ידיעון חדשות כלכלי - יוני 2010
General news on Chinese economy
Consumer Goods
Environment & Energy
Telecom & IT
Medical & Healthcare
Other Sectors
General news on Chinese economy
Chinese Manufacturing expanded at slower pace in May
"The economy may continue to maintain relatively fast growth, but the growth rate may slow," Zhang Liqun, a researcher at the State Council's Development and Research Center, said in the statement from the logistics federation. "The May PMI may be an indication that the economic rebound is stabilizing." Chinese policy makers are trimming stimulus this year after the $1.4 trillion lending binge that revived growth in 2009. Officials are targeting a 22 percent reduction in new loans and have sold bills and raised banks' reserve requirements to suck money out of the financial system. Restraining inflation expectations and keeping housing affordable are two of the government's key goals after urban property prices jumped a record 12.8 percent in April from a year earlier. Wuhan Iron & Steel Group, the nation's third-biggest steelmaker, said May 26 that demand for steel is declining, partly because of the curbs on property loans. (June 1st /Xinhua)
"The economy may continue to maintain relatively fast growth, but the growth rate may slow," Zhang Liqun, a researcher at the State Council's Development and Research Center, said in the statement from the logistics federation. "The May PMI may be an indication that the economic rebound is stabilizing." Chinese policy makers are trimming stimulus this year after the $1.4 trillion lending binge that revived growth in 2009. Officials are targeting a 22 percent reduction in new loans and have sold bills and raised banks' reserve requirements to suck money out of the financial system. Restraining inflation expectations and keeping housing affordable are two of the government's key goals after urban property prices jumped a record 12.8 percent in April from a year earlier. Wuhan Iron & Steel Group, the nation's third-biggest steelmaker, said May 26 that demand for steel is declining, partly because of the curbs on property loans. (June 1 /Xinhua)
China unlikely to see serious inflation in short term
Growth in China's consumer price index (CPI) is likely to see a reverse "V" shape this year and the possibility of a serious inflation is easing, said Ha Jiming, chief economist at the China International Capital Corp (CICC). The CICC has cut its estimate for China's economic growth this year to 9.5 percent from 10.5 percent, he said. Interest rate hikes would be unlikely this year as growth in consumer prices was expected to fall in the second half, he said (May 31st/Xinhua).
China to continue proactive fiscal policy
BEIJING - China's Minister of Finance Xie Xuren said Friday that the government would stick to a proactive fiscal policy to buoy economic and social development as the country faced uncertainties, both home and abroad. The current domestic and international situation was "still very complicated," Xie said at a conference in Beijing, adding that the world economic recovery was still fragile. He said the government would stick to a proactive fiscal policy and make the measures introduced since the crisis, more flexible and better-targeted. (May 29th/Xinhua)
China opens index futures to foreign investors
Beijing decided to allow qualified foreign institutions to trade in its stock-index futures, in a measure to open its capital market to overseas investors. The permission was deemed a result of this week’s two-day China-US Strategic & Economic Dialogue (SE&D) in Beijing. The move will widen investment options for overseas institutions in the world’s third-biggest stock market by value. QFII, or qualified foreign institutional investors, have been able to invest in the yuan-denominated Chinese A shares. The total combined quota for QFII funds is US$30 billion. The Shanghai Composite Index has slumped 20 percent this year after surging 80 percent in 2009.
Opening up the futures markets to foreign investors may reduce volatility by allowing more participants to place strategic bets, analysts said. (May 27th /People's Daily Online)
Consumer Goods
$512.45 billion: The amount of China's credit card transactions in 2009
$2.33 billion: The volume of Beijing's catering industry sales in Q1 of 2010
Home appliance trade-in program to go national
China will extend its home appliance trade-in program through 2011 and may modify the number of products available under the program, Bloomberg reported, citing a statement by the Ministry of Commerce. The program will gradually be extended across the nation from the original nine provinces and cities currently offering subsidies under the program. Since the project launched, sales of televisions, refrigerators, washing machines and computers have surged in the designated regions. Gome Electrical Appliances (0493.HK) and Suning Appliance (002024.SH) reported that sales volumes of products covered by the program increased by 94% and 62% respectively in the nine areas. Unit sales from trade-ins accounted for more than half their total sales. (June 6th /China Economic Review)
Environment & Energy
PetroChina to spend $1.5b on coal methane capacity
PetroChina will invest more 10 billion Yuan ($1.46 billion) in coming years to build 4.5 billion cubic meters of coal seam gas production capacity in China, a company official said. "We aim to complete capacity building by 2013 and boost actual output to that level by 2015," Jie Mingxun, general manager of PetroChina Coal bed Methane Gas Co told an industry forum in Beijing on May 28. PetroChina has two coal seam gas subsidiaries. Huabei Oilfield was focused mostly in Qinshui Basin, northern Shanxi and PetroChina Coal bed Methane Gas Co worked in other regions. (June 2/China Daily)
PetroChina will invest more 10 billion Yuan ($1.46 billion) in coming years to build 4.5 billion cubic meters of coal seam gas production capacity in China, a company official said. "We aim to complete capacity building by 2013 and boost actual output to that level by 2015," Jie Mingxun, general manager of PetroChina Coal bed Methane Gas Co told an industry forum in Beijing on May 28. PetroChina has two coal seam gas subsidiaries. Huabei Oilfield was focused mostly in Qinshui Basin, northern Shanxi and PetroChina Coal bed Methane Gas Co worked in other regions. (June 2/China Daily)
Promise, problems found in China's wind power
China's wind energy resources are so abundant that the exploitable wind power reserve is about 1 billion kilowatts in a 1:3 land to sea ratio. In the past two years China has continually upgraded its wind power capacity and now it ranks first in Asia and fourth worldwide, but there are still many setbacks that prevent China from fully utilizing its wind resources. China has not mastered the core technologies of wind power generation, and there are still many other problems badly in need of solutions. This is mainly because of outdated power grids, insufficient technology; Second, China has lagged behind certain developed countries in industrial planning as well as investigating and valuing wind energy resources. Furthermore, government should introduce more preferential policies in aspects such as investments, taxes and technological development. (June 1st /People's Daily Online)
PetroChina tops Financial Times' Global 500 list
PetroChina Co., China's largest oil producer, became the first Chinese company in history to top the Financial Times' Global 500 list of largest enterprises ranked by market value. According to the Financial Times, Petro China’s market value was 329.3 billion U.S. dollars as of March 31, which was 13 billion U.S. dollars higher than ExxonMobil, the second largest. (June 1st/People’s Daily On line)
China clean energy goal will require hydro projects
China must starts building big hydropower projects soon, or fail the clean energy development targets for 2020, China's top energy official said, supporting industry calls for fast project approvals. China has 197 gigawatts of hydropower generating capacity, or 23 percent of its total installation. Coal is the source of more than three quarters of electricity. China pledged ahead of the Copenhagen summit last year that it would cut the amount of carbon dioxide produced for each unit of national income by 40-45 percent by 2020 from 2005 levels. But he said hydropower project approvals had almost come to a halt due to environmental, immigration and management reasons, with new approvals amounting to only 14.07 gigawatts since 2007, or less than 5 gigawatts each year. (May 30th/China Daily)
China accelerates South-North water project
China is accelerating the construction of the south-to-north water diversion project, a massive project aimed at diverting water to meet growing demand in the parched north, project authorities said. The project will divert water from the Yangtze River to the dry north via three routes: eastern, middle and western. A number of construction projects have been completed or are near completion. By the end of March, 40.896 billion yuan (5.99 billion U.S. dollars) had been spent in constructing the middle and central routes, from the earmarked total of 90.6 billion yuan. (2010-5-31 Xinhua)
Suez Environnement: Wins 30-Yr Water Contract In China
Suez Environnement through its subsidiary Sino French Water, together with Chongqing Water Group and Changshou Chemical Industrial Park Development and Construction Company Ltd., has secured a new 30 year concession, with a possible 20 year extension, for industrial water services in Chongqing Changshou Chemical Industrial Park via a new joint venture of the three parties. (2010-
5-1Dow Jones)
Telecom & IT
Telecom
Turnover of Telecoms Industry Up 21.7%
The telecoms industry recorded a 21.7 percent year-on-year increase in total turnover to 967.38 billion Yuan in the first four months of the year, according to the Ministry of Industry and Information Technology. Revenues from the telecom industry's main businesses in the first four months rose 5.7 percent year-on-year to 284.55 billion Yuan, of which the mobile sector accounted for 68.14 percent or 193.88 billion Yuan, an increase of 11.5 percent year-on-year. China had 111.02 million broadband users as of end April, including 7.795 million new users added in the first four months. (June 2nd/C114)
China Preps for IP Triple Play
The government of mainland China has formulated a general plan to launch triple-play services, integrating telecom networks, broadcast and TV networks, and Internet together. From 2010 to 2012, China will focus on the trial integration of broadcast and TV services and telecom services (including Internet services), dealing with any related policies. From 2013 to 2015, based on the trial experience, China will promote the integration nationwide. (June 2nd/C114)
Carriers
China Unicom's UniStore Set to be Operational This June
UniStore, the online app store under (Hong Kong) Ltd., has by far put more than 780 applications on the shelves, and it is scheduled to come into official operation in the second half of this year after a period of inner tests. These applications include 335 mobile phone themes, 230 mobile games, and a wide selection of reading, entertainment, and life tools. Lu Yimin, general manager of China Unicom, discloses that UniStore is very likely to come into service in June or July this year. To enhance the app store' allure to developers, UniStore will give 30% of its profits to them. (June 1st/C114)
China Mobile parent names new president
The state-run parent of China Mobile said on Monday that it has named a new president, Li Yue, to replace Wang Jianzhou, who will assume the newly created post of chairman. Analysts said the shuffle was part of a move to make China Mobile's parent company, China Mobile Communications Corp, more systematic and business-like, including the new formation of a board of directors that Wang will head (May 27th/C114)
China Mobile To Partner With Bank Of Shanghai On Mobile Payment
China Mobile is expected to reach an agreement with Bank of Shanghai on the promotion of its mobile payment business, reports Chinabyte. China Mobile started the pilot program of its mobile payment business in Shanghai in September 2009. It launched the “Expo Express” mobile payment business on 25 January, 2010.According to the report, more than 1,400 stores in Shanghai accept payment via mobiles. Mobile payment services are available in 11 subway lines in Shanghai and in the city's Expo express buses. China Mobile currently has about 130,000 users of its mobile payment services. The company expects to have more than 200,000 users of its mobile payment services before the end of the year. (June 7th /C114)
Equipment Manufacturers
RIM to offer BlackBerry Storm through China Telecom
Research In Motion Ltd will start selling its BlackBerry Storm smart phone with China Telecom Corp as it tries to gain an edge over rival China Unicom (Hong Kong) Ltd, the local carrier of Apple Inc's iphone. China Telecom will offer the touch-screen Storm for its business users starting Monday, according to an e-mailed statement. The carrier will initially make the e-mail device available in 16 of the country's 31 provinces. No details on prices were given. (May 18th/ China Daily)
ZTE Completes the World's First TD-LTE S1/X2 Interface Conformity Test
ZTE Corporation, a leading global provider of telecommunications equipment and network solutions, and China’s Ministry of Industry and Information Technology (MII) today announced they have completed the world’s first S1/X2 Interface Conformity test, an important development under MII’s initiatives for the deployment of TD-LTE. ZTE has taken the lead in the TD-LTE development and has attained significant achievements in the industry. To date, ZTE has deployed five commercial LTE networks and built 40 LTE trial networks for leading telecom operators in Europe, North America, Asia-Pacific and MEA. With an aim to advance the telecommunications market into 3.5/4G, ZTE will continue to drive innovation and introduce innovative and cost-efficient solutions to the market. (June 1st/C114)
Huawei Wins More Than 60% Market Share of China Mobile IMS Deployment
Huawei, a leader in providing next-generation telecommunications network solutions for operators around the world, today announced that it obtained the largest market share of China Mobile IMS (IP Multimedia Subsystem) deployment. After ranking first overall in technical capabilities tests, Huawei was awarded contracts in 19 provinces, serving more than 60% of China Mobiles subscriber base for the entire project. Four other vendors share the remaining portion. As of February 2010, Huawei won more than 120 commercial and trial IMS contracts. (May 25th/C114)
Internet
China issues white paper on Internet policy
China will not ease state control over what can be said online and will brook no foreign criticism of its rules, according to a government white paper released on Tuesday after months of wrangling about freedoms for Web users. The 31-page white paper, which called the Internet "a crystallization of human wisdom", said its usage in the most populous nation on earth was "transforming the pattern of economic development”. The white paper said China would accept no outside criticism of its controls. "Within Chinese territory the Internet is under the jurisdiction of Chinese sovereignty. The Internet sovereignty of China should be respected and protected," it said. (June 7th/C114)
Medical & Healthcare
Affordable medicines top agenda
BEIJING, May 31 -- President Hu Jintao has called for more efforts to establish a national system of essential medicines to offer affordable and safe medicines for all people. So far, all provinces, municipalities and autonomous regions have set up government-led not-for-profit online purchasing platforms. Central buying was organized at provincial levels. Building a drug system to guarantee accessibility to essential drugs is part of the country's three-year plan in the latest round of medical reform unveiled in April 2009. (June 6th/Xinhua News)
Charles River to buy WuXi PharmaTech
Charles River Laboratories International (CRL.NYSE) has agreed to buy China's WuXi PharmaTech (WX.NYSE) for US$1.6 billion in what is set to become the largest foreign takeover of a Chinese company, Bloomberg reported. The acquisition would give the US firm a foothold in the Chinese market, where revenue from drug-testing services is growing by up to 30% a year. WuXi PharmaTech has testing facilities in Shanghai, Suzhou and Tianjin. It counts Pfizer, Merck, Novartis and AstraZeneca among its customers. Charles River will pay US$21.25 a share – US$11.25 in cash and US$10 in stock – for each WuXi American depository share. The offer is 28% more than WuXi's closing price on April 23. James Foster, CEO of Charles River, noted that all the major international drug companies are building out their operations in China. He cited lower costs and a large supply of trained scientists as the principal attractions. (April 27th/Economic News)
Other Sectors
Automobile
Honda hit by second China factory strike
Workers have gone on strike at a Honda (HMC.NYSE, 7267.TYO) exhaust systems plant in China, apparently emboldened by the recent two-week strike another of the Japanese carmaker’s factories, the South China Morning Post reported. About 250 employees at Foshan Fengfu, which serves Guangqi Honda Automobile, a joint venture with Guangzhou Auto’s Denway Motors (0203.HK), are demanding better wages and paid overtime. The earlier strike led to a suspension of production at four Honda assembly plants in China. Honda said supplies remained stable but it would be hard to say what the effect would be should the strike continue. (June 8th /China Economic News)
China to subsidize hybrid, electric vehicle purchases
The Chinese government will subsidize purchases of plug-in hybrid and battery-powered cars in a pilot program, the Wall Street Journal reported. Buyers of purely electric vehicles will receive up to US$8,8000 and buyers of qualified gasoline-electric hybrids will receive US$7,333. The two-year program will start this year in Shanghai, Hangzhou, Changchun, Shenzhen and Hefei. Auto executives said the subsidies are likely to only be applied to domestic brands, although the government's statement was not explicit on the point (June 2nd/China Economic News)
