China Economy Forum

[yusheng]

State-owned enterprises urged to expand overseas

12-02-2012 20:00 BJT

video


China’s overseas investment has risen sharply in recent years. And as the country pushes ahead with its “Go-Out” strategy, State Owned Enterprises are being urged to expand outward investment further.

“China’s state owned enterprises should continue to seek business opportunities in various sectors worldwide”, Chen Yuan, the newly appointed chairman of Chinese Enterprise Investment Association made the remark at its high-level council meeting in the Great Hall of People, adding that domestic companies need to further expand investment overseas.

Chen Yuan said,“As well as attracting inward foreign investment, domestic enterprises should focus more on expanding outward foreign investment, and speed up transformation of outward investment models.”

With a foreign reserve of more than 3 trillion dollars in hand, China’s “Go Out” strategy has been given high priority by the country’s ruling Communist Party. At the recently concluded National Party Congress, president Hu Jintao said in the country’s overall development plan that China should encourage domestic companies to increase the pace of outbound investments.

The direction they are headed, is seeing some shifts.

Chen Yuan said,“SOEs’ outbound investment continues to be the mainstream of China’s investment overseas. Energy sector such as mining and electricity remain as the focus. Telecommunication, petrochemical and machinery manufacturing are also popular sectors. And while we keep working with China’s traditional trading partners such as US, Europe and Japan, more SOEs will be turning to emerging markets in Asia, Latin-America and Africa, investing in service and business sectors, as well as energy and resource fields."

China’s Outbound Direct Investment increased to more than 74 billion dollars in 2011, making it the world’s 6th largest investing country.

SOEs however, have encountered many obstacles in meeting their overseas plans. Foreign governments for instance, have on several occasions blocked proposals on national security concerns. Reported loss was also linked to a lack of knowledge about foreign markets, poor management and insufficient number of qualified workers.

But despite the challenges, Chinese SOEs continue to show strong commercial motivation, and many of them are operating in a manner similar to international companies.

China’s emergence as a major force in the international investment arena has caused some anxiety in the world’s capitals. But the country has made it clear that this will be a major trend for the years to come. And as China’s state-own enterprises seek business opportunities worldwide, they are also urged to be responsible corporations in foreign countries.

 

[shuttler]

Int'l Volunteer Day marked in China
2012-12-05

xinhuanet

A volunteer from Anhui Chinese Traditional Medicine Institute checks blood pressure for a migrant worker in Hefei, capital of east China's Anhui Province, Dec. 5, 2012. Many Chinese volunteers make their contributions to the society on Wednesday, to mark the International Volunteer Day, which is an international observance designated by the United Nations since 1985. (Photo/Xinhua)

A volunteer from Anhui Chinese Traditional Medicine Institute checks blood pressure for a migrant worker in Hefei, capital of east China's Anhui Province, Dec. 5, 2012.

Volunteers chat with elders who have no children living with them in Hefei

A volunteer from Anhui Chinese Traditional Medicine Institute implements cupping therapy on a migrant worker in Hefei,

sina

 

[shuttler]

中国最大海上风电安装船“华尔辰”号交付使用
记者 荣佳颖 通讯员 邱永旺 中国水运报 更新时间：2012-12-4


中国水运 www.zgsyb.com

总造价达3亿人民币 将赴珠港澳大桥协助施工

本报讯 12月3日，泰州海事局传来消息：日前，中国目前最大的海上风电安装船“华尔辰”号正式建造完工，并在该局办理了临时船舶国籍登记。下一步，该安装船将远赴珠港澳大桥协助施工。

“华尔辰”号工程船由靖江南洋船舶制造有限公司制造，该船采用双体船设计，是中国最大的集风塔打桩、风电设备安装于一体的海上风电设备工程安装施工船舶，在一体化综合作业功能和船体形式上创造了多个“世界第一”，总造价达人民币3亿元左右。

该船船长90米，船宽50米，型深6.8米。船体上配置83米高的主吊钩平台，主吊钩平台安装一台400吨能360度回转的起重机，最大吊高为120多米，相当于40层楼高。

“华尔辰”号除了能进行风电安装外，还可以进行风机桩基的打桩作业、风机整体运输和风机散件安装等功能，实现海上风电施工一体化作业。而之前，这些功能则必须由多艘专业船舶承担，也就是说，“华尔辰”号可完成以往一个船队的作业量。

据了解，近年来受国际金融危机影响，各大船企面临接单难、利润低等一系列问题，船舶行业陷入低谷。为突破困境，促进企业持续稳定发展，靖江南洋船舶制造有限公司及时 “调转船头”，瞄准需求量大、附加值高的海洋工程船、特种船，抢抓发展先机，创下了多项国内记录。

China's largest offshore wind power installation vessel delivered
Reporter the Rong Jiaying correspondent Qiuyong Wang
China Water Transport updated :2012 -12-4
Total cost amounted to 300 million yuan will go to Zhuhai-Hong Kong-Macau Bridge assist construction

* December 3, Taizhou Maritime Bureau came the news: A few days ago, China's largest offshore wind power installation vessel the "Waldorfchen" formal completion of the construction, and the council to apply for a temporary nationality of the ship registration. Next, the installation vessel went to Zhuhai-Hong Kong-Macau Bridge assist construction.

****Waldorfchen "project boat by Jingjiang Nanyang Shipbuilding Co., Ltd., the ship is a catamaran design piling is the largest collection of wind towers, wind power equipment installed in one of the offshore wind power equipment engineering installation and construction ship in one comprehensive job functions and hull formally created the "world's first" total cost of about 300 million yuan.

****The master of the ship 90 meters, the ship is 50 meters wide, 6.8 meters deep. The main hook platforms hull configuration of 83 meters, the main hook platform installed a 400-ton crane 360 degree rotation, maximum hanging height of over 120 meters, equivalent to 40 storeys high.

google translation

 

[cirr]

Southwest China starts track-laying for first high-speed railway

(Xinhua)16:59, December 03, 2012

CHENGDU, Dec. 2 (Xinhua) -- Sichuan province started laying tracks on Sunday for the first high-speed railway in mountainous southwest China, where ancient visitors called a trip there harder than that to heaven.

The railway, which will link cities including the cities of Mianyang, Deyang, Chengdu and Leshan, stretches 312 kilometers across the Wenchuan earthquake struck areas.

Workers will lay down tracks about six kilometers a day, and work will be completed by the end of 2013. High-speed trains will run at a designed speed of 200 kilometers per hour.

The total investment for the line will reach 40.5 billion yuan (6.4 billion U.S. dollars). There are 30 million residents along the railway.

The railway is expected to make transportation more convenient in China's southwestern regions neighboring a few Southeast Asian nations.

China opened the world's first high-speed rail line in areas with extreme low temperatures on Saturday, bringing the country's high-speed rails in operation to 8,600 kilometers, the longest globally.

Southwest China starts track-laying for first high-speed railway - People's Daily Online

 

[yusheng]

China leaves behind the US as world's leading trade partner


Russia Today Published: 03 December, 2012, 21:50

This picture taken on November 7, 2012 shows a ship berthed ahead of its cargo of containers being unloaded at the port of Qingdao in northeast China's Shandong province.(AFP Photo / China Out)

In just five years, China surpassed the US as leading a trading partner in the world. With 124 countries considering China their largest trading partner and only 76 having that relationship with the US, the Asian country’s influence is on the rise.

In 2006, the US was the larger trading partner for 127 countries, while China dominated among 70. In 2011, the numbers reversed, with China dominating trade among 124 countries and the US being the top trade partner for only 76, the Associated Press reported. Some US allies even consider China their top trading partner, including Australia and South Korea.

The AP findings demonstrate China’s rapid ascent as a trade partner. As a result of its international relationships, the world’s most populous country is becoming more politically influential – and its rise won’t be ending anytime soon. China’s world output is forecasted to grow up to 8 percent a year over the next decade – a rate that surpasses all Western levels.

Trade with China was on average 12.4 percent of GDP for other countries – a rate that is higher than trade with the US has been in the past 30 years. Trade with China was only 3 percent of a country’s GDP in 2002, which demonstrates the surge that occurred in the last decade.

With rising trade influence, China is likely to also generate jobs, raise living standards and gain political power.
“The United States is a tiger with no power. Nobody can deny that China is the one now rising,” said Shin Cheol-soo, a South Korean businessman at the ENA Industry Co.

While the US is still the world’s largest importer and exports more expensive and high-quality products, China is a bigger market for 77 countries, which is an increase of 20 countries since the year 2000. The US exports innovative products in the automobile industry, aerospace, medicine, computers, finance and pharmaceuticals, but China’s low labor costs make it a success in products that can be produced cheaply.

At the current rate of trading, China will surpass the US and become the largest trader by the end of this year.
“The center of gravity of the world economy has moved to the east,” Mauricio Cardenas, the finance minister of Colombia, told AP. “I would say that there is nothing comparable in the last 50 years.”

While the recession hit US businesses hard, some began to thrive in China. Shin, the businessman at ENA Industry Co. who sold auto parts, moved his struggling business from the US to China. And across the world, people have begun to recognize the importance of China in the future world economy. Parents are increasingly encouraging their children to learn Mandarin in school.

“Mothers who send their kids here believe our children’s generation is the China generation. In the future, without learning Chinese, one won’t be able to get a job,” said Nancy Ching, who opened a Chinese-language school in South Korea.

China is also starting to look into markets that were so far dominated by the US. Rather than exporting products, the Chinese hope to soon sell services and investments, including construction and engineering. By building roads, dams, highways, and other structures in developing countries, China is now rivaling the US and Europe in areas it never touched before.

“When we see the people from America, they say ‘We want to assist Kenya’. But I don’t see it. China comes and I see one thing: the road,” said Joseph Makori, a professional driver in Kenya, where Chinese companies are increasingly winning government contracts to do construction.

China’s trade is reaching beyond just economic partnerships with countries in need of cheap products. The world’s most populous country is becoming an influential power in a range of aspects. While China is set to surpass the US and become the largest trader by the end of 2012, it may not be long before the countries will compete politically.

 

[cirr]

Russia, China Ink Deal to Build 2 New Nuclear Reactors

06/12/2012

MOSCOW, December 6 (RIA Novosti) – Russia will build two new reactors at China’s Tianwan nuclear power plant under an inter-governmental agreement signed on Thursday.

The bilateral protocol on the construction of Tainwan’s third and fourth reactors was signed in the presence of Russian Prime Minister Dmitry Medvedev and his Chinese counterpart Wen Jiabao.

Construction work will begin in December this year, Rosatom civilian nuclear power corporation head Sergei Kiriyenko said.

“At the end of 2012, the first concrete will be poured for the foundation of the third and fourth reactors,” Kiriyenko said, adding the nuclear power station’s site could accommodate as many as eight reactors.

The Tianwan NPP is the largest facility the two countries have built under a bilateral cooperation agreement. Its first stage includes two power units with VVER-1000 reactors and was put into commercial operation in 2007.

Atomstroyexport and the Jiangsu nuclear power corporation signed a general contract to build the NPP in 1997. The Russian company was charged with design work, equipment and material supplies, construction and assembly work, putting it into operation and training Chinese personnel.

Russia, China Ink Deal to Build 2 New Nuclear Reactors | Business | RIA Novosti

 

[sweetgrape]

Solar Yacht be put into operation in Xiamen
太阳能游艇在厦门研制成功并投入使用

?????????????????---?????????

日前，由福建省厦门市杰能船艇科技有限公司研究开发的太阳能游艇在厦门研制成功并投入使用。这一由玻璃钢制成的游艇长15米，宽6米，重3吨，船顶太阳能面板面积达90平方米，太阳能所产生的能量转化储存为电能，为船上各种电器用设备提供用电，无污染、无噪音、零排放，是城市内河、湖泊、水库等水域旅游观光理想的节能环保船只。新华社记者 张国俊摄

Google translate:
A few days ago, by the Xiamen City, Fujian Province, boat Technology Co., Ltd. - to research and development of solar yacht in Xiamen successfully developed and put into use. Made of glass fiber reinforced plastic yacht length of 15 meters, 6 meters wide and weighs three tons, the ship top solar panel area of ​​90 square meters, solar energy conversion of stored electrical energy on board a variety of electrical equipment used electricity , no pollution, no noise, zero emissions, energy saving and environmental protection vessels ideal tourist cities inland rivers, lakes, reservoirs and other waters. Xinhua News Agency reporters Zhang Guo and Jun She

 

[cirr]

China's electric railway mileage exceeds 48,000 km

Luc Citrinot - 06 December 2012

BEIJING- China's electric railway mileage has surpassed 48,000 kilometers, ranking first in the world, the China Railway Engineering Corporation Railway Electrification Bureau Group Co., Ltd. (EEB) said Tuesday. It achieved this figure following the launching operation of a 921-kilometer electric railway line connecting the northeastern cities of Harbin and Dalian. The line is also the world's fastest rail line in regions with extremely low temperatures.

Wang Zuoxiang, head of the EEB technology department, said the country started to build electric railways in 1958, and in just over half a century, the mileage has exceeded that of Russia, the former country with the most electric railway mileage. There are 68 countries and regions with electric railways. Behind China, the leading ones are Russia with 43,300 kilometers, Germany with 21,013 kilometers, India with 18,810 kilometers, Japan with 16,965 kilometers and France with 15,217 kilometers.

According to the 12th five-year plan for railway development, China will have around 120,000 kilometers of railway in operation -- 60 percent of which will be electric -- by the end of 2015.

In between, Sichuan province started laying tracks on Sunday for the first high-speed railway in mountainous southwest China, where ancient visitors called a trip there harder than that to heaven. The railway, which will link cities including the cities of Mianyang, Deyang, Chengdu and Leshan, stretches 312 kilometers across the Wenchuan earthquake struck areas.Work is expected to be completed by the end of 2013. High-speed trains will run at a designed speed of 200 kilometers per hour.

The total investment for the line will reach 40.5 billion yuan (6.4 billion U.S. dollars). There are 30 million residents along the railway. The railway is expected to make transportation more convenient in China's southwestern regions which are neighbouring Laos and Vietnam, both located in the ASEAN. China has currently 8,600 kilometers of high-speed rails in operation.

China's electric railway mileage exceeds 48,000 km

 

[cirr]

Central Plains Economic Zone established in 2012/12/8

--------------------------------------------------------------------------------

Central Plains Economic Zone, or the Zhongyuan economic zone covers an area of 290,000 square kilometers with a population of about 170 million, located in Central China's Henan province and includes areas in the neighboring provinces of Shanxi (Changzhi, Jincheng, Yuncheng cites), Shandong (Liaocheng, Heze cities), Heibei (Handan, Xingtai cities) and another 5 cities in Anhui province.

 

[Fanling Monk]

Canada OK's foreign energy takeovers, but slams door on any more

Nexen headquarter building in downtown Calgary, Alberta, Canada


(Reuters) - Canada approved China's biggest ever foreign takeover on Friday, a $15.1 billion bid by state-controlled CNOOC Ltd for energy company Nexen Inc., but drew a line in the sand against future buys by state-owned enterprises.

In a fierce defense of a tough, new foreign investment framework, Prime Minister Stephen Harper said Canada would not deliver control of the oil sands - the world's third-largest proven reserves of crude - to a foreign government.

The ruling, anxiously awaited by investors and politicians alike, followed months of heated debate about how much of Canada's energy sector could and should be absorbed by companies run by other nations.

The bid triggered unusually open dissent among legislators in the ruling right-of-center Conservatives, many of whom were particularly nervous about the idea of allowing China to gain control of the oil sands.

Canada said yes to this deal, but will not do so next time.

"To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead," Harper told reporters after Ottawa gave the deal the green light, along with approval for the less controversial takeover of gas company Progress Energy Resources Corp by another state-owned energy company, Petronas of Malaysia.

"Foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada," he added.

The bid by CNOOC, China's third-largest oil company, had raised huge questions for Harper's Conservative government, which sought both to appear open for investment and to diversify Canadian energy exports toward Asia and away from the United States. The strict new approach restricts state-owned enterprises to minority stakes in Canadian enterprises except in what Harper described as "exceptional circumstances".

It will raise questions about how Canada can raise C$650 billion ($657 billion) in investment it says it needs in the natural resources sector in the next decade alone.

Ottawa has yet to clarify the meaning of "exceptional circumstances", but Canadian ministers and analysts say much of the money will have to come from abroad and cash-rich China is an obvious source.

Analysts said the new rules could please market operators who complain Ottawa is too vague about the kinds of foreign investment it wants. Investment Canada, part of the industry ministry, must decide if takeovers are a net benefit for Canada, but critics say the process is opaque.

The Conservatives shocked markets in October 2010 by unexpectedly blocking a bid by BHP Billiton Ltd for Saskatchewan-based fertilizer maker Potash Corp.

"This approval helps overcome some of the stigma that was associated with Investment Canada after the BHP rejection. I think it is good news for the perception of Canada as a destination for capital," said Oliver Borgers, a partner at McCarthy Tetrault in Toronto.

STATE RUN, BUT WHICH STATE

Harper said he was confident other firms would want to invest in the oil sands, third only to OPEC members Saudi Arabia and Venezuela in crude reserves.

"What we're doing here is preventing a situation which I see developing, I have been worried about for a while now, ... where in the name of an open, globally competitive economy, we could see the transformation of our economy into a state-run economy, just a state-run economy not (run) by our government," he said.

The main opposition New Democrats, who had wanted the Nexen deal blocked, said Harper had not done enough to clarify the net benefit test.

"What the decision today does is send a very clear signal that these types of transactions, that these kind of takeovers will be approved," said energy spokesman Peter Julian.

Nexen, long viewed as a takeover target, is involved in oil sands in Canada and offshore production operations around the world. It was an ideal target for CNOOC, especially since no Canadian firms had tried to buy it.

Petronas offered C$5.2 billion ($5.3 billion) for Progress, a mid-size gas producer. Both suitors offered hefty premiums.

The shares of both takeover targets went on a wild ride, slumping late in the Canadian trading session on speculation that an after-market announcement could be negative.

Nexen's New York-listed shares then surged in after-hours trading on a Reuters story that the deal had been approved. The Canadian dollar firmed.

UNOCAL LESSON

Canada said the approval came after CNOOC made significant commitments on transparency, employment and capital investments.

"By pushing back quite a bit they were probably able to get concessions in both these deals, in Nexen and in Progress," said Keith Moore, managing director at MKM Partners LLC in Stamford, Connecticut.

The all-cash offer and commitments are generous, some China and Hong Kong-based analysts said. But CNOOC had drawn lessons from its failed $18.5 billion bid for U.S. oil producer Unocal in 2005.

CNOOC has pledged, for example, to make Calgary the headquarters of its operations in the Americas, where it has already made major investments.

"CNOOC has been careful to address the net benefits to the Canadian authorities and regulators after its Unocal experience," said Scott Darling, head of Asia ex-Japan Oil & Gas Equity Research with Barclays in Hong Kong, adding that he expected CNOOC to complete the deal by the end of this year.

CNOOC has said the acquisition would boost production by 20 percent and proven reserves by 30 percent. The company has nine years of reserves based on current production -- one of the lowest ratios among major oil companies worldwide.

"For Nexen this is a fantastic deal," said Simon Powell, head of Asian oil and gas research at CLSA in Hong Kong. "What the big concern to me is that Nexen does not have the production growth that people think it does."

CNOOC officials in Beijing were not immediately available for comment.

The takeover gives CNOOC control of Nexen's 43 percent stake in the Buzzard field in the North Sea, the most important contributor in the crude blend used to for Brent international pricing benchmark.

CNOOC has asked the U.S. government to review its bid for Nexen's offshore oil assets in the Gulf of Mexico. CNOOC said last week the review was underway, and a Washington spokesman declined further comment on Friday.

PROGRESS REJECTION

Industry Minister Christian Paradis had initially rejected Petronas's bid for Progress but he allowed it to make new representations.

Petronas plans to re-list Progress in the next 3 to 5 years, said a Petronas source with knowledge of the deal. Progress assets include Canadian shale assets, in which Petronas already has a stake, and a liquefied natural gas export terminal under construction.

It has also agreed to have Canadians on the Progress board as independent directors and to retain the local workforce, the source said.

Petronas and Progress, which already have a joint venture in the Montney shale gas region of British Columbia, said this week they are advancing the C$11 billion LNG plant on Canada's West Coast. They held out the prospect of a bigger project if the takeover is approved, because Petronas would have access to all of Progress's gas reserves.

Canada OK's foreign energy takeovers, but slams door on any more | Reuters

 

[yusheng]

Chateau de Chine: Chinese buy prestige Bordeaux vineyard

Chateau Bellefont Belcier estate and its vineyards,
a Saint-Emilion premier grand cru classe
in the southwestern town of Saint-Emilion near Bordeaux
(AFP Photo / Nicolas Tucat)


Chinese investors have purchased the elite Chateau Bellfont-Belcier vineyard in the Bordeaux region of France. Similar deals have caused outrage among some French politicians who are concerned the country is selling its wine heritage.
*The sale of the 20 hectare Bellfont-Belcier vineyard was first reported in September, and was priced at up to two million euros per hectare according to the French media. Le Figaro newspaper describes the investor as simply Wang.

The wine from the Chateau is the best quality and is classified as Grand Cru, and it’s the first such in the region to be bought by the Chinese.
“The classification played an enormous role,” a spokesman for the agency which negotiated the deal, told France 24. Without the classification, “the price would not have been the same,” he added.

In August the castle and vineyard of Gevrey-Chambertin in the Burgundy region was sold for over $8 million to a Chinese businessmen, RFI reports. A number of politicians said that France is selling off the national heritage.

The sale in Bordeaux didn’t cause as much fuss as the province has a long tradition of foreign investment in the wine industry, says AFP.
"What is different is that it's in such short period. They've purchased 30 estates in two years. That's something," Herve Olivier, regional director of SAFER, French government agency overseeing rural land development, told France 24.

Chinese investors in Bordeaux are primarily industrialists with diverse business interests including real estate and tourism, Olivier added.
French wine has become very popular in China making it the fifth largest export market for French winemakers in 2011, chinapro.ru reports.

 

[shuttler]

It needs a better design.

The sale in Bordeaux didn’t cause as much fuss as the province has a long tradition of foreign investment in the wine industry, says AFP.

The floodgate is opened！

 

[cirr]

632m 121FL Shanghai Tower, the speed at which this thing is rising is just insane:

 

[cirr]

China November factory output jumps to eight-month high

By Aileen Wang and Koh Gui Qing

BEIJING | Sun Dec 9, 2012 2:46am EST

BEIJING (Reuters) - Growth in China's factory output and retail sales jumped to eight-month highs in November as consumer inflation bounced off 33-month lows in the latest sign that its economy is snapping out of a protracted slump.

Analysts said Sunday's data showed China is enjoying an enviable mix of benign inflation and rebounding economic growth that allows Beijing to stand still on monetary and fiscal policies, or switch to an easier stance if needed.

"The Chinese economy is now in a sweet spot and can stay in the sweet spot through the first half of 2013," said Ting Lu, an economist at Bank of America-Merrill Lynch. "Beijing will be happy to sustain the current policy stance."

Data from the National Bureau of Statistics showed output from Chinese factories beat forecasts to climb 10.1 percent in November from a year ago, its best performance since March.

Annual growth in retail sales also surprised by jumping 14.9 percent in November, while fixed asset investment rose 20.7 percent in the first 11 months of the year, a shade below forecasts.

The batch of activity data came after an inflation report out earlier on Sunday showed China's consumer price index rose 2 percent in November from a year ago -- just under forecasts for a 2.1 percent gain -- as vegetable prices soared.

But economists said the rise in consumer prices from near three-year lows was far from worrying, especially since it is well under Beijing's annual 4 percent inflation target.

"We expect consumer inflation to not see a big rebound until the first quarter of next year," said Jiang Chao, an analyst at Guotai Junan Securities in Shanghai.

"Therefore, the central bank may stick to its current policy stance and we see little chance of further (policy) loosening towards the year end."

"DURABLE RECOVERY"

China's economy has slowed for seven consecutive quarters, hurt by wilting export growth and lackluster domestic demand. Growth hit a low of 7.4 percent between July and September and is poised this year for its weakest annual showing since 1999.

But things are looking up, due in part to policy easing by the central bank.

The People's Bank of China cut interest rates twice in June and July and lowered banks' reserve requirement ratio (RRR) three times since late 2011, freeing an estimated 1.2 trillion yuan ($193 billion) for lending.

"We expect such (economic) recovery to be durable and will at least extend into the first half of next year, though the pace of recovery will remain mild," said Sun Junwei, an economist at HSBC in Beijing.

As growth revives, the central bank is keeping an eagle eye on inflation, its policy priority in normal times.

It has not cut interest rates or RRR since July and has instead added short-term cash to the banking system through open market operations, a move analysts say underlines its worries about consumer and property price inflation.

As China's economy breaks away from central planning and as wages rise on average at least 10 percent each year, the central bank has warned inflation will be the biggest long-term risk, a point reiterated by Governor Zhou Xiaochuan last month.

Indeed, November's data showed price momentum was gathering even in factories.

Factory-gate prices fell 2.2 percent in November from a year earlier, its ninth straight month of declines but easing from October's 2.8 percent annual drop, boding well for firms struggling with falling profits.

(Reporting by Aileen Wang and Koh Gui Qing; Editing by Paul Tait)

China November factory output jumps to eight-month high | Reuters

 

[cirr]

Buy、Buy and Buy，Buy The Lot。

China Investors Buy 80% of AIG Plane Unit for $4.23B

By Zachary Tracer and Cathy Chan on December 09, 2012

A Chinese group agreed to buy an 80.1 percent stake in the plane-leasing unit (0067543Q) of American International Group Inc. (AIG) for $4.23 billion, the largest acquisition by that nation’s investors in the U.S.

The investors in International Lease Finance Corp. include New China Trust Co., China Aviation Industrial Fund and P3 Investments Ltd., New York-based AIG said today in a statement. The buyers have an option to take an additional 9.9 percent stake, according to the statement. The deal values ILFC at $5.3 billion, and eclipses China Investment Corp.’s $3 billion purchase of a stake in Blackstone Group LP (BX) in 2007.

ILFC is the largest aircraft lessor in China, with a 30 percent market share and more than 175 aircraft leased to 16 airlines in the Greater China region, according to the company. AIG, the insurer that counts the U.S. government as its largest investor, is selling the Los Angeles-based business as Chief Executive Officer Robert Benmosche focuses on insurance operations and works to reduce debt.

“AIG has made a strategic decision to be really an insurance company,” Paul Newsome, an analyst at Sandler O’Neill & Partners LP, said in an interview before the deal was announced. “Most investors in AIG and potential investors in AIG would like to see AIG be a simpler company.”

‘Different Company’

AIG will record a $4.4 billion non-operating loss, which includes a $1.8 billion non-cash charge tied to tax assets, when the transaction meets criteria for “held for sale” accounting treatment, according to the statement. The deal is subject to approval by U.S. and Chinese regulators.

The new owners would be poised to expand in China and other emerging markets in Asia, Latin America, the Middle East and Eastern Europe,” Benmosche, 68, said in a memo to staff. The sale will help AIG narrow its focus on global property-casualty coverage and U.S. life insurance.

“AIG is a different company today than it was four years ago,” Benmosche, 68, said in a memo staff. “We’re leaner, more focused.”

ILFC CEO Henri Courpron and President Frederick S. Cromer will continue to manage the business, which will remain a U.S. corporation and be registered with the Securities and Exchange Commission, the company said. The firm plans to appoint a new board, which will include Benmosche, when the deal is completed, according to the statement.

Hiring Staff

ILFC had stockholders’ equity of $7.9 billion at the end of the third quarter, the company said last month in a filing. The unit employs about 560 people, with more than 450 in the U.S., where it plans to hire more staff to replace AIG-supported operations, according to today’s statement.

AIG filed for an initial public offering of the plane- leasing unit last year, and said as recently as last month that an initial public offering may take place in 2013. The insurer had considered selling ILFC in 2009 to raise funds to repay a $182.3 billion U.S. bailout that saved the firm from collapsing amid the financial crisis. The company sold more than $60 billion in assets, including Asian insurers, a U.S. consumer lender, and its Japanese headquarters, to help repay the rescue.

AIG has gained 47 percent this year through Dec. 7, compared with a 13 percent advance for the Standard & Poor’s 500 Index. A sale may boost AIG’s shares and help the insurer reduce debt (AIG), Newsome said.

AIG acquired ILFC in 1990 for $1.16 billion, data compiled by Bloomberg show. Under AIG’s ownership, the plane-leasing unit originally benefited from the ability to borrow money at low rates, an advantage that evaporated when the insurer was hobbled by losses tied to subprime mortgages.

Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS) are advising AIG on the transaction, with New York-based Citigroup providing a fairness opinion to the insurer, and Credit Suisse Group AG is representing the investor group, Jon Diat, an AIG spokesman, said in an e-mail. Debevoise & Plimpton LLP is providing AIG with legal advice, and Simpson Thacher & Bartlett LLP is doing so for the investors.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Cathy Chan in Hong Kong at kchan14@bloomberg.net

To contact the editors responsible for this story: Dan Kraut at dkraut2@bloomberg.net Philip Lagerkranser at lagerkranser@bloomberg.net

Businessweek - Business News, Stock market & Financial Advice



China's Wanxiang wins A123 auction

Updated: 2012-12-10 05:36

By Bloomberg News in Wilmington

China's Wanxiang Group bid $260 million for assets of car-battery maker A123 Systems Inc, winning a bankruptcy auction, officials said.

The assets purchased may include A123's automotive segment, energy-grid storage business, commercial business and the United States government business.

"I can tell you that we have won the bid, and the total value is about $260 million," said Mo Xiaoping, a spokesman for Wanxiang Group based in Hangzhou, Zhejiang province. "From our side, we see no additional obstacles to complete the deal."

A123, which received a $249.1 million federal grant, held the auction behind closed doors in the Chicago law offices of Latham & Watkins. The auction began on Dec 6 with prospective bidders including Johnson Controls, Wanxiang, Siemens AG of Germany and Tokyo-based NEC Corp.

The company will seek court approval to sell the assets from US Bankruptcy judge Kevin Carey at a Dec 11 hearing in Wilmington, Delaware.

A123's automotive business includes facilities in Livonia and Romulus, Michigan. A123 used $132 million of the grant toward building the two Michigan factories.

As part of the purchase, the buyer may get A123's stake in a joint venture with Shanghai Automotive Industry Corp.

The grid business focuses on energy generation, transmission and distribution while the commercial division develops products for industries such as telecommunications, industrial robotics and power tools, according to court papers. A123 works with the government on portable power solutions, unmanned aerial vehicles, pulsed power weapons as well as small energy cells for remote devices.

A123 announced in August that it was working on a deal with Wanxiang, China's largest auto-parts maker, for financing in exchange for a majority ownership stake. The battery-maker needed a lifeline after recalling faulty batteries supplied to its main customer, Fisker Automotive Inc.

Fisker Chief Executive Officer Tony Posawatz said last month the Anaheim, California-based automaker was awaiting the sale of A123's Michigan plant that makes lithium-ion batteries for its Karma so it could resume production of the $103,000 plug-in sedan.

Wanxiang had planned to invest as much as $465 million in A123, giving the Hangzhou, China-based company a stake of as much as 80 percent, A123 said in an Aug 16 statement.

Wanxiang has been pursuing approval from the Committee on Foreign Investment in the US CFIUS, a multiagency group led by the Treasury Department that reviews mergers and acquisitions for national-security concerns when a takeover may give a foreign owner control of a US company.

A123, based in Waltham, Massachusetts, filed for bankruptcy in October after the Wanxiang deal was scuttled amid congressional Republicans' reluctance to allow the sale of the government-funded company to a Chinese company.

A123 listed assets of $459.8 million and debt of $376 million as of Aug 31 in court documents.

http://www.chinadaily.com.cn/cndy/2012-12/10/content_16000683.htm