China Economy Forum

[TaiShang]

Dec 14 (Reuters) - Serbia and China will sign a deal worth more than $600 million next week to add a new unit at the Kostolac coal-fired power plant, the first major investment in more than two decades in Serbia's ageing energy infrastructure, the plant's manager told local media.

The agreement will be signed on the sidelines of a summit of leaders from central and eastern Europe and China on Dec. 16 and 17 in Belgrade, Dragan Jovanovic told Pink Television.

Chinese investors are increasingly targeting energy projects in the Balkans, boosting their presence and showing a willingness to take bigger risks than European rivals in a potentially lucrative market with good links to the European Union and scope for price rises.

The project will include the construction of a new 350 megawatt (MW) unit and expansion of nearby Drmno coal mine. It will take five years to complete, said Jovanovic.

He said that China will finance the project via a $608 million loan to be repaid over 20 years. It will include a seven year grace period and fixed annual interest of 2.5 percent.

The Serbian government and the state-run utility Elektroprivreda Srbije (EPS) will provide the remaining $107 million.

EPS is already undertaking a $1.25 billion upgrade at Kostolac, mainly financed by Export-Import Bank of China and using China Machinery and Engineering Corp. .

Due to the outdated technology the plant's B1 and B2 units operate below their full capacity and the upgrade is designed to boost their output, extend life span and reduce greenhouse gas emissions.

Serbia generates two thirds of its electricity from ageing coal-fired plants and the rest from hydro power. It urgently needs to upgrade its energy infrastructure to meet rising demand.

Its energy sector has been under severe strain since major flooding in May this year inundated a mine supplying Serbia's biggest power plant and forced the country to import power and coal to meet its energy shortfall. (Reporting by Maja Zuvela; Editing by Rosalind Russell)

China to help Serbia build 350 MW coal-fired power plant-media| Reuters

@Galad

 

[cirr]

China's CSR wins $275 mln worth of orders from Argentina

Mon Dec 15, 2014 2:18am EST

SHANGHAI Dec 15 (Reuters) - Chinese trainmaker CSR Corp Ltd said it won 1.7 billion yuan ($274.84 million) worth of orders from Argentina, as Chinese rail firms increasingly flex their muscles overseas.

CSR will provide locomotive products for a railway renovation project in the South American country, the company said on its website on Monday.

China has stepped up its focus on railways this year, spending 590 billion yuan ($95.4 billion) from January to October on new domestic lines and making a concerted effort to push its so-called "railroad diplomacy" overseas.

China Railway Construction Corp Ltd signed a $12 billion railway contract in Nigeria in November, the largest single overseas construction deal won by a Chinese firm.

CSR said it has been supplying trains and other rail products to Argentina since 2006. In 2013, it won two orders worth about $1 billion together from the country to supply inter-city trains.

CSR Corp and its main rival China CNR Corp Ltd are in merger talks to create a giant able to compete globally with the likes of Siemens AG and Bombardier Inc , state media have reported.

 

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China FDI inflows jump 22.2% in November

Source: Xinhua | December 16, 2014, Tuesday | Online Edition

FOREIGN direct investment (FDI) into the Chinese mainland jumped 22.2 percent in November from a year earlier, settling at US$10.36 billion, the Ministry of Commerce said on Tuesday.

The growth quickened from a 1.3-percent rise in October and 1.9 percent in September, as investments to the country's service industry continue rising steadily.

For the first 11 months, the FDI, which excludes investment in the financial sector, stood at US$106.24 billion, up 0.7 percent from the same period last year, the ministry said.

Around 55.1 percent of the FDI went into the country's service sector during the Jan.-Nov. period. FDI into the manufacturing sector moved down 13.3 percent to US$35.93 billion, accounting for 33.8 percent of the total.

Investments from the Republic of Korea and Britain saw fast growth, up 22.9 percent and 28 percent respectively. In contrast, investment from Japan plunged 39.7 percent, followed by a 23.6-percent drop from the ASEAN nations and 22.2-percent slump from the United States.

Tuesday's data also showed China's outbound direct investment by non-financial firms moved down 26.1 percent to US$7.92 billion in November.

 

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Economic planner OKs building new airport in Beijing

2014-12-16 08:17 Xinhua Web Editor: Qin Dexing

China's economic planner announced its approval on construction of a new airport in Beijing on Monday.

The project will involve 79.98 billion yuan (13.11 billion U.S. dollars) of investment and take about five years, said a statement from the National Development and Reform Commission.

The airport is designed to be able to handle 72 million passengers, 2 million tonnes of cargoes and mail, and 620,000 planes in 2025, it said.

It is expected to meet Beijing's rising demand for air transportation and help achieve balanced development in the capital's southern and northern areas, it said.

The new airport will be built in southern Beijing's Daxing District, which borders Hebei Province.

Beijing International Airport, located northeastern Beijing, was listed as the second busiest airport by passenger numbers in the world last year, behind Hartsfield-Jackson Atlanta International Airport in the United States.

 

[cirr]

First Published: Mon, Dec 15 2014

China says will build $31 billion worth of new infrastructure

Five roads to be built in the southern and central region and a third airport will be built in Beijing

Beijing: China’s economic planner has approved the construction of 192 billion yuan ($31 billion) of roads and an airport in the latest government effort to increase investment and support a slowing economy.

Five roads will be built in the southern and central region and provinces of Guangxi, Guangdong and Sichuan, the National Development and Reform Commission said on its website.

It said that 80 billion yuan would be invested in Beijing to build a third airport in the capital city.

Investment is a crucial driver of the world’s second-largest economy, but it has slowed this year as authorities try to re-engineer the growth model by reducing inefficient state spending and encouraging domestic consumption.

Official data showed investment, which accounted for nearly 42% of China’s economic growth in the first nine months of this year, grew at its slowest pace in nearly 13 years between January and November at 15.8%.

Listless growth in investment and a sagging housing market have led some analysts to predict that China may slip into its worst economic cool down in nearly a quarter of a century this year as annual growth hits a 24-year-low of 7.4%. Reuters

 

[Ruisheng]

If I could protest... Beijing drained too much.

 

[TaiShang]

Payments in National Currencies Within SCO Could Curb Speculator Activity / Sputnik International

Deputy Director General of the Center for Political Information claims that transition to payments in national currencies within the framework of the Shanghai Cooperation Organization may reduce speculator pressure on member states' stock exchanges.

MOSCOW, December 16 (Sputnik) — A transition to payments in national currencies within the framework of the Shanghai Cooperation Organization (SCO) may reduce speculator pressure on member states' stock exchanges, the Deputy Director General of the Center for Political Information told Sputnik News Agency, Tuesday.

"The problem is that the participants of the foreign economic activity are used to acquiring additional profits from the possibility of having a lot of currency. This particularly concerns exporters who got used to receive dollars and euros and, depending on the economic situation, to invest in economy, or, more often, to place free money in deposits and speculate on currency exchanges," Alexey Panin said.

Strengthening Cooperation with SCO Best Response to Sanctions: Secretary General

The economy of Kazakhstan has recently suffered from an exchange crisis, similar to the one that Russia faces now.

"In terms of currency Russia and Kazakhstan are more of the developing countries, rather than the developed ones. Their currency is linked to the commodity market. Due to strengthening of dollar, both [Russian] ruble and [Kazakh] tenge show similar [negative] dynamics," Panin said.

Panin is sure that a transition to payments in national currencies between SCO countries will enable member states to reduce speculative pressure. Kazakhstan is worried by external influence on its national currency and is interested in stabilizing the currency to minimize potential risks from speculators.

On December 15, the Prime Minister of Kazakhstan Karim Massimov called on SCO countries to use national currencies for mutual payments.

"We already have an experience on the bilateral level, which could shift to the whole organization," Massimov said during the SCO meeting.

"Today, effective use of the existing resources is essential for minimization of consequences of global economic shocks," he added.

During the same meeting, Russian Prime Minister Dmitry Medvedev said that a joint bank could be established on the same basis as the Eurasian Development Bank that currently operates in the region.

At the moment, single payments between SCO countries in national currencies are conducted in "test mode," the Executive Secretary of the SCO Business Council Sergey Kanavsky told Sputnik.

© SPUTNIK/ ALEKSANDR YUREV
China, Kazakhstan Agree on Using National Currencies in Trade

"Russia, China and Kazakhstan are involved in those payments more often. Uzbekistan, Kyrgyzstan and Tajikistan are also trying to link, but they still get accustomed," he said.

First initiatives with regard to payments in national currencies within the framework of the SCO were taken back in 2002. Several specific proposals to carry out such payments have since been made by financial and banking associations, as well as by business structures, Kakaevsky said, adding that such transition could be easily implemented if sufficient political will exists.

The SCO is a Eurasian political, economic and military alliance founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. India, Iran and Pakistan, as well as Mongolia and Afghanistan have observer country status in the organization, while Belarus, Turkey and Sri Lanka are considered to be dialogue partners.

 

[TaiShang]

13 December 2014 | By Joe Quirke

Chinese construction giant to buy Australia’s John Holland in bid for global expansion

One of Australia’s leading infrastructure firms, John Holland, is to be sold to a state-owned Chinese construction giant, giving the Chinese firm access to new markets in Australia and overseas.

Yesterday Leighton Holdings announced the sale of John Holland to CCCI, a subsidiary of China Communications Construction Company (CCCC), for approximately US$950m (A$1.15bn).

CCCI called it a “momentous step” in its bid to be a global infrastructure business.

State-owned CCCC is the fourth largest construction company in the world by revenue, and has a market capitalisation of approximately $19.5bn. Around 4,100 John Holland employees will transfer to CCCI.

John Holland, a Leighton Holdings business, is a major player in Australia’s infrastructure market, but is also active overseas. In 2011, in a joint venture with Leighton Asia, it won the contract to build a new mass rapid transit station in Singapore – the new Sungei Road Station. Also in 2011, it won a major tunelling contract for Hong Kong’s subway expansion.

“This is a momentous step for our company,” said President of CCCI, Mr Lu Jianzhong said after the announcement.

“We believe there are very significant growth opportunities in the Australian market, and clearly in the proposed acquisition of John Holland, we are recognising the strong leadership and solid performance of the business.

“From our perspective, ownership of John Holland is the optimal way for CCCC to participate in this dynamic market as part of our aim to be a global transportation infrastructure business. It will be an important strategic addition to CCCC and we see JHG as a strong independent competitor in the Australian market.”

The sale, which is subject to regulatory approvals, will reduce Leighton’s gearing by around 10% and cut group revenue by around $3.7bn, the company said. Work in hand will also fall by around $5.4bn.

But Leighton believes the move is necessary to streamline the business and free up cash for future growth in public-private partnerships (PPPs).

John Holland's Parliament House in Canberra (Wikipedia)

Writing in The Australian newspaper, columnist Stephen Bartholomeusz notes that John Holland “has been part of a quite complex and overlapping structure of competing brands and businesses within the Leighton group since 2000”.

The historic divestment would “strengthen the balance sheet, streamline the operating model and improve project delivery”, said Marcelino Fernández Verdes, Leighton chief executive.

“The divestment of John Holland supports our focus on further reducing gearing and strengthening our balance sheet so that we can be sustainably competitive,” Verdes said. “Proceeds will also be used to finance future growth, particularly in PPPs.”

He added: “The existing John Holland management will work closely with CCCI to ensure a smooth transition so that the business continues to safely and efficiently provide services to its clients.”

As for John Holland, its group managing director Glenn Palin said that CCCI’s “strength and capability” would give the company “a bright future in the Australian infrastructure market”.

“Not only is our proud heritage assured but it will enable us to effectively deliver innovative projects for our customers,” Palin said.

That heritage includes building Federal Parliament House in Canberra (pictured). Completed in 1988, it was one of the largest building projects to have been undertaken in Australia at the time.

Spain’s Ferrovial had been tipped to make a bid for John Holland, and Australian press reports said that Leighton and CCCI had been in talks for the last month after rival suitors Samsung and ATEC Retail fell by the wayside.

 

[cirr]

CCCC is the 4th largest construction company in China after Chinese Railway Engineering Corporation（CREC）、China Railway Construction Corporation（CRCC） and China State Construction Engineering Corporation（CSCEC），which means。。。

 

[TaiShang]

“People are approaching us and we are talking, but we are not going for it”– Lau Yew Cheong, Beijing Engineering Construction Group

Why Chinese builder loves Manchester, and what they’re planning next
16 December 2014 | By David Rogers

Why Chinese builder loves Manchester, and what they’re planning next
The executive director of Beijing Engineering Construction Group has said his firm expects to do $300m to $400m worth of work in the UK in the next five years.

Chinese money and Chinese companies are expected to become big players in the UK construction industry over the next decade.

One report suggested that China’s capital investment in Britain’s built environment might amount to $169bn in that time.

The report also foresaw the entry of Chinese contractors into the UK civils and construction market, initially through joint ventures. If this is also true, then history will record that the company that blazed the trail was the Beijing Engineering Construction Group (BCEG). Back in October 2013 it formed a joint venture with UK contractor Carillion, and joined the consortium that was developing the UK’s first ‘airport city’, in Manchester.

Now that the company has been in the UK for long enough to become acquainted with the British way of building, GCR talked to Lau Yew Cheong, the 64-year-old executive director of BCEG, about why he decided to take the plunge, and what he plans to do next in the UK.

“At this moment we are still quite new to the UK,” he says, “so we will just concentrate on Airport City for the next two or three years before we try to venture out.”

BCEG has a staffed office at Manchester Airport. Although the firm has been linked to a number of other joint ventures with UK contractors, Cheong says nothing has been agreed. “In the next five years we hope to do maybe $300m to $400m of work. People are approaching us and we are talking, but we are not going for it.”

Cheong says BCEG had been examining developments in Europe for some time before it chose to become involved in Manchester Airport City. The key factor was that the potential benefits were much greater than an ordinary construction scheme.

“China has got a very extensive programme of investing overseas and our company has been looking for an opportunity in European and UK, so when the opportunity came to invest in Manchester Airport City we saw it as a very good project because it’s the first of its kind in the UK, and it’s got a lot of potential. There are a lot of airport cities coming up in other parts of the world and we also see a lot of potential for airport cities back in China later. We also saw that our partners were all reputable and big players and that reduced the risk of investment.”

As well as Carillion, the $1.25bn scheme is being developed by the Greater Manchester Pension Fund and Manchester Airports Group (MAG), the airport operator owned by the Manchester borough councils. More comfort was offered by the UK government, which made its enthusiasm for China’s involvement clear, and had also made the development the flagship of its enterprise zone policy.

Another factor in BCEG’s decision was that it thought it had identified a market for the airport city’s facilities, in particular its high-tech manufacturing plants. “We liked the advanced manufacturing base, which offers a different opportunity of investment than just residential. We can see the potential, because now the Chinese are going out of China in droves to invest, and many of these of small and medium-sized industries, and Airport City fits in very well for them.

“Manchester is a well-connected city and the final destination of the projects will not just be the UK – it is Europe, and you can also see the UK has a vast set of Commonwealth connections, so tapping into the UK market means also tapping into some Commonwealth country markets – mainly Africa but also Australian and New Zealand. If you have a product that’s made in the UK it’s a lot easier to be accepted in these countries.”

The airport city team went to China in the summer to bring that message to the business communities in Beijing, Shanghai, Tianjin and Shenzhen. Cheong said: “We were mainly presenting to manufacturers and logistics people and financial institutions and some property developers. The first line was connectivity – connectivity is important because when Chinese come to do business in the UK they want to be connected with other parts of the world.”

On this, Manchester is forging ahead. After striking an historic deal with Cathay Pacific, the first direct flight to Hong Kong took off from Manchester on 8 December. It’s the only UK airport outside London to offer direct flights to China.

MAG chief executive Charlie Cornish told newspaper The Manchester Evening News that the airport is the final stages of securing a direct route to Beijing, and that the first flight could happen early in 2015.

He said the two new routes would lead to nearly 300,000 passenger journeys a year.

But work is needed on the regional infrastructure. John Atkins, the property director of MAG, told GCR: “I think it’s really important to improve the rail network and to begin HS2 [the high-speed rail link between London and Manchester]. If you look at the north–south links and the importance of London to the UK economy, and how that links into Manchester being the UK’s second city, then it’s clearly needed.

“It’s also a matter of gaining the full benefit of the scale of the northern region – you are looking at a bigger population being serviced if you are able to link together in a more connected way than they are at the moment – by road and rail in particular, where the infrastructure leaves a lot to be desired.”

 

[TaiShang]

China pledges 3-billion-USD investment fund for CEE countries
2014-12-17 01:02:07 GMT2014-12-17 09:02:07(Beijing Time) Xinhua English

BELGRADE, Dec. 16 (Xinhua) -- Chinese Premier Li Keqiang said Tuesday that his country will create an investment fund of 3 billion U.S. dollars to facilitate financing in the cash-strapped Central and Eastern European (CEE) countries.

Li made the announcement at the third leaders' meeting between China and 16 CEE countries in Serbia.

The latest pledge came two years after the world's second-largest economy set up a 10-billion-dollar special credit line to support cooperative projects with CEE countries.

"China will make the loan more preferential and reduce the cost of financing," Li told the meeting.

He also announced that the second phase of the China-CEE Investment Cooperation Fund worth 1 billion dollars will be launched.

The financing package is among the five-pronged proposals made by the Chinese premier to further enhance cooperation between China and CEE countries, which also include constructing a new corridor of inter-connectivity and expanding people-to-people exchanges.

"One year after the Bucharest action guideline was issued, China and CEE countries have witnessed closer exchanges and more active cooperation in various areas," Li said.

At the second China-CEE leaders' meeting in the Romanian capital of Bucharest last year, the two sides sketched out 38 cooperation projects, 80 percent of which have been put into practice.

Reiterating China's unwavering pursuit of peaceful development, Li stressed that his country stands ready to promote sustainable development, prosperity and stability of the world along with all countries including CEE nations.

Li called on China and CEE countries to give full play to their complementarity and advance cooperation in infrastructure construction, transformation of production capacity and finance while taking into consideration concerns of all sides.

On connectivity construction, Li said the two sides should develop interconnected land and sea channels between China and Europe by taking advantage of the railway between Hungary and Serbia and the Greek sea port of Piraeus, among others.

China is also willing to join hands with CEE countries in facilitating customs clearance, he said.

The premier added that China's high capacity in producing equipment of high-speed railways, nuclear power and telecommunication as well as raw materials including steel, cement and plate glass could satisfy the enormous demands of CEE countries' large-scale projects.

"We will encourage Chinese enterprises to set up factories in CEE countries and actively participate in the construction of industrial parks there," said Li.

"That will not only boost local employment, but also facilitate industry transformation and upgrading in China," he added.

China and CEE countries, said Li, should also strengthen cooperation in such fields as tourism, science and technology, culture, education, health care, youth, women and media.

He called for well-designed activities for the China-CEE tourism year of 2015 and urged support for creating a scholar think tank center.

All sides should continue to simplify visa application procedures to facilitate their personnel exchanges, said Li, adding that his country will double the number of CEE students studying in China next year.

The premier stressed that the China-CEE cooperation will not only benefit the two sides, but also be conducive to the balanced development of Europe and its integration.

Echoing Li's proposals, the CEE leaders attending the meeting said they are willing to deepen cooperation with China in such areas as trade, investment, infrastructure construction, energy, finance and people-to-people exchanges.

 

[TaiShang]

China's property developer plans major project in NYC
2014-12-17 01:36:21 GMT2014-12-17 09:36:21(Beijing Time) China Daily

Chinese property developer Greenland Holding Group has broken ground for an affordable housing project in downtown Brooklyn with its US partner Forest City Ratner Companies. Provided to China Daily

Chinese property developer Greenland Holding Group has broken ground for a project that could be the largest real estate development plan in New York City for 20 years.

Greenland USA said on Monday that it is developing an affordable housing project in downtown Brooklyn with its US partner Forest City Ratner Companies.

The 18-story project at 535 Carlton Avenue will include 298 units "100 percent affordable" for low-, moderate- and middle-income households, according to Greenland Forest City Partners.

The affordable housing plan is part of a multitower Pacific Park Brooklyn project, which was previously known as the Atlantic Yards. Greenland Group said it will invest $4.9 billion.

With revenue of $41 billion last year, Shanghai-based Greenland is one of China's largest conglomerates focusing on energy, finance and real estate.

The developer entered the US market in 2013 as doubts hit the cooling market at home. After investing $1 billion in the Los Angeles Metropolis project in July, it took a major stake in the Pacific Park project last October.

The project at 535 Carlton Avenue falls under New York City's Inclusionary Housing Program.

Under the program's regulations, if new developments or floor area enlargements of more than 50 percent in designated areas allocate at least 20 percent of the residential floor area for affordable housing, developers can receive subsidies and a floor area bonus.

The affordable housing project, which is expected to open in the fall of 2016, is the second of its kind by Greenland Forest City Partners at Pacific Park.

Of the 6,430 units Greenland Forest City Partners is expected to deliver, more than one-third will be affordable housing.

Zhu Yiming, a senior analyst at China Real Estate Information Corp, said given that similar projects in developed economies have been operating at a profit, the profitability of the New York project should not be a major cause for concern.

Greenland's position in the capital market could boost the company's financial strength, Zhu said.

Part of the group's business has been listed in Hong Kong, and the company is seeking to list its entire business in Shanghai.

Yan Yuejin, a researcher at E-house (China) Holding, was more cautious. He said the rents of the affordable housing means it will take time to recover the investment.

Greenland's strength is focused more on developing "landmark" commercial properties, and it will also take time for the company to understand local practice and nurture local capability, Yan said.

"The value of the project for Greenland might be in 'testing the waters'. It wants to better understand demand in the US market, so it may focus less on profitability," Yan said.

Greenland Group Chairman Zhang Yuliang told The Wall Street Journal the firm needs to do more to fuel its global expansion, including familiarizing itself with local laws and taxes and adjusting its ambitions to the number of its employees.

"It's not just size. We want to improve the quality, efficiency and business model of the firm," he said.

An aggressive expansion drive has propelled the once-unknown Greenland Group onto the global stage. It has invested about $20 billion in overseas projects since 2013 and expanded into 13 cities in nine countries, including the United States, Australia and Britain.

Greenland said it expects its overseas revenue from presales－or sales of units before they are completed－to reach $3.9 billion this year.

Zhu said, "Greenland's State-owned enterprise status could be a help, including in overseas markets. But its internal management and incentive system－usually weak for SOEs－could be a potential drag."

 

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[TimeTraveller]

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[TaiShang]

Ireland president visits China's Alibaba
2014-12-13 01:32:27 GMT2014-12-13 09:32:27(Beijing Time) ecns.cn
Ireland's President Michael Higgins on Friday paid a visit to Alibaba, China's biggest e-commerce platform in southern city Hangzhou. Higgins and Alibaba founder Jack Ma reportedly enjoyed Taichi performance after holding wide-ranging talks.