Most Respectful Companies   

Recently I read a large list in the weekly newspaper - The Economic Observer, which includes a candidate companies to be elected as China's most respectful companies in 2007. The chemical firms are listed in the Energy/Mining sector, such as CNOOC, Sinopec Group, CNPC, Shell China Group, Shanxi LuAn Mining (Group) Co., Ltd., and Total (China) Investment Co., Ltd. They will compete with electricity firms, coal manufacturers, metal/alloy operators and mining companies in the sector. The Household Chemicals Manufacturing sector includes Procter & Gamble (China) Co., Ltd., Johnson & Johnson (China) Co., Ltd., Guangzhou Colgate Palmolive Co., Ltd., L'OREAL (China) Co., Ltd. and Unilever (Shanghai) Co., Ltd. Other chemicals related candidates listed in the Comprehensive sector cover Dow Chemical (China) Investment Company Limited, China Lucky Film Corporation, Kodak (China) Company Limited. There are no positions for basic chemicals firms, papermaking works, chlor-alkali manufacturers or dyestuff makers. The candidates shall major in healthy business, have remained a positive profit in the past three consecutive years, have entered into China's top ten in its business scope, and have no big problems in CSR (corporate social responsibility) and so on. This action is not officially organized by any governmental departments, but at least represents that China is paying more attention to the healthy affect than ever before.
   The most important political action in January till today may be that Premier Wen Jiabao ordered to remain the consuming prices stable. Prices of urea and phosphorus fertilizers are also required to be steady without special approval. This affects moderately the whole petrochemical industry, but has negative impact on chemical fertilizers players who are expecting to push the selling price of fertilizer to move up again.
   Regarding the 2008 economic trend, a team of the State Information Center published a commenting report recently. The report thinks that innovation will be the key factor to promote development of economy. Judgment on regional economy will rely largely on the factor of improving living quality rather than GDP growth. Saving energy and reducing pollution will be the most important index for 2008. The sensitivity of financial tools is higher and will be difficult to control when facing the high pressure of RMB revaluation.

Zhong Weike
January 18th, 2008