The international competitiveness assessments on China's electronic information products and phosphate fertilizer were unveiled at a seminar in Xiamen yesterday.
The two reports make up part of the government's efforts to assess China's international competitiveness in various sectors, said Chen Jian, assistant minister of commerce, at the seminar held during the China International Fair for Investment & Trade (CIFIT).
The report on electronic information products covers four categories, namely computers, telecommunications equipment, audio and video, and electronic components, said An Xiaopeng, head of the team assessing the competitiveness of the sector.
| It reveals that China has obtained a relatively large market share and growth in product exports in the first three categories. However, this relatively strong competitiveness has come mainly from the foreign-invested ventures in the country.
The electronic components sector remains a weak link, indicating that China remains largely an assembler in this field, An said.
Chinese electronic information companies are still far behind multinational firms in terms of revenue, profit margin, brand building and investment into research and development (R&D).
This sector is subject to the impact, positive or negative, of the Implementation of Information Technology Agreement, which allows participants to eliminate duties on IT products covered by the agreement, and the establishment of the China-ASEAN (Association of Southeast Asian Nations) Free Trade Area.
It is also subject to the impact of disputes concerning intellectual property rights and technical trade barriers, An said.
The suggestions put forward by An's team include building big domestic companies, strengthening industrial clusters, tackling technical bottlenecks, fortifying the weak links in the industrial chain, as well as improving co-ordination among various government departments so as to better solve trade disputes.
As for phosphate fertilizer, China's products rank first in the domestic market and fifth in the international market in terms of overall competitiveness, said Ma Wenqi, head of the team assessing the competitiveness of this sector.
China is second only to Morocco in terms of its competitiveness in providing resources for making phosphate fertilizer.
The competitiveness of domestic firms, however, remains weak in both domestic and international markets, in terms of size, efficiency and R&D capacity, Ma said.
Chinese products are successful at the low-price end of the market, which means a lower brand profile in branding.
The challenges to this sector also include the potential over-supply of resources and competition from large firms formed through mergers and acquisitions.
Meanwhile, Chen Jian said, China has been striving to increase its industrial competitiveness in the three years since it joined the World Trade Organization (WTO). More Chinese companies are entering the list of the world's top 500 firms.
However, the country's overall economic competitiveness remains relatively weak and faces new challenges during the so-called post-transitional period after China's WTO entry.
The Ministry of Commerce of China is working on regulations covering research on industrial competitiveness based on the newly amended Foreign Trade Law, Chen said.
| Speeding up the reform of domestic property rights exchange markets is key to a breakthrough in the reform of State-owned enterprises (SOEs), it was argued at a seminar in Xiamen yesterday.
"The property rights market plays an important role in the revaluation of SOEs since property rights exchange has become one of the major forms of handling SOEs' assets transaction," said Wu Hongbing, deputy general manager of the Shanghai United Assets and Equity Exchange (SUAEE).
He made the remarks at the Seminar on Development of Property Rights Exchange Market and Risk Aversion, held in conjunction with the ongoing Ninth China International Fair for Investment and Trade.
The seminar was organized by the State-owned Assets Supervision and Administration Commission of the State Council.
Approved by the Shanghai municipal government, SUAEE is an integrated market platform for all property rights, including asset rights, creditor's rights, stock rights and IPR.
More than 60 per cent of the nation's equity and asset trading of central government-owned enterprises -- the so-called "central enterprises" -- was submitted for consideration in the SUAEE between February 2004 and May 2005, eventually resulting in 15.5 billion yuan (US$1.9 billion) in trade,SUAEE sources said.
The China Beijing Equity Exchange, meanwhile, received submissions regarding nearly half of central SOE equity and asset trading last year, and was responsible for trades totalling 1.13 trillion yuan (US$136.6 billion).
"Through these exchange markets, the workers, technical personnel, managerial staff and entrepreneurs can become owners of the property rights of their enterprises, thus making a breakthrough in SOE reform," said Wu.
He added that the property rights market will also help domestic enterprises, especially SOEs, smoothly introduce capital injections from foreign counterparts.
Referring to the central government's decision to sell part of its 11.83 trillion yuan (US$1.43 trillion) stake in State-owned assets to maintain fast economic growth, Wu said the property rights exchange market will put the transfer of State-owned assets on a legal footing and curb corruption and the draining of these assets during transactions.
"Speeding up the reform of the property rights system through equity exchange markets is the basis and precondition for establishing an effective corporate governance structure in SOEs and building a modern enterprise system," said Wu.
He also emphasized the need for a multi-form property rights exchange market to serve as a market environment for the reform of the property rights system.
"A sound and healthy property rights exchange market is also critical for an overall reform of the property rights system," he said.
In the meantime, a well-built information system for risk aversion in property rights market is required, Wu added.
He revealed that financial and corporate information on buyers and sellers of State-owned assets is to be published on websites of the provincial-level assets and equity exchanges for 20 working days.
| Government officials pledged to strengthen the monitoring system for State-owned enterprises (SOEs) during a Summit on Regulating SOE Restructuring and Equity Trading attended by dozens of experts and officials in Xiamen yesterday.
"To maintain and increase the value of State-owned assets, our commission must quickly set up a feasible enterprise performance monitoring system which manages State assets, personnel and enterprise operations," said Li Rongrong, chairman and Party secretary of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC).
"We will also set up another appraisal system of SOE management. The system includes indicators like financial status, enterprise operation, debt repayment and enterprise potential," he said.
"We will strengthen the instruction and supervision of local commissions for managing State properties, and punish executives responsible for losses."
World Bank economist Zhang Chunlin drew attention to the need for a SASAC mechanism ensuring the efficiency and fairness of SOE reform, thereby preventing any losses in State assets during their transfer.
He said he believes this can be achieved through a "check price and competition" policy that strictly distinguishes between the check price and target price.
"There is a problem of loss of State assets only when the purchase price is lower than the check price," said Zhang. "Otherwise, the so-called `loss of State assets' is actually a problem about how to maximize the State's interest."
He said national interest could be maximized by increasing competition and transparency.
A fair and transparent public bidding system will enable all potential buyers to make informed decisions - a choice between competitive contenders can thus be made in the best interests of the State, Zhang said.
Directors of Shanghai United Assets and Equity Exchange, Tianjin Equity Exchange Centre and Beijing Assets and Equity Exchange all agreed that the assets and exchange market is playing an important role in the restructuring of SOEs.