ידיעון כלכלי - ינואר 2010 - (i)
In this issue:
General news on Chinese economy
Consumer Goods
Environment & Energy
Telecom & IT
Carriers
Electronics
Equipment Manufacturers
Internet
Medical & Healthcare
Other Sectors
General news on Chinese economy
China's 2009 fiscal revenue expected to surpass USD1 trillion
China's 2009 fiscal revenue was estimated at 6.85 trillion yuan (just over 1 trillion U.S. dollars), an increase of 11.7 percent over a year earlier, Finance Minister Xie Xuren said here Sunday. Xie also said the budget of public investment in 2010 from the central government was likely to stand at 992.7 billion yuan, up 572.2 billion yuan from the 2008 budget. (Jan 10, Xinhua)
China's 2009 foreign trade falls 13.9% to $2.21 trln with surplus at $196.1 bln
China's foreign trade in 2009 dropped 13.9 percent from a year earlier to 2.21 trillion U.S. dollars and its trade surplus last year slid 34.2 percent year on year to 196.1 billion U.S. dollars, according to figures released Sunday by the General Administration of Customs (GAC). (Jan 10, Xinhua)
China rolls out fresh measures for property market amid rising house prices
The General Office of the State Council, China's cabinet, Sunday issued a notice that required central governmental departments and local governments to strengthen management, stabilize market expectations and facilitate stable and sound development of the real estate market. "With the recovery of the real estate market, such problems as excessively rising house prices have recently emerged in some cities, which call for great attention," said the notice. (Jan 10, Gov.cn)
Curbing overcapacity, stimulating consumption key for China's economic revival
Fueled by a massive stimulus package and bank credit, China's economy grew at an enviable pace last year given the world economy was in deep recession. For growth to keep increasing steadily, the government must focus on trimming industrial overcapacity and spurring consumer spending this year. (Jan 7, Xinhua)
Consumer Goods
Chinese auto market overtakes US as world's largest
China's passenger vehicle market ended last year with a 59 percent year-on-year sales increase to surpass the United States as the world's largest auto market for the first year, thanks to the central government's stimulus package. The domestic sales of cars, sports-utility vehicles (SUV), minivans and multi-purpose vehicles (MPV) hit 10.26 million units last year, surging from 6.4 million units in 2008, said Rao Da, secretary-general of the China Passenger Car Association. (Jan 9, China Daily)
Beijing's biggest diamond shop launched
Beijing's largest diamond marketplace "Make Lumer Shopping Plaza" opened for business during the New Year's Day holiday. Industry statistics show China, which saw a 15 percent growth of diamond consumption last year, is the only country that experienced an increase in diamond consumption in the global financial crisis. China has been a major consumer for diamonds in the world. The transaction value of Shanghai Diamond Exchange, the only diamond exchange in China, reached $1.37 billion in 2008. (Jan 4, China Daily)
Environment & Energy
Huge water project to get RMB 48-bln injection in 2010
A record RMB 48 billion will be injected into the South-to-North Water Diversion Project in 2010, said Zhang Jiyao, the official in charge of the program under the State Council, at a press conference. The injection is equivalent to the sum of all the money invested in the project in the past seven years. The new funds will be used not only for the main project but also to launch 70 new subsidiary projects. In order for the project to proceed, an estimated 141,000 residents will need to be relocated. (China Knowledge 2009-12-31)
Water price hikes in China
Since the beginning of the year, many cities in China have been raising their water prices. Being such a crucial commodity, the increases have stirred up public concern. Guangzhou and have lifted water price, and many other major cities including Shanghai, Tianjin, Shenyang and Lanzhou held hearings to debate raising their water prices. Experts say there are two reasons for the water-price increase. First, the Chinese economy is in a transition period in which the prices of natural resources should be raised gradually from the lowest levels, in order to change the economic growth pattern to be eco-friendly. And the second reason is that local governments in China are under great fiscal pressure to offer subsidies on water. (CCTV.com, 2009-12-4)
Beijing: Water price could rise 24 percent
The Beijing government wants to increase the price of water by almost 24 percent to 4.6 yuan per cu m to cut down on water use. The price will be debated at a hearing of 25 delegates, including 10 consumers, government representatives and water experts, on Dec 16.
Government said it would present two options, including a one-time price increase to 4.6 yuan per cu. The second option is to increase the price by 0.30 yuan per cu m every year between 2009-11 and also increase the annual sewage treatment fee by 0.14 yuan per cu m every year over the same period. The increased cost of sewage treatment will go towards enhancing recycled water production capacity and treatment, the price department of the municipal development and reform commission yesterday. (China Daily 2009-12-4)
Govt puts money into water pollution fight
China will invest approximately 90 billion yuan to fight water pollution in the next two or three years, said Wu Xiaoqing, vice minister of environmental protection. The money will be spent in building wastewater treatment plants, water distribution systems and facilities to collect and recycle rain water in a bid to expand the nation's sewage treatment capability. The central government will encourage banks and financial institutes to channel more funds into projects that fight water pollution. The current collection system of a fee for pollution discharges needs to be improved. China has become the world's second-biggest market for wastewater treatment. By the end of 2008, it has invested more than 200 billion yuan in around 1,550 sewage treatment plants, which handle 86 million tons of wastewater every day. (China Daily 2009-12-2)
China speed' in clean energy business
During the last few years, China has taken "huge strides forward" in renewable energy. Within the last six years, China jumped to become the world's largest producer of solar energy panels, or solar photovoltaic (PV). Last year, China manufactured over 2,000 megawatts of solar PVs, accounting for more than 30% of global production. But in 2003, China's share was merely 1%.
At the end of last year, China also had more than 130 million square meters of solar water heaters, accounting for 76% of the world's total. Within the last six years, China's installed wind power capacity jumped to 12,170 MWs at the end of 2008, from 470 MWs at the end of 2002. Its annual wind turbine manufacturing capacity soared to 10,000 MWs from less than 100 MWs in 2003. (Xinhua 2009-12-13)
China to be world's 3rd largest wind power producer
China will become the world's third largest wind power producer this year, an official with the National Energy Administration said. The country's installed wind power capacity would total 20 million kilowatts (kw) this year. The capacity was 764,000 kw by the end of 2004 and increased to 12 million kw in 2008. The estimated figure will lift China to the third place following the United States and Germany. China has now a complete industrial chain in wind power industry. However, technology remained the bottleneck of Chinese wind power development.
(Xinhua 2009-12-31)
Grids pushed to tap clean power
China's top legislature adopted an amendment to the renewable energy law that requires electricity grid companies to buy all the power produced by renewable energy generators.
The amendment says the State Council energy department and the State power regulatory agency should supervise the purchases. The State Council energy department, in conjunction with the State power regulatory agency and the State Council finance departments, should "determine the proportion of renewable energy power generation to the overall generating capacity for a certain period". (China Daily 2009-12-28)
Telecom & IT
Chinese Premier Wen: to accelerate Triple Play deployment
Chinese Premier Wen Jiabao presided over a State Council executive meeting on 13th Jan, decided to accelerate the telecommunications network, radio and television networks and the Internet triple play. Pilot projects should be carried out to connect telecommunications, TV and radio networks from 2010 to 2012. Based on the pilot projects, other projects should be established to connect the three networks comprehensively from 2013 to 2015.(Jan 14, Xinhua)
China produces 600m mobile phones in 2009
China produced 600 million mobile phones in 2009, 7% over 2008, and the output of Shanzhaiji - a term used to describe domestically produced mobile phones imitating big brands - reached 145 million, according to statistics released by the consulting company AVC. Of the 600 million phones produced, 168 million were sold in China, up 6.5 percent compared with a year earlier. The company predicts that mobile phone sales in China will reach 185 million in 2010. (Jan 6, China Daily)
Carriers
China's 3G Market to Hit CNY7.4bn in 2010
China's 3G market is expected to hit CNY 7.4 billion in 2010, quadrupling the figure in 2009, and the nation's 3G user base in 2010 is predicted to sextuple the number in 2009. The nation's Big Three telecoms operators are predicted to pump more investments into 3G construction in 2010. Notably, the rapid 3G user growth in China will create a wide development opportunity for electronics component vendors and telecoms equipment sellers in the future. (Jan 5, c114)
China Mobile's investment in TD-SCDMA hits RMB 80 bln
China Mobile Ltd, the country's largest telecom operator, has invested RMB 80 billion in its 3G development, which is based on the home-grown TD-SCDMA standard, as of the end of 2009. The Chinese telecom giant has signed strategic agreements with provincial governments to develop TD-SCDMA technology, which are expected to boost investment totaling RMB 300 billion in the TD-SCDMA industry and create 100,000 jobs. (Jan 8, C114)
China Mobile set up a new department for terminals
After 2010 New Year's Day, China Mobile has announced China Mobile's first "terminal department" was established. This new "terminal department" will operate separate. Earlier, China Mobile's Terminal Management located in two departments, Department of Marketing and Department of Terminal Management. This new "terminal department" will manage teams of people dispersed about terminals across the whole company. (Jan 11, C114)
China Mobile TD-SCDMA users exceed 5 mln
China Mobile recently disclosed that the number of China's TD-SCDMA users has exceeded 5 million. Furthermore, the third phase project of the TD-SCDMA network has also been successfully completed, and currently, 70 percent of China's prefecture-level cities are now covered by the network. (Jan 4, People’s Daily)
China Mobile's Vice Chairman Removed from Post
Zhang Chunjiang, party chief and vice chairman of China Mobile, has been removed from his post for involvement in "serious economic issues," the Organization Department of the Communist Party of China Central Committee confirmed on Thursday. (Dec 31, Xinhua)
China Telecom Likely to Be Global Largest CDMA Operator
China's CDMA mobile phone sales volume approached 30 million in 2009, nearly quadrupling the highest historic record, disclosed Ma Daojie, general manager of eSurfing Telecom Terminal Co., Ltd., saying that the market share of his company has risen from 5% at the beginning of last year to 17%. In provinces of Jiangsu and Gansu and Xinjiang Autonomous Region, the figure reaches 30%. He predicts that China Telecom will become the world's largest CDMA network operator in terms of user base by the end of 2010. (Jan 11, TMCnet)
China Telecom Cuts into Mobile Reading Market
China Telecom has decided to set up a mobile reading base in Zhejiang Province, eastern China, expanding its presence to the fast-growing mobile reading market. (Jan 4, C114)
China Unicom's 3G Users to Reach 3Million
China Unicom (NYSE: CHU - News), the second largest Chinese wireless carrier, will exit 2009 with roughly 3 million 3G subscribers. The carrier has reportedly added 801,000 customers for its WCDMA technology based 3G services in Nov 2009, bringing its 3G subscriber base to 1.82 million. (Jan 5, C114)
Electronics
Tianjin Home To IBM's New Financing Deal In China
IBM's lending unit has signed a financing deal with Advanced Micro Devices and its distributor network to begin the flow of cash and credit in Tianjin Binhai New Area. The Tianjin government last year provided IBM Global Financing, the lending and leasing business segment of IBM, an exclusive license to provide accounts-receivable lending in the Tianjin Binhai New Area, a key economic development zone in China. (Jan 11, ChinaTechNews)
E-book sales to explode in China
Chinese hi-tech firm Hanwang Technology plans to sell 2 million e-book readers in 2010, which will be a 400% increase compared with 500,000 in 2009. According to research firm Display Search, China's e-reader sales will grow from 800,000 units in 2009 to 3 million units this year, accounting for 20 percent of global e-reader sales. Hanwang claims to control 95 percent of China's e-book market, and 20 percent of its products were sold abroad, mainly in Russia, Italy and Spain. Hanvon unveiled an array of new products for the U.S. market, including more than 10 eBook readers and electromagnetic touch tablet devices, at the International Consumer Electronics Show (CES). (Jan 7&8, Xinhua)
Lenovo unveils gadgets to tap mobile Internet
Lenovo launched three new models, including a smartphone, at the world's biggest consumer electronics fair in the United States to tap into new mobile Internet opportunities, the world's No. 4 PC maker said. Lenovo launched the LePhone, a smartphone that uses Google's Android system for mobile phones. It is the first new product to make its debut since the firm announced in November that it would acquire Lenovo Mobile, which it originally set up in 2002 and sold in 2008 for US$200 million. "The next big opportunity (in the industry) is the mobile Internet," Chief Executive Yang Yuanqing said during a news conference at the Consumer Electronics Shows in Las Vegas, Nevada. (Jan 8, Shanghai Daily)
China may achieve double IC production in 10 years
A recent research by SEMI indicates that China's focus on narrowing the gap between its IC production and consumption, could lead to doubling the country's global equipment and materials market in ten years. Given the size of the gap and the current policy actions by both national and provincial governments, this means a growing equipment and material purchasing over the next decade. In addition, new equipment purchasing by multinational chip companies with fabs or packaging and test plants in China will increasingly be made in-country by China R&D and process engineering staffs. (Jan 11, EETimes)
Equipment Manufacturers
Huawei '09 Sales Reach $30b
Huawei, a leader in providing next-generation telecommunications network solutions for operators around the world, recorded contract sales of more than $30 billion, generating revenue of $21.5 billion in 2009, and expects contract sales to reach $36 billion in 2010, Huawei recorded revenue of about $17 billion and $23.3 billion in global contract sales, up 46% year-on-year with over 75% of contracts from overseas. (Jan 5, C114)
Huawei to invest $500m in Indian R&D, manufacture
Huawei’s embattled Indian subsidiary is to spend $500 million on research and manufacturing in Bangalore. A company spokesperson has confirmed the five-year investment, which was announced by Huawei India CEO Max Yang in an interview with FT.com today. (Jan 11, TelecomAsia)
Huawei to Offer E-Books Tailored to Telecom Carriers
Huawei is to move into the e-book market after teaming up with China's Tianjin Jinke Electronics System. The two companies will jointly develop and market the e-publishing solutions tailored to telecom carriers. (Jan 11, mc21st)
ZTE bags Europe 3G network upgrades
The E-Plus Group and KPN Group Belgium have both chosen ZTE Corp. to supply HSPA-enabled 3G equipment to expand and upgrade their mobile networks. The China telecoms equipment provider will support both operators in all aspects of their customer-oriented voice and data network expansion strategy, focusing investment in the right technology at the right time. (Jan 5, C114)
China-based vendors prefer TD-SCDMA, CDMA to WCDMA due to cost concerns
China-based 3G handset vendors have generally offered more TD-SCDMA and CDMA2000 products than WCDMA in the China market, according to industry sources in Taiwan. This is because development of WCDMA models entails high patent licensing fees, which amout to 20-25% of production costs, while rates are lower than 10% for CDMA 2000 and even less for the home-grown TD-SCDMA standard. (Jan 6, DIGITIMES)
Internet
Online Video Firms Face Tough Times
China's online-video industry may require a facelift as domestic technology giants and government-backed media groups enter the fragmented but potentially lucrative market. Market entry by these mammoths casts a dark cloud over the future of domestic Youtube-like websites, such as Youku.com and Tudou.com, which are funded heavily by foreign venture-capital firms. Some people believed that these websites which have long been accused of offering pirated content uploaded by their users, and therefore they may need to shift their focus to specific market sectors like entertainment programming or user-generated content. (Jan 8, China Daily)
Baidu launches online video channel
The leading Chinese Internet search provider BAIDU Inc announced it will establish a new independent online video company to tap the growing domestic Internet market. The new company will provide copyrighted video content through an advertising-supported model. Baidu didn't elaborate when the new site will be launched. On Jan 4, NetEase, another leading Internet portal, also launched a video channel in collaboration with Joy.cn, a private video site focused on licensed movies and TV series. The news came shortly after China Central Television, Shanghai Media Group and Hunan Television, one of China's most popular providers of entertainment programs, announced plans to post their videos online. (Jan 7, Shanghai Daily)
E-commerce in China hits $36.6 bln: Survey
Internet shopping in China hit a staggering 250 billion yuan ($36.6 billion) in 2009 accounting for 1.97 percent of all domestic retail. About 100 million Chinese shop online, most of which through consumer websites, or C2C, like Taobao.com, but it is business-to-consumer platform, or B2C, growing faster, according a report released by the investigation agencies Anylysys and iResearch. (Dec 30, China Daily)
Medical & Healthcare
Cathaya injects $25m for medical services
Private equity fund Cathaya Funds, financed by renowned French industrialist Jacques de Chateauvieux, announce that it will inject $25 million into Asia Pacific Medical Group (APMG) to develop world class medical services in China. The funds will be used to develop premium medical care facilities throughout China. APMG has pioneered the concept of integrating quality global medical resources and technologies to enhance its medical services in China. Joint ventures have been set up with China's top medical organizations including Beijing Tiantan Hospital and Shanghai Huashan Hospital to expand APMG's operational effectiveness and market influence. (China Daily 2010-01-06)
GE Healthcare aims to cross billion barrier
According to Marcelo Mosci,Ppresident and CEO of GE Healthcare China, GE Healthcare China's business is to "cross the billion-dollar barrier (in terms of sales) next year for the first time". The company now has 4,000 employees here. It runs eight factories, mainly joint ventures, nationwide, with more than 600 engineers designing products in China and for China. It has a research and development center in Shanghai enjoying $200 million of investment, where scientists research new technologies for it global business, not just China alone. GE Healthcare China maintained two-digit growth over the last decade. So far China has contributed $4 billion to $5 billion in revenue to GE Healthcare, a $17-billion company. (China Daily 2009-12-21)
China to extend essential drugs program to more hospitals
Health Minister Chen Zhu said on 5 January that the country would equip at least 60 percent of State-run grass-roots health institutions with essential drugs by the end of the year, compared to the current 30 percent. Essential medicines refer to those which satisfy the health care needs and are available to the public at all times in adequate amounts and in appropriate dosage forms, at a price the public can afford. The Health Ministry last year issued a list of 307 essential drugs as part of its plan to create an essential medicine system in the coming 10 years to ensure people's access to essential drugs and cut their medical costs. (Xinhua 2010-01-06)
Watchdog moves to tighten scrutiny on drug market
China's State Food and Drug Administration (SFDA) has ordered local drug watchdogs to tighten market surveillance as it exposed eight unregistered websites marketing and selling medicines that could allegedly treat diseases such as high blood pressure. The websites, including the Beijing-based jwsjkw.com, had been engaged in illegal dealing of medicines in the name of non-existent organizations or legal drug manufacturers, said a statement on the SFDA website.
(Xinhua 2010-01-08)
China encourages building non-public hospitals
China is set to build non-public funded hospitals to diversify its medical system, according to an announcement today by the Ministry of Health. The government will provide policy, technology and training support to the non-public hospitals. (chinadaily.com.cn, 2010-01-07)
Other Sectors
Ministry of Railways to invest RMB 823.5 bln in rail in 2010
China plans to inject RMB 823.5 billion into the development of railways in 2010, including around RMB 700 billion in infrastructure, said Liu Zhijun, minister of the country's Ministry of Railways. Liu added that China invested around RMB 600 billion in railway development in 2009, 79% or RMB 265 billion more than in 2008. (Jan 11, CCID)
High-speed Rail Network Set to Take Global Lead
China is well on its way to becoming the high-speed railway capital of the world, with 33,000 km of these railways currently under construction and about 70 projects slated to launch this year. By the end of 2012, China's high-speed railway is expected to account for half of the world's total length. Currently, 2.1 trillion yuan ($300 billion) worth of rail construction projects are under way. (Jan 8, China Daily)
Beijing's per capita GDP estimated to exceed $10,000 in 2009
The annual per capita GDP in Beijing was expected to top 10,000 U.S. dollars in 2009 as the national capital expected an over 9.5 percent economic growth for the same year, said an official with the municipal economic planning agency. (Jan 7, Xinhua)
Report Highlights Corruption of China's SOE Executives
Thirty-five senior executives of China's large state-owned enterprises (SOE), such as former Sinopec chairman Chen Tonghai, faced corruption charges last year. A report by Faren Magazine, affiliated to the Legal Daily and overseen by the Ministry of Justice, examined 95 serious criminal cases of executives of both state and private companies last year. Thirty-one of the SOE executives were found to be involved in cases involving an average of 110 million yuan (16.18 million U.S. dollars). Of those, 28 were charged with taking bribes, 16 with embezzlement and eight with misappropriation of public funds. (Jan 5, Xinhua)
