MARKET WEEK -- Foreign Investment

Will Walls Come Down for Wireless Players in China ?

Among the telecom outfits bravely presenting to global investors at a Credit

Suisse First Boston conference last week was China Unicom, China's second-largest
wireless company. Unicom shares are down 1% this year, a better performance than
rival China Mobile and the Hang Seng index. Unicom changed hands in Hong Kong last
week at HK$10.85, for a market cap of US$17.4 billion, while its American
depository receipts (ADRs) traded at US$13.50. Meanwhile, China Mobile, with a
market cap of $89 billion, is down 5% this year. (Both are three-quarters-owned by
the government.)

At last week's conference, Unicom president Jianzhou Wang triumphantly unveiled

stronger-than-expected cellular subscriber growth, and announced that the company's
new 56,000-kilometer fiber backbone would let Unicom begin selling voice over
Internet and long-distance service in 220 of China's 320 cities. Yet Unicom shares
barely budged, and remain lower than last summer's IPO price of HK$15.42.

The swoon in Unicom shares corresponds to a couple of things: global abhorrence

for wireless stocks, caused in part by enormous European investment in next-
generation networks; fears of a price war between China Mobile and Unicom;
questions about Unicom's capital spending plans, given that its nonlisted parent,
China United Telecommunications, owns a license to offer service based on a
competing wireless standard; and uncertainty about how China's plans to open up its
telecom sector will affect Unicom and China Mobile.

Bulls like to say that at current levels, Unicom represents superb value for
unparalleled growth prospects, given expected 45% growth in its mobile business
this year, low penetration rates in China and a growing Chinese middle class. "Just
as it was important to the Chinese consumer to own a television set a few years
ago, the focus is now shifted to mobile phones," writes Merrill Lynch. Then there's
the fact that China's wireless industry is a duopoly. Thus, Wang notes that
Unicom's share of the Chinese wireless market jumped to 22% last year from 14.2% a
year earlier, and he thinks that 35% over the next several years isn't
unreasonable. In fact, CSFB reckons Unicom is worth HK$22.10 per share or US$26.40
per ADR, putting a middle-of-the-road 10.5 multiple on Unicom's EBITDA.

We hate to disagree, but there are several reasons to think Unicom won't snap back
anytime soon, and may even drift lower. One is that government proposals to
simplify billing procedures to a calling-party-pays plan haven't yet been
clarified, and investors rightly worry that such proposals may cut revenues.

Another is that China's wireless market may soon become a "triopoly." Last week,
China said it wouldn't grant a third cellular license this year, but China Telecom,
the fixed-line provider, is widely expected to win one soon. Rivals may crop up --
as investors in China Mobile, assuming that they were buying a monopoly, learned to
their chagrin. Other prospective competitors in the wireless arena are China Netcom
and Railcom, which both operate fixed-line networks.

Which brings us to the issue of capital flows. China Telecom is expected to raise
$5-$10 billion in stock as soon as next quarter, in a deal to be underwritten by
Morgan Stanley and Merrill Lynch. That money could fund China Tel's aspirations in
cellular, and will undoubtedly draw investor cash at a time when Unicom has its own
capital requirements.

Unicom's parent has the sole license to operate a network based on the CDMA
standard promoted by Qualcomm. Like China Mobile, Unicom has a GSM network. Its
parent plans to build the CDMA network, with eventual capacity for 13.3 million
subscribers over 160 cities, starting this year, for 20 billion renminbi (US$2.4
billion) or so. Wang maintains that CDMA is "a high-quality, reliable, cost-
effective technology," and that China is sufficiently large to support two
standards. Unicom investors are shielded from the new network's risks, he says,
because the license and costs are borne by the parent. The network, once
profitable, will be "injected" into Unicom, Wang adds.

That sounds nice. But spending on CDMA comes just as Unicom completes a fiber
network -- and plenty of new competitors are on the horizon for each of Unicom's
business lines.

Wang claims being an "integrated operator" gives Unicom a advantage. Yet bears
interpret "integration" as a lack of focus, just one of the risks associated with
Unicom. Vincent McBride of Credit Suisse Asset Management doesn't own Unicom, and
gave Barron's a laundry list of reasons why. "China said the other day that there
won't be a new wireless operator for a year -- as if that will make you go buy the
stock," says McBride. "Then there's this calling-party-pays thing. I've heard
credible analysts talk about a 50% hit to earnings. Let's be optimistic and say
it's a 10%-20% hit. CDMA is not even on my list yet. Finally, there's a big funding
gap. Even with current earnings and cash flow projections, which I think are a
little optimistic, they will need $3 billion. You and I are still being deluded.
Will it be a strategic investor who pays it, or will it be you and me through a
rights issue?"

To be sure, Unicom stock is down sharply; Unicom is early to the game and thus
enjoys a competitive advantage; and its low penetration rates compared to rival
China Mobile mean that cash flow margins (nearly 60%) can stay fat even if
promotions and tariff cuts reduce average revenues per subscriber. And after China
enters WTO, Unicom's CDMA license may be worth something to a foreign partner.
Still, Wang's appearance last week failed to answer many questions weighing on the
stock. Predicts McBride: "Unicom will continue to suffer."

-- The yield spreads on asian sovereign bonds tightened this year

after the Fed cut rates, widened out on Turkey's financial crisis, then
tightened again after Argentina appointed a new economics minister --
lifting a cloud from the world of emerging markets debt. Yields remain
sharply lower than they were a year ago, notwithstanding the
highly-publicized debt woes of Asia Pulp & Paper and other troubled
issuers. Corporates fared worse than sovereigns last year, because of
rising oil prices and Nasdaq's collapse, which killed hopes of
refinancing.
Naturally, the future is cloudier than the past, but Mohamed
El-Erian, Pimco's chief of emerging markets, thinks life will stay
tough for owners of Asian corporates, but okay for those holding
sovereign debt. However, El-Erian also warns investors to stay alert.
A key issue in emerging-markets bond investing involves betting on
whether sliding U.S. rates will offset the negative impact of lower
exports. Under that scenario, many wagered on countries with high debt
and low trade links with the U.S.. That was a bad move in Turkish
bonds. Meanwhile, currency risks remain high.

With corporates, much depends on the duration of the U.S. slowdown.

Many investors have embraced the scenario of "a shallow V recovery, but
the jury is still out," says El-Erian. "If there is a deep V or U or W,
risk aversion in the U.S. financial system goes up," corporates become
more illiquid, and spreads widen out.

The outperformance of sovereigns ought to last as long as issuers

"resist the pressure to subsidize the corporate sector," a heavy
temptation indeed in South Korea, the Philippines, and Thailand. For
now, El-Erian's favorite sovereign issues are Republic of Korea '08s,
government-guaranteed Korea Development Bank '04s, and Malaysia '09s.

Johanna Chua of Salomon Smith Barney notes that South Korean and
Malaysian bonds are even more expensive than U.S. corporates, reflecting
the charms of sovereign issues and a growing of supply of U.S. corporate
bond sales. In contrast, sales of new emerging market issues dropped to
$66.5 billion last year and will probably slide more this year. The
benchmark Korea '08 and Malaysia '09 trade at about 190 basis points
over comparable Treasuries, Chua notes, while U.S. triple-B rated
corporates trade at 220-230 basis points above.

Chua is partial to South Korea, observing that Standard & Poor's is

considering upgrading the credit. Korea has taken great steps in bank
reform, and sovereign investors are shielded from the troubled chaebol.
"If there's an upgrade in Korea, you can get a 50-basis-point
tightening," she said. On the other hand, says Chua, there's far less
corporate restructuring going on in Malaysia.

One of the largest Asian issuers has been the Philippines, which is
beset by a sliding peso, a disastrous economy, and political turmoil.

After Gloria Arroyo assumed the presidency (former president Estrada

faces corruption charges), the bellwether 10-year issue traded between
560 and 590 basis points over comparable Treasuries, down from 610
during the presidential crisis. "Pre corruption crisis, it was in the
low 500s," Chua notes. Any reversal will be a welcome change for
long-suffering owners of Philippine paper.

-- The yen briefly fell through 120 to the dollar amid a series of
official gaffes about Japan's exchange-rate policy, and ongoing rumors
that Prime Minister Mori would resign. Late last week, Finance Minister
Kiichi Miyazawa told Parliament that public finances are "very near
collapsing."

Miyazawa later apologized, but didn't retract his words. Speaking in

New York last week, Ministry of Finance Vice Minister Haruhiko Kuroda
said Miyazawa wasn't trying to weaken the yen, and that "we continue to
think the exchange rate should reflect economic fundamentals."
Kuroda said he didn't think action to deliberately weaken or
strengthen the yen would be appropriate. He wouldn't specify at what
level the yen would accurately reflect economic conditions, but
suggested it is still too strong versus the "undervalued" euro.

Meanwhile, Kuroda said that Japan is "almost assured" of posting 1.2%

economic growth for the fiscal year ending March, and found a U.S. soft
landing "likely."

From Japan's perspective, that is devoutly to be wished.

---

E-mail: leslie.norton@barrons.com.

---
Emerging Markets
In U.S. Dollars Index*
Index % Chg. 2/22 2001 Range
Argentina 9.2 1421.1 1593.0-1232.7
BrazilFree 1.1 788.5 858.0- 758.5
Chile 0.8 608.3 656.2- 591.2
ChinaFree -4.2 21.4 26.0- 20.8
Colombia -1.1 48.3 52.2- 41.2
CzechRep. 3.4 79.3 86.5- 74.2
Egypt 1.6 127.7 142.6- 120.4
Greece 5.4 458.4 480.1- 418.0
Hungary 1.0 205.1 248.1- 197.7
India -6.2 113.0 127.4- 111.9
Indonesia -0.3 83.8 94.6- 75.6
Israel -4.0 164.3 201.3- 161.6
Jordan 0.0 57.6 58.8- 55.1
Korea 0.4 92.7 101.0- 78.7
Mexico 5.3 1357.5 1377.2-1170.2
Morocco -0.3 178.4 179.0- 146.2
Pakistan 0.3 40.3 45.5- 39.9
Peru 0.2 139.6 143.8- 125.0
Philippines 3.2 157.1 169.0- 126.6
Poland 3.4 437.7 504.6- 423.3
Russia 13.8 188.9 198.4- 139.0
So.Africa 0.6 167.2 172.2- 152.4
Sri Lanka -1.2 34.4 36.9- 31.5
Taiwan 3.7 229.9 249.7- 191.1
Thailand -5.0 65.1 75.1- 56.4
Turkey 0.7 190.4 307.8- 129.4
Venezuela -2.1 122.1 139.2- 106.1
 *Base: Jan 1, 1988 = 100. Adjusted for foreign exchange fluctuations
relative to the U.S. $.
**Base: Jan. 1, 1993 = 100.
***Base: Jan. 2, 1995 = 100.
Source: Morgan Stanley Capital International Perspective, Geneva.

BEIJING -(Dow Jones)- Growth in China's broad measure of money supply continued to
slow in October as banks cut back on lending, according to central bank figures
issued Wednesday.

M2, which measures all money in circulation as well as total deposits, rose 12.9%
on year at the end of October to 15.1 trillion yuan ($1=CNY8.28), down 0.7
percentage point from the end of September.

The narrow M1 measure, which comprises cash in circulation and savings held in
withdrawal on demand deposits, rose 12.3% on year to CNY5.6 trillion, unchanged
from end-September.

M0, which measures cash in circulation, rose 6.6% on year to CNY1.45 trillion,
down 1.8 percentage points from end-September.

Total outstanding loans rose 11.4% on year to CNY10.9 trillion at end-October, 0.9
percentage point lower than at end-September, according to a notice posted on the
People's Bank of China Web site.

The central bank said the growth in lending has slowed due to reduced demand for
finance and working capital from the country's various infrastructure projects.

Tighter controls on illegal capital flows also contributed to the reduced lending
during the period, the central bank notice said. Demand for loans to finance the
purchase of agricultural produce also declined, the bank added.

Total deposits rose 16.8% on year to CNY14 trillion during the same period, 0.9
percentage point higher than the end of September.

China's yuan exchange rate appreciated by 13 basis points to 8.2768 against the
dollar compared with end-December 2000. The bank said in the notice that the yuan's
exchange rate remained stable.

TABLE: Below is a table of money supply growth in China to the end

of October, according to figures issued Wednesday by the People's Bank
of China.
Growth figures are relative to the same period in 2000.
Change(Yr/yr) Total
M2 End Oct 2001 +12.9% CNY15.1 Tln
M1 End Oct 2001 +12.3% CNY 5.6 Tln
M0 End Oct 2001 + 6.6% CNY 1.45 Tln
owen.brown@dowjones.com
-0-

The talk of the town: Little profit in big China

In 1937, Harper & Brothers published "Four Hundred Million Customers," by Carl
Crow, the founder of the first American advertising agency in China. In style and
tone, the book is a pure period piece, part patronizing sketch of the inscrutable
Orient and part prewar marketing tract. (Did you know that Chinese dogs always bark
at foreigners, that Chinese consumers are unremittingly faithful to their favorite
brands, and that Chinese women have the world's most beautiful legs?) But in spirit
the book could have been written at any time in the last seven hundred years.
Fourteenth-century Genoese merchants, sixteenth-century Portuguese navigators,
nineteenth-century opium pushers, and twenty-first-century C.E.O.s all have fallen
for the same idea that enthralled Crow: China is potentially the world's biggest
market, so there must be a way to make lots of money there.

In the eighteen-fifties, that dream had English textile-makers calculating how rich
they'd be if every man in China lengthened his shirttail by a single inch. By the
end of the century, American businessmen were eying China, too: John D. Rockefeller
wanted his kerosene in every lamp. So, although the current China craze may date
back to the late seventies, when Deng Xiaoping opened the door to capitalism and
American companies dashed in, it's the same old Shanghai ragexcept that now there
are nearly 1.3 billion potential customers. American businesses remain obsessed
with the idea of selling them stuff, and have still not figured out how. China
remains our Seven Cities of Cibola, promising untold riches yet shimmering just out
of reach.

For the China dreamers, the market is always on the verge of exploding. In 1992,
for instance, the World Bank predicted that by 2004 China's G.N.P. would be larger
than that of the United States. Not likely. (China's economy is still just one-
seventh the size of ours.) Then, there's that new ad for the consulting firm
Accenture, which claims that by the year 2007 Chinese will be the No. 1 language on
the Web. (If you believe that, I'd be happy to sell you some lovely Three Gorges
land.) The latest source of optimism is China's entry into the World Trade
Organization, which could happen later this summer. This time, the boosters claim,
it will be different. Tariffs and barriers will fall, and those billion customers
will finally be ripe for the plucking. And, as designers, brewers, automakers, and
theme-park operators have said, "If just one per cent of the Chinese buy our
product, we'll be rich."

The real Chinese market is much smaller, and harder to crack. Of that vaunted 1.3
billion, nine hundred million are rural peasants. Another hundred million or so are
unemployed rural workers who have moved to the cities in search of jobs. That
leaves a population about the size of the United States, including a growing middle
class, with a much smaller average income. One per cent of that is pretty good, but
it's no El Dorado. And though Mao's Four Musts (bicycle, radio, watch, sewing
machine) were replaced by Deng's Eight Bigs (color TV, electric fan, refrigerator,
stereo, camera, motorcycle, suite of furniture, and washing machine), the Chinese
are not consumers in the American vein. They save about forty per cent of their
income; Americans save just five per cent.
China's economy has quintupled in the past two decades, but that has not translated
into huge corporate profits for the West. Some companiesnotably, Coke and
Motorolahave cracked the Chinese market, but most have been flummoxed by it. A 1999
study by the consulting firm A. T. Kearney found that only forty per cent of
multinational corporations doing business in China had turned a profit there. And
even the profitable ones have rates of return (an average of merely five per cent,
according to some estimates) lower than what they'd get anywhere else in Asia.
There are just too many impediments: a massive bureaucracy, widespread corruption,
the government's mercantilist bent, the country's sheer sprawl, its Iron Rooster
infrastructure. But the most often overlooked impediment is the fact that the
Chinese have companies, too. And not all of them are state-supported pikers.
Westerners imagined that once China was open they'd have free rein, with little
domestic competition. But China is not a commercial void. Chinese businessmen are
just as interested as American businessmen in selling to the Chinese. And they're
better positioned.

Why bother, then? The argument goes that the market is so big you can't afford not
to be there, no matter how much it costs. Someday, millions of Chinese are going to
want a Michelob, and when they do Anheuser-Busch will be ready. But something more
than economics is at work here. After all, India has a billion people, who are
better educated and more likely to speak English than the Chinese, yet somehow it's
always China that we look to. What keeps the West coming is the idea of China as
the world's most enduring commercial frontier. A century ago, American businessmen
looked to China after the American West had been divvied up, because they feared
there were no markets left for them to exploit. Today, when companies are asked how
they can possibly keep growing at the rapid rate the stock market demands, they
say, "China!" In a way, China is like the Internet: a real thing turned chimera, by
way of hyperbole. It is huge, and getting huger, yet even forty years from now it
will be, as its own government says, "a middle-developed country." Think Italy,
with barking dogs.

LONDON -- Antimony prices have jumped as supply problems in China begin to bite.
Trade sources said that metal availability was extremely limited, although consumer
buying outside China was still very thin. The root of the current supply tightness
is the continued turmoil in the Chinese market following a major accident at
Longquan Mining Co., Guangxi province, in July. Severe restrictions are still in
place in the mining sector there, limiting the supply of antimony concentrates. As
a consequence, Chinese trade sources have raised their offering prices and antimony
smuggled through Vietnam has dried up.

FULL TEXT
 NEW YORK -(Dow Jones)- China welcomed Japan's decision Tuesday to lift a ban on
the import of Chinese poultry imposed in June after the South Korean government
detected a bird-flu virus in Chinese duck meat, Kyodo News Agency reported.

According to Xinhua news agency, Gao Yan, a spokesman for Chinese Ministry of
Foreign Trade, said the Japanese ban has hurt Chinese poultry farmers. It has also
urged the two countries to cooperate in the future in removing poultry trade
issues.

Japan's Ministry of Agriculture, Forestry and Fisheries said earlier Tuesday it

lifted the ban on imports of Chinese chicken and turkey meat, as well as eggs, from
all types of Chinese fowl, as it has confirmed the safety of such items, the agency
reported.

The ban on imports of other poultry meat including duck and goose will remain in
force because tests for the viral infection are still insufficient in those
products, the ministry said.

Japan imported 250,000 tons of poultry meat from China in 2000, with chicken meat
accounting for 238,000 tons, or 95.1% of the total, the agency reported.

There were no imports of turkey meat, and imported poultry eggs amounted to 2,100
tons, according to the ministry, the news agency said.

BEIJING -(Dow Jones)- China expects total trade in 2002 will be at least as high
as the level of trade in 2001, despite the global recession, as trade in
electronics and other high-tech products rise, the International Business Daily
reports.

Foreign trade minister Shi Guangsheng said he anticipates exports will continue to
rise in 2002, with high-technology exports surging 15%, the report says.

Trade of machinery and electronics products - imports and exports combined - is

expected to rise 10% next year, Shi is quoted as saying.

As reported earlier, China estimates its total trade volume will have grown by
about 7% year-on-year in full-year 2001 to more than $500 billion. Export growth is
forecast to have slowed to about 5% year-on-year, against a rise of about 8% in
imports.
 In an effort to increase antidumping duties on imported apple juice concentrate
from the People's Republic of China, the U.S. apple industry has formally requested
the Commerce Department conduct an administrative review of the antidumping duties
announced last May, [See FOOD INSTITUTE REPORT, May 22, 2000, page 9, for earlier
story]. Most suppliers in China have been subjected to a 52% levy although some
were levied as little as 9.4%. The duties are subject to review annually for five
years, with this request from the apple industry marking the first anniversary of
the imposition of these duties. Commerce will now review and if needed, recalculate
the dumping margins for shipments from each supplier since Nov. 23, 1999. If those
margins are found to be insufficient, new margins will be announced and importers
will be required to make up the difference on those shipments.

Preliminary results are expected to be announced in March 2002, and final results
by June of that year.

The review request was spearheaded by the U.S. Apple Association, McLean, VA,
whose President and CEO, Kraig R. Naasz, noted, "We have suffered severe losses due
to dumped imports of Chinese concentrate, and we intend to avail ourselves of every
legal opportunity to safeguard our livelihoods against the abuse of our nation's
trade laws."

In a press release from U.S. Apple, the association notes that China re-emerged as
the leading supplier of apple juice concentrate to the U.S. this spring, shipping
15 million single strength equivalent gallons during the first quarter of 2001 at
prices of $3.75-$4.00 per gallon of concentrate - "the same price at which Chinese
concentrate was being sold in the U.S. market when the apple industry decided to
pursue and antidumping complaint three years ago."

Last month, U.S. Customs announced it had developed means of determining the
country of origin of various commodities, including apple juice concentrate, which
it is employing to investigate possible circumvention of antidumping duties. See
FOOD INSTITUTE REPORT June 25, page 22, for details.

FULL TEXT The Food Institute THIS IS THE FULL TEXT: COPYRIGHT 2001 The Food
Institute Subscription: $565.00 per year. Published weekly. 1 Broadway, 2nd Floor,
Elmwood Park, NJ 07407.

PITTSBURGH -- Fata Production Machinery, Riverside, Calif., a division of Fata

Hunter Inc., Pianezza, Italy, has received a contract from China's Taigang Group
International Trade Co. Ltd. to supply a modern stainless steel grinding and
polishing line.

The new line is part of Taiyuan Iron & Steel Co.'s 500,000-ton-per-year expansion
and modernization program.
 The grind and polish unit will be installed in early 2002 at Taiyuan Iron &
Steel's plant in Shanxi province, the largest stainless steel producer in China.
The line will have a capacity of 60,000 tons per year, processing 300 and 400
series hot- and cold-rolled stainless steel. Polishing of the cold-rolled
material's top surface while simultaneously grinding the bottom surface will
produce No. 3 and No. 4 finishes, or a "hairline" finish.

The two-speed line will process stainless steel strip ranging from 0.5 millimeter
to 6.0 mm thick in widths from 600 mm to 1,300 mm. It includes two bottom and four
top grinder heads, coolant filtration, swarf processing, alkali degassing,
inspection and mill sleeve handling equipment. The line's electrical control will
be highly automated.

Fata Production Machinery also will be responsible for supervising Chinese

equipment manufacturing, installation and commissioning of the process line and
providing customer, operator and maintenance training.

FULL TEXT

Chinese increase primary aluminum output nearly 20%.

NEW YORK -- China's aluminum industry, watched nervously of late for signs of
meaningful shifts in the import/export balance, boosted its primary aluminum
production by 220,781 tonnes, or nearly 20 percent, in the first five months of
this year.

Aluminum industry analyst R. Wayne Atwell of Morgan Stanley in a report dated June
18 called China "a bit of a wild card." Atwell predicted that Chinese smelting
capacity would grow about 12 percent over the next two years, adding that "we
believe net Chinese imports will decline 200,000 to 300,000 tonnes this year."

The Morgan Stanley analyst, who also said that Western-bloc aluminum consumption
this year, was shaping up to be the worst since 1982, said the anticipated drop in
Chinese net imports prompted him to halve his earlier forecast of an overall supply
deficit in 2001 to 100,000 tonnes.

China's State Statistical Committee putprimary aluminum production through May at

1,341,500 tonnes, up 19.7 percent from a year earlier, with May output at 278,300
tonnes, up 16 percent from the same month last year.

In the process, higher alumina output notwithstanding, Chinese smelters increased

the country's dependence on imported alumina by nearly 5 percent. However, this was
during at period when international alumina prices were soft because of the impact
of substantial production cuts in the North American Pacific Northwest. Some China
Watchers were predicting earlier this year that the country would take advantage of
the alumina situation to at least narrow the aluminum trade gap. Some even saw a
significant shift to the export column, but this was not evident at the five-month
mark.
 The State Statistical Committee said that alumina out put was 12.6 percent higher
inthe first five months of the year to 1,951,600 tonnes. Alumina output was equal
to 72.7 percent of requirements in the period compared with 77.3 percent in the
same period last year. China's primary aluminum production was up 9.4 percent last
year to 2,794,600 tonnes and domestic alumina production was equal to 77.3 percent
of needs.

In early May, China's State Economic and Trade Commission reportedly left
virtually unchanged 'the quota for low-tariff imports of alumina at 1.3 million
tonnes. This would be equal to a fifth of assumed alumina requirements based on
annualization of the five-month aluminum production total.

FULL TEXT

Chinese boost aluminum moot exports.

NEW YORK -- The Chinese cranked up the export side of their two-way in got traffic
in the first half, when they also added to their raw materials supply substantially
by more than doubling imports of alumina despite higher domestic production.

The latest customs tally out of Beijing showed the Chinese upped the ante by
boosting first-half exports of unalloyed primary aluminum to 137,155 tonnes and
cutting alloyed ingot exports nearly 16 percent to 56,090 tonnes.

The Chinese were net exporters of unalloyed ingot but remained net importers in
the overall unwrought sector. Imports of unalloyed, and alloyed ingot dropped 21.3
percent to 266,277 tonnes in the first half of this year from 338,138 tonnes in the
same year-earlier period, but were tonnes of unalloyed and alloyed ingot shipped
out.

Carmine Nappi, director of industry-analysis for Alcan Inc., said earlier this
month that the Chinese appeared to be pulling their ingot imports down closer to
"their more-normal level, which, is around 300,000 tonnes." Last year, the Chinese
brought in 614,822 tonnes of primary aluminum and another 299,676 tonnes of
unwrought aluminum alloy, while their exports amounted to 81,189 tonnes of primary
aluminum and 127,921 tonnes of unwrought alloy. Nappi noted that the overall count
could include "other content, like scrap or mill products."

The Chinese, who have been increasing production of alumina and aluminum this
year, bumped up their alumina imports in the first half by anywhere from 113 to 164
percent. Customs put the total for this year's six-month period at 1,580,000
tonnes; in-July 2000, Beijing put the first-half alumina import total at 740,000
tonnes.

They upped primary production nearly 17 percent to 1,618,200 tonnes in the first
half, but the jump in alumina production and imports, was enough to cover the
increased requirements and boost alumina stocks nearly 700,000 tonnes besides.

FULL TEXT
 BEIJING -- Chinese alumina imports have soared this year as smelters look to boost
stocks on the back of depressed international prices.

The price of imported alumina is lower still, traders said, with recent quotations
placing prices at between $145 and $150 per tonne f.o.b. for Australian-origin
material sold into China.

While stockpiling low-priced, material is the driving factor behind the import
surge, industry sources commented that increasing aluminum in got production is
also a contributory factor. This is supported by the fact that domestic refineries
have also boosted production by almost 10 percent this year to around 2.74 million
tonnes in the January-July period.

China imported in the region of 1.8 million tonnes of alumina last year but is
widely forecast to bring in 2.8 million to 3 million tonnes by the close of 2001.
Recent months have seen import levels maintained at substantially above 200,000
tonnes per month, one industry source said. Others placed the figure. closer to the
300,000-tonne mark.

In the short-term, the market is eyeing an upcoming tender from India's National
Aluminium Co. Ltd. (Nalco).

FULL TEXT

News; International
Senate Begins Debate on Budget; Administration Demands Prompt Return of Crew,
Plane Held by Chinese

With campaign finance reform debate finished, the Senate now takes up the
president's $1.9 trillion budget. The administration is demanding the prompt
return of a crew and its plane being held by the Chinese.

CAROL LIN, CNN ANCHOR: Now, with campaign finance reform finished, the Senate
takes up President Bush's $1.9 trillion budget. Democrats are vowing a week-long
assault on the Bush blueprint.

CNN's Eileen O'Connor is at the White House this morning as the debate begins.

What's the strategy out of there, today -- Eileen.

EILEEN O'CONNOR, CNN CORRESPONDENT: Well, this is, as you said, the first real
test for the Bush budget blueprint, and where Democrats are going to attack the
budget is, of course, on the tax cut. And this blueprint and its resolution will
determine the size and the shape of that tax cut.

Republicans, Carol, already know that they don't have the votes to pass that tax
cut as it's already planned, at $1.9 trillion, and Democrats plan, basically, to
whittle away at the tax cut and use some of the money that they take from the tax
cut to shore things like prescription drug benefits, education, and also debt
relief. These are very popular issues with the voters. Republican leadership in
the Senate has already faced the reality of a divided Senate, and they're already
talking that we're going to have a tax cut of up to $1.6 trillion -- Carol.

LIN: Eileen, while you've been covering the story, I know you've been keeping
your eye on the China spy plane controversy. You've just got some new information
from the White House. What is it?

O'CONNOR: Well, basically, they say that they are encouraged by the news that
these diplomats will be meeting with the crew shortly, but they are also saying
that they still insist on the prompt return of the crew and the return of that
airplane -- Carol.

LIN: Did they define for you what prompt is -- within a matter of hours or days?

O'CONNOR: Well, I think as is reasonable, probably within a matter of days.

They're not defining it.

LIN: All right, thank you very much, Eileen O'Connor, reporting live out of the
White House.

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SINGAPORE -- High stockpiles of alumina, accumulated during the first half of the
year. in China, are likely to contribute to an increase in the country's aluminum
ingot exports in the coming months.

Chinese industry sources said they expect aluminum exports to pick up in the
second half of 2001. They were guarded in assessing reports from elsewhere in the
industry that export sales have risen in the last couple of weeks as Chinese
suppliers offload excess stocks, including some tonnages of Russian-origin
material.

"Domestic demand is very stable but total production, due to expansions, is

increasing," one prominent industry source in Beijing said. "Production exceeds
demand, so we need to export," he said. Significant aluminum stocks have also built
up over the last year, reducing requirements for imported ingot.

Despite the predicted increase in exports, however, the source added that export
sales are currently less prominent than earlier in the year, as suppliers are
unable to secure high premiums on Chinese-origin material. While Chinese suppliers
are looking to increase exports, opinion seems divided as to how quickly sales will
rise.

"We haven't seen to much. Some smelters are still keeping an eye on the domestic
market," one trader said.

"For the moment, prices are going down," another market source said. "The market
is almost flat. There is no premium today on spot deals."

Another trader expressed the opinion that the forecast increase in exports will be
more prevalent toward the end of the year as expansions come on stream in China.

During the first six months of the year, China imported around 266,000 tonnes of
refined aluminum and aluminum alloys, a 21-percent period last year. In the same
comparison, exports rocketed by 85 percent to just over 193,000 tonnes, according
to Chinese customs data published in the China Metals newsletter. Also in the
period January-June 2001, imports of alumina to China more than doubled vs. last
year's first half to 1.58 million tonnes.

"China has imported a record amount of alumina," the Beijing-based industry source
said. "And more alumina has been coming into China in July. Imports are very active
this year but will be cooling down in the second half due to lots of accumulated
inventories."

He added that, as the international market descended to lower levels, some

smelters built considerable alumina stockpiles, making increased ingot production
likely in the later part of this year.

FULL TEXT

OTTAWA -(Dow Jones)- Canada Customs & Revenue Agency has reaffirmed an August
decision that leather footwear with metal toe caps from China was dumped in Canada
at an average of 39% below "normal" price levels.
 In a news release, the government agency noted that after the preliminary decision
in August, it started collecting provisional duties on imports of these products.

The government said it will continue to impose the duties until the Canadian
International Trade Tribunal determines whether the dumped imports hurt Canadian
production. The Tribunal has started public hearings to that end.

The dumping investigation was launched June 15 after the Shoe Manufacturers'
Association of Canada of Beaconsfield, Que., complained. The Association alleges
Canadian producers are losing market share, profit margin and jobs because of the
sales of the Chinese footwear.

Dumping occurs when goods are sold to importers in Canada at prices that are less
than the selling prices in the exporter's domestic market, or at prices that are
unprofitable, by the government's definition.

The Tribunal is expected to rule on harm by Dec. 27. If it rules in favor of

Canadian producers, the duties will remain in place.

Web Site: http://www.ccra.gc.ca/sima("http://www.ccra.gc.ca/sima")

LAKE FOREST, Ill., Oct. 22 /PRNewswire/ -- The Phosphate Chemicals Export

Association, Inc. (PhosChem) today announced that it has concluded two major new
contracts for 2002 that together provide for the shipment of up to 2.4 million
metric tons of diammonium phosphate (DAP) to China.

The contracts, with China National Chemicals Import & Export Corporation
(Sinochem) and China National Agricultural Means of Production Group Corporation
(CNAMPGC), total approximately 1.9 million metric tons of firm shipments and
550,000 metric tons of optional tonnage. The agreements provide for shipments of
DAP throughout 2002 at prices reflecting the market at the time of shipment.

"This significant new annual import tonnage, which will in part be shipped in the
first quarter of 2002 on top of the large fourth quarter DAP line-up already booked
for China, clearly signals that key Chinese buyers are optimistic about phosphate
demand levels for next spring," said C. Steve Hoffman, President of PhosChem. "In
addition, these contracts reinforce the belief that China will soon join the World
Trade Organization and that the new Tariff Rate Quota (TRQ) system will be
implemented after accession, providing import quota of 5.4 million metric tons of
DAP for 2002."

Hoffman added, "Based upon current 2002 PhosChem member nominations of product,
this new China business, when combined with other contract obligations for DAP,
will essentially exhaust PhosChem's annual tonnage availability."

PhosChem was founded in 1974 in accordance with the provisions of the Webb-
Pomerene Act and is the exclusive export marketing association for its members.
The Act was created to promote U.S. exports. PhosChem is the largest exporter of
concentrated phosphates from North America.

PhosChem member companies are IMC Phosphates Company, a joint venture partnership
between IMC Global Inc. (NYSE: IGL) and Phosphate Resource Partners Limited
Partnership (NYSE: PLP); PCS Phosphate Company, Inc., a subsidiary of Potash
Corporation of Saskatchewan Inc. (TSE and NYSE: POT); and Mississippi Phosphates
Corporation, a subsidiary of Mississippi Chemical Corporation (NYSE: GRO).

MAKE YOUR OPINION COUNT - Click Here

http://tbutton.prnewswire.com/prn/11690X55133986("http://tbutton.prnewswire.com/
prn/11690X55133986")

/CONTACT: Dave Prichard of IMC Phosphates Company, +1-847-739-1810, or

daprichard@imcglobal.com; or Betty-Ann Heggie of PCS Phosphate Company, +1-306-933-
8521, or baheggie@potashcorp.com; or Melinda Hood of Mississippi Phosphates
Corporation, +1-662-746-5529, or corpcomm@misschem.com/ 08:24 EDT

Justice Department Drops Charges in McDonnell Douglas Chinese Export Case

WASHINGTON--The Justice Department on Wednesday dropped all criminal charges

against the former McDonnell Douglas Corp. related to aerospace exports to China,
two years after accusing the St. Louis firm of sacrificing national security for
corporate profit.

The government charged McDonnell Douglas with conspiring to obtain export licenses
fraudulently in 1994 to sell large machine tools that China then tried to convert
to military use from commercial aviation.

The government's action Wednesday "confirmed that McDonnell Douglas engaged in no

wrongdoing," said Larry McCracken, a spokesman for Boeing Co., which bought
McDonnell several years ago.

As part of the settlement, Boeing agreed to pay a civil penalty of $2.1 million.
Government officials said they were satisfied that the six-year investigation ended
with the "second-largest fine ever imposed by the Commerce Department in an export-
control case."

U.S. Attorney Roscoe C. Howard Jr. said the settlement "addresses the interests of
the United States in enforcing closely the export regulations and holding
corporations and individuals accountable for any violations."

It was a far cry from language used by his predecessor, former U.S. Attorney Wilma
A. Lewis, who announced the indictment Oct. 19, 1999. At the time, she said, "This
criminal conspiracy was a serious attempt to circumvent the export laws designed to
protect the national security of the United States and further our nonproliferation
goals."

A throng of U.S. officials had hailed the indictment as "a message to corporate
America" that firms selling out national security for corporate profit "will pay a
heavy price."

Federal authorities acknowledged privately Wednesday that they had offered the
settlement in part because the case against McDonnell Douglas would have been
difficult to win in front of a jury.

If convicted on the original charges, McDonnell and its Chinese partner faced $10
million in fines and, more importantly for Boeing, the possible denial of export
licenses and even federal contracts.

Instead, the settlement means that restrictions placed on Boeing's military

division, based in St. Louis, will be lifted.

Lawrence Korb, who served as assistant secretary of defense in the Ronald Reagan
administration and now serves as vice president of the Council on Foreign
Relations, said officials are mindful of the security implications when sensitive
cases come to trial. If a company won't plead guilty, he said, the government might
seek a settlement to avert letting information surface that officials prefer to
keep secret.

McCracken said Boeing paid the fine to end the lengthy case. "We've had legal fees
since 1995," he said.

Along with McDonnell, several individuals as well as the China National Aero
Technology Import and Export Corp., known as CATIC, were named as defendants, the
first indictment of a Chinese agency for violating U.S. export laws.

The charges against McDonnell executive Robert Hitt were dismissed last year
because the statute of limitations had expired.

CATIC pleaded no contest in May to felony violation of the Export Administration

Act for making false and misleading statements in connection with the exports. The
agency was hit with a $1 million criminal fine and agreed to pay $1.3 million in
civil charges. The civil fine that McDonnell agreed to Wednesday stems from CATIC's
actions, not from actions taken by McDonnell, McCracken said.

Cathay Pacific Airways, a Hong Kong-based carrier, is apparently interested in

forming a partnership with China's top three airline groups.

Airline chairman James Hughes-Hallet stated on 23 May that the airline also hopes
to receive permission to fly directly to China after China becomes a member of the
World Trade Organisation. Hughes-Hallet stated that a partnership with one of
China's consolidated airline groups would help to develop Hong Kong, Shanghai and
Beijing as international aviation hubs, Reuters reported.

((Comments on this story may be sent to aii.feedback@m2.com))

 The U.S. International Trade Commission determined that revoking the existing
antidumping duty order on imports of fresh garlic from China would be likely to
lead to continuation or recurrence of material injury within a reasonably
foreseeable time. As a result of the Commission's affirmative determination, the
existing antidumping duty order on imports of this product will remain in place.

The Commission's public report Fresh Garlic from China (Inv. No. 731-TA-683
(Review), USITC Publication 3393, February 2001) will contain the views of the
Commission and information developed during the review.

Copies may be requested after March 14, 2001, by calling 202-205-1809 or by

contacting the Office of the Secretary, U.S. International Trade Commission, 500 E
Street SW, Washington, DC 20436. Requests may be made by fax at 202-205-2104.

FULL TEXT American Institute of Food Distribution, Inc. THIS IS THE FULL TEXT:
COPYRIGHT 2001 American Institute of Food Distribution, Inc. Subscription: $565.00
per year. Published weekly. 28-12 Broadway, Fair Lawn, NJ 07410.

SINGAPORE - Aluminium Corp. of China (Chinalco) is preparing to acquire more

Chinese smelters. in an effort to strengthen its domestic market position.

The plan will only be implemented, however, after Chinalco completes its dual
listing on the Hong Kong arid Shanghai stock exchanges, said Liu Shihe, divisional
director of the company's marketing and trade department.

"There are plans to pursue acquisitions but we need to discuss them with
government authorities," he said in an interview during Metal Bulletin's 16th
International Aluminium Conference here Monday. He added that the target sites were
mainly in Henan and Shanxi provinces.

Liu said that while the imminent accession of China to the World Trade
Organization was set to bring in a whole new era in the country's trading system
and taxation rules, China's WTO entry also meant that smaller aluminum smelters
would face the prospect of closure amid difficult trading conditions. "The smaller
electrolytic smelters might have to close with greater competition," he said.

Aluminum demand and supply in China are likely to find a balance this year with
increased production by a large number of smelters--a vastly different situation to
that seen in 2000. "China had to import last year to meet-demand, but we expect the
demand-supply equation to be well balanced this year," Liu said. "However, we
believe that, supply will exceed demand in the long run.

Chinalco also expects to achieve its 2001 earnings forecast despite lower,
aluminum prices. "Last year's profits were buoyed by good aluminum prices but we
believe that we are still able to hit our earnings target," he said.

Expansion projects are continuing at Chinalco's smelters and refineries and should
be completed within the scheduled timeframe, Liu said. The state-owned company is-
in the process of retrofitting plants and abandoning Soderberg technology at its
smelters.

No date has yet been fixed for the share listing, although Liu noted, "A possible
time could be in November, but this could be delayed further by poor aluminum
prices."

FULL TEXT

AUTOMOTIVE
Facing competition, Chinese automakers try marketing

SANTA ANA, Calif. -- The biggest competitor to First Auto Works, China's largest
car and truck manufacturer, is another state-owned company called Second Auto
Works.

But Chinese automakers will face new competition after their country's admission
to the World Trade Organization, expected later this year - admission that is
supposed to end protectionism for First and Second Auto Works.

With WTO admission in mind, 17 First Auto Works executives recently attended a
crash course in American-style marketing at the University of California-Irvine.

Their short-term goal is learning to sell in China's increasingly competitive

marketplace. Their long-term dream is exporting Chinese vehicles to the United
States.

"If we can improve our technology, with our competitive edge with respect to low
prices, we think we can start exporting," said Zhao Zhongxin, general manager of
the First Auto Works truck plant in the northeastern Chinese province of Jilin. "We
can see in the future we will be able to sell trucks here."

Foreign automakers have made deep inroads into the U.S. market, with vehicles from
Japan, Europe and South Korea eroding the shares of General Motors Corp., Ford
Motor Co., and the Chrysler Group of DaimlerChrysler AG.

China racked up an $83 billion trade surplus with the United States last year,
more than any other country. Auto exports could add money, prestige and power to
China's clout as a trade partner.

"The economies of scale possible in China should allow their [production] costs to
go down," said Donald McCrea, director of the University of California-Irvine's
executive education program, which organized the seminar. "They have the potential
to become a formidable competitor."

First Auto Works' most popular product is a line of Jien Fang trucks. It produces
about 136,000 of the light- and heavy-hauling vehicles a year, some of which
already are exported to Africa, the Middle East, and Southeast Asia. First Auto
Works also makes Red Flag sedans and, in two joint ventures, assembles Volkswagens
and Audis.
 The trucks cost about half as much as comparable Japanese-made models, Zhao said.

If China wants to shift to a market-driven economy, executives were told, they

need to abide by the old American maxim: "The customer is king."

First Auto Works also needs to build an image, marketing the quality, service and
sizzle of its trucks if it wants to compete internationally.

Chinese vehicles are designed for heavy lifting and rough riding. Cup holders,
air-conditioning and power steering are not among the standard features.

First Auto Works' slogan "Jien Fang A moneymaking machine!" lacks the ring of such
Madison Avenue campaigns as Chevy Trucks' "Like a Rock," the visiting executives
said.

"TV ads in the United States are more creative and interesting than in China,"
said Wang Li, general manager of a First Auto Works plant in Shenyang.

PHILADELPHIA INQUIRER

Hong Kong (Platts)-13Dec2001/1059 pm EST/359 GMT Chinese and Hong Kong metal
traders told Platts this week they were keeping a wary eye on tariff cuts and new
anti-dumping measures following China's accession to the World Trade Organization.
China, which formally entered the WTO on Dec 11, will encourage free trade among
member countries as well as the lowering of tariffs. Reports said China would slash
its average tariff rate to 12% from the current 15.3% starting Jan 1, 2002 to
fulfill WTO commitments. A Hong Kong trader said: "We don't expect there would be
immediate effects on metal prices as traders still have to wait and see how far and
how much the tariff will be lowered. But for sure, we are keeping a close watch on
it."

Hong Kong (Platts)-13Dec2001/1100 pm EST/400 GMT Another trader said: "It is

believed that tariffs will gradually be lowered next year and will be beneficial to
both Chinese exports and imports between member countries. However, as a mature
trading network has yet to be formed with other WTO members, China will have to
wait." The trader added that China's WTO entry would ultimately boost the wholesale
metal trade in China as lower tariffs would help stimulate imports. A third trader
said: "Higher transparency on metal trading following the WTO entry is expected to
generate more business opportunities. With new rules on anti-dumping duties to be
carried out, cost of exports is expected to lower and hopefully those countries
will have to open more of their protected markets."

Hong Kong (Platts)-13Dec2001/1102 pm EST/402 GMT A Hong Kong trader said: "Trading
companies and plants in China will take time to get to learn more about the WTO-
related issues. At the moment, we are still a bit confused about all the new
rules." He added that the Chinese market was expected to become more attractive to
investors and its competitiveness in the metal business was expected to rise.
Reports said China's Ministry of Foreign Trade and Economic Cooperation had set up
the Department of World Trade Organization Affairs and the Fair Trade Bureau in
November to help decide how anti-dumping and subsidy issues operate and ensure
China would strictly abide by the WTO agreements. The Bureau of Industrial Injury
Investigation was recently set up to investigate whether and how imported products
harm domestic manufacturers.

.... Japan's recent mandate for quarantine on the import of Chinese vegetables,
which became effective Apr. 1, has green onions, mushrooms and rush plants rotting
in the ports, according to China Online.

FULL TEXT The Food Institute THIS IS THE FULL TEXT: COPYRIGHT 2001 The Food
Institute Subscription: $565.00 per year. Published weekly. 1 Broadway, 2nd Floor,
Elmwood Park, NJ 07407.

Philippine IT Industry Braces For Chinese Competition

China currently is preparing to join the WTO.

The Philippines currently has the greatest number of electronics plants in Asia,
according to a report by the Semiconductor and Electronics Industries in the
Philippines, Inc. (SEIPI). These companies generate yearly a total of $20 billion
to $30 billion of export revenues.

Arthur Young, president and CEO of electronics manufacturing firm PSI

Technologies, said China's membership into the WTO could trigger movement of
Philippines companies into China.

"One of the key implications of China's entry into the WTO is that it would
liberalize its trade rules to accommodate foreign firms. That could take away the
bulk of investments that could be placed in the Philippines," he said.

"China's entry into the World Trade Organization is a two-way thing," said Peter
Wallace, president of AYC Consultants, Inc., one of the resource persons invited by
Philippine-based electronics manufacturers at a recent symposium they have
organized.

"China poses as a tough competitor for countries that are also promoting
information and communications technology, but it's also a big potential market
these countries can tap," Wallace said. China's membership into the WTO means it
would also have to open its large domestic market comprising more than 1.6 billion
people, he explained.

Wallace noted that over $40 billion of foreign direct investments pour annually
into China. With more than 53 high-tech industrial parks, China exported about $37
billion worth of electronics products in year 2000, he noted.
 The threat of China as an attractive alternative location to even the existing
electronics manufacturing plants in the Philippines is not something that the
Philippine government can shrug off for long, he argued.

"You've heard about the Silicon Valley model. Then there was the resounding
success of Japan, Inc. Now, China is at the brink of its own debut as a
technological power. And where does the Philippines figure in all this?" Wallace
asked.

Wallace said the expected opening of China's 1.6 billion market would be a boon to
various manufacturers outside China, but much more for those with manufacturing
operations in China.

Unlike the Philippines, which is an archipelago, China is just one massive

landscape, making transportation of materials from one plant to another easier and
cheaper.

Also, the massive labor force of China makes it possible for China to offer much
lower labor rates than the Philippines.

But the picture might not be that bleak for the Philippines if overall
competitiveness of China versus the Philippines is carefully looked at, according
to local economist Solita Collas-Monsod.

Monsod said investors that have to choose between China and the Philippines should
consider how much return on investment do they generate out of a dollar that they
invest in either location.

According to SEIPI's Executive Director Ernie Santiago, the Philippine electronics

manufacturers' rule-of-thumb says that every dollar of investment generates $3 in
export revenues.

Wallace said it also might be instructive for the Philippine government to

carefully compare the Philippines' strengths and weaknesses relative to that of
China.

"The Philippines' greatest strength is its people," Wallace said, as he reckoned

how favorably the country's manpower ranked in terms of IT skills and readiness. He
also cited the high availability of skilled technology and managerial workers in
the country - their trainability, English proficiency and adaptability to Western
Culture.

But he also pointed out China's educational system is fast improving, and the
Chinese government is working hard at churning out more skilled technology and
managerial workforce. Many of China's fresh graduates are reportedly at par with
the high-tech skills of their Filipino counterparts and are also as persistent in
learning English.

Wallace further reckoned that around 20,000 Chinese students are being sent abroad
to hone their skills and knowledge, especially as these are applied to the high-
tech sector.

In comparison the Philippines' educational system is gradually deteriorating,

Wallace noted.

If the Philippine government isn't able to work on improving its educational

system soon, it may eventually lose its competitiveness as a source of reasonably
priced, highly trainable workers, or as the country whose workforce has the highest
English-language proficiency, he said.

"It seems that while the Philippines greatest strength is its people, it greatest
weakness is its government," Wallace said.

Accordingly, bureaucratic negotiations between city governments in China are

slowly being replaced by a centralized system of transactions, as the Chinese
government tries to be friendlier towards business.

In contrast, cronyism, corruption persists in the Philippine Government, which has

not been that successful in curbing bureaucratic red tape for foreign investors or
in keeping internal peace, order and security.

SEIPI Executive Director Ernie Santiago said: "All is not lost for the Philippines
to maintain its position as a haven for multinational semiconductor and electronics
firms."

Santiago said one of the aces the Philippines has in this bid is its labor force.
He cited that the country produces over 100,000 engineering, IT and technical
graduates every year - enough to fill in key labor requirements of the
manufacturing firms. He also said Filipinos are comparably more skilled against
their Asian counterparts having a much shorter learning curve.

"Other Asian workers are trained for an average of six months for a particular
task; Filipinos of the same educational background only need less than half of
that," Santiago said.

Young also argued the Philippines still has a three to four-year window of
opportunity to sustain high-tech investment inflows and keep companies from moving
out.

Santiago also revealed that the SEIPI is also working closely with the Information
Technology and E-Commerce Council (ITECC), the government's policy-making body for
IT-related issues, and is chaired by President Gloria Macapagal-Arroyo herself. He
said they are working on regulatory issues that would entice more foreign companies
to invest in the Philippines.

"It's a team effort for both the private sector and the public. We have to act
fast if we still want the Philippines to be a manufacturing haven for electronics
products," Santiago said.

SEIPI is on the Web at http://www.seipi.org.ph

Reported by Newsbytes.com, http://www.newsbytes.com

Reported by Newsbytes.com, http://www.newsbytes.com("http://www.newsbytes.com").

09:52 CST Reposted 09:53 CST

WIRES PC, TELECOM, ONLINE, LEGAL, ASIA, BUSINESS/

Machine Fluid Company Brings Chinese Customers to Wichita, Kan., Seminar

 Threats of economic slowdown in his industry haven't hurt business for John Tsou,
an independent distributor for BG Products Inc., who sells such products as
transmission fluid, power steering fluid and engine coolants to dealers in China
and Taiwan.

His sales are up 3 percent this year. And overall sales of BG's automotive
chemical products have increased almost 10 percent since last year, customer
relations coordinator Wayne Valentine said.

More than 100 people now work at the Wichita company, which employed between 85
and 90 last year.

The key to this success, he said, has been education programs that give buyers a
better understanding of BG's products and encourage them to stress service and
vehicle maintenance to their customers.

John Tsou brought seven of his Chinese customers to Wichita this week to
participate in a three-day seminar the company calls BG University and to observe
how business operates in a foreign culture.

"It's a learning experience that's invaluable," BG president Galen Myers said.

The visitors spent Monday learning the production process, composition and proper
use of BG's additives and lubricants.

On Tuesday, they learned marketing and service skills. Today, the lessons will be
combined into practical applications in dealerships.

Classes take place in a high-tech 100-seat training room the company built in
1999. Instructors drive vehicles into the room and teach through hands-on
experience.

Educating foreign customers is important because 7 percent of BG's sales are

overseas, Myers said. Tsou is one of the company's top exporters.

Business on the other side of the globe could be even better, Tsou said, if his
customers incorporate strategies that have been successful for BG.

His visitors are learning that warmer relationships between employers and
employees in the United States raise workplace morale.

"The biggest difference, they say, is everybody in BG always smiles," Tsou said.
"Their employees don't have that feel."

Tsou plans to expose the Wichita experience to more Asian buyers by making the
project an annual event.

"It's a big job bringing them here," Tsou said. "But it's worth it."

.... The Canadian Food Inspection Agency is warning people with a sensitivity to
sulfites not to consume fresh Chinese shitake mushrooms imported by Emperor
Specialty Foods Ltd. from China which may contain sulfites. The product is being
voluntarily recalled by the importer, and may have been distributed to retail and
restaurants from June 6, 2001 to present in package sizes of 100 g., 1 lb., 3 lb.,
5 lb., 5 kg., and in bulk.

FULL TEXT The Food Institute THIS IS THE FULL TEXT: COPYRIGHT 2001 The Food
Institute Subscription: $565.00 per year. Published weekly. 1 Broadway, 2nd Floor,
Elmwood Park, NJ 07407.

Spy Plane Incident Threatens U.S.- Chinese Trade Relations

The huge economic relationship between the U.S. and China isn't yet on the table
in the diplomatic game to extricate an American spy plane from Hainan Island. But
the longer the standoff goes on, the more likely the U.S. is to play that card,
experts said Monday.

That business and diplomacy so far have remained unlinked was clear Monday, when
CNH Global NV of Racine said it would invest $45 million in a joint venture with a
Chinese company to make small farm tractors and engines in Shanghai.

Under the deal, Case and the Shanghai Tractor and Internal Combustion Engine Corp.
will invest $75 million in an existing Shanghai Tractor plant. Case also will
transfer some technology to the joint venture, of which it will own 60 percent .

The plant will be run by a Chinese general manager, said Carter Langston, a
spokesman for CNH Global, in Lake Forest, Ill.

The companies said the venture is expected to make more than 18,000 tractors and
about 16,000 engines within five years, with initial employment at 1,550 people.
The tractors will be smaller than 100 horsepower, complementing another Case joint
venture at Harbin, in northern China, where larger tractors are made, Langston
said.

Langston said the Shanghai deal is not expected to materially effect Case earnings
this year, saying it was an important strategic investment.

Tractors made in Shanghai are expected to be sold in China and other Asian
countries, he said.

Negotiating the deal took two years and "it is unfortunate that we had an
international tragedy" just before talks ended, he said.

On April 1, the American spy plane and a Chinese military jet collided over
international waters near Hainan. The Chinese pilot is missing and presumed dead,
while the Americans made an emergency landing at a Chinese air base on the island.

As difficult as the situation had become diplomatically, "I don't think it will
have any impact on the deal," Langston said.

Others agree.

"There is a strong mutual interest between U.S. business and Chinese business,"
said John W. Eichenseher, a professor of business at the University of Wisconsin-
Madison. Eichenseher specializes in China, speaks Chinese and as a member of the
military many years ago flew on the same kind of missions as that which ended on
Hainan Island.

"The business side of things in China has always operated a little bit distanced
from the political side," added David Borst, director of graduate business studies
at Concordia University in Mequon and an expert in Chinese matters.

Except for some hardliners in the Chinese military, "virtually nobody (in either
country) benefits from disruption of economic activities, trade and investment,"
Eichenseher said.

The Chinese have more to lose.

While the U.S. sells about $14 billion a year in goods to China, it is not the
nation's No. 1 export market, standing behind Canada, Europe and Japan.

On the other hand, the U.S. is China's No. 1 export market, absorbing about 22
percent of all the goods it sells overseas. In 1999, that was $42 billion worth of
merchandise, giving China a $28 billion trade surplus with the U.S.

China is poised to greatly expand its international commerce by becoming a member

of the World Trade Organization soon, a deal the U.S. still could block. For that
reason, it has much more to lose by letting economics become part of the argument
over the spy plane than does the U.S.

"I don't think from the Chinese side they will do anything to harm the trade,"
said Shaojie Jiang, a professor of Chinese studies at Concordia and native of the
People's Republic. "China needs this trade relationship with the U.S." Eichenseher
said that only a grass-roots movement in China to boycott American goods over the
matter could force the government in Beijing to link the two situations. He said
that was unlikely.

The experts were less sure that American political leaders could keep the two
matters separate.

Jiang noted that U.S. officials have already mentioned Chinese membership in the
WTO in connection with the spy plane.

And Eichenseher said that if the matter goes on too long, U.S. leaders from
President George W. Bush on down will be under increased pressure to put greater
leverage on the Chinese, including possible trade sanctions.

However, he said even those were unlikely to threaten the CNH deal. "It would have
to be based in national security. It is more likely to be in telecommunications
than tractors," he said.

Jiang said it is a good sign that diplomatic talks continue over the matter.

"I don't think they are talking about business, they are just talking about whose
fault it was," he said. "The Chinese want the U.S. to stop these (spy) flights."
Eichenseher, too, said some kind of agreement on stopping or limiting the flights
might resolve the situation. "The Chinese government may be pushing for some
behind-the-scene compromise," he said. "They might reach some agreement on
curtailing those missions."
 Asian Trader
MARKET WEEK -- Foreign Investment
A Way to Shed Light on Chinese Investments

A common complaint of investors in developing markets concerns the lack of

reliable corporate information that allows easy comparisons of companies. But as
the glittering riches of China beckon, people are willing to forgo standards they
might normally apply elsewhere. Come this week, some might argue that such laxity
is no longer excusable. Stern Stewart, the consultant that holds the copyright on
EVA analysis, releases a new ranking of the EVA of 1,000 publicly traded companies
in China, and the results are to be published in Caijing, the Chinese financial
monthly. Some of the key findings can be found in the nearby table.

EVA, which stands for Economic Value Added, gives investors a yardstick of how
companies are using their capital. Stern Stewart began pushing the concept in the
early 'Eighties. It began to be widely adopted in the early 'Nineties, and Goldman
Sachs and Credit Suisse First Boston popularized it as a way to evaluate stocks.
Peter Drucker is also a fan.

EVA is simply what people used to call "economic profit," and is defined as the
amount that exceeds the cost of capital invested to generate that profit. The cost
of capital, of course, is the minimum return that investors expect. How does one
calculate EVA? Basically, it's profits after tax and depreciation but before
interest payments, minus a charge for the weighted average cost of both debt and
equity. Stern Stewart makes numerous adjustments to that number, however, to
eliminate accounting anomalies. For example, it capitalizes outlays on research and
development instead of treating them as current expenses.

MVA is a companion tool that represents the difference between the capital
invested in the company and the market value. How do you calculate it? It's the
difference between the amount investors have contributed in the form of loans,
paid-in capital and retained earnings and the amount investors could realize by
selling the company at its current market value.

Says Bennett Stewart, a founding partner of Stern Stewart and a general in the
firm's China strategy: "In theory, MVA is equal to the discounted sum of EVA profit
the market expects a company can produce in future. Companies with a positive and
rapidly expanding EVA tend to sell for the highest MVA premiums."

Bennett Stewart thinks EVA will become a terrific tool in places like China,
because it's a key component of corporate governance. EVA forces managers to think
about boosting profits without tying up assets, and releasing nonproductive assets
that cost more to run than you could produce with outsourcing. Bennett Stewart
claims EVA imbues an organization with a value focus, promotes economic and
strategic thinking over short-term financial results, gives people a clear way to
measure performance, and provides managers incentives to boost performance based on
related bonuses.

Stern Stewart recently opened an office in Shanghai, with the aim of providing
financial management advice and incentive compensation systems as state-owned
industries are restructured. EVA, says Bennett Stewart, "serves as an effective and
efficient way for Chinese companies to develop corporate cultures, design suitable
governance policies and create wealth." In fact, he maintains, "this is the most
socialistic form of capitalism going."

Meanwhile, widespread use of EVA, the thinking goes, ought to make China's
companies more transparent and lure foreign investors to help fund China's
industrial restructuring.

Four of the companies in the EVA top 10 can also be found in the MVA top 10.
Guangdong Electric Power, the top company, recently reported that first-half net
profit jumped 17.5%. Analysts think the second half looks good, thanks to the
company's expansion strategy and new tariffs. At No. 4 is Shenergy, which invests
in power plants near Shanghai. (For more on China's power producers, see page 28.)
Then there's Baoshan Iron & Steel, one of China's largest steelmakers, and Shanghai
Port Container, which reported that first-half net income sprang 43% higher. Many
of the companies that ranked poorly, it ought to be noted, are well-known to
foreign investors, including China Eastern Airlines and Guangdong Kelon Electric.

Quite a few Chinese companies, Bennett Stewart observes, sell for exorbitant MVA
premiums despite producing relatively low or even negative EVA profit. "In this
respect, they resemble many of the highflying New Economy dot.com companies that
sold for high wealth premiums based upon their prospect for producing big EVAs down
the road. Of course, the EVAs failed to materialize and so the MVAs vanished." Part
of the premium, of course, owes to the huge flood of liquidity into Chinese shares.
"Right now the stock market is placing a very large bet that Chinese companies will
flourish and become profitable, but only time will tell if that is so."

In fact, the carnage in the dot.com sector was one reason Stern Stewart was able
to staff its Shanghai office so quickly. At one time, there was an exodus from the
consulting industry to the Internet. Now that's reversed, to Stern Stewart's gain.
The firm's China country manager, Oliver Hua, was formerly with McKinsey in
Shanghai and then founded Luban.com, a B2B company.

This isn't Stern Stewart's first foray into Asia. It broke into Asia three years
ago by introducing EVA to Singapore Technologies. Soon, consulting gigs with the
Port of Singapore Authority, Kao, Sony, Kirin Beer and Asahi Kasei, formerly Asahi
Chemical, followed. With help from Stern Stewart, Sony moved to outsource two
electronics manufacturing plants to Solectron, freeing Sony up for product design
and marketing.

Stern Stewart's first client in China is the Central Viewer Survey & Consulting
Centre, the country's largest market-research organization. It's also working on
projects with the China Security Regulatory Committee, the China Securities
Association and China International Capital, a leading investment bank. Apart from
the CSRC, other EVA fans include the State Council Office for Restructuring the
Economic System. It's also creating an index to measure how closely companies'
interests are aligned with those of shareholders.

How's the rest of Asia shaping up in terms of EVA? Singapore, Bennett Stewart
says, "is rapidly on its way to becoming an EVA country." Temasek Holdings, the
powerful investment arm of the Singapore Finance Ministry, is "an incredibly keen
fan." Other EVA adherents include Singapore Airlines. On the other hand, he says,
Japanese companies have been reluctant to adopt EVA. "The biggest obstacle in Japan
is the incentive compensation. It's still somewhat feudal, and top managers are
unwilling to cede control, priding themselves on emphasizing harmony and
equalization." As Corporate Japan faces more challenges, that may change, of
course, but it's no sure thing. For now, however, the outlook for China looks
bright.

---
 Emerging Markets
In U.S. Dollars Index*
Index % Chg. 8/16 2001 Range
Argentina 0.6 991.4 1593.0- 897.7
Brazil Free - 1.5 579.1 858.0- 551.3
Chile 1.5 595.2 662.3- 569.8
China Free2 - 0.8 18.2 26.0- 17.7
Colombia2 - 0.1 56.0 57.5- 41.2
Czech Rep.3 3.7 63.8 86.5- 59.7
Egypt3 0.6 97.9 142.6- 94.2
Hungary3 - 2.6 176.4 248.1- 171.6
India2 0.3 91.3 127.4- 86.1
Indonesia 7.2 95.4 100.3- 54.0
Israel2 - 2.0 137.3 201.3- 125.8
Jordan 6.3 65.9 65.9- 55.1
Korea 6.5 92.5 101.0- 71.7
Mexico - 2.1 1430.5 1523.1-1170.2
Morocco2 0.8 147.4 179.8- 135.4
Pakistan2 6.5 32.1 45.5- 30.1
Peru2 3.6 146.2 147.0- 124.5
Philippines 6.4 127.1 169.0- 119.4
Poland2 - 5.3 292.9 504.6- 292.9
Russia3 0.5 190.3 230.0- 139.0
So. Africa 2.7 144.8 172.2- 136.8
Sri Lanka2 - 12.7 24.3 36.9- 24.3
Taiwan 6.0 181.8 249.7- 154.0
Thailand 1.6 62.9 75.1- 56.4
Turkey - 2.9 121.0 307.8- 112.0
Venezuela2 - 3.3 108.8 139.2- 106.1
*Base: Jan. 1, 1988 = 100. Adjusted for Foreign exchange fluctuations
relative to the U.S. $.
**Base: Jan. 1, 1993 = 100.
***Base: Jan. 2, 1995 = 100.
Source: Morgan Stanley Capital Int'l Perspective, Geneva

Hong Kong (Platts)-3Dec2001/506 am EST/1006 GMT Chinese and Hong Kong traders told
Platts Monday that news of Enron's voluntary Chapter 11 Bankruptcy filing in New
York on Sunday was expected to have little immediate influence on the metals market
in China. A Chinese trader said: "It's still not a common practice doing online
trading in China. Most Chinese traders are still less receptive to trading online
as it has not yet reached a mature stage in the country." Enron has an existing
online trading platform, EnronOnline, used for trading metals commodities. A Hong
Kong said: "As Enron has just filed bankruptcy, the Hong Kong market is still
watching the ongoing development to see if it will unload its positions soon and
how big in quantity they will be."

Hong Kong (Platts)-3Dec2001/507 am EST/1007 GMT A third trader said: "Prices on

aluminum and copper seem to have remained in a positive tone recently on the LME
and Shanghai markets. I don't think metal markets have been affected much by the
[bankruptcy] news so far." He added that some market players had been awaiting news
on which company would takeover the online trading giant. "It's still too early to
make any predictions, especially after Dynegy's withdrawal from its proposed
acquisition," the trader added. Chinese and Hong Kong traders said they had not yet
received any formal notice with regard to the bankruptcy filing of Enron Metals and
Commodity Corp.

Chinese Portal Netease.com Names Acting Chief Executive

BEIJING -- Chinese-language Internet portal Netease.com Inc. has appointed Ted

Sun, a board member, to serve as acting chief executive officer, the company said
in a statement.

Mr. Sun replaces founder William Ding, who had taken over as acting CEO after the
June resignations of former Chief Executive King Lai and Chief Operating Officer
Susan Chen. The executives left after the company expanded an internal
investigation into misleading accounting.

That investigation finished at the end of August and led Netease to restate its
results for 2000. The firm now says it made just $3.7 million in revenue last year,
when it had previously reported $7.9 million.

However, the Nasdaq exchange, where Netease is listed, last week suspended trading
of its shares and asked the company to supply unspecified additional information.

In its statement, Netease said it is still working to respond to that request, and
expects trading of its shares to remain suspended until the exchange's hearing
panel reaches a final decision.

The firm has been negotiating with numerous potential merger partners, most
recently local Chinese firm Sinohome Internet Technology Co., as it searches for
profitability amid weakening online advertising revenues and negative investor
sentiment.

Write to Andrew Batson at andrew.batson@dowjones.com

All Rights Reserved.

 SINGAPORE -- Chinese copper premiums have risen slightly as trading activity in
Shanghai remains buoyant on arbitrage opportunities present by low London Metal
Exchange prices. While market players noted a slight softening in physical trading
in early October as consumers settled into the week-long Chinese national holiday
celebrations, business has largely returned to normal. Trading is now steady,
according to industry sources in the region. Shanghai in-warehouse premiums are now
being offered by traders in a range of $50 to $60 per tonne over LME for spot
metal.

FULL TEXT

China moves a step closer to human spaceflight goal.

China's pilotless Shenzhou-2 spacecraft experienced a successful week of flight in

space. The spacecraft reflects China's attempt to become the third country ever to
launch humans into outer space.

Total number of pages for this article: 2 Army Times Publishing Company

BIZNET: E-BIZ/IT
Aeroxchange added China Airlines and Transavia Airlines

Aeroxchange added China Airlines and Transavia Airlines to its aviation exchange,
bringing the airline partners in the venture to 31.

Copyright 2001 Gale Group Inc. All rights reserved.

Kemira's fertilizer division has commenced production at a revamped plant in

Zhanjiang, China. The NPK plant has capacity of 2000,000 tonnes/y. The project is
being implemented by a joint venture called Kemira Compound Fertilizer (KCF),
formed in 1998 with Finnfund, and Guangdong Zhanhua Enterprise Group. A phosphoric
acid plant is also to operate at the site. KCF intends supplying the speciality
crops market in Guandong province and on Hainan Island.

Chemical and Engineering News, Vol. 79, No. 2

This very brief article states that the China Insurance Regulatory Commission has
issued approval for St. Paul Fire and Marine Insurance Company, the principal
underwriting company of the St. Paul Group, to open an office in Beijing, and to
appoint Dawei Bai as the company's chief representative there.

Source: National Underwriter, Property/Casualty Edition

Article ID Number: 2000122440

NEW YORK -- Jianxi Copper Co. will spend $20 million to install MIM Holdings
Ltd.'s ISA Process technology in its Guixi refinery near the city of Ying Tan. The
plant, the first copper refinery in China to be modernized, will produce 200,000
tonnes of copper per year.

FULL TEXT

Airbus SAS, a European aircraft manufacturer, stated on 22 August that China may
order as many as 50 of its aircraft this year.
 A spokesperson for the company confirmed comments made on Tuesday (21 August) by
salesman John Leahy that China is likely to commit itself to purchasing between 30
and 50 A320 aircraft by the end of 2001, Reuters reported.

The contract would be valued at up to USD2.7bn for 50 aircraft, although buyers

usually demand discounts.

((Comments on this story may be sent to aii.feedback@m2.com))

(Copyright - The New York Times Co. 2001)

Rosenbluth International enters into cooperative agreement with China Comfort, one
of China's largest travel agencies

Copyright 2001 Gale Group Inc. All rights reserved.

Syngenta has officially opened a $85 M, 6000 tonnes/y paraquat plant in Nantong,
China. The facility also makes the insecticide Kung Fu.

Chemical and Engineering News, Vol. 79, No. 16

China and South Korea will sign a contract worth $16.85 mil to launch the Arirang-
2 multipurpose satellite in 2004 from Sichuan Province, China.

Total number of pages for this article: 1 Army Times Publishing Company

A China Northern Airlines aircraft had a bumpy landing on 23 July after part of
its left wing touched the ground while landing at Toyama airport on the Sea of
Japan coast.
 The aircraft had been en route from Dalian with some 50 passengers and crewmembers
onboard. No-one was injured and the aircraft only suffered damage to its wing
lights, which broke as the aircraft touched down according to Kyodo News.

The airport's runway was closed until after 1300 local time while it was cleaned
of light fragments, but later flights were apparently unaffected by the closure.

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NORTH PALM BEACH, FLA. -- China Premium Food Corp. changed its name to Bravo!
Foods International Corp. Bravo! is the parent of China Premium Food Corp. Co.
Ltd., in Shanghai, China. The board of directors approved the name change to
reflect the company's emphasis on international marketing and branding in the
flavored-milk business.

FULL TEXT

NEW YORK LIFE, HAIER PLAN CHINA VENTURE

This item in the World Watch column notes that New
venture with Haier Group to sell life insurance to
is China's largest appliance manufacturer. Earlier
announced that it had received regulatory approval
operations in China.
York Life is working on a joint
China. Haier, based in Qingdao,
this month New York Life
to establish insurance

Source: The Wall Street Journal

Article ID Number: 2001122704

Singapore (Platts)-18Nov2001/1045 pm EST/345 GMT China Oil has allocated about

210,000mt of Daqing crude for export to Japan in December, a company official said
Monday. The December allocation is unchanged from the November allocation.
Typically, demand for Daqing crude from Japanese term customers slows down towards
the end of the year, when demand for power falls sharply. In other developments,
China and Japan are expected to begin negotiations on term 2002 Daqing crude
contracts from December 2001.

Hong Kong (Platts)-4Sep2001/348 am EDT/748 GMT China's imports of manganese ore

increased 31.6% year-on-year to reach 940,000mt for the January-July period,
according to the latest statistics from the country's General Administration of
Customs. The import value of manganese ore also rose 26% to reach $69.67-mil.
Imports of chrome ore, however, dipped 16.4% to settle at 580,000mt, with the value
also dropping 27.7% to reach $44.18-mil. Meanwhile, a total of 290,000mt of
ferrosilicon were exported during the period, edging up 4.2% on year. Exports of
managanese were 18% higher to settle at 64,227mt, with the value also rising 35.5%
to total $67.61-mil. (For details, see p480).

Copyright 2001 Gale Group Inc. All rights reserved.

BP and its Chinese partners have signed a joint venture deal to erect a worldscale
petrochemicals complex in Shanghai, China. The $2.7 bn project will be in Caojing
and will include a 900,000 tonnes/y cracker and downstream units. BP will have a
50% stake, Sinopec 30%, and Sinopec subsidiary Shanghai Petrochemical 20%.

Chemical and Engineering News, Vol. 79, No. 37

Copyright 2001 Gale Group Inc. All rights reserved.

Varsal Instruments is erecting a plant in China to produce methanesulfonic acid

and methanesulfonyl chloride (MSC). The plant in Tangshan Seaport Development Zone
in Hebei will eventually include facilities for drug intermediates and actives.
Total investment will be around $15 M. The MSA and MSC plants will come onstream in
Dec.

Chemical and Engineering News, Vol. 79, No. 37

Copyright 2001 Gale Group Inc. All rights reserved.

Investments in China by Formosa Plastics and other Taiwanese companies will become
easier if the Taiwanese government adopts a proposal to ease investment
restrictions. One of the recommendations is the lifting of a ban on Chinese
investment projects of over $50 M. Projects will still be scrutinized on a case-by-
case basis. Formosa is to erect a $6 bn petrochemical complex in Jiangsu province,
China, if there is no opposition from Taiwan.

Chemical and Engineering News, Vol. 79, No. 36

Shanghai show will be largest yet.(the fifth annual Furniture China show)

The article discusses the upcoming fifth annual Furniture China show, to be held
in Shanghai in September. Roughly 800 exhibitors are expected to fill nearly
850,000 square feet.

Total number of pages for this article: 1 Cahners Business Information

Embraer, China Near Deal for 50 Regional Jets.

BRASILIA - Embraer of Brazil is seeking final approval from the Chinese government
for a sale of 40 fifty-passenger ERJ-145 regional jets to that country's airlines.
The deal could be worth as much as $1 billion.Embraer would not identify the
specific Chinese customers or airlines involved in the deal. Embraer recently
opened a sales office in China. The Brazilian manufacturer has sold nearly 600 ERJ-
145s to date and delivered 112 of this model last year.

Copyright 2001 Gale Group Inc. All rights reserved.

Weifang Yaxing Chemicals Co Ltd has awarded Krupp Uhde a contract to build a DM 30
M chlorine-alkali electrolysis facility in Weifang, Shandong, China. The contract
includes supply of electrolyzers and other special equipment, some detail and basic
engineering and technical assistance.
Copyright 2001 Gale Group Inc. All rights reserved.

General Chemical has signed a definitive agreement with Tangshan Sanyou Group for
a joint venture to make and sell calcium chloride in China. A plant using General
Chemical's technology would have capacity of at least 100,000 tons of calcium
chloride, with scope for a further 200,000 tons/y via expansion. The plant will be
in Tangshan.

Chemical and Engineering News, Vol. 79, No. 48

Hong Kong (Platts)-15Nov2001/1124 pm EST/424 GMT China's Jiangxi Copper is

considering shutting down one of its six copper mines on poor prices, the producer
said Friday. "Due to depressed prices, as well as poor concentrate quality at one
of our mines, we plan to shut it down, possibly permanently," a Jiangxi official
said. "But there is no firm schedule for shutdown," he said. The proposed mine
shutdown is not expected to "affect our overall raw materials supply next year," he
said. Jiangxi plans to produce 220,000mt of copper cathode in 2001, up 14% from the
193,000mt produced in 2000.

International

BEIJING, China-China's state Development Planning Commission said it has approved

19 firms to make CDMA handsets to cater to part of its 120.6 million cellular phone
subscribers.

Some of the approved companies include Ningo Bird, China Kejian Co., Zhongxing
telecom and TCL Group.

News

SUNNYVALE, Calif.-Mirapoint announced China Telecom purchased the company's

messaging products and will offer the services to customers in the Guangxi
province.
 The announcement comes just weeks after Mirapoint released new versions of its
messaging products.

Pay March 30, record March 15.

10:57 AM

Copyright 2001 Gale Group Inc. All rights reserved.

Mahler AGS has been commissioned by Sangang Messer Gas Products Co Ltd to provide
a hydrogen generation facility at the Jiangsu Fasten Photonics Co Ltd in Jangying,
China. The facility will have a capacity of 1000 N cu m/h hydrogen and will employ
a process based on steam reforming of methanol. The hydrogen will be utilised to
manufacture optical and glass fibres.

China Southern Airlines has signed a cooperative agreement with KLM Royal Dutch
Airlines regarding the joint operation of the Beijing-Amsterdam and Shanghai-
Amsterdam routes.

Under the agreement KLM will take a block of seats on each of China Southern's
frequencies between Amsterdam and Beijing and China Southern will take a block of
seats on KLM's frequencies between Amsterdam and Beijing/Shanghai.

The blocks will be published under each airlines' respective codes.

((Comments on this story may be sent to aii.feedback@m2.com))

A China Airlines flight was evacuated immediately upon landing in Hong Kong on 23
October after white powder was found in the cabin, prompting fears that it could be
anthrax.
 The powder was found by flight crew on the upper deck of the Boeing 747 and
initial investigations into the substance found that it was not anthrax. The makeup
of the substance has not been revealed, Kyodo News reported.

The aircraft arrived in Hong Kong from Taipei, Taiwan with 361 passengers on
board.

((Comments on this story may be sent to aii.feedback@m2.com))

Moscow (Platts)-14Aug2001/1006 am EDT/1406 GMT Kazakhstan's state oil company

Kazakhoil plans to participate in a project to build an LPG storage and
distribution terminal in southern China, a company spokesman said Tuesday. The
60,000mt terminal will cost around $40-mil and will be build in partnership with
both a Chinese and a Western company.

An Air China Boeing 747 was evacuated at Sydney Airport on 22 March after an
anonymous bomb threat was made.

The call was received just before the aircraft was due to depart for Beijing,
China and resulted in all passengers being evacuated and all luggage unloaded so
that the aircraft could be searched. The flight was delayed overnight and left on
23 March, The Associated Press reported.

There was no report of an explosive device being found.

((Comments on this story may be sent to aii.feedback@m2.com))

Biznet: AVIONICS/COMPONENTS
China Southwest Airlines

China Southwest Airlines chose BFGoodrich wheels and brakes for its fleet of
Boeing 737NG aircraft including three -800s and six -600s.
 Singapore (Platts)-21Oct2001/1123 pm EDT/323 GMT China has seen a 6.04% year-on-
year increase in its gold production for January-September to 128.10mt, compared
with 120.80mt in the same period of 2000, a source at the China Gold Bureau said
Monday. "This figure also represents an 85.4% completion of our total gold output
target for 2001," the source said. Output in the third quarter was 47.89mt, which
represented a 6.7% increase over the 44.89mt achieved in the previous quarter.
"Improved productivity and steady demand has helped to boost production this year,"
another source said. China aims to maintain gold output in 2001 at 170-175mt, which
is similar to the 173mt produced in 2000.

Nippon Kayaku (Tokyo) has acquired the 20% it did not own in dyes producer Wuxi
Advanced Chemicals, from Bada Chemical Factory (Wuxi, China). Nippon Kayaku says it
will also double capacity of water-soluble dyes at the Wuxi site to 1,000
m.t./year.

FULL TEXT

Tokyo (Platts)-1Oct2001/454 am EDT/854 GMT Asia's PVC producers prefer to boost

their sales to China rather than Vietnam, where the cost of freight would be more.
China's market had leapt to $490-500/mt CFR China after the Sep 11 terrorist
attacks on the US. But they have since retraced downward to $460-480/mt. But offers
are high still, at $500/mt CFR China.

Hong Kong (Platts)-3Oct2001/1134 pm EDT/334 GMT China's imports of manganese ore

increased 37.4% year-on-year to reach 1.08-mil mt for the January-August period,
according to the latest statistics from the country's General Administration of
Customs. The import value of manganese ore also rose 29.4% to a total of $80.63-
mil. Imports of chrome ore, however, dipped 16% to 660,000mt, with the value also
decreasing 27.7% to $50.12-mil. Meanwhile, a total of 340,000mt of ferrosilicon
were exported during the period, edging up 1.2% on year. Exports of manganese were
21.5% higher to settle at 76,158mt, with the value also rising 40.4% to a total of
$80.77-mil. (For details, see p480).

Copyright 2001 Gale Group Inc. All rights reserved.

DSM has commissioned a new plant in China for the production of semi-synthetic
cephalosporin antibiotics. The plant will be run by Xinhua-Chemferm, a joint
venture of DSM and Shandong Xinhua Pharmaceutical. DSM has also formed another
joint venture in China with Zhang Jia Kou Pharmaceutical Factory and Harbin
Pharmaceuticals Factory, to make semi-synthetic penicillin. A plant for raw
material 6-aminopenicillanic acid is currently under construction.

Chemical and Engineering News, Vol. 79, No. 49

Copyright 2001 Gale Group Inc. All rights reserved.

Degussa is erecting a formulation and service centre in Shanghai's Xinzhuang

industry park. 50 will be employed and the centre will come onstream in 2002.
Production will initially focus on silicone-based PU additives from Degussa's
Goldschmidt unit.

Chemical and Engineering News, Vol. 79, No. 49

 London (Platts)-25Sep2001/717 am EDT/1117 GMT China's total gold output reached
15.71mt in August, pushing total gold output during the first eight months of 2001
up by 7.84% year-on-year to 112.05mt, Russian news agency Interfax said Tuesday. Of
the total gold processed during the first eight months, 30.85% was from non-ferrous
smelters and 69.15% was from mines, Interfax said. The country produced 173mt of
gold in 2000, and it plans to produce 150mt this year.

(Copyright - The New York Times Co. 2001)

Amkor Technology Inc plans to open semiconductor and assembly plant in China

International

BEIJING-Minister Wu Jichuan of China's Ministry of Information Industry (MII) told

a national information technology conference in Beijing that his ministry will help
create a group of big international telecom companies. Three to four companies
should realize sales of $4.8 billion this year, with a further 8 to 10 reaching
sales figures of $2.4 billion.

He is also recommending five companies to go public abroad. One or two of them are
expected to make initial public offerings before the end of the year.

The telecom law is expected to be promulgated soon.

Minister Wu also expects China to become the world's biggest telecom market in
number of subscribers and network capacity during the tenth five-year plan period
(2001-2005). By 2005, China will have between 260 and 290 million mobile-phone
users, one-fourth of the world's total.

Hong Kong (Platts)-15Aug2001/623 am EDT/1023 GMT China's total lead concentrate

output for the first half of 2001 hit 321,000mt, up 12% from the same period in
2000, an official with Antaike, the information center of China National Nonferrous
Metals Industry said Wednesday. "The rise is due to smelters' expanding output,
boosting the needs [for materials]," he said. "The twenty-eight mines' shutdown in
Nandan county [of Guangxi] earlier this year has not affected overall output much
for the shutdown only lasted for a few weeks," the official said.

China Petroleum & Chemical has completed a three-year upgrade of its Qilu refinery
to increase the capacity for sour crude to 6 M tonnes/y. The five revamped units
and three new units - a hydrocracker, a terephthalic acid continuous reformer and a
sulfur recovery unit - are now all in operation.

CHERYL GLASER, anchor: The high-tech industry, meanwhile, may be in for a much
needed lift. Intel president Craig Barrett says demand for his company's computer
chips is picking up in India and China, and it's even stronger in Latin America,
where Intel has just wrapped up its best quarter ever. However, demand in the US
and Europe remains weak, and Barrett says the telecommunications business remains
in a slump as well.

Singapore (Platts)-5Oct2001/224 am EDT/624 GMT China Aviation Oil has issued a

prompt jet A-1 cargo spot buy tender for October delivery/loading into China,
industry sources said Friday. CAOSCO's tender seeks one cargo of 10,000 mt (+/-10%)
of jet A-1 for FOB Singapore loading around Oct 23 (buyer's option) to Japan/Korea
range or delivered to Huangpu, China between Oct 10-29, sources added. Tender
closes at 2pm local time (0600GMT) Oct 8.

Copyright 2001 Gale Group Inc. All rights reserved.

Domestic demand for PE and PP in China has risen due to the nation's rising
recreational economy and growing applications in the construction industry. For the
period covering Jan 2000 to Oct 2000, PP and PE consumption rose by 21.5% and 9.1%,
respectively, and reached 3.9 M tonnes and 4.8 M tonnes, respectively. Demand for
PP and PE in 2001 is expected to rise by 15% and 9%, and reach 5.5M tonnes and 6.1
M tonnes, respectively.

Copyright 2001 Gale Group Inc. All rights reserved.

Two hydrogen plant are being constructed by Caloric in Zhuhai and Xiamen, both in
China. The two new plants are in addition to two other plants built by the firm in
Xiamen and Liuzhou. Three methanol cracking plants with 600 N cu m/hour of capacity
each will provide hydrogen for sorbitol production, hydrogen bottling and tungsten
processing. The remaining plant is a steam reforming plant with 750 N cu m/hour of
LPG that will supply hydrogen to a refinery.

Copyright 2001 Gale Group Inc. All rights reserved.

CarboCeramics of China has commissioned Kvaerner to provide management consultancy

services for the procurement and construction phases of a grassroot $10 M proppant
plant in China. The plant, which will be located in Luoyang City, Henan Province,
will yield 20,000 tons/day of proppant. An in-house technology will be used by
CarboCeramics for the production process. Mechanical completion of the projects is
slated for Sep 2002. Proppant is used in the hydrocarbons industry to improve flow
and well performance in oil and gas reservoirs.

Copyright 2001 Gale Group Inc. All rights reserved.

Formosa Plastics is looking seriously at a $6 bn investment in petrochemicals in

China. It is hoped to erect a complex within 5 years, at either Taichang or Ningbo,
that would include a 1 M tonnes/y ethylene cracker and a cogeneration unit.
Downstream units would include a 500,000 tonnes/y PVC plant. Formosa will join up
with Japanese companies for some of the downstream units.

Chemical and Engineering News, Vol. 79, No. 22

The Chinese government has decided to extend its guarantee for war insurance cover
to Chinese airlines for amounts over USD50m.

The guarantee, which was introduced after global insurance firms capped third-
party war and terrorism insurance at USD50m following the 11 September terrorist
attacks on the United States, will be extended for a further month according to
Xinhua News Agency.

This is the third consecutive month that China has extended the guarantee.

((Comments on this story may be sent to aii.feedback@m2.com))

(Corrected 11:29 AM)

08:35 AM

Copyright 2001 Gale Group Inc. All rights reserved.

Polyplastics, Mitsubishi Gas Chemical and Celanese's Ticona unit are to come
together to erect a 60,000 tonnes/y polyacetal facility in Nantong, Jiangsu. The
unit is due onstream in 2004. Chinese polyacetal demand is currently over 100,000
tons/y.
 Chemical and Engineering News, Vol. 79, No. 27

BOL, the German media group Bertelsmann's online bookstore, has launched web sites
in Italy and China.

Under a joint venture with the Italian publisher Mondadori, it.bol.com will offer
a choice of 120,000 books in Italian, as well as reviews, reading tips and other
services, while in China Bolchina.com will offer 110,000 Chinese books, reported DM
News.

((Comments on this story may be sent to info@m2.com))

NEW YORK - China's aluminum industry bumped up its primary aluminum production by
nearly 17 percent in the first half of this year and reinforced its potential for
higher output by boosting alumina production about 10 percent in the same period.
Beijing's State Statistical Bureau said Tuesday that first-half production rose
about 234,000 tonnes in the first half to 1,618,200 tonnes and alumina output rose
9.8 percent to 2,349,000 tonnes. Alumina output was equal to 72.6 percent of
alumina requirements in the first half compared with between 75.1 percent and 77.3
percent in the first six months of last year.

FULL TEXT

China National Chemical Construction plans to launch new products into the market.
These products include 3,5-difluoroaniline, bifenthrin technical, sulcotrione,
dichlobenil, clomazone, dodine, kresoxim-methyl, iprodione and tebuconazole. 3,5-
difluoroaniline is an intermediate for agrochemicals and pharmaceuticals.

International
 BEIJING-Li Xiangping, vice-president of Ericsson (China), told reporters his
company plans to increase its investment in China to $5.1 billion during the next
five years, refuting speculation that Ericsson would withdraw from China following
the January announcement that it would outsource mobile-phone production.

Exports by Ericsson (China) and its suppliers will increase from $1.49 billion in
2000 to $4.5 billion in 2005. The company sold 3 million handsets in China last
year.

International

BEIJING-China's Minister of Information Industry Wu Jichuan told reporters at the

annual session of the National People's Congress (NPC) that his ministry has no
plans to issue new mobile licenses this year.

Only two operators, China Mobile and China Unicom, are licensed to operate mobile
services in China, but China Telecom, the country's major fixed-line operator, is
also eager to expand into cellular services ahead of an initial public offering
(IPO) abroad. The company wants to raise US$8 million to US$10 million in what
would become Asia's largest-ever IPO outside Japan.

DEREK McGINTY, co-anchor: China is using an unusual weapon in its war against the
locusts. Farmers have brought in thousands of ducks to wipe out the country's
biggest insect problem in many years. You see, a duck can eat up to a pound of
locusts a day, and they don't even have to be chocolate coated. Chinese officials
say their solution beats costly and environmentally unfriendly pesticides, and
that's what I call organic farming.

ALISON STEWART, co-anchor:

That's what they call buffet. All you can eat.

Singapore (Platts)-17Sep2001/414 am EDT/814 GMT China Oil has allocated about

220,000mt of Daqing crude for export to Japan in October, a company official said
Monday. The October allocations is about 20,000mt lower than the September
allocation. The allocation is about the same that nominated by its Japanese
customers, said the official. Typically, demand for Daqing crude from Japanese term
customer slows down towards the end of summer, when demand for power falls sharply.

BIZNET: ENGINES
China Southern Airlines

China Southern Airlines recently became the seventh airline worldwide to achieve
the one million-hour mark using the Rolls-Royce RB211-535E4 engine. China Southern
has 44 of the engine type to power its fleet of 18 Boeing 757s.

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