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CHINESE insurers' investments rose 60 percent in the first 11 months due to a broader investment scope, the industry watchdog said yesterday. Insurance investments rose to 1.83 trillion yuan (US$245.6 billion) through November, the China Insurance Regulatory Commission said yesterday on its Website. China has allowed 20 insurers to invest overseas, mainly in the Hong Kong stock market, under the qualified domestic institutional investor scheme, the top insurance regulator said in November. Insurers including Ping An, China Life, Taikang, Sino Life and American International Assurance have won the go-ahead to invest in the Hong Kong market. The investments are mainly limited to H-shares and red chips. H-shares are the shares of Chinese mainland companies and red chips are shares of overseas-incorporated companies whose main business is derived from the mainland. In July, China raised the limit for domestic insurers to invest in overseas stocks and bonds from five percent to

CHINA'S military enterprises are encouraged to conduct group listings and are expected to raise between 50 billion yuan (US$6.75 billion) and 60 billion yuan from public share sales by the end of 2010, a senior official said. The majority of these enterprises will complete their reform to turn into shareholding companies in five years, which paves the way to trade shares publicly, said Wu Fenglai, head of the Reform Department under China's Commission of Science Technology and Industry for National Defense. In his article published yesterday in the China Securities Journal, Wu noted that military enterprises, except wholly state-owned ones, welcome foreign investment. Depending on their influence in national security, the country's military enterprises are divided into wholly state-owned, state-controlled and state-invested. "Most of China's military enterprises are allowed to source funds from the capital market and foreign investors," said Wu. China issued a new

NANYANG Commercial Bank plans to at least double its network on the Chinese mainland in two years, after it opened its local incorporation yesterday to fully tap the mainland market. The bank said in Shanghai yesterday it would offer unlimited yuan services. The Hong Kong-based bank gained the approval to set up the local incorporation with a registered capital of 2.5 billion yuan (US$341 million) from the China Banking Regulatory Commission on December 4. The local incorporation was set up on December 14. Nanyang Commercial Bank has six branches and one sub-branch on the Chinese mainland in cities of Shanghai, Beijing, Shenzhen, Guangzhou, Dalian and Haikou. "Network expansion is a key part of the local incorporation's business development," a bank spokesman said. He said the bank would first focus on major cities in the Pearl River Delta, Yangtze River Delta and coastal areas in the geographic expansion. It will also seek opportunities to open outlets in

THE management of a second batch of power generating assets owned by State Grid Corp of China has been transferred to electricity producers, paving way for an eventual sale and making the firm a pure distributor as part of an industry reform. As of Sunday, the power-producing companies are responsible for safety operations and management of eight power plants in which State Grid owned a combined equity generating capacity of 6.47 gigawatts. The State Electricity Regulatory Commission said yesterday this marks the completion of the "main work" in the asset disposal. Other areas still to be done include deal signing, transaction and registration. State Grid, China's dominant power distributor, retained certain generating assets in 2002 during the breakup of the former State Power Corp into five national power producers and two grid operators. It had completed the sale of combined 10.8GW in the first phase of the sale in May to 31 companies, raising 18.7 billion yuan

NANYANG Commercial Bank plans to at least double its network on the Chinese mainland in two years after it opened its local incorporation today. Nanyang Commercial Bank (China) Ltd opened in Shanghai yesterday to offer unlimited yuan services to Chinese. The Hong Kong-based bank gained approval to set up the local incorporation with a registered capital of 2.5 billion yuan (US$341 million) from the China Banking Regulatory Commission on December 4. Nanyang Commercial Bank has six branches and one sub-branch on the Chinese mainland in Beijing, Shenzhen, Guangzhou, Dalian, Haikou and Shanghai. "Network expansion is a key part of the local incorporation's business development," the bank said. The bank will first focus on major cities in the Pearl River Delta, Yangtze River Delta and the coastal area. It will also seek other opportunities in other areas. The bank will focus on personal financial planning products and services in retail banking. In corporate banking,

CHINA'S centrally administered state-owned enterprises are expected to see annual profits leap some 30 percent in 2007 buoyed by a strong economy, according to statistics released yesterday. Aggregate profits of 152 SOEs under the supervision of the State-owned Assets Supervision and Administration Commission of the State Council would probably hit 980 billion yuan (US$132.4 billion) for the whole year, SASAC said. In the January-November period, SOEs recorded gross profits totaling 918.66 billion yuan, up 31.7 percent from the same period last year. Net profits surged 33 percent to 552.21 billion yuan.

TIANJIN Port Co, operator of the busiest port in northern China, says it has received "conditional" regulatory approval for a private share placement to buy assets worth 4.1 billion yuan (US$556 million) from its parent. In May it said it planned to issue up to 226 million new A shares at 18.17 yuan each to acquire berths and the container handling business from its state-owned parent, Tianjin Port (Group) Co. China Securities Regulatory Commission gave approval for the deal on Friday with some conditions, Tianjin Port said in a brief statement to the Shanghai Stock Exchange, without elaborating. Formal approval is expected later, it said. After the announcement, Tianjin Port rose 2.56 percent to 24.88 yuan yesterday when its shares resumed trading after a suspension on Friday. The Shanghai Composite Index was down 2.62 percent. The deal would reduce business overlap between Tianjin Port and its parent and the amount of connected transactions, as well as improve the

CHINA may not subsidize oil refiners this year to compensate them for selling fuels at state-controlled prices, as it did in 2005 and 2006, a government official said. Refiners benefited from oil prices in the first nine months of 2007 that were lower than a year earlier, National Development and Reform Commission Vice-Chairman Zhang Xiaoqiang said in Beijing yesterday. Zhang said he was expressing his personal views. Bloomberg News reported China paid China Petroleum & Chemical Corp (Sinopec), 15 billion yuan (US$2 billion) in the past two years as compensation for losses caused by selling oil products at below-cost prices. The government increased fuel prices last month to encourage oil processors to bolster diesel and gasoline supplies. "On a full-year basis, refiners' losses in the fourth quarter can be absorbed allowing them to break even," Zhang said. The commission is China's main economic planning body. Shares in Sinopec, Asia's biggest refiner, fell 5.5

CHINA has rejected an application by American International Group Inc to turn its Shanghai life insurance branch into a wholly owned subsidiary, the top insurance regulator said yesterday. AIG's American International Assurance unit has applied to transform its Shanghai branch into a subsidiary, which "actually" equals setting up a wholly owned life insurer and is against Chinese regulations, the China Insurance Regulatory Commission said yesterday on its Website. The attempt by the world's biggest insurer contravenes China's World Trade Organization agreements - overseas life insurers can only set up joint-venture life insurance business in China and can own no more than 50 percent. Legal barriers The plan has "legal barriers" and won't be approved, the regulator said. AIA was not available for immediate comment yesterday. AIA is one of the first overseas life insurers to tap the Chinese market. Its premiums topped 7.02 billion yuan (US$949 million) at

CITIC Securities Co, Asia's biggest brokerage by market value, said its US$1-billion cross-investment in Bear Stearns Cos has the support of the nation's stock market regulator. The China Securities Regulatory Commission "supports the cross-investment in principal," Citic Securities Chairman Wang Dongming told investors at a shareholder meeting in Beijing yesterday. "We certainly hope to speed up the process and start the due diligence work with Bear Stearns."

CHINA will collect more than 60 billion yuan (US$8.1 billion) in special funds from oil producers to offer subsidies to public service sectors and low-income families feeling the pinch of increasingly higher prices. In the first nine months, the country's oil producers have paid 41 billion yuan into the special fund, the National Development and Reform Commission said on its Website on Thursday. The special fund was launched to regulate profits earned by oil producers from soaring international crude prices. The country's domestic crude prices were roughly in line with global prices, unlike government-controlled prices for refined products, according to Xinhua news agency. The commission said it had provided subsidies totaling 42 billion yuan this year for taxi drivers, low-income families challenged by higher charges for LPG and farmers affected by increased diesel prices. In 2006, the special fund received 45 billion yuan from oil producers. The commission said 21 billion

THE second-largest shareholder in China Oriental Group, ArcelorMittal, said yesterday it plans to pay at least US$1.7 billion for the shares it doesn't own in the Hong Kong-listed steel maker, in line with local listing rules. Luxembourg-based ArcelorMittal bought a 28.02-percent stake in the company last month for HK$5.02 billion, or HK$6.12 per share, from a former director. Hong Kong's Securities and Futures Commission ruled this week that ArcelorMittal and China Oriental's chairman and controlling shareholder, Han Jingyuan, had acted in concert to buy the stake. Under listing rules, ArcelorMittal now must make a general offer for China Oriental and the offer price must be at least HK$6.12, or a 13-percent premium on its closing of HK$5.4 prior to a trading suspension on November 7. This values the general offer at at least HK$12.9 billion, or US$1.7 billion. ArcelorMittal said it intends to maintain China Oriental's listing status upon the close of the general offer.

CHINA has started building an 80,000-ton press forge in Deyang, in southwestern Sichuan Province, paving the way for making large planes, a longtime dream of the nation. The project, with an investment of 1.517 billion yuan (US$204.7 million), has won the approval of the National Development and Reform Commission and is expected to be the world's largest when it is finished in two and a half years, said Zeng Xiangdong, project director and vice general manager of China National Erzhong Group Co yesterday.

CHINA'S proposed sale of the latest batch of special treasury bonds next week won't largely affect short-term liquidity or dampen stock-market performance, industry analysts said yesterday. The Ministry of Finance said it will sell 750 billion yuan (US$100 billion) of 15-year special treasury bonds to the central bank via the Agricultural Bank of China next Tuesday to raise capital for its state investment fund. Analysts said the central bank may gradually use the special bonds as collateral for repurchase deals with commercial banks to soak up excess liquidity. The sale may help the Agricultural Bank of China earn commission fees to prepare it for an initial public offering next year, they said. This batch of special treasury bonds, to be sold to institutional investors on the interbank market at a coupon rate of 4.45 percent, is part of the ministry's plan to issue 1.55 trillion yuan of special debt this year. In August, China announced the sale of 600 billion yuan in

CHINA Guodian Corp plans to build a nuclear power plant in the country's southeast that will use Westinghouse technology, the major electricity generator has said. China Guodian plans several one-million-kilowatt reactors for the plant in Zhangzhou, Fujian Province, according to a company statement. They will feature the US-based Westinghouse's AP1000 technology, the statement said. Westinghouse is owned by Japan's Toshiba Corp. A planning office for the new plant was set up on November 28, China Guodian said. China plans to spend 450 billion yuan (US$61 billion) on nuclear power plants during the 15 years through 2020, the National Development and Reform Commission has said.

CHINA'S proposed sale of the latest batch of special treasury bonds next week won't largely affect short-term liquidity or damp the nation's stock markets, industry analysts said today. China's Ministry of Finance said that it will sell 750 billion yuan (US$100 billion) of 15-year special treasury bonds on Tuesday to the central bank via Agricultural Bank of China. The money will be used for the ministry's state investment fund. Industry analysts noted that the central bank may gradually use the special bonds as collateral for repurchase deals with commercial banks to soak up excess liquidity. The sale may help Agricultural Bank of China earn a certain amount of commission fees to prepare the lender for an initial public offering next year, they said. This batch of special treasury bonds, to be sold to institutional investors on the interbank market at a coupon rate of 4.45 percent, is part of the ministry's plan to issue 1.55-trillion-yuan in special debt this year. In

PING An Insurance (Group) Co has received regulatory approval to invest as much as 15 percent of total assets overseas, the insurer said yesterday. The Shenzhen-based insurer has won approval from the China Insurance Regulatory Commission to invest in Hong Kong's stock market and major stake investment projects, Ping An said yesterday in a filing to the Shanghai Stock Exchange. Ping An reported 441.8 billion yuan (US$59.7 billion) of total assets at the end of last year. The 15-percent cap means Ping An can invest up to 66.27 billion yuan overseas. The regulator last month allowed Ping An to begin buying Hong Kong stocks with up to five percent of its assets in the previous year. China has allowed 20 insurers to invest overseas, mainly in the Hong Kong stock market, under the qualified domestic institutional investors scheme, the top insurance regulator said earlier. The Hang Seng Index rose 0.77 percent to 28,879.59 yesterday. China introduced the QDII program last year

CHINA has approved Sinopec Corp's US$5 billion joint venture oil refinery and petrochemical project with Kuwait Petroleum Corp in the southern Guangdong Province, a company newsletter said yesterday. The project will have annual ethylene capacity of one million tons, according to a brief statement carried by the online Sinopecnews. Ethylene is a basic petrochemical building block. The statement didn't specify the size of the refinery. Sinopec officials said earlier the plant would process 12 million tons of crude oil from Kuwait per year and expected it to come on stream in 2010. China's top industry planner, the National Development and Reform Commission, has approved the project, it added. Accordingly, Sinopec will stop an 800,000-ton-a-year ethylene expansion project in its Guangzhou unit, near the proposed Nansha plant. The existing 200,000-ton-a-year ethylene cracker at the Guangzhou unit will be closed when the new project starts, it said. Sinopec said earlier that the

China Pacific Insurance Group, which is part-owned by the Carlyle Group and Prudential Financial, has received approval to sell a billion new shares in a Shanghai offering to bolster its finances and compete with domestic rivals. The listing committee of China’s securities watchdog agency approved the share sale yesterday, the China Securities Regulatory Commission said on its Web site. China Pacific also plans to sell as many as 900 million shares in a Hong Kong public offering “as soon as possible” after the mainland initial public offering. The two offerings are expected to raise as much as $6 billion.

CHINA Securities Regulatory Commission yesterday approved the A share initial public offering plan of China Pacific Insurance (Group) Co Ltd. The company will issue one billion A shares on the Shanghai Stock Exchange, making it the third insurer listed on the Chinese mainland after its larger rivals China Life and Ping An Insurance. The A shares will account for 12.99 percent of China Pacific's expanded share capital and the money raised through the domestic listing will be used to replenish capital to help expand business, its prospectus said. Analysts estimated the shares would be sold at 20 yuan apiece and start trading on the Shanghai Stock Exchange before the year-end. The diluted earnings per A share are estimated at 0.84 yuan, as the company anticipates a net profit of 6.45 billion yuan this year.