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learn Chinese online – High prices for pigs scare meat producers

chinmanbjcn — Thu, 02 Jun 2011 06:44:17 +0000

Many pork-meat producers and meat processors are in a sad pickle as live pig prices have risen nearly 60 percent year-on-year, which transfers the cost to slaughtering and meat processing companies by squeezing out their profit from up to 60 yuan ($9.2) down to around 20 yuan ($3), the China Business News reported Tuesday.

The national average price for live pig is 15.5 yuan ($2.38) per kilogram and the figure in North China has reached 16 yuan ($2.46), the report said. Pig raisers gain 400 yuan ($61.48) per pig, reaching the peak in profit since September 2008.

The hikes are mainly attributed to the rising corn price, a main raw material for pig feeding, said an insider of the Guangdong-based Wens Group, the largest domestic pig-producing company. Corn price in Guangdong Province rose 30 percent from around 1,800 yuan ($277) per ton last year to between 2,250 yuan ($346) and 2,300 ($353) per ton.

Some pig slaughterers found their benefits from pig slaughtering declined to 20 yuan ($3) per head from previous up to 60 yuan ($9.2). While the animal’s population rapidly decreases, supply is approaching insufficiency.

Analysts say the clenbuterol scandal involving Shuanghui Group also greatly affected the market and supply.

Some industry insiders suggested that government subsidies can be a better option for helping ease the awkward situation for producers.

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learn Chinese – Property developers facing capital shortage

chinmanbjcn — Wed, 01 Jun 2011 06:42:18 +0000

Evergrande Real Estate Group, one of China’s biggest property developers, has announced the sale of a 49 percent stake in its subsidiary, Grandday Group Ltd, whose principal asset is a large area of land in Jiangsu Province. Analysts described it as a necessary step for the developer to ease its shortage of capital, amid a general tightening of credit loans.

The Hong Kong listed developer said in a statement late Monday that the stake in Grandday Group was sold to Chinese Estates Holdings Ltd for $500 million, and that the sale would enable the two companies to form a strategic alliance in property development.

Evergrande also said it plans to develop residential and commercial properties on the land, which has an area of 1.34 million square meters.

“This can ensure cash flow for Evergrande, which has acquired a large amount of land in recent years,” Fan Xiaochong, vice president of Sunshine 100 Real Estate Group, told the Global Times Tuesday.

Among domestic developers, Evergrande is famous for buying huge areas of land, and speeding up the financing, investment and sales process in order to reap larger profits.

As of the end of last year, Evergrande owned 96 million square meters, having bought it at an average price of 520 yuan ($79.91) per square meter, according to the company’s statement earlier this year.

“All developers are diversifying their ways of maintaining strong capital, since accessing limited bank loans is much more difficult than before. Mergers and acquisitions will be a possible choice among developers, not just for Evergrande,” Fan said.

“For developers, acquiring a plot of undeveloped land is easier than acquiring a project already under construction,” Fan added.

Facing strict credit tightening policies, developers are facing capital flow difficulties. The index for the top 100 developers’ average cash flow, a standard to calculate the flow of money, declined to a negative 510 million yuan ($78 million) last year from the previous year’s positive 980 million yuan ($149 million), according to a report by the China Index Academy.

“For listed companies, acquiring and selling stakes is a possible financing method,” Chen Baocun, deputy director of the research institute with the National Real Estate Managers Association, told the Global Times Tuesday.

The price of shares in Evergrande increased by 5.22 percent Tuesday, closing at HK$5.64 ($0.73) per share, while Chinese Estates’ shares declined 0.88 percent to close at HK$13.44 per share.

Chinese School – Green air conditioner subsidies to end this month

chinmanbjcn — Tue, 31 May 2011 06:33:55 +0000

Subsidies to promote energy-efficient air conditioners for manufacturers are due to expire at the end of the month, with no indication that they will be extended for another year.

The Ministry of Finance and the National Development and Reform Commission (NDRC) first introduced subsidies in June 2009 to promote energy efficient air conditioners. The subsidies were extended for another year and expire on May 31. The NDRC has so far said nothing about extending the program.

The subsidies had been reduced to between 150 yuan ($23.06) and 250 yuan in 2010, depending on the type of unit purchased, compared to the previous range of 300 yuan to 850 yuan.

Costs for manufacturers are also rising because raw materials such as aluminum and copper are becoming more expensive. The global price of copper is projected to rise 22 percent compared to last year, according to Standard Chartered Bank.

“Although national subsidies will be cancelled soon, we haven’t heard anything from manufacturers suggesting that air conditioner prices will rise,” said a spokesperson surnamed Li from home appliances retailer Suning Appliance in Nanjing, Jiangsu Province.

“The price of air conditioners will not rise after the subsidies are cancelled and may go down, ” said Luo Qingqi, director of Pa Le Consulting Co.

There is currently overproduction in the air conditioner market, Luo said. Without subsidies, manufacturers will step up marketing efforts. Raising prices is risky, particularly for smaller manufacturers, which suffer more from inflation and higher costs.

Suning’s Li added that most manufacturers have begun promoting new products such as frequency conversion air conditioners, which are set to dominate sales this summer.

Top power companies lose $1.5 bln

China’s five State-owned power generating groups lost more than 10 billion yuan ($1.5 billion) on their thermal power operations in the first four months of the year, an industry official said, as the country braces for the worst summer power crunch in years.

With profitable wind and hydropower businesses included, overall power generation losses narrowed to 6 billion yuan, Xue Jing, director of the statistics and information department under the China Electricity Council, said at a conference in Beijing Tuesday. The council is overseen by the State Electricity Regulatory Commission.

Chinese language – Growth of foreign direct investment in China slowing: MOFCOM

chinmanbjcn — Mon, 30 May 2011 06:32:12 +0000

Foreign direct investment (FDI) in China rose to $8.46 billion in April, driven largely by investment in the property sector. The figure is 15.21 percent higher than the previous year but represents a slower rate of growth than seen in March, according to official data released Tuesday.

The slowdown of FDI growth as well as other economic indices this month showed that the economy is cooling down, economists warned Tuesday.

April’s figure was lower than the $12.52 billion invested in March and represented less than half of March’s year on year growth rate of 32.9 percent. The ministry did not elaborate on the reasons for the fall.

The property sector attracted about 24 percent of April’s investment flows, Ministry of Commerce spokesman Yao Jian said at a press briefing.

During the first four months of the year, FDI rose 26.03 percent over levels of the previous year to $38.80 billion, the data showed.

During this period, 10 Asian economies including Japan, Singapore and Hong Kong set up 6,487 new businesses, up 9.87 percent from the previous year, and invested $32.9 billion, up 31.23 percent from the previous year.

EU countries set up 562 new businesses in China, up 16.36 percent from the previous year, while investment from the EU rose 23.42 percent to reach $2.6 billion.

“Despite the financial crisis, European companies are still expanding and investing abroad, including in China. We encourage further market access in China to attract even more EU companies to invest there and indeed we also encourage Chinese companies to invest in Europe,” William Fingleton, a spokesman for the Delegation of the EU to China, told the Global Times in an email.

However, investment from the US dropped 28 percent during the first four months of this year to $1.03 billion in April.
FDI in China plunged after the financial crisis in 2008 but rebounded strongly last year to reach $105.7 billion.

“If the figures released in the first three months are regarded as volatile, April’s FDI figure as well as the month’s imports, manufacturing and other economic indices reported earlier showed a cooldown has firmly set into the economy,” Tian Yun, director of the research center of China Society of Macroeconomics, told the Global Times.

“The economy risks a further slowdown if the government’s monetary tightening policy continues and the country’s employment situation, which should always come before inflation issues, will remain worrisome,” Tian warned.

China Travel – NDRC to increase electricity prices in five provinces

chinmanbjcn — Sun, 29 May 2011 06:31:19 +0000

The National Development and Reform Commission (NDRC) of China has agreed to raise the on-grid electricity price by 0.02 yuan (0.3 cents) per kilowatt hour (Kwh) in the provinces of Jiangxi, Hunan and Guizhou and by 0.005 yuan (0.08 cents) per kilowatt hour in the provinces of Henan and Hubei, in an effort to reduce an increasingly intense electricity shortage in the country, according to a report from Shanghai Securities News on Wednesday.

In early April, the NDRC raised its on-grid electricity prices in 16 provinces and regions by 0.012 yuan (0.18 cents) per Kwh on average, with increases of 0.015 yuan (0.23 cents) per Kwh in Henan and Hubei provinces. As the shortage of electricity has become more severe, the NDRC has decided to extend the on-grid electricity price hike to more provinces.

The reasons for raising electricity prices in these provinces include shortages in the coal supply, the high cost of logistics and the rising price of coal to steam-power plants in the area. A reasonable elevation of the price of electricity can help relieve management pressure and also encourage electricity factories to actively purchase coal and generate electricity.

It was also reported that the NDRC has agreed to suspend the two-tier pricing system for peak and non-peak hours in Hunan Province, as the present power shortage does not allow for large-scale use of electricity at any time during the day or night.

China Business – Construction begins on NW China’s largest geological equipment production base

chinmanbjcn — Sat, 28 May 2011 06:30:33 +0000

Northwest China’s largest geological equipment research and production base, with a total investment of 150 million yuan ($23 million), recently began construction in Yanliang district in Xi’an, capital of Shaanxi Province, the Shaanxi Daily reported Tuesday.

The construction period for the base is planned to be six months. The base will be put into use during the first half of 2012, the report said.

The construction project is led by the Shaanxi Bureau of Geology and Mineral Exploration and Development (SBGME). The main function of the base will be the manufacturing, research and development of geological equipment. These products will be specifically applied to geological prospecting, pile foundation construction and soft foundation treatment for railways and highways, and prevention against leakage in reservoir dams.

The base will also produce non-standard equipment for the aviation industry. It aims to become an environmentally-friendly and energy-saving production base in the near future.

HSK – China to spend $5.3 billion on Sichuan river navigation

chinmanbjcn — Fri, 27 May 2011 06:29:37 +0000

China will allocate 35 billion yuan ($5.3 billion) to improve the inland water navigable capacity of rivers in southwest China’s Sichuan Province between 2011 and 2015, the Southwest Commercial News said Tuesday, citing provincial government officials.

With a budget of 2.5 billion yuan ($384.34 million) allocated for 2011, two projects at harbors in the cities of Nanchong and Guangyuan are scheduled to begin operations within this year. In the succeeding four years, an integrated water-and-land transportation system will be established in the region, as part of China’s 12th Five-Year-Plan (2011-2015), Xu Dongming, head of the Shipping Administration Bureau at the Sichuan Transportation Department, made the statements during a survey in the region.

With an annual average allotment of 7 billion yuan ($1.08 billion), which exceeds the region’s total investment spent on navigation transportation in the past five years, the project involves constructing a framework that will combine the Yangtze, Minjiang, Jialing and Qujiang rivers and their branches. Six key ports in the province will be designated as hubs.

The project will allow vessels of 2000 to 3000 tons to sail from Yinbin Port to Chongqing through an overall distance of 228 kilometers. Vessels of a maximum of 1000 tons will be allowed in the Yangtze River’s Shuifu-Yinbin section of 30 kilometers, Minjiang River’s Leshan-Yinbin section of 162 kilometers and Qujiang River’s 131-kilometer stretch.

The annual volume of water freight in the province will exceed 100 million tons and the ports’ annual cargo throughput will exceed 120 million tons. Another 500 thousand shipping containers will also be added.

learn mandarin – Hotels.com sees bright online future in domestic market

chinmanbjcn — Thu, 26 May 2011 06:28:12 +0000

Hotels.com, a hotel booking website that came to China in 2009, is looking to expand in the ever-growing Chinese online travel market, the company’s Asia Pacific vice president said Wednesday.

“There is quite a lot of space for several players in China’s market, and we have our unique strengths,” Johan Svanstrom, vice president and managing director of Hotels.com Asia Pacific Region, told the Global Times.

“The total travel market in China is worth $60 -65 billion; however, only 7-8 percent is online. In the US, the online proportion of the travel market is 55-60 percent and it’s 40 percent in Europe,” he said.

Tencent Holdings Limited, one of the largest Internet service providers in China, acquired a 16 percent stake Monday in eLong Inc, one of China’s leading online travel service providers. Expedia Inc, the world’s largest online travel company and also the parent company of Hotels.com, invested a further $41.2 million to bump its majority stake in eLong up to 56 percent.

“Hotels.com has the advantage of a resource of international hotels, but it needs greater effort to build its brand through localization and knowing the hotel booking habits of Chinese consumers,” Su Ran, an analyst at Internet research firm iResearch, told the Global Times Wednesday.

Data from iResearch shows that the revenue of China’s online travel market totaled 6.16 billion yuan ($946.61 million) in 2010, up 58.4 percent over 2009, and revenue is expected to reach 24.56 billion yuan by 2014.

learn Chinese online – China still engine of economic growth

chinmanbjcn — Wed, 25 May 2011 09:05:15 +0000

China is expected to see GDP growth at 9.6 percent this year and will continue to act as the engine for global economic growth, the International Monetary Fund (IMF) said in its latest forecast released Monday.

Emerging economies, such as China and India, will continue their solid growth, despite concerns over rising oil prices and the fallout from the Japanese earthquake, the IMF said in its annual World Economic Outlook report.

However, the IMF warned that inflation is likely to build further and credit and that China’s credit and asset price behavior is disconcerting.

The IMF report said China is expected to see 5 percent inflation this year. In addition, price pressures that started in a narrow range of food products have now broadened to other sectors, including housing.

The IMF’s growth forecast echoes the results of a report released by the Asian Development Bank last Wednesday.

With inflationary pressure building and tight government monetary policy, China’s economy is expected to grow 9.6 percent in 2011 and 9.2 percent in 2012, the report from the Asian Development Bank stated.

China’s economy grew 10.3 percent last year, and registered an annualized rate of 11.2 percent over the past five years.

Meanwhile, the forecast report released by the China Center for International Economic Exchange on Monday said first quarter GDP is expected to grow at 9.4 percent, 2.5 percentage points down from the previous year.

The center attributed the projected slowdown in the first quarter economy to the fall of industrial added value, purchase management index (PMI) and exports numbers – which are closely related to GDP figures.

Industrial added value closely related to GDP was 14.9 percent for the first two months, down 20.7 percent from the previous year; the average PMI for the first quarter was 52.8 percent, a fall of 54.3 percent from last year.

China saw a trade deficit of $1.02 billion in the first quarter, Wang Jun, head of the macroeconomic division with the China Center for International Economic Exchange said.

The National Bureau of Statistics will release March economic data Friday, including GDP, CPI, industrial production and fixed asset investments.

“These forecasts indicate that China’s GDP growth is bound to moderate this year, which tallies with the target for sustainable growth of the economy set by government,” Tian Yun, a research director with the China Society of Macroeconomics said.

China set its annual economic growth target at 8 percent this year and at 7 percent for the next five years, Premier Wen Jiabao said in a government report last month.

learn Chinese – Coal, power industries to get overhaul

chinmanbjcn — Tue, 24 May 2011 08:59:20 +0000

China will improve the structure and mechanism of its coal and power industries to ease the burden of soaring coal costs of power companies, said Liu Tienan, head of the National Energy Administration.

It is necessary to adopt measures to ease the burden of power companies as international coal prices are now higher than domestic prices, Liu was quoted as saying in a report posted on the National Development and Reform Commission’s website.

The National Energy Administration is drafting a plan for energy development during 2011 and 2015, Liu said during a recent visit to China Datang Power Group, parent of Datang International Power Generation Co. The plan aims to raise energy efficiency and keep energy consumption at a reasonable level via an improvement in mechanism and technological innovation, Liu said without elaborating.

China keeps electricity prices under tight control, and its big State-owned utilities have suffered big declines in profits because they have been unable to pass surging coal costs onto consumers.

The country’s biggest electricity producer, Huaneng Power said this week that its earnings in the fourth quarter of 2010 plunged 75 percent.

Earlier this month, the commission called on regions and enterprises to adopt “effective measures” to keep coal prices stable as its power utilities struggle with rising costs.

Last month, industry sources said China might raise power prices at the point where supplies from generators enter the grid as early as April, in what would be the first power price hike since late 2009 to cope with rising coal costs.