Economy

　　Shoring Up SMEs

　　Chinese officials said on May 27 that more efforts by the government are under way to revitalize the country’s small and medium-sized enterprises (SMEs) in boosting economic growth.

　　SMEs， which create more than 60 percent of economic output and more than 80 percent of urban jobs in the country， are the most numerous and innovative of the country’s enterprises.

　　“They are irreplaceable in boosting economic growth， pushing forward innovation， and providing employment，” said Zheng Xin， Director of the SME Department of the Ministry of Industry and Information Technology (MIIT).

　　The Central Government will budget 11.5 billion yuan ($1.86 billion) in a special fund for SMEs to support their innovation and international cooperation. The money will also be used to provide financial assistance to some SMEs， according to Xu Kemin， Deputy Director of the MIIT SME Department.

　　The State Council said in April that tax breaks for small and micro firms will be extended until the end of 2016， with companies to be eligible to have their business income tax halved if their taxable income is under 100，000 yuan ($16，010) per year.

　　Food Safety Stressed

　　The State Council has issued a guideline to boost food safety， a government statement said on May 27.

　　More measures will be taken to deal with land and water pollution and those who are using banned pesticides and veterinary drugs will be punished.

　　The quality of baby formulas will be strictly monitored and a campaign will be made to crack down on any illegal use of food additives.

　　More efforts will be made to improve food safety in meat products and punish those who illegally purchase， process or sell sick or dead animals.

　　Draft amendments to the Food Safety Law released in October last year said China will triple the fines for severe food safety violations， and those jailed for such crimes will be banned forever from the food industry.

　　Salary Survey

　　Employees in China’s foreign-invested companies earned more than any other group last year， according to new survey results released May 27.

　　The National Bureau of Statistics (NBS) said in a statement on its website that foreign companies paid an average annual salary of 61，694 yuan ($10，001) to their employees in 2013， topping all other types of companies.

　　State-owned companies paid the second highest at 56，728 yuan ($9，082)， while companies with investment from Hong Kong， Macao and Taiwan paid 49，683 yuan ($7，954) to employees， the statement showed.

　　The NBS tracked 870，000 companies in 16 sectors for the survey. The average salary of all tracked companies was 45，676 yuan ($7，313).

　　Water Facility Loan

　　The Asian Development Bank (ADB) will help improve water access and quality in China in a $200-million deal signed here on May 27 with private water supplier China Water Affairs Group Ltd. (CWA).

　　Under the project， for which no time frame was specified， CWA will extend urban water pipeline networks into semi-urban and rural communities to provide household connections to tap water 24 hours a day， seven days a week. Customers will enjoy better water quality and more reliable access.

　　CWA will also strengthen existing water facilities to prevent leakage and secondary contamination during distribution.

　　According to the deal， the ADB’s support will comprise a direct A-loan of $100 million， denominated in U.S. dollars and the yuan. The yuan portion will use funds raised via the bank’s Panda bonds as well as Dim Sum bonds.

　　The ADB will also arrange a $100-million B-loan， under which it acts as the lender of record for commercial banks.

　　Oil Exploration

　　China Oilfield Services Ltd. (COSL) completed the first phase of oil drilling and exploration off Zhongjian Island of the country’s Xisha Islands on May 27， the company said in a statement.

　　According to a plan made by its client， the exploration operation has moved to another site for its second-phase work， the COSL said.

　　The operation， carried out by the HYSY981 drilling platform managed by COSL， started on May 2 and is expected to be completed by mid-August.

　　The waters for the first phase were 17 nautical miles from Zhongjian Island， completely within China’s territorial waters， while they are as far as 130-150 nautical miles (241-278 km) from Viet Nam’s coastline.

　　However， preceding the announcement， Viet Nam had carried out intensive disruptions of Chinese company’s normal oil drilling since May 2.

　　Seeking Private Capital

　　The State Grid Corp of China， the nation’s largest utility by sales， said on May 27 it plans to seek private capital investment to establish a distributed power network and charging stations for electric vehicles. It’s a step toward mixed ownership in state-monopolized industries.

　　State Grid representative Wang Yanfang said the company supports private capital in investing in distributed power generation connection projects， as it will develop the industry.

　　At the end of April， the company’s grid-connected capacity of distributed power had reached 1.28 million kilowatts， among which distributed solar power accounted for 1.21 million kilowatts， according to the company.

　　The Chinese Government has shown a clear intention to open up state-owned enterprises to private investment. Sinopec announced in February it will sell up to 30 percent of its retail oil business to private investors.

　　PetroChina just said it will sell 100 percent of its pipeline assets valued at $6.3 billion to private investors.

　　The assets include the first and second west-east gas pipelines， which carry natural gas from Central Asian countries and China’s energy-rich region of Xinjiang to the nation’s eastern cities.

　　Logistics Growth

　　The growth of China’s logistics industry continued to slow in the first four months of 2014 due to shrinking demand amid an economic slowdown.

　　The total value of goods transported by logistics services increased 8.5 percent year on year to 64.2 trillion yuan ($10.4 trillion)， according to the National Development and Reform Commission (NDRC).

　　The growth rate was 0.1 percentage points lower than the first quarter and 0.9 percentage points lower compared to the same period last year.

　　NDRC said that the industry’s efficiency has been improving as the growth of logistics expenditure was slower than that of the value of goods transported.

　　Combined logistics expenditure in the January-April period totaled 3.1 trillion yuan ($500 billion)， up 8.0 percent from a year ago.

　　The China Federation of Logistics and Purchasing forecast in mid-May that the logistics sector will improve later this year and the growth for the whole year will be around 9 percent.

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