China Economy Forum

[cirr]

China's foreign trade recovers further

Updated: 2013-03-08 11:12

BEIJING -- China's foreign trade showed stronger signs of recovery buoyed by the upbeat demands from the United States and the emerging markets.

Exports increased 21.8 percent year-on-year to $139.37 billion in February, while imports fell 15.2 percent to $124.12 billion. the General Administration of Customs (GAC) said Friday.

Trade surplus expanded to $15.2 billion from a deficit of $31.98 billion a year earlier.

But the GAC also pointed out that allowing for the seasonally-adjusted factors, that is to say in February China had four less working days than January as the Spring Festival holiday fell in February this year, exports rose 20.6 percent while imports climbed 6.5 percent.

China's foreign trade recovers further |Economy |chinadaily.com.cn

 

[cirr]

China's February exports surge but imports fall

March 7, 2013 11:12 PM EST | Associated Press

HONG KONG — China's exports surged more than expected last month in a possible sign of stronger global demand.

Exports leaped 21.8 percent in February, slower than the 25 percent growth recorded in January but still a surprise to economists who had been forecasting single-digit growth for the month. That's because the timing of a major holiday had been expected to crimp shipments.

Imports fell 15.2 percent last month, a sharp turnaround from 28 percent growth in January, according to data released Friday. That suggests weaker domestic demand but the picture is clouded by Lunar New Year holidays.

China's trade growth has been rebounding in recent months in a sign of recovery in the world's second biggest economy.

February had been expected to be weak because the Lunar New Year holiday fell during the month, leaving fewer work days as businesses shut for up to two weeks. Last year the holiday occurred in January, which flattered the performance of trade in the first month of this year.

"We are impressed by China's ability to expand its exports so strongly despite a muted external environment," Darius Kowalczyk, a strategist with Credit Agricole CIB said in a report.

Exports rose to $139.4 billion while imports declined to $124.12 billion, resulting in a trade surplus of $15.2 billion.

 

[cirr]

High-speed rail to feed Hebei airport

Updated: 2013-03-08 07:05

By Zheng Jinran and Pei Pei in Shijiazhuang ( China Daily)

Now that China's high-speed rail has a stop close to the largest airport in Hebei province, the airport has become an even better alternate flight destination for travelers heading to or from nearby Beijing.

On Wednesday, the new high-speed rail terminal opened near Shijiazhuang Zhengding International Airport.

About 13,000 passengers, 70 percent of whom were individual travelers, used the airrail integration in the past two months after the train began stopping in the airport's rail station on Dec 26.

"The number of passengers using the airport by the end of 2015 will reach 10 million with the help of rail lines, double the number in 2012," said Zhang Yanjie, chairman of Hebei Airport Management Holdings.

One of the biggest incentives for passengers to use high-speed rail to get to the airport is that they can get a refund for their train tickets through March 31 when they take flights to and from there.

The airport has not decided whether it will extend the offer, said Li Ning, deputy general manager of the airport's management authority.

The offer targets passengers who take the high-speed trains from seven neighboring major cities - Beijing; Zhuozhou and Gaobeidian of Hebei province; Taiyuan and Yangquan of Shanxi province; and Zhengzhou and Anyang of Henan province.

A second-class, high-speed train ticket from Beijing to the airport costs 111 yuan ($18), and tickets from other cities are as little as 40 yuan.

The preferential policy attracted more passengers, as the airport management company had expected.

Li Hui, a Beijing resident studying in Hong Kong, cheered when she got back the money she had spent on her train tickets when she left on Feb 17. "I didn't expect to cut more expenses from my travel," the 26-year-old said. "It only costs me about 600 yuan for a trip from here to Hong Kong. It's hard to book tickets at this price in Beijing."

She said she encouraged her parents to visit Hong Kong before the train ticket refund policy expires.

The airport has spent more than 1 million yuan on the project, which doesn't collect money from airlines or the government, said Li, the airport's deputy general manager.

"It's not a small amount of money for our company but a necessary investment for a booming business in the future," he said.

The new railway connecting the airport with Beijing and other major cities persuaded more airline companies to open routes to Shijiazhuang.

"Many foreign airlines didn't get the access to fly to the capital airport, so they turned their focus on Shijiazhuang as a springboard and use the smooth air-rail integration to tap the capital market," Li said.

Far Eastern Air Transport, a Taiwan airline, added new routes connecting Shijiazhuang and Penghu, Taiwan, in 2013.

"We opened two routes in this airport, aiming to attract the larger group of Taiwan businessmen from Beijing," said Evan Teng, Far Eastern's deputy chief representative for the Chinese mainland.

He said more businesspeople from Beijing will consider flights from Shijiazhuang because they can reach the airport in a shorter time. "They may take that much time just to arrive in the (Beijing) airport and it may take a longer time considering the severe traffic jams," he said, "Besides, Beijing residents who want to travel to Taiwan will prefer the choice as well."

The cost of a round trip will be reduced by 800 yuan during the travel off-season, he said.

To offer better service, the airport will build a reception room at the Beijing West Railway Station soon.

Spring Airlines, based in Shanghai and famous for providing cheap flights within China, has opened 11 regular routes and three tour flights during the tourism season, making it one of the three largest bases of the company.

"We have strong confidence about the sales in this airport because of the high-speed railway," airline spokesman Zhang Wu'an told China Daily. "The local market is also growing larger after the economic boom of the province."

The airline also plans to open more routes and increase the capacity of the prosperous airport.

Diversion needed

Beijing faces the challenge of satisfying the increase of passengers with its limited traffic capacity. More than 81 million passengers used Beijing Capital International Airport in 2012, surpassing the designed capacity of 80 million.

Before the city's new airport comes into service in 2018, more than 37 million passengers in Beijing need to be diverted to neighboring airports, which requires the coordinated development of the Beijing, Tianjin and Shijiazhuang airports, according to the North China Regional Administration of Civil Aviation Administration of China.

"The detailed plan for diverting passengers will be released by the end of July," Li said.

Compared with Tianjin airport, the direct check-in in the railway station is the advantage of an airport in Shijiazhuang, he said.

In China, airports in metropolises like Beijing and Shanghai have fewer arrangements for more flights in recent years, while the neighboring airports didn't have enough passengers to make a profit, according to a Civil Aviation Administration report.

"It has been a trend to spread passengers to other airports, which requires smooth rail-air integration," Li said.

 

[cirr]

Promise less，deliver more。

It is educational to know and note how the Indian government does the exact opposite。

Agreed! But then you guys had better watch out as the housing bubble is on the verge of bursting! Chinese shares fell the most in two years last Monday as the Shanghai stock exchange’s property index tumbled 9.25 percent. Late on Friday, China’s State Council had announced a new set of policies designed to cool down the housing market.

The new rules include a 20 percent tax on gains from a sale, higher down payments and mortgage rates, and requirements that cities set annual price easing targets. The real estate market in China is already quite distorted, and these repeated rounds of repressive policies may be just layering on more distortions.

However, we should perhaps give China’s leaders some credit for acknowledging potential bubbles and taking steps to rein them in.

Would it surprise you if property prices in large Indian cities which are much poorer than their Chinese equivalents，are actually higher？

No bubble in your backyard then？

The West WANTS China to crash so that they might continue their dominance of the world。

And you actually believe whatever the West feeds you？

Listen dude，I have 11 properties（10 flats and 1 villa）in Shanghai，all bought in the last 12 years with either cash or small loans（now worth less than 1/20 of the value of the property in question。The rent income covers over 4 times monthly mortgage outlay）。

Chinese people are prudent by nature。When they buy a major item like a house，they put down a huge amount of cash and use very limited credit，if at all。

So don't worry。There won't be a credit crisis even if the housing market goes down tomorrow and the average proces halve。

Property owners will simply sit back and enjoy their rent income，while those who haven't bought will have a chance to become a proud owner on the cheap.

 

[KRAIT]

Promise less，deliver more。It is educational to know and note how the Indian government does the exact opposite。Would it surprise you if property prices in large Indian cities which are much poorer than their Chinese equivalents，are actually higher？No bubble in your backyard then？

Indian Govt. always create excuses and the policy paralysis directly affects our growth.

One minister goes bonkers, entire nation suffer.

 

[Developereo]

The rent income covers over 4 times monthly mortgage outlay

That's good.

In Australia, it is the reverse. Most rental income barely makes up 1/4th of the mortgage payment. The government had to introduce a tax shelter (negative gearing) to subsidize landlords.

 

[tranquilium]

Agreed! But then you guys had better watch out as the housing bubble is on the verge of bursting! Chinese shares fell the most in two years last Monday as the Shanghai stock exchange’s property index tumbled 9.25 percent. Late on Friday, China’s State Council had announced a new set of policies designed to cool down the housing market.

The new rules include a 20 percent tax on gains from a sale, higher down payments and mortgage rates, and requirements that cities set annual price easing targets. The real estate market in China is already quite distorted, and these repeated rounds of repressive policies may be just layering on more distortions.

However, we should perhaps give China’s leaders some credit for acknowledging potential bubbles and taking steps to rein them in.

What burst? Unlike Japan or US, China economic is half industrial production, 9% agriculture. Real estate and stock are already only a small part of the pie. There are also economic policy that firmly clamp down on the bubble. Remember, in our country, corporate executives doesn't get to decide what's best for the society.
In fact, the Chinese stock was hottest in 06, but the Chinese government simply clamp it down and it has been kept low for the past few years now. This is on top of the fact that stocks for key industry and raw materials are not open to foreign capital at all. There is a reason we beat the financial attacks in 1997.
The same thing has been done to the real estate market as well. Not only was laws been issued to prevent price jacking, reserve housing are also released into the market. The real estate price has not really change in the past year.

 

[Ayush]

Looks good enough.

What burst? Unlike Japan or US, China economic is half industrial production, 9% agriculture. Real estate and stock are already only a small part of the pie. There are also economic policy that firmly clamp down on the bubble. Remember, in our country, corporate executives doesn't get to decide what's best for the society.
In fact, the Chinese stock was hottest in 06, but the Chinese government simply clamp it down and it has been kept low for the past few years now. This is on top of the fact that stocks for key industry and raw materials are not open to foreign capital at all. There is a reason we beat the financial attacks in 1997.
The same thing has been done to the real estate market as well. Not only was laws been issued to prevent price jacking, reserve housing are also released into the market. The real estate price has not really change in the past year.

True mate. I have been hearing this BS for the past few years and nothing has happened so far.in fact it keeps on increasing.

 

[cirr]

That's good.

In Australia, it is the reverse. Most rental income barely makes up 1/4th of the mortgage payment. The government had to introduce a tax shelter (negative gearing) to subsidize landlords.

I was refering to properties bought years ago。

Nowadays the prices are so high that even property bought with only 50% mortgage can't pay for itself with rental income。

 

[cirr]

01.03.2012 Hangzhou-Ningbo HSR starts testing run with CRH380D

Length: 149.89km, 7 stations
Design speed: 350km/h
Cost: 21.2 bln yuan
Construction: April 2009 ~ March 2013

The new HSR will open in July 2013.

The newly constructed Hangzhou-Nanjing HSR is scheduled to open around the same time，completing a triangular link of the three major cities in the Yangtze River delta：Shanghai-Nanjing-Hangzhou-Shanghai。

 

[Skyman]

Chinese housing prices have kept up with income growth. Chinese buy houses with mostly cash. First house 30% down payment and 2nd house 50% down payment. Housing crashes are less likely to occur in developing countries with fast urbanisation. Speculators bid up prices and housing sales will increase due to speculators, but when housing prices come down, the sales don't collapse because urbanisation keep the demand for houses up (although not as high sales).
In countries like Japan and US, they were both fully urbanised when their housing bubbles formed so when house prices went down, there wasn't people willing to buy (due to urbanisation being complete) them as they were only used for speculation. Also they both had low or no down payments so when the housing market collapsed, the banks were responsible for nearly all the losses.

This same 'China will collapse' nonsense the west has been spewing since 1978 has never occurred. Another big doomsay is that 'China will have a financial/banking crisis'.
Chinese Non-performing loans were 40% back in the early 1980's, but still didn't collapse. But now the NPL is below 5% as profits have surged due to the net interest margin (difference between deposit and lending rates).

Saying that, Chinese banking system is not very efficient since state owned companies get the majority of the bank loans as those companies are backed up by the government. So it's less risky to lend to them but the private businesses suffer as they don't get loans due to its high risk. As we all know private companies is where the real innovation takes place and majority of employment happens.
What we need is to develop our capital markets to decrease our reliance on bank loans and get more direct financing such as bonds and stocks, both over-the-counter and exchanges.

 

[cirr]

A Colossus - New Beijing Airport with 7 runways，including one for military use：

Phase I
Runways：4
Land area - 29.4 square kilometres
Annual passenger througput：72 million
Annual cargoes：2 million tonnes
Investment：84 billion yuan

Phase I + II
Runways：6
Land area：65.3 square kilometres
Annual passenger througput：over 100 million
Annual cargoes：2.4 million tonnes
Investment：

Military use
Runway：1
Land area：4.6 square kilometres

 

[cirr]

Railway saw 240.47 million trips during Chinese New Year holiday period (40-day), up 12.1%, including 67.27 million from high-speed rails, up 37.5%.

Pic of the Day: Yangjiaozhan on Qinghai-Tibet railway

 

[cirr]

Shell Sees Major Advance in China Shale Output Within Two Years
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SINGAPORE—Royal Dutch Shell said it may be less than two years away from a major advance in shale gas production in China, bringing the country closer to being the first outside of North America to cash in on technology that has transformed the U.S. energy industry.

Unlocking the gas trapped inside China's shale rock reserves, the world's biggest, would provide much needed energy supplies to the energy-hungry economy and help cut down on expensive imports of gas. It would also provide a windfall for Western energy giants that provide the complex hydraulic fracturing technology.

Shell is on track to have spent $2 billion by the end of this year exploring the central province of Sichuan, and has drilled nearly 30 wells in joint-venture projects with China National Petroleum Corp.

"Mid-decade we will be able to decide" on the so-called final investment decision that will determine whether to go into full commercial production, said Maarten Wetselaar, head of Shell's integrated gas operations world-wide, excluding North America.

The multinational energy company is already producing tiny amounts of shale gas as part of its exploration work, and it pumps this into Sichuan's natural-gas network. How quickly output can be ramped up after further investment is unclear.

Beijing has set an ambitious target of producing 6.5 billion cubic meters of shale gas annually by 2015, and as much as 100 billion cubic meters by 2020, from nearly zero now. Getting the Shell project into operation will be critical in meeting those goals.

In the U.S., which pioneered the technology to extract gas and oil trapped in shale rock formations, gas production has soared, bringing down prices of fuel for manufacturing and chemical production. It has also raised the prospect of liquefied natural gas exports from North America of as much as 70 million tons a year within a decade, equivalent to deliveries from current world leader Qatar, Mr. Wetselaar said in an interview

The U.S. Energy Information Administration has a preliminary estimate of some 36 trillion cubic meters of recoverable shale-gas resources in China, more than the U.S. and Canada combined, which, if extracted, could transform China's energy profile.

Those estimates have also sent rival Chevron Corp. into China searching for shale, while ConocoPhillips and Total SA are also planning exploration projects. Foreign companies are obliged to have local partners when exploring for shale in China.

China's government hasn't yet given a formal go-ahead to Shell's draft production-sharing pact with partner CNPC, but Mr. Wetselaar said he isn't worried.

"We will get the correct regime in place," he said. "I don't think it is lack of intent."

Other obstacles in China to successful exploitation include scarce supplies of water required to get the gas out of shale rock, and more complicated geology than in Canada and the U.S.

Still, "outside of North America, China is the most mature in terms of wells, in terms of activity on the ground," Mr. Wetselaar said.

But after China, the next country ready to produce commercial quantities for shale gas is likely to be Ukraine, where Shell is in the early stages of a drilling program, he said.

http://online.wsj.com/article/SB1000...532346990.html

 

[cirr]

China Wants Nuclear Reactors, and Lots of Them

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By Christina Larson
February 21, 2013
businessweek.com

Soon after the Fukushima Dai-Ichi nuclear meltdown in March 2011, Germany announced it would decommission all its nuclear plants. Switzerland and Italy rejected proposals to build more reactors. Japan shut down its reactors and has yet to restart them. China, on the other hand, plowed ahead with existing projects, even though it suspended new approvals so it could perform more safety checks. Last November, the government lifted the moratorium and approved four projects. The number of reactors being built is now 29—the most of any country, and 40 percent of the world’s total. “China is now one of the most important countries, if not the most important country, in the global nuclear industry,” says Antony Froggatt, a senior research fellow at Chatham House, a British think tank.

Photograph by ChinaFotoPress via Getty Images - Construction site of the No. 2 reactor at the
Changjiang Nuclear Power Plant in September 2012 on Hainan Island, China

China is likely to become the first country in which new reactor designs are built and tested at full size. Chief among them is the AP1000—AP stands for “advanced passive”—designed by Westinghouse Electric, the U.S. company now majority-owned by Japan’s Toshiba. The AP1000 is, in theory, safer than previous models because it has an 8 million-pound water tank perched on its roof; in the event of a power outage or generator failure, it provides an emergency cooling system powered by gravity for up to three days—a window of time estimated to be long enough to avert a meltdown. “The operator doesn’t have to do anything,” says Sandy Rupprecht, who runs business and project development for Westinghouse. Froggatt notes that with no orders in Europe and construction plans behind schedule in the U.S., Westinghouse needs a working reactor in China to show possible customers that its model is viable and safe.

China is also building a pebble-bed reactor, a dream of nuclear scientists since German engineers tried to build one in the 1960s. This kind of reactor should run at extremely high temperatures—900C (1,650F) or more; other reactors operate at around 400C—and use helium as a coolant and graphite instead of water as a moderator, which slows down neutrons in a reactor’s core to increase the chances of inducing nuclear fission. In theory, a pebble-bed model operates much more efficiently than other designs. “The problem has been that although graphite is slippery when it’s cool, at high temperatures and when it’s heavily radiated it gets more sticky,” causing the graphite pebbles to get lodged in one place, explains Steve Thomas, professor of energy studies at London’s University of Greenwich. “When the pebbles stick, they overheat and start to disintegrate, leaving a dust of fuel products and radioactive graphite.” Construction on the reactor began in December. The design came from Beijing’s Tsinghua University. If successful, it would be the first full-size prototype of this technology. If unsuccessful, it would be a costly, dangerous mess to clean up. Germany’s pebble-bed prototype, which was never operational, cost €5.5 billion ($7.3 billion) to decontaminate.

The Chinese are also testing the radioactive chemical thorium, said to be safer than uranium, as a nuclear fuel. That program was launched in 2011 in Shanghai by former President Jiang Zemin’s son, Jiang Mianheng.

China’s engineers have already adapted the Westinghouse technology into a larger design, called the CAP1400, which increases the power the reactor can produce from 1,000 megawatts to 1,400 megawatts. “They took the American design and basically stretched it,” says Arnie Gundersen, chief engineer for consultant Fairewinds Energy Education. Construction on China’s first CAP1400 is expected to begin this year. At a Feb. 1 press conference in Beijing, Gu Jun, president of State Nuclear Power, said, “Exploration of the global market for the CAP1400 will start in 2013.”

One hurdle for China’s export drive: New technology needs the blessing of the U.S. Nuclear Regulatory Commission, which is “still regarded as the global accrediting body,” says Bo Kong, assistant research professor at Johns Hopkins School of Advanced International Studies. “China has to convince the rest of the world it has the ability to build safely and securely.”

The bottom line: With 29 reactors under construction, China has become the most important factor in the global nuclear industry.