Chinese Economy/Development thread (updated regularly)

[Brotherhood]

China's 2010 investments: 100 bln USD inbound, 50 bln USD outbound - People's Daily Online December 22, 2010

China's actual use of foreign direct investment (FDI) is expected to rise 11 percent to some 100 billion U.S. dollars in 2010 and China's outbound investments on the international market are expected to exceed 50 billion U.S. dollars in 2010, said Chen Deming, China's minister of Commerce, on Wednesday.

He also estimated the imports and exports of the whole year would reach 2.9 trillion U.S. dollars, surging more than 30 percent over 2009.

The government has made great efforts on alleviating foreign investors' concern over China's investment environment, particularly in terms of China's policies on innovation, government procurement and intellectual property rights protection. Foreign capital inflow into Tibet and Xinjiang are also being encouraged.

Over the first 11 months of the year, China has used 92 billion U.S. dollars of foreign capital, up 18 percent over the same period of last year. The 9.7 billion U.S. dollars of FDI that was actually used in November means a year-on-year increase of 38 percent, marking the 16th consecutive monthly rise.

China has made 47.6 billion U.S. dollars of non-financial overseas investment over the first 11 months of the year, with 17.5 billion U.S. dollars through mergers and acquisitions. The figure for the whole year, according to Chen, could be higher than 50 billion U.S. dollars.

 

[Brotherhood]

China spends 5 bln USD on poverty relief for ethnic minorities over 5 years - People's Daily Online December 22, 2010

The Chinese government has spent 34.24 billion yuan (5.1 billion U.S. dollars) in poverty relief in regions inhabited by ethnic minorities over the past five years, said a senior ethnic affairs official here Wednesday.

Poverty relief funding to eight provinces and autonomous regions largely inhabited by people from ethnic minorities -- Inner Mongolia, Tibet, Guangxi, Ningxia, Xinjiang, Yunnan, Guizhou and Qinghai -- had increased by 15 percent annually over the past five years, higher than the average growth of poverty relief funds allocated by the central government nationwide, said Yang Jing, minister in charge of the State Ethnic Affairs Commission, at the bimonthly session of the top legislature.

In addition, the central government has allocated 3.04 billion yuan (453.73 million dollars) in boosting economic and social development in the eight provinces and autonomous regions since 2006, registering an annual increase of 28.9 percent, Yang said in a report to the 18th session of the Standing Committee of the 11th National People's Congress (NPC), running from Dec. 20 to 25.

Thanks in part to increased government investment, the gross domestic product (GDP) of the eight provinces and regions reached 3.46 trillion yuan and the GDP per capita reached 18,014 yuan in 2009, he said.

People living in absolute poverty in rural areas of the eight regions and provinces dropped from 30.76 million in 2001 to 14.52 million in 2009.

Yang admitted, however, that ethnic minority regions still lagged far behind the developed eastern regions and the government still faced serious challenges to reduce poverty.

The disposable income of urban residents in the eight provinces and regions accounted for 82.9 percent of the national level and net income of rural residents accounted for 72.4 percent of the national level, he said.

Yang pledged that the government would continue to step up infrastructure development in ethnic minority regions and spend more on education, medical services, poverty relief and environmental protection.

Source: Xinhua

 

[Brotherhood]

Chinese contractors' sales rank 1st in world - People's Daily Online December 23, 2010

The total overseas turnover of Chinese contractor enterprises surpassed the United States and France in 2009 and now ranks first in the world, the Xinhua News Agency reported on Dec. 22.

The Engineering News-Record has published a ranking list of the top 225 international contractors in the world. A total of 54 Chinese companies were ranked on this list and they had a total turnover of 50.6 billion U.S. dollars, an increase of 41.7 percent compared with the total turnover of the previous year. Contractors from China topped the list in terms of the number selected and business volume for the first time.

Chinese companies in the African and Asian regions occupied massive markets except for the Middle East. Chinese enterprises in the African region that made the list in the 2009 rankings have brought in 20.8 billion U.S. dollars, accounting for 36.6 percent of the total business volume in the sector in Africa.

Excluding the Middle East and Australia, Chinese contractors had a turnover of 18.1 billion U.S. dollars, accounting for 24.9 percent of the total business volume in the sector in Asia.

By Zhang Qian, People's Daily Online

 

[Brotherhood]

China has world's most profitable banking sector - People's Daily Online December 23, 2010

China's banking sector has been outshining its foreign peers since 2008 when the global financial crisis devastated Wall Street giants like Lehman Brothers. Its total profits, profit growth and returns on capital all rank highest in the world.

The net profits of China's banking sector rose to 668.4 billion yuan in 2009 after a surge of 30.6 percent to 583 billion yuan in 2008. The largest five state-owned commercial banks, known as the "Big Five," have been doing well so far this year. The first three quarters has seen a 29 percent increase in the Big Five's net profits, and small and medium-sized shareholding banks saw a more than 30 percent increase.

So far, 18 Chinese banks are on the list of the world's top 500 banks. Three of the Big Five are among the world's largest in terms of capitalization. In the world's five most profitable banks, three are from China.

The Big Five includes the Industrial and Commercial Bank of China, Bank of China, China Construction Bank, the Agricultural Bank of China and Bank of Communications. They are all listed companies.

By Li Jia, People’s Daily Online

 

[Brotherhood]

China-Africa trade hits record high - People's Daily Online December 24, 2010

Trade volume between China and Africa hit a record this year, sending out positive signals about economic and trade cooperation, experts said on Thursday.

Bilateral trade to the end of November increased 43.5 percent year-on-year to $114.8 billion, surpassing the pre-crisis level of $106.8 billion for all of 2008, according to a white paper on China-Africa economic and trade cooperation released by the Chinese government.

"China's robust economic activities, and enhanced cooperation between the two regions, have dragged bilateral trade out of the shadows of the global economic crisis," said He Wenping, director of the African studies department of the Institute of West-Asian and African Studies under the Chinese Academy of Social Sciences.

China emerged as Africa's largest trading partner in 2009, outpacing the European Union and the United States.

Trade structures have improved in recent years and markets have opened for each other's products, said the white paper.

According to the white paper, China's exports of machinery and electronic products account for more than half of the overall export volume, while the country's imports of agricultural commodities have increased dramatically over the years.

To boost exports from Africa to China, some products from the least-developed countries in Africa with diplomatic relations with China have been exempt from tariffs since 2005.

By July 2010, the number of tariff-free products had increased to 4,700 taxable items, and is expected to grow to cover 95 percent of China's total taxable items.

In the meantime, China's total direct investment in Africa surged to $9.3 billion by the end of 2009, and the scope of investment has been widened from the mining sector to finance, manufacturing, tourism and agriculture, said the white paper.

"At the same time, modes of investment have become more diversified to include merger and acquisition, equity participation and others," He said.

According to He, trade and investment structures will be further optimized.

"Both China and African countries are in the process of industrialization and urbanization, which dictate cooperation will be deepened in sectors such as infrastructure, agriculture, manufacturing and technology, to continue enhancing Africa's economic development and improving its people's livelihood," she said.

By the end of 2009, China had provided assistance for the construction of more than 500 infrastructure projects in Africa.

From 2007 to 2009, the country offered $5 billion in preferential loans and preferential export buyers' credit, and promised another $10 billion of preferential loans from 2010 to 2012.

In education and training, more than 30,000 people in Africa had attended training programs provided by the Chinese government by June, covering more than 20 fields such as economics, agriculture and public administration.

In the meantime, China has been conducting activities to improve people's livelihood in African countries, including improving medical and health conditions, carrying out agricultural cooperation and reducing Africa's debts.

From 2000 to 2009, 312 debts of 35 African countries were cancelled by China, exceeding 18.9 billion yuan ($2.85 billion), according to the white paper.

Source: China Daily

 

[Brotherhood]

China's booming nuclear power industry brings opportunities for domestic firms - People's Daily Online December 24, 2010

Hydropresses, cranes, planers, drills and lathes hum in the workshops of China First Heavy Industries in northeast China. Outside, snow piles up and leafless trees shiver in the cold.

Over the past year, workers in China's largest heavy machinery company have been busy machining parts for a nuclear power plant.

The Qiqihaer City, Heilongjiang Province-based company owns the largest water press in Asia. The press has a capacity of 15,000 tons.

The company has signed contracts for nuclear parts worth almost three billion yuan (447 million US dollars), becoming China's largest manufacturer of nuclear power equipment.

At the same time and 2,000 kilometers away, in Yixing City in east China's Jiangsu Province, the Sino-French joint venture Wanxiang Nuclear Power Plant Gate Company was launched.

"A joint venture with a licensed foreign company is a shortcut for domestic firms wanting to enter this huge market," said the joint venture's general manager, Cui Junqiang.

Cui, president of Jiangsu-based Wanxiang Nuclear Power Group, plans to set up another joint venture with another French company in the near future to manufacture pressure containers for nuclear power plants.

Cui's company is among the small number of private Chinese firms that have succeeded in taking a share of the country's fast-growing nuclear power market.

Under the ever-growing pressure of fulfilling its promise to save energy and reduce emissions, the Chinese government has stepped up its efforts to develop the nation's nuclear power industry.

This has prompted an increasing number of Chinese firms -- both state-owned and private -- to join the the fledgling industry's supply chain.

In 2007, China released its long-term development plan for its nuclear power industry (2005-2020), pledging to pump 450 billion yuan (67 billion US dollars) into the sector.

The planned investment, however, will double as the government is speeding up construction of nuclear power plants.

China currently has 23 generator units for nuclear power plants under construction, mainly in the coastal provinces of Liaoning, Jiangsu, Zhejiang, Fujian and Guangdong.

The localization rate stands at 50 percent for nuclear power equipment installed in China, which means half of the country's investment in the industry has gone into the pockets of foreign manufacturers.

He Zhongqi, a Chinese expert on the nuclear power industry, has urged domestic manufacturers to increase their capabilities in nuclear power technology research and development through the study of advanced foreign technology, in order to be competitive in both the domestic and international market.

In addition to the nation's nuclear industry flag-carrier, China National Nuclear Corporation (CNNC), all major power groups in the country have established their own nuclear-energy departments to enter the capital-intensive but lucrative market.

To further consolidate its strength, CNNC recently began building the CNNC Beijing Nuclear Technology Park in Beijing, which will be the largest research and development center for the country's nuclear power industry.

Meanwhile, the China Institute of Atomic Energy, the cradle of Chinese nuclear science, plans to step up research efforts to close the gap between China and developed nations in nuclear science.

Source: Xinhua

 

[中国万岁-ProsperThroughCo-]

This article is not directly involving Chinese economy, but I found it interesting nevertheless.


Nobel laureate attacks India on growth

By James Lamont in New Delhi
Published: December 21 2010 19:19 | Last updated: December 21 2010 19:19

The Indian fixation with surpassing China’s rate of economic growth is “very stupid” as a measure of the nation’s advancement, Amartya Sen, the world-renowned scholar and Nobel laureate for economics, has warned.

Prof Sen on Tuesday said that such comparisons between the two rising economies were dangerously misguided, and recommended that Indian leaders pay more attention to reducing chronic undernourishment among their country’s 1.2bn people than pursuing ever higher growth targets.

“I don’t think the issue of India and China and which one will have a higher rate of growth is interesting at all,” Prof Sen told students and young entrepreneurs in the Indian capital. “It’s not a serious question how [India’s] 8.5 per cent compares with [China’s] 9.5 per cent.”

Mr Sen was responding to an obsession with India’s climbing growth rate among New Delhi’s policy elite, a focus that often overlooks whether greater activity in parts of the country translates into improved human development indicators.

Indians suffer some of the severest nutritional deficiencies in the world. Stunted development affects about half of the nation’s young children.

Manmohan Singh, prime minister and close friend of Prof Sen, has forecast that India will reach 10 per cent economic growth in the medium term, placing it on par with China.

Data released last month showed that India’s economy grew close to 9 per cent in the three months to the end of September. Business leaders and policymakers believe India could grow much faster but acknowledge that faster, unbalanced growth could pose dangers for the country.

One Mumbai-based business leader describe India’s current growth as a “default rate” that could easily be exceeded if government intervention was lessened.

Prof Sen said higher growth was a “positive thing” in the context of social justice, poverty reduction and directing greater public revenues towards health and education.

He proposed that greater attention be given to whether India was “falling behind” in feeding its population at a time of high food prices and what India could learn from China about social improvement. “Why is it that undernourishment is so hardy [in India]?” he asked.

 

[gpit]

China on road from acquired to world's No. 2 acquirer - People's Daily Online

09:23, December 27, 2010

China will become the world's second-largest acquirer this year after the United States with surging outbound direct foreign investment, according to a Chinese Academy of Social Sciences report issued yesterday.

In the first 11 months, China's non-financial outbound foreign investment was US$47.5 billion, 1.1 times the total value of last year, according to the Ministry of Commerce data. In 2003, the figure was just US$2.8 billion.

"Despite the country's continued efforts to attract foreign investment, China has been in transition from the acquired to an acquirer," said Zhang Yuyan, chief author of the report. "It is based on China's solid economic development and many good opportunities offered by the global financial crisis."

China eclipsed Japan to become the world's second-largest economy in the first half of the year and is on its way to claim the position for the whole year.

In August, the Zhejiang Geely Holding Group took over Volvo from the Ford Motor Co for US$1.5 billion, putting China's "going global strategy" into headlines across the world. Last week, China Petrochemical Corp, better known as the Sinopec Group, won government approval to purchase oil and gas assets in two deals in South America.

Commerce Minister Chen Deming said last week that China will support domestic companies to invest overseas and the "going global strategy" will be a priority for the ministry in the 12th Five-Year Plan starting next year.

Zhang said mergers and acquisitions in the energy sector so far still make up the majority of China's outbound takeovers, but the tendency is that targets of investment will become more diversified.

From 2005 to the first half of this year, Chinese enterprises clinched 91 deals worth US$31.9 billion with overseas coal and mineral partners, the report said.

It predicted China's two-way investment will become more balanced in the future. In the first 11 months, China's inbound foreign direct investment was US$91.7 billion, far exceeding the outbound figure. This year's overall outbound investment is expected to rise to US$50 billion.

Source: Shanghai Daily

 

[Brotherhood]

Hainan's 1st high-speed railway has test run - People's Daily Online December 27, 2010

Donghuan High Speed Rail, the first high-speed railway on Hainan Isaland, had a test run on Dec. 26, 2010. Leaving from Haikou East Station, A China Railways high-speed train ran passed Wenchang, Qionghai, Wanning and Lingshui Yi Autonomous County and finally arrived at Sanya Station.

It took the train 90 minutes to finish the 308.11 km-long journey, with a maximum speed of 250 kph.　

As the largest infrastructure investment in Hainan's history, the rail was built using more than 200 billion yuan. It features extensive use of bridges and tunnels. After the opening, the rail and the Xihuan High Speed Railway will form an Express Railway around the island enabling tourists to enjoy the picturesque views of the island.

By People's Daily Online

 

[Brotherhood]

China's major enterprises 49% more profitable this year - People's Daily Online December 27, 2010

China's major industrial enterprises reported a 49 percent increase in profits over the first 11 months of 2010, reaching 3.9 trillion yuan. Their main business has yielded 62 trillion yuan of revenue, which is 32 percent higher than the same period of last year.

An industrial enterprise that has annual revenue of more than 5 million yuan from its main business is known as an above-scale enterprise. The statistics reflect the performance of these enterprises.

State-owned enterprises (SOEs) led the growth. Their combined profit of 1.2 trillion yuan marks a growth of 59 percent. Collectively-owned enterprises are up by 35 percent to 68.9 billion yuan, while share-holding companies were up by 49 percent to 2.1 trillion yuan.

Foreign-funded enterprises, including those from China's Hong Kong, Macao and Taiwan, generated 1.1 trillion yuan of profits, rising by 46 percent. The private sector posts 1 trillion yuan of profit during this period, surging 49 percent.

The fastest profit growth was seen in the chemical fiber manufacturing and ferrous metal sectors. Both have doubled their profits. Mining and processing of non-ferrous metals and power generation also enjoyed high profit growth of 82 percent and 74.5 percent, respectively.


By Li Jia, People’s Daily Online

 

[Brotherhood]

20 million use Wuhan-Guangzhou high-speed rail this year - People's Daily Online December 27, 2010

The Wuhan-Guangzhou high-speed railway, the world's longest and fastest, had a positive outlook this year. The line carried 20.6 million passengers— 56,000 per day on average — and the highest daily number was 135,000.

The Wuhan-Guangzhou high-speed rail adjusted the running diagram of high-speed rail trains four times this year. The daily running multiple-unit trains increased from 28 pairs to 80 pairs. Yu Zhuomin, director-general of the Wuhan Railway Bureau said that the Wuhan-Guangzhou high-speed railway operated safely for a total distance of nearly 20 million kilometers without incident or casualties.

By People's Daily Online

 

[no_name]

What would it be like to send 135,000 troops thousands Km on a single day?

 

[中国万岁-ProsperThroughCo-]

FT

Eaton chief hits out at Beijing’s critics

By Peter Marsh in London
Published: December 27 2010 18:13 | Last updated: December 27 2010 18:13

Criticism of China for its role in favouring local industry at the expense of US companies has gone too far and could lead to a dangerous bout of trade protectionism, according to Sandy Cutler, chief executive of Eaton, US industrial conglomerate, for the past 10 years.

He said that some of the criticism of China by US industrialists and politicians over actions such as currency manipulation was the result of “national jealousy” in the US about China’s relatively buoyant economy.

In an interview with the Financial Times, he said: “There is a strand of political thought in the US that is against the idea of free trade, with China bearing the brunt of a lot of negative commentsn.

“But I hope the US will resist the populist idea that the best way to ignite [national] growth is to construct walls around local economies through protectionist measures, the aims of which are to restrict trade.”

He said such moves – which could include imposing high tariffs and other import barriers to restrict sales in the US of goods made in China and other countries – were part of “discredited” policies that would only damage growth in the long run.

Some politicians and industrialists in the US have called for tariff barriers as a way to stimulate the US economy, which is still struggling to move into a higher phase of growth after the recession.

In 2011, according to projections from the IHS Global Insight economics consultancy, the US is likely to lose to China the position it has held over more than 100 years as the world’s biggest manufacturing nation by output.

Asked about negative comments on China earlier in the year by Jeff Immelt, chief executive of General Electric, Mr Cutler said he did not share the view that the mood in China was turning against foreign businesses.

“There are some political pressures inside China to favour local companies when awarding [government] contracts but this is not the same as saying that the climate is acting to discourage companies based outside China,” Mr Cutler said.

He also side-stepped the question of whether China had indulged in “currency manipulation” by giving its exporters an artificial boost through keeping the renminbi low. The topic is another controversial issue in the US, with a number of commentators pressing for the US government to step up action to force a revaluation. “I don’t have the [economic] competence to give a view as to whether the renminbi is fairly valued.”

But he added that swings in currencies were a problem for most international manufacturers, and that they had to cope as best they could. One way to do this, he said, was to open up local centres of production so that demand for goods in specific countries could be matched as much as possible by products made in the same location, as a result reducing currency risks.

Eaton produces a range of products and services, from fuel-efficient systems to management tools and aircraft components, and is likely this year to have sales in China of about $1bn, making the country one of its largest markets.

Mr Cutler said China’s political rulers deserved praise for “the fine job” they had made of “fine-tuning” the economy by pushing up growth without sparking inflation

 

[Brotherhood]

Foxconn to invest $1.2 billion in Hitachi LCD unit: report - People's Daily Online December 28, 2010

Taiwan's Hon Hai Precision Industry Co, better known by its trade name, Foxconn, is to buy majority stake in a Hitachi Ltd display unit for about $1.2 billion, making it the world's top-ranked maker of small and medium-sized LCDs, Nikkei Business Daily said Monday.

The venture, Hitachi Displays Ltd, will channel the funds into the building of a new factory in Japan that will supply Hon Hai, one of the biggest manufacturers of Apple's iPhone and iPad, it said.

After its recent acquisition of Taiwanese LCD panel maker Chimei Innolux Corp, Hon Hai will become the world's top maker of smaller LCD panels with a market share of 17.3 percent, outstripping Sharp Corp, according to 2009 data.

Hitachi declined to confirm the report on its subsidiary, according to AFP, with a spokeswoman saying, "The company is seeking measures to strengthen its operations."

Source: Global Times/Agencies

 

[Brotherhood]

Research center releases 2010 China Development Index - People's Daily Online December 29, 2010

The 2010 China Development Index was released by the National Survey Research Center (NSRC) at Renmin University of China on Dec. 29.

The index has been published by Renmin University since 2007. Since the foundation of New China, especially during the 20 years of reform, China has achieved great economic development and has become the subject of awe worldwide.

It was reported that the Beijing Development General Index has remained the first for five consecutive years, while Shanghai ranked second. Tianjin and Zhejiang ranked third and forth, respectively.

The China Development Index is composed of four single indexes, which are the Health Index, Educational Index, Living Standard Index and Social Environment Index.

Peng Fei, a professor of Renmin University, indicated that many problems still exist in China and there are worrisome aspects in the development process. For example, China's GDP has risen every year, but the average income level has declined relatively. Also, China's urbanization has been unbalanced in many areas.

Solving these problems require close attention to the quality of economic growth. It is necessary to increase the people's living standards and social living environment as well as pay more attention to social equality,Peng said.

The different social classes in the current should strengthen mutual understanding and communication. Particularly, the local governments at all levels should be highly concerned about the living conditions of vulnerable groups.

"Soaring prices mean more and more people are disappointed with China's GDP growth. Rapid economic growth not only brings improvement to living standards, but also a high cost of living," Peng said.

By Zhang Qian, People's Daily Online