By Thomas Clouse
All clear: Policymakers backed away from Internet filtering
With China's 4 trillion renminbi ($585 billion) stimulus package starting to show real results, the World Bank has upped its estimate for the country's 2009 GDP growth from 6.5% to 7.2%. China's fixed-asset investment increased by 32.9% in the first five months of the year, and consumer sales remained strong, up by 15.2% year-on-year in May. The World Bank also warned, however, that the effects of the government stimulus might not carry over into next year, especially if the global economy continues to struggle. Chinese exports continue to fall, decreasing by a record 26.4% year-on-year in May.
China's state-owned aluminum company Chinalco suffered a blow as Australia- and UK-based mining giant Rio Tinto pulled out of a $19.5 billion deal that would have given Chinalco access to some mining deposits and an 18% stake in the company. Rio Tinto will instead pay $195 million to break the agreement with Chinalco and, in a separate move, is entering a joint venture with long-time competitor BHP Billiton. The decision to terminate the Chinalco contract likely stemmed from rising raw-material prices and thus stronger business performance by Rio Tinto.
Traditional Chinese medicine producer Guilin Sanjin Pharmaceutical Company in June became the first company in nine months to gain approval for an IPO on China's domestic stock market. Sanjin plans to raise RMB634 million with the share offering. The government halted IPOs last fall after the Shanghai stock exchange lost more than 60% in value in the first nine months of last year. Since the beginning of this year, however, the exchange has gained more than 50%.
China risked triggering an international trade war when policymakers ordered that all personal computers sold within the country be equipped with government-approved Internet filtering software. Officials indefinitely delayed the move in the face of fierce opposition from foreign computer manufacturers and from users who feared the move would allow the government to exercise greater control over politically sensitive information.