currently held 4% of the firm’s investment accounts and the number opening accounts in person was growing significantly, particularly during the recent Labor Day holiday. At present, 44 companies are listed both in Hong Kong and on mainland markets. Data from the Hong Kong Stock Exchange  showed that 42% of the total transactions in Hong Kong in 2005/2006 were on behalf of foreign investors, of which non-Hong Kong Asian investors accounted for 21%. There are mainly two ways for mainlanders to invest in Hong Kong stock market: First, mainlanders open accounts at Hong Kong securities firms in person and operate online from the mainland; Second, mainlanders open accounts through intermediary agencies and pay commissions fees on transactions.