Shanghai shares set to climb
Shanghai stock market was expected to climb early this week on heavy turnover but analysts predicted profit taking would cause a correction later this week, the Shanghai Securities News reported. The Shanghai Composite Index surged 3.71% last week to close at nearly 4,180 points – an all-time record. Last week’s consolidated turnover totaled US$150.6 billion (RMB1.16 trillion) – the heaviest ever for any single week since the bourse started trading in 1990. Experts predicted that blue chips, especially those that did not show a strong performance last month, would bounce back. They also advised investors to cut their stock exposure to half of their investment portfolios and think twice before buying more stocks as the market seemed to be divided on whether the rally would be sustainable for a longer period.

China rebuts Forbes Tax Misery Index
China’s tax administration (SAT) has rebutted Forbes Magazine for its Tax Misery Index. The index placed China’s tax burden as No.3 in the world, after France and Belgium, the People’s Daily reported. A senior official with the SAT said the index was more entertaining than scientific. China’s tax burden was 18%, which was on average 12% lower than that of industrialized nations and 3% lower than developing countries. The official also argued that no direct correlation has been found between tax burden and happiness. A university professor said that fundamental differences between the tax system of China and western countries cast doubt on the credibility of the index.

Opportunity for foreign insurers looms
China’s insurance regulator (CIRC) may speed up its approval of foreign non-life insurers’ applications to upgrade their branches to subsidiaries, the China Daily reported. CIRC statistics show foreign non-life insurers saw a 24.5% growth in premiums in 2005 – 10 percentage points higher than that for domestic insurers. Some US experts are also keen on greater access for foreign insurers to innovative insurance products. “Such products would bolster the financial security of Chinese companies and offer models to domestic insurers," said Marc Racicot, president of American Insurance Association (AIA), which consists of 350 major non-life insurers. “Unfortunately, our companies experience delays in getting these products approved, which results in less efficiency for both Chinese and American businesses and consumers,” said Racicot. “This should change and we’re hopeful that it will change in the future.” AIA member companies are trying to offer innovative insurance coverage in China, including political risk insurance for Chinese companies operating in foreign markets.

Securities sector to open further
China has agreed to resume allowing overseas market players to set up joint venture securities firms. It will also allow international firms to expand from investment banking to brokerage, principal investment and asset management businesses later this year. A high-ranking official from the UBS Asia office said Monday that the agreement means brokerages can form securities firms in China. Some analysts said China’s capital market will be better of if the country further opens its securities sector.

Shanghai property developers under inspection
Shanghai’s Communist Party Disciplinary Commission and the municipal government supervision body have teamed up with auditing, taxation and real estate bodies for a complete inquiry into possible legal and regulatory violations by the city’s real estate developers and officials, according to relevant authorities. Local newspapers have reported that the former deputy director of the Shanghai Housing, Land and Resources Administration was expelled from the Party and will be under trial for his alleged crimes. The ongoing investigation of illegal activities in the property sector focuses on three categories, the 21st Century Business Herald said, citing inside sources. The first category involves cases of illegal land leasing or selling land at low prices. The second category involves officials who sold sensitive information about the property market to developers, such as the disclosure of subway construction projects before they were made public. The third category involves officials who bought their homes at prices much lower than the market price.

Florist boom in Shuyang
More than 90% of the residents of Shuyang county in northern Jiangsu province are in the flower business, the Yangzi Wanbao reported. Some RMB2.3 billion worth of flowers were sold in Shuyang last year, accounting for 19.8% of the local GDP. Shuyang, known as the "oriental capital of flowers", is one of China’s biggest flower producers. One local official said Shuyang will be home to one of the country’s largest dry flower production bases in the next few years. The county is projected to have 25,300 hectares of flowers producing revenue of RMB3.5 billion.

Online Expo site considered
Shanghai is considering broadcasting the 2010 World Expo live online, the Xinmin Evening News reported. The Expo coordination bureau is in talks with professional institutes to design the “online expo”, but details are not yet available. The institutes from China and overseas were invited by the Shanghai Institute of Visual Arts. The expo’s locations have been selected and construction is scheduled to kick off this September. The Theme Pavilion will fall into four parts – an open-air plaza and three halls symbolizing people, Shanghai and nature.

VW exclusively favored by Shanghai Circuit
Shanghai’s F1 circuit said Monday the track will open for the first time to private cars for free on June 9 and 10. However, the offer is limited to Volkswagen cars only, the Oriental Morning Post reported. The event is part of the up-coming 2007 Shanghai Sports and Health Month. Each private car, with at most four passengers (including the driver) will be allowed to drive two laps of the racetrack if it passes a security check. Mao Xiaohan, head of the Shanghai Circuit, told the newspaper that the speed will be strictly limited in the first lap and a relatively higher speed may be allowed for the second lap. There will also be some basic pre-driving safety training and car owners can buy insurance. Mao said another two test drivings have been scheduled this year. The circuit plans to open to the general public once a month from 2008.