From: xc17@cicero.spc.uchicago.edu ()
Subject: CND-Global, September 7, 1992
Organization: U of Chicago, SSPPCC
Summary: CND-Global
Reply-To: cnd-editor@sdsc.edu
Keywords:  CND-Global
Date: Mon, 7 Sep 1992 04:14:12 GMT
X-Posted-From: cicero.spc.uchicago.edu
X-Posted-Through: sol.ctr.columbia.edu

              * * *  C h i n a   N e w s   D i g e s t  * * *

                              (News Global)

                        Monday, September 7, 1992

Table of Contents                                                # of Lines
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1. News Brief (2 Items) ................................................ 18
2. Taiwan Reportedly to Buy 60 Mirage Fighters from France ..............28
3. Hong Kong Dickson to Spend 15 M US Dlrs on China Retail Ventures .....38
4. Fonic Announced Joint Venture to Assemble Cellular Phones in China ...30
5. Singapore's Kim Eng Okayed to Place China B Shares ...................18
6. Lack of Data: China Stocks Concerned on Wall Street ..................60
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1. News Brief (2 Items) ................................................ 18
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[AP-DJ, 9/06/92] BEIJING -- The president of China's state-run Bank of China
will visit South Korea in November and meet with leading finance and banking
officials, an official newspaper reported Sunday. The English-language China
Daily said Wang Deyan, the bank's president, would seek closer economic ties
and host an official ceremony for the bank's first representative office in
South Korea. The visit signals Beijing's eagerness to develop closer trade
links with Seoul following the estabishment of diplomatic relations on Aug.
24. South Korean president Roh Tae-woo is expected to visit the Chinese
capital next month. (From: Jian Liu)
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[AP-DJ, 9/06/92] HONG KONG -- Chinese Estates Holdings Ltd. announced it has
received minority shareholder approval for its 716-million-Hong Kong-dlr bid
to privatize its China Entertainment and Land Investments Holdings Ltd.
subsidiary. The property investment group, controlled by corporate raiders
Thomas and Joseph Lau, said the proposal, had offered 2.20 HK dlrs a share
for the 20.6% of the company it didn't already control. The move follows
China Entertainment's January privatization of its Paul Y. International
Group Ltd. subsidiary. (From: Jian Liu)

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2. Taiwan Reportedly to Buy 60 Mirage Fighters from France ..............28
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From: Jian Liu
Source: AP-DJ, 9/06/92

TAIPEI -- Taiwan has agreed to buy 60 Mirage 2000-5 fighter jets from
France at a discounted price of 2.6 billion U.S. dlrs, a leading newspaper
reported Sunday.

The mass-circulation China Times, quoting unnamed air force officials, said
the price reflected a 20% discount and the two governments will soon announce
the sale.

The newspaper said the Nationalist government is also negotiating with
Russia to purchase Russian fighter jets to further strengthen Taiwan's air
force.

The newspaper did not specify the type of Russian fighters involved.
Newspapers reported last month that Taiwan was negotiating to purchase 50
MiG-29 fighter jets, but the Defense Ministry denied the reports.

On Sunday, the Defense Ministry declined comment on United Daily News'
report.

The purchase of the Mirage jets, if true, would be the second major fighter
plane sale to Taiwan in a week.

Last Wednesday, President George Bush lifted a decade-old U.S. ban and
approved the sale of 150 F-16 fighter jets worth 6 billion dlrs to the
Nationalist government.

The rival Communist government in Beijing, which considers Taiwan a renegade
Chinese province, condemned Bush's decision.

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3. Hong Kong Dickson to Spend 15 M US Dlrs on China Retail Ventures .....38
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From: Jian Liu
Source: AP-DJ, 9/02/92

HONG KONG -- Dickson Concepts (International) Ltd. disclosed plans
Wednesday to invest 15 million U.S. dlrs to establish two joint ventures to
bring its upscale brandnames to Chinese consumers.

The group, a market favorite in the late 1980s which remains hampered by the
global economic slowdown, said it has also established agreements to produce a
wide range of products for sale in China under the Charles Jourdan, Guy
Laroche and S.T. Dupont labels.

Group executive chairman Dickson Poon, who first described plans to enter
the mainland market in June, told a press conference that he is in talks with
a series of other Chinese partners to establish further joint ventures.

The largest of the agreements calls for the group to spend 12 million dlrs
in a 50-50 venture with Shanghai's Jin Jiang Group, a state-owned investment
arm with hotel, real estate and finance holdings. It will refurbish an
evocative 1930s-era building provided by Jin Jiang in the city's tourist
district and convert it into a luxury shopping arcade.

The renovation, expected to be completed in mid-1993, will create 100,000
square feet of retail and office space over four storeys. The ground floor
will be used for free-standing international boutiques, some of which will be
owned by Dickson Concepts, while the second and third floors will be converted
into what the group calls a 'luxury lifestyle' store selling clothing, jewelry
and other personal goods. The top floor will serve as offices.

In Canton, the company has separately agreed to take an 80-20 stake in a
3-million-U.S.-dlr venture with the Yangcheng Group, a manufacturing, property
and hotel company, to invest in retailing, wholesaling and manufacturing
businesses.

Dickson Concepts also said its production of brandname products, expected to
begin in 1993's first half, will rely on offices and distribution centers in
Beijing, Shanghai, Canton and Shenzhen.

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4. Fonic Announced Joint Venture to Assemble Cellular Phones in China ...30
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From: Jian Liu
Source: PRNewswire, 9/02/92

NEW YORK -- Fonic, Inc. (NASDAQ: FONCF), today announced the formation of
a wholly-owned subsidiary, Fonic Communications Inc., to own a 51 percent
interest in Novatel-Fonic (Asia) Communications Corporation Limited, which
in turn has a 51 percent interest in a Peoples Republic of China joint
venture company set up to assemble cellular phone systems and portable
cellular phones in the PRC.

The joint venture company is expected to commence operations in September
1992.  Initially Fonic will act as buying agent to acquire finished product
from Canada and Europe until the joint venture company's own production
facilities become operational, which is expected to be about September 1993.

The company has previously announced an order for two "TACS" system,
cellular phone exchange switches to be installed in two provinces in the PRC.
The contract requires systems to be installed by Dec. 31, 1992, and March 30,
1993, in the provinces, respectively, together with a supply of 15,500
portable phone sets by Dec. 31, 1992.

Fonic, Inc., through its subsidiaries, is engaged in the design,
development, manufacture, assembly and marketing of consumer audio and video
products, including stereo radio double cassette recorders, citizens band and
multiband radios, mini music systems, Hi-Fi systems, amplifiers, video
cassette players and recorders, and television sets. Telecommunications
products sold, engineered or manufactured by the company include "TACS" system
cellular phone exchange switches, portable telephone sets and paging
receivers.

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5. Singapore's Kim Eng Okayed to Place China B Shares ...................18
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From: Jian Liu
Source: AP-DJ, 9/02/92

SINGAPORE -- Kim Eng Securities (Pte.) Ltd. said Wednesday it has
received approval from the Chinese authorities to place orders for China B
shares on the Shanghai Stock Exchange.

The orders will be placed through China's Shanghai Hai Tong Securities Co.,
with whom Kim Eng has an overseas securities agency agreement.

Kim Eng, a wholly-owned subsidiary of Kim Eng Holdings Ltd., said its agency
agreement with Shanghai Hai Tong was approved by China's central bank, the
People's Bank of China on August 26.

Shanghai Hai Tong is a subsidiary of the Bank of Communications.

China B shares are special Renminbi-denominated shares offered exclusively
to foreigners.

Kim Eng Holdings said it did not expect this development to have any
significant impact on the current earnings or net tangible asset of Kim Eng.

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6. Lack of Data: China Stocks Concerned on Wall Street ..................60
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From: Jian Liu
Source: Wall Street Journal, 9/04/92
By: Robert Steiner

If you think it's tough to figure out how much a U.S. stock is worth, try
guessing the value of China No. 1 Pencil Factory, The Wall Street Journal
reported.

It's a stock, it trades in Shanghai, and whatever you think of pencils, it
is worthy of attention. The big-time money managers are looking at it.
Investors all over the world are eager to get into China and may end up owning
the stock through mutual funds.

We're not here to tell you that China No. 1 Pencil is going to be the next
Procter & Gamble. It's really too early to say. But it isn't too soon to
examine how money managers approach the mysterious realm known as an
"emerging" market.

So much cash has poured into China's puny stock market that some share
prices there are between 100 and 300 times expected earnings this year. Riots
last month during the issue of entry forms for a share lottery suggested that
few investors even care what stocks they buy.

Yet, blind speculation isn't supposed to be the life work of the
sophisticated money managers based in Hong Kong. More than 21 China funds
managed in the British colony are racing to invest as much as $1.17 billion in
China. (Coincidentally, the total market value of Class B shares in China's
Shenzhen and Shanghai markets is about $1.17 billion, according to Standard
Chartered Securities Asia Ltd.). Class B shares are the ones that foreigners
can own.

To win, managers of those funds must be among the first to guess the
long-term value of Hong Kong or Chinese companies -- often with only the
haziest growth predictions as a guideline.

Take China No. 1 Pencil. Sam Lau, an investment manager at Barings
International Asset Administration, is thinking of buying the stock for the
New York-listed Greater China Fund that he manages. The company's
writing-pencil operations account for 75% of revenue and have little room to
grow, he says. But the company's earnings are expected to soar with
cosmetic-pencil sales -- which he says should rocket to "at least 50% of
revenue" from about 11% of company revenue today. Has Lau seen projections
from the company? No.

"This bet is based on a concept," he explains. "This is a direct play on
China's consumer market." Lau figures that about 250 million people -- half of
China's women -- are potential buyers of No. 1 Pencil's potential cosmetic
products.

Sound like a high-stakes guessing game? Money managers replay that investors
who wait too long will miss the best deals. Already, fund managers seem to
have missed the mark with Class B shares, the only listed stocks foreigners
can buy inside China itself. The Standard Chartered Index of Class B shares
traded in Shenzhen, across the border from Hong Kong, has tumbled about 30%
from its peak of 229.82 May 27. Prior to that, the index soared 177% in less
than two months.

"At first, it wasn't investment," says Douglas Eu, who manages Jardine
Fleming China Region Fund, a closed-end fund listed on the New York Stock
Exchange. Rather, demand far stocks was so intense that prices simply had to
rise. So far, his fund has lacked clearance from the U.S. Securities and
Exchange Commission to trade stocks on China's two exchanges. But other funds
dedicated to investing in China were compelled to put cash to work.

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