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China Briefings

Reports on China issued by Samsung Economic Research Institute

China Business Intelligence No. 94

China Business Intelligence No. 94

Samsung Economic Research Institute Beijing Office

Nov. 12, 2008

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I. Economy

In October 2008, the Communist Party of China announced a new rural land policy, giving farmers the right to cultivate their land in perpetuity, even if the Chinese government retains ownership. Before the policy, farmers were entitled to their land for only 30 years. Also, farmers will be able to transfer, rent, sell, or buy their cultivation rights. This will facilitate larger farms and economies of scale, leading to higher efficiency in agricultural production. As income grows in rural and urban-rural integrated areas, the income gap between cities and the countryside is expected to narrow. Foreign companies, especially those in agriculture, finance, and consumer electronics, should also be able to benefit from China's vitalized rural markets.

II. Industry

Monster.com acquired ChinaHR as part of its strategy to strengthen its competitiveness through expansion of its global network, and to create a stronger presence in China, one of its strategic markets. Fore i gn companies are expected to increase investment in the Chinese online job market which has been growing at a rapid pace thanks to the nation' s fast urbanization and the government' s heavy investment in education. The rapid growth of China' s Internet market also contributed to making both companies and job seekers rely more on online job services. According to the China Internet Network Information Center, the number of China' s Internet users shot up to 253 million people in June 2008 from 68 million people in June 2003, with the nation' s Internet uptake rate estimated at 19.1% in June 2008.

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