Short Takes

Strategic Economic Dialogue

At the second round of the Strategic Economic Dialogue in late May, the United States and China agreed to double the number of daily passenger flights between the two countries by 2012 and to lift all restrictions on the number of cargo flights and carriers by 2011.

China also agreed to resume approving the license applications of foreign securities firms, allow foreign banks to offer renminbi credit- and debit-card services under their own brands, and finish reviewing outstanding applications by foreign insurance firms to convert their China branches into subsidiaries.

Census

China's second nationwide land census will begin in July 2007 and end in 2009. The census will focus on the use of agricultural land while also surveying the use of other land in both rural and urban areas. China's first land census took place in 1996.

China will launch its first nationwide census of environmental pollution in December 2007. The census will seek to identify the quantities and geographic distribution of pollutants from all sectors of the economy and from residences. The results of the census will be reported in the first half of 2009.

Software

Software piracy in China dropped 10 percentage points to 82 percent from 2004 to 2006, a Business Software Alliance report indicates, but annual losses from piracy rose from $3.8 billion to $5.4 billion in the same period. The US piracy rate in 2006 was only 21 percent, but the resulting losses reached nearly $7.3 billion.

Exports of software from China will grow 28 percent annually to reach $12.5 billion in 2010, the PRC Ministry of Information Industry predicts. Domestic sales of software, meanwhile, are expected to rise 30 percent annually and reach ¥1 trillion ($130.8 billion) in 2010.

Trade

To discourage the export of energy- and resource-intensive and polluting products and to trim the trade surplus, the PRC government on June 1 raised export tariffs for 142 items and lowered import tariffs for 209 products. The majority of items that saw export duty hikes are steel products, some of which had their value-added tax rebates canceled in April.

Five US manufacturers of steel nails in late May filed an antidumping case, arguing that imports from China have led to "material injury" to US industry. Observers expect the final determinations of injury and dumping to be reached in mid-2008.

The US Department of Commerce in late May announced its preliminary determination that Chinese exporters of coated free sheet paper have sold glossy paper at 23.19-99.65 percent less than fair value. The department is expected to issue its final antidumping determination in the fall.

Economy

China jumped three places to rank fifteenth among 55 economies in the World Competitiveness Yearbook, compiled by the International Institute for Management and Development. The United States tops the list, followed by Singapore and Hong Kong, but 40 economies are gaining or maintaining their position relative to the United States.

Sixty percent of Americans believe that China's economy will eventually catch up with that of the United States, but only one in three think that China's economic rise will have negative consequences, according to a survey by the Chicago Council on Global Affairs and the Program on International Policy Attitudes.

The World Bank predicts that China's GDP growth this year will reach 10.4 percent, up 0.8 percentage points from its previous estimate. The bank attributes this increase to an economic policy that is "less tight than expected" and to better export prospects.

Energy

The PRC State Council in early June released China's first policy blueprint on climate change. The document rejects mandatory caps on greenhouse gas emissions but says that China plans to emit 1.5 billion metric tons less carbon dioxide equivalent by 2010 by developing renewable energy and enhancing energy efficiency.

Public buildings, including those of businesses, may not set their thermostats below 26 degrees Celsius (78.8 degrees Fahrenheit) during the summer or above 20 degrees Celsius (68 degrees Farhenheit) during the winter, the State Council mandated in early June. The new policy is aimed at reducing energy use.

Food and Drug Safety

Zheng Xiaoyu, the former head of the PRC State Food and Drug Administration, was sentenced to death in late May. He had taken bribes worth more than ¥6.5 million ($850,000) from eight pharmaceutical companies that were seeking approval for their drugs and medical devices.

The General Administration of Quality Supervision, Inspection, and Quarantine (AQSIQ) will finalize regulations on food recall, an AQSIQ official said in late May. The regulations would require all domestic and foriegn food distributors and producers to withdraw products that the government deems to be dangerous.

WTO

By the end of July, China will formally begin negotiations to join the World Trade Organization (WTO) Government Procurement Agreement, according to official PRC press reports. At the 2006 Joint Commission on Commerce and Trade meeting, China agreed to begin such talks by the end of 2007. In 2006, PRC government procurement exceeded ¥350 billion ($45.7 billion).

The United States and China in early June failed to reach a settlement in consultations on the two WTO cases filed by the United States in April. The United States has argued that PRC law does not adequately protect intellectual property rights and that restrictions on the import and export of media products violate China's WTO commitments.