ידיעון חדשות כלכלי - יולי 2010
In this Issue:
Events
General News on Chinese Economy
Consumer Goods
Environment & Energy
Telecom & IT
Medical & Healthcare
Other Sectors
Events
July 2010: Israeli delegation to participate SINOCES 2010
Organized by the Israel Export and International Cooperation Institute (IEICI), the Israeli Trade Mission of China, the Israeli delegation will participate in SINOCES 2010 which will be held in Qingdao 8-11 July at the Qingdao Shandong Exhibition Center. (www.sinoces.com). The Israeli exhibitors will display the advanced electronic and high tech technologies. Apart from exhibition at the Israeli national pavilion, the Israeli companies will present at the seminar and will have pre-arranged one-on-one meetings with potential Chinese partners. Welcome to visit the Israeli National Pavilion and meet with Israeli companies. From July 11-13, Israeli companies will go to Shenzhen to meet more Chinese partners.
China Hi-Tech Fair Overseas Seminar held in Israel
From June 7 to June 9, 2010, the Seminar on Sino-Israel Hi-Tech Collaboration of China Hi-Tech Fair was successfully held in Tel Aviv and Jerusalem. The Seminar held in Israel for the very first time has provided an excellent opportunity for the Chinese companies to explore Israel. The Chinese companies are deeply impressed with the great achievements that Israel has made in the hi-tech sector and could feel the strong interests to Chinese market from their Israeli counterparts. 103 Chinese delegates from 8 cities of Guangdong, Henan, Sichuang and Hubei together with 120 entrepreneurs from Israel attended the Seminar. 90 one-on-one meetings were arranged. Through the meetings and exchanges with the Israeli companies, the Chinese companies such as Tencent, Livzon Pharm, Caska, Fenghua Technology, Truths Electronics, BioCare Technology and Shenzhen Capital Group fruitfully returned back with their potential partners in Israel. China Hi-Tech Fair has been held once a year in November since 1999, and it has become the No. 1 exhibition of Hi-Tech industry in China, and also a best platform for international hi-tech cooperation.
General news on Chinese economy
China’s Central Bank has announced it will reform the yuan exchange rate regime
The People's Bank of China made the decision based on the recent economic situation, market developments at home and abroad, and the balance of domestic payments. The bank says stability of the yuan exchange rate has played an important role in mitigating the impact of the global financial crisis. It also stressed it has contributed significantly to the Asian and worldwide recovery, and demonstrated China's efforts in promoting global re-balancing. The central bank will further enable markets to play a fundamental role in resource allocation, promote a more balanced BOP account and maintain a stable yuan exchange rate. (June 20/Xinhuanet)
China’s industrial profit up 81.6% in first five months
Profits of China's industrial enterprises jumped 81.6 percent year on year for the first five months this year, China's National Bureau of Statistics (NBS) said Friday. Profits of the industrial firms totaled 1.54 trillion yuan (226.82 billion U.S. dollars) from January to May, and revenues increased 38.2 percent to 25.35 trillion yuan, the NBS said in a statement. The figures cover state-owned and private firms with annual turnover exceeding five million yuan, according the NBS.State-owned industrial firms accounted for more than one third of the total profit, reaching 524.38 billion yuan, 118.9 percent higher than the same period last year. Most of the 39 major industries registered profits growth, while the petroleum processing, coking and nuclear fuel processing sectors saw profits shrinking by 8.9 percent on average, according to the NBS. (June 25th/Xinhua
Consumption in China may top Japan by 2015
China may see its final consumption reach 5 trillion U.S. dollars in value by 2015, surpassing Japan as the world's second largest consumer, a senior government official has projected. Wang Xuanqing, deputy director of the Department of Commercial Services Administration with the Ministry of Commerce, made the forecast Friday based on an average annual 11.6-percent growth in consumption in China since 2000. However, Wang said China's domestic consumption was still weaker per capita than that in many developing nations. Data from the country's National Bureau of Statistics showed China's retail sales rose 18.7 percent year on year to 1.25 trillion yuan (183 billion U.S. dollars) in May, with total retail sales up 18.2 percent to 6.03 trillion yuan in the first five months. (June 25th/Xinhua)
Consumer Goods
RT-Mart considers Hong Kong IPO
RT-Mart China, the country’s largest hypermarket chain by market share, is eyeing a US$800 million initial public offering in Hong Kong, Bloomberg reported, citing two people familiar with the situation. The company, which originated in Taiwan and is now part-owned by French chain Groupe Auchan, generated sales worth US$5.7 billion in 2009, or 10.7% of total spending at China’s hypermarkets. Carrefour (CA.Euronext) and Wal-Mart (WMT.NYSE) had market shares of 9.2% and 8.6% respectively. Both the French and US chains have identified China as a key growth market and RT-Mart is expected to use the listing proceeds to fund further expansion. The company may open up to 35 new stores annually over the next three years, which would bring its total to 210 by 2012. According to Chloe Wu, an analyst at Fubon Securities, RT-Mart owns only 20% of its stores in China, so it might be tempted to buy up land for new outlets. (June 8th/China Economic Review)
Environment & Energy
China could become largest coal importer in 2010
The International Energy Agency said that China will become the world's largest importer of thermal coal this year, despite earlier expectations that it would not overtake Japan – the largest importer at present – before 2015, the Financial Times reported. Imports of coal hit 47.5 million metric tons in the January-May period, a 120% year-on-year increase. Demand from China has helped to push coal in Europe to prices not seen since 2008; Asian benchmark Newcastle coal has risen to US$100 per ton. The agency also said that demand from China would help to push demand for oil up by an average of 1.4% through 2015. Demand growth in China, India and the Middle East would offset flat or declining growth in the rest of the world, the agency said. (June 24th/China Economic News)
Applied Materials sees growth in China
Applied Materials, the world's biggest supplier of solar panel production machines and computer chips, sees China as remaining an important target for growth, the Wall Street Journal reported. Chief technology officer Mark Pinto said: "I thought personally that this year was going to be a down year, but it will be bigger than two years ago." The company earlier reported a swing to net profit in the second fiscal quarter ended May 2 after a doubling of revenue when an uptick in demand for mobile phones and PCs made up for shortfalls in the solar panel market. Applied Materials is planning for an increase in Chinese demand for solar power. The company signed an agreement to sell equipment to China's ENN Solar Energy for a new solar power farm in Inner Mongolia which is to be built by China Energy Conservation & Environmental Protection Group. (May 28th/China Economic News)
Goldwind wants to become top-three global turbine producer
Xinjiang Goldwind Science & Technology (002202.SZ) said ahead of its Hong Kong listing that it aims to become one of the world’s top three wind turbine manufacturers within five years, Bloomberg reported. The company expects to raise more than US$1 billion through the share sale. It will spend about 40% of the proceeds on building plants, 24% on overseas expansion, 15% on design and development, 11% on repaying loans and hold 10% as working capital. Goldwind’s turbine sales surpassed 2 gig watts (GW) last year, up from 1.37 GW in 2008. The company expects profit to rise at least 26% to US$322 million this year after generating revenue of US$1.56 billion in 2009, 99% of which derived from China. CEO Wu Gang said the firm wants to increase sales in the US and Europe. It already has a wind-farm project in the US and a production base at Vensys, a subsidiary based in Germany.
China to double natural gas energy
China will endeavor to double the weighting of natural gas in its total energy consumption basket over the next five years to reduce its reliance on coal, Wu Yin, Deputy Head with the National Energy Administration (NEA) said at an energy forum in Beijing. Natural gas accounts for only 4% of energy in China now. The country will raise that to 8% during the 12th Five-Year Period (2011-2015). China is set to enhance exploration efforts, build gas reserve projects and increase natural gas imports to meet the goal. China currently relies on coal for about 70% of its total energy.
(Xinhua, June 20, 2010)
China uses seawater desalination technology at nuke project
Seawater desalination technology is being used at the Hongyanhe nuclear power station under construction in Wafangdian City in northeast China's Liaoning Province. Desalinated seawater has for years been used at foreign nuclear projects abroad but it is the first time the technology has been used at a major nuclear power project in China. The seawater desalination facility at Hongyanhe station is able to provide 10,080 tonnes of freshwater for the project. The Hongyanhe nuclear plant has four generating units with an annual capacity of one million kilowatts each.
(Xinhua, June 18, 2010)
China releases plan on drinking-water source protection
The Chinese government has released a plan on the protection of drinking-water sources in urban areas to guarantee the safety of drinking water. The Urban Drinking Water Sources Protection Plan (2008-2020), jointly issued by five ministries including the ministries of Environmental Protection and Health, will guide environmental-protection and pollution-control work at drinking-water source areas. The plan vowed to control water pollution caused by farming, animal husbandry, and water transportation in the areas. Local governments will also launch ecological restoration projects at protected areas. Meanwhile, monitoring and emergency response systems will be enhanced for water quality control and management.
(2010-6-17 Xinhua)
Tianjin to have desalinated seawater as domestic water
North China's Tianjin Municipality will start providing desalinated seawater for home use and drinking this month to ease the city's water shortage. The first stage of the seawater desalination project, the nation's largest to date, had been completed, said Guo Qigang, General Manager of Tianjin Beijiang Power Plant, which is in charge of the project. It was processing 100,000 tons of water a day and the water quality was undergoing tests. The second stage of the project was expected to be completed by December next year, taking the total desalination volume to 200,000 tonnes a day, or a quarter of the city's daily water consumption. Tianjin Beijiang Power Plant, with total investment of 26 billion yuan (3.82 billion U.S. dollars), has undertaken the trial project of China's recycling economy, which consists of power generation, seawater desalination, sea salt production and waste resource reuse. (Xinhua, June 4, 2010)
Marriott International to invest USD 5,00,000 for water conservation program in China
Marriott International will invest USD 5,00,000 over the next two years to support a vital water conservation program. The program will focus its work in Sichuan Province, the area which was hit hard by the 2008 earthquake. Concurrently, Marriott and Ritz-Carlton hotels throughout China have committed to reducing their water and energy use by 25 per cent by 2017.
According to a company release, the program, known as ‘Nobility of Nature,’ is designed to assist rural communities in Sichuan Province with sustainable businesses, such as mushroom farming and honey production, which will place less stress on the environment. Reducing erosion and sedimentation will also improve water quality downstream in both rural and urban areas.
(2010-5-26 Hospitality Biz India)
Clean Energy Expo points up investment opportunity
More than 400 companies and enterprises from 22 countries participated in the Clean Energy Expo China 2010 and the Asian Wind Energy Exhibition on June 23 in Beijing. The 25,000 square-meter 3-day combined exhibition gave visitors an opportunity to discuss the opportunities for developing clean energy technologies and to explore a viable clean energy future.
Figures from China Clean Energy Industry Report, 2009-2010 showed that the proportion of nuclear power, hydropower and other clean power sources increased from 19.7 percent in 2007 to 23.0 percent in March 2010, up 3.3 percentage points. As China implements preferential policies for wind power and solar energy, the proportion of clean energy in power generation will continue to increase. The New York Times reported that China overtook competitors in Denmark, Germany, Spain and the United States last year to become the world's largest manufacturer of wind turbines. (China.org.cn, June 24, 2010)
China's power supply to meet summer demand
Liu Tienan, deputy minister of National Development and Reform Commission (NDRC), China's economic planning agency, said that the nation's power supply would meet its general demand, though regional black-outs are likely to occur during peak hours. Liu said the electricity supply in northeast and northwest China would be adequate, while electric supplies in the more developed east, south and north China would be rather tight. (Xinhua, June 11, 2010)
Huaneng invests 100 bln yuan for Xinjiang energy
China's leading power company Huaneng said that it would spend more than 100 billion yuan (USD 15 billion) in the far west Xinjiang region for energy exploration during the next ten years. Huaneng signed an agreement with the government of Xinjiang Autonomous Region to speed up the construction of energy bases in the Junggar Basin, and the Turpan Basin and Hami.
The company sought to achieve 10 million kilowatts of installed power generating capacity per year in Xinjiang by the end of 2020, while producing 60 million tonnes of coal and 6 billion cubic meters of coal-turned natural gas. The regional government would support the company to integrate coal resources and carry out hydropower and wind power projects.
(Xinhua, June 8, 2010)
Telecom & IT
Telecom
China's mobile phone users top 776 million by end of May
All three of China's telecom operators have announced their operating data for May, and altogether gained 9.58 million mobile-phone users in the month, which boosts the number China's total mobile-phone users to 776 million by the end of May. China Unicom adopted an aggressive marketing strategy and accomplished the fastest growth in cell-phone service subscribers in May, and its 3G user base broke 1 million. In terms of 3G user development, China Mobile also showed rapid and stable progress. In May, the telecom giant gained 917,000 3G subscribers to its service, up 28.6 per cent month on month, and boosting its total 3G user base to 9.32 million. Besides this, China Telecom recruited 3.02 million new cell-phone users in May, broadly the same as the 3.03 million net addition in April, and in accord with its expectations of gaining about 3 million users each month. China Unicom's net addition of mobile-phone users and broadband users all rebounded from April, and the number of 3G service subscribers gained in May hit this year's record monthly high, surpassing 1 million. (June 28th /C114)
Trial launched to converge TV, web and phones
Authorities on Thursday launched a major pilot project in 12 cities nationwide to help converge the telecommunications, Internet and broadcast networks, the State Council said in a statement on the government's website. The project aims to make the three sectors compatible in the country to allow users to make telephone calls, surf the Net and watch television through one cable or wireless gateway. It will enable telecom carriers, Internet companies and broadcasters to enter each other's fields and provide services, and is expected to create billions of yuan of investment in the coming years, analysts said. Cities chosen for the pilot project include Beijing, Shanghai, Dalian, Hangzhou, Shenzhen and Wuhan. The trial will last till 2012 and will focus on connecting the broadcasting and telecom networks, the government announced earlier. Authorities also vowed to achieve a comprehensive integration in line with the project by 2015. The convergence project will attract at least 300 billion yuan ($44 billion) of investment from broadcasters and telecom carriers to upgrade their networks, said Xiang Ligang, a leading Chinese telecom analyst. The move to bring the three sectors together has been mulled for more than a decade, but has made little headway because of factors such as technological challenges and contention among stakeholders. Competition among telecom carriers, Internet companies and media groups has been changing in recent years worldwide with the rise of new technologies such as 3G and digital media. The trend has generated innovative services such as mobile TV, online video and Voice over Internet Protocol or VoIP, but it has also intensified competition among industry players, analysts said.
Carriers
China Mobile to release result of phase four of TD-SCDMA vendor
A source said that China Mobile to release results of phase four of TD-SCDMA vender on 30th June. China Mobile sent bidding invitations to telecoms equipment vendors at the end of last month, kicking off a long-awaited tender for the phase four deployment of its 3G TD-SCDMA network. China Mobile is expected to procure around 102,000 base stations for the TD-SCDMA network in 101 cities, close to the total number in the previous projects. In the previous three TD-SCDMA network construction projects, China Mobile set up 108,000 base stations in total, with a combined investment of over CNY90 billion (USD13.16 billion). A total of eight telecoms equipment makers are likely to take part in the bidding in three groups by ZTE Corporation, Datang Mobile Communications Equipment and Huawei Technologies, Nokia Siemens Network, China Potevio, Firehome, Xinyoutong and Ericsson.(June 29th/C114)
China Telecom Will Formally Launch Mobile E-book Service in Late July
The once-postponed mobile phone reading service of China Telecom will now reportedly be formally launched in late July 2010. An insider revealed to the local media that the related departments of China Telecom have started planning and deploying resources for the launch of this new service and the company will set up a mobile reading base in Zhejiang at the same time. By then, China Telecom will sign a strategic agreement with the General Administration of Press and Publication of China for its development in the Chinese digital publishing and e-book sector. Prior to this, China Telecom announced plans to launch the mobile reading service on April 30, 2010, but the plan was postponed due to the incompleteness of various parts of its plan. Statistics from local media show the scale of the Chinese mobile phone reading market will reach CNY4.6 billion in 2010 and it will be over CNY10 billion by 2013. .(June 29th/C114)
China Unicom to expand 3G user base via low-cost handsets
China Unicom Wednesday rolled out five models of smart phones valued at about 1,000 yuan per unit, which are respectively manufactured by Nokia, Sony-Ericsson, Beijing Tianyu communication Equipment, Huawei Technologies, and ZTE Corp. Song Limei, an official of China Unicom, said that the telecom operator would offer high subsidies to the five 3G cell phones.
Taking a 1,800 yuan handset model rolling out this time as an example, if users prepay service fees of 2,200 yuan, they will have the mobile phone for free, which means that China Unicom is providing an 80 percent subsidy, said Ren Zhiguo, a China Unicom terminal sales official. According to statistics released by Sino-Market Research, China Unicom's 3G WCDMA terminal products took up a 46 percent share in the country's 3G terminal market by May. .(June 29th/C114)
China Telecom Chooses Spirent Automated Device System for 3G Rollout
Spirent Communications, a company specializing in wireless networks, services and devices testing, announced that China Telecom has selected the Spirent C2K-ATS automated device system to test EV-DO Revision B (Rev. B) mobile devices. With Spirent, China Telecom is able to ensure subscriber quality of experience (QoE) for mobile device and smart phones on its high-speed 3G data network. The EV-DO Rev. B deployment marks the next phase of China Telecom's 3G services rollout. This allows China Telecom to enhance the capacity and throughput of its existing wireless network, while enhancing quality of 3G services such as video on demand (VoD), VoIP and streaming video. .(June 29th/C114)
China Telecom CDMA Phone Sales Up 51%
China Telecom recorded a 51 percent year-on-year increase in the number of CDMA mobile phones sold to 16.97 million units in the first five months, reports China Business News, citing Ma Daojie, general manager of China Telecom's E-surfing business. Ma predicts that sales of CDMA mobile phones will total approximately 20 million units in the first half of 2010. Sales of 3G mobile phones leapt 60 percent from January to 170,000 units in May. According to Ma, China Telecom currently has approximately 600 models of CDMA mobile phones, of which 146 are 3G phones. (Jun 28th/C114)
China Telecom to start national IMS procurement July
China Telecom's, China's largest fixed-line telecom service provider by user number, will close its IMS (IP Multimedia Subsystem) trial operation soon and start the nationwide IMS procurement in July at the earliest, according to an insider of the carrier. China Telecom chose Jiangsu, Sichuan, Guangdong, Zhejiang and Fujian provinces and Shanghai municipality as the pilot regions of its IMS operation with differentiated focuses, such as the driving force of IMS service and evolution of network integration, which all achieved satisfactory results. Five telecom equipment manufacturers, including Huawei Technologies, ZTE Corp., Nokia-Siemens, Alcatel Shanghai Bell and Ericsson, are candidate firms of China Telecom's procurement. (June 18th/C114)
Equipment Manufacturers
Lenovo targets 1m Lephone China sales this year
Lenovo Group is targeting sales of 1 million units of its self-developed smart phone in the China market this year, an executive said on Monday. The phone, called Lephone, is based on Google's Android operating system. It was showcased at a mobile fair in January this year. "We hope to sell 1 million this year," Tong Fuyao, Lenovo's vice president, told reporters. Tong also said he saw potential for the phone in business and was working with developers to come up with applications to target that market. Lenovo, the world's No 4 PC brand, said in April mobile Internet products would account for 10-20 percent of revenue in five years.
Huawei Earns Three Tops from Telecom Magazine
Global Telecoms Business Innovations awarded three top industry awards to Huawei. The publication chose Huawei for its outstanding performance in “Transforming service enablement through software developer kit” project, TalkTalk’s “Dancing on Ice- cost-free contestant voting” campaign and Vodafone’s “Green wireless solution- affordable for all communities” campaign. The judges highlighted Huawei’s strong innovation abilities across the different telecom sectors from wireless to wholesale and all tied together with strong collaborated projects with the world’s leading telecom operators.(June 22nd/C114)
ZTE Overtakes Alcatel-Lucent in Broadband Battle
Following a year of major fiber access deployments in China, ZTE Corp. claims to have replaced Alcatel-Lucent as the global No. 2 fixed broadband infrastructure vendor, trailing only domestic rival Huawei Technologies Co. Ltd. in terms of worldwide revenues. Citing market research statistics from Ovum Ltd, ZTE says it captured 16.5 percent of the global broadband gear market in 2009, compared with AlcaLu's 16.1 percent, and Huawei's 22.6 percent. ZTE says 55 percent of its broadband fixed access revenues came from its domestic market, and the remaining 45 percent from international markets. (June 17th/C114)
Internet
China gets tough on online gaming
The country's Ministry of Culture (MOC) has meted out a tentative regulation on the administration of online games, stipulating that online game players should register their real names before participating in virtual competitions in cyberspace. The regulation, which is the first official document focusing on China's thriving online gaming industry, will become effective on Aug 1. It applies to all domestic and imported multiplayer role-playing games as well as social networking games. The measure came after the number of China's online game players skyrocketed to 105 million as of April, according to a report released by the China Internet Network Information Center (CNNIC), the State Internet administrator. Internet users who want to play a particular online game must go through a real-name registration process with valid identifications, the regulation said. (June 23rd/C114)
Google examining impact of new China laws on products
Google Inc (GOOG.O) said on Thursday it was examining the impact of a new set of Chinese regulations towards mapping on its Google Maps product in the country. China's State Bureau of Surveying and Mapping announced new regulations last month that required firms providing online map and location services in the country to apply for a license. The laws give China the right to close providers that fail to get a license, reported the official China Daily newspaper on Thursday. The paper also reported that the mapping bureau had approved 18 domestic firms to provide online mapping services and several foreign companies had applied for a license.
"China recently implemented a wide-ranging set of rules relating to online mapping. We are examining the regulations to understand their impact on our maps products in China," a Google spokeswoman said in an emailed statement. Google did not say whether it had applied for a license. (June 24th/C114)
Medical & Healthcare
Chinese drug firm readies for Pfizer unit takeover
Harbin Pharmaceutical Group (HPG), the Chinese buyer of Pfizer's swine vaccine unit, is preparing workshops and technicians to take over the production line, the company announced.
"The production preparations are underway, and we hope to obtain production certificates for Pfizer's vaccines of RespiSure and RespiSure-One a year from now," said Jiang Linkui, General Manager of HPG. It was the first news briefing by the company after the 50-million-U.S.-dollar deal was completed in May. The deal between HPG and Pfizer has been eyed as the first of many such transfers of Western intellectual property to Chinese firms after China's anti-monopoly law took effect in August 2008. The company was aiming to make 10% of its revenues from the animal vaccine business by 2015, while the current ratio was only 2%.
As part of the agreement, Pfizer has to provide HPG with technical assistance and training for up to three years. (June 11, 2010 Xinhua)
Other Sectors
Automobile
Subsidies have been granted to 71 fuel-efficient automobile models
Subsidies have been granted to 71 fuel-efficient automobile models as China drives ahead to promote vehicles that use less fuel to address pollution and to safeguard energy security, the country's top economic planner said Wednesday. The vehicles, which have an engine capacity of 1.6 liters or less, will be entitled to a 3,000-yuan (441 U.S. dollars) subsidy per car after they demonstrated they can save fuel consumption by 20 percent, the National Development and Reform Commission said in a statement. Sixteen Chinese car makers, including BYD Automobile Ltd and Chongqing Changan Automobile Co, will produce the first batch of the vehicles, the NDRC said. More models that qualify for the subsidies will be included in the future, it said. Despite the under-developed infrastructure for electric vehicles, such as battery-charging stations, China wants about 500,000 green vehicles including hybrids and electric cars on the roads by 2011. The government has also said it would offer subsidies of as much as 60,000 yuan for plug-in hybrid and electric car makers. (July 1st/Shanghai Daily)
