China Economy Forum

[JayAtl]

Toyota cut back China production
Toyota Motor Corp will cut back on its production of Lexus vehicles for the Chinese market amid growing tensions over a group of disputed islands in the East China Sea, a news report said Tuesday.

Japan's largest carmaker will reduce output by about 20 per cent as early as this month in reaction to a 30-per-cent fall in sales in China since an eruption of anti-Japan protests across the country, the Nikkei business daily reported, citing an unnamed company official.
The Japanese government's purchase of three of the islands from a private owner led to anti-Japan protests across China last week.

Some of Toyota's Chinese dealerships were damaged in the demonstrations, with some set on fire.

Toyota cut back China production - Yahoo! Finance New Zealand



Home Depot To Close 7 Stores In China
Home Depot, the U.S.-based home improvement big box chain, says it's going to leave some big boxes behind. It's going to close seven of its stores in China. The company says it's moving away from the do-it-yourself model in China.

http://www.npr.org/2012/09/14/161130014/home-depot-to-close-7-stores-in-china

 

[JayAtl]

China stocks stuck in massive rut
China stocks stuck in massive rut - Yahoo! News

Despite a rapidly growing economy, China's marquee stock index has taken an epic drubbing, falling to a three-and-a-half year low.
The Shanghai Composite Index has tumbled 66% over the past five years, 27% over the past three years, and 6% so far in 2012.
The losses are stunning, especially given that the Shanghai Composite is only one of two major indexes to show declines this year. Spain's IBEX 35 is the other (it's down about 5%). But the NIkkei is up more than 7%, the FTSE 100 is up 5%, and Germany's DAX has skyrocketed 26%. In the United States, the S&P 500 has more than doubled from its recession lows, jumping 16% since January.
China's economy is still expanding at a 7% to 8% annual clip, but it has slowed somewhat from pre-recession figures that often exceeded 10%. Even with strong growth, state officials have taken steps to further spur the economy. China's central bank has cut rates twice this year, and a load of infrastructure projects are set to break ground.
Yet the actions have failed to arrest the Shanghai Composite's decline.

Some of the index's slowdown can be attributed to the sharp decline in corporate profits.
"While the economy may be on track for a soft landing, interim results show that corporate earnings growth has already crashed," HSBC economists noted in a research note that details the "disconnect" between the performance of equities and the larger economy.

Analysts also noted that retail investors have abandoned stocks in droves and are instead seeking out higher returns in alternative investments.

"There has been a shift in demand for investors in general," said Winnie Deng, a senior associate at Z-Ben Advisors. "They are moving to short-term investments with more liquidity."
Among the top choices are physical property, wealth management and trust products that sometimes offer more lucrative returns. Equity analysts at Nomura have said that, while lacking hard data, anecdotal evidence suggests retail investors are also diverting funds to underground lending outlets and foreign real estate.
According to HSBC, millions of retail trading accounts have gone idle.
Regulators have loosened market controls in recent years, and reforms have increased the number of foreigners who are able to buy into the index, but there are still legal limits when it comes to foreign investors.
Meanwhile, dividends have been encouraged as a means toward drawing in more retail investors, who account for the majority of the index.

HSBC's analysts said that "listed companies have raised too much equity capital, but paid out too little in dividends," which supports public criticisms that the "market heavily favors the interests of issuers (mostly state-owned enterprises), brokerages, and the government over investors."
Most observers agree that the once-a-decade political transition scheduled for next month will precede any substantial reforms. The make-up of the new leadership team is not yet known, but there is a chance that economic concerns will rank high on their agenda.

That may offer up a sliver of hope.
HSBC's analysts said that if China's economic growth stabilizes, its new administration commits to substantial structural and regulatory reforms, and foreign investment comes back, the Shanghai Composite could be poised for growth by the second half of 2013.

 

[JayAtl]

Investors Protest Private Equity Scam in Tianjin City
Illegal fundraising promoted by local government harms savers

Tianjin City in North China was once known as the private equity paradise but has now become a living hell due to illicit fundraising activities and outright theft of invested money.

Over 1,000 disgruntled investors protested outside the Tianjin municipal government building on Sept. 3 and Sept. 4, alleging they were defrauded by the local government.

Tianjin is China’s third largest city and an economic hub, at times leading the country in gross domestic product (GDP).
But for Chinese, an attempt to capitalize on that growth has left them empty handed, with no return on investment and their capital gone.

Large groups of police attempted to disperse the protesters, beating several and taking three women into custody.
They demanded to speak to the mayor, blaming the municipal government for what they allege is wide-scale investment fraud.
Over the two days, a couple thousand people have demonstrated in front of the government building, chanting the slogan, ‘Zhang Gaoli, Cui Jindu, give back our money,” a protester named Li Peng told The Epoch Times:
Zhang is the secretary of the Tianjin municipal committee, and Cui is the vice mayor.

“There were large groups of police officers on the spot. On Sept. 3, three female protesters were arrested and we asked for their release. The authorities said they would only consider our request when we leave the government building,” Li said.
The women were released later that day and the protesters moved away from the building, said Li. On Sept. 4, the demonstrators had a negotiator meet with officials from the city and were awaiting a response.

Investors Protest Private Equity Scam in Tianjin City | Business & Economy | China | Epoch Times

 

[JayAtl]

Steel tubing used for scaffolding sits outside a construction site supporting a billboard showing the Beijing city skyline on Sept. 2, 2012. Investors are becoming aware of the stark economic reality in China. (Mark Ralston/AFP/Getty Images)


Newly released statistics and increasing trade tensions are combining to show a Chinese economy that is softening and losing its attraction for foreign investment. Recent remarks by knowledgeable and discerning investors point to a need for lowered expectations.

Foreign direct investment (FDI) into China fell in August by 1.4 percent, compared to the same period in the previous year, making it the third consecutive month of decline.


Other trade figures continue to weaken. Imports in August failed to grow for the first time in the past seven months. The export growth rate also remained weak in August. Reuters predicted that China’s 2012 GDP growth may drop to seven percent, below the all-important eight percent, and the lowest since 1999.

The Financial Times reports that China’s economy has slowed down, and characterizes domestic demand as insufficient, exports as worrisome, the efficiency of capital allocation as dropping, and profits as slipping, while bad debts are rising, and the economic bubble is bursting.
Prominent investors, sensing that these lackluster stats illustrate that China’s always-seen-as-rosy economic outlook no longer exists and that the rapid growth phenomenon is over, appear to be willing to face reality.

Third Consecutive Decline
Foreign direct investment (FDI) amounted to $8.326 billion in August, which was a drop of 1.4 percent compared to the same month last year, according to the Ministry of Commerce. There was a total of 2,100 newly established foreign companies in China, which was a year-on-year decline of 12.72 percent.
From January to August this year, $74.994 billion in foreign direct investment came to China, down 3.4 percent from 2011. During this same period, investment by the EU and US in China showed a 4.1 and 2.9 percent drop, respectively. Only Japan bucked the trend with an increase of 16.2 percent in her investment in China.

This third consecutive monthly decline in foreign direct investment is an ominous sign as May is the only month this year when FDI showed a positive increase from last year. The Ministry of Commerce also commented that the outlook for foreign trade appears grim as multiple uncertainties and unstable factors are affecting the business environment. For next few months, FDI may even be worse than the period between January and August.
Tension Boiling
Currently, tension is boiling between China’s trading partners, the EU, the United States, and Japan, and this will cast a shadow on the FDI outlook since these countries are the largest foreign investors.

On Sept. 6, the EU began an investigation into the alleged dumping of solar panels by China, “in what amounts to history’s biggest anti-dumping investigation by value,” according to the New York Times. This is sure to be a thorny topic between the two trade partners.
President Obama formally announced that the United States will file a complaint to the World Trade Organization (WTO), which says that the subsidy provided by the Chinese government to automobile parts and automobiles is hurting the interests of the U.S. manufacturers, according to CNN.

The anti-Japanese demonstrations that have engulfed China for the past week have forced many large Japanese companies to close down their factories in China, for fear of being looted or damaged. This has many observers worried that Sino-Japanese trade will take a hit for a long time.l

GDP Hits 13-year Low
The overall trade data continues to show a very sluggish Chinese economy. Data released by the General Administration of Customs showed no import growth in the month of August, down 2.6 percent from the same month last year, according to state-run media Xinhua.
This value was much lower than the median forecast of a 3.4 percent gain expected in a Dow Jones Newswire survey of 11 economists, and shows that domestic demand continues to languish.
Chinese exports in August showed an anemic growth of 2.7 percent compared to the same month last year. Since exports contribute to 25 percent of Chinese GDP and create 200 million jobs, the weak economic data is devastating to the Chinese economy.
Economists have predicted that this Chinese economic recession will last at least until the third quarter, and the GDP for the year 2012 will drop to a growth rate of 7.7 percent, the lowest recorded since 1999, according to Reuters.
Investors Awaken to Reality

“Is the world of forecasting overly fixated on China’s growth rate staying at 8 per cent? Certainly, investment banks in the past few days have tripped over themselves trying to guess the size of the China stimulus package and whether it’ll keep China on track for that default growth figure,” Rahul Jacob, a Financial Times columnist wrote in his blog.

“Fraser Howie, co-author of Red Capitalism, urges caution. He says that while people have wised up to many of the risks of investing in China in recent years, many are still too bullish and ‘there’s still a lot of wishful thinking.’ One of the most dangerous misconceptions still prevalent, he says, is the idea that the Chinese government is ‘all powerful—that they somehow are better stewards of the economy than in the west,’” according to the Financial Times.

Ray Dalio, founder of the world’s largest hedge fund company, Bridgewater, predicted that growth will decrease to less than five percent in a speech given last week at the Council on Foreign Relations in New York.

What is worse is that the factors that have fueled the rapid growth of the Chinese economy for the last decade are disappearing. First, the Chinese yuan is no longer considered to be undervalued. Second, population growth is at a standstill. Third, investment, which previously contributed to over 50 percent of GDP has likewise reached its limits.
Investors are becoming aware of the stark economic reality in China. The glorious past of rapid non-stop economic growth may very well now be a distant memory.

China’s Economy Loses Its Luster | Business & Economy | China | Epoch Times

 

[bhisma]

What Japan's investment increased by 16 percentage in china !!?? and chinese are protesting against them..
And the subsidy for the solar panel is an old news, I don't know when obama is going to file complaint in WTO. China should trade with its partners with transparency otherwise it will lead to a bad impression which is already not good..

 

[Viet]

The economy has slowed a bit but is still very impressive!

 

[grandmaster]

Toyota cut back China production
Toyota Motor Corp will cut back on its production of Lexus vehicles for the Chinese market amid growing tensions over a group of disputed islands in the East China Sea, a news report said Tuesday.

Japan's largest carmaker will reduce output by about 20 per cent as early as this month in reaction to a 30-per-cent fall in sales in China since an eruption of anti-Japan protests across the country, the Nikkei business daily reported, citing an unnamed company official.
The Japanese government's purchase of three of the islands from a private owner led to anti-Japan protests across China last week.

Some of Toyota's Chinese dealerships were damaged in the demonstrations, with some set on fire.

Toyota cut back China production - Yahoo! Finance New Zealand



Home Depot To Close 7 Stores In China
Home Depot, the U.S.-based home improvement big box chain, says it's going to leave some big boxes behind. It's going to close seven of its stores in China. The company says it's moving away from the do-it-yourself model in China.

Home Depot To Close 7 Stores In China : NPR

some japan's brown nosers may think that is bad for china! but china will gain more than lost. it will be good chance for local and german auto companies to gain the market and grow up. the japan media keep saying about umemployment when japanese companies close their business in china. but the forgot intentionally to mention how many japanese people will suffer unemployment too. japanese companies move their business to other countries! yes, go ahead! and, we do the math for their business in other market like vietnam, example. how many percent of vietnam polulation or how many people can afford buying a car? want to export product back to china? let see how much china custom will raise the tariff.

 

[sweetgrape]

China can produce cheaper alloy blades for gas turbine
China can produce cheaper alloy blades for gas turbine | China's Great Science and Technology

2012-09-27 — The gas turbine is the power source of modern manufacturing, in which the turbine high temperature blade is one of the core components of the gas turbine. Recently, significant special issue of the Science and Technology Commission of Shanghai Municipality “high-temperature alloy blade manufacturing technology research by experts at the Shanghai University of acceptance, which also marked in the field of domestic technologies are close to the highest international level.

According to Project Leader, Shanghai University, Professor Ren Zhongming, the research group in the alloy purification, a breakthrough in the field of precision casting control, process optimization, the successful production of the F-class 256-megawatt heavy-duty gas turbine turbine high temperature alloys directionally solidified blades. Meanwhile, in the Research Center of Shanghai University to establish the high-temperature alloy blades, has formed a manufacturing technology research, process testing, product testing and small batch production capacity of the gas turbine and other high-temperature alloy precision casting hot end parts. At present, the research group has microturbine pilot production of three high-temperature turbine blades for commissioning and commissioning. Also trial production for domestic investment casting of gas turbine high temperature turbine power blades, guide vanes and vectoring nozzle guide leaves and other key components.

It is understood that, due to the strict blockade of this technology abroad, most of our power plants, gas turbines are machine purchased from abroad, these devices are not cheap, and a need to spend more than ten billion maintenance equipment The steady flow of huge sums of money invested.

Professor Ren Zhongming showed an example: an imported single crystal blades cost about $ 40 million, sold to Chinese manufacturers through an intermediate agents, and doubled the price of 2.8 times, that is, 112 million, a gas turbine needs by the number of stage turbine vanes, which a turbine blade by the 96 such single crystal blades, that is to say, only the purchase price of a turbine blade, 100 million yuan.

Professor Ren Zhongming said that the production process is stable, independent research and development of Shanghai University of single crystal blades cost about 10 yuan / piece, only 1/4 of the price abroad, which no doubt will greatly reduce the use of power plants, large passenger aircraft, special ships The cost of the gas turbine field, while the domestic single crystal blades into the market, there are still about 3-5 years away to go.

The Acceptance Group this proposal, the Shanghai Municipal Government and other interested parties continue to give strong support to the project, the results further process stable and engineering optimization, and accelerate their application in the field of heavy-duty gas turbine development and manufacturing. At the same time, recommended further work on the development of the F grade heavy-duty gas turbine turbine high temperature alloy single crystal hollow blades, so as to enhance China’s high-end manufacturing services.

According to reports, China’s gas turbine manufacturing industry began in the fifties of the last century, Turbine Factory in the 1960s and 1970s have development and production of gas turbine. Was mainly a reference to the former Soviet Union Technical generic and independent design, and successfully developed part of the gas turbine. But with the national energy structure adjustment, the lack of supply of natural gas, gas turbine developed gradually losing market. SAIC, Harbin Turbine Gas Turbine Project helpless dismount, universities gas turbine professional shut down, a large number of gas turbine talent career change. 30 years of the fault to let our gas turbine technology missed foreign high-speed development period, widening the gap with international standards quickly. Nearly 10 years, with the adjustment of the national energy strategy, the gas turbine was re-entered the fast lane.

Previously, the reporter learned from the gas turbine Professional Committee of the Chinese Society of Electrical Engineering, to accelerate the gas turbine development speed, leaps and bounds, it is necessary to introduce, digest, innovation linkage key breakthroughs in core technologies, including: the manufacture of metallic materials smelting, vane nozzle processing technology, large parts of the heat treatment, large parts of the composite assembly, computer control, instrumentation, including a comprehensive energy technology, cogeneration technology, gas-steam cycle technology, vibration measurement and analysis.

 

[JayAtl]

some japan's brown nosers may think that is bad for china! but china will gain more than lost. it will be good chance for local and german auto companies to gain the market and grow up. the japan media keep saying about umemployment when japanese companies close their business in china. but the forgot intentionally to mention how many japanese people will suffer unemployment too. japanese companies move their business to other countries! yes, go ahead! and, we do the math for their business in other market like vietnam, example. how many percent of vietnam polulation or how many people can afford buying a car? want to export product back to china? let see how much china custom will raise the tariff.

this is a huge trade in terms of 100's of billions taking place between the countries- which is not lopsided enough that only one hand will feel it .

Japan has already indicted that it covets India to shift the dollars of trade towards. The FDI ruling in India should help it move the losses in one market to yet another huge market. The lack of investment policies of the past in India were a hurdle...

alternatively where will China go to recover its billions it losses from Japan? China's loss with it's neighbor is India's gain.

 

[gpit]

some japan's brown nosers may think that is bad for china! but china will gain more than lost. it will be good chance for local and german auto companies to gain the market and grow up. the japan media keep saying about umemployment when japanese companies close their business in china. but the forgot intentionally to mention how many japanese people will suffer unemployment too. japanese companies move their business to other countries! yes, go ahead! and, we do the math for their business in other market like vietnam, example. how many percent of vietnam polulation or how many people can afford buying a car? want to export product back to china? let see how much china custom will raise the tariff.

Only some misinformed, evil-spirit motivated cheerleaders would get excited that withdrawal of Japanese auto industry is bad for China.

In fact, China has for a while been discouraging foreign auto investments, and perhaps in an attempt to nurture China's own domestic industry. Please read this old article:
China to Damp Foreign Investment in Auto Sector - WSJ.com

Chinese authorities are wisely utilizing this anti-Japan emotion in a timely manner to promote their own agenda seamlessly.

LOL! You can see how clueless and hilarious those cheerleaders would look like!

 

[grandmaster]

China can produce cheaper alloy blades for gas turbine
China can produce cheaper alloy blades for gas turbine | China's Great Science and Technology

2012-09-27 — The gas turbine is the power source of modern manufacturing, in which the turbine high temperature blade is one of the core components of the gas turbine. Recently, significant special issue of the Science and Technology Commission of Shanghai Municipality “high-temperature alloy blade manufacturing technology research by experts at the Shanghai University of acceptance, which also marked in the field of domestic technologies are close to the highest international level.

According to Project Leader, Shanghai University, Professor Ren Zhongming, the research group in the alloy purification, a breakthrough in the field of precision casting control, process optimization, the successful production of the F-class 256-megawatt heavy-duty gas turbine turbine high temperature alloys directionally solidified blades. Meanwhile, in the Research Center of Shanghai University to establish the high-temperature alloy blades, has formed a manufacturing technology research, process testing, product testing and small batch production capacity of the gas turbine and other high-temperature alloy precision casting hot end parts. At present, the research group has microturbine pilot production of three high-temperature turbine blades for commissioning and commissioning. Also trial production for domestic investment casting of gas turbine high temperature turbine power blades, guide vanes and vectoring nozzle guide leaves and other key components.

It is understood that, due to the strict blockade of this technology abroad, most of our power plants, gas turbines are machine purchased from abroad, these devices are not cheap, and a need to spend more than ten billion maintenance equipment The steady flow of huge sums of money invested.

Professor Ren Zhongming showed an example: an imported single crystal blades cost about $ 40 million, sold to Chinese manufacturers through an intermediate agents, and doubled the price of 2.8 times, that is, 112 million, a gas turbine needs by the number of stage turbine vanes, which a turbine blade by the 96 such single crystal blades, that is to say, only the purchase price of a turbine blade, 100 million yuan.

Professor Ren Zhongming said that the production process is stable, independent research and development of Shanghai University of single crystal blades cost about 10 yuan / piece, only 1/4 of the price abroad, which no doubt will greatly reduce the use of power plants, large passenger aircraft, special ships The cost of the gas turbine field, while the domestic single crystal blades into the market, there are still about 3-5 years away to go.

The Acceptance Group this proposal, the Shanghai Municipal Government and other interested parties continue to give strong support to the project, the results further process stable and engineering optimization, and accelerate their application in the field of heavy-duty gas turbine development and manufacturing. At the same time, recommended further work on the development of the F grade heavy-duty gas turbine turbine high temperature alloy single crystal hollow blades, so as to enhance China’s high-end manufacturing services.

According to reports, China’s gas turbine manufacturing industry began in the fifties of the last century, Turbine Factory in the 1960s and 1970s have development and production of gas turbine. Was mainly a reference to the former Soviet Union Technical generic and independent design, and successfully developed part of the gas turbine. But with the national energy structure adjustment, the lack of supply of natural gas, gas turbine developed gradually losing market. SAIC, Harbin Turbine Gas Turbine Project helpless dismount, universities gas turbine professional shut down, a large number of gas turbine talent career change. 30 years of the fault to let our gas turbine technology missed foreign high-speed development period, widening the gap with international standards quickly. Nearly 10 years, with the adjustment of the national energy strategy, the gas turbine was re-entered the fast lane.

Previously, the reporter learned from the gas turbine Professional Committee of the Chinese Society of Electrical Engineering, to accelerate the gas turbine development speed, leaps and bounds, it is necessary to introduce, digest, innovation linkage key breakthroughs in core technologies, including: the manufacture of metallic materials smelting, vane nozzle processing technology, large parts of the heat treatment, large parts of the composite assembly, computer control, instrumentation, including a comprehensive energy technology, cogeneration technology, gas-steam cycle technology, vibration measurement and analysis.

good job! perhaps some brown nosers of japan would comment jealously that this high tech is transfered from japan, LoL

 

[JayAtl]

China's biggest steelmaker shuts mill

BEIJING (AP) — China's biggest steelmaker said Thursday it has shut down a mill in Shanghai in a new sign of weakening growth in the world's second-largest economy.

Baosteel Group's announcement adds to a drumbeat of bad news including a decline in trade and corporate profits despite two interest rate cuts and higher government spending on public works construction. Growth fell to a three-year low in the latest quarter and officials including President Hu Jintao have warned it could fall further before rebounding.
Baosteel said it was closing its mill in Shanghai's Luojing district to avoid mounting losses at the facility amid weak demand for steel plate that is used in shipbuilding and construction.
The move by one of China's most prominent and prosperous companies reflects the painful squeeze that has hit producers of steel, aluminum, cement and some other goods. They grew fast as investment in new factories and other assets soared in the years before the 2008 global crisis and now production capacity far outstrips anemic demand.
"There are signs of severe overcapacity in steelmaking and other industries as well," said Capital Economics analyst Mark Williams.

"It's going to be painful for a lot of industries in China," said Williams. "And the pain is going to be felt beyond China's borders because a lot of companies elsewhere in the world have prospered from selling commodities and capital goods to China. The outlook for them is not so rosy."

China's demand for steel has been hurt by government curbs imposed on construction to prevent overinvestment and cool surging housing costs. Shipbuilding also has suffered; its industry group says orders are down 50 percent compared with a year ago and news reports say dozens of shipyards might close for lack of business.

The Shanghai mill, which Baosteel bought in 2008 for 14 billion yuan ($2.2 billion), had a production capacity of 3 million tons a year, according to Chinese news reports.
China's economic growth fell to 7.6 percent in the three months ended in June. That is robust by the standards of the United States and Japan, where growth this year is forecast in low single digits, but is painful for Chinese companies that rely on high growth to drive demand for new factories, apartments and other assets.

Analysts are forecasting a rebound late this year or in early 2013 but say it likely will be too weak to support global growth without improvement in the United States and Europe. Hu warned in a speech this month at the Asia Pacific Economic Cooperation meeting in Russia that "pressure for economic growth to slow is obvious."
The communist government has tried to support growth by approving a multibillion-dollar wave of investment projects and construction of public facilities such as subways and airports. But authorities have moved cautiously after their huge stimulus in response to the 2008 downturn ignited inflation and a wasteful building boom.

Also Thursday, the government reported total profits for China's biggest industrial companies fell for a fifth month in August, declining 6.2 percent from a year earlier. The National Bureau of Statistics said profits for state-owned companies such as Baosteel fell 12.7 percent from a year earlier, while those for private sector companies rose 15.1 percent.
Chinese steelmakers lost money four out of the first seven months of the year, according to their industry group, the China Iron & Steel Association.

Some industries have been hit even harder. Chinese producers of solar panels, an industry in which supply far outstrips demand, have reported losses of hundreds of millions of dollars this year.
China accounts for about half of world steel production and its voracious appetite for imported iron ore has helped to drive economic booms for Australia, Brazil and other suppliers.
Baosteel was the first major steel producer to announce the closure of a mill while others have kept mills operating at low capacity, buoyed by loans and subsidies from local governments that want to avoid losing jobs.
Baosteel had some 117,000 employees as of the end of 2011, according to the company website. It reported 18 billion yuan ($2.9 billion) in profit last year despite the slowing Chinese economy.
Even after China's growth recovers, analysts say industries such as steel and cement production will see much lower demand than they did during the investment boom.

Chinese authorities have pointed to cement, solar panels, wind turbines and other industries as areas in which overcapacity should be reduced, suggesting they might let companies go bankrupt or arrange mergers.

China's biggest steelmaker shuts mill - Yahoo! News

 

[JayAtl]

BEIJING (AP) — China's biggest steelmaker said Thursday it has shut down a mill in Shanghai in a new sign of weakening growth in the world's second-largest economy.
Baosteel Group's announcement adds to a drumbeat of bad news including a decline in trade and corporate profits despite two interest rate cuts and higher government spending on public works construction. Growth fell to a three-year low in the latest quarter and officials including President Hu Jintao have warned it could fall further before rebounding.

Baosteel said it was closing its mill in Shanghai's Luojing district to avoid mounting losses at the facility amid weak demand for steel plate that is used in shipbuilding and construction.
The move by one of China's most prominent and prosperous companies reflects the painful squeeze that has hit producers of steel, aluminum, cement and some other goods. They grew fast as investment in new factories and other assets soared in the years before the 2008 global crisis and now production capacity far outstrips anemic demand.

"There are signs of severe overcapacity in steelmaking and other industries as well," said Capital Economics analyst Mark Williams.

"It's going to be painful for a lot of industries in China," said Williams. "And the pain is going to be felt beyond China's borders because a lot of companies elsewhere in the world have prospered from selling commodities and capital goods to China. The outlook for them is not so rosy."
China's demand for steel has been hurt by government curbs imposed on construction to prevent overinvestment and cool surging housing costs. Shipbuilding also has suffered; its industry group says orders are down 50 percent compared with a year ago and news reports say dozens of shipyards might close for lack of business.

The Shanghai mill, which Baosteel bought in 2008 for 14 billion yuan ($2.2 billion), had a production capacity of 3 million tons a year, according to Chinese news reports.
China's economic growth fell to 7.6 percent in the three months ended in June. That is robust by the standards of the United States and Japan, where growth this year is forecast in low single digits, but is painful for Chinese companies that rely on high growth to drive demand for new factories, apartments and other assets.

Analysts are forecasting a rebound late this year or in early 2013 but say it likely will be too weak to support global growth without improvement in the United States and Europe. Hu warned in a speech this month at the Asia Pacific Economic Cooperation meeting in Russia that "pressure for economic growth to slow is obvious."

The communist government has tried to support growth by approving a multibillion-dollar wave of investment projects and construction of public facilities such as subways and airports. But authorities have moved cautiously after their huge stimulus in response to the 2008 downturn ignited inflation and a wasteful building boom.

Also Thursday, the government reported total profits for China's biggest industrial companies fell for a fifth month in August, declining 6.2 percent from a year earlier. The National Bureau of Statistics said profits for state-owned companies such as Baosteel fell 12.7 percent from a year earlier, while those for private sector companies rose 15.1 percent.
Chinese steelmakers lost money four out of the first seven months of the year, according to their industry group, the China Iron & Steel Association.

Some industries have been hit even harder. Chinese producers of solar panels, an industry in which supply far outstrips demand, have reported losses of hundreds of millions of dollars this year.

China accounts for about half of world steel production and its voracious appetite for imported iron ore has helped to drive economic booms for Australia, Brazil and other suppliers.
Baosteel was the first major steel producer to announce the closure of a mill while others have kept mills operating at low capacity, buoyed by loans and subsidies from local governments that want to avoid losing jobs.

Baosteel had some 117,000 employees as of the end of 2011, according to the company website. It reported 18 billion yuan ($2.9 billion) in profit last year despite the slowing Chinese economy.
Even after China's growth recovers, analysts say industries such as steel and cement production will see much lower demand than they did during the investment boom.
Chinese authorities have pointed to cement, solar panels, wind turbines and other industries as areas in which overcapacity should be reduced, suggesting they might let companies go bankrupt or arrange mergers.

China's biggest steelmaker shuts mill - Yahoo! News

doh double posted...

 

[Fanling Monk]

self deleted

 

[Mitro]

I think we should worry about our manufacturing units .

India’s manufacturing hits brick wall as economy slows

India’s manufacturing hits brick wall as economy slows - The Washington Post