China Economy Forum

[cirr]

China Caixin service PMI hits three-month high

2017-09-05 12:34

Xinhua Editor: Gu Liping

China's service sector growth accelerated in August, hitting a three-month high, a private survey showed Tuesday.

The Caixin General Services Purchasing Managers' Index rose to 52.7 in August from July's 51.5, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.

A reading above 50 indicates expansion.

This came after an official survey showed China's non-manufacturing sector expanded at a slightly slower pace, as the index for the service sector stood at 53.4 in August, down from 54.5 in July.

The official survey samples 4,000 relatively large non-manufacturing companies, while the Caixin survey has a smaller sample size of over 400 companies and mainly focuses on small and medium-sized firms.

Caixin said that the increase in new orders received by Chinese services firms was the quickest in three months. A number of companies responding to the survey attributed the jump to improving market conditions and new marketing strategies.

The solid demand led services providers to speed up payroll expansion, with the rate of job creation accelerating to the fastest in four months.

Input costs rose marginally last month at services firms while output prices fell for the first time in 17 months amid reports of greater market competition.

The upturn, combined with the acceleration in the Caixin China General Manufacturing Purchasing Managers' Index to a six-month high of 51.6 in August, provides signs that growth in the economy has stabilized after a disappointing performance in July.

"The recovery in both manufacturing and services has led the economic outlook to continue to improve," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group.

The service sector -- which includes finance, real estate services and marketing, transport and retail -- has become an increasingly important part of the Chinese economy as the country tries to shift its economy toward a growth model that draws strength from consumption, services, and innovation. The sector accounted for more than half of the Chinese economy last year.

http://www.ecns.cn/business/2017/09-05/272208.shtml

 

[Galactic Penguin SST]

Spoiler: Links

http://img.yonhapnews.co.kr/etc/graphic/YH/2017/09/08//GYH2017090800010031500.jpg
http://english.yonhapnews.co.kr/graphic/1002000000.html?cid=GYH20170908000100315

▲ Analysis on Chinese handset market. 2017-09-08 09:28

 

[onebyone]

China’s Economy Growing Faster Than Expected

FILE - A laborer works at a steel plant of Shandong Iron & Steel Group in Jinan, Shandong province, China, July 7, 2017. Activity in China’s steel industry expanded in August at the fastest pace since April 2016.


BEIJING —

China’s producer price inflation accelerated more than expected to a four-month high in August, fueled by strong gains in raw materials prices and pointing to strong, sustained growth for both factory profits and the economy.

The producer price index (PPI) rose 6.3 percent in August from a year earlier, from 5.5 percent in July, the National Bureau of Statistics said Saturday.

Analysts polled by Reuters had expected the August producer price inflation rate would edge up to 5.6 percent, its first pickup in six months.

Strong industrial profits

China’s industrial firms have been posting their strongest profits in years thanks to a government-led construction boom that has fueled demand and prices for everything from cement to steel.

The country’s strong appetite for resources such as iron ore has helped fuel a reflationary pulse in the manufacturing sector worldwide.

But analysts continue to maintain that factory-gate prices will lose steam eventually as the government continues to clamp down on riskier types of financing, which is slowly pushing consumer and corporate borrowing costs higher.

China’s commodities futures markets have rallied hard this year and continued to surge through in August. Strong restocking demand and government pledges to shut inefficient and highly polluting mines and plants have underscored concerns over tight supply heading into winter.

Steel industry expands

Activity in China’s steel industry expanded in August at the fastest pace since April 2016, reflecting high levels of production and low inventory.

With the industrial sector in high gear, China’s economy grew by a faster-than-expected 6.9 percent in the first half of this year, turbo-charged by heavy government spending and massive bank lending last year.

That momentum plus strong August readings so far should allow Beijing to easily meet or beat its full-year growth target of 6.5 percent.

Indeed, relatively steady growth through the rest of the year would see the world’s second-largest economy accelerate for the first time in seven years. Last’s years pace of 6.7 percent was the slowest in 26 years.

China’s consumer inflation rate also rose more than expected to a seven-month high of 1.8 percent in August, the bureau said, the first time it has accelerated in three months.

The consumer price index (CPI) had been expected to rise 1.6 percent on-year compared with an increase of 1.4 percent in July.

Food prices, the biggest component of the consumer price index (CPI), fell 0.2 percent from a year earlier.

Nonfood price inflation quickened to 2.3 percent in August from 2 percent in July. Analysts had expected the CPI to rise 1.6 percent from 1.4 percent in July but remain well within the central bank’s comfort zone.

https://www.voanews.com/a/china-economy-growing/4021699.html

 

[JSCh]

Oil futures on the horizon
By Meng Fanbin | China Daily | Updated: 2017-09-11 08:08

Employees work at Qingdao Dongjiakou Port, which is one of China's largest ports for crude oil transit and storage. [Zhang Jingang/for China Daily]

New segment will likely stabilize prices and improve efficiency

China, the world's largest crude importer, is moving swiftly toward the introduction of oil futures.

The Shanghai International Energy Trading Center, a subsidiary of the Shanghai Futures Exchange, has completed the fourth trial of the digital platform of the oil futures market in July.

Most of the market players concerned tried it out. Launch would follow the regulatory approval, which is awaited, according to industry insiders.

The China Securities Regulatory Commission has forwarded the SIETC's application to the State Council, the country's Cabinet, for the final green signal.

This means, it is just a matter of time before trading in oil futures takes off in China, said Li Yaqian, general manager of international business at SDIC Essence Futures.

Zhan Sheng, investment director of JZ Investment, said, "The government has to choose a suitable time for the listing, because crude oil futures show clearly a country's demand for oil and could have a bearing on the country's macroeconomic factors."

Agreed Li. "Crude futures will bring about many things－an important tool of price discovery, hedging, risk aversion and arbitrage－for commodity producers, operators and domestic market speculators."

Since 2014, the SFE has been urging the State Administration of Foreign Exchange to allow foreign investors into China's oil futures market whenever it is launched.

"Crude oil is expected to be the first futures segment in China to see foreign traders," said Li.

In fact, some overseas investors have already opened trading accounts during the trials, he said.

He also stressed that crude oil futures will help systematize oil pricing. Futures will have a significant bearing on oil prices, experts said.

That's because uncertainty and wild price fluctuations, which bedevil the spot market currently, would be reined in by the futures market.

Since the futures market would set the tone for the price trend, they would "not only give China more control over oil prices in the global market, but also reduce operational costs of refineries and petrochemical companies", said Zhan.

When fuel and chemical producers are assured of a future price trend, they would be able to plan and manage costs more efficiently. This could result in substantial savings, which would help lower commodity prices at the consumer level, experts said.

In the global commodity futures markets, crude oil trading is the largest segment. In China, new players specializing in oil futures are expected to enter the market.

"Their entry will greatly improve market activity and create more opportunities to make profits," said Li.

As early as 2014, market players started to anticipate and prepare for oil futures in China. Such efforts accelerated this year, said insiders.

Global commodity funds have been visiting China to understand the latest developments, trading rules, expected changes in the country's oil supply and demand, and how funds could enter and exit the futures market, according a report in 21st Century Business Herald.

Some of them began to design corresponding hedging and spread arbitrage investment strategies, the Herald reported.

Li is optimistic about China's crude oil futures.

China is a major oil producer whose large number of production units have a direct say in the physical delivery of the commodity.

This could alter the contours of the global futures market, given the size of China's oil economy.

Last year, the Daqing Oilfield in Heilongjiang province produced 730,000 barrels per day. The Shengli Oilfield in Hebei province produced 480,000 bpd.

Given the significance of oil among natural resources, crude futures are always under the spotlight in the global commodity markets; and the expected launch of crude futures in China would keep the tradition alive.

The crude oil futures market is expected to be vibrant due to large trading volumes in the physical market. There is also strong demand for hedging opportunities among refiners, said Zhan. Those into hedging would be able to control their procurement costs better, he said.

Besides oil, futures markets in other commodities are developing in China. On Aug 18, the Zhengzhou Community Exchange in Henan province launched cotton yarn futures.

Speaking on the occasion, Fang Xinghai, vice-chairman of the CSRC, said that to meet the demand of the real economy, China will enhance research into, and listing of, futures and introduce varieties of futures trading in the future.

 

[cirr]

E China nuclear power reactor begins commercial operations

2017-09-18 09:15 Xinhua Editor: Gu Liping

A fourth unit of the Fuqing branch of China National Nuclear Corp. (CNNC) began commercial operations on Sunday in east China's Fujian Province.

The China-designed No. 4 unit brings the total installed capacity of the project to 4.35 million kw. The first unit was put into use in 2014.

The nuclear power units in Fuqing have generated 42 billion kwh of electricity, equivalent to a cut in coal consumption of nearly 17 million tonnes and a drop in emissions of 55 million tonnes of carbon dioxide.

The government has approved the CNNC Fuqing branch to build six nuclear power units. The No. 5 and 6 units will be a pilot project featuring Hualong One technology, a domestically developed third-generation reactor design.

In May, the hemispherical dome, weighing 340 tonnes and measuring 46.8 meters in diameter, was installed by crane on the No. 5 unit, marking the completion of construction work on the pilot project and the beginning of the assembly stage.

Currently, CNNC has 17 operating nuclear power units. China has 36 operational nuclear reactors and is building 20 more.

By 2020, China aims to have 58 million kw of nuclear power capacity in operation.

On Sept. 1, China's legislature passed a Nuclear Safety Law, which reflects the country's rational, coordinated and balanced nuclear safety outlook, as well as its commitment to fulfilling obligations under international treaties.

http://www.ecns.cn/business/2017/09-18/273970.shtml

 

[Martian2]

China's port container-volume up 7.5% in first-half 2017 | JOC

To eliminate the distortion caused by fluctuating currencies, the most accurate measure of China's export industries is the Chinese port container volume (which is the number of twenty-foot containers or TEU/"Twenty-foot Equivalent Unit" shipped through Chinese ports).

As reported by JOC, China's port container volume grew by 7.5% in the first six months of 2017. This indicates a healthy Chinese export sector.

We expect China's technology to improve year-by-year. For example, Chinese exports of Huawei smartphones have faster processors and are more capable. Thus, a 7.5% increase in the quantity of Chinese exports and an expected technological increase in their quality indicate a growing competitiveness for Chinese exports.
----------

Chinese container port growth surges on strong US demand | JOC

Quote from first sentence of the article below: "Growth at China’s top 20 container ports is gaining momentum, with volume in July up 8.7 percent year over year, building on the 7.5 percent growth in container volumes in the first half."

 

[Bussard Ramjet]

As reported by JOC, China's port container volume grew by 7.5% in the first six months of 2017. This indicates a healthy Chinese export sector.

You should read the report again. It talks about container throughput from China's top 20 ports.

If there is a consolidation going on in the sector, (like it is in many Chinese industries) than the container throughput of top ports will grow faster than normal growth.

I am not suggesting that this is really the case, just highlighting the possibility.

 

[Martian2]

You should read the report again. It talks about container throughput from China's top 20 ports.

If there is a consolidation going on in the sector, (like it is in many Chinese industries) than the container throughput of top ports will grow faster than normal growth.

I am not suggesting that this is really the case, just highlighting the possibility.

I think you're getting confused between shipping companies (which is undergoing consolidation) and CONTAINER PORTS.

Container ports are fixed geographical locations that handle the shipment of twenty-foot containers into and out of China.

In the citation below, China's largest port (which is Shanghai) handled 35 million containers. In contrast, China's twentieth-largest port handled a mere 1 million containers.

China's top 20 ports accounted for over 170 million containers. China's 21st ranked port handles a volume less than 1.3 million containers. No one tracks the volume beyond China's top 20 ports, because the volume handled by smaller ports is negligible and has little effect on China's container-volume trade data.

The basic concept of using the Top 20 largest entities to measure an industry is common practice. For example, IC Insights tracks the 20 largest semiconductor companies in the world (see second citation below) and use them as a proxy for the entire semiconductor industry. By the time you get to the 21st semiconductor company, the revenues are pretty tiny compared to the largest semiconductor company (Intel).

In the case of semiconductors, IC Insights concluded the semiconductor industry grew by 3% (see chart below) from 2015 to 2016 based on the results of the top 20 semiconductor companies.

China Unveils 2014 Top 20 Container Ports

----------

 

[Bussard Ramjet]

I think you're getting confused between shipping companies (which is undergoing consolidation) and CONTAINER PORTS.

Container ports are fixed geographical locations that handle the shipment of twenty-foot containers into and out of China.

In the citation below, China's largest port (which is Shanghai) handled 35 million containers. In contrast, China's twentieth-largest port handled a mere 1 million containers.

China's top 20 ports accounted for over 170 million containers. China's 21st ranked port handles a volume less than 1.3 million containers. No one tracks the volume beyond China's top 20 ports, because the volume handled by smaller ports is negligible and has little effect on China's container-volume trade data.

The basic concept of using the Top 20 largest entities to measure an industry is common practice. For example, IC Insights tracks the 20 largest semiconductor companies in the world (see second citation below) and use them as a proxy for the entire semiconductor industry. By the time you get to the 21st semiconductor company, the revenues are pretty tiny compared to the largest semiconductor company (Intel).

In the case of semiconductors, IC Insights concluded the semiconductor industry grew by 3% (see chart below) from 2015 to 2016 based on the results of the top 20 semiconductor companies.

China Unveils 2014 Top 20 Container Ports

----------

I agree with a lot of what you say, however I disagree that only container shipping companies are getting consolidated.

The fact of the matter is that the average size of a normal ship (of container, or ore, or fuel) is increasing. It makes more sense to direct it to larger ports than small ports.

Apart from that, this dynamic also increases port through put without necessarily increasing actual real shipments.

In large container ship shipment, material has to be first unloaded to a large port, from which it than goes on to a smaller port using a smaller ship.

The next thing is that container through put measures both input and output.

I don't really think we need container throughputs to measure exports when we have dollar figures to measure them directly.

I think you're getting confused between shipping companies (which is undergoing consolidation) and CONTAINER PORTS.

Container ports are fixed geographical locations that handle the shipment of twenty-foot containers into and out of China.

In the citation below, China's largest port (which is Shanghai) handled 35 million containers. In contrast, China's twentieth-largest port handled a mere 1 million containers.

China's top 20 ports accounted for over 170 million containers. China's 21st ranked port handles a volume less than 1.3 million containers. No one tracks the volume beyond China's top 20 ports, because the volume handled by smaller ports is negligible and has little effect on China's container-volume trade data.

The basic concept of using the Top 20 largest entities to measure an industry is common practice. For example, IC Insights tracks the 20 largest semiconductor companies in the world (see second citation below) and use them as a proxy for the entire semiconductor industry. By the time you get to the 21st semiconductor company, the revenues are pretty tiny compared to the largest semiconductor company (Intel).

In the case of semiconductors, IC Insights concluded the semiconductor industry grew by 3% (see chart below) from 2015 to 2016 based on the results of the top 20 semiconductor companies.

China Unveils 2014 Top 20 Container Ports

----------

Also, can you do me a favor. Since you have access to JOC, can you post these below articles:
https://www.joc.com/port-news/termi...-dominant-productivity-rankings_20130726.html

https://www.joc.com/port-news/joc-group-launches-port-productivity-database_20130722.html

 

[Martian2]

I agree with a lot of what you say, however I disagree that only container shipping companies are getting consolidated.

The fact of the matter is that the average size of a normal ship (of container, or ore, or fuel) is increasing. It makes more sense to direct it to larger ports than small ports.

Apart from that, this dynamic also increases port through put without necessarily increasing actual real shipments.

In large container ship shipment, material has to be first unloaded to a large port, from which it than goes on to a smaller port using a smaller ship.

The next thing is that container through put measures both input and output.

I don't really think we need container throughputs to measure exports when we have dollar figures to measure them directly.




Also, can you do me a favor. Since you have access to JOC, can you post these below articles:
https://www.joc.com/port-news/termi...-dominant-productivity-rankings_20130726.html

https://www.joc.com/port-news/joc-group-launches-port-productivity-database_20130722.html

I don't have a subscription to JOC. Only their most recent articles are free.

I cannot access the archived JOC articles.

 

[Martian2]

One more thing Martian, can you be so kind as to give me data regarding China's annual births and their ethnicities.

Basically I want to know the number of children born in the last 5 years and their ethnicities (Han, Hui, Mongol, Manchu, Tibetan, Uygur etc.)

I have no idea.

I also don't see its relevance.

I focus on technology and broad metrics of national power (such as economic size, energy consumption, military power, South China Sea islands construction, etc.).

I think ethnicity is trivial. China's Han ethnic group comprises 92% of mainland China's population. Hans are dominant. Furthermore, Hans control all of the technology and major corporations in China. The minority populations have little effect on Chinese national power.

Additionally, the Manchus have voluntarily relinquished their own dialect. They speak only Mandarin, which is the language of China's Hans. China's minority populations want to join the mainstream Hans. It is the only path to opportunity. All of the universities, research institutes, and high-tech jobs are Han. Go Han or go home.

 

[cirr]

China's manufacturing PMI continues to pick up in September

Source: Xinhua| 2017-09-30 09:52:12|Editor: ying

BEIJING, Sept. 30 (Xinhua) -- China's manufacturing sector in September expanded at the fastest pace in more than five years, adding to strong economic resilience against headwinds, the National Bureau of Statistics (NBS) said Saturday.

The country's manufacturing purchasing managers' index (PMI) for this month came in at 52.4, up from 51.7 in August and hitting the highest level since May 2012, according to NBS data.

A reading above 50 indicates expansion, while a reading below reflects contraction.

"The indicator showed a steady upward trend in the manufacturing sector," NBS statistician Zhao Qinghe said, attributing the quickened expansion mainly to improving demand at both home and broad and booming high-tech industries.

Robust consumption in food, beverage and clothing ahead of an eight-day National Day and Mid Autumn Festival holiday period also contributed to the performance, Zhao said.

Saturday's data also showed that China's non-manufacturing sector grew at the fastest pace since June 2014 in September, with its PMI standing at 55.4, up from 53.4 in August.

http://news.xinhuanet.com/english/2017-09/30/c_136650445.htm

@Bussard Ramjet India?

 

[TaiShang]

 

[samsara]

Transformation of social structure buttresses China's rapid rise

By Jin Canrong
Globaltimes.cn - 2017-10-05

Academics around the world show great interest in how China made remarkable achievements since 1949, especially after the reform and opening-up in 1978. The answer lies in comparing China with developed countries in the West in ways of industrialization and modernization.

Europe set an example to the world as it took the lead in promoting social transformation from pre-modern to modern society. This transformation consisted of three core processes: Renaissance, Reformation and Revolution.

Before Renaissance, Europe focused on fulfilling religious responsibilities. State rulers governed through religion. Renaissance and the subsequent Enlightenment Movement called on people to pursue their own happiness, which added a secular flavor to society.

Then came Reformation, which set a boundary between religion and secularism — religion should not intrude into social life.

Revolution followed. The French Revolution resulted in the abolition of privileges of noble birth.

The completion of social transformation fueled industrialization featuring machine manufacturing and higher productivity. Western industrial strength dominated after industrialization and Western countries began to promote globalization around the world.

China is probably the only country that has finished the transformation of social structure in the non-Western world.

Chinese culture has always been open and inclusive to the world. Agrarian society dominated ancient China and horsemen took a back seat. However, the horse-mounted groups were used in military exchanges during the Spring and Autumn Period (770BC-476BC). Then, "Wearing the Hu-styled (exotic) attire and shooting from horseback in battle" emerged during the reign of King Wuling of Zhao (325-299 BC) during the Warring States period (475BC-221BC).

In addition, Buddhism was embraced by the ancient Chinese and fitted into Chinese culture where some prominent schools of thought, such as Confucianism, Legalism and Daoism, had been acknowledged by the masses. The integration of Buddhism into Chinese culture helped maintain social function.

Since the beginning of modern Chinese history in 1842, Chinese people have witnessed the large-scale import of Western values. Advanced technologies were brought into China during the late Qing Dynasty (1644-1912), political and social system during the Republic of China (1912-1949) and the introduction of Marxism since the founding of the People's Republic of China. China has also drawn on the development experience of the West after the opening-up. Based on that, Chinese culture has successfully gone through the Renaissance.

As for the Reformation, Chinese culture has abandoned feudalism namely, the Three Cardinal Guides - ruler guides subject, father guides son and husband guides wife, and Five Constant Virtues - benevolence, righteousness, propriety, knowledge and sincerity, which is similar to the European religious reformation.

Considering the Revolution, China has built a brand new social structure and introduced democracy among the people through several waves of revolution.

Social transformation underpins the bourgeoning industrialization in China. China's industrialization has made amazing strides. For example, China's manufacturing scale rose to 160 percent of the US in 2016, with an output totaling the manufacturing output of Japan, Germany and the US. This gap is widening and China's manufacturing sector will surpass the total manufacturing output of Japan, the EU and the US in 10 years. After two decades, the world will likely see the rise of two "countries" in terms of manufacturing growth - China and the rest of the world. China's manufacturing sector will outstrip that of the other countries combined.

China has developed a robust industrial system. In April 2017, a report from Goldman Sachs said that Shenzhen has outperformed the Silicon Valley in the transformation of research outcomes into commercial products. The US led technological innovation in the last 30 years, but suffered lower productivity because of outsource of industry.

Industrialization in other non-Western countries advanced via colonialism and force. For instance, India was under British colonial rule for about 100 years. Although India became independent in 1947, it failed to launch Revolution or Reformation, or complete the transformation of its social structure. Up to now, India is still in the pre-modern phase. Despite some modernization, India is somewhat incapable of taking its own industrialization to a higher level.

China has a growing interest in globalization and global governance after making inroads into industrialization. China proposed its own solutions to global issues during the G20 Hangzhou Summit last year and thereafter. China's modernization is in full swing.

The author is the vice director of the School of International Studies at Renmin University of China. opinion@globaltimes.com.cn

http://www.globaltimes.cn/content/1069062.shtml

。

 

[cirr]

China's producer price up 6.9 pct in September

2017-10-16 10:10 Xinhua Editor: Gu Liping

China's producer price index (PPI), which measures costs for goods at the factory gate, rose 6.9 percent year on year in September, data showed on Monday.

The pace of PPI increase accelerated from 6.3 percent registered in August and surpassed market forecast of 6.4 percent. On a month-on-month basis, the index was up 1.0 percent last month, according to the National Bureau of Statistics.

For the first nine months of the year, PPI climbed 6.5 percent from one year earlier.

http://www.ecns.cn/business/2017/10-16/277168.shtml

China's consumer inflation up 1.6 pct in September

2017-10-16 10:11 Xinhua Editor: Gu Liping

China's consumer price index (CPI), a main gauge of inflation, rose 1.6 percent year on year in September, the National Bureau of Statistics said Monday.

The pace moderated from August's 1.8 percent. On a monthly basis, the index was up 0.5 percent, according to the bureau.

China's producer price up 6.9 pct in September

China's producer price index (PPI), which measures costs for goods at the factory gate, rose 6.9 percent year on year in September, data showed on Monday.

http://www.ecns.cn/business/2017/10-16/277169.shtml