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The Ministry of Science and Technology
People's Republic of China

N0.281 December 30,2001

* Full-Fledged Implementation of the 10th S&T Plan

* China's S&T Papers in 8th Place

* Foreign Medicine Wholesaler and Retailers into China 2003

* Favorable Changes for Foreign Banking Institutions in China

* China Stocks Exchange Promises for WTO

* World Thinnest Motor

* China's Sonic Suspension 


Full-Fledged Implementation of the 10th S&T Plan

Along with the final dishing-out of major priority projects for the National 863 Program and the Key Technologies R&D Program in the 10th Five-Year Plan period(2001-2005), the implementation of different national S&T programs has entered a full fledged stage. According to the National S&T Development Plan approved by the State Council for the 10th Five-Year Plan period, China's S&T activities in the next five years will focus on two areas: promoting industrial technical upgrading and enhancing sustainable R&D innovation capacity.

The National 863 Program will pay its major attention to six fields such as information, biology, modern agriculture, new materials, advanced manufacturing and automation, energy, resources and environment and it will organize the implementation on a classified basis in line with priorities and subjects. 55% of its budget will be used to support major projects. The first group of the so-called major projects will include super large-scale IC, electricity auto, innovative drugs and associated industrialization among many others.

The National Key Technologies R&D Program is composed of major projects, priority projects and guiding projects with 60% of its budget supporting major projects. The first 29 major projects thus far defined have covered a number of important fields such as information security and electronic administrative affairs, banking information process, deep processing of major agricultural produce, modernization of Chinese Traditional Medicine industry, food security and others.

It is reported that during the 10th Five-Year Plan period, the budgeting of different S&T programs has seen some increase against that in the 9th period. For example, the budget for the national 863 program has been raised from RMB 5.9 billion allocated by the state in the past 15 years to RMB 15 billion for the following 5 years. Though the National Key Technologies R&D Program is only of a budget amounting to RMB 5 billion for the 10th period, the estimated investment intensity will see great increase as the result of increasing industrial R&D input in the Program.

 China's S&T Papers in 8th Place

Institute of Scientific and Technical Information of China announced on December 3, 2001 that in the previous year China maintained its 8th place in the number of its S&T papers published internationally (excluding the ones by scientists from Hong Kong, Macao and Taiwan). The total number goes up by 7.6% in comparison with that of the year before.

Statistics have shown that in 2000 China's S&T papers maintained its increase in number with improved quality. Chinese scientists published 49,678 papers internationally including the ones collected by SCI and ISTP, or 3,490 papers more than the previous year, higher than the world average growth with a percentage of 3.55% of the world total. As far as China's S&T papers' ranking is concerned, China has maintained its 8th place followed by Russia with its betters as US, Japan, UK, Germany, France, Italy and Canada. In the meanwhile, the number of Chinese S&T papers quoted also went up from 13,024 in the previous year to 15,733 in 2000, and the times quoted from 25,173 to 31,354, landing a respective increase by 20.8% and 24.6%, which demonstrated the improvement of China's international papers both in quality and in influence.



Foreign Medicine Wholesaler and Retailers into China 2003

As disclosed by the State Economic and Trade Commission, China will open its medicine distribution market to foreign wholesalers and retailers from January 2003. In the year before such all-around opening, China will allow selected foreign businesses to enter its market on an experimental basis. The State Economic and Trade Commission and Ministry of Foreign Trade and Economic Co-operation have defined the following qualifications for candidate foreign businesses:

1. Upon approval, foreign businesses will be allowed to establish joint ventures or cooperative businesses with Chinese businesses on the Chinese territories for medicine retailing transactions.

2. The foreign partner for the aforesaid retail joint ventures shall be the one who has an average annual sale volume above USD 2 billion in the previous three years before the application and its total assets shall reach USD 0.2 billion or above in the previous year before the application.

3. The Chinese partner shall be the circulating business of required strength and operation capacity with its total assets reaching RMB 50 million in the previous year before application ( or RMB 30 million for the middle and the west regions) and its average annual sale volume in the previous three years before the application reaching RMB 300 million (or RMB 200 million in the middle and the west regions). When the Chines partner is a foreign trade business, its import and export volume in the previous three years before the application shall be USD 50 million with its export volume not lower than USD 30 million. When establishing a joint medicine wholesaler business, the equity of the Chinese partner shall not be less than 51%.

No Solely Foreign Funded Medical Businesses in China

The Chinese Ministry of Health announced on December 10, 2001 that due to the special nature of health and medical industries, China will not allow opening solely foreign funded medical institutions in China even though China has now become a member of WTO. The said practice is believed in line with acknowledged international norms.

Since the publication of Interim Rules on the Management of China-Foreign Joint Venture and Cooperative Medical Institutions on July 1st, 2000, China has approved the establishment of 23 joint-venture medical institutions in 2001, a most gracious gesture shown for foreign investment in the sector in the past years. As indicated by the statistics provided by the Ministry of Health, China now has 300,000 and more medical institutions at different levels, of which 130,000 and more are non-publicly owned businesses. China-foreign joint-venture medical institutions officially approved by the Ministry of Health have reached 200 and more in number, of which joint-venture clinics have taken a proportion of 50% or more.

When being admitted into WTO, China has promised to allow foreign investors to open China-foreign joint-venture medical institutions in the country provided that the institutions, working staff, technologies and major facilities and instruments are in agreement with relevant requirements. Such opening practice can only be seen in three or five countries in the world. In this sense, China has made a great step in opening its medical market especially in comparison with other countries.

Favorable Changes for Foreign Banking Institutions in China

On December 9, 2001,  the People's Bank of China publicized its changed policies in favor of foreign banking institutions on the eve of China's accession to WTO.

It is reported that starting from December 11, 2001 China will annul its target clients restrictions imposed on foreign banking institutions for their foreign exchange transactions. As a result, foreign banking institutions may extend their foreign exchange services to all the institutions or individuals on the Chinese territories, though they are required to increase their matching operational funds or capitals and have their old banking business license or banking legal person permit updated. From December 11, 2001 on, foreign banking institutions physically located in Shanghai and Shenzhen are allowed to run their transactions in RMB and foreign banking institutions stationed in Tianjin and Dalian may apply for business transactions in RMB.  From the same date on, foreign funded non-banking institutions may, in accordance with the relevant management rules soon to be published by the People's Bank of China, apply for independently or jointly funded automobile banking service firms, providing auto consumers' credit services.  From December 11, 2001 on, foreign investors may, in accordance with the Methods on Banking Leasing Firms Management published by the People's Bank of China, apply for the incorporation of independently or jointly funded banking and leasing firms, providing banking and leasing services. The People's Bank of China will, in accordance with revised by-laws such as “PRC Rules on Foreign Funded Banking Institutions Management” and “PRC Implementation Rules on Foreign Funded Banking Institutions Management”, handle the said applications filed by foreign banking institutions. The applications for incorporation previously filed by foreign banking institutions with the People's Bank of China are still valid, though the applicants are required to submit supplementary materials as required by the revised by-laws.

China Stocks Exchange Promises for WTO

On December 11, 2001, the Chinese Stocks Exchange Watchdog Committee publicized its major promises upon China's accession to WTO.  These promises will bring the following new hopes for foreign investors: 1. foreign stock exchange institutions may directly engage in B-share trading without going through Chinese brokerage firms; 2. representative offices of foreign stock exchange institutions will be allowed to be special members of China's stock exchange system; 3. foreign institutions will be allowed to establish their joint-venture firms engaging in domestic security and investment funds management with the proportion of foreign equity not exceeding 33% or not exceeding 49% within the first three years after China's accession to WTO; 4. within 3 years after China's accession to WTO, foreign stock exchanges will be allowed to establish their joint-venture firms in China with the proportion of foreign equity not exceeding the one third. The joint-venture firms can be selected as A-share undertaking agent, or undertaking agent for B-share, H-share, governmental and corporate bonds or as the sponsor for the establishment of a fund.

On the basis of the above mentioned promises, Chinese stock exchange system will soon start to accept the applications filed by foreign stock exchange firms for direct B-share trading, or for making their representative office in China special members of Chinese stock exchange system. In the meanwhile, the by-laws on incorporation of joint ventures for the businesses of securities investment and IPO undertaking have also seen the finalization and the Chinese Stocks Exchange Watchdog Committee is expected to accept applications in the near future. China has imposed no restrictions on the incorporation of joint ventures by overseas stock exchange firms whether in terms of quantity or geographic regions. Market accessibility will be mainly determined by the prudent practices based on market economy. China will keep its promise for its accession to WTO and faithfully fulfill its obligations in accordance with the provisions regulated in the agreement on service trade.

The Watchdog Committee stressed that opening of stock exchange sector and opening of stock exchange market are two totally different concepts. The former means allowing foreign service provider to be part of China's domestic stock exchange businesses, as regulated by WTO on service trade.  Specifically speaking, it means it should allow overseas service provider to have the access to Chinese market and provide brokerage service for Chinese citizens for their investment in domestic stock exchanges in Chinese currency, while not incurring any transboundary capital flow (registered capital is not included). The latter implies allowing foreign investors to trade China's domestic stocks on a free basis, which could lead to the transboundary flow of capital and is not within the agreement with WTO as it is a capital item in nature.

Major Breakthroughs in Palaeo-geomagnetism Studies

Physically located in the northern section of Hebei Province and 150 km away from Beijing,  Xiaochangliang cultural relics in the east of Nihewan Basin has been acknowledged as one of the oldest basin based stone age relics. The measurement of its age will provide important evidence for the palaeoanthropological studies.

Zhu Rixiang, a research fellow of the Institute of Geology and Earth Physics under the Chinese Academy of Sciences and his collaborators have created a unique palaeo-geomagnetism lab which improves the related experimental equipment, techniques and methods. They have spent three years on the detailed lithomagnetism and geomagnetism studies of 1600 and more palaeo-geomagnetism samples collected for the purpose, and eventually identified the age of Xiaochangliang Stone Layer as 1.36 million years old through calculating sediment rate and vertical position of the relic stone layer.

Zhu and his collaborator’s paper on the finding was published in Nature on September 27, 2001. On the following day, a US anthropologist who used to work on Nihewan project published his comments on the finding in Science. Geologists from Utah University believed that the most distinctiveness of the finding is that it has applied a very good and clear method to determining the year of indisputable artificial stone rather than a natural one, and it is a new breakthrough in basin age determination.

World Thinnest Motor

Tsinghua University has recently worked out the thinnest motor in the world. With a diameter of 1mm, a length of 5 mm and a weight of 36 mg, the said motor is literally a vertical cylinder in shape. When driven by surrounding cables, its head may make even circulation with its bottom producing rhythmic vibration. The miracle power it produces may drive mini-robots to move freely in man's blood vessels.

Made of piezoelectricity ceramics, the motor body has to be surfaced with silver and then evenly divided into four parts with tiny space kept among them. Its polarization is made under high pressure so that silver matter can be made to penetrate into the ceramics.

Thanks to its capacity for driving mini-machinery to change direction and position freely, the said motor is of broad application perspectives in the field of biology, medical treatment and national defense. At present, scientists of Tsinghua University are working on super mini-motor with a diameter of only 0.5mm. 


China's Sonic Suspension

Prof. Wei Bingbo, in the Dept. of Applied Physics, China Northwest Polytechnic University and his collaborators have made materials suspended in the air by taking advantage of supersonic technique. Prof. Wei and others developed a single axle device able to improve the said suspension and associated stability and realized for the first time in the world the suspension of metal tungsten cake in the air with supersonic waves. In addition, they have created a detailed theoretical model for the said study with the result of the theoretical analysis identical to that from experiments. The finding is of great importance to research and development of new materials. Both the technical memorandum of US NASA and UK based journal Nature  think highly of the result.

Superconductor Production Line

China's first production line able to annually produce 200km of bismuth series high-temperature superconductor materials was recently put into operation. Developed by Beijing Innar Superconductor Technology Co. Ltd., the said production line has successfully produced a number of 1000-meter-long, high-temperature superconductor materials during its trial production stage with each of them able to bear an electric current of 43 amperes and an engineering critical current density as high as 6000 amperes per square centimeters or more. The manufacturer is planning within two years' time to create a bismuth series high-temperature superconductor material production base of an annual capacity for 1000 km, so as to provide key raw materials needed by China's high temperature superconductor research and development applications.

China's Electric Autos

The full electricity powered sedan car developed by Anhui Zhaocheng Electric Vehicle Tech Co. Ltd. has recently passed its testing running for 25,000 km with its major technical indicators such as consecutive running distance, hourly speed, slope climbing capacity, per hundred electricity consumption exceeding the national standards and that of its overseas counterparts. The said electric sedan car may house 4 people with a normal running speed at 70 km for 220 km consecutive run, power consumption 15kwh per hundred kilometers, slope climbing capability 18 degrees, maximum hourly speed 80 km and maximum non-stop running range 273 km. Basically it can meet the requirements of urban traffic system and short haul running.

It is reported that the market pricing of the said electric auto is currently sitting at RMB 110,000, and can be reduced to around RMB 90,000 when going into mass production, a price similar to that of internal combustion sedan cars.

       Comments or inquiries on editorial matters or Newsletter content should be directed to:Mr. Cheng Jiayi, Department of International Cooperation, MOST 15B, Fuxing Road Beijing 100862, PR China  Tel: (8610)68512650 Fax: (8610) 68512594                   http://www.most.gov.cn