China Economy - News & Updates

[aimarraul]

Taiwan opens door for mainland investment
(Agencies)
Updated: 2009-06-30 19:34

TAIPEI, Taiwan: Taiwan has opened up key parts of its manufacturing and service sectors to mainland investment as another barrier falls across the Straits.

The new rules announced Tuesday are part of Taiwan leader Ma Ying-jeou's ambitious effort to move the island's economy closer to Chinese mainland, and foster a dialogue aimed at ending six decades of estrangement.

Under the new rules, Chinese mainland companies will be able to invest in 100 categories of local business, including computer components, cell phones, car making and building of resort hotels and commercial ports.

But Taiwan is keeping the semiconductor, flat panel display, solar panel making and communications sectors to itself, to maintain its technological advantages. Real estate development will not be open to mainland companies, though their mainland employees will be permitted to buy property for private use.

No specific investment caps have been imposed but officials said the percentage of mainland ownership in a Taiwanese firm will be subject to approval on a case-by-case basis.

Under the new rules, mainland institutional investors will also be allowed to buy Taiwanese shares as long as the accumulated stock does not exceed 10 percent of a listed firm's total share value.

The new rules take effect immediately.

"We will start on a smaller scale and expand the scope when we see results of the (initial) investments," said Deng Cheng-chung, Taiwan's deputy economics chief.

Despite the limitations, a substantial influx of mainland capital is expected into the island. Chinese mainland has encouraged its businesses to invest in Taiwan, as a chance to establish closer ties across the Taiwan Straits.

Until now, the trade and investment flows have been largely one way. Cumulative Taiwanese investment on the mainland since the late 1980s stands at more than $100 billion and trade now exceeds $110 billion annually.

Since Ma took office 13 months ago, the island leader has pushed aggressively to cement closer economic ties and liberalized conditions for Taiwanese investment on the mainland. The two sides launched regular direct air and maritime links last December.

Fresh mainland funds are expected to help stimulate Taiwan's economy, which shrank by a record 10.2 percent in the first quarter of 2009 from a year earlier.

Property developers say they expect upscale office rentals in Taipei, currently lagging way behind those of Hong Kong or Singapore because of the sluggish local economy, to shoot up as more mainland enterprises set up operations on the island.

 

[aimarraul]

Sri Lanka grants China exclusive economic zone
(Agencies)
Updated: 2009-07-01 20:03


COLOMBO: Sri Lanka has granted China an exclusive economic zone in its first post-war effort to attract more investment from the world's largest developing economy, the country's investment promotion agency said on Wednesday.

Hong Kong-based conglomerate Huichen Investment Holdings Ltd. will invest $28 million to develop the zone located in Mirigama, which is 55 km (34 miles) from the main port in the capital Colombo and 40 km from the international airport.

"The Chinese company will establish, develop, and market the new special economic zone," A.M.C. Kulasekera, BOI deputy director general, said in a statement.

China has long had ties with Sri Lanka and was a time-tested ally in the last stage of a 25-year war with the Tamil Tigers.

Sri Lanka declared total victory on May 18 in a war that has been a drag on its $40 billion economy for decades. It is expecting foreign direct investment this year to surpass the record $889 million seen in 2008.

Already, China's government and Chinese firms are taking part in two major projects, building the Hambantota port in southern Sri Lanka and the financing of a coal-fired electricity plant.

To build the second and third phases of the 900 megawatt coal-fired Norochcholai power plant, China offered an $891 million loan with a tenure of 20 years at 2 percent, media reported this week.

China's Exim bank also gave $360 million to finance the first phase of the Hambantota port, in which Chinese firms are building the harbour and fuel oil bunkering terminals to service ships plying the busy sea lanes at the Indian Ocean island's south.

 

[scshqgcm]

China Is Moving to Dominate the Global Auto Market

China's Geely Auto unveiled a new model called the GE at the Shanghai Motor Show in April, grabbing the world's attention. The reason was that the model looked like a knockoff of the Rolls-Royce Phantom. Not only was the overall exterior the same, but the GE even copied the British automaker's trademark grill and "Spirit of Ecstasy" emblem complete with wings. However, there was one obvious difference between the two models, the price tag. While a Rolls-Royce Phantom costs more than W500 million (US$1=W1,272), a GE costs just W60 million.

Chinese automakers have become notorious for producing knock-offs of foreign vehicles. Most compact and mid-sized cars popular in the global market, including Hyundai Motor's Santa Fe and GM Daewoo's Matiz, have been copied without authorization. Now, even the most luxurious car in the world has become a target. However, Chinese carmakers do not seem to care despite growing criticism from around the world. Geely claims it has merely "recreated" the classic style of the Rolls-Royce. Chinese media have even lauded Geely, saying a home-grown carmaker has finally entered the luxury car market.

And now, Geely, China's first privately-run carmaker, has taken the world by surprise once again. The company, established in 1998, has reached a tentative agreement with Ford Motor Company to buy Volvo from the U.S. carmaker, which bought the 82-year-old Swedish carmaker in 1999. Although Geely is only China's 10th largest car company, it has already acquired a stake in a British taxi cab manufacturer in 2007, and earlier this year purchased an Australian manufacturer of gearboxes. Given all this, the world can no longer look down on the company.

Tengzhong Heavy Industrial Machinery Company based in Sichuan Province recently bought GM's Hummer division, which is famous for producing military vehicles. Another Chinese company also bought the brake and suspension division of Delphi, the world's largest automotive parts maker. Shanghai Automotive Industries Corporation, the largest shareholder of Korea's Ssangyong Motor, owns Britain's MG Rover. Although ending in failure, Chinese automakers also demonstrated interest in acquiring Chrysler and Opel, the European unit of GM. The global automotive landscape is undergoing major change with Chinese carmakers at the center of it.

Until recently, China's automobile industry was a target of ridicule. None of China's 100 plus carmakers was able to compete internationally. However, once the global economic crisis has passed, things will surely change for Chinese carmakers. Equipped with world-class brands and technologies by acquiring leading global companies, they look set to dominate the world auto market, starting from the small car segment. It remains to be seen whether Korean carmakers will be able to survive these big changes led by China.

By Chosun Ilbo columnist Kim Ki-cheon
englishnews@chosun.com / Jun. 22, 2009 12:08 KST

 

[scshqgcm]

From the Freakonomics blog.

Why the Chinese Save - Freakonomics Blog - NYTimes.com

Some say that a major cause of the U.S. housing bubble was a surge in savings overseas, particularly in China, where the personal savings rate soared to 30 percent of disposable income. (In the U.S., meanwhile, we were saving next to nothing). Just why the Chinese were saving so much has been a puzzle to many economists. Now Shang-Jin Wei and Xiaobo Zhang think they’ve come up with an explanation. It turns out that China’s “one child” policy, which created a huge surplus of men in the country, has driven up the cost of getting married, as more and more men compete for fewer and fewer women. To keep up, families with sons have been holding off on spending to save up wealth that boosts their children’s marriage prospects. In their paper, Wei and Zhang argue that Chinese marriage-price inflation could account for as much as half of the increase in the country’s household savings since 1990.

when you r in trouble ,you will understand it very well

 

[jeypore]

It is the freakonomics blog... the author (of blog) made a bunch of money on a book that correlates abortion with reduction in crime.

But that is the problem of correlation, techincally you can correlate anything. For example one can correlate, sales of American cars down to increasing in savings, but is it really true?

There are other factors far greater, i would suspect.

It terms of Chinese savings, that is based on Asian mentallity, nothing new that I can see.

 

[Gabriel]

Very optimistic article regarding China auto industry considering the results " Brilliance " got at European New Car Assessment Programme.

 

[Gucci Juice]

wow cant they create something original?

is it really that hard to make a car?

i mean even Tata makes original stuff...

look at the nano brilliant engineering for a 2000 dollar car

oh and even Mahindra is doing original stuff

they are launching a pickup truck right here soon i hear

 

[scshqgcm]

wow cant they create something original?

is it really that hard to make a car?

i mean even Tata makes original stuff...

look at the nano brilliant engineering for a 2000 dollar car

oh and even Mahindra is doing original stuff

they are launching a pickup truck right here soon i hear

it is not really hard to make a car,but we know that it is really hard to make a good car,and we r on the way.

in your eyes we made nothing original,sorry we just did not good enough,but we all know that it will last for a short time from now.
this financial crisis is a turnning point ,we r changing ,so you may surprise,wait ---------

 

[SinoIndusFriendship]

Look here, European and American automakers copy Japanese Designs, so do Koreans. If we trace the 'vehicle' back to China, then all vehicles copied ancient Chinese 'cars'. Get over it, you did NOT invent everything. You copied us first, now we return the "favor".

 

[jeypore]

Look here, European and American automakers copy Japanese Designs, so do Koreans. If we trace the 'vehicle' back to China, then all vehicles copied ancient Chinese 'cars'. Get over it, you did NOT invent everything. You copied us first, now we return the "favor".

Really, ancient Chinese CARS. Can you show me a photo for a proof.

By the way, you do not mean this, Right!!!

 

[SinoIndusFriendship]

Edited.

This thread is about some guys' theory of why Chinese save money. But I find his theory not credible. Jeypore is correct. It is the appreciation of hard-earned dollars and a responsible long-term attitude that is prevalent in all of Asia. Not related to 'dowry'. Nothing unusual here.

 

[SinoIndusFriendship]

Great news for all! Colombo can now rebuild its shattered nation into a world-class island nation. Was looking at Bangladesh and amazed at its beauty (and modernity). SL can be a jewel/pearl in the sea!

 

[fhassan]

Good, China needs to completely encircle India to ensure that it doesn’t misbehave.

 

[Enigma SIG]

thats great!!! this will be a big boost to the chinese aviation industry!!

 

[Jako]

Nonsense fabricated numbers. Just visit India and you'll see sex ratio of Hindustan (which is extremely chauvinistic, just saying) is MUCH higher. Thus there are huge male homosexuality there (which they export to Singapore).

That said, jeypore is correct. It is the appreciation of hard-earned dollars and a responsible long-term attitude that is prevalent in all of Asia. Not related to 'dowry'. Nothing unusual here.

amusing indeed......what are you?....some kind of super agent?.....how do you come up with this kind of crap theories?.......trolling at its best