The sky is not the limit for high-flying China

AS 2007 NEARS THE END OF ITS RUN, IT IS TIME TO LOOK BACK AND REFLECT ON ANOTHER UNIQUE AND INSIGHTFUL YEAR.

While many of China's headlines addressed the Beijing Olympics in 2008 and the changes that come with it, the country has made a number of other advances.

The summer's big business story was definitely the major series of product recalls of sub-standard toys by multina-tionals like Mattel. However, the reduction of the Value-Added Tax (VAT) rates at the end of June had much greater impact on many Chinese manufacturers and foreign buyers. With the aim of navigating China towards a more even trade balance and higher-value production, this government-induced action trimmed the profit margins of a large number of businesses, especially small and medium-sized manufacturers. Business wasn't only tough though. As the Shanghai Stock Exchange rose to record highs this year, a huge group of middle- and lower-class individual investors were left on the bright side of business life ?and with full wallets. On the other hand, inflation has also shot up: the consumer price index grew by an 11-year high of 6.5% in early November mainly due to rising food cost.

But Chinese stock prices and inflation aren't the only things reaching for the sky. The government launched Chang'el, a probe that is orbiting the moon after its launch in late October. Chang'e is the name of a Chinese goddess that is believed to live on the sun's antagonist. Talking about lunar life: there are plans that within the next few years, the first Chinese will be walking on the moon.

The Chinese art world is taking off as well. Recent auctions in Europe and the US have helped Chinese artists such as Zhang Xiaogang, Li Tianbing and Yue Minjun gain international acclaim and recognition - commanding record breaking prices. Reason enough for us to choose "Contemporary Chinese Art" as the theme of Fiducia's Picture Calendar 2008.

For Fiducia, 2007 was a milestone as we celebrated the company's 25th anniversary with three parties in Hong Kong, Shanghai and Duesseldorf in June. We published a book for this memorable occasion. "25 years of China Insight" tells stories about the China of then and now, and how our company developed over time. We would like to thank our clients for placing their trust in us over these many years. Another "thank you" is owed to our global partners for their cooperation and assistance this year. And last but not least, we would like to thank our employees in Beijing, Hong Kong, Shanghai, and Shenzhen - the Fiducia family - who have contributed to our company's success with their hard work and continuous efforts.

We extend our holiday greetings to all of our clients, friends and partners and wish you a prosperous year 2008. We hope that you will also be able to enjoy time with your family and friends over the festive days.

Cynthia, Juergen and Stefan Kracht

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