Hong Kong-listed brewer China Resources Enterprise and Japan’s Kirin Holdings will establish a joint venture to produce and distribute soft drinks in Greater China, aiming for an annual turnover of CNY6 billion. Kirin will invest USD400 million to take a 40% stake in the venture, with CRE holding the rest. The two parties will split the profit according to this ratio. The product line would include purified water, tea, coffee, carbonated beverages as well as fruit and vegetable juice.

The second phase of China’s strategic oil reserve is expected to finish by 2012 with a total of 37.53 million tons. The second phase of the project would be composed of eight bases, two of which will be located in Zhanjiang, Guangdong province, and Jinzhou, Liaoning province. The country will complete the third phase of the project by 2020, establishing a total reserve  volume equivalent to 100 days of imports, which may surpass 800 million tons. China’s’s oil imports hit 239 million tons in 2010, up 17.5% from 2009. China’s oil imports reached 55% of total oil consumption last year from 10.4% in 1996. The China National Petroleum Corp   (CNPC) predicted that foreign oil will make up more than 60% of oil demand by 2015, when the nation’s consumption will reach 540 million tons, a 18.7% increase from 2010. The  National Energy Administration (NEA) said that China’s crude oil output had stabilized at 190 million tons annually during the period of the 11th Five Year Plan (2006-2010). The country’s strategic stockpiling capacity had reached 178 million barrels at the end of last year, while its commercial inventory capacity hit 168 million barrels, the China Petroleum and Chemical Industry Federation (CPCIF) said. The combined reserve capacity was equivalent to about 36 days of domestic demand. By the end of 2010, the combined length of all of China’s oil and gas pipelines extended 78,000 kilometers, including a 1,000 km-long oil pipeline linking Russia and China that started transporting oil on January 1. The petrochemical industry is expected to realize a profit of CNY840 billion this year, and domestic crude oil output will rise by 4%.

Buyers of second homes in China will have to pay a downpayment of 60% of the price, up from the current 50%. Buying a third home in the city where residents already have two is banned and residents could only buy one home elsewhere. Families will be banned from buying any homes in cities if they have not been long-time residents and cannot provide tax or social insurance certificates to show their length of residence. The Chinese government also ordered that at least 70% of new land should be earmarked for affordable housing. Local governments are for the first time required to set a home price target for this year and publish it in the first quarter. If prices rise beyond the target, local governments would be punished.

Property taxes introduced in Shanghai and Chongqing target higher-end, newly purchased second homes and will require buyers to pay from 0.4% to 1.2%. The tax rate will depend on the value of homes compared to average market prices. In Shanghai, buyers will pay 0.6% on new second homes unless the value of homes is less than double the average market price, when buyers will pay just 0.4%. Chongqing will tax all villas as well as new apartments priced at least twice the average price of all newly-built homes in the city’s downtown areas. A rate of 0.5% will apply to property priced at less than three times the average price, 1% for those three to four times the average and 1.2% for those more than four times the average. All provinces in China will adopt the property tax “when conditions are ripe,” the Ministry of Fiance said. Residential properties in China will be charged the full transaction tax if they are sold within five years of purchase. For “ordinary” homes held for five years or more, no tax will be levied while for “non-ordinary” houses, only the profit will be taxed after five years. Chongqing Mayor Huang Qifan said the capital cost of speculating in the housing market, property fees and a 3% property tax will bring maintenance costs to about 10% of a property’s price — a cost high enough to dampen a speculator’s prospects of getting a return. The tax the city government will impose at present will however not exceed 1.2%. A nationwide online survey conducted by news portal sina.com.cn showed 57.1% of the 149,821 respondents opposed the tax. More than 60,000 respondents said they thought property prices would continue to rise in spite of it.

Sports goods retailer Li Ning, with more than 7,900 stores in China, plans to invest USD10 million in U.S. operations this year, becoming one of the first Chinese companies to enter the U.S. retail sector. At present, international operations made up only 2% of the company’s total revenue. The U.S. expansion began in earnest in 2007 with the opening of an R&D center and design studio in the Portland, Oregon, area, heart of the U.S. athletic shoe industry where Nike is headquartered and Adidas has a regional office. Li Ning has a quality product but “we need to bring in the cool factor, the street legitimacy, the street cred. Bring all these elements together and fuse them into the product. It’s a systemic project and we are working on it,” Li Ning said. “A few brands are attempting it, but no one has come out as a dominant Chinese brand in any industry yet,” he said. “I always optimistically look back on the Japanese brands in the ’50s and ’60s and the Korean brands in the ’80s and ’90s. It’s our turn. We’ll get there.”