POISED TO TAKE OFF The 10th Western China International Economy and Trade Fair in Chengdu showcases local resources, technologies, industries and services, attracting investors to expand operations in the quake-hit region (CHEN XIE)

Overcapacity Redressed

Top economic planner, the National Development and Reform Commission (NDRC) will fight production overcapacity in six sectors, including steel, cement, plate glass, coal-chemical industry, polycrystalline silicon and wind power equipment.

The NDRC also warns of signs of overcapacity in sectors like electrolytic aluminum, ship manufacturing and soybean oil extraction.

China will fight serious overcapacity while offering guidance for newborn industries, like wind power equipment, said Chen Bin, Director of the Department of Industry of NDRC.

China has yet to achieve a stable economic recovery and sustainable growth, but production overcapacity in many sectors, which could add uncertainty to the recovery prospects altogether, has aroused public concern.

CIC's New Deal

China Investment Corp. (CIC), the nation's sovereign wealth fund, announced on October 16 that it had settled the first-phase purchase of a 45-percent stake in Russian oil company, Nobel Oil Group.

The $300 million investment, which would be completed in two phases by the end of September 2009 and June 2010, respectively, is one of CIC's latest moves of investment diversification, shifting preference from financial sectors to resource commodities, under the forecast of excess liquidity and the devaluation of the U.S. dollar.

Search Engine Alliance

China's Internet search engine Baidu Inc. recently partnered with the country's second largest mobile phone operator, China Unicom, to offer wireless search services for the carrier's 3G mobile subscribers in a move to gain ground on Google Inc.'s growing presence in China's mobile arena.

Under the partnership, Baidu will preinstall its services, including text, image, MP3 and news search capabilities, onto China Unicom's 3G mobile phones. It will also provide search services for mobile Internet websites operated by the carrier.

But the deal Baidu secured is not exclusive and China Unicom will keep Google's preinstalled services on the carrier's iPhones intact when it launches the Apple multi-function phone in China later in October, a China Unicom spokesman said.

Hedging Scrutiny

The State-owned Assets Supervision and Administration Commission (SASAC) plans to implement more stringent supervision on China's state-owned enterprises (SOEs), which look to hedge their losses from rising crude oil prices.

During a recent budget meeting, the SASAC tightened its rules and required enterprises under its control to review hedging deals more closely while signing financial derivatives contracts, due to rising book losses from such contracts.

The revised rules require inexperienced companies or companies having reported significant losses to cut their future trading volume of hedging deals significantly. The SASAC also promised to negotiate with investment institutions to protect the legal interests of hedging firms in case there are misleading clauses in signed deals.

Overseas Search

The first China Overseas Fair, held on November 3-4 in Beijing, will provide a platform for overseas projects to find potential Chinese investors.

The fair is slated to attract a total of more than 2,000 projects from 122 countries, covering mining and energy, infrastructure construction, new energy, information technology, biological medicine, manufacturing, agriculture and petrochemical engineering.

At the fair, 21 developed countries, such as the United States, Australia, Canada, France, and Italy will hold investment promotion sessions to brief Chinese enterprises on their investment environment and policies. China Development Bank will sponsor the UN list of 50 least developed countries to attend the fair.