China Economy Forum

[Brotherhood]

CSR predicts net profit rose by more than 50% last year - People's Daily Online February 02, 2011

Passengers prepare to board an intercity high-speed train in Shanghai, which connects to Hangzhou in Zhejiang province. China hopes to expand its high-speed railway industry by exploring overseas markets. [Photo/Agencies]


Railway company eyes cooperation in more domestic, foreign projects

China's largest train manufacturer CSR Corp said on Monday that it expects its net profit to have increased by more than 50 percent in 2010, thanks to the country's fast development of high-speed railways.

In a statement to the Hong Kong Stock Exchange, CSR said its business continued its good growth last year and it expects its profit rose more than 50 percent from the 1.68 billion yuan ($254 million) in 2009.

Since China rolled out the first high-speed railway between Beijing and Tianjin in 2008, the nation's high-speed rail network has topped the world in both speed and distance covered.

The nation's latest fast train, the CRH380A, built by CSR, set a world record on Dec 3 by hitting 486.1 kilometers an hour during a trial run on the Beijing-Shanghai High-Speed Railway. China is operating the world's longest high-speed rail network, a combined length of 7,531 kilometers, which will reach 13,000 kilometers by 2012.

CSR, now the world's third-largest high-speed train producer, just behind Bombardier and Alstom, is aiming to become number one in the sector, Zheng Changhong, president of CSR, said earlier.

"The next five years will be a peak period in terms of railway construction in China, with annual investment touching 700 billion yuan," he said.

Looking not only at the domestic market, CSR is also aiming to tap more overseas opportunities. In 2009, it earned $1.24 billion in overseas sales.

"CSR's overseas business accounted for only 10 percent of the company's total revenue, and we will raise the proportion to 20 percent," Zhao Xiaogang, chairman of CSR, told Xinhua News Agency.

The South China Morning Post said on Jan 19 that CSR and CNR, China's second-largest train maker, are in the final negotiations for four deals worth $800 million with UK companies.

The contracts would be the first for Chinese train producers to tap the Western European market, the report said.

CSR signed an agreement with General Electric in December 2010 to establish a 50-50 joint venture to manufacture high-speed trains in the United States, using China's technology, and to jointly explore the US high-speed railway market.

When President Hu Jintao visited the United States, CSR signed letters of intent for ventures with GE. The deals could bring in $1.4 billion and add 2,000 jobs in the US, including an order for 500 exported locomotive kits and related services valued at $350 million, GE Transportation Chief Executive Officer Lorenzo Simonelli said on Jan 19.

California is to build a 1,100-kilometer high-speed rail system and China would like to be involved, but it faces competition from Japan, France, Germany, Spain, Italy, Belgium and South Korea, local media reported.

"Although China's high-speed railway technology has been transferred to overseas markets, it's mainly focused on developing economies, including India, Malaysia, and Turkey," said a CSR insider who wished to remain anonymous.

"The cooperation with GE can be the pioneering venture in North American markets, and can also serve as the model for exploring European nations," he said.

Source: China Daily(By Zhang Qi)

 

[CardSharp]

FT
Canada eager to increase timber exports to China

“I would want to be able to sit down with the Americans and look at my watch and say: ‘Gosh, I’m a bit busy right now. I’ve got some customers in China that I’d like to talk to. Can we do this another time?’ ” said Mr Bell.

Bolded part is funny

Canada and the US fought a lumber war, a long time ago but it looks like it might start again.


U.S. launches legal action to reignite lumber war with Canada

 

[Brotherhood]

Energy efficiency of China's energy intensive sectors up 20 pct in past 5 years: NBS - People's Daily Online February 04, 2011

The energy consumption per unit of gross domestic product (GDP) for China's major energy intensive industries decreased by more than 20 percent during the 2006-2010 period, the statistics authorities have reported.

The National Bureau of Statistics (NBS) attributed the rising energy efficiency for the industries to the government's growing investment in energy savings, and the accelerated energy-saving technological upgrading for the sectors.

The sectors include oil processing, coking and nuclear fuel processing, chemicals and chemical product manufacturing, non-metallic mineral product manufacturing, ferrous metal smelting and rolling, nonferrous metal smelting and rolling, and electricity and heat producing and supplying.

Data from the energy department of the NBS showed that the industries had saved a total of 400 million tonnes of standard coal, contributing more than 60 percent to the entire country' s energy savings.

The performance of the energy intensive sectors is key to whether China can reach its energy efficiency goal, as the industries accounted for about 77 percent of China's total industrial energy consumption and more than half of the country's total energy consumption, said the NBS.

China's National Development and Reform Commission (NDRC) said last month that China could basically meet its goal of reducing energy consumption per unit of GDP by about 20 percent from 2005 levels by the end of 2010.

Source: Xinhua

 

[中国万岁-ProsperThroughCo-]

FT
Chinese property bubble: a myth?

February 3, 2011 12:45 pm by Ranjit Lall

Citigroup’s calculation that residential property investment in China has soared to 6.1 per cent of gross domestic product – a level last seen in the United States shortly before the global financial crisis – has intensified fears of a property bubble in the country.

But a closer look at China’s complex property market suggests that these fears may be unwarranted. Not only has the market’s growth been slowing since mid-2010, but property prices do not appear to be significantly out of line with fundamentals.

According to Shen Minggao, Citigroup’s China research head, property prices are “no longer sustainable” once residential investments reach 8 per cent of GDP, a threshold China is rapidly approaching. “China’s property market is entering into a bubble stage,” Shen told Bloomberg on Tuesday.

At first glance, the data appear to support Shen’s claim: property prices rose for a fourth consecutive month in December, up 0.3 per cent on a monthly basis and 6.4 per cent on an annual basis.

But it’s important to note that December’s rise was the slowest in more than a year, and just half the annualised 12.8 per cent increase in April. Tightening measures in December 2009 and January 2010, including a minimum down payment ratio for second mortgages of 40 per cent, appear to be paying dividends.

The fact that property prices have been rising for an extended period, of course, means little. China’s property market slumped in mid-2008, and the latest expansion should be viewed as part of its recovery. Indeed, prices only recently regained their 2007 peak.

The key indicator when it comes to identifying potential property bubbles is the ratio of property prices to average disposable incomes. This ratio has been declining in China since the end of 2007, and is far lower than in the US, Britain and continental Europe.

With the economy growing at almost 10 per cent per year and incomes soaring – particularly in urban areas – this is not surprising. Lex estimates that since August 2005 property prices rise have increased 7 per cent on average, while urban disposable incomes have gone up 12 per cent. Urban Chinese, far from being priced out of the market, have seen their property purchasing power rise in recent years.

Admittedly, there is variation. House price-to-income ratios in large cities such as Beijing, Shanghai and particularly Shenzhen have been rising steadily over the past two years.

Yet these cities make up less than 5 per cent of new home sales in China. True, their share of the total value of sales is likely to be much higher (no data is publicly available), as is their share of mortgage credit. But the fact that China’s overall price-to-income ratio continues to fall – even as it rises in these cities – suggests that this share is not large enough to inflict serious damage on the property market.

This is consistent with the findings of a study released by the International Monetary Fund in December entitled ‘Are house prices rising too fast in China?’. Comparing current prices with expected prices based on factors such as interest rates, GDP per capita and land prices, the report concludes:

We have found that house prices are not significantly overvalued in China as a whole… However, the mass-market segment in a few large cities – such as Shanghai and Shenzhen, and the luxury segment in Beijing and Nanjing – do appear to be increasingly disconnected from fundamentals.

Even in these cities, though, the report offers grounds for optimism. It finds that “over the past decade, when misalignments in house prices have occurred, they have been corrected relatively quickly.” In most advanced economies, by contrast, deviations from fundamentals tend to persist for lengthy periods.

Further, many of the trends underlying rising prices, such as negative real interest rates, the absence of property taxes and a lack of alternative investment opportunities, are already being reversed.

Last week, for instance, the government for the first time authorised a property tax in Shanghai and Chongqing. And with interest rates almost certain to rise over the coming months, cheap capital can no longer be taken for granted. This should put the brakes on property investment, particularly by spectulators.

The overall picture, then, is of a property market expanding at a sustainable pace and broadly in line with fundamentals. While the spectre of an urban real estate bubble remains, this is confined to a few large cities and likely to be quickly corrected. It could not, as the China bears are so keen to believe, drag the whole of the Chinese economy down with it.

 

[CardSharp]

No one before reform had private, this artificially deflats the home market. I can only assume the Chinese market is compensating.

I just advised my parents to buy a holiday property. F the bubble.

 

[中国万岁-ProsperThroughCo-]

US retreats from attack on renminbi

By Robin Harding in Washington
Published: February 5 2011 00:19 | Last updated: February 5 2011 00:19

The US Treasury has again declined to label China a currency manipulator, saying the renminbi’s real exchange rate is rising at an annualised pace of 10 per cent.

In a politically sensitive report slipped out on Friday afternoon, the Treasury said high inflation in China meant its true exchange rate had risen rapidly since it was allowed to appreciate last June.

The report is further evidence that the issue of renminbi undervaluation has slipped down the agenda after China let its currency rise again, the Republicans regained control of the House of Representatives and Hu Jintao, China’s president, visited the US in January.

“The report studiously avoids bringing things to a boil by calling China a currency manipulator,” said Eswar Prasad, professor of trade policy at Cornell University. “Exercising that nuclear option at this stage is certainly in nobody’s interest.”

But the Treasury continued to say in its report the speed of renminbi appreciation “is insufficient and that more rapid progress is needed”.

By law, the Treasury must produce semi-annual reports that declare whether important trading partners manipulate their currencies to gain trade advantages against the US. Officials say that China has made enough progress – including changes to its language during Mr Hu’s state visit – that such a declaration is not warranted.

In a joint statement at the end of the state visit, Mr Hu and Barack Obama, US president, said: “China will continue to promote RMB exchange rate reform and enhance RMB exchange rate flexibility, and promote the transformation of its economic development model.”

Treasury officials believe allowing the renminbi to rise is in China’s self interest – to control inflation, prevent bubbles in stock and property markets, and shift growth towards more sustainable domestic demand. They therefore see little merit in provoking a confrontation.

China has also been taking steps to allow the renminbi to circulate more abroad. In the long-run that will erode China’s ability to prevent speculative buying of the renminbi – and hence keep the currency down.

Max Baucus, a Democrat who chairs the Senate finance committee, said he was disappointed by the report. “China has been given a free pass on its currency practices for far too long,” he said.

 

[中国万岁-ProsperThroughCo-]

World seeing beyond cheap labour to Chinese values

LEADER

Feb 06, 2011

Last week, in keeping with Lunar New Year tradition, China's leaders offered festive greetings to Chinese people across the nation as well as overseas, wishing them good health, prosperity (SEHK: 0803, announcements, news) and happiness. In Hong Kong, the public were again treated to a short, government-produced film involving Chief Executive Donald Tsang Yam-kuen and his wife, in brightly coloured dress, offering their new year greetings. None of this is surprising or new. The Lunar New Year, or Spring Festival, is the most important festival for Chinese everywhere. Even though much of the world has taken to celebrating Christmas and the calendar new year, it is evident that Chinese communities still reserve the Lunar New Year for get-togethers and for opportunities to show generosity and to reflect on love, family and happiness.
While developments in Egypt hogged the news headlines and preoccupied many foreign leaders during this period, these leaders were still eager to impress upon the world their familiarity with Chinese customs. It is a sign of the times that more and more people around the world are beginning to recognise the importance of Lunar New Year. When he was Australian prime minister, Kevin Rudd delivered Lunar New Year greetings in Putonghua. Last year, United States President Barack Obama delivered a greeting emphasising how such celebrations served as a reminder of the "richness and diversity" of American life. This year Rudd's successor, Julia Gillard, used the proximity of Australia Day, on January 26, and the Lunar New Year to give a public reminder that the Chinese had "been a proud part" of the Australian nation.

A notable entry this year to the list of foreign state leaders eager to connect with the Chinese population was British Prime Minister David Cameron, who issued a video greeting with Chinese subtitles that was circulated via government internet sites and mailing lists and posted on YouTube, and tellingly, the Chinese equivalent of the video-sharing website, Youku, to ensure that ordinary mainland residents would be able to view it. He begins by greeting "people in China, the United Kingdom, and around the world", and makes his own attempt to interpret what the Year of the Rabbit means, calling it "a time for friends and family, new beginnings and old wisdoms, for home and optimism". Cameron articulates the meaning of Lunar New Year impressively; some might even think he outshines Tsang, who issued a simple message of "good health and happiness".

No doubt, such messages smack of political opportunism at a time when many nations' economies depend on China to varying degrees. Cameron uses the opportunity to recall his trip last year to Beijing at the head of the biggest delegation of British cabinet ministers ever to visit China and to underline his aim to double the value of trade between the two countries to more than US$100 billion by 2015.

But these messages are also indicative of the influence of Chinese culture and values which have brought admiration from people around the world. China's No.1 women's tennis player, Li Na, charmed the world with her healthy mix of wit, dedication and skill in her run to the Australian Open final. Cameron concludes his message by paying tribute to the Chinese community's "enormous contribution" to British society, which he said offered a shining example of the value of hard work.

The story of China's rise is often told in economic terms, but the world is belatedly realising that China, in terms of its values, traditions and culture, has far more to offer than just cheap labour.

YouTube - Prime Minister's Chinese New Year greetings with Chinese subtitles

 

[Brotherhood]

China tops world in gold output in 2010 - People's Daily Online February 07, 2011

China, which became the world's largest gold producer since in 2007, retained its position again in 2010 by mining 340.88 tonnes, up 8.57 percent year on year, the China Gold Association said Sunday.

Increases in gold output will help China hedge against financial risks and inflation, as well as maintain economic security, the association said.

The number of domestic gold producers shrank to around 700 at the end of 2010, from 1,200 in 2002, through mergers and acquisitions. At present, China's top ten producers account for 49.19 percent of the total gold output.

Production is concentrated in five provinces, including Shandong, Henan, Jiangxi, Yunnan, and Fujian, which account for 59.82 percent of total output.

Violent movements in asset prices caused by the financial crisis boosted Chinese investors' demands for gold as a safe haven. The yearly average gold price jumped 25.6 percent from one year earlier to 1,224.53 U.S. dollars per ounce.

Source: Xinhua

 

[Brotherhood]

Cross-strait Trade Statistics in Perspective 2011-02-07

Scholars criticized the confusing statistics used in cross-strait trade. Picture: Containers at a port in Taiwan. (File Photo/Commercial Times)

There are three different sets of statistics being talked about in regard to Taiwan's trade with China. So to what extent do Taiwan's exports really rely on China: 41%, 31% or 28%?

There are two methods to measure a nation's reliance on exports. The first is the ratio of its exports to its gross domestic product, which enables one to understand the different components of the country's whole economy. Another is a nation's exports to a specific area as a percentage of its total exports. This is used to measure the importance of that market to exports.

The excess of exports over imports in money terms is referred to as trade surplus; the excess of imports over exports is called trade deficit.

In the past, President Ma Ying-jeo and Premier Wu Den-yih have frequently said that Taiwan's exports to China accounted for 40% of its total exports. However, the Ministry of Economic Affairs has said that it only accounts for 30% of total exports.

What explains this difference? To understand how this works, we need to first understand how Taiwan's export reliance on China is represented. It can be represented either by the ratio of exports to China to Taiwan's total exports or by the share of exports to China in every 100 dollars of Taiwan's exports.

So why does the government release different figures for them? To understand that, it is necessary to understand the basics of Taiwan's trade with China. Before 1987, trade with China was banned altogether, and the prohibition was lifted only gradually thereafter.

In order to sidestep the restrictions, many exports to China used to be shipped to Hong Kong before being diverted to China. It was a practice followed by many local exporters even after several of the restrictions were lifted. Therefore, the data gathered by Customs about exports to China clearly understated the real value of exports to China.

In order fully understand the extent of Taiwan's exports to China, the Bureau of Foreign Trade, under the Ministry of Economic Affairs, began, in 1990, to compare the statistics issued by Taiwan, China and Hong Kong to figure out Taiwan's exports to China. They were intended to be more realistic than the numbers released by customs.

Of course, with most restrictions on trade with China lifted, local exporters no longer have to hide their exports to the mainland. So today, Customs data is more accurate than before. However, the figures are still different from those released by the Bureau of Foreign Trade.

For example, data from Customs showed that Taiwan's exports to China totaled US$63.7 billion during the first ten months of 2010, representing 28.1% of the country's total exports, while the Bureau of Foreign Trade said that it totaled US$70.4 billion, making up 31.1% of the country's total exports.

So where did the 40% cited by the president and the premier come from? It comes from combining the Customs' figures for exports to Hong Kong and to China. However, since some of Taiwan's exports to Hong Kong are intended for re-export to markets other than China, this figure, in fact, overstates Taiwan's export reliance on China.

A similar difference exists between the figures of the two agencies regarding Taiwan's trade surplus against China. While Customs has estimated the surplus to be US$64.8 billion, including Taiwan's surplus against Hong Kong, the Bureau of Foreign Trade has said that it in fact stands at US$41.5 billion.

The Bureau of Foreign Trade's figure, which excludes Taiwan's trade surplus against Hong Kong, is closer to the true picture.

Contrary to the claims of critics, the Bureau has also included, in its figures, the value of Taiwan's exports to Hong Kong, which were eventually re-exported to China.

Based on this explanation, we can see that the Bureau of Foreign Trade's figures give the most accurate representation of Taiwan's trade with China. Taiwan's exports to China therefore account for 31% of its total exports, and show the island enjoyed a trade surplus of US$41.5 billion in the first ten months of 2010.

 

[中国万岁-ProsperThroughCo-]

Public and lawmakers demand details of mystery regional plan

Chloe Lai
Feb 08, 2011

An ambitious joint study by Hong Kong, Guangdong and Macau has proposed building a new town in North Lantau, a cross-border checkpoint in the West Kowloon arts hub and new cultural villages in Tai O and Fanling to attract tourists.
And crowded Central, Wan Chai and Causeway Bay will transform into low-carbon areas with priority given to pedestrians over vehicles.

The study is titled "The Action Plan for the Bay Area of the Pearl River Estuary" and was jointly produced by authorities in Hong Kong, Macau, Shenzhen, Dongguan , Guangzhou, Zhuhai and Zhongshan , with the aim of upgrading the region's quality of life.

However, the 18-page public consultation digest - and the 45-page Powerpoint document that goes with it - aims high but is short on detail.

The document has gone unnoticed - at least until recently - with the Planning Department only making a brief statement about it in mid-January before launching a one-month public consultation.

But now, more than 7,000 people have expressed concerns about it and joined a Facebook petition urging the government to extend its public consultation, which is to close on Thursday.

Lawmakers have complained they were not consulted on the plan. The Legislative Council has not received information about it.

"We do not accept our future being decided without us having a fair say," Chan Kim-ching, who started the Facebook campaign, said. "We are also uncertain about whether it is a genuine consultation. The Northern Link is still under study. But they have included it in the action plan. Does it mean the government will build it for sure?"

The action plan is one of several attempts at better integrating Hong Kong, Macau and the mainland.

The State Council has outlined a plan for the Pearl River Delta region between 2008 and 2020.

Guangdong, Hong Kong and Macau jointly commissioned Peking University and Guangdong Urban and Regional Planning and Design Institute to report on the issues between March and April last year.

Under the action plan, the region will become a "bay for quality living", building on an advanced public transport network, residential communities with diversified housing types and adequate infrastructure and facilities. It also wants the region to excel in scientific research and development, boost its service sector and expand as a financial and transport hub.

Details of the plan relating to Hong Kong were not included in the text, but low-resolution maps included in the document show a new town in northern Lantau, a cross-border checkpoint in West Kowloon, cultural villages at Tai O and Fanling, and a low-carbon emission plan for Central, Wan Chai and Causeway Bay.

The Northern Link and the express rail connecting Hong Kong and Shenzhen airports, though still under study, are also included.

Authorities in Macau and Guangdong will co-ordinate land use and development of 500 hectares of Macau land - whose reclamation was approved by Beijing in December 2009 - and the business district in Henqin, Zhuhai. The new plan envisages a Zhuhai-Macau industrial zone as a logistics and exhibition centre.

Lawmaker Cyd Ho Sau-lan has demanded an explanation from the Planning Department as to why the Legislative Council was excluded from the exercise.

Paul Zimmerman of Designing Hong Kong urged the government to publish the full report, in English, and criticised the Planning Department's lack of attempt to engage the non-Chinese speaking community in Hong Kong. "The information available is not the full report," he said. "It doesn't even have the population of each city involved in the study. I understand the study was conducted in Chinese. But the Planning Department should translate the materials into English so everyone in Hong Kong can participate in the discussion."

A Planning Department spokeswoman said the government would continue to listen to public responses to the plan.

LINK:The report in simplified Chinese, also available in traditional Chinese。 Lots of illustrations and maps

 

[no_name]

see post no. 9 for the original article.

ps: I had thought this might be too good to be true. The city would have had almost enough power to rival the provincial government. But then Chongqing is a megacity itself. Anyone know what was the rational for merging Chongqing?

------
No ambitious megacity plan in S. China province

Guangdong provincial authorities denied on Friday that they plan to merge nine cities in the Pearl River Delta region into a super-sized metropolis.

Guo Yuewen, spokesman for the Guangdong Provincial Committee of the Communist Party of China, made the remarks on Friday in response to recent overseas media reports that an ambitious urbanization project had been launched by the Guangdong government to merge nine cities in the delta region.

"The reports were totally false. There is no such plan," Guo said at a news conference.

Overseas media, including Hong Kong-based South China Morning Post, reported recently that the Guangdong government had planned the nearly 2-trillion-yuan ($303 billion) project to merge the Pearl River Delta cities of Guangzhou, Foshan, Zhaoqing, Shenzhen, Dongguan, Huizhou, Zhuhai, Zhongshan and Jiangmen and the rural areas between them.

The reports also said the merged megalopolis will cover 40,000 square kilometers and have a population of 42 million.

"I can only say that Guangdong province is improving integration of infrastructure, industries, urban-rural planning, environmental protection and basic public services in the delta region," Guo said.

The integration was in line with the Outline of Planning of the Pearl River Delta Region Reform and Development (2008-2020), passed by the central government in December 2008, according to Guo.

Under the outline, three economic circles - Guangfozhao (Guangzhou, Foshan and Zhaoqing), Shenguanhui (Shenzhen, Dongguan and Huizhou) and Zhuzhongjiang (Zhuhai, Zhongshan and Jiangmen) - will be developed in the near future.

"The outline is aimed at increasing economic and social development in the delta area," Guo said. "It was also designed to boost competitiveness in economic development in the delta region."

Guangdong, which borders Hong Kong and Macao special administrative regions, surpassed Hong Kong, Taiwan and Singapore in GDP to reach 4 trillion yuan in 2010, according to provincial government sources.

No ambitious megacity plan in S. China province - China.org.cn

 

[no_name]

Chongqing is larger than Hainan and Taiwan (!) (more populous too)

Still, for the extreme definition of a spread out (and sparsely populated) city, see this:

City of Kalgoorlie-Boulder - Wikipedia, the free encyclopedia

 

[CardSharp]

Chongqing is larger than Hainan and Taiwan (!) (more populous too)

Still, for the extreme definition of a spread out (and sparsely populated) city, see this:

City of Kalgoorlie-Boulder - Wikipedia, the free encyclopedia

That's not a city, that's a taxonomy error.

 

[Rafi]

Guangdong, others richer than some countries: blue paper

An increasing number of provinces in China are richer than some countries, according to a blue paper published Sunday by China's top think tank.

Compared to the 18 G20 nations, Guangdong ranked 16th in terms of overall GDP, surpassing Saudi Arabia, Argentina and South Africa. Shandong and Jiangsu surpassed Argentina and South Africa, and Zhejiang topped South Africa.

In terms of per capita GDP, Shanghai ranked 12th in comparison with the 18 G20 countries, better than Turkey, Mexico, Argentina, Brazil, South Africa, Indonesia and India. Tianjin ranked 15th and Beijing 16th.


Amazing !!!!

 

[no_name]

That's not a city, that's a taxonomy error.

It counts as a municipality which can be fluid in its definitions. I got that one from this list:

List of cities by surface area - Wikipedia, the free encyclopedia