ידיעון כלכלי - פברואר 2010 (i)

In this issue:

General News on Chinese Economy

Consumer Goods

Environment & Energy

Telecom & IT

Medical & Healthcare

Other Sectors

General news on Chinese economy

China's Jan CPI up 1.5%, PPI up 4.3%
China's consumer price index (CPI), a main gauge of inflation, increased by 1.5 percent in January from the previous year, according to the National Bureau of Statistics (NBS). The producer price index (PPI) increased by 4.3 percent year-on-year in January. (Feb 11, China Daily)

China's housing prices up 9.5% in Jan
Housing prices in China's 70 large and medium-sized cities rose 9.5 percent in January 2010 from a year earlier, up 1.3 percent compared to the previous month, said the National Bureau of Statistics. Prices of new houses in January rose 11.3 percent from the same month last year, and were up 1.7 percent from December 2009. (Feb 11, China Daily)

China Moves to Curb Housing Prices amid Bubble Fears
Chinese authorities have moved to curb soaring property prices, amid concerns that speculation and explosive growth in bank lending have caused an asset-price bubble. In one of the latest moves, several major banks have toughened lending rules for property developers and reduced 2010 loan quotas. (Feb 11, Xinhua)

Saudi Arabia, Angola, Iran Remain Top 3 Oil Suppliers to China
Saudi Arabia, Angola and Iran remained the three largest oil sources for China in 2009, with the three supplying 47.7 percent of China's total imports, according data released Wednesday by the General Administration of Customs (GAC). (Feb 10, Xinhua)

China's Bank Card Spending up 31 Pct in 2009
Chinese consumers spent 166 trillion yuan (24.3 trillion U.S. dollars) with their bank cards last year in China, up 30.5 percent from 2008, the People's Bank of China (PBOC), the central bank, said Monday in a statement on its official website.  (Feb 8, Xinhua)

23% of national fiscal revenues come from land sale in 2009
According to data released by the Ministry of Land and Resources (MLR) February 2, the gross national land sale revenues increased sharply in 2009 reaching 1.59 trillion yuan, an increase of 63.4 percent year-on-year. The data issued by the Ministry of Finance in January shows that China's national fiscal revenues were expected to equal 6.85 trillion yuan in 2009, indicating that 23.22 percent came from land sale revenues. (Feb 4, People’s Daily)

China's land sale revenue close to $233 bln in '09
Land sale revenues for China's local governments rose more than 60 percent in 2009 as the country's property market surged, figures from the Ministry of Land Resource revealed. Local governments generated 1.59 trillion yuan ($233 billion) from the sale of 209,000 hectares of land in 2009. Of that, 103,000 hectares was sold to real estate developers, up 36.7 percent year on year. (Feb 3, Xinhua)

Consumer Goods

China Finds No Sweet Solution to Sugar Shortage
China, the world's second-largest sugar consumer next to India, will see a sugar deficit of more than 2 million tons this year. China may sell its sugar reserves to cool the market and avert a sugar shortage after poor weather damaged sugarcane fields and jacked prices up to a three-year high. (Feb 11, China Daily)
 

Jewelers See Bright Year Due to Expo
Jewelers in China are banking on 2010 World Expo to boost revenues by introducing licensed Expo diamond and jade pieces. The Diamond Administration of China is coordinating with Expo organizers to introduce more diamond jewelers as licensed Expo merchants. (Feb 6, Shanghai Daily)

H&M China sales up to $219b
The Swedish fashion retailer H&M saw its China sales reach SEK 1.61 billion ($219.01 million) in 2008/2009 up 83 percent year-on-year, or 51 percent in local currency, the company said in its annual report. (Feb 2, China Daily)

Toasting the future of China's wine industry
Sales of wine in China last year were 44 billion yuan ($6.44 billion) at retail price, up 12 per cent on 40 billion yuan in 2008, according to research by global management consultants AT Kearney.
Although demonstrating annual double-digit growth in recent years. China's wine consumption at 0.4 liters per person a year is still quite low in the international league table. If China's per capital wine consumption was to only increase slightly because of the scale of the population it could easily shift the center of gravity of the world's wine industry. (Feb 1, China Daily)

Luxury goods demand may peak by 2015
China is poised to become the world's largest luxury goods market in the next five to seven years, according to Boston Consulting Group in its latest survey of Chinese consumer trends release. "By 2015, 29 percent of global luxury product consumption will come from China, making it the world's largest luxury market," said Vincent Lui, principal of Boston Consulting's Hong Kong office. (Jan 22, China Daily)
 

Environment & Energy

China to invest 12 bln yuan into rural environment protection 
China's central government plans to spend 12 billion yuan (1.76 billion U.S. dollars) on rural environment protection in the three years to 2012, according to Ministry of Finance. MOF will work with the Ministry of Environmental Protection (MEP) in the coming three years to help treat rural pollution, a move expected to benefit 100 million rural population. (2010-1-29 Xinhua )

KWIG Is Included in 2009 China Top 10 Low Carbon Contribution International Enterprises
At the first Annual Meeting of Low Carbon China Forum on Jan. 21, 2010 Kardan Water International Group (KWIG) received the Award as one of 2009 Top 10 Low Carbon Contribution International Enterprises in China with three new records: 1. The only professional water company in the List; 2. The only Israeli company in the List; 3. The youngest international company in the List. (2010-1-26 chinawater.net)

Chinas investment in water conservancy projects reaches record high 
China's investment in water conservancy projects reached a record high of 142.7 billion yuan (20.9 billion U.S. dollars) in 2009, said Minister of Water Resources Chen Lei.  The total spending more than doubled the investment of 65.54 billion yuan in 2008.  The massive investment last year had pushed forward maintenance and upgrading of 6,124 reservoirs around the country, and helped nearly 61 million people gain access to safe drinking water. In 2009 alone, another 3 million kilowatts were added to the installed capacity of rural hydro power plants, bringing the total capacity to 54 million kw. The annual power output exceeded 150 billion kilowatt-hours.
(2010-1-18 Xinhua)

Pollution delays water diversion
Shandong's efforts to clean up clogged waterways prove futile. The Eastern Route of the South-to-North Water Diversion Project, one of the world's largest water projects, has been delayed by about five years due to problems associated with water pollution, officials in east China's Shandong province said. Construction of the Eastern Route of the project, which aims to divert water from China's rainy south to its dry north, is now expected to be completed in 2013. According to the original plan, water was expected to reach Shandong in 2007. But the quality of water in major waterways remains unqualified for diversion. Paper mills, chemical plants, pharmaceutical factories and other polluting enterprises dot the areas surrounding major waterways in the province. (2010-2-8 China Daily)

Seawater plan selected to quench city's thirst
Beijing may divert seawater from nearby provinces as an immediate solution against the scarcity of water in the populated city. Studies on the diversion routes, desalination methods and cost evaluation have been ongoing. The 1,200 km South-to-North water diversion project, planned to feed more than one billion cu m of water to Beijing this year, was delayed to 2014 due to relocation issues in southern provinces. The delay of the massive diversion project has forced authorities to come up with a quick and feasible solution, such as utilizing seawater.
(2010-01-28 China Daily)

China to increase LNG import
China would make efforts to import more liquefied natural gas (LNG) to cope with supply shortage, said head of China's National Energy Administration (NEA). China would speed up the building of LNG terminals, natural gas pipelines, and storage facilities in the country's coastal areas. China had been diversifying its gas import sources which included Malaysia, Qatar, Papua New Guinea in addition to Australia and Indonesia.  (2010-02-08 Xinhua)

Telecom & IT

Subsidies to Boost China's 3G Handset Market in 2010
Driven by aggressive subsidies from wireless carriers that reduce consumer pricing for cell phones, domestic shipments of 3G handsets in China are expected to rise by nearly a factor of six in 2010, according to iSuppli. Domestic shipments of 3G handsets in China are expected to amount to 42.97 million units in 2010, up from 7.2 million in 2009. Chinese carriers plan to provide more than RMB50 billion, or $7.3 billion, worth of subsidies to promote the domestic 3G handset market in 2010, according to iSuppli. (Feb 5, Cellular-News)

TD-SCDMA Industry Alliance to attract overseas carriers to join
In more than 70 members of TD-SCDMA Industry Alliance, there is only a single mobile operator – China Mobile. compared with so many operators in the international organization such as GSMA and CDG. But now, this phenomenon has changed in yesterday's "TD-SCDMA Innovation Conference". South Korea's SK Telecom and Ghana's NetAfrique joined the TD-SCDMA industry Alliance, and they are also in the construction of the TD trial network. (Feb 5, c114)

China builds world's largest mobile TV network
China Broadcast Corp, a subsidiary of the State Administration of Radio Film and Television (SARFT), announced that China Mobile Multimedia Broadcasting has begun operations in 280 cities of China, becoming the world's largest mobile TV network. The Beijing-based company also said it will permit users to have six channels in China for free on their mobile terminals in the next three years. (Feb 3, China Knowledge)

Carriers

China Mobile dominates handset-based e-mail services in 4Q09
There were 115.8 million active users of handset-based e-mail services in China as of the end of fourth-quarter 2009 and revenues from the services in the quarter totaled 430 million yuan (US$63.0 million), according to Analysys International. China Mobile accounted for 71.03% of the active users and 77.97% of the total revenues. (Feb 6, C114)

China Telecom to build production base for mobile reading
China Telecom plans to establish a plant to produce electronic book readers in eastern China's Zhejiang province, and is negotiating with telecom equipment manufacturer Datang Telecom Technology in joint developing the devices. It is widely believed that e-book readers will gradually spread across domestic market, and e-book readers capable of accessing 3G networks will be the focus of Chinese telecom operators' competition. Therefore, China Telecom expects to make deployment early. (Feb 9, C114)

China Telecom to Increase IPTV Trial Cities
The State-owned Assets Supervision and Administration Commission (SARFT) has agreed to allow China Telecom to apply to SARFT for approval of an IPTV license to expand its IPTV trial from the current ten cites to more cities and industries. SARFT has already awarded 3G video licenses to eight companies, including China Central Television, Shanghai Media Group, People's Daily and Xinhua News Agency, qq.com reported separately citing unnamed sources. (Feb 3, CCID)

Electronics

China to spur private investment in electronic information
The Ministry of Industry and Information Technology will consider making policies to encourage private investment in the electronic information industry, it said in a report released yesterday.
The MIIT predicts that boosting private investment will benefit the electronic information industry. The government is likely to carry out measures to optimize the investment environment for private capital, widening the field and lowering the costs. (Feb 4, China Knowledge)

Equipment Manufacturers

Huawei plans to launch multiple Android devices
Huawei is planning to launch a number of Android-based devices, including smartphones and "home-use Internet devices" at Mobile World Congress. The Google-backed platform is nothing new to the Chinese vendor. Huawei has already launched the U8220 or T-Mobile Pulse, which is one of the cheapest Android-based smartphones available. (Feb 8, C114)

UTStarcom to move from Alameda to China
UTStarcom announced that it has entered into agreements for a strategic relationship with Beijing E-town International Investment and Development Co., Ltd (BEIID), an investment company established by the Beijing Municipality which includes an investment of $48.5 million by BEIID and two unrelated investment funds, Ram Max Group Limited and Shah Capital Management. The three investment parties are advised by Yellowstone Capital. As part of the investment, UTStarcom will issue approximately 22 million shares of common stock at a price of $2.20 per share, with BEIID investing $25 million, Ram Max Group Limited investing $12.5 million and Shah Capital investing $11 million. (Feb 3, C114)

ZTE Sees Sizable Increases in Worldwide Patent Applications in 2009
ZTE has reported that the Patent Protection Association of China (PPAC) recently released patent application rankings for 2009 with ZTE, Huawei and Hongfujin claiming the top three spots on the ranking list. With 5,719 patent applications, ZTE widened its lead over its competitors, claiming the top spot for the first time. The number of patent applications filed by ZTE in 2009 was up over 20% compared to the number filed in 2008. Meanwhile, ZTE also saw its overseas patent applications increase over 200%, hitting 1,164, achieving the fastest growth of patent applications in the world. (Feb 9, C114)

Internet

China's game industry booms
China’s game industry, a new and fast-growing industry in the country's service sector, exported US$109 million worth of online games in 2009, 53.9% more than in 2008. There were 64 products from 29 online game companies sold overseas last year. (Feb 3, CK)

Baidu to build Int'l headquarters
World's largest Chinese search engine Baidu.com signed Monday an agreement with Shenzhen city government to build its international headquarters in this boomtown of southern Guangdong province. The entrance of Baidu.com will boost Shenzhen's development and enhance Baidu's influence in southern China and even southeastern Asia, said Wang Rong, Shenzhen's acting mayor, at the signing ceremony. (Feb 2, Xinhua)

Medical & Healthcare

China encourages building non-public hospitals
Roche diagnostic sales may rise 20% in Asia on China
Roche Holding AG expects sales at its diagnostics unit to climb more than 20% in Asia-Pacific markets this year, helped by healthcare spending in China.  China is the biggest market in Asia for Roche's diagnostics business, with revenue rising almost 50 percent in 2009. The division's Asia-Pacific sales expanded 25% last year to 986 million Swiss francs ($924 million) in constant-currency terms, about double the industry's growth. (2010-02-05 China Daily)

Chinese cabinet passes public hospital reform guideline
China has decided to start public hospital reform with pilot programs in selected cities or districts in each province, autonomous region and municipality. The guideline on public hospital reform was discussed and approved by an executive meeting of the State Council. The public hospital reform is aimed to establish a reasonable, effective and optimized medical service system, and to fully motivate all medical workers to provide the public with safe, effective, convenient and affordable medical services, according to a statement issued after the meeting.
(Xinhua 2010-02-04)

Other Sectors

Disney, Google to invest in China's largest bus digital media
A consortium from the United States led by Disney is planning to invest in Bus-Online Co., Ltd., hoping to build a new platform for Disney's publicity in China. In addition to Disney, Google is also an investor in the consortium. (Feb 9, Oriental Morning Post)

China gears up for the advent of electric cars
Chinese companies are gearing-up to be among the sale leaders in what has been touted as the next big trend in the car industry: the electric car. The big car makers are all working on electric models and Chinese brands such as Chery, Great Wall Motors and BYD are said to be in the front row of manufacturers seeking to bring the car to the market. (Feb 4, CCID)

China's ad market now worth more than RMB 500 bln
China's advertising market was worth RMB 507.52 billion at the end of last year, 13.5% more than a year earlier, and the country is expected to see a year-on-year increase of 10% in spending this year, said Tian Tao, vice president of CTR, which has been doing market research in China with Kantar Media for more than 15 years. (Feb 3, CK)