China Netcom to launch IM
China Netcom plans to launch an instant messaging tool to challenge China Mobile, China Unicom, QQ and MSN, sources at the company told China Business News. The platform, named “Lingxin”, differs from China Mobile and China Unicom’s mobile phone-based IM platforms in that it would be compatible with mobile phones, PCs and personal access systems. The source said the mobile phone-based platform was also 3G-proofed with a view to upcoming issuing of 3G licenses. IM would be installed on operator customized cell phones using Netcom’s payment channels and subscriber base. Since broadband subscribers are Netcom’s main customer segment, the operator plans to combine IM and broadband services with the Lingxin platform. Industry analysts said IM will raise subscriber loyalty and enable the company to launch and promote VOIP and other core business.

Advertiser focused on InGameAd Interactive
Focus Media is in talks to acquire InGamesAd Interactive in an effort to enter the online gaming advertising sector, DoNews reported, citing market sources. The sources said Focus Media was reacting to Microsoft’s acquisition of Massive and Google’s acquisition of Adscape, both of which are in a strategic partnership with online game giant Shanda.  InGamesAd Interactive specializes in scheduling and publishing ads on online games without interfering in the gaming process. Its current partners include game developer and operator Hangzhou Tianchang Network Technology, China Cyber Port and U.I. Pacific. Its advertising clients include Pepsi, New Balance and Nokia.

SIG Capital and DBS form venture capital fund
SIG Capital Partners, Singapore’s DBS Bank and Shanghai Science and Technology will combine to form two venture capital funds, Shanghai Venture Star and SIG Venture Star Management, China Venture reported. The three parties will invest US$5 million each. The funds, which would be in both US and Chinese currencies, will be managed by SIG. The funds will primarily invest in Chinese high-tech companies looking to list. They will focus on the IT and biopharmaceutical sectors.

Sequoia and Shenzhen Venture Capital form fund
Shenzhen Venture Capital and Sequoia Capital will form a yuan fund to invest in mainland start-ups, SVC chairman Jin Haitao told the China Business News. It will be China’s second yuan fund formed by a partnership between a foreign and a mainland venture capital firm. The fund, called Sequoia Venture Capital, hopes to raise up to 1 billion yuan (US$126.58 million). A Beijing-based venture capitalist said more foreign venture capitalists could seek to cooperate with mainland institutions because there was no policy in place to let foreign investors independently form yuan funds. Cooperation would also help gain listing approval and give access to investment options generally available only to mainland ventures, he added.

Central bank eyes interest rate hike

According to a report in the China Business Post, Asian Development Bank chief economist Ming Tang and National Development and Reform Commission economist Xia Bin both expect the People’s Bank of China to hike interest rates in the near future. The economists said the bank’s 50 basis point reserve ratio requirement hike on April 16 suggested the central bank could soon also raise rates as part of ongoing efforts to curb growth in new bank loans and fixed asset investment. However, when it would do so depended on upcoming macroeconomic data. The April 16 reserve requirement hike was the third this year and the sixth in the last 10 months. The bank also raised benchmark deposit and lending rates 27 basis points on March 17.

New regulations on insurance products
The China Insurance Regulatory Commission (CIRC) announced Friday new personal insurance regulations that are calling for public consultation over the sector, the National Business Daily reported. With the aim to tighten controls on new product launches, the regulations require expert evaluations and public hearings prior product launch to purge homogeneity of personal insurance that includes health insurance, accident insurance and life insurance. The new regulations also require insurers to report to the CIRC within ten days when a product is terminated, detailing the  termination reasons, regions and aftermath measures. Any product that has not generated insurance premiums for one year will be considered to have been terminated.