The assets to be transferred to Xi’an Aircraft, a unit of AVIC, include component factories in the cities of Shenyang and Chengdu, Geng Ruguang, executive vice president of AVIC, told reporters in Shanghai today.

Talks with the government to nail down the timeline for the deal are under way, he said.

The Shenyang plant in Liaoning Province will specialize in making tails, while the facility in Chengdu, capital of Sichuan Province, will focus its business on plane fronts, he added.

Wings will be built in Xi’an City, the capital of Shaanxi Province, he said.

AVIC won’t inject money-losing assets into Xi’an Aircraft, Geng emphasized. He declined to give a value for the assets that will be transferred.

China has merged its two largest aerospace companies to form AVIC as it aims to build aircraft to compete with Airbus SAS and Boeing Co. The government is also encouraging state-owned companies to transfer assets to listed units to boost efficiency and financial transparency.

China is aiming to develop its first 150-seat passenger jet by 2020. A draft plan for the so-called “Big Plane” will be completed this year, Wu Guanghui, its chief designer, said earlier this month.

(Shanghai Daily November 20, 2008)

The company and its partner - the International Air Transport Association - presented the project to Chinese authorities and aviation industry stakeholders yesterday at a seminar in Shanghai. They would like China to be part of this project by, for example, being one of the solar aircraft’s five stopovers.

The Switzerland-based firm will test its first solar aircraft next year by conducting a 36-hour zero-fuel flight and construct a second aircraft in 2010.

The second aircraft, which can seat only one person, will make a flight lasting about a month around the world in 2011 with five stopovers including the United Arab Emirates, Hawaii, Florida and south Europe.

The aircraft’s batteries will be charged using power from the sun when the plane is flying during the day so that it can fly at night. Each aircraft will cost US$5 million to make, said Bertrand Piccard, initiator and president of Solar Impulse. IATA has a vision of eliminating all polluting emissions by 2050 and the two partners target to achieve a 25-percent improvement in fuel efficiency by 2020.

(Shanghai Daily November 20, 2008)

The State Council wants to upgrade the entire industry from cow breeding to final sales.

The tainted milk powder scandal was a major food security incident. It not only damaged the health of babies and children, but also hurt China’s national image, said an official with the National Development and Reform Commission (NDRC).

“The crisis has put China’s diary industry in peril and exposed major problems existing in the quality control and supervision of the industry,” said the official.

According to the campaign, the Ministry of Health will revise the quality and safety standard of dairy products, and the Ministry of Agriculture will draft an examination standard for checking of melamine and other poisonous elements in animal feedstuff. The two tasks are required to be finished within a year. An interim quality standard was set up shortly after the scandal.

Before the new standard takes effect, dairy producers and sellers should follow existing national standards or the requirement of Codex Alimentarius Commission (CAC) and International Diary Federation (IDF).

The State Council asked local governments to supply necessary instruments and devices to quality control and agricultural departments, so as to ensure regular examination of dairy products.

Subsidies would be paid to cow farmers and loans be granted to dairy companies, to help them weather the current crisis.

A tracking system will be established to record the flow and delivery of dairy products. Dairy companies are also required to meet the production standard GB 12693 within three years, or risk stopping production.

The guideline also set periodical target that the operation of the industry be recovered to normal production by the end of 2008.

The production and sales of the industry has been damaged severely after the crisis. As an example, Sanlu Group’s daily sales has lost 20 percent, averaging 50 tonnes, compared with before the scandal, said Cao Zhanwu, marketing director of Xingtai Sanlu Dairies Co. Ltd.

By the end of October next year, related laws, regulations and quality standards should be established, and measures be taken to push forward standard production in the industry, said the State Council.

The goal is to have well-bred cows and a mass-producing dairy industry by the end of October, 2011.

The guideline was formulated collectively by the NDRC, the central bank and 11 other ministries, commissions and departments.

(Xinhua News Agency November 20, 2008)

The investment will be part of the fourth-quarter stimulus spending, which has been put at 100 billion yuan.

“The money will mainly go to projects that will reinforce risky water reservoirs, save water in major irrigation areas and improve drinking water safety in rural areas, as well as other projects,” said Chen Lei, head of the Ministry of Water Resources.

According to the National Development and Reform Committee (NDRC), the nation’s top planning body, provincial economic planners and water resource departments will work together to ensure all the governmental funds are allocated to specific projects covered in the plan within 10 days. All the projects must be completed by March.

Vice Premier Hui Liangyu provided further information on the country’s blueprint of rural water conservancy development in the next decade.

“Our target is to enhance the safety of key reservoirs by 2010, provide qualified drinking water for all rural residents by 2013 and complete the construction of water-saving facilities for large-scale irrigation areas across the country by 2020,” he said.

These projects will address prominent rural development problems. Statistics indicate that 53 percent of China’s arable land lacks basic irrigation facilities, causing 50 billion kg of grain to be lost every year.

More than one third of the 85,000 reservoirs nationwide are rated as risky, while about one third of all counties and villages lack qualified water supply equipment.

According to Hui, the plan is also in line with China’s first mid- and long-term grain security plan, released by the NDRC on November 13.

The plan targets grain production of at least 500 billion kg by 2010 and more than 540 billion kg by 2020. Output was 501.6 billion kg last year.

“To achieve the multi-billion kilogram increase in grain output, we will step up the improvement of rural farming infrastructure,” he said.

Hui predicted grain output would increase for a fifth consecutive year in 2008 to exceed 512.3 billion kg, the peak harvest recorded in 1998.

(China Daily November 19, 2008)

The US$21-million project was launched after the global giant acquired a majority stake in the Tianjin-based BHA Aero Composites Parts Co. Ltd. (BHA) in July. Boeing also gained rights to land adjacent to the venture facilities in the Binhai New Area.

Construction was expected to be completed by early 2010 and the new facility would be fully operational by 2013, the US company said. The expansion would increase capacity by about 60 percent by 2013 and employment would rise to about 1,000 from the current 600, it added.

BHA was previously a joint venture between Boeing, Hexcel – a leading global supplier of advanced materials – and the former China Aviation Industry Corp. I (AVIC I). AVIC I and II merged to create the China Aviation Industry Corp. (AVIC) this month.

Earlier this month, Boeing renamed BHA as Boeing Tianjin Composites Co. after the company purchased a 40 percent stake in the venture from Hexcel.

The venture has supplied composite parts to domestic and foreign companies since it started up in 2002.

Boeing said it had purchased more than US$1.5 billion worth of aviation hardware and services from China since the 1980s and the figure would more than double in coming years.

(Xinhua News Agency November 19, 2008)

China is also preparing to start offices in the US.

The FDA will open an office in Beijing today, followed by one in Guangzhou and Shanghai, according to Mike Leavitt, Secretary of the Department of Health and Human Services of the US.

Addressing a joint press conference with Leavitt in Beijing yesterday, Health Minister Chen Zhu said China was set to open offices in the US although no date, location or number was given.

“It shows the new trend of deepened cooperation on food safety between our two countries,” Chen said.

He said the move would help inspection agencies and businesses of both countries.

Leavitt said: “We need to globalize the mission of the Food and Drug Administration because its task now is not domestic but international.”

The United States will import about US$2 trillion worth of goods this year.

“The volume of those goods has become so robust that it requires us to change our strategy,” Leavitt said. “We have to build quality into every product at every step.”

Meanwhile, the Chinese Foreign Ministry said yesterday it regretted the FDA move last Thursday to order dozens of imported milk items from China held at the border. Most are ethnic treats like snacks.

Qin Gang, a foreign ministry spokesman, said Chinese authorities strictly examined exported products.

“We hope the US side will take seriously China’s major concerns because what they are doing now will impact on our trade,” Qin said.

Under an FDA directive, inspectors at US ports of entry will detain foods from China made with milk and other dairy ingredients in the wake of the melamine scandal.

Importers must pay to have their products tested by an independent laboratory that meets FDA standards. Only products found to be melamine-free will be allowed into the US market.

(Xinhua News Agency November 19, 2008)

Speaking at a press conference in Beijing, Zhang Zhizhong, president & CEO of Capital Airports Holding Co, said the airport had been hit by the economic slowdown.

“International (passenger) arrivals have been much lower,” he said.

“In the first half of November, the number was down by 5 to 6 percent year on year,” he said.

October was the only strong month, when passenger throughput rose 24 percent year on year, as people flocked to Beijing after it hosted the Olympics, Zhang said.

But growth was down in the first quarter, and slowed further in the second and third quarters, he said.

The airport has lowered its forecast for the year from 60 million passengers to 58 million, he said.

Last year, Beijing Capital handled 53 million passengers, making it the world’s ninth busiest, general manager Dong Zhiyi said.

It could still achieve 5 percent growth this year for passenger traffic, and 10 percent is forecast for next year, as the long-term outlook for the Asia-Pacific region is promising, he said.

Angela Gittens, director-general of Geneva-based Airport Council International, said yesterday that air passenger transport will double worldwide in next 20 years, and the Asia-Pacific region will overtake North America as the largest market.

In the meantime, Zhang said airlines are being encouraged to boost flight numbers.

“With international arrivals down, we have suggested airlines increase domestic flights, so we can fight the economic slowdown together,” he said.

Meanwhile, Capital Airports Holding Co, which manages 35 airports, will receive a 1 billion yuan cash injection before the end of the year, Zhang said.

The money is part of the central government’s 4 billion yuan fund allocated to the Civil Aviation Administration to boost domestic demand, he said.

“We will use the capital for ongoing projects, including the expansion of Chongqing airport, adding a second runway at Tianjin, and upgrading one of the runways at Beijing Capital,” he said.

(China Daily November 19, 2008)

“The MOC decided not to prohibit the merger as it will not limit competition in the Chinese market in terms of regions and products,” the statement said.

The MOC did restrict the two companies from increasing their existing stake in Chinese beer makers in order to “reduce the negative impact on future competition in the domestic market”.

A-B cannot boost its 27 percent share in Tsingtao Brewer Co. and the Belgian brewer cannot increase its existing 28.56 percent stake in Zhujiang Beer.

The MOC also demanded that InBev not seek shares of China Resources Snow Breweries and the Yanjing Beer Group, the other two major players in the Chinese beer market.

InBev must also report to the ministry if any changes are made to the new company’s structure of controlling shareholders.

The ministry made its decision after inquiring into the acquisition according to the 27th item in Chinese anti-trust law. The MOC has also solicited opinions from related authorities, industrial associations and competitors in the same industry.

InBev announced its bid to acquire all stake of A-B for a total of 52 billion U.S. dollars, or 70 U.S. dollar per share. If successful, the merger would create the world’s largest brewery by sales and effectively help InBev boost its share of the American market.

The deals won approval from A-B shareholders and China, but still needs nods from the United States and Britain.

InBev and A-B are required by Chinese anti-trust law to report to the ministry for approval on the transaction as their 2007 revenue in China hit 5.8 billion yuan (852 million U.S. dollars) and 4.5 billion yuan respectively, well above the reporting threshold. InBev sent the application to the MOC on Sept. 10, 2008.

(Xinhua News Agency November 19, 2008)

As part of the recent 4-trillion-yuan fiscal stimulus package, the money is expected to spur a further 165.4 million yuan in local investment, the website of Xinhua News Agency reported on Monday.

Quoting an unnamed source with the Ministry of Agriculture, the report said the money will be spent on “are to further enhance China’s capabilities and levels in inspecting the quality and safety of its agricultural products”.

An earlier statement on the ministry website (www.agri.gov.cn) said the money will help set up 18 ministerial quality inspection centers, 15 at the provincial and 117 at the county level. Seven regional quality inspection projects will also be launched.

The funds are the first to beef up the quality and safety of the country’s agricultural products, following the recent tainted milk scandal, which resulted in the resignation of Li Changjiang, chief of the country’s top quality control agency.

Legislators have suggested establishing food safety commissions at different levels of government, and the draft of the food safety law is due to be passed next month.

The ministry has received a total of 5.15 billion yuan from the stimulus package, which it said will be used to improve rural infrastructure and the living conditions of farmers in the country.

The ministry source was quoted as saying that it plans to spend 3 billion yuan on rural methane projects. The goal is to offer household biogas to 2.25 million families in 1,212 counties, build more than 30,000 rural biogas service outlets in 1,496 counties, and launch methane projects for some 7,500 breeding farms in 675 counties.

The projects will be concentrated in areas south of the Yellow River, Xinhua said.

By year’s end, these projects will have helped push the number of rural households that use biogas to 35 million, or 25 percent of the total.

Similarly, 1,600 breeding farms, or 13 percent of the total, will have become biogas users.

(China Daily November 19, 2008)

China Southern Airlines Co, the country’s biggest carrier by fleet size, rose by the 10 percent daily cap to close at 3.67 yuan (US$ 0.54), compared with a 2.22 percent gain on the benchmark Shanghai Composite Index.

China Eastern Airlines Corp, the nation’s third-largest, advanced 10 percent to 3.85 yuan while Air China, the country’s flagship international air carrier, also jumped 10 percent to finish at 4.65 yuan.

The central government is likely to offer a cash injection of 3 billion yuan each to the parents of China Eastern and China Southern, newspapers including the Shanghai Securities News and the Oriental Morning Post reported, citing unnamed sources.

The parents China Eastern Air Holding Co and China Southern Air Holding Co will then pass the money on to their listed units, according to the Oriental Morning Post.

The state-run parent of Air China is also reportedly seeking cash from the government. Industry sources said earlier that the central government was considering bailing out several troubled airlines but decision has yet to be made.

Officials at the three air companies all declined to comment on media reports yesterday. Calls made to the Civil Aviation Administration of China, the industry regulator, went unanswered.

The proposals to inject money into airlines are part of the central government’s plan to help a raft of state-owned enterprises as it acts to bolster demand and spur growth, according to the Shanghai Securities News.

Chinese airlines posted heavy losses in the third quarter due to rising fuel costs and declining traffic. Industry analysts have expected the air transport industry to sink into the red for the entire year.

“It’s an apparent signal by the government to spur growth,” said Liu Yu, an Orient Securities Co trader. “With this support and easing fuel expenses, airlines may recover a bit next year although they won’t experience growth as fast as before.”

(Shanghai Daily November 18, 2008)