PPI

The producer price index (PPI) for manufactured goods increased 2.4 percent year on year in May, according to the NBS. Of the total, purchasing prices of raw materials, fuels and power climbed 5.5 percent over a year ago.

Producer prices of capital goods went up 3.4 percent compared with the same period last year, while those of consumer goods saw a decline of 0.4 percent from a year ago (see graph 3).

In May, producer prices of crude oil ranged up 20.7 percent year on year, contributing 0.6 percentage points to the overall growth of the PPI. Among refined oil products, prices of gasoline, kerosene and diesel oil were up 19.8 percent, 24.1 percent and 20.5 percent, respectively, compared with the same time last year.

During this month, producer prices of raw coal grew 4.4 percent over the year-earlier period.

Among purchasing prices of raw materials, fuels and power, those of fuel power, nonferrous metal materials and chemical materials rose 11.8 percent, 35.3 percent and 0.4 percent, respectively, year on year, while purchasing prices of ferrous metal materials dropped 3.6 percent over a year ago.

From January to May, the PPI went up 2.6 percent compared with the same period last year and purchasing prices of raw materials, fuels and power jumped 5.9 percent from a year ago.

Technology Introduction

According to the statistic from the Ministry of Commerce, 4,630 contracts of technology introduction were signed from January through May. The total value of these contracts arrived at $11.1 billion, surging 57.2 percent compared with the same period last year. Of this total, technology fees amounted to $5.98 billion, accounting for 53.9 percent of the total value.

In the first five months, the transaction value of joint ventures or cooperation production with introduced technologies was $3.63 billion, 15 times the figure in the same period last year, accounting for 32.7 percent of the total contractual value of technology introduction. Imports and exports of know-how license contracts as well as complete sets and key equipment stood at $2.8 billion and $2 billion, respectively, contributing 25.2 percent and 18 percent to the total value of technology introduction.

The EU was the biggest source of China's technology introduction in the first five months. The value of technology introduction contracts signed between China and the EU reached $4.67 billion, shooting up 38.3 percent year on year, accounting for 42.1 percent of the country's total value of technology introduction. Japan and the United States ranked second and third, with contractual value of $3.11 billion and $1.45 billion, constituting 28 percent and 13 percent of China's total technology introduction contracts.

From January to May, technology introduction by state-owned enterprises amounted to $5.83 billion, double the figure a year ago and constituting 52.5 percent of the country's total value of technology introduction. Technologies introduced by foreign-funded enterprises totaled $4.68 billion, accounting for 42.2 percent of the national total.

Railway transportation was still the fastest growing industry of technology introduction in China. Technology introduction contracts registered by the railway sector in the first five months increased eight fold, constituting 35.4 percent of the total technology introduction. During this period, technologies introduced by electrical product and communications equipment manufacturing and transportation equipment manufacturing sectors were at $2.1 billion and $840 million, contributing 18.9 percent and 7.6 percent to the country's total.

Oil Imports

China's crude oil imports rose sharply in May because of the low base a year ago and rising demand from refiners after the government raised retail fuel prices. The country imported 12.39 million tons, or 2.93 million barrels of oil per day in May, up 19 percent year on year, according to the General Administration of Customs.

The Central Government raised the prices of gasoline and diesel by more than 10 percent in May, the second time this year, to help the country's refining industry, which lost 9.8 billion yuan in the first quarter.

The market expects further price increases this year as analysts, including David Hurd at Deutsche Bank AG, said the two hikes in March and May were still not enough to make up for losses of big refineries like Sinopec Corp.

EXIM Bank

The Export-Import Bank of China issued 10 billion yuan worth of financial bonds by inviting bids on June 15-23. The 18-month financial bond is the bank's second batch of financial bonds this year.

The interest rate will be decided through public bids and it will be paid every half year, according to a recent report by China Securities News.

Major underwriters of the financial bonds include the Industrial and Commercial Bank of China, the Agricultural Bank of China, Bank of China and 53 other financial institutions.

Macao

Standard & Poor's Ratings Services said in a recently released article that in the next few years, Macao might overtake the Las Vegas Strip as the biggest gaming market in the world in terms of revenue. China could also become the second largest gaming jurisdiction, after the United States.

The article, titled "Macao Versus The Las Vegas Strip: Which Will Be The Bigger Winner?" discusses the building booms in the two gaming centers and analyzes their respective visitor trends, revenue mix, supply versus demand dynamics and regulatory risks.

"Macao's gaming revenue could exceed $10 billion over the next five years, but much will depend on the success of the Cotai Strip, which is scheduled to open for business in 2007. Its early success is essential to the financial stability of casino operators," says Standard & Poor's credit analyst Mary Ellen Olson.

Both Las Vegas and Macao will need to create sufficient incremental customer demand and revenue growth to prevent oversupply.

Beauty Festival

The China International Beauty Festival 2006 will be held July 6-9 in Beijing. The event, organized by the China Hairdressing and Beauty Association, includes exhibitions, presentations, competitions, forums and performances in hairdressing, nail beauty and makeup.