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1.RMB Revaluation
On July 21, the People's Bank of China, China's central bank,
announced that China's currency, the RMB, would be traded at
a rate of 8.11 to the US dollar and the yuan's 11-year-old peg
to the dollar would be exchanged instead to a basket of foreign
currencies. The yuan, which was revalued by 2.1 percent at that
time, has since appreciated a further around 0.4 of a percent. |
2. Retail Prices for Medicines Reduced
Retail prices for 22 kinds of medicine were reduced in September,
with prices expected to fall an average of 40 percent. This
move has the potential to save consumers about 4 billion yuan
(494 million US dollars), according to the sales volume of the
medicines at that time. |
3. Housing Market Bubble
The Chinese central government began to implement tough measures
to curb the over-heated real estate market and speculation from
April. As a result land used for houses in the first three quarters
this year decreased nearly 25 percent compared with the same
period of last year. In the second half of 2005, the average
growth rate of housing price in 70 Chinese mid- and large-cities
has geared down to 0.6 percent. However, housing prices in big
cities still remained high at the end of the year, and a large
number of people cannot afford to buy an apartment. |
4.
The 11th Five-year Development Program
A roadmap for development over the next five years, aimed at
improving the living standards of the Chinese people, was proposed
on October 11th by the Communist Party of China (CPC), following
a four day meeting. China is aiming to double its per capita
gross domestic product (GDP) by 2010, from the 2000 level of
US$854. |
5.
Cancellation of Agriculture Tax
Since the beginning of 2005, China's Government has stopped
collecting agricultural tax in all but three provinces, where
agricultural tax rates have been reduced to 2 percent. Chinese
rural workers have seen their incomes rise by about 12.5 percent,
at a faster rate than that for urban residents. On December
29th, the country's top legislature announced to abolish the
2,600-year-old agricultural tax from Jan. 1, 2006. |
6.
Split Share Reform
On April 29, the China Securities Regulatory Commission issued
a document to begin trials on floating non-tradable shares.
In June, China's stock market fell below the gloomy 1,000 point
mark for the first time. After winning the war to stay above
the 1,000 point mark, the Chinese stock market dragged itself
through the year in structural adjustment and infrastructure
reconstruction. On August 24, five government departments announced
guidelines to advance share reform, after pilot projects on
share mergers had proved successful and were well received by
the markets. Under the guidelines, more than 1,400 listed companies
will "gradually'' convert their non-tradable shares. |
7.
Banking Sector Reform
China's banking sector is booming, with foreign banks flocking
into the market in advance of it being fully opened up in December
2006. The major state owned banks, Construction Bank and the
Bank of Communications have listed successfully in Hong Kong,
while the Bank of China also plans to list on the Hong Kong
bourse. Meanwhile, China has granted foreign banks more freedom
to conduct the crucial local currency business. |
8.
Chinese Companies' Overseas Merger & Acquisition
China's growing economic strength enables it to be more ambitious
in looking for business opportunities overseas. In 2005, Lenovo's
purchase of IBM's PC business was a landmark deal for Chinese
companies going international. Nanjing Automobile Corp also
bought troubled British automaker, MG Rover Group and China
National Petroleum Corporation announced a successful takeover
of PetroKazakhstan. |
9.
New Regulations on Direct Selling
In August, China approved two draft regulations on direct selling,
aimed at curbing illegal pyramid sales schemes. The regulations
remove all limits on the number of stores which can undertake
direct sales. They also abo lish the provision that the parent
company of a direct selling firm must be an industrial enterprise.
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10.
Solution to Textile Disputes
On January 1, 2005, global quotas on textile imports were cancelled,
and China began to face increasing textile trade disputes with
major trade partners, the EU and the US. China and United States
signed a Memorandum of Understanding on November 8 in London
to find a solution to the bilateral textile tensions after seven
rounds of talks in five months. On June 11, China and the European
Union also managed to reach a way to tackle the textile problems.
Chinese Commerce Minister Mr. Bo Xilai noticed that China needs
to export 800 million shirts to get enough money for one A380
plane. |
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2,411
In 2005, China altogether closed down 2,411 coal mines across the country due to safety problems. | 6
China's government increased the official size of its economy by 16.8% last year, ranking the world's 6th. | 70.85
On Aug 30th, crude oil hits a record $70.85 a barrel in the US after Hurricane Katrina. | 998.23
China's Shanghai Stock Index dropped to a low of 998.23 points June 6, the lowest in nearly eight years. | 46.1%
46.1 % of urban Chinese employees between the ages of 18 and 60 expect promotion and pay rises or to change jobs. | |
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No matter where you live or how you live, money is almost always a concern. Here is your chance to tell us which financial issues concern you most when you think about the coming year:
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Producer: Han Wei 
