Chinese Economy/Development thread (updated regularly)

[中国万岁-ProsperThroughCo-]

SCMP
HK$10b university hub planned for border loop

24,000 students will study at up to four tertiary institutions
Joyce Ng and Elaine Yau
Nov 24, 2010

An uninhabited pocket of land polluted by toxic mud will be turned into a hub for higher learning, according to the Planning Department.
Up to four new tertiary institutions may be built on the Lok Ma Chau Loop, a swathe of land that will also feature research and development facilities and a nature conservation area, it said. Officials yesterday disclosed details of the plan for the 870,000-square-metre area, which belongs to Shenzhen but is managed by the Hong Kong government. At least five local universities have expressed interest in opening new campuses there.

"The site is ideal for training talent for the Pearl River Delta so that it can compete with the Yangtze River Delta, which has a lot more tertiary institutions," said deputy director of planning Ling Kar-kan.

The loop was carved from Shenzhen's territory during the straightening of the Shenzhen River in the 1990s. Controversy has dogged the site. Developers wanted full-scale building while environmentalists fought for its conservation after cleaning up the toxic mud from industrial waste discharged into the river. The new plan will disappoint both groups. The result of a joint study by the Hong Kong and Shenzhen governments, it will be open for public consultation until January.

Ling said the loop could produce a floor area of 1.2 million square metres for the new education hub. More than half the space, or 720,000 square metres, will be reserved for educational facilities. That space should be enough for one to four institutions to set up a new campus or faculty, or even a new university, Ling said.

The facilities, to open no sooner than 2020, will accommodate 24,000 students, half of whom will live in dormitories on the site. Building the infrastructure is expected to cost about HK$10 billion. It will include new roads, sewage treatment plants and possibly a light-rail system. Hong Kong will pay for most of that but is in negotiation with Shenzhen over possibly sharing the cost.

A University of Hong Kong spokeswoman said it had already handed in a development proposal for the site. "We are interested in setting up a school zone in Lok Ma Chau," she said.

"We are waiting for the results of government research. [The proposal] could help HKU further its development in teaching and research."

Chinese University said the site's geographical proximity to Shenzhen made it ideal for its expansion plan. "We have always hoped to make use of this edge to help cope with the demand for talents from Hong Kong, Shenzhen and the Pearl River Delta," a university spokesman said.

The University of Science and Technology, Baptist University and the Polytechnic University, along with several educational institutions based in Shenzhen, have expressed interest. Ling hopes to attract interest from overseas universities, as well.

The rest of the loop will go to hi-tech research and development, and creative industries. Buildings on the loop will be restricted to 15 storeys or less. To be a low-carbon area, only electric cars and bicycles will be allowed in. The loop will be linked to the Lok Ma Chau boundary control point with a road or light rail system, which will make it a 10-minute journey for commuters to travel to the hub from the control point.

An ecological zone, intended to be a no-go area, will be created along the edge of the loop to preserve the flight paths of migratory birds.

Areas adjoining the loop - covering 182 hectares of land that contain villagers, hills and fish ponds - will see small-scale, commercial developments such as restaurants, shops and guest houses. Across the border, a similar-sized site in Shenzhen, including the Huangguang and Futian ports, will have offices, hotels, exhibition venues and research facilities to support the education hub.

Public forums will be held in Hong Kong and Shenzhen to collect public views.

Looks good. Perhaps my future children will study there one day Notice that they are really transparent about the fact that the Pearl River Delta should compete with the Yangtse River Delta (Shanghai region).

Making these two regions competing against each other certainly must be valuable to the country, and even the world

 

[no_name]

They will need to make sure the contractors actually make the environment safe and non-toxic for students and not do a half-*** job or cut costs.

 

[中国万岁-ProsperThroughCo-]

US group gives China details of nuclear technology

By Leslie Hook in Beijing
Published: November 23 2010 21:12 | Last updated: November 23 2010 21:12

Westinghouse Electric has handed over more than 75,000 documents to its Chinese customers as the initial part of a technology transfer agreement that it hopes will secure the company’s place in the world’s fastest-growing nuclear market.

The documents relate to the construction of the four third-generation AP1000 reactors that Westinghouse, a US nuclear company controlled by Toshiba of Japan, is building in China.

Westinghouse won the hotly contested bid to build the AP1000 reactors in China partly because of the technology transfer element of the contract, according to the World Nuclear Association.

Foreign companies, with the backing of a growing number of their governments, have become increasingly critical of China’s demand for technology in return for winning contracts.

Technology transfer is a key issue for the nuclear industry, not only for safety reasons but also because Beijing wants cutting edge technologies to further its ambitious agenda of nuclear growth.

China has 23 reactors under construction and a further 120 proposed. Beijing has embraced nuclear energy to lessen reliance on fossil fuels.

Jack Allen, president of Westinghouse for Asia, told the Financial Times that the company has “no guarantees” of its role in China once the four AP1000 reactors were completed.

“We don’t expect that we will walk away at the completion of these units and not participate in the [nuclear] programme, but there are no guarantees.”

Westinghouse is pursuing a strategy that many foreign companies have tried before in China: handing technology to local counterparts, and betting that it will be many years before they can match it.

However, Germany’s Siemens and Japan’s Kawasaki shared their high-speed rail technology with Chinese state companies, only to see them quickly digest the information and turn themselves into competitors.

“Our experience has been in the past that you can’t just give people drawings and manuals and they become proficient in a year or two years,” said Mr Allen.

“Many of the exchanges we have worked on with other countries have gone on for 20 years, as with the Korea experience, so we continue to share and enhance and exchange technology and understanding.”

Westinghouse has had technology transfer agreements with other countries including Italy, Spain and France.

He suggested that the technology transfer agreements were designed in such a way as to prevent copying. “The formulation of these technology transfer agreements did anticipate most of that,” he said when asked about the possibility of Chinese copying Westinghouse designs, a problem that other foreign companies in China have encountered.

The complexity of the nuclear industry—as well as the extremely high bar for safety—makes nuclear the ultimate test case for the ability of Chinese companies to absorb and copy nuclear technology from overseas.

“In a lot of other industries we have seen this strategy not work very well because China has emerged as a competitor. But for nuclear we don’t know how much time China will take to master the technology and emerge as a competitor,” said Rajesh Panjwani, regional head of power research for CLSA, a Hong Kong-based brokerage.

Westinghouse Electric is in the process of bidding to build four AP1000 reactors in the UK.

“We see a huge buildup in nuclear energy in the next 10 years,” say Zhou Xizhou, associate director at IHS Cera in Beijing. He calculates that the AP1000 is the basis for just over 30 per cent of the nuclear reactors that are in the pipeline in China, including units under construction, approved and planned.

Westinghouse has shared technology with customers before. “I’ve been with Westinghouse over 40 years and in my early days we were exchanging technology with the French,” Mr Allen said when asked about the possibility of Chinese copying of Westinghouse technology.

Nuclear power is the way to go

 

[Aeon]

Chinese software industry revenues surge 29.9 pct on-year in first 10 months: MIIT
2010-11-24 19:31:14

BEIJING, Nov. 24 (Xinhua) -- China's software industry revenue in the first ten months surged 29.9 percent year on year to 1.09 trillion yuan (160.3 billion U.S. dollars), the Ministry of Industry and Information Technology (MIIT) said Wednesday.

In the January-to-October period, the industry's revenue was more than ten times that in the same period of 2001, equivalent to an annual growth rate of 38 percent over the period, the MIIT said in a statement on its website.

In the first ten months, the industry's revenue accounted for 18 percent of all revenue in the China's electronics and information technology sector, compared with six percent in 2001, according to the statement.

Revenues of software-related services, including information technology consulting services and other value-added technological services, grew faster than those of software products.

In the period, software-related services accounted for 22.2 percent of the revenues of the whole software sector, up from 6.6 percent in 2001, while software products accounted for 34 percent, down from 68 percent in 2001, according to the statement.

In the period, China's software sector exports grew 24.6 percent year on year. The growth rate was 17.5 percentage points lower than that in the same period of last year due to reduced international demand and the appreciation of the Chinese currency, the renminbi, the MIIT said.

 

[Aeon]

China to launch communications satellite
2010-11-23 23:55:21

XICHANG, Sichuan, Nov. 23 (Xinhua) -- China will launch a communications satellite, "Zhongxing-20A", at an appropriate time in coming days, the Xichang Satellite Launch Center in southwest China's Sichuan Province said in a statement Tuesday.

The satellite will be carried by a Long March 3A carrier rocket, said the statement.

 

[Brotherhood]

Huawei takes gold medal for data gridlock solution - People's Daily OnlineNovember 25, 2010

Car owners know too well the frustrations of traffic congestion, but another form of gridlock can bedevil even those indoors.

Widespread use of computers and increasingly innovative online business models are pushing data traffic beyond the limit of even large-volume servers.

Service providers and in-house computer departments are often required to buy new equipment to keep up with the torrid pace.

Yet routers created by Deng Chaojun, director of hardware development at Huawei, create a new path around congestion.

Known to professionals as in-service expansion, the patented technology can increase data capacity on existing servers.

The most difficult part of the technology is how to accurately compile data on the main server, as well as between routers, Deng said.

To date, the 1,200 Huawei NE5000E routers serving the Internet have earned Huawei more than 2 billion yuan ($301 million).

The technology brought Deng a China Patent Award gold medal and a national award for technological progress.

He attributed the honor to his research team and support from the company.

"I learned how to turn an idea into a reality at Huawei," Deng said. "Different from research in a university that focuses on resolving a technical problem, we also consider how the solution can bring market value."

"Our company encourages innovation," he said.

"If you have an idea that is really good for the company yet your direct supervisor cannot see its value, you can submit your proposal to higher-level management all the way to the top," he added.

Sometimes for the innovation it is not an invention, but insight into a trend.

Deng said while he was researching other technology - information exchange about 12 years ago - he wondered about a time when data flow could overwhelm routers.

He found a solution, developed a model and applied for a patent in 2000. Few people in China then thought about the coming explosion of data on the Internet.

In 2007, the NE5000E router using his patented technology was commercialized.

"It is a really core technology and usually takes a graduate three to four years to understand," said the scholarly creator.

Source: China Daily

 

[Brotherhood]

Wireless broadband to cover Beijing's urban and rural areas by 2015 - People's Daily OnlineNovember 25, 2010

The construction of an urban high-speed information network will be completed in the end of 2012. And by 2015, wireless broadband will cover Beijing's urban and rural areas and form the basis of the city's Internet of Things network. These would be the new achievements brought about by the construction of "Smart Beijing."

At the Beijing-Hong Kong Smart City Construction Exchanges Fair on Nov. 24, Beijing introduced the status and future development trends of Smart Beijing construction and the application of the emerging technologies and industries, such as cloud computing, to Hong Kong. There were agreements on seven Beijing and Hong Kong cooperation projects in information technology signed at the meeting amounting to 150 million.

Zhu Yan, director of the Beijing Municipal Commission of Economy and Information Technology, said Beijing is currently entering a post-industrial era. Smart Beijing will bring new development opportunities to Beijing in the information infrastructure.

Zhu said high-speed broadband will enter family homes and companies, the upgrade of high-definition interactive digital television networks will be completed and wireless broadband will cover urban and rural areas in Beijing.

It is reported that Beijing will soon release the "Smart Beijing Platform for Action," which covers more than 60 projects, including intelligent transportation, electronic medical records, telemedicine, smart home, e-commerce and so on.

In addition, Beijing will also promote electronic medical records and telemedicine as well as smart grids and build home energy automatic management systems. The city government will provide smart home devices to ordinary families, establish child protection services systems and popularize elderly care and emergency response remote systems.

In the future, Beijing will speed up large-scale operations in cloud computing and the Internet of Things industries, cultivate 10 world-class information enterprises with international influence and more than 10 billion yuan of operating income. By 2012, the city's current e-commerce trade volume will increase from nearly 300 billion currently to 500 billion yuan.

By Yan Meng, People's Daily Online

 

[Brotherhood]

China to build more gas reserves in 11 areas - People's Daily OnlineNovember 25, 2010

China has recently decided to build a number of natural gas reserve facilities in 11 areas, namely Pingdingshan and Wenliu in Henan Province, Changchun in Jilin Province, Liaohe in Liaoning Province, Daqing in Heilongjiang Province, Ordos in Inner Mongolia, Yanling in Hebei Province, Huai'an in Jiangsu Province, Qianjiang and Yingcheng in Hubei Province, and Anning in Yunnan Province.

At present, China has altogether four gas storage projects that are newly built or still under construction, located in Tianjin, Beijing and Jiangsu, which are slated to start operation by 2012.

Boosting the gas storage capacity is one of the country's important energy development strategies. A source close to the projects said that the National Energy Administration requires the domestic gas reserve to cover 20 percent to 25 percent of China's annual gas demand so as to ensure stable gas supply.

China Petroleum Planning and Engineering Institute predicted that China's demand for natural gas will reach 350 billion to 400 billion cubic meters by 2020, indicating that the domestic natural gas reserve should reach 70 billion to 100 billion cubic meters by then.

By People's Daily Online

 

[Martian2]

Bird's-eye view of only one China Strategic Petroleum Reserve (SPR) storage site

A vigilant guard at a China SPR site

- Oil & Gas Journal

"China works to double SPR capacity by 2013
Oct 4, 2010
By Liutong Zhang and Kang Wu

China is moving quickly on construction of its Phase II strategic petroleum reserve and FACTS Global Energy believes most SPR Phase II sites will come on stream by 2012-13, doubling China's SPR capacity. China will also expand commercial crude storage capacity by about 18 million cu m (about 113 million bbl) by end 2012."

China to bolster oil reserves

"China to bolster oil reserves
By Sun Xiaohua (China Daily)
Updated: 2009-03-02 07:54

China is accelerating the build-up of its oil reserves to avoid the economic dislocations the country suffered in 2008 from fluctuations in the world oil price.

China's National Energy Administration (NEA) recently released a plan to build nine large refining bases in coastal areas over the next three years, sources with the China Petroleum and Chemical Industry Association said last week.

The plan involves building three 30-million-ton refinery bases in three cities (Shanghai, Ningbo and Nanjing) in China's economically dynamic Yangtze Delta and six 20-million-ton bases in other coastal areas from Tianjin in the north to Guangzhou in the south. It will also facilitate major joint-venture refinery projects between Chinese companies and partners from oil-producing countries such as Venezuela, Qatar and Russia.

The refinery scheme is part of China's plan to bolster its oil inventories. The NEA announced at a national energy conference in early February that China will, in addition to the current four strategic petroleum reserve (SPR) bases, build eight new ones by 2011. The program will increase China's strategic crude reserve capacity to 44.6 million cu m, or 281 million barrels.

The country will also increase its refined oil reserve to 10 million tons by 2011, a source familiar with the stockpile plan told China Daily in February.

"China's attentiveness to its oil reserve capacity has grown in tandem with its rising dependence on imported oil," said Pan Jiahua, an expert with the Chinese petroleum society.

This undated file photo shows an oil reserve base in eastern China's Zhejiang province. [Asianewsphoto]

China, the world's second largest oil consumer, relies on imports for about half of its oil needs. It imported 178.9 million tons of crude oil in 2008, up 9.6 percent from the previous year, according to the National Development and Reform Commission.

The country's lack of strategic oil reserve became a pressing concern during the steep oil price surge from 2004-07, when the Chinese government and state energy companies were left at a disadvantage compared to other major oil-consuming countries. China's national oil inventory reportedly covered only 21 days of its economy's need. Reserves in other countries, such as Japan and the United States, were enough for 100 days.

"China's construction of SPR started pretty late. The country's rising reliance on imported oil and the sharp fluctuation in world market made it a strategic issue," said Pan.

NEA's chief Zhang Guobao said in February that China still "badly needs" energy. His administration plans to ensure a 200-millon-ton domestic annual oil output from 2009-11 but the trend of growing dependence on imported oil will remain. China is expected to import 60 percent of its oil in 2020.

Taking advantage

"The country should take advantage of falling global energy prices to increase its oil reserves," Zhang wrote in a signed article in the official People's Daily in January.

Where China's new eight SPR tanks will be built so far remains unannounced, although there has been a lot of guesswork. All four existing SPR bases are in coastal areas but Pan said some of the new ones will likely be built in the hinterland.

The government's decision to increase oil inventory seems well-received across China. A recent web survey by People's Daily of 2,569 participants, showed 98 percent of them agree China should buy more oil now at a relatively low price. Surveys by other major Chinese portals showed similar results.

But China cannot simply take advantage of attractive prices and store as much oil as it wants because its current reserve capacity is not commensurate with its energy appetite.

Customs statistics shows China's crude imports in January even fell 7.99 percent year-on-year. A slowing economy bears most of the blame but analysts said the country's limited capacity also played a role.

Zhao Youshan, head of the petroleum distribution committee of the China General Chamber of Commerce, an industry group, recently submitted a proposal to oil-related government agencies, calling for using tanks controlled by private companies to store more cheap oil.

Zhou said in his proposal that China's more than 600 private oil companies have 230 million tons worth of storage tanks, almost ten times the capacity of the eight new SPR tanks combined.

China has massive private oil storage facilities, built up by oil companies since China opened its oil markets to private operators in the mid-1990s. But State companies, mainly China National Petroleum Corp (CNPC) and China PetroChemical Corp (Sinopec), basically control oil-importing licenses and hundreds of private oil distributors and refiners are currently sitting on empty tanks.

Zhou said in his report that the industry slump last year has left many private oil companies broke and that some of the survivors are struggling with the high maintenance cost of empty tanks.

Using idle private tanks for national oil reserves could be a win-win situation; the country can cheaply increase storage capacity and private companies can use the extra business to pull through the recession, according to Guan Qingyou, an energy expert at Tsinghua University.

But some analysts said the involvement of private companies in SPR is not likely soon, as the government needs to make sure this is done the right way.

"If import licenses are issued to private companies and there is no proper management, that could lead to speculation and oil market disorder and even threaten national security," said Tong Lixia, a Ministry of Commerce researcher.

'So the government has to weigh the pros and cons very carefully.'"

 

[Aeon]

China launches communications satellite
2010-11-25 14:00:16

XICHANG, Sichuan, Nov. 25 (Xinhua) -- China successfully launched a communications satellite, "Zhongxing-20A", at 12:09 a.m. Thursday from the Xichang Satellite Launch Center in southwest China's Sichuan Province.

"Zhongxing-20A" would help improve the country's radio and television broadcasts, said a statement from the center.

The satellite was sent by a Long March 3A rocket into the preset orbit.

It was the 135th launch of China's Long March series of rockets since April 24, 1970, when a Long March-1 rocket successfully sent China's first satellite, Dongfanghong-1, into space.

 

[Brotherhood]

Central gov't allocates 11 bln yuan more for rural education - People's Daily OnlineNovember 25, 2010

The central government recently allocated an additional 11 billion yuan in order to further advance the fund guarantee system for rural compulsory education in addition to the 64 billion yuan of funds appropriated earlier in 2010, according to the Ministry of Finance website.

The extra funds will mainly be used in two areas. First, they will be used to raise the basic standards of the public funds for rural compulsory education by 100 yuan per student. Under the new standards, the annual public funds for rural compulsory education will reach 450 yuan per primary school student and 650 yuan per junior middle school student in eastern regions and hit 400 yuan per primary school student and 600 yuan per junior middle school student in western and central regions.

Furthermore, to address the difficulties in the operation of small rural primary schools, rural primary schools with fewer than 100 students will receive the amount of public funds allocated to 100 students. The 15 billion yuan of extra funds will be covered by fiscal budgets, including 9 billion yuan from central budgets.

The funds will also be used to raise the standards of daily allowances to rural boarding-school students who are receiving compulsory education and are from low-income households in the central and western regions by one yuan per recipient, so the standards of annual allowances will reach 750 yuan per primary school student and 1,000 yuan per junior middle school student. About 12 million students in the central and western regions will benefit from the total of 1.5 billion yuan allowances allocated by the central government.

By People's Daily Online

 

[Aeon]

China's 2010 crude steel consumption to hit 596 million tonnes: steel association
2010-11-28 08:29:20

BEIJING, Nov. 27 (Xinhua) -- China's apparent consumption of crude steel is likely to reach 596 million tonnes this year, a year-on-year increase of 5.6 percent, according to a steel association official.

Apparent consumption represents the sum of net imports and output, and can be used to estimate real consumption excluding inventory.

Luo Bingsheng, deputy head of the China Iron and Steel Association, expected the country's crude steel output to climb 8.2 percent this year from one year earlier, to reach 624 million tonnes.

Luo further noted that a rising investment in 2011 would result in an increase in China's steel demand.

If the year-on-year growth of the country's social fixed assets investment maintained itself at around 20 percent next year, China's crude steel apparent consumption would see an annual increase of 40 million to 50 million tonnes next year, said Luo.

 

[Aeon]

Chinese private firms emerge from economic doldrums: prosperity index
2010-11-27 15:00:41

HANGZHOU, Nov. 27 (Xinhua) -- Chinese private enterprises have emerged from the doldrums of the global economic slowdown, according to the country's first private business prosperity index released Saturday.

The Zhejiang Private Enterprises Prosperity Index (ZEPI), issued by the industry and commerce bureau in east China's Zhejiang Province, put the comprehensive status of the private sector in the third quarter at 121.25 points, based on the benchmark of 100 points for the last quarter of 2007.

The index compiled from official statistics and a survey of 1,644 private companies in the province suggested the worst time appeared in the first quarter of 2009, when the index was at 89.46 points.

Yao Jun, statistics official with the bureau, said the ZEPI had been continuously rising since then.

Zhejiang with 82 percent of its 781,969 registered firms privately owned has one of the country's most vibrant private economic sectors.

During the global economic slowdown in 2008 and 2009, thousands of private firms in Zhejiang closed. However, the number of new registered firms exceeded 86,200 in the first 11 months this year.

 

[TechLahore]

I love keeping up with global development news, but frankly, it is impossible to keep up with all that is happening in China. I don't think mankind has seen such rapid infrastructure development at such large a scale ever in the history of the world. It's absolutely unbelievable. We have a lot to learn from you.

 

[中国万岁-ProsperThroughCo-]

TCL bets on 3-D TVs to crack mainland, overseas markets

TCL bets on 3-D TVs to crack mainland, overseas markets
Sophie Yu in Guangzhou
Nov 29, 2010

Mainland household appliance maker TCL (SEHK: 1070, announcements, news) Corp is shifting to lucrative high-end products such as 3-D and LED-backlight LCD televisions and expanding the brand overseas.
Sales of LED televisions are rapidly rising on the mainland, the company's chief sales officer Hao Yi said.

Of all its flat panels, the percentage of LED televisions sold has increased from 10 per cent at the start of the year to 30 per cent. "The rate will rise to 50 per cent next year," he said. "LED is the future of the TV industry."

An LED, or light emitting diode, is a lighting component. Their tiny size means televisions that use them can be much thinner - only two to three centimetres - than other LCD screens.

TCL is also one of the first manufacturers making and selling 3-D TVs that do not need glasses to watch.

During the Asian Games in Guangzhou, TCL organised 3-D screenings of two soccer games - China and South Korea, and Kuwait playing the United Arab Emirates.

"As most families don't yet have 3-D TVs, we wanted to popularise the idea of this product," Hao said.

Sales of 3-D televisions are being held back by the limited content on offer and their prohibitive price.

But the general manager of the company's branding department, QC Liang, believes the technology will take off on the mainland next year as the price falls to a level nearer the cost of a 2-D screen.

"As the technology becomes more commonplace and the cost drops, 3-D televisions will be only 1,000 yuan (HK$1,162) or 2,000 yuan more expensive than a 2-D TV of the same size," Liang said.

The State Administration of Radio, Film and Television said in September it will launch a trial 3-D channel next year to help boost content.

The overseas market is also on TCL's radar. It already sells its products worldwide and has factories making televisions and mobile phones in Vietnam, Thailand, Indonesia and the Philippines.

Nearly half of the company's total revenues in the first nine months came from the international market, Hao said, adding that overseas acquisitions could be a possibility if the right opportunity comes along.

TCL's sales volume in overseas markets was 14.25 billion yuan for the first nine months - an increase of 40 per cent from a year ago. Europe and the US have proven the biggest challenge as the firm tries to take on better known brands in those markets.

But it is developing fast in North Africa and the Middle East. "The turnover in North Africa and the Middle East is triple that of the last year," Hao said.

He believes sponsorship of the Asian Games will help TCL, or The Creative Life, to boost its presence in Asia. The company paid a "nine-digit sum" to sponsor the Games, Liang said, and it has spent even more on publicity and promotion - including a TCL theme park - since 2008.

But it has not been plain sailing for TCL, which is currently embroiled in a lawsuit in France's Commercial Court of Nanterre.

The liquidator of a subsidiary, TCL Thomson Electronics (TTE), that TCL closed in 2007 is seeking about 655 million yuan for an alleged misappropriation during its insolvency. TCL's profit for the first three quarters this year was 195 million yuan.

TCL holds about 60 per cent of TTE, with the rest owned by European television maker Thomson. It was set up in 2004 but filed for bankruptcy in 2007 because of substantial losses. The first summary hearing will be on January 11.

CR Cement embarks on expansion course

Lending curbs not stopping mainland company from doubling production capacity
Toh Han Shih
Nov 29, 2010


Calls to curb the massive loan growth on the mainland are not stopping China Resources (SEHK: 0291) Cement Holdings from building what will become possibly the world's biggest cement plant and doubling production capacity.
"By 2012, we will have the world's biggest cement plant in Fengkai," said the company's strategic development director, Max Yu Zhongliang.


The state-owned firm's plant in Fengkai, Guangdong, started operation last year. Its annual production capacity is four million tonnes, which would double to eight million tonnes in January, Yu said.

By 2012, the plant would have an annual production capacity of 12 million tonnes of cement, 9.3 million tonnes of clinker and 4 million tonnes of concrete, he said.

Currently, the largest cement plants in the world have annual production capacity of 10 million tonnes, and there are four plants, all on the mainland. Three are owned by Anhui Conch Cement (SEHK: 0914). The fourth, in Pingnan, Guangxi, is owned by China Resources.

The total investment in the Fengkai plant is 5.5 billion yuan (HK$6.4 billion), with 1.4 billion yuan yet to be invested, Yu said.

"We have no problem obtaining bank financing," he said.

People's Bank of China adviser Xia Bin has called for a slowing of the nation's loan growth to reduce the excessive liquidity fuelling inflation.

New loans totalled 9.5 trillion yuan last year, which would fall to 7.5 trillion yuan this year and 6.5 trillion yuan next year, Yu said. "There will still be loan growth, but slower growth."

From June to 2012, China Resources would almost double its annual production capacity from 36.7 million tonnes of cement to 70 million tonnes, 20.2 million tonnes of concrete to 42 million tonnes and 25.2 million tonnes of clinker to 55 million tonnes, Yu said.

"In future, mergers and acquisitions are definitely the way to expand our production capacity. In three to five years, revenue from acquired plants will equal revenue from plants built by us," he said.

He said it would be impossible to build new plants following the government move to curb overcapacity in September last year, he said.

The cost of acquiring one tonne of annual cement production capacity was 400 to 450 yuan, he said.

This year, China would have 200 million tonnes of new cement production capacity while 110 million tonnes of obsolete capacity would be eliminated, giving a net addition of 900 million tonnes, Yu said. Next year, there would be 150 million tonnes of new capacity while 150 million tonnes of obsolete capacity would be removed.

More than half of China Resources' output is for the booming domestic infrastructure sector.

"The pace of infrastructure construction in China will triple in the coming decade," Yu said.

In the railways sector, 1,800 kilometres of tracks were built in the past five years. This will rise to 4,000 kilometres of high-speed and 4,000 kilometres of ordinary tracks each year in the next five years, Yu said.

One kilometre of high-speed railway would need 20,000 tonnes of cement, said Hu Song, a business director of China Resources (Holdings), the state-owned parent of China Resources Cement.

The Fengkai plant boasts another world record - the world's longest conveyor belt at 39.8 kilometres. It carries gravel from a quarry to the plant. The two billion yuan belt would be lengthened to 48 kilometres in the first quarter of next year, Yu said.

He said it cost 25 yuan per tonne for trucks to transport gravel, but the conveyor belt would cost only eight yuan per tonne, which would drop to five yuan when it was lengthened.

The Fengkai plant is next to the Xijiang or Western River. China Resources invested 1.2 billion yuan in a cargo terminal to transport cement from the plant by river. It was seven times cheaper to transport cement by river compared to trucks, Hu said.

Next year, the river terminal would start shipping fine stones, or aggregate as it is known in the industry, to Hong Kong as a raw material for construction projects, Yu said.