China Economy - News & Updates

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Auto sales may top 10m units this year​

China's booming automobile market is expected to break the 10-million-unit in sales barrier this year, as the government's positive measures drive demand and revive consumer confidence, an industry body said yesterday.

China Association of Automobile Manufacturers (CAAM) has upgraded its forecast for this year's automobile sales to 10.2 million units, with year-on-year growth rate of 8.7 percent, up from the 5 percent projection earlier this year, said Dong Yang, its deputy director.

The passenger car segment is expected to grow by 10.2 percent while commercial vehicle sales are likely to increase by 5 percent this year, Dong said.

The association modified its forecast after vehicle sales hit a monthly record in April, the second consecutive month since March, with a year-on-year growth of 25 percent.

"It seems 2009 will be an optimistic year for China's automobile market, but we all should be cautious amid the gloomy global environment," said Dong.

According to CAAM, 1.153 million vehicles were sold in China last month, up 3.91 percent from March.

"The back-to-back pick-up in sales showed that China's auto industry has recovered and the government's stimulus package is taking effect," said Dong.

"Those vehicles that are eligible for government subsidies, which account for around 52 percent of the total industry, were the major driving force behind the rapid sales growth," said Zhu Yiping, associate secretary-general of CAAM.

The sales of passenger cars with engine capacity of or less than 1.6 liters increased by 56.5 percent over April 2008, to 419,000 units.

However, commercial vehicles continued to show a downtrend with 1 million units sold in April, a drop of 3.86 percent year-on-year.

In the first quarter, the total revenues of 19 major automakers dropped 14.2 percent, with their combined profits diving 48.36 percent year-on-year, according to CAAM.

In April, the US automobile market showed a 34.4 percent fall in unit sales over the past year, the lowest year-on-year growth rate in 30 years.

Auto sales may top 10m units this year

 

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China GDP forecast raised(China Daily/Agencies)​

Updated: 2009-05-15 08:04

Morgan Stanley raised its forecast for China economic growth to 7-8 percent from 5 percent for 2009 but warned the pace will slow next year as a protracted global slowdown deals a blow to the export-led economy.

The government's 4 trillion yuan ($586 billion) stimulus package announced late last year will provide temporary support to China's economy, but growth may fall back to 5.5 to 7 percent in 2010, as external demand will remain weak, Morgan Stanley Asia Chairman Stephen Roach said yesterday.

"I think there's a possibility that this year's strength may borrow from growth that might otherwise occur next year," Roach said in Shanghai. "It's premature to say China is enjoying a V-shaped recovery. I think the outcome is going to be closer to the letter W."

Roach's views contrast with more optimistic tones of other China economists who are betting on a quick turnaround after some encouraging data offered evidence that the country's expansive monetary and fiscal policies are starting to take effect.

Goldman Sachs raised its China growth forecast to 8.3 percent for 2009 and 10.9 percent for 2010, citing strong expansion in both fixed-asset and private sector investment.

"I'm worried about China staying on the same unbalanced, unsustainable path," Roach said, adding that China adopted the same investment-focused strategy during the previous two crises in 1997/98 and 2000/01.

But China's hopes to use infrastructure investment to sustain growth while waiting for the global economy to snap back would be dashed this time because the current crisis, the worst since the 1930's, will curb external demand for years, he said.

Roach expected the government's 4 trillion yuan stimulus would boost the share of investment to 45 percent of GDP from 40 percent. "Those levels are unheard of and underscores the continued building-up of imbalances."

Roach suggested that China should strengthen its social safety net so that people will become more willing to spend.

China should double the size of the country's social security fund to $160 billion immediately and boost the private consumption share of the Chinese economy to 50 percent from currently 36 percent in five years, he said.

"China needs to stop depending on the over-extended American consumer and needs to rely more on the untapped potential of its own consumers," Roach said.

China GDP forecast raised

 

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Baxter draws up 1b yuan capex plan for ChinaBy Zheng Lifei (China Daily)​

Updated: 2009-05-16 09:58

US healthcare company Baxter International Inc said on Friday that it would spend 1 billion yuan ($146.50 million) in China this year to ramp up production capacity in the latest investment made by foreign drugmakers in the country.

The US drugmaker will use the funds to expand the intravenous solutions and peritoneal dialysis products output at its Guangzhou, Suzhou, Tianjin and Shanghai plants.

"The investment reinforces our commitment to China," said Paul Vibert, general manager, Baxter China. "It will also allow us to provide a significant number of jobs, which is in line with our corporate social responsibility," Vibert said.

The investment is expected to create 2,500 jobs, of which 1,000 will be available this year, the manager said.

Baxter, the maker of intravenous drug pumps, renal and other products, realized sales revenue of $200 million from China last year.

The company, Vibert said, "is confident" that it can achieve double-digit sales growth this year despite the economic downturn.

Globally, Baxter expects a sales growth of 7 percent this year from last year's $12.3 billion, excluding the foreign currency exchange impact.

The foreign pharmaceutical industry is one of the few that still continues to increase investment in China this year even as most of the others are cutting spending as a result of the global financial crisis.

Sanofi-Aventis, the world's fourth-biggest drugmaker, said last month that it would invest $90 million in China, after a $94 million investment made in 2007.

The global pharmaceutical market is expected to grow by a mere 2.5 percent to 3.5 percent in 2009, the lowest growth rate in at least 25 years, according to US healthcare market research firm IMS Health Inc.

But China is expected to see sales grow by 13 percent to 16 percent through 2013, IMS said, forecasting that China may become the third-largest market by 2011, up from its current sixth place ranking.

China announced this year that it would invest 850 billion yuan to overhaul its healthcare system over three years.

Baxter draws up 1b yuan capex plan for China

 

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3G ready but users lag behind​

By Li Fei (China Daily)
Updated: 2009-05-18 08:22

China Unicom, one of the nation's three leading mobile operators, started trials of its high-speed, third-generation (3G) network Sunday.

3G lets users enjoy faster wireless data downloads, make video calls and watch TV programs via mobile phones.

The trial network covers 55 cities and would expand to 284 cities by the end of September, said company president Chang Xiaobing.

He said regular service would start at year-end.

China Unicom is the last operator after China Mobile and China Telecom to start trial operation for a 3G service.

However, experts warn that the new service may not give a boost to the telecommunications market due to its high cost.

"Developing killer applications (such as the text messaging in the 2G era) is critical to spur the 3G business as people are still used to and satisfied with the dominant voice and text messaging service available in the 2G era," said Chen Jinqiao, deputy chief engineer from China Academy of Telecommunication Research.

"This is the only way the 3G business can really take off," said Chen, predicting it will take at least five years for 3G to be widely popular in China.

According to an online survey by ÐÂÎÅÖÐÐÄÊ×Ò³_ÐÂÀËÍø, the largest Internet portal in China, only 1.9 percent of 363,000 respondents said they "have an idea of what 3G really is".

And although 59 percent of respondents said they would "ultimately become a 3G subscriber" in the future, nearly half said the pricing offered by the three telecom carriers was "too high".

According to the survey, in addition to the price and the need to get a new handset, 17.5 percent of respondents said the limited 3G application was the third biggest reason why they wouldn't rush to 3G.

The ministry expected the three operators to invest 170 billion yuan ($25 billion) in 3G network construction this year.

Despite the fanfare of 3G entering the market, some analysts said it would not give much boost to China's telecom carriers.

"China's telecom industry is now entering a downward spiral, a trend that is likely to last at least one or two years," said Wang Jinjin, head of Asian telecom research at Swiss bank UBS.

"Global experience shows that 3G has not been very helpful in driving carriers' business growth," said Wang.

3G ready but users lag behind

 

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HK may become yuan hub​

By George Ng (China Daily)
Updated: 2009-05-18 08:03

Hong Kong's ambition to become an offshore yuan center is a step closer thanks to recent central government moves to expand the yuan's international role.

Among the most significant moves is an announcement by the State Council (China's Cabinet) early last month that exporters and importers in five mainland cities will be able to settle their cross-border trade deals in yuan under a pilot program.

The five cities include Shanghai in the Yangtze River Delta and Guangzhou, Shenzhen, Zhuhai and Dongguan in the Pearl River Delta. All have large numbers of export-oriented manufacturers in their surrounding regions and will initially likely only involve deals with the special administrative regions of Hong Kong and Macao.

No timetables for, or details of, the program have been made available.

But signs indicate the scheme could be implemented soon.

Li Feng, Shenzhen's deputy major, told Hong Kong reporters earlier last week that the city authority had chosen 100 import and export firms to participate in the pilot scheme.

He said he expects the Guangdong provincial government to approve the list soon.

Tu Guangshao, a Shanghai vice-mayor, also told media late last month that the city was selecting its first batch of companies to participate in the scheme.

The move to allow yuan settlement in cross-border trade will strengthen Hong Kong's role as a financial gateway to the mainland, Hong Kong's Secretary of Financial Services and the Treasury Chan Ka-keung said.

"Both our financial industry and trade between the two places will benefit immensely from this breakthrough," he said.

Analysts were uncertain on whether the move was intended primarily to help Hong Kong become an offshore yuan hub.

"I can't really speculate what the central government's ultimate intention is. It may not necessarily be intended to help Hong Kong become an offshore yuan hub. But it will be a breakthrough to that effect," said Irina Fan, a senior economist at Hang Seng Bank.

China's rapid growth and the scale of its economy naturally demand a bigger role for the yuan in the international arena, she said.

Yuan settlement for cross-border trade in Hong Kong would likely lead to other services such as yuan lending, issuing yuan bonds and yuan investment assets in the special administrative region, she said.

Hong Kong will enjoy a "first-mover advantage", although the central government may allow yuan settlement in trade with bordering Asian markets, such as ASEAN countries, effectively making them "first movers" too, the economist said.

"But Hong Kong would retain an edge over those countries, in terms of having a mature financial market and financial expertise," she added.

"The move will push Hong Kong a step closer to develop into an offshore yuan hub," said Paul Tang, chief economist at Bank of East Asia.

Tang said the arrangement intends not only to make Hong Kong an offshore yuan hub but also to help open up the mainland's financial system.

The ultimate intention of the move is to boost the role of the yuan in the international monetary system, said Frances Cheung, an economist at Standard Chartered Bank.

"Turning Hong Kong into a offshore yuan hub is just a side effect," she said.

Hong Kong is the only offshore market that is allowed to issue yuan bonds, which helps its drive to become an offshore yuan center, she said.

How fast Hong Kong develops into an offshore yuan center will depend on the pace at which the central government expands the role of the yuan, said economists.

Signs are encouraging in this aspect, according to some observers.

In a meeting with Hong Kong's Chief Executive Donald Tsang last month, Premier Wen Jiabao said the central government will try to expand Hong Kong's yuan bond market.

Mainland units of Hong Kong banks will soon be allowed to issue yuan bonds in the administrative region and the Ministry of Finance is considering issuing yuan bonds in Hong Kong, the Premier said.

The central government is also studying a proposal to extend financial aid to developing countries in yuan instead of in US dollars, according to a report by the South China Morning Post.

China will then allow beneficiary nations to trade yuan reserves in Hong Kong (if they do not use up all the aid) to buy Chinese products, the report said, quoting unidentified sources.

The move, if it materializes, will boost Hong Kong's chances of becoming an offshore yuan hub, Standard Chartered Bank's Cheung said.

Economists said the central government, at some point in the future, will likely announce other measures to boost yuan use in Hong Kong such as allowing yuan lending and developing yuan-based assets other than yuan bonds.

HK may become yuan hub

 

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China, Brazil have huge trade potential: former ambassador​

(Xinhua) Updated: 2009-05-19 13:20

Former Chinese ambassador to Brazil, Chen Duqing, told Xinhua Monday that the two sides have huge potential to expand trade.

He made the comment as Brazilian President Luiz Inacio Lula da Silva began his 3-day visit to Beijing Monday to enhance economic ties.

Bilateral trade rose 63.2 percent year on year to $48.98 billion in 2008, according to data released by the General Administration of Customs.

Despite the sharp rise, the figure made up less than 3 percent of China's foreign trade in 2008, said Chen who left office in March.

Since both countries have abundant resources, there is big potential to increase bilateral trade, he added.

China surpassed the United States to become Brazil's biggest trading partner in April.

Chen said it reflected America's contracting foreign trade as it was hard-hit by the financial crisis. It also showed that closer trade relations between China and Brazil had become a reality.

For example, Brazil's exports to China, mainly iron ore and soybeans, increased.

Chen noted many Brazilian businessmen still knew little about the Chinese market. The two sides lacked understanding partly because of geographical distance and should seek more areas for collaboration.

"The two countries could further expand technology cooperation as the two had good collaboration on satellite launches," Chen said.

Agriculture is another important part of bilateral economic ties as the volume of farm produce between the two sides grew 83.4 percent to $9.06 billion in 2008, data released by the Ministry of Agriculture Monday showed.

In a faxed letter sent Monday, the ministry told Xinhua that while improving agricultural trade with Brazil, China hoped to enhance exchanges in bio-fuel development and animal husbandry technology.

The ministry promised to facilitate information exchanges and encourage mutual direct investment.

Brazil imported $268 million worth of farm produce from China, up 125.2 percent year on year. Imported goods were mainly soybeans, aquatic and livestock products.

China imported vegetable oil, cotton and fruit worth $8.79 billion from Brazil last year, an increase of 82.4 percent from a year ago.

On July 3, 2008, the Brazilian government issued a report analyzing areas that Brazil could increase exports to China.

Chen said it showed a positive attitude from Brazil to beef up trade with China.

China, Brazil have huge trade potential: former ambassador

 

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Mainland urges faster building of economic zone in Fujian​

(Xinhua)Updated: 2009-05-19 10:49

At the conclusion of an inspection tour Monday, China's top political advisor Jia Qinglin said he wants to speed up the building of an economic zone in Fujian province on the western side of the Taiwan Straits.

Jia, chairman of the National Committee of the Chinese People's Political Consultative Conference, the top political advisory body, said the economic zone was conducive to promoting development of areas with comparatively heavy Taiwan investment. It would also enhance exchanges and cooperation with Taiwan.

Facing Taiwan on the other side of the Straits, Fujian sees frequent business exchanges with the island. The State Council issued a document in early May which supported Fujian's construction of an economic zone on the western side of the Taiwan Straits.

During his visits with Taiwan businesses in Fujian, Jia said the province could "make bold attempts" to implement the document and expand mutual investment and cooperation in agriculture, finance, tourism and infrastructure construction.

Jia also stressed the significance of developing "towns" as they play an important role in expanding the domestic market, especially the rural market, facilitating employment of migrant workers, and channeling capital, talent, technologies and information to flow from cities to the countryside.

He also said investment from all social sectors should be expanded as the country strives to expand domestic demand.

Mainland urges faster building of economic zone in Fujian

 

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$10b loan-oil deal lubricates tradeBy Li Xiaokun and Zhang Haizhou ​

(China Daily)
Updated: 2009-05-20 07:38

China yesterday agreed to lend $10 billion to Brazil's state-owned oil giant in exchange for guaranteed oil supply from the South American country over the next decade.

Brazil's Petrobras and Sinopec, China's largest refiner, agreed that the former will supply 150,000 barrels of crude oil a day to China this year and 200,000 barrels per day for nine years from 2010.

The two oil companies also signed a memorandum of understanding on oil exploration, refining and petrochemicals. China will explore for oil in two areas in Brazil, Zhang Guobao, head of the National Energy Administration, told Bloomberg.

Beijing last month finalized a similar agreement under which Russia will supply oil for 20 years in exchange for loans to state firms.

Petrobras and the China Development Bank inked the loan deal in a ceremony attended by President Hu Jintao and his visiting Brazilian counterpart Luiz Inacio Lula da Silva at the Great Hall of the People.

The deal was among 13 signed yesterday, with the others ranging from equipment, financing, science and space exploration to agricultural products.

Petrobras will repay the loan with revenue from oil sales to China, and not with oil itself as some media have speculated, CEO Jose S. Gabrielli De Azevedo told a press conference.


"This is the largest loan Brazil has ever obtained in China," he added.

The China Development Bank and the Brazilian Development Bank also agreed on a framework deal for an $800 million credit extension.

Petrobras had been negotiating for finance with oil consuming countries in exchange for future supplies, seeking alternatives to international borrowing and bond issues to finance its spending plans amid the global credit crunch.

The firm needs funds to help extract massive, newly-found oil reserves deep beneath the ocean floor off Brazil's southern coast.

During talks with Lula, Hu proposed that the countries work more closely in such key areas as infrastructure, energy, minerals, manufacturing and agriculture.

He also called for greater financial collaboration in bilateral economic and trade activities.

Lula told Hu that 35 years after establishing diplomatic relations, Brazil and China "have more to celebrate than countries that have had relations for more than 100 years".

From 2006 to 2008, China-Brazil trade surged by an average of 50 percent annually.

China replaced the United States as Brazil's top trade partner last month.

The Brazilian government said trade with China in April reached $3.2 billion, compared with $2.8 billion with the United States.

"I believe Brazil and China are consolidating their strategic partnership (established in 1993), which is reflected in bilateral trade. I also believe the current status is just 10 percent of the potential," Lula said when he met Premier Wen Jiabao earlier yesterday.

Sun Hongbo, an expert in Latin America studies at the Chinese Academy of Social Sciences (CASS), said enhancing oil cooperation is a "significant part" of the Brazilian president's visit, adding that the current financial crisis offered China the opportunity to seal the deal.

It is Lula's second state visit to China; he first visited after he assumed presidency in 2003.

The visit is to "develop the strategic partnership" between the two "mutually complementary emerging powers", Lula said in a speech at the CASS before unveiling the Center for Brazilian Studies there yesterday morning.

He said there is no way to overcome the current global financial without the involvement of developing countries.

He also called for reforming the UN Security Council to give the developing world more voice.

Zhou Zhiwei, secretary-general of the Centre for Brazilian Studies at the CASS, said Lula's visit also paves the way for the first summit of the BRIC countries (the others being Russia and India) to be held in Russia next month.


$10b loan-oil deal lubricates trade

 

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Yuan may be reserve currency by 2020​

Official(Agencies)
Updated: 2009-05-21 13:28

China's currency yuan could make up more than 3 percent of global foreign exchange reserves by 2020, an official suggested on Wednesday.

The yuan is not convertible for purely financial purposes, ruling it out as a reserve currency for now, but China has started to carve out a bigger international role for its money.

A pilot scheme will start soon in Hong Kong to use the yuan to settle trade with selected companies in southern Guangdong province; China has signed yuan swap deals totalling 650 billion yuan ($95 billion) since December with six central banks; and on Tuesday two foreign banks said they had won permission to float yuan bonds in Hong Kong.

Zhang Guangping, vice-head of the Shanghai branch of the China Banking Regulatory Commission, acknowledged that a series of conditions would have to be met for the yuan internationalisation trend to gather momentum.

China would have to gradually make the yuan convertible on the capital account; it needed a more liquid foreign exchange market; its bond markets and banking system needed to be more developed; and there had to be proper monitoring of cross-border capital flows, Zhang told a foreign exchange conference.

But, hypothetically, he said there was no reason why the yuan could not account for over three percent of global reserves by 2020, the target date for Shanghai to have evolved into an international financial centre.

That would mean the yuan displacing the Japanese yen as the fourth-largest currency in reserve portfolios, behind the pound, the euro and the dollar.

Zhang told reporters later his target was plausible, given the rapid growth of China's economy and outbound investment and its big share of world trade.

"We have the conditions to reach such a proportion," he said.

In late March, central bank governor Zhou Xiaochuan signalled China's intention to play a greater role on the global currency stage by proposing that the dollar be eventually replaced as the dominant reserve currency by a beefed-up version of the Special Drawing Right, the International Monetary Fund's unit of account.

Yuan may be reserve currency by 2020 - official

 

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Economists confident on 8% growth targetBy Si Tingting (China Daily)​

Updated: 2009-05-21 08:18


Chinese economists have expressed optimism that the targeted 8 percent economic growth is achievable if the nation manages to rein in rising inventory levels, check manufacturing overcapacity and reduce its dependence on external demand.

"With stronger domestic demand, China is very likely to see its economy facing better conditions this year and the government's goal of 8 percent growth will be more than achievable," said Wang Yuanhong, senior economist and head of the Economic Forecasting Department of the State Information Center at a seminar organized by the All-China Journalists Association.

Wang, however, expressed concerns on whether the current economic recovery is sustainable.


Xu Lin, director general of the fiscal and financial affairs department at the National Development and Reform Commission, said China can achieve its goal of 8 percent growth this year as it has enough resources to add to government spending if needed.

Many observers suspect this may be an overestimate. The World Bank estimates that a 6.5 percent growth is more realistic and said the enthusiasm about an economic recovery in China may be "premature" as private investment lags behind government spending.

Most China watchers, however, feel that an 8 percent growth is required to boost employment.

China will also have to identify new growth sectors apart from the saturated automobile and real estate markets, Wang said.

"Technological innovation, green energy and biotechnology sectors could be new investment destinations, especially from the private sector," said Wang, adding that, stimulus spending by the central and local governments are essential to "stabilize" the economy from falling further.

Economists confident on 8% growth target

 

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Household income reforms unveiled​

By Zhang Ran (China Daily)
Updated: 2009-05-26 08:14

China will fast track its payment system reforms to boost household income, especially those of the medium- and low-income group, and spur consumption, the State Council said on Monday.

The cabinet yesterday listed as many as nine steps to increase household income, according to a statement on the reform guidelines posted on its website.

Executives of State-owned enterprises may see their salaries trimmed to narrow the gap between the rich and the poor amid an economic slump that has put pressure on profits and wiped out millions of jobs, according to the statement.

Other measures to encourage spending include an improved social security net, reduced precautionary savings, and increased income for rural and low-income households through fiscal transfers, it said.

Analysts said these measures would help boost consumption, which accounted for just 40 percent of China's GDP growth in 2008.

"In the last few years the household income growth could not keep pace with the growth of treasury income and that of the national economy. As a result, consumption did not take off," said Zhou Tianyong, professor from the Party School of the Central Committee of Communist Party of China.

According to Chang Xiuze, researcher, Academy of Macroeconomy Research, NDRC, China's labor payments have dropped to 11 percent of the GDP in 2007, compared to 17 percent in 1980.

"The government's policies to create jobs and raise household income will definitely boost consumption," said Sun Mingchun, economist, Nomura Securities.

"The real potential for consumption growth is in China's rural areas. While on an average almost every Chinese urban family owns a washing machine, refrigerator, and air conditioner, less than half of their rural counterparts enjoy such luxuries. But as rural household incomes rise, the demand for consumer durable goods will also go up," Sun said.

The cabinet yesterday released a reform package that almost tapped all the aspects of a national economy in a bid to lead the country out of the financial crisis.

"This is the most difficult year for the country's economy and development since we entered the new century. The financial crisis has not bottomed out yet, the speed of the economy has slowed down remarkably, bringing to fore the system contradiction accumulated from the past," the State Council said in a statement posted on its website.

"This requires us to deepen reforms and open up further," it said.

Household income reforms unveiled

 

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Chinese group buys stake in US basketball team(China Daily/AP)​

Updated: 2009-05-26 08:14

The Cleveland Cavaliers have signed an agreement with an investment group from China to become minority owners of the NBA franchise and its arena, a partnership that could impact superstar LeBron James' future with the team.

The Asian conglomerate, which includes Huang Jianhua, a Chinese businessman who has brokered sponsorship deals with the New York Yankees and other sports franchises in the US, could acquire up to 15 percent of Cavaliers Operating Company, the entity that owns the team and operates Quicken Loans Arena.

The league's board of governors must approve the deal, completed in recent days.


Team President Len Komoroski said on Sunday the group approached Cavs principal owner Dan Gilbert about the partnership and called the business venture "an exciting new opportunity".

Gilbert's role in overseeing the organization and 20,000-seat arena will not be affected by the new partners.

Citing multiple unnamed sources, the Cleveland Plain Dealer first reported the sides had a tentative deal in place. But in recent days, paperwork was completed between Gilbert and the consortium. It will now be sent to the league office for approval.

With an eye on spreading the game on a global scale, the NBA has been quietly pushing for an international group to become involved in ownership on a minority level. And with a huge fan base already in China - mainly because of Houston All-Star Yao Ming -- the league has entered into several ventures with the nation to develop players and build arenas to NBA specifications.

Huang and others in the group attended Games 1 and 2 of the Eastern Conference finals in Cleveland. On Friday, they sat courtside and watched James hit a game-winning 3-pointer in the final second to give the Cavaliers a 96-95 win and even the best-of-seven series.

If approved, the deal would provide marketing opportunities for the Cavaliers and James, who is eligible to become a free agent in the summer of 2010. The 24-year-old MVP, who is already among the league's most popular players in Asia, has stated he wants to become the first billionaire athlete. Playing for a team with Chinese business partners could enhance his brand overseas.

There has been ongoing speculation that James will leave Cleveland to play in a larger market like New York or Los Angeles because of the vast business opportunities. But James -- and his corporate sponsors like Nike -- have broader goals and may be able to attain them by tapping into China's colossal consumer marketplace without him ever leaving Cleveland.

James has never given any indication he wants to leave the Cavaliers, who drafted the Akron, Ohio, native with the No 1 overall pick in 2003. He won a gold medal with the US team last summer at the Beijing Games and has made four trips to China, including one with the Cavs during the preseason two years ago.

"It's a big market," James said before Game 3. "They love the game of basketball. I've been over there the last four or five summers. It should be good. It should be fun."

Gilbert has been approached by outside investors in the past, but his original business group has mostly remained intact since he bought the Cavaliers and the rights to operate their arena for $375 million from former majority owner Gordon Gund in 2004.

Gilbert purchased the team with several other investors, including longtime business partner David Katzman, R&B superstar Usher and others. Gund maintained partial ownership.

However, in the past two years, Katzman has decided to focus on other business interests and the Chinese group would essentially take over his percentage of the Cavs.

Chinese group buys stake in US basketball team

 

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Shandong plans auto behemoth​

By Li Fei (China Daily)
Updated: 2009-05-26 08:14

Three auto parts makers, including a leading engine maker and an earthmover manufacturer, will merge to create an industrial conglomerate in Shandong province with sales projected to exceed 100 billion yuan by 2012, the latest industry consolidation move in China's fragmented auto sector.

Weichai Holdings Group, the biggest shareholder of the country's major high-speed heavy-duty diesel engine maker Weichai Power, and Shandong Construction Machinery Group Co, parent of one of the nation's leading earthmover makers, and Shandong Auto Industrial Group, will form a venture called Shandong Heavy Industry Group Co, according to separate exchange filings by their listed units.

The three companies, all based in the eastern province of Shandong, did not elaborate on the details, such as the financial terms, the timetable and the future structure, of the planned merger in their exchange statements.

But they all said the positions of their controlling shareholders would remain unchanged.

Weichai Holdings owns 14.92 percent of Hong Kong and Shenzhen-listed Weichai Power and 30.59 percent of Shenzhen-listed Weichai Heavy Machinery Co.

Shandong Construction Machinery has a 21.1 percent stake in Shenzhen-listed Shantui Construction, one of the country's biggest earthmover makers.

The combined sales of the three listed companies amounted to more than 40 billion yuan in 2008, according to their annual reports.

Shandong Auto Industrial Group has the capacity of producing 60,000 light trucks and 1 billion yuan of auto parts a year, according to Shandong Association of Automobile Manufacturers.

Shandong plans auto behemoth

 

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China, world's 4th in wind power capacity(Xinhua)

BEIJING - With total installed capacity of 12 million kilowatts, China has become the world's fourth country in terms of wind power-installed capacity, an official said on Saturday in Beijing.

"Concerning wind power-installed capacity, China is next only to the United States, France and Spain," Lu Yanchang, vice chairman of the China Science and Technology Association, made the above remarks at the fifth China Energy Strategy Forum.

Wind power has become a main force in China's new energy development cause, said Lu, adding that the country had built more than 200 wind power plants as of 2008, with 12.8 billion kwh electricity generated.

China's total wind power has accounted for 1.5 percent of country's total installed electricity capacity. The country will build more wind power projects before 2010, in east coastal areas, and vast western regions, according to Lu.

North Inner Mongolia and Hebei have exploited wind energy earlier than other regions on the Chinese mainland.

Inner Mongolia, covering 1.18 million square kilometers, boasts 100 million kilowatts of wind energy resources, with enormous white turbines standing high to capture the strong winds from the heartland of Mongolia and Siberia.

The region is striving to increase installed capacity of wind power to more than 10 million kilowatts in 2010, almost half of that of the country's largest hydropower project at the Three Gorges, said Ya Saning, director of the region's economic commission.

Hebei Province will also construct wind power plants with an installed capacity of more than 10 million kilowatts as of 2020, said Zhao Weidong, an official with the provincial Commission of Development and Reform.

China, world's 4th in wind power capacity

 

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Foreign firms get red-carpet welcome​

By Wang Jingqiong (China Daily)
Updated: 2009-05-27 08:08

The Beijing government yesterday released new regulations aimed at attracting more multinational corporations to set up their regional headquarters in the capital.

The New Regulations on Encouraging Multinational Companies to Establish Regional Headquarters in Beijing will take the place of the old one of 1999, and its implementation rules on how these policies will come out next month.

This regulation applies to foreign multinational corporations and those from Hong Kong, Macau and Taiwan.

"The regulations will provide privileges and conveniences in taxation and foreign exchange management for foreign workers in China. This is to attract more multinational companies to invest in Beijing," said Chen Guangming, committee member of the Beijing Municipal Commission of Development and Reform.


According to the regulations, foreign multinational corporations with an accumulated registered capital of not less than $10 million in China can establish regional headquarters in Beijing. The figure set by the regulation of 1999 was $30 million.

It also allows regional headquarters in Beijing to expand their operational and business areas, hike imports and exports, expand distribution, and logistics within China.

The rules stipulate that regional headquarters registered or set up after January 1, 2009 in Beijing, with a registered capital more than 100 million yuan, will be given subsidies for three years.

Headquarters that have had annual sales revenue of more than 100 million yuan for the first time will receive an encouragement bonus.

The purpose is "to improve the functions of the regional headquarters, and at the same time, promote the development of finance, insurance, trade, accounting and legal system in Beijing," said Chen.

New rules on entry and exit have also been put out to improve the working and living conditions of foreign workers.

High-level managers and technicians can apply for a multiple-entry visa for less than five years; mid-level ones can apply for a multiple-entry visa for less than three years, and common workers for no more than one year. These three kinds of workers can apply for residential permits in Beijing for no more than 5, 4, or 3 years.

Foreign firms get red-carpet welcome