China to increase subsidy for auto, home appliance replacements
China will increase subsidies for consumers who sell their cars and heavy home appliances in order to purchase new ones. This was announced yesterday during a cabinet meeting and has been set-up to spur domestic consumption and curb pollution. The government will raise subsidies for vehicle replacements from 1 billion yuan to 5 billion yuan, and allocate 2 billion Yuan to encourage people to upgrade their home appliances.

(resource from www.ccn.com.cn)

$10b loan-oil deal lubricates trade
China yesterday agreed to lend 10 billion USD to Brazil's state-owned oil giant in exchange for a guaranteed oil supply over the next decade. Brazil's Petrobras agreed to supply 150,000 barrels of crude oil a day to China in 2009 and from 2010, 200,000 barrels per day for nine years. Petrobras and Sinopec also signed a memorandum on oil exploration, refining and petrochemicals.

Guangzhou Auto to Buy into Changfeng Motor
Guangzhou Automobile has reached an initial agreement with Hunan Changfeng Motor Co. to take a major stake, possibly up to 30%, in the sport utility vehicle manufacturer. The deal would make Guangzhou Auto, already a partner of Toyota and Honda, the largest shareholder of the Shanghai-listed Changfeng.

China to encourage overseas investment with easier procedures
China's foreign exchange regulator recently said it plans to simplify examination and approval procedures for domestic companies investing abroad. The State Administration of Foreign Exchange (SAFE) posted a draft regulation on foreign exchange management involving domestic enterprises investing abroad, to solicit public opinions. According to the draft, domestic companies will be allowed to register the source of their foreign exchange financing after their investment overseas instead of obtaining approval beforehand.