The Bank of China said the government may look to introduce more macroeconomic controls in the second half of the year to cool an apparent economic overheating, the Shanghai Securities News reported. In the bank’s monthly monetary market report, the bank said that most macroeconomic indicators pointed to continued rapid growth during the first half of this year, predicting GDP would increase 11.3% this year, beyond the central bank's expectation of 11%. Likely measure included rate hikes and the cancellation or reduction of taxes on bank interest. The bank added that increases in the price of agricultural products, rebounding oil prices, resource price adjustment and the "wealth effect" of the stock market were probably the main pressures driving the consumer price index (CPI) to 4% in June.

Silos in China’s financial sector are slowly being eroded and financial conglomerates are set to emerge. As the China Securities Journal reports, better cooperation between the sector’s disparate regulators will be required if the financial sector is to cope with these new financial giants.

China Minsheng Banking Corp – the country’s first private bank – plans to issue RMB20 billion worth of bonds, the Shanghai Securities News reported. The bank is expected to raise RMB8 billion through its three-year flat rate bonds and RMB12 billion through three-year and five-year floating-rate bonds. The bank hopes to increase its capital reservesin order to boost its loan services and hence its interest income and earnings. The bank, which was founded in 1997, hopes to increase its lending to RMB530 billion in 2007.

Chinese companies are looking offshore to meet the country’s voracious appetite for natural resources. As China Business News reports, they are meeting with more failure than success. Consolidation and greater government support is needed.