Economy
China's economy grew 10.4 percent in the first half of 2008, down 1.8 percentage points from the first half of 2007, according to the PRC National Bureau of Statistics.
Consumer prices climbed 7.9 percent in the first half of 2008, largely due to steep food price increases. Prices for raw materials, fuel, and power rose 11.1 percent, up 7.3 percentage points from the same period last year.
Real per capita disposable income of urban residents grew 6.3 percent year on year, while real rural incomes grew 10.3 percent.
Meanwhile, PRC exports rose 21.9 percent to $666.6 billion, or 5.7 percentage points less than in the first half of 2007. Imports jumped 30.6 percent to $567.6 billion, 12.4 percentage points higher than last year's increase. China's trade surplus for the first half of 2008 was $99 billion, down more than $13 billion from June 2007. To help exporters, the State Administration of Taxation and the Ministry of Finance on July 30 raised value-added tax rebates on several categories of textile and apparel products.
China's foreign exchange reserves hit $1.8 trillion at the end of June 2008, up 35.7 percent from June 2007. The bulk of the increase occurred from January to May, with only $11.9 billion accumulating in June.
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Olympics
The opening ceremony of the 2008 Beijing Olympic Games on August 8 kicked off China's moment in the spotlight with a bang. The event, which involved high-tech displays and some 20,000 performers, was attended by more than 80 foreign leaders, including US President George W. Bush, French President Nicolas Sarkozy, Japanese Prime Minister Fukuda Yasuo, and Russian Prime Minister Vladimir Putin. Bush made history as the first sitting US president to attend an Olympic opening ceremony outside of the United States.
Thanks to the Olympics, intellectual property rights (IPR) enforcement may experience a temporary boost. The Beijing Olympic organizing committee sought to recruit 350 volunteer lawyers by August 8 to collect clues and investigate suspicious cases related to Olympic IPR infringement, according to a government IPR website. MOFCOM and SAIC in July announced that local jurisdictions and SAIC departments would conduct investigations of counterfeit branded and Olympic products in large wholesale markets and other Olympics-related venues in the six cities hosting Olympic events.
Direct flights
Signaling that cross-strait relations have warmed since Taiwan's new president, Ma Ying-jeou, took office, the two sides on June 13 signed a tourism agreement that permits passenger aircraft to fly directly between the mainland and Taiwan. The agreement initially allows 36 charter flights to travel directly between five mainland cities and eight Taiwan destinations every weekend. The first flights took off on July 4. The number of flights will gradually increase as demand grows, according to Xinhua News Agency.
Before the agreement took effect, almost all travelers between Taiwan and the mainland were routed through Hong Kong or Macao. Hong Kong's airport currently handles about 80 percent of passengers between the mainland and Taiwan, but this number could drop significantly because of the new weekend services.
Negotiations are expected to continue on several topics related to direct flights, including the possible addition of new routes, regularly scheduled flights, and chartered cargo flights.
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Legal Issues
China's landmark Antimonopoly Law (AML) took effect August 1 (see Antitrust Regime Takes Shape). Information on implementation and composition of key enforcement bodies remains scarce, but PRC media report that the Ministry of Commerce (MOFCOM), National Development and Reform Commission (NDRC), and State Administration for Industry and Commerce (SAIC) will share responsibility for AML administrative enforcement through the Antimonopoly Enforcement Agency.
China's State Council on August 1 announced the creation of the other AML authority, the Antimonopoly Commission, which will coordinate the work of the three agencies responsible for enforcement. One of those agencies, NDRC, on August 1 completed draft regulations on price monopolies that set quantitative standards for fair product pricing. In addition, the State Council on August 3 released new regulations on reporting thresholds for mergers and acquisitions.
The World Trade Organization (WTO) in July confirmed an earlier February decision that China improperly treated foreign auto parts imports. This was the first time a WTO dispute settlement panel ruled against China since its entry in 2001. MOFCOM on July 22 issued a written statement that it disagreed with the decision and reserved the right to appeal. If China appeals the ruling, the WTO appellate body will have 90 days to make a decision. Three other WTO cases, including two related to intellectual property rights, are still pending settlement.
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