China Economy Forum

[bolo]

Chinese fast food firms challenging McDonald's

Updated: 2013-10-29 11:28
( Agencies)

http://www.chinadaily.com.cn/business/2013-10/29/content_17065973_3.htm

Bearing rice burgers and lotus roots, an army of Chinese fast food firms is cooking up a challenge to McDonald's Corp and Yum Brands Inc, tempting cost-conscious diners with healthy, homegrown fare and causing a drag on growth for the US chains in the country's $174 billion fast food market.

McDonald's said last week it was thinking of slowing expansion in China as diners are tempted by local rivals. KFC-parent Yum warned this month economic weakness in China would drag on a recovery in sales dented by a food safety scare at the end of last year.

credit: ideaon.cn

credit: gzbx.net.cn

Credit: smartshanghai.com

Meanwhile, local firms such as chicken chain Dicos, Country Style Cooking, and Kung Fu Catering have been nibbling away at the dominance of their US rivals.

"I'm a bit sick of Western fast food. There's too much oil, and you hear things like chickens having six legs," said student Tang Mei, 25, as she dined at Taiwan people-owned fast food outlet Dicos. "Health concerns have really made people worried."

McDonald's and Yum are still the largest fast food chains in China but, despite heavy investment, McDonald's has seen its market share by value stagnate at 2.3 percent since 2007, according to data from market research firm Euromonitor.

Yum, which held 6.5 percent last year, is up slightly over the same period, but has seen same-store sales hit after a food scare last year and a local outbreak of avian flu. Yum has 5,600 KFC and Pizza Hut China stores while McDonald's has 1,800 local outlets.

Brands like Ting Hsin International-owned Dicos, the third largest fast food brand in China, have taken note. The firm, which plans to triple its store count to around 3,700 by 2020, says it aims to "break the traditional Western fast food mould".

While conceived in the image of KFC - its name is a play on "Texas" in Chinese - Dicos now also pushes its Chinese roots. Its website displays an ornate blue ceramic bowl steaming with traditional herbal tea, while rice cake burgers and soybean milk flank the chain's more traditional nuggets and crispy wings.

"After all, since ancient times rice has been the key staple of the Chinese people," explained Zhuang Weitang, a spokesman for Ting Hsin International, adding the brand was planning to up its drive towards healthier, Chinese-style cooking.

"It's the mix (of traditional chicken) with new, health-focused Chinese specialties that has helped us create a niche in the fiercely-competitive Chinese fast-food market."

Eating the colonel's lunch

In a slowing economy, many consumers are trading down to cheaper alternatives or simply dining at home, said analysts, which has contributed to the growth rate in the wider fast food market halving over the last 5 years to 8 percent this year.

Lunch at Dicos costs less than 17 yuan ($2.80) compared with a similar offering from KFC, which costs 25 yuan ($4.11), according to Mintel.

"Local establishments generally also do a better job catering to local tastes," said Karla Wang, associate research director at market research firm TNS China. "These familiar 'comfort foods' often go a long way in soothing frazzled consumers during times of uncertainty."

Diners have even started to question international chains' quality, traditionally a strong point after scandals ranging from the use of recycled "gutter oil" for cooking to industrial chemical-laced milk made consumers wary of local products.

But a number of scares over the last year, including reports that some chicken purchased by KFC and McDonald's had been fed excess antibiotics, seems to have altered consumer views. Only one-in-four Chinese thought Western fast food has healthier and better quality than Chinese alternatives, said a recent report from research firm Mintel.

McDonald's and Yum have taken note.

"We address food quality and food safety in all aspects of our communication; most recently, we launched a Moms' Trust campaign... and we will be doing more in this area," said Jessica Lee, a Shanghai-based spokeswoman for McDonald's.

Yum officials were not immediately available for comment.

The company has trimmed its local supply chain and plans to launch a new China quality assurance campaign in November that will feature KFC employees, suppliers and poultry farmers.

"We still have work to do, but we know we are doing the right things to regain consumer trust and we remain confident that our best days for KFC in China are yet to come," Chief Executive David Novak said in an analysts call on Oct 9.

Home style

As trust of domestic brands grows, diners are being increasingly drawn to local dishes, perceived as healthier due to a wider variety of ingredients, while there is mounting interest in traditional Chinese food and dining culture.

Last year a documentary called "A Bite of China" aired on local television drawing more than 100 million viewers, making it the most successful documentary in China since the 1990s.

Chinese heritage has become a key selling point.

Kung Fu Catering, which sports an emblem of martial artist Bruce Lee, underscores its local credentials by playing up the natural ingredients for its Chinese-style food against backgrounds of Chinese mountains, wispy clouds and bamboo.

GII Wonton

Credit: 4301.91jm.com

Credit: cntuke.com
Vegie Wontons

Credit：sy.hr1000.com

Credit: 57tuan.com


Others such as Country Style Cooking, CNHLS and Gll Wonton, owned by Shanghai Shihao Catering, all offer fast food with a Chinese flavor. Though some way behind Yum and McDonald's in terms of size, all are taking market share from the huge independent sector of single shops and stalls.

Local brands also perform strongly in regions away from the saturated east coast market, catering to local tastes in areas seen as the China's next drivers for growth.

"Country Style Cooking is really strong in western China, while Kung Fu Catering is from Shenzhen and does well with more rice-based Chinese set meals, which fit the trend towards less oily and healthier food," said James Roy, Shanghai-based senior analyst at China Market Research Group.

China's influential netizens also suggest the US firms are struggling to remain the flavor of the month. Chatter about the two brands on China's Twitter-like Weibo fell to an almost two-year low in September, according to analysis by Reuters.

As one microblogger wrote: "I won't choose anything but Chinese fast food. We've got crab meat dumplings to Hunan-style cooking, fragrant Xinjiang breads and lamb kebabs... What do brands like Pizza Hut and McDonald's possibly have to offer?"

these Chinese fast food looks pretty delicious. I have eaten these before and it sure beats a Big mac combo.

 

[cirr]

China official PMI seen hitting 18-month high in October

By Natalie Thomas

BEIJING | Wed Oct 30, 2013 3:42am EDT

(Reuters) - China's manufacturing activity in October likely grew at its fastest rate since April 2012, a Reuters poll showed, adding to signs of a stabilization in the world's No.2 economy as the government readies a series of key economic reforms.

The official manufacturing purchasing managers' index (PMI) is forecast to reach 51.2 from September's 51.1, according to the median estimate of 11 economists, remaining well above the 50 point line separating expansion from contraction.

A preliminary PMI survey last week by HSBC and Markit Economics showed that the factory sector grew at its fastest pace in seven months in October.

A firm reading in the official PMI could help put to rest worries that the economy may slow down significantly in the fourth quarter.

"We expect a continued moderate growth improvement in the fourth quarter," said Wei Li, an economist with Standard Chartered in Shanghai.

Concerns had surfaced after disappointing export figures in September and a one-point drop in the final HSBC/Markit PMI figures for the month from its preliminary estimate.

"I'm expecting both the final HSBC PMI and the official number to be close what the flash was signaling in September, and what the flash signaled again in October," said Tim Condon, Asia economist at ING in Singapore.

Condon said that bad weather had played a role in the divergence between the initial and final HSBC PMI figures for September.

The official PMI is weighted more towards bigger and state owned enterprises and tends to paint a rosier picture than the private survey, which focuses more on smaller and private sector firms.

Economists in a recent Reuters poll saw China's economy growing at 7.5 percent in the fourth quarter from 7.8 percent in the third.

The government has said it would accept a slowdown while it pushes forward with its reform agenda.

That agenda will be the focus of the Communist Party's third plenary session starting on November 9. The government wants to shift the economy away from a reliance on exports and investment and more towards consumption.

"Market confidence will be on the rise ahead of the third plenum, as people are hoping that we will see some more comprehensive economic reforms, so October should be a good month."

Earlier this week, media said the Development Research Centre, an influential think tank linked to China's state council, or cabinet, had recommended eight key areas for reform: finance, taxation, land, state assets, social welfare, innovation, foreign investment and governance.

Those recommendations are likely to form some of the basic agenda for the plenary session.

The official PMI figures will be released on Nov 1 at 9 am (0100 GMT). The final HSBC/Markit PMI will also be released on November 1, at 9:45 am.

(This story was refiled to clarify median in table is 51.2)



(Editing by Kim Coghill)

 

[shuttler]

What's the top left one? Is that Spanish chorro?

No it's deep fried dough fritter,mainly eaten with congee.

It is called you-tiao 油条.

http://en.wikipedia.org/wiki/Youtiao

The preparation of which is rather similar to churro.

Youtiao is usually eaten together with congee / porridge or soy milk. It is salty whereas churro is usually eaten sweetened.

Credit: .doughculture.com.sg


Youtiao with soy milk

Credit: yunyuzhishi.cn

Youtiao with congee / porridge:

Credit: 80121.cn

Credit: en.petitchef.com

Other variety of dishes using youtiao as ingredients

粢饭 Ci-fan - youtiao wrapped in sticky rice rolls with pork/meat floss ( 肉松 rou-song）and a dash of salty pickles as fillings

Steamed youtiao with scrambled eggs

油条拌黄瓜 - youtiao with cucumber
Credit: zhufukc.com



炸兩 Zhaliang: youtiao in steamed rice flour wrapper (eaten with soysauce or optional chili sauce, a sprinkle of sesame ...or other sauce)

Credit: 3.bp.blogspot

Credit: 3.bp.blogspot and @Chinese-Dragon
https://defence.pk/threads/chinese-economy-news-updates.80982/page-180

 

[cirr]

Green branch of Israel Corporation to build 200-megawatt solar project in China

By SHARON UDASIN

10/31/2013 08:23

The 200-megawatt thermo-solar facility is the second phase of a multi-stage solar city to be established in the region.

Photovoltaic solar panels Photo: Courtesy Shikun Vebinuini and Suntech

The Israeli solar firm HelioFocus signed a memorandum of understanding on Tuesday with Chinese energy giant Taiqinq to build a $340 million solar facility that will reinforce a giant coalfired power plant in Inner Mongolia.

The 200-megawatt thermo-solar facility is the second phase of a multi-stage solar city to be established in the region.

It is the direct continuation of the completion of construction of solar reinforcement plates that were installed in the region of Alasha.

HelioFocus, founded in 2007, is owned jointly by the Israeli group IC Green Energy – the green arm of the Israel Corporation – and the Chinese firm Zhejiang Sanhua.

Attending Tuesday’s signing ceremony were Israel’s ambassador to China Matan Vilnai, the governor of Alasha, and Nir Gilad, president and CEO of the Israeli Corporation.

Construction on the project is likely to start in 2015 with the simultaneous establishment of a 600-megawatt coalfired power station, which is currently in its planning stages, the companies said.

“Cooperation between companies from China and Israel and the advantages of each of the partners will create a venture with the potential for breakthroughs in environmentally friendly production of electricity,” Gilad said.

“The integration of advanced Israeli technology with the Chinese ability to execute constitutes an important basis for continued enterprise.”

This is the second joint venture between HelioFocus and Sanhua, with the original being a demonstration facility launched in Rotem Industrial Park in summer 2012.

Dr. Yom-Tov Samia, president and CEO of IC Green Energy, stressed that the new agreement represents “a significant stepping stone” toward deepening the company’s activity in Asia.

The HelioFocus thermo-solar technology relies on parabolic dishes with large optical concentrators that follow the movement of the sun and create temperatures of up to 650 degrees Celsius. The radiation is then channeled to a receiver above that heats the air, which moves to a central heat-exchange system that produces hot steam. In turn, the steam can drive a power plant turbine.

“The signing of the memorandum of understanding is a commercial badge of honor for HelioFocus’s engineers,” said Oren Gadot, CEO of HelioFocus. “It serves as an indication that HelioFocus is part of an enormous story taking place in China of late, of awareness that national energy efficiency is the way to harness the growth in energy usage stemming primarily from population growth and the continuing increase in usage for GDP.”

http://www.jpost.com/Enviro-Tech/Gr...ld-200-megawatt-solar-project-in-China-330229

 

[shuttler]

^^^
I dont know why Israel should be allowed to build solar farms in China when the local industry is in over-production even though they are a JV and may be they are going to install facilities with new technology.

Meanwhile a glimpse of hope for the rescue of Suntec :


Guolian looks to invest in bankrupt solar power maker
Updated: 2013-11-01 20:41
By Yao Jing ( chinadaily.com.cn)

http://www.chinadaily.com.cn/china/2013-11/01/content_17075336.htm

above pix credit: news.efw.cn

Credit: wpmedia.business.financialpost.com

Credit: eccsolar.com/portfolio/sun-tech-panels

Credit:
http://www.aeconline.ae/suntech-power-launches-two-innovative-solutions-34133/news.html

Credit: www2.dupont.com/Photovoltaics/en_US/assets/images/gallery/suntech-china_hirez

Suntech image brochure:
http://www.suntech-power.com/images/stories/pdf/brochures/en-GB/stp_brochure_screen_eu_en.pdf


State-owned Wuxi Guolian Development (Group) Co Ltd may potentially save China solar power giant Wuxi Suntech Power Co Ltd, the failed solar power maker, from bankruptcy.

Guolian intends to make an equity investment of more than $150 million in cash to support Suntech's restructuring plan, Suntech announced on Wednesday.

Previously, a consortium formed by Wuxi Guolian and Chinese polysilicon producer GCL-Poly Energy Holdings Ltd had submitted an offer to acquire Suntech's main manufacturing unit Wuxi Suntech Power Co earlier, but the bid didn't pan out.

In mid-October, court-appointed administrators of Wuxi Suntech Power Co Ltd said it selected Shunfeng Photovoltaic International Ltd as its primary candidate for a partnership.

Wuxi Suntech had been China's biggest solar panel manufacturer. It filed for bankruptcy protection in China in March, five days after its New York-listed parent company defaulted on $541 million in convertible bonds.

Earlier reports said Wuxi Suntech had verified all debt claims filed by its creditors, including domestic banks and suppliers, and confirmed that its liabilities amounted to 10.7 billion yuan.

 

[cirr]

China's services industry picks up further in October

Sun Nov 3, 2013 1:13am EDT

By Natalie Thomas

Nov 3 (Reuters) - Activity in China's services sector expanded at the fastest pace in 13 months in October, offering further indications that the economyhas stabilised, though activity in some important areas including new orders slowed.

The official purchasing managers' index (PMI) for the non-manufacturing sector rose to 56.3 in October from September's 55.4, the National Bureau of Statistics (NBS) said on Sunday.

"The non-manufacturing sector should continue to develop at a stable rate over the next few months, though there still needs to be more market training and promotion to further release the service sector's potential," said Cai Jin, vice-president of the China Federation of Logistics and Purchasing, which helped compile the data.

The services industry is an increasingly important pillar in China's economy as the government tries to move away from investment and exports as the main drivers of expansion.

The sector contributed to 45 percent of China's gross domestic output in 2012, and it overtook manufacturing as the biggest employer in 2011. It has weathered the global slowdown much better than the factory sector.

However, the PMI showed some areas of slowing activity, pointing to unevenness in the recovery.

The sub-index measuring new orders fell to 51.6 from a high of 53.4 the previous month, while the commercial services, the food and drinks industry and real estate sub-indices were below the 50 point line separating expansion from contraction.

GOVERNMENT CONFIDENCE

The government says its plans should lead to a firm economy, if not one that grows at the very high rates of previous years.

Speaking at a meeting of global business leaders on Saturday, President Xi Jinping said he was confident China would have healthy growth through the government's reform drive.

"We are currently changing our way of development, adjusting our economic structure, accelerating our new style of industrialisation, promoting technology, urbanisation and agricultural modernisation," state media quoted Xi as saying.

Measures to boost the service sector and to open it up to foreign competition are expected to be unveiled at a meeting of top communist party officials to be held from Nov. 9 to Nov 12. The meeting will lay out the leadership's economic reform agenda.

"We will put forward a comprehensive plan to deepen full implementation of reforms," state media cited Xi as saying of the upcoming meeting.

Analysts expect the restructuring of the economy to a more consumption-reliant model will take its toll on headline growth figures. A recent Reuters poll sees growth moderating to 7.5 percent in the final three months of 2013, down from 7.8 percent in the third quarter.

Sunday's release of the services sector index followed the bureau's manufacturing PMI on Friday, which showed factory activity expanded at its fastest rate in 18 months in October, with strong output the main driver of the expansion.

A separate PMI survey of the manufacturing industry by Markit Economics and HSBC put manufacturing at a seven-month high.

HSBC and Markit will release their services sector PMI on Tuesday. That survey covers more smaller, private firms than the official PMI.

http://www.reuters.com/article/2013/11/03/china-economy-pmiservices-idUSL3N0IO00O20131103

 

[cirr]

October 16, 2013 4:14 pm

China may be in much better shape than it looks

By David Pilling

The transition to consumption-driven growth may be more advanced than previously thought

The story of China’s investment addiction is well known. China invests more in factories, smelters, roads, airports, shopping malls and vast housing complexes than any modern nation has done in history. At its peak, after the stimulus that followed the 2008 global financial crisis, gross capital investment hit a vertigo-inducing 49 per cent of output. Worse, every time growth sags, as it did at the start of this year, central planners reach for the cement-mixers, pushing investment up again.

Yu Yongding, a well-known academic at the Chinese Academy of Social Sciences, worries about this a lot. China is storing up trouble, he believes, as it adds to its stock of white elephants and unprofitable industries. Take the steel industry, he writes in a recent article. China has more than 1,000 steel mills and produces roughly half the world’s output. There is so much overcapacity that profitability last year was an atom-thin 0.04 per cent.

China’s high investment rate is the flip side of its high savings rate, which in 2007 topped 50 per cent of gross domestic product. This story is also well known. Chinese people save too much. One reason is that they stash away money to cover catastrophic events such as sickness or redundancy. In addition, the system penalises consumers by suppressing deposit rates so that cheap money can be funnelled to favoured sectors – all those steel mills. This propensity to save makes the necessary rebalancing of the Chinese economy harder. If consumers cannot be relied upon to spend and exports can no longer be the engine of growth, all that is left is investment.

Growth this year is likely to be about 7.5 per cent, quite a comedown from the nearly 12 per cent of 2010. But Xi Li, assistant professor at Hong Kong University of Science and Technology, says it will have to fall more. He calculates that if household consumption, now at 34 per cent of GDP, is to rise to 50 per cent in 10 years, annual investment growth would need to fall to minus 3 per cent a year. That would mean GDP growth falling to 4 per cent. Part of the basis for such assessments is empirical. You only need to visit China to see the investment, whether in the world’s longest high-speed rail network or in huge “ghost cities”. Part, though, is statistical. Each year, official data show investment at close to 50 per cent, savings at about the same level and consumption at about 35 per cent.

But what if the official data were wrong? That is the intriguing claim by two academics, Jun Zhang and Tian Zhu, respectively of Fudan University and China Europe International Business School, who argue that consumption has been consistently underreported. In a recent paper they find three important areas of undercounting. One is housing. China, they argue, does not properly account for “imputed rent”, an estimate of how much owner-occupiers would need to pay if they were renting. Second, they say, a lot of private consumption shows up in statistics as corporate expenses. For example, many executives pay for their private car on the company account. Although this appears in official data as investment, it is really consumption.

Third, and most important, they argue, GDP surveys underrepresent high earners, who may not relish the idea of officials with clipboards noting down their every expenditure. If high-income households are missing from the survey, so is their consumption. Taking these three factors together, the two academics calculate that China underestimates consumption by 10-12 percentage points.

That view, though still a minority one, has some support among investors. Jonathan Garner, head of Asian and emerging market equity strategy at Morgan Stanley, has long argued that Chinese consumption is higher than captured in official statistics. In a February report, using a bottom-up method, his team estimated household consumption at 46 per cent of GDP, $1.6tn higher than officially recognised. If he is right – or even half right – then some of the scare stories about China look slightly less scary. For example, investment, though still excessive by anyone’s standards, might not be quite as outrageously wasteful as assumed. Mr Garner puts capital investment at 41 per cent of GDP in 2012, not 49 per cent. “Our data suggest the transition to consumption-driven growth has already been under way for some time.” That, he says, is borne out by concrete data. Car sales, for example, are growing by 13-14 per cent, double the pace of the economy. Consumer-related stocks have long outperformed industrial ones.

Of course, if consumption data are wrong, that would imply investment data are wrong too. More work needs to be done to explain this. Nor do even the most optimistic estimates of consumption make concerns about chronic overinvestment vanish. They would, however, make them smaller. What seems like an obscurantist debate over the methodology for calculating GDP turns out to be of vital importance for China’s economic future.

 

[cirr]

China reports sharp widening of trade surplus in October

• Liyan Qi

• From: Dow Jones

• November 08, 2013 2:25PM

CHINA'S trade surplus widened sharply in October to $US31.1 billion from $US15.2 billion in September and surpassed a median $US23.9 billion forecast by 13 economists surveyed by The Wall Street Journal.

Exports rose 5.6 per cent on year in October, data from the General Administration of Customs showed today. This was a marked improvement over September's 0.3 per cent decline and above economists' median forecast of a 1.5 per cent expansion.

Imports rose 7.6 per cent on-year--up from a 7.4 per cent rise in September and beating the median forecast by economists of a 7.4 per cent increase.

In the first 10 months of the year, China's total trade reached $US3.4 trillion, up 7.6 per cent year-on-year, the statement said.

The 10-month rise in total trade was slightly below the government's annual growth target of eight per cent for this year.

- See more at: Cookies must be enabled. | The Australian

 

[cirr]

Coca-Cola plans more than $4 bn investment in China

By AP | 8 Nov, 2013, 09.48PM IST

Coca-Cola says it plans to invest more than $4 billion in China over three years.

David Brooks, president of Coca-Cola's Greater China and Korea business unit, said earlier this week that the company plans to invest the money between 2015 and 2017 to build factories and add new products to its portfolio. The company is also investing $4 billion in China between 2012 and 2014.

The Atlanta-based company confirmed the plan on Friday.

Coca-Cola has been expanding in emerging markets such as Russia and China. It aims to reach $200 billion in revenue by 2020, in part by catering to the rising middle class in emerging markets.

Shares fell a penny to $39.82 in midday trading. The stock has risen 10 per cent since the beginning of the year.

 

[cirr]

Positive economic growth expected to continue

English.news.cn 2013-11-10 09:18:21

​

Cargo trucks are loaded with import goods at the Port of Lianyungang, east China's Jiangsu Province, Nov. 5, 2013. (Xinhua/Wang Chun)


By Chen Jia

BEIJING, Nov. 10 (Xinhuanet) -- China's stable economic development in October strengthened economists' expectations of a "happy ending" to the year, with industrial and service sectors progressing amid moderate inflation.

The National Bureau of Statistics reported on Saturday that October's industrial output reached 10.3 percent compared with 10.2 percent in September. The increase was higher than the market had expected and was led by manufacturing, which increased 11.4 percent from a year earlier.

Retail sales of consumer goods rose by 13.3 percent - the same rate as in September.

Fixed-asset investment, which has been the backbone of the world's second-largest economy in withstanding the global financial crisis, moderated slightly during the first 10 months to a growth rate of 20.1 percent, compared with 20.2 percent from January to September.

HSBC's Chief China Economist Qu Hongbin said there is no signal hinting at an economic slowdown in the fourth quarter, which departs from earlier expectations.

"The economic situation will not be worse in the last two months," he said.

Meanwhile, consumer inflation in October increased at a rate of 3.2 percent, compared with 3.1 percent in September. The rise was mainly caused by the 6.5 percent increase in food prices, the NBS reported.

In the first 10 months, the Consumer Price Index average was 2.6 percent, which is lower than the 2.7 percent during the same period last year.

The Producer Price Index, an indicator of industrial inflation, dropped faster in October, by 1.5 percent. It declined by 1.3 percent year-on-year in September.

Industrial Bank's Chief Economist Lu Zhenwei said consumer inflation is expected to remain moderate for the last quarter, and there is no need to worry about inflation pressure this year. However, industrial enterprises still face great pressure from excess production capacity, indicated by the continually softening out-the-factory-gate prices.

"Maybe the upward turning point of the economy still has to wait," Lu said.

As overall inflation has remained at a relatively low level, the current monetary policy is expected to remain unchanged, economists said.

"But some fine-tuning of the open-market operation may be needed to hedge capital inflows into the country," said Qu from HSBC.

In addition to positive short-term economic growth expectations, economists greatly anticipate the long-term balancing of development and structural reform.

They agreed that a 7 to 8 percent GDP growth will be a "normal speed" for China in the next decade - a shift away from the previous double-digit rates.

On the same day the NBS released the October economic indicators, a meeting of the country's top leaders to discuss the reform agenda for the next five to 10 years began in Beijing.

The leadership will try to push more sustainable growth and find ways to smoothly transform the development mode into a consumption-driven model.

UBS' Chief China Economist Wang Tao said: "We expect more tangible progress in service-sector deregulation, social welfare-system reform and financial-sector reforms in the next couple of years.

"But we think major breakthroughs in fiscal, land and State-owned enterprise reforms will be unlikely in the near future."

Positive economic growth expected to continue - Xinhua | English.news.cn

 

[cirr]

China in midst of oil refinery boom

Updated: 2013-11-19 07:44

By CAROLINE BERG in New York (China Daily USA)

China's voracious oil appetite is now a bygone phenomenon, industry forecasters say. While demand is cooling down, however, China appears to be dominating another part of the oil world: refining.

"China has been in the middle of a major expansion boom in the refining sector, and there's a lot more coming down the pipe," said Antoine Halff, head of the Oil Industry & Markets Division at the International Energy Agency (IEA). "This is a major transformation."

On Monday, Columbia University's Center on Global Energy Policy hosted a discussion led by guest speaker Halff, who outlined key findings from both the IEA's annual Medium-Term Oil Report and monthly Oil Market Report, which he edited.

The discussion focused on the current status of the global oil market, particularly on the interplay of oil supply and geopolitics; the evolution of demand; the transformation of refining, transportation and storage sectors; and what all those developments mean for the global oil-supply chain, oil prices and energy security.

Halff said the oil refining industry, which helps process and refine crude oil into useful products like gasoline, is experiencing significant change. Refining capacity is expanding much faster than supply is coming from the Organization of the Petroleum Exporting Countries and also is exceeding global demand, he said.

"[The refining industry is] moving from smaller refineries that used to be very close to the immediate market to very large refineries that are increasingly export driven and have the global reach that no longer cater to their immediate surroundings," Halff said. "Most of this growth is forecast to come from China."

Although two refinery projects in China have been put on hold in the past two months, Halff still voiced confidence.

"We don't expect that all the projects that have been approved in China will come to fruition on time," he said. "Some may be delayed, some may be cancelled, but we generally assume that once a project gets approved it tends to stick."

Growth in China, as well as in India and the Middle East, poses a challenge to the older refining industries, particularly in Europe where at least 15 refineries have been closed since 2008, Halff said.

In addition to significant developments in its refining business, Halff said China's demand for natural gas for transportation purposes is expected to increase. Whereas demand in the US, which is also increasing, is driven by economics, Halff said China's motivation would be more environmentally minded.

"Beijing needs to clean up the air," he said. "[Natural] gas is a very good candidate to replace oil to clean up the air to some extent."

Although growth in demand for natural gas will be strong in both China and the US, Halff said it will remain marginal compared to demand for oil.

As for risks in the market, Halff said China is the biggest wild card.

"Chinese forecasts seem to vary, especially in the oil market," he said. "Each month, because of the volatility in Chinese data, us [IEA] forecasters tend to extrapolate from current conditions."

Due to uneven statistics, the Chinese economy's current conditions are also a monthly gamble. Halff said the IEA's view is generally that the Chinese economy will slow down, and become more consumer and export oriented.

"We also assume that the Chinese government will support policy that will shift some of the demand from oil to natural gas, especially from coal to natural gas," he said. "We see some shift from oil to gas in China in a way that would really make a difference [in global market forecasts]."

Contact the writer at carolineberg@chinadailyusa.com

China in midst of oil refinery boom|Industries|chinadaily.com.cn

 

[AirRodgers]

China to lead growth in Asia, India will lag: Goldman Sachs - NDTVProfit.com

Emerging economies in Asia such as China and Korea are poised for solid growth in 2014, but India is likely to miss the bus, according to a report by Goldman Sachs.

 

[navtrek]

Emerging economies in Asia such as China and Korea are poised for solid growth in 2014, but India is likely to miss the bus, according to a report by Goldman Sachs.

India is likely to grow at 4.3 per cent in fiscal year 2013-14 and at below consensus 5.5 per cent in fiscal year 2014-15, Goldman Sachs estimated.

The forecast would give little comfort to policy makers, who expect the economy to turn for the better in the second half of the current fiscal. Finance Minister P Chidambaram recently said India might end fiscal 2013-14 with 5.5 per cent growth.

The rise in long term interest rates across developed markets led to funding pressures and contributed to a severe slowdown in growth, Goldman noted.

Interest rates in the US have been rising in anticipation of an impending tapering of stimulus. Rising yields in the US led to fears of exodus of funds from India. As a result, the rupee fell to a record low in August as fears about financing of a record current account deficit grew.

"The Reserve Bank raised effective policy rate, utilized reserves and encouraged capital inflows, but nonetheless acquiesced to some currency depreciation. The near-term impact has been deceleration in growth...," Goldman said.

India has also been hurt because of policy uncertainty ahead of elections in 2014, the investment bank said.

"Upcoming parliamentary elections in early 2014 are a major area of uncertainty, with potentially large impact on policy reforms and investor/corporate sentiment in either a positive or negative direction," Goldman said.

The new RBI Governor Raghuram Rajan is trying to "balance growth and inflation concerns," the investment bank said adding the central bank may hike the repo rate to 8.5 per cent by the end of June 2014.

That would mean a 75 basis point hike from current levels of 7.75 per cent and may further hamper India's investment cycle.

Wholesale price inflation hit an 8-month high in October, while retail inflation has hit the double digit mark. Goldman expects headline inflation to ease to 6 per cent range and CPI (retail) inflation to 8.3 per cent by 2014-15.

A greater than expected policy rate hike to tackle persistent inflation will lead to further downsides to growth, the bank noted.

 

[AnnoyingOrange]

Bhai election year hai... is saal to yahi hoga...


Being an election year... the entire economy is bound to slow down... nothing new here..

 

[Hafizzz]

Toy story: They’re Chinese but made in India | Business Line

Hyderabad, Nov. 21:

The next time you buy a soft toy from a global retailer, chances are, it was made in a small unit located in Sri City, an industrial hub in Andhra Pradesh’s Chittoor district.

The range of toys made by Pals Plush India, the subsidiary of a Chinese company, spans everything from ‘huggables’ such as teddy bears and tigers to Disney characters such as Mickey Mouse and Donald Duck.

A tour of the small manufacturing facility, where more than 80 per cent of the workers are local women, shows how the toys evolve from bundles of cotton into huggable possessions.

The women churn out thousands of these toys, which pass through a metal detector before being shipped out of the special economic zone.

Says Seema Nehra, Director of Pals Plush: “It is a great experience working with local people and producing toys for global retail chains. Our toys are sold by chains such as Tesco and through licence arrangements globally.”

It is difficult to operate in the Indian market as organised retail is still evolving, says Nehra. Mothercare, Shoppers Stop and Lifestyle are among its clients in India.

The toys cost between $1 and $150, depending on the form and size. Some take an hour to make, others just a few minutes.

According to an Assocham report, the domestic toy industry is estimated to be worth Rs 8,000 crore, and expected to grow by about 30 per cent by 2015.

D.S. Rawat, Secretary-General of Assocham, says that though the domestic toy market has expanded manifold, the industry is fragmented.
In EXPANSION mode

Pals Plush has set up its Sri City unit with an investment of $1.5 million (about Rs 10 crore). In the first year of operation, it logged a turnover of $7-8 million. The company, which makes about 5,000 pieces a day, is in the process of expanding.

It plans to invest about $3 million in another unit, adjacent to the existing one, with the potential to employ about 1,500 people.