China Economy - News & Updates

[Neo]

Airport notches up 50m passengers​

By Xin Dingding (China Daily)
Updated: 2007-12-06 10:00

The Beijing Capital International Airport announced its annual passenger throughput hit a record of 50 million yesterday and would reach 53.31 million by year-end, enabling it to possibly become the world's eighth largest airport by passenger volume.

Crowded Beijing Capital International Airport on February 24, 2007. The airport announced its annual passenger throughput hit a record of 50 million yesterday and would reach 53.31 million by year-end, enabling it to possibly become the world's eighth largest airport by passenger volume. [Xinhua]

Li Bianzhuo, a Beijinger in his 30s working in Guangzhou, was the lucky 50-millionth passenger. He arrived yesterday morning aboard a China Southern flight from Guangzhou on a home visit.

Li was invited to act as a supervisor of the airport's services.

Last year, the airport was ninth among the top 10 world airports by passenger traffic, with a passenger transport volume of 48.65 million, according to Geneva-based Airports Council International (ACI) statistics.

"The 50-million mark is a critical point. In the days after it is reached, airport growth would be even faster than before," Professor Li Xiaojin, with the Civil Aviation University of China in Tianjin, told China Daily yesterday.

Airport notches up 50m passengers

 

[Neo]

GM reveals $5b China vision​

By Irene Shen (China Daily)
Updated: 2007-12-07 09:45

General Motors Corp, the world's largest automaker, plans to invest as much as $5 billion in China over the next five years to expand its share of the world's fastest-growing major car market.

The Detroit-based company will spend about $1 billion a year on car and engine development, production facilities, technical and after-sales support and infrastructure, Kevin Wale, president of GM's China unit, said in an interview in Shanghai.

GM will sell more than 1 million Cadillacs, Buicks, and other models in China in 2008, a more than 150-fold increase in sales over a decade. Toyota Motor Corp and Volkswagen AG both plan to add production capacity in the country to raise their own sales.

"Even with this $1 billion a year, it'll still be tough to remain No 1 in China," Ashvin Chotai, a London-based analyst for Global Insight Inc, said. "With China becoming the most important strategic market in the world, it's crucial to have their investment to stay in the race."

China's annual economic growth has averaged 9.6 percent over the past five years, making cars affordable to more people. The country's total demand will rise to 9.5 million and 10 million vehicles next year, Wale said. That compares with sales of between 8 million and 8.5 million vehicles for 2007, according to the China Association of Automobile Manufacturers. The passenger car market will grow 70 percent to 9.2 million vehicles by 2012, according to Chotai.

"No one has seen growth like this anywhere in the world," Wale said.

"We target to grow a little faster than the market."

Toyota, the world's biggest carmaker by market value, expects to sell more than 450,000 vehicles this year. The Toyota City, Japan-based company began building a second plant in Guangzhou in June to make Camry sedans and Yaris compacts. Volkswagen, which has lost market share to GM, plans to sell about 900,000 vehicles and will expand production by 2010.

GM relies on Asia and Latin America for profit in contrast to its home market, where it is closing factories and cutting jobs. Globally, GM plans to build about 9.3 million vehicles in 2007.

In the first nine months of this year, GM posted net income of $481 million in Asia-Pacific and $754 million in Latin America. In Europe, the company had a loss of $2.6 billion and in North America, it posted a loss of $34.7 billion, mostly because it wrote down the value of future tax benefits.

GM is cutting first-quarter North American production 11 percent after its US sales dropped by the same rate in November. Growth in China, Brazil and Russia kept the company's sales higher than Toyota's in the first nine months of the year. US sales may fall to 30 percent of the company's total within 10 years, Vice-Chairman Bob Lutz said in October.

GM reveals $5b China vision

 

[Neo]

Ford mulls new China car plant​

By Gong Zhengzheng (China Daily)
Updated: 2007-12-04 09:23

Ford Motor Co, which is closing factories in North America, is mulling a new car plant in China with its Japanese unit Mazda Motor Co and local partner Chang'an Motor Corp, to meet growing demand.

Kenneth Hsu, spokesman for Ford's China operations, told China Daily: "We are gauging the need for further expansion of our manufacturing capacity. We are considering all kinds of options."
The US carmaker plans to reach a final decision by early next year, Hsu said, declining to give details.

"Local governments are keen to have a new plant from Ford in their regions," he said.

Chang'an Ford Mazda Automobile Co, a tripartite joint venture, now has two factories in the western municipality of Chongqing and Nanjing in the east with a combined production capacity of 410,000 cars a year.

Jeffrey Shen, president of the venture, said it will move 225,000 cars this year, mainly boosted by the hot-selling Focus compact model, up from roughly 160,000 units in 2006.

The venture's 2008 sales are expected to reach 300,000 units, Shen said.

The tie-up, whose current line-up also includes the Ford Mondeo and S-Max, Mazda3 and Volvo S40, plans to produce a subcompact based on the Verve concept before the end of next year, Shen said. The Verve made its Asian premiere at a recent auto show in Guangzhou.

The venture will also launch the Mazda2 subcompact in 2008.

"Our profitability is fairly good," Shen said, without elaborating.

Chang'an holds a 50 percent stake in the venture, Ford 35 percent and Mazda 15 percent. Mazda is one-third owned by the Detroit-based group.

Shen predicted that total vehicle sales in China, the world's second-biggest auto market after the US, will hit 9 million units this year and 10 million units in 2008, propelled by the country's booming economy. Last year, sales amounted to 7.22 million units.

Other foreign carmakers, such as Toyota, Volkswagen, PSA Peugeot Citroen and BMW, are also planning to build more production capacity in China.

Ford also owns a 30 percent stake in another Chinese automaker Jiangling Motors Co Ltd, which makes Transit commercial vehicles in the eastern city of Nanchang.

The struggling US carmaker said two years ago it planned to shut down at least 10 plants in North America by 2010 as part of its turnaround plan.

Ford mulls new China car plant

 

[Neo]

Komatsu mulls three new plants in China​

(Agencies)
Updated: 2007-11-29 11:46

Komatsu Ltd, the world's second-largest maker of earth-moving equipment, said on Thursday it may build three new plants in China to respond to robust demand for excavators and other construction and mining machinery there.

"We expect continued growth in infrastructure and construction demand in China, and sooner or later our production capacity will hit the limit," said a company spokesman.

The firm is considering building two construction machinery plants and one casting parts factory and has begun talks on buying land for one of the plants, he said.

Japanese business daily Nikkan Kogyo said Komatsu would invest at least five billion yen (US$45.4 million) for construction work on the plants by the financial year starting in April 2009.

It aims to lift its annual production capacity for hydraulic excavators in China to at least 16,000 units by the 2010/11 business year, up 33 percent from that planned for the current year, the paper said.

China's rapid urbanisation and big infrastructure projects have meant soaring demand for construction machinery, and its hunger for minerals has spurred a massive upturn for the global mining industry.

In China, mainly an excavator market, Komatsu has 18 percent of the crawler excavator segment, ahead of Hitachi Construction Machinery Co Ltd, Doosan Infracore Co Ltd and Hyundai Heavy Industries Co Ltd, according to private research firm Off-Highway Research. Industry leader Caterpillar Inc ranks fifth with 10 percent.

Komatsu mulls three new plants in China

 

[Neo]

China to have 12,000 km of express rail lines by 2020​

(Xinhua)
Updated: 2007-11-18 19:58

China has started construction on 16 new express passenger rail projects and is expected to have 12,000 kilometers of express rail lines by 2020, the Ministry of Railways said Sunday.

New express rail lines will link up provincial capitals and large and medium-sized cities, as well as cities in the booming Bohai Sea, Yangtze and Pearl River regions.

The construction of such lines is aimed to substantially enhance the country's rail transport capacities, as stated in the country's mid- and long-term plan on railway networks.
The 115 km express rail line connecting Beijing and Tianjin would become the country's first that allows a maximum speed of 300 kilometers per hour. Track laying on the route started just days ago.

The line will be ready for operation in time for the 2008 Olympic Games in August, and will shorten the journey between Tianjin and Beijing from 70 minutes at present to around 30 minutes, according to Liu Rong, director of the railway construction project.

China's State Council has also approved the feasibility report on the planned 1,318 km high-speed railway linking Shanghai and Beijing after nearly 10 years of preparations. The project, if completed, will be the longest high-speed rail line in the world.

The Beijing-Shanghai express railway is expected to cut travel time between the two cities from around 10 hours at present to about five hours.

China's fastest domestic trains currently run at a speed of up to 250 kilometers per hour.

China to have 12,000 km of express rail lines by 2020

 

[Neo]

China's service trade to hit $400b in 2010​

(Xinhua)
Updated: 2007-12-06 23:11

China's service trade is expected to reach US$400 billion in 2010, an official with the Ministry of Commerce said Thursday.

Hu Jingyan, head of the ministry's Service Trade Department, said the figure is 155 percent higher than the US$157.1 billion in 2005 and represents an average annual growth of more than 20 percent between 2006 and 2010.
China's service trade volume in 2006 stood at US$191.75 billion, 22 percent higher than the 2005 level, Hu noted.

He said the nation will take a gradual approach to the opening of the services sectors and unveil more measures to boost the proportion of service exports in its total exports as well as in the world's total service exports.

The service exports in 2005 accounted for 8.9 percent of the nation's total exports and 3.1 percent of the world's total service exports, according to Hu.

Exports value of the labor-intensive sectors like transport and tourism are expected to fall to 60 percent of the nation's total service exports in 2010, he added.

Meanwhile, proportion of exports from capital-intensive sectors including telecommunications, insurance, finance, advertising, and counselling are expected to widen.

China's service trade to hit $400b in 2010

 

[gpit]

wow the articles on this page are all anti china, gloom and doom predcitions of chinese economy, doctored figures and so on. why not something positive on china?

Posted by an Indian member.

I think it's fine.

1) China has been deamonized by hostile countries/individuals/forces since she comes into existence, yet China moves forward steadily, though not without ups and downs.

2) It is always good to have a different opinion to serve as a alarm/reference. People know pretty much who are the "dragon slayers" and who are true friends wanting problems to be solved.

BTW, thanks Neo for your efforts in keeping up with the news.

 

[gpit]

Grrr...Its THIS very market that we want to steal from China.

Reportedly Intel weighed among India, Dalian, China and some other cities for the plant.

Craig Barrett, Intel’s chairman, said: “The (Indian) government has been a bit slow in coming out with a semiconductor policy and missed the window on Intel's manufacturing facility for now. It did not have a well documented plan. The Indian programme for semiconductor manufacturing was not as timely and we had already made prior commitments elsewhere.”

Intel pulls out of Indian investment - Times Online

But, "Reacting to Intel Corp. Chairman Craig Barrett's statement that policy delays forced the chipmaker to look for a foundry site elsewhere, the India government countered that Intel was never serious about chip manufacturing in India. "

India govt. counters Intel on chip policy delay

 

[Neo]

Iran, China finalise $2bn oil contract ​

Tuesday, December 11, 2007

TEHRAN: Iran and China’s Sinopec on Sunday signed a two billion dollar contract to develop a major Iranian oil field, a crucial deal for the Iranian energy industry at a time of mounting international pressure.

The Iranian oil ministry and Sinopec inked the deal to pump oil from the Yadavaran onshore field in southwestern Iran, which was first agreed back in late 2004, at a ceremony in Tehran, an AFP correspondent reported.

“The initial estimation of cost of the project is about 2.0 billion dollars and the final cost of the project will be decided after the offering of the tenders,” said Iranian Oil Minister Gholam Hossein Nozari.

The field will be producing 185,000 barrels of oil a day within the next seven years, he added. The signing came at a time when the United States has been pressuring European and Asian firms, including oil majors, to cut their business ties with Iran to exert pressure on the Islamic republic in the nuclear crisis.

“The signing shows that there is no lack of investment in Iran and we are solidifying our economic relations with China more,” said Nozari. “The second message is that if other countries are willing to invest in the big oil and gas fields of Iran they should not lose the opportunity,” he added, in an apparent warning to any dithering Western firms.

The deal is one of the biggest foreign energy contracts ever signed by Iran, which holds the world’s second-largest oil and gas reserves and is seeking development of its oil fields. The contract was signed in Tehran by Zhou Baixiu, the head of Sinopec’s international arm, and Iranian Deputy Oil Minister for international affairs Hossein Noghrehkar Shirazi.

The talks to finalise the contract had been long held up by disagreements on the terms of the Yadavaran deal, most notably involving the rate of return proposed by Sinopec. Sinopec had originally asked for a 15 per cent rate of return from its investment but Nozari said this had been finalised at 14.98 per cent.

However he added that the period of reimbursement for Sinopec had been decreased from eight years in the initial agreement to four in the final contract. “The development will be carried out in two phases,” added Nozari.

“The first phase to produce 85,000 barrels per day will be carried out in four years and the second phase to produce another 100,000 bpd will be carried out in another 36 months.” “So in total, the field will produce 185,000 barrels a day.”

The National Iranian Oil Company’s (NIOC) director for exploration Mahmoud Mohades had earlier put the Yadavaran field’s reserves at 18.3 billion barrels, estimating recoverable oil at 3.2 billion barrels.

The 2004 initial agreement also envisaged China’s purchase of an annual 10 million tons of Iranian liquefied natural gas (LNG) for 25 years, beginning in 2009. But Zhou indicated that this was not in the final contract and would be discussed at a later date.

“China is willing to buy LNG from Iran and we hope to talk about the LNG project later.” Sinopec is the sole main partner and investor in the field, although it will be employing sub-contractors, more than half of whom must be Iranian. Iran and China have significant economic ties and Beijing is the second largest importer of Iranian goods after Japan.

Iran, China finalise $2bn oil contract

 

[Neo]

Everything on rise in China​

Consumer Price Index

BEIJING: China’s annual consumer price inflation hit an 11-year high in November, with new signs that price pressures are spreading from food to the broader economy, raising the prospect of more aggressive monetary tightening.

The rise in the consumer price index of 6.9 percent from a year earlier — above the 6.4 percent forecast by economists and up from 6.5 percent in October — underscored why the government sees the fight against inflation as a priority in the year ahead.

The country’s gaping trade surplus is another concern, and separate data released on Tuesday showed that measures to curb exports and promote imports had narrowed it slightly in November.

However, while the $26.3 billion surplus was below October’s record $27.1 billion, it was still the third highest ever.

Critics say the surplus is pushed up by an unfairly undervalued currency, a topic that will loom large at high-level Sino-American talks this week in Beijing. The yuan hit 7.3770 per dollar on Tuesday, the highest since its 2005 revaluation.

For now, economists are paying closer attention to inflation, which has been driven up largely by food costs.

In November, food cost 18.2 percent more than a year earlier, but the statistics showed wider price pressures. Annual non-food inflation accelerated to 1.4 percent in November, the sharpest rise this year. reuters

Trade surplus hits $26.3bn

BEIJING: China’s trade surplus hit $26.3 billion in November, an increase of 14.7 percent from the same month a year ago and the third largest on record, official data showed Tuesday.

China’s exports were up 22.8 percent in November from a year earlier to $117.6 billion, the customs bureau said in a statement.

The figures were released as Chinese and US top envoys kicked off three days of economic talks, likely to centre on China’s huge trade surplus.

Critics in the United States charge that China is keeping its currency, the yuan, artificially weak, giving Chinese firms an unfair advantage when they sell their products overseas.

China has seen a year of record-high trade surpluses, peaking in October, when the figure topped $27 billion.

For the first 11 months of the year, the trade surplus totalled $238.1 billion, a rise of 52.2 percent from a year earlier, customs said.

This puts the full-year trade surplus well on track to beat last year’s $177.5 billion, then a record, by a wide margin.

Imports increased at a faster rate than exports in November, rising 25.3 percent from a year earlier to $91.3 billion.

It was the first time ever that imports exceeded $90 billion for a single month, according to the customs authorities.

“In our view, strong imports growth reflected robust domestic demand momentum,” said investment bank Goldman Sachs in a research note.

“However, the increasing intensity of the policy tightening is likely to put pressure on domestic demand growth going forward, and therefore the current strength of imports growth is unlikely to be sustained.”

China’s economy is expected to expand 11.5 percent in 2007, fuelled mainly by investment spending, making it the fifth consecutive year of double-digit growth, according to previous reports in the state media. afp

Daily Times - Leading News Resource of Pakistan

 

[Neo]

US says China recognises need for stronger yuan​

(Reuters)

13 December 2007

XIANGHE, China - US Treasury Secretary Henry Paulson came away from two days of talks on Thursday convinced that China sees the need for a stronger yuan and with a promise that Beijing will open its financial markets a bit wider.

The grand-sounding “strategic economic dialogue” produced only modest immediate gains but Paulson said it provided a foundation on which to expand cooperation between two nations whose ties he deems vital to global economic prosperity.

The exchange rate was a major focus of the meetings because, as Paulson put it, the pace of the yuan’s rise had effectively become a proxy for China’s willingness to permit market forces to play a greater role in its economic development.

Paulson sought no specific commitments from Beijing on the yuan, but he said Chinese policy makers now knew that a stronger exchange rate would help them to fight inflation.

“The Chinese recognise growing inflationary pressures in their economy and that a more flexible currency expands their ability to use monetary policy to stabilize their economy,” Paulson said at a closing news conference.

China’s central bank, which keeps the currency on a tight leash, let the yuan rise on Thursday to its highest level since it was revalued and depegged from the dollar in July 2005. The bank is battling inflation of 6.9 percent, an 11-year high.

The yuan has climbed about 6 percent against the dollar in the past year, but some US lawmakers say it remains grossly undervalued and are preparing legislation to force China’s hand.

Yuan’s rise

Paulson declined to say how much more quickly Beijing needed to let the currency climb. “The pace of appreciation has increased over the past year,” he said. “I’ve talked to the Chinese enough that we’ve agreed we don’t talk about how fast is fast. We agree with the principle (of appreciation).”

The US Treasury chief later held separate meetings with Chinese President Hu Jintao and with Premier Wen Jiabao, using the occasion to claim that the twice-a-year dialogue was making it easier to resolve prickly issues.

“We are building a bond of trust between us and there is a comfort to our communications that makes it easier to deal with some of the most sensitive and complex and difficult issues,” Paulson said as he began a meeting with Hu at the Great Hall of the People.

Wen congratulated Paulson and Chinese Vice Premier Wu Yi, who led the Chinese delegation, saying they had helped reach ”common understanding on an issue of much importance to both countries, product safety” during the talks.

A highlight of the talks was announcement of an agreement to increase safety standards for Chinese food and product exports to US markets. This is a highly sensitive topic after millions of Chinese-made toys were recalled and American indignity over tainted food and pharmaceuticals from China ran high.

Paulson cited other progress on specific fronts, including a Chinese commitment to let banks and other foreign companies that do business in China issue yuan-denominated debt and equity securities.

“Modest progress”

“I would also note we have made modest progress in the financial services area, expanding opportunities for global financial services companies to do business in China,” he said.

Paulson said Beijing would end a two-year freeze on foreign securities joint ventures in China, an especially sensitive issue for the influential US financial services industry, and expressed confidence that the permitted business scope of such ventures would be expanded.

“We want them to do more and to move faster,” he said.

Opening China’s financial markets to foreign competition strengthens the financial backbone of the Chinese economy, and is critical to China’s goals of spreading the benefits of growth to all the Chinese people,” Paulson said.

But it was evident that US negotiators did not get all they sought.

US Trade Representative Susan Schwab, answering reporters’ questions, said one troubling issue related to China’s Xinhua News Agency which she said operated as “both the regulator as well as the competitor” in its line of business.

She said the Xinhua issue was one of “a series of financial issues raised with various ministries” but not resolved.

Throughout the talks, Chinese officials made sure their views were heard and sometimes pushed back against US calls for China to speed up economic reforms.

Beijing declined to lift foreign-ownership caps in Chinese banks and brokerages and left US officials fuming over an apparent ban on US-made movies, which Schwab called “a very serious matter.”

Commerce Secretary Carlos Gutierrez said the United States was still trying to get clarification from China about the film ban and to have it lifted. “We are all over it,” he said.

Chinese officials went into less detail about the meeting.

Wu said the two sides had achieved satisfactory results and had gone beyond burning trade and economic issues of the day.

The next instalment of the dialogue would take place in Washington in June, she said.

Khaleej Times Online - US says China recognises need for stronger yuan

 

[gpit]

Reportedly Paulson was given some made-in-China toys as (Christmas?) gift.

 

[Neo]

Reportedly Paulson was given some made-in-China toys as (Christmas?) gift.

Lol...

 

[Neo]

China refiner to triple Iran crude imports ​

Friday, December 14, 2007

BEIJING: China’s top refiner Sinopec Corp will nearly triple its imports of Iranian crude next year, increasing Beijing’s reliance on the OPEC producer that faces Western political pressure over its nuclear programme.

Its state-owned parent Sinopec Group has agreed to buy 160,000 barrels per day (bpd) from Iran next year, up from this year’s 60,000 bpd, two sources familiar with the supply negotiations told Reuters on Thursday.

Including a separate pact, agreed earlier between China’s state-run Zhuhai Zhenrong Corp and National Iranian Oil Company, China has contracted to buy 400,000 bpd of Iranian crude for next year, roughly 6 per cent of China’s total crude demand.

The supply deal comes days after the state-run Chinese oil giant finalised a $2 billion pact to develop Iran’s huge Yadavaran oilfield, after nearly three years of negotiations, part of Beijing’s plan to help ensure a stable, secure supply of oil for the world’s second-largest consumer.

Analysts saw the deal as a further sign of a long-term strategic relationship between China and Iran. Beijing is scrambling to fuel the world’s fastest growing major economy and Tehran is relying on oil revenue to establish itself as a dominant Middle Eastern power.

“There is a growing rivalry among the big powers for access to major sources of crude oil. For so long America had a monopoly on much of the crude oil exports from the Persian Gulf region and it is now facing increasing rivalry,” said Mehdi Varzi of London-based consultancy Varzi Energy.

The 400,000 bpd supply for 2008 would be a third above that set under this year’s term deals at just under 300,000 bpd, although China’s total imports from the world’s fourth-largest producer are far higher since it has been buying extra supplies on a spot basis.

An NIOC source familiar with the negotiations for the new term contract told Reuters by telephone that the deal was linked to the Yadavaran investment. “This is a service type contract, they are taking more of our crude because they have invested heavily in our Yadavaran field, it is like payment for the investment,” the source said.

China has shown no reluctance to deepen ties with countries where Western companies fear to tread, such as Sudan and Myanmar. Its pragmatic state oil firms have long brushed aside the threat of more United Nations sanctions on Iran’s disputed atomic activities, focusing instead on commercial terms.

China may extend spot purchases from Iran, now Beijing’s third-largest crude supplier after Saudi Arabia and Angola, for next year, to meet strong fresh demand from the country’s new refining facilities, a Beijing-based trading source said.

Beijing has been reluctant to back a US-led drive for further sanctions against Iran, seeing it as a key oil supplier as China’s crude imports soar to meet half of its demand. In a push to boost the use of natural gas to curb dependence on oil that now costs nearly $100 a barrel, China is also interested in Iran’s rich gas reserves, the world’s second-largest after Russia. Apart from the two crude pacts, China buys fuel oil, a heavy refinery product, from Iran under a one-year contract of around one million tonnes.

China refiner to triple Iran crude imports

 

[Neo]

China’s industrial output up 17.3pc in Nov ​

Friday, December 14, 2007

BEIJING: China’s industrial output, a key measure of economic growth, expanded by 17.3 per cent in November from the same month a year ago, the National Bureau of Statistics said ON Thursday.

This marked a slowdown from growth of 17.9 per cent in October and 18.9 per cent in September, according to previously published statistics. In the first 11 months of the year industrial output was up 18.5 per cent from the same period in 2006, the bureau said.

Output continued to be driven by industrial exports, which increased by 19.5 per cent during November from the same month a year ago, the bureau said. China’s trade surplus hit 26.3 billion dollars in November, an increase of 14.7 per cent from the same period in 2006 and the third-largest on record, the government announced earlier this week.

The slight slowdown in industrial growth appeared to reflect the government’s efforts to cool a booming economy which grew by a blistering 11.5 per cent in the first nine months of the year. However the output of some major industrial sectors continued to boom in November, with production of non-ferrous metals up by 23.5 per cent and machinery by 24.4pc, the bureau said.

China’s industrial output up 17.3pc in Nov