Quotations for newly-signed export contracts for ceramics from Foshan, Guangdong province – China’s largest ceramics production base – have increased between 15% and 20% following the introduction of a new export tax rebate policy on July 1, the Guangzhou Daily reported. According to the Ceramics Association of Foshan, ceramic glaze prices also rose, up between 20% and 30%. “Foshan’s ceramics industry accounts for 25% to 30% of the world market,” said Yin Hong, the association's secretary. “Unfortunately, ceramics production is high in inputs, energy and pollution but low in productivity, which makes the industry one of the victims of the rebate cut policy.” The export tax rebate for ceramics has been lowered four times since 1985, and following the latest cut it sits at just 5%. The rate for ceramic glaze, a compulsory raw material, has been slashed from 13% to zero. The government’s new export rebate policy has been criticized for failing to provide a transitional period. “This is like a dagger in the throat of Foshan’s ceramics sector, which had been rapidly expanding over recent years,” a Foshan government official told the newspaper.

Fiat (China) is predicting it will increase its local sales revenue fivefold from last year to US$5.5 billion by 2010, the China Auto News reported. It is targeting US$3 billion in revenue from car sales, US$1.5 billion from trucks and US$1 billion from spare components. The Italian automaker has expanded in China at an annualized growth rate of 25% over the past three years. Last year, it unveiled a US$677 million five-year plan to sell 300,000 vehicles in China and gain a 4.5% market share by 2010. Analysts predict its goal is unattainable given that its 8-year joint venture with Nanjing Auto sold just 44,230 vehicles in 2006. Fiat CEO Sergio Marchi said its Chinese partner was to blame for poor sales because it defaulted on a promised investment in Nanjing Auto’s self-branded models. It was reported Monday that Fiat will inject RMB3 billion to salvage the partnership.

Foreign investment in Chinese real estate soared almost 90% year-on-year to US$2.91 billion (RMB22.2 billion) in the first five months of 2007 despite government initiatives to cool the market, the China Economy reported, citing National Bureau of Statistics figures. The surge was attributed to RMB appreciation, rapid urbanization, high rental yields and the enhanced purchasing power of the growing middle class. Separately, US-based property group Aetos Capital has established a partnership with China’s largest insurer, China Life, to invest between US$500 and US$600 million (RMB3.8-4-6 billion)in property, while Morgan Stanley has teamed up with a Shanghai developer to invest US$170 million (RMB1.3 billion) in a 24,000 square meter land lot in Luwan district for business use. The New York-based investment bank’s earlier deals were all top-end luxury residential projects.

Foreign direct investment (FDI) in Shanghai dropped 14.4% year-on-year to US$1.2 billion (RMB9.1 billion) in May, Shanghai Statistics Bureau figures showed. FDI for the first five months was down 8.9% to US$5.53 billion (US$42.1 billion). The China Times reported the decline was due to shrinking investment in the city’s real estate market, which contracted 60% year-on-year during May to US$734 million (RMB5.6 billion), as a result of central government policies introduced in July last year to slow foreign investment in the real estate market. The policies include a requirement for foreign institutional investors with over US$10 million (RMB76 million) worth of property assets to have at least half of the amount registered with a firm incorporated in the mainland, and another that requires foreigners to have lived in China for at least one year before they can buy a residential property.

Climbing staple food prices could drive inflation above the Chinese government’s 3% target for 2007, the China Securities Journal reported. The Consumer Price Index (CPI) is projected to jump around 3.3% this year, according to the State Information Center. Food prices representing one-third of the CPI indicator have climbed 8.3% compared to the same period last year, largely due to higher costs for raw materials such as feed. Egg prices skyrocketed 37.1%, while meat and poultry prices soared 26.5%. However, improved productivity kept industrial sector costs steady, counterbalancing some of the inflationary pressure from food.

The Ministry of Information has given the go-ahead for an industrial park to be built in Xinzhuang, Shanghai, the 21st Century Business Herald reported. The Xizhuang Industrial Park will attract US$6 billion in investment and accommodate display components suppliers and buyers such as TV and laptop producers, establishing Shanghai as China’s number one production base for flat panel displays. Shanghai was one of the earliest cities in China to manufacture flat panel displays. In October 2005, NEC (Shanghai) started mass producing 15-inch displays, and these currently represent 25% of the global market. China made over 150,000 flat panel displays in 2006 and the figure for 2007 is projected to exceed 200,000.