China's largest coal company, Shenhua Group, will produce the country's first barrel of liquid fuel from coal in 2008 using proprietary technology.

"We have finished 95 percent of the engineering projects at the first production line in Erdos in North China's Inner Mongolia Autonomous Region. The line will start making liquid products next year in trial operation," says Zhang Yuzhuo, who is in charge of Shenhua's coal liquefaction business, during the China International Coal and Energy New Industry Expo 2007 last week in Taiyuan.

Zhang said the first production line would use 3.45 million tons of coal every year to make 1.08 million tons of liquid products, including diesel oil, liquefied petroleum gas and naphtha.

Oil imports have risen recently to fuel China's booming economy, spurring the nation to look for technologies that can turn some of its coal reserves into fuel and other chemicals. Indirect-liquefaction technology was first developed more than 70 years ago. It has been commercialized by South Africa's Sasol Ltd, the world's biggest producer of motor fuel from coal. The direct-liquefaction technology used by Shenhua, however, hasn't been industrialized until now. Shenhua has improved production flow, built larger facilities and developed its own technologies, Zhang says.

Cartoon humidifier

Beijing Yadu Indoor Environmental Protection Science Technology Co Ltd, the Beijing 2008 Olympic Games Air Humidifier Purifier Exclusive Supplier, recently said that it has signed a strategic cooperation agreement with cartoon giant Walt Disney.

Under the agreement, Yadu will be authorized by Disney to use well-known Disney cartoon images on Yadu's electronic home appliances, including Mickey Mouse and Aladdin. Yadu will begin by adding Disney's Mickey Mouse and Winnie the Pooh into the figure design of its flagship products.

This October, Yadu and Disney will jointly launch a nationwide promotion initiative with theme of its Disney cartoon image humidifiers. After the first five series of cartoon humidifiers hit the market, the two parties will further cooperate on adding more Disney cartoon elements into the small home appliances. Different from other authorization, Disney will also provide support on the retail distribution network and product design and development to Yadu.

Beijing-based Yadu is the first Chinese company to tap into the humidifier and purifier industry, occupying more than 95 percent of domestic market share. It takes up the second position in the international air quality industry and holds over 70 percent of the core technology in the segment.

Game competition sponsorship

Sina, China's leading online media company, announced last Tuesday that it has joined as a sponsor in Nokia's ongoing mobile multiplayer games competition to support the global search for new game developer talent and bring a new breed of innovative, connected mobile games to the Chinese market.

As a result of Sina joining the competition, Nokia announced that the deadline for accepting mobile game concepts based on the Scalable Network Application Package (SNAP) Mobile platform has been extended to September 24. Selected concepts based on SNAP Mobile will receive free development support and preparation for market deployment.

"Sina will provide the winners of the multiplayer competition with a fast track opportunity to distribute games in China. This competition encourages developers and publishers to raise the bar on mobile game innovation, and developers located anywhere in the world, can compete," says Terry Tian, director of Sina's Network Business Department. "We are keen to add more SNAP Mobile based games to our portfolio, and see this competition as a unique way to speed deployment of innovative games to market."

E-commerce investment

Alibaba.com Corp will invest 10 billion yuan in the next three to five years to integrate sectors linked to e-commerce.

The big-picture plan is to come up with a complete industry chain, such as facilitating small companies' overseas sales, according to Alibaba.com senior executives.

The money will be invested not only to strengthen its own muscle, which covers online auctions, business-to-business trader matching and online payment, but also in external projects like logistics to improve the e-commerce infrastructure and support the industry. Company officials wouldn't say whether it means acquisitions to expand Alibaba's portfolio. The company is already China's largest e-commerce firm.

"In the next few years we will be devoted to the industry's development to build a favorable environment and 'an ecological chain' to go with it," said Jack Ma, Alibaba's founder and chief executive officer, last week.

Ma said the money will be used for reforms of the e-commerce industry chain that government doesn't have the budget for.

Property cooperation

China's Ginwa Enterprise Co said last Monday that Citigroup Property Investors Asia Ltd, Citigroup's property investment arm, plans to sign an agreement to invest in real estate and related assets in major Chinese cities owned by the Chinese firm.

According to Ginwa's filing to the Shanghai Stock Exchange, Citigroup will soon sign an agreement with Ginwa to invest in its five-star Howard Johnson Ginwa Plaza Hotel in Xi'an, Northwest China's Shaanxi Province.

Xi'an-based Ginwa may join with Citigroup to buy other projects. The two parties are still in the letter-of-intention stage, which doesn't mean any compliance force, the Chinese firm said.

The Chinese company has been losing money for three straight years and is at the risk of being delisted.

In February, Citigroup raised $1.29 billion in its Asia opportunities fund and plans to invest $600 million of the fund in China and $400 million in India.

Overseas investors are buying properties in China in expectation that the country's economic boom will boost demand for office buildings and residential properties. The Chinese government last year imposed restrictions on foreign investment to curb overseas speculation and a surge in domestic property prices.

Steel merger

The mainland's largest privately owned steelmaker Jiangsu Shagang Group said last week that it's seeking a controlling stake in Anyang Yongxing Iron Steel Co Ltd.

Anyang Yongxing is the biggest privately owned steel producer in Central China's Henan Province.

"We are talking with Anyang Yongxing on the acquisition because their product structure is complementary to ours," says a Shagang executive surnamed Qian.

If the deal goes through, it will be China's first cross-regional merger of two privately owned steel manufacturers. The deal is expected to be completed this year.

An Anyang County government official said last month that Henan Province is actively promoting a merger between Shagang and Anyang Yongxing as part of a plan to restructure the steel industry.

"We are also talking with other local and international steelmakers about possible mergers and acquisitions," says Qian, who declined to elaborate.

Qian denied rumors about Baosteel's intention to acquire Shagang and speculation that his company will invite strategic funds from US investment bank Goldman Sachs. "I'm in charge of investment, and I haven't heard anything about this," Qian says. Shagang began cooperating with Anyang Yongxing in 2002.

(China Daily 09/24/2007 page6)