China Mulling Launch for Fuel Tax Reform

The government is studying a long-awaited plan for fuel tax reform that could include scratching China’s roadway toll system. The National Development and Reform Commission, with the Ministry of Finance and Ministry of Transport, have discussed details such as proposals to abolish road and waterway maintenance fees, lower refined oil prices, and to revamp state-controlled fuel pricing.

The government has repeatedly declared its commitment to energy price reform as a means to encourage fuel conservation. Because international crude prices have plunged almost 70 percent from July, industry analysts have said a shrinking gap between domestic and international prices gives China a good opportunity to reform fuel policies. The State Council, said it would publish a draft reform plan and seek public input.

China Signs Global Anti-smoking Guidelines

After days of heated debate, Chinese government delegates signed guidelines for implementing a global tobacco treaty called the Framework Convention on Tobacco Control at a November conference in Durban, South Africa. The guidelines require clear health warnings on cigarette packets and prohibit tobacco company intervention in public health policymaking. Nor may companies try to improve their images through corporate responsibility activities. But China’s commitment was questioned after state-controlled China National Tobacco Corp. received the China Philanthropy Award in early December.

The Chinese delegates in Durban, including two officials from the State Tobacco Monopoly Administration, argued against the guidelines, saying Chinese tobacco companies are state-owned and that stark warning pictures on packets would conflict with cultural heritage goals. In the end, China was among the 130 nations to sign the document.

Stock Probe Targets China’s Richest Man

Chinese appliance tycoon Huang Guangyu has been arrested by police for alleged stock manipulation. As chairman and controlling shareholder of China’s largest appliance retailer Gome Group, the 39-year-old with 43 billion yuan in assets was first on a recent list of the country’s wealthiest people. But the China Securities Regulatory Commission named Huang in an investigation that began early this year into unusual movements of Shanghai-listed shares of appliance services company Sanlian Commercial and Shenzhen-traded property developer Beijing Centergate Technologies.

Investigators said irregular restructurings of these companies involved Huang Guangyu’s firm Beijing Pengrun Investment Co. Bejing police arrested Huang on November 19. At least three alleged co-conspirators were also detained, including Huang’s older brother. Gome appointed an interim management team to prevent disruptions.

Nuclear Plant Bidding Scandal Widens

Authorities have expanded their investigation into the alleged leaking of confidential information about China’s national nuclear power plant building program. More than 20 suspects have been added to a case tied to the competition for government contracts for inland power plants between French supplier Areva and U.S.-based Westinghouse. Caijing learned that Guangdong Nuclear Power Co. Ltd. Vice President Shen Rugang was among those recently detained by Communist Party disciplinary officials in connection with the scandal.

The probe dates to late 2007 when Jiang Xinsheng, then-president of China National Technical Import & Export Co., was detained for allegedly disclosing sensitive information to Areva during a bidding war with Westinghouse in 2004. A source close to the investigation told Caijing that, in addition to the leaks, the case may involve economic crimes.

Former Life Insurance Chief Found Guilty

A Beijing intermediate court has found Guan Guoliang, who once headed one of China’s largest life insurance companies, New China Life, guilty of fraud and embezzling 260 million yuan. The court plans to sentence Guan later. A prosecutor said the former executive illegally tapped New China Life’s bank account for major investments in real estate made by his or business partners’ companies.

New China Life under Guan’s leadership failed to submit financial statements for three years. Nor did the company have a conventional board of directors. Guan was ousted from his position shortly before being detained in December 2007. The insurance company and its shareholders are now trying to collect debts. But the task is complicated because company transactions during the Guan years were neither transparent nor properly documented.