China's Economy - News and Projects III

[Whiteeclipse]

Foxconn to build industrial base in Chongqing
Taiwan-based Hon Hai Precision Industry Ltd, also known as Foxconn, has kicked off construction of an industrial base in Xiyong Micro-electronic Industrial Park, Chongqing Municipaity, sources reported.

Hon Hai's new industrial base, covering a land area of 1,800 Mu, will be home to production facilities in ten fields such as computer manufacturing, software development, service outsourcing, and cartoon and animation.

The Chongqing Industrial Base is expected to involve a total investment of US$1 billion. Upon the completion of the project, it will be able to produce 20 million notebooks and related accessories annually.

In the future, 80% of Hon Hai's key components will be produced in the Chongqing base, said president Terry Gou, adding that the development of both software and hardware is expected to be done in Chongqing thanks to its rich talent pool.

The base will provide around 50,000 job opportunities, and the output value is estimated to exceed RMB 100 billion.
http://www.chinaknowledge.com/Newswi...1&NewsID=27549

[Ohno]

SHANGHAI (AP) - Ford Motor Co. said Friday it plans to spend $490 million on building a third assembly plant in China, ramping up production to meet surging demand in this fast-growing market as the U.S. automaker expands in Asia.

The factory, to be built in the central Chinese city of Chongqing, will make the next-generation Focus compact car, which Ford plans to sell globally.

The announcement from Chongqing came the day after the Dearborn, Michigan-based automaker unveiled a made-in-India compact car — part of a plan to boost sales in Asia, a region the U.S. automaker has hardly dented but is counting on to drive growth.

"Today's announcement reinforces our commitment to the further expansion of our China operations to meet the continued rise in demand from Chinese consumers for world-class Ford products and services," Ford chief executive Alan Mulally said in a statement.

In India earlier this week, Mulally said he expects a third of global car sales to come from Asia in 20 years, a third from the Americas and a third from Europe and Russia.

China is proving a lifesaver for all the big automakers, helping offset miseries elsewhere.

Total sales in January-August surpassed those in the U.S. for all but two months, rising to 8.33 million units, up nearly 30 percent from a year earlier, according to the China Association of Automobile Manufacturers.

Sales should soar to 12.6 million units this year, up 35 percent from 2008, boosted by subsidies that the industry is lobbying Beijing to extend, Xu Changming, a senior economist with the Cabinet's State Information Center, said at a seminar Friday in Beijing.

The government is due to decide by mid-December, Xu said, if it will continue the subsidies, which are aimed at promoting energy-efficient vehicles.

"If the policy is extended to next year, rapid growth of auto sales will be sustained," Xu said. "Otherwise, it will fluctuate, and it's hard to predict the degree."

The Chongqing plant, part of Ford's joint venture Changan Ford Mazda Automobile Co., is the third for Ford in China and its second in Chongqing, an industrial hub of 30 million people sprawled along the upper reaches of the Yangtze River.

Slated for full completion by 2012, Ford said the plant will be equipped to make other small cars on the company's global C-car platform in addition to the Focus.

Ford lags behind other automakers in Asia, capturing only 2 percent of auto sales there, compared with nearly 15 percent in North America and 10 percent in Europe.

Ford currently produces 450,000 vehicles in China annually. The new Chongqing facility will initially be able to manufacture 150,000 cars per year, with the capacity to produce 600,000 by 2012 when the plant is at full capacity, the company said.

Other foreign automakers are also expanding their investments in China, while China's domestic automakers are shopping overseas for big brand names and advanced technology.

Wolfsburg, Germany-based Volkswagen AG recently said it plans to spend euro 4 billion ($5.8 billion) in China between now and 2011 on new products and expansions at its plants in Nanjing and Chengdu.

On Thursday, General Motors Co. announced it was setting up a new technology research laboratory in Shanghai.

"China is one of the few markets worldwide which still keeps growing this year. It's obvious any automaker would like to set up plants here," said Zhang Xin, an analyst at Guotai Junan Securities, in Beijing.

Ford says it plans to introduce four new vehicles in the Chinese market in the next three years.
September 25, 2009 4:36 AM ET
The four-door "Figo", which is Italian slang for 'cool', will go on sale in India during the first quarter of next year, Ford executives told a press conference Wednesday. There are also plans to export the low-cost car to other Asian countries.

The next-generation Focus, scheduled to debut in January at the North American International Auto Show, represents a shift toward C-segment vehicles that Ford says it expects to account for nearly 28 percent of global sales by 2013.

Ford's current plant in Chongqing makes the Ford Focus, Ford Mondeo and Ford S-MAX. Its plant in Nanjing, in eastern China, makes the Ford Fiesta.

Changan Ford Mazda Engine Co. also has an engine manufacturing plant in Nanjing with an annual capacity of 350,000 units — one of the largest in China.

Ford's other partner in China, Jiangling Motors Corp., makes commercial vehicles, including the popular Ford Transit van.
http://news.moneycentral.msn.com/pro...25&id=10423151

[Sabanban]

Originally Posted by YelloPerilo

Chinese should stick to their wan system even when the test is translaterd That would lessen the misunderstanding. Instead of writing 100,000 they should write 10 wan.

I, too, always get confused when I have to translate big numbers from Chinese to German or English and vice versa.

I agree. China should keep wan (10 thousands) number system. This is one of few things that is Chinese in math today. I don't see the advantage of western tri-digit (thousand) number system comparing to the Chinese quadra-digit (wan) system. For some people, it may have conversion problem, but I can convert a number from one system to the other without thinking.

[snow is red]

China's retail sales hit $83.5 billion during holiday

2009-10-10


BEIJING: China's retail sales of consumer goods totaled 570 billion yuan ($ 83.50 billion) during the National Day holiday, with average daily sales up 18 percent compared with the same period of last year, the Ministry of Commerce said Friday.

Sales of household appliances soared during the eight-day holiday which started on October 1. Among them, high-definition flat screen TV sets, digital cameras, side-by-side refrigerators and 3G mobile phones are consumers' favorites. In the case of Kaiyuan Mall in Xi'an, capital of Northwest China's Shaanxi province, sales of household appliances gained by 34.7 percent year on year.

Jewelry and cars became hot sellers as well. The sales of jewelry of Caishikou Department Store in Beijing topped 100 million yuan, up 30 percent year on year. Car sales of major car-selling companies in Southwest China's Chongqing Municipality increased by 71.7 percent year on year.

The selling boom in the home appliance and car sectors was partly stimulated by a policy approved by the State Council in June this year, aiming to spur domestic consumption by subsidizing buyers of cars and household appliances, according to the ministry.

For example, consumers can first sell their old household appliances to recycling companies and obtain a certification card from the recyclers. Card holders then can purchase new appliances with a 10 percent cut in prices when showing retailers the card.

Meanwhile, sales promotion in major cities also played an important role in the holiday consumption boom.

http://www.chinadaily.com.cn/china/2...nt_8774251.htm

[snow is red]

Putin's China visit to bring $5.5b in deals

2009-10-11

MOSCOW: Russian firms plan to sign over $5.5 billion worth of deals with their Chinese partners during the visit of Prime Minister Vladimir Putin to Beijing next week, Putin's deputy said during an interview with Reuters.

The 34 deals will range from a $500 million loan agreement between China's Development Bank and its Russian equivalent VEB to joint projects in transport, infrastructure, construction and mineral extraction, a draft list obtained by Reuters showed.

Russia's trade with China soared to $56 billion in 2008 from $9.3 billion in 2002. The share of oil in Russia's exports stands at 56 percent, metals at 5 percent while the share of machinery stands at 4.4 percent.

The list also showed Russia's diversified holding Sistema will sign a $200 million funding deal with the Bank of China and telecoms equipment maker ZTE Corp.

China National Materials (Sinoma) and investment holding company CNBM will sign four cement production facilities construction deals with Russian cement maker Eurocement.

Zhukov, who chairs Russia-China government commission and oversees preparations for the visit, said Russia pinned its hopes on future exports of commercial jets as well as equipment for nuclear power plants to boost machinery exports.

Latest data shows a 12.5 percent rise in machinery exports from Russia to China in January-July 2009, largely due to a 3.5-fold increase in aviation exports.

Putin, who stepped down as President in 2008 and became prime minister, last met his Chinese counterpart Wen Jiabao in Davos earlier this year where both addressed the business elite on the global economic crisis.

Last year Putin and Wen Jiabao oversaw the signing of a pipeline deal between Russia and China to create a new overland supply route for Siberian oil and negotiated an oil-for-loan deal through which China secured Russian oil supply for the next 20 years and Russian companies borrowed $25 billion from China at low rates.

Zhukov said the two sides will continue the energy dialogue, including talks about cooperation in the coal industry. He said Russia has also agreed to resume electricity exports to China.

Zhukov said the bilateral banking commission, headed by senior central bankers, will discuss raising the share of the rouble and the yuan in bilateral trade where the two currencies currently account for just over 1 percent of the trade turnover.

"Both us and the Chinese are interested in expanding this share. This is cheaper than settling trade in global currencies," Zhukov said. "If businessmen see it is convenient they will use this possibility more and more."

He said the two countries have not yet set targets for the share of trade to be done in national currencies.

http://www.chinadaily.com.cn/world/2...nt_8777112.htm

[snow is red]

China's new model of 'model workers'

2009-09-28

Oilman Wang Jinxi, father of hybrid rice Yuan Longping, bus-ticket seller Li Suli, astronaut Yang Liwei, hurdler Liu Xiang. These seemingly unrelated names have one thing in common - they have all been designated a model worker.

Model worker is an honor bestowed on people who have made a significant contribution to the country through their hard work. It was one of China's most prestigious honors under the old planned economy.

However, with the country's rapid economic and social development, the criteria of what defines a model worker have undergone a sea of change.

The nationwide selection of model workers began in 1950, and was based on the endurance of hardship and the sacrifice of self-interests. The model worker was expected to inspire the masses and inculcate such virtues as hard work, modesty and patriotism.

According to Liang Jun, China's first woman tractor driver and also one of the first batch of national model workers, various competitions were held to choose model workers in the early years of New China. "One who works like an old bull" was a common description of model workers at that time.


"I remember that once I worked non-stop for three days in the fields. I was so tired that I could have even slept through an earthquake. My colleagues told me later that they found me sleeping soundly in a mud hut," recalls Liang, with smile.

Manual laborers, such as toilet cleaners, coal miners and construction workers, were typical model workers during that period. "Old bull" was how most people referred to them.

More than 460 people were selected as China's first batch of model workers in 1950, among whom 158, or 34 percent, were farmers and 113, or 24.3 percent, were workers. Only 7.1 percent were from the managerial class.

As time went by, the composition of model workers also changed. In the 1960s, for the first time, model workers began to be drawn from diverse fields, such as education, culture, sports and media.

The selection of model workers was suspended during the "cultural revolution" (1966-76), resuming only in the late 1970s. Deng Xiaoping, chief architect of China's reform and opening-up, put forward the ideas of "technology is productivity" and "intellectuals are part of the working class", triggering new respect for intellectuals and knowledge.

Many of those chosen as model workers at this time were scientists, engineers and educationists, such as scientist Jiang Zhuying who brought Chinese color television technology up to world standards.

As China entered the 1990s, more and more manual labor began to be replaced with machines. This was especially true after the promulgation of the Labor Law in 1994, which clearly prohibited unlimited overtime.

More importantly, entrepreneurs and managers with insight and courage began to play a more important role in China's switch from a planned to a market economy.

More than 340 entrepreneurs and managers were elected during the eighth National Model Worker Conference in 1989. In 1995, 2,873 people were elected as national model workers, among whom heads of enterprises numbered 409.

"It is not surprising that nowadays when you open the resumes of most of the entrepreneurs and managers of large-scale enterprises, they were all once elected as model workers," says You Zhenglin, associate professor of sociology at China University of Politics and Law.

"Few frontline workers get the honor now, because they have been left far behind by the intellectual group in creating wealth for the country," says You.

In a bid to balance the proportion of model workers from different fields, the State Council decided before the opening of the 1989 conference to guarantee that at least a third of the elected model workers would be frontline workers. It also revised and standardized the selection criteria for model workers.

In 2005, the model worker title was bestowed on basketball player Yao Ming and hurdler Liu Xiang, and Liu Yonghao, one of China's richest men then. The same year, the people's government of Dalian honored seven foreign managers working in the Dalian Development Zone with the title of model worker.

Today's model workers are not laborers in the traditional sense. Those who work in air-conditioned rooms, frequent five-star hotels and drive luxury cars are also deemed entitled to the honor.

Dissatisfaction over the changing profile of model workers has sparked quite a heated debate on the Internet.

According to Professor Zhou Xiaozheng of Renmin University of China, it is a little strange to honor athletes as model workers. "We cannot take athletes as common people, for their success and achievements owe not only to their efforts, but also a lot to the physical quality they are born with," he says. "It is not easy for common people to follow their model."

Some online posters have even sarcastically suggested new selection criteria such as being good at flattery, able to win the hearts of leaders and being skilled at self-promotion.

But many continue to support the new breed of model workers, saying they don't necessarily have to imply meager incomes and low living standards.

"The assessment procedures to select model workers need to be revised, because today's society needs knowledgeable and skilled workers," says professor Zhou Yunlong, of Northeast China Institute of Electric Power Engineering.

"A model worker is one who excels in his field of work, reflecting the values most cherished by a society at a particular period in time.

"Although Yao is not a laborer, he works very hard and worked his way to win honors for the country. He truly is a model worker."

http://www.chinadaily.com.cn/china/2..._8744702_2.htm

[urheimait]

The debate about Chinese asset prices
A bubble in Beijing?

Not yet. But China will soon look dangerously frothy unless policymakers allow the yuan to rise

HAS the world got a new bubble economy? A rising chorus of foam-spotters believes so. Their argument is simple: to support demand, China’s government has created huge quantities of credit. That lending is leading to unsustainable asset-price inflation, while wasteful investment is producing oodles of excess capacity. As a result, China’s stimulus will inevitably be followed by a bust down the road (see article).



Few things matter more for the global economy than whether this argument is right. With America and other economies in the English-speaking world weakened by their own asset busts, the pace of global growth over the next couple of years will depend heavily on China. A painful asset slump or banking collapse there would further slow the pace of global growth. No one doubts that credit has been growing dramatically in the Middle Kingdom. Lending grew by 34% in the year to August, around four times faster than nominal GDP. Nonetheless, today’s fears are exaggerated—for four main reasons.

First, neither China’s stock nor property markets looks dangerously overvalued. The average price/earnings multiple, at 24, is well below China’s long-run average. Property prices are rising smartly in Shanghai and other cities, but nationally house-price growth has only just turned positive. Next, even if China’s asset prices surge and then slump, the damage will be less grave than elsewhere, because China’s house and share prices have not led to too much debt-driven borrowing. Only around a quarter of middle-class homeowners have mortgages and the average loan-to-value is less than 50%.

Third, although there is much scope to improve the efficiency of capital allocation in China, the lending boost may not be as inefficient as some fear. Much has gone into infrastructure, which ought to improve the rate of productivity growth. Lastly, Chinese officials have long been more worried about excess credit growth and asset-price bubbles than many of their Western counterparts. Even now, regulators are tightening the rules—demanding bigger down-payments on second homes and higher provisioning from banks—even as Beijing’s politicians promise that monetary conditions will stay loose.

But even if immediate worries about a bubble are overdone, there are medium-term risks. Ample liquidity, low inflation and strong growth are the perfect ingredients for sustained asset-price inflation. And China lacks one essential anti-bubble instrument: the ability to raise interest rates.

Yuan to do what?

To support its exporters China has kept the yuan stable against the dollar over the past year, in effect tying China’s monetary conditions to America’s. So far that has mattered little. Domestic deflation means China’s real interest rates are the highest of any big economy. But this monetary coupling will become increasingly dangerous. America’s weak economy means its monetary conditions are likely to stay ultra-loose for far longer than makes sense for China. Left in place too long, the currency alignment could swell an asset bubble.

Just as the rebalancing of China’s economy calls for a stronger yuan, so the ability to avert bubbles requires a more flexible one. The transition will not be easy. The spectre of a stronger yuan will, temporarily at least, worsen China’s asset-price bubbliness, as foreign capital floods into the country in anticipation of a stronger currency. But this argues for acting quickly and carefully, rather than doing nothing. The longer China shadows the dollar, the bigger the distortions and the risks from any currency adjustment. Without an independent monetary policy China will eventually become a bubble economy. To avoid that fate, Beijing must let go of the yuan.

http://www.economist.com/research/ar...ry_id=14587027

[urheimait]

China's roaring economy
Bull in a china shop

China does not have dangerous bubbles in shares and housing—yet

EARLY this year, many China-watchers warned that the government’s stimulus was not enough to save the economy from a deep downturn. With indecent haste, they have now switched to worrying that overly lax policies have created a gigantic bubble in shares and house prices.

Figures due later this month are likely to show that China’s real GDP grew by around 9% in the year to the third quarter—a period over which output in most other economies probably fell. A recent flurry of bearish reports has warned that sooner or later the markets will crash, excessive borrowing and investment will cause banks’ bad loans to surge, and China’s growth will collapse.

If the government does not act soon to tighten liquidity, share and house prices will become seriously overvalued. But it is much too early to use the “B” word. Start with China’s stockmarket, described by Andy Xie, an independent economist, as a “giant Ponzi scheme”. Despite a recent slide, Shanghai’s A-share index is still up by over 60% since its trough last November. Yet this is only a fraction of the gain during China’s previous bubble in 2006-07, when the price/earnings ratio jumped to an eye-popping 70. Today the p/e ratio stands at 24. That is high compared with developed markets but well below China’s long-term average of 37 (see left-hand chart). China’s faster trend pace of growth also means that the outlook for corporate profits is rosier than elsewhere. They are already bouncing back: in the three months to August industrial profits were 7% higher than a year ago, after falling by 37% in the year to February.



Bubble suspect number two is the housing market. Average Chinese home prices are nine times average annual household income. In the rich world a ratio of more than four would sound alarm bells; in other Asian countries prices are typically 5-7 times income. The volume of property sales has surged by 85% over the past year and prices of new apartments in Shanghai have risen by nearly 30%. Some conclude that prices have been pumped up by imprudent bank lending and that the market is at risk of crashing.

However, average nationwide house prices have risen by only 2% over the past year, after falling in 2008. The official price index may understate the true average gain but figures for central Shanghai will overstate it. Either way, house prices are rising nowhere near as fast as they did during the previous boom in 2004-07 (see right-hand chart). And in relation to income, average house prices in China have fallen slightly over the past decade (although they have risen in some big cities).

Arthur Kroeber, an economist at Dragonomics, a research firm in Beijing, argues that the high level of prices relative to income is partly explained by hidden subsidies. A high proportion of households live in apartments purchased at a fraction of their value from the government a decade ago (when the housing market was privatised) or have upgraded to apartments financed by the sale of such properties.

The leap in property sales follows a deep slump last year after the government deliberately cooled the market. The level of transactions in August was less than half its level in 2005 or 2006. More important, China’s housing market is much less dependent on credit than those in places like America, so its economy would be less vulnerable to any sharp fall in prices. Andy Rothman, an economist at CLSA, a broker, estimates that only one-quarter of middle-class homeowners have a mortgage and their average loan is only 46% of the property’s value, compared with 76% in America. Homeowners have to put down a minimum deposit of 20%. Speculators buying property as an investment have to put down 40%.

Rising home prices are not an accidental consequence of government easing but one of its goals. The government needs a lively housing market to support the economy when its fiscal stimulus fades. It creates a lot of jobs, spurs private-sector investment in construction and encourages new homebuyers to spend more on furniture and electrical goods. Until recently China’s recovery was driven largely by state spending but thanks to a rebound in construction, private-sector investment rose by 30% in the year to August, double its growth rate in December.

But even if China’s stockmarkets and housing markets do not look particularly overvalued now, there is a clear risk that they could become so. Mingchun Sun, an economist at Nomura, points to some big differences between the recent sell-off in shares and the previous one in November 2007. Inflation was then 6.9% and rising, so policymakers were forced to slam on the monetary brakes. Today consumer prices are falling. In 2007 liquidity was tight, with the M2 measure of money supply growing more slowly than nominal GDP. Today excess liquidity (money growth minus GDP growth) is growing at its fastest pace on record. Low inflation, lashings of liquidity and strong growth are the ideal environment for asset-price inflation. Mr Sun concludes that equity and housing bubbles are inevitable and may grow even bigger than those in 2007.

The third alleged threat to China’s recovery is overinvestment. It is widely argued that the recent investment boom has simply exacerbated China’s overcapacity, which will reduce the return on capital and eventually drag down its growth rate. Yet analysis by BCA Research, a Canadian research firm, finds surprisingly little evidence of wasteful overinvestment to date.

One yardstick of the efficiency of capital is the incremental capital-output ratio (ICOR)—the investment needed to generate an additional unit of output (ie, annual investment divided by the annual increase in GDP). The higher the ICOR, the less efficient the investment. China’s ICOR has been fairly stable over the past three decades. This year it will shoot up because investment surged and growth slowed, but the ICOR is meaningless in a recession. America’s ICOR, for example, will be infinite because GDP fell. In general, BCA finds that China’s ICOR is lower than that in many other places, suggesting that its capital spending is more, not less, efficient.

But what about this year’s state-directed investment boom? The good news is that little new investment has gone into industries which already had excess supply, such as steel. Three-fifths of new lending this year went into infrastructure projects. Some of this money will inevitably be wasted and banks’ non-performing loans will rise in future years as payments come due. But much of the new infrastructure, especially railways and roads, should help improve future productivity.

As for bank lending, which grew by a thumping 34% in the year to August, the government has repeatedly signalled that it will maintain its easy monetary policy because it is still concerned about the sustainability of the recovery. But it is also trying to curb speculative excesses and to tighten bank supervision. The banking regulator strengthened the rules on mortgages for investment properties this summer, and has told banks to raise their capital ratios to 10% and to hold provisions equal to 150% of projected loan losses by the end of the year.

China does not yet have dangerous bubbles in housing and shares that could threaten its recovery. Indeed, rising asset prices will help boost consumer spending over the next year, which will in turn help broaden China’s recovery. But to minimise the risk that China is starting to inflate its biggest bubble ever, the government does need to curb excessive liquidity. That means allowing the yuan to appreciate. With interest rates likely to remain close to zero in America for some time, China cannot significantly tighten its own rates unless it allows its currency to rise. If China’s growth has decoupled from America, then so must its monetary policy.

http://www.economist.com/businessfin...=features_box2

[z0rg]

BEIJING, Oct 12 (Reuters) - China's annual economic growth probably accelerated to 8.9 percent in the third quarter from 7.9 percent in the April-June quarter, according to a Reuters poll.

Following are the detailed forecasts of 22 banks and brokerages for Q3 GDP, as well as the consumer price index, producer price index, urban fixed-asset investment, industrial output and retail sales for September.

(Percent change from a year earlier):
Institution GDP CPI PPI *FAI IO RS
Action Economics ~ -0.6 -7.0 32.6 11.0 15.5
Bank of China 8.2 -0.6 -5.0 32.0 12.5 16.0
Bank of Communications 9.0 -0.9 -7.0 33.2 12.5 15.5
Bank of East Asia ~ -0.8 -7.3 33.1 14.3 15.6
Bohai Securities 8.2 -1.0 -7.5 33.0 13.5 15.6
China Construction Bank 8.6 -1.0 -6.5 32.2 13.0 14.9
CICC 8.7 -0.7 -6.6 ~ 12.8 15.5
CITIC Securities ~ -0.8 -7.5 33.0 13.1 15.6
Daiwa Research Institute 8.5 -0.8 -6.9 33.0 13.1 15.4
Deutsche Bank ~ -0.8 -6.9 33.0 13.1 15.4
Essence Securities 9.4 -0.8 -6.8 33.2 13.8 15.6
Fortune Trust 8.9 -0.9 -7.0 33.2 13.5 15.5
Goldman Sachs 9.5 -1.0 -7.5 33.3 13.6 15.7
Guotai & Junan Securities 8.5 -0.8 -7.4 33.1 13.2 15.5
Industrial Bank 9.0 -0.7 -6.8 33.5 13.0 15.5
Industrial Securities 9.5 -0.7 -7.0 33.0 13.5 15.6
Jiangnan Securities 8.9 -0.8 -6.0 32.0 13.5 15.8
Merrill Lynch 9.1 -0.8 -7.3 33.2 13.5 15.5
Morgan Stanley 9.5 -0.7 -7.5 32.5 13.5 15.5
Northeast Securities 8.8 -0.8 -6.2 32.6 14.0 15.6
Qilu Securities 9.1 -1.0 -6.3 33.4 12.6 15.5
Royal Bank of Scotland 8.3 -0.9 -7.5 32.5 13.4 15.5

_____________________________________________________________
Median 8.9 -0.8 -7.0 33.0 13.3 15.5
Minimum 8.2 -1.0 -7.5 32.0 11.0 14.9
Maximum 9.5 -0.6 -5.0 33.5 14.3 16.0

~ Not available

# FIXED-ASSET INVESTMENT IN URBAN AREAS, YEAR-TO-DATE

http://www.iii.co.uk/news/?type=afxn...action=article

Real figures will be released on Oct 22nd.

[big-dog]

Originally Posted by Sabanban

I agree. China should keep wan (10 thousands) number system. This is one of few things that is Chinese in math today. I don't see the advantage of western tri-digit (thousand) number system comparing to the Chinese quadra-digit (wan) system. For some people, it may have conversion problem, but I can convert a number from one system to the other without thinking.

The only problem is that with people demanding larger numbers in economics/finance/Science fields, more characters should be invented to the wan numbering system, i.e.

Number----------English------------Chinese

1000---------------Thousand-------------Qian 千
10000------------------------------------Wan 万
1000000------------Million
100000000--------------------------------Yi 亿
1000000000---------Billion
1000000000000-----Trillion-----------------? (万亿)
1000000000000000--Quadrillion
10000000000000000------------------------? (万万亿)

[z0rg]

What about this
http://en.wikipedia.org/wiki/Chinese...#Large_numbers

[big-dog]

Thanks for the information.

It's good they already have it. the bad thing is some chracters' meanings are still ambiguous (i.e. definition of Zhao 兆) and unpopular.

[YelloPerilo]

Originally Posted by big-dog

Thanks for the information.

It's good they already have it. the bad thing is some chracters' meanings are still ambiguous (i.e. definition of Zhao 兆) and unpopular.

What is so ambigous about zhao?

They are unpopular because they are rarely needed, even in Europe these large numbers are more used in the academics than in the daily newspapers or average households.

[big-dog]

Originally Posted by YelloPerilo

What is so ambigous about zhao?

you can visit z0rg's link, it has two meanings in Chinese.

Originally Posted by YelloPerilo

They are unpopular because they are rarely needed, even in Europe these large numbers are more used in the academics than in the daily newspapers or average households.

as I mentioned, they are frequently used only in economics/finance/science. i.e. trillion is already a popular term in GDP valuation, but there's no equivalent popular Chinese character describing it (we call it Wan Yi).

[snow is red]

Western regions to get $43.3b investment


2009-10-17

China's relatively poor western regions are to receive 296 billion yuan ($43.3 billion) of investment through 551 projects signed Friday with investors from both China and abroad.

Those deals were sealed at the tenth Western China International Economy and Trade Fair in Chengdu, provincial capital of Southwest China's Sichuan province.

The region has 12 provinces, autonomous regions and municipalities, with a combined population of about 370 million.

Chinese investors contributed 539 of the 551 projects, involving 288.9 billion yuan of investment. The rest 12 projects would be invested by foreign contractors, involving in around $1 billion of investment.

Sectors involving local resources, equipment manufacturing, service and new and high technology were investors' favorite target areas.

According to agreements signed here, German industrial conglomerate Siemens would spend 30 million yuan in Chengdu to setup a "Global IT Operation Center", intending to provide better IT operation support for its customers.

Meanwhile, Taiwan's Foxconn Group, the world's top maker of outsourced electronics, would invest $1 billion to build an industrial base in Chengdu, setting up production lines for products like LED-TV, LCD module, LED backlight module and LCD package. The new base will also develop software and sell 3C digital products as wells.

http://www.chinadaily.com.cn/bizchin...nt_8805658.htm

[big-dog]

China to be largest auto market in the world

(chinadaily.com.cn)
Updated: 2009-10-20

Experts expect that China will become the biggest auto market in the world this year, the West China City Daily reported yesterday. Based on current trends, consumers will buy between 12 and 13 million cars this year, analysts said.

China’s auto sales will reach 10 million units on Tuesday, estimated Rao Da, secretary-general of the Joint Advisory Committee of China Passenger Car Market. About 9.66 million vehicles have been sold in the first nine months of the year, according to data from the China Association of Automobile Manufacturers.

Another analyst, Jia Xinguang said this country’s auto sales will continue to grow rapidly in the fourth quarter, for three reasons: the imminent end of a policy that halved the sales tax on mini cars, the auto exposition in Guangzhou, the capital of Guangdong province and new cars like Audi Q5 entering the market.

In addition, China has produced 10 million units of cars so far this year, becoming a l0-million-unit car producer, according to auto.qq.com.

(http://www.chinadaily.com.cn/china/2...nt_8820728.htm)

[big-dog]

Great news!!! The 2009 full year GDP growth is atleast 8%.

China's GDP grows nearly 9 percent last quarter

updated 22 minutes ago

Story Highlights

•China's GDP increased 8.9 percent for the third quarter

•China's economy has been picking up pace the first three quarters of the year

•China spent $586 billion to bolster its economyupdated 22 minutes ago

BEIJING, China (CNN) -- China's GDP increased 8.9 percent for the third quarter, moving closer toward the goal of 8 percent growth for the year.

Growth for the first three quarters of the year is up 7.7 percent; economists says 8 percent growth is needed to keep current employment levels.

The growth was in line with analyst expectations, although there are rising fears that the government's massive stimulus package may be inflating stock and property prices. The Chinese government spent $586 billion to bolster its economy.

"We have obtained obvious achievements and further strengthened the steady upturn trend of the economy. The overall situation of national economy is good," said Li Xiaochao, of the National Bureau of Statistics.

"At present, it's a crucial stage for the national economy to realize stable growth," Li said. "Yet the basis of the economic recovery still needs to be consolidated, and the insufficient external demand is still severe with the arduous task of expanding domestic demand and adjusting the structures."

China's economy has been picking up pace the first three quarters of the year, growing at 6.1 percent the first quarter and 7.9 percent the second quarter.

Foreign trade has continued to drop, but its rate of decline is slowing. The total volue of imports and exports in September was down 10.1 percent compared to the same month last year, but up 14.2 percent from August.

(cnn.com)

[z0rg]

Chinese GDP Rockets 8.9% Higher In Q3

All the caveats about Chinese statistics aside, Q3 was a monster, with GDP growing 8.9%.

For some context, do check out this FT op-ed from Qin Xiao, warning of global imbalances, asset bubbles in China, and clueless central bankers without any ideas for how to pull back the stimulus.

Here's the full GDP announcement from China's Bureau of Statistics.

-----

In the first three quarters of 2009, the various localities and departments have conscientiously implemented the arrays of plans by the central government and the State Council on dealing with the international financial crisis and maintaining stable and fast development of the economy. We have attained obvious achievements, and further strengthened the steady upturn trend of the economy. The overall situation of national economy was good.

According to preliminary estimation, the gross domestic product (GDP) of China in the first three quarters of this year was 21,781.7 billion yuan, a year-on-year increase of 7.7 percent, which was 0.6 percentage points higher than that in the first half of this year. In terms of growth by quarters, it was up 6.1 percent for the first quarter, 7.9 percent for the second, and 8.9 percent for the third quarter. In terms of growth by sectors, the value added of the primary industry was 2,250.0 billion yuan, up by 4.0 percent; that of the secondary industry was 10,647.7 billion yuan, up by 7.5 percent; and that of the tertiary industry was 8,884.0 billion yuan, up by 8.8 percent.

1. The situation of agricultural production was steady with expected bumper harvest of grain. Given the increase of summer grain for six consecutive years, the total output of early rice reached 33.27 million tons, an increase of 1.67 million tons over that in the same period of last year, up 5.3 percent. A bumper harvest of the grain for the whole year is to be achieved. The output of meat maintains steady growth, with 52.80 million tons of port, beef and mutton output in the first three quarters, up by 5.6 percent. Of this total, the output of pork was 34.95 million tons, up by 6.3 percent; the total stock of pigs was 468 million, up 2.2 percent, while the number of slaughtered pigs was 463 million, up by 6.4 percent.

2. The growth rate of industrial production increased on a quarterly basis and the decrease rate of profits made by industrial enterprises slowed down. In the first three quarters of this year, the total value added of the industrial enterprises above designated size was up 8.7 percent year-on-year, or 6.5 percentage points lower than that in the same period of last year. Of this total, the growth in the first quarter was 5.1 percent, the second quarter 9.1 percent, and that in the third quarter was 12.4 percent. Analysis on different types of enterprises showed that the value added growth of the state-owned and state holding enterprises went up by 4.1 percent; collective enterprises, 7.9 percent; share-holding enterprises, 11.0 percent; and 3.4 percent growth for enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan province. The year-on-year growth of heavy industry was 8.7 percent, and 8.7 percent for the light industry. Among the 39 industrial divisions, all were increased over the same period of last years. In terms of different areas, the growth in eastern, central and western regions went up by 7.5 percent, 8.7 percent and 13.8 percent respectively. The production and market of industrial products went on well. In the first three quarters of this year, the sales ratio of industrial products was 97.43 percent.

In the first eight months of this year, the profits made by industrial enterprises above designated size stood at 1,674.7 billion yuan, a year-on-year decrease of 10.6 percent, narrowed down by 12.2 percentage points as compared with that from January to May. Among the 39 industrial divisions, 36 divisions registered narrowed year-on-year growth or decrease with profits.

3. Investment in fixed assets enjoyed fast growth with acceleration of growth in investment in real estate. In the first three quarters of this year, the investment in fixed assets of the country was 15,505.7 billion yuan, a year-on-year growth of 33.4 percent, or a rise of 6.4 percentage points as compared with the growth in the same period last year. The investment in urban areas reached 13,317.7 billion yuan, up by 33.3 percent, or 5.7 percentage points higher while that in rural areas was 2,188.0 billion yuan, up by 33.6 percent, or a rise of 10.3 percentage points. The investment in the primary industry, secondary industry and the tertiary industry in urban areas went up by 54.8 percent, 26.9 percent and 38.1 percent respectively. In terms of the areas, the investment in eastern, central and western regions grew by 28.1 percent, 38.3 percent and 38.9 percent respectively. The investment in infrastructures was increased by a large margin. In the first three quarters, the investment in infrastructure (excluding electricity) went up by 52.6 percent, of which, that in the railway transportation, up by 87.5 percent, that in road transportation, up by 50.7 percent, and that in health, social security and social welfare up by 72.9 percent. In the first three quarters, the investment in real estate development was 2,505.0 billion yuan, up by 17.7 percent year on year, or a 7.8 percentage point higher than that in first half of this year.

4. Sales on domestic markets continued to steadily accelerate with higher growth rate at or below county level than that in cities. In the first three quarters, the total retail sales of consumer goods reached 8,967.6 billion yuan, a year-on-year rise of 15.1 percent; the real growth was 17.0 percent after deducting the price factors, which was 2.8 percentage points higher than that in the same period last year. The retail sales in cities reached 6,101.3 billion yuan, up by 14.8 percent, and the retail sales at and below county level stood at 2,866.3 billion yuan, up by 16.0 percent. Grouped by different sectors, the sale by wholesale and retail businesses was up by 15.0 percent and that by lodging and catering industry was up by 17.4 percent. Among the sales by wholesale and retail businesses above designated size, apart from the telecommunication devices, the sales of all the other 20 categories of commodities realized positive growth. Of these, the sale of furniture increased by 32.3 percent, and that of the automobile up by 24.5 percent.

5. The month-on-month changes of consumer price and producers’ price reversed from decreasing to increasing while the year-on-year decrease narrowed. In the first three quarters of this year, the consumer price index went down by 1.1 percent. Of which it dropped by 1.3 percent in cities and 0.7 percent in rural areas. Grouped by commodity categories, three out of eight went up while the rest five dropped: prices for tobacco, liquor and articles rose by 1.6 percent, price for household facilities, articles and maintenance services up by 0.6 percent, health care and personal articles up by 1.0 percent; prices for food down by 0.1 percent, clothing down by 2.3 percent, transportation and communication down by 2.6 percent, recreation, education, culture articles and services down by 0.7 percent, and housing down 4.4 percent. The month-on-month change of consumer price in July reversed from decreasing to maintaining the same level, the month-on-month change in August and September was up 0.5 percent and 0.4 percent respectively. In the first three quarters, the retail prices of commodities dropped by 1.6 percent year-on-year. The producers’ prices for manufactured goods went down by 6.5 percent year on year, by the end of September the month-on-month changes enjoyed growth for six consecutive years, it was up 0.6 percent in September. In the first three quarters of this year, the purchaser’s prices for raw material, fuel and power decreased by 9.5 percent year-on-year. The year-on-year growth of the prices for housing in 70 large and medium-sized cities went up by 0.1 percent.

6. The foreign trade continued to drop but the decrease rate obviously lowered. In the first three quarters of this year, the total value of imports and exports was US$ 1,557.8 billion, down 20.9 percent year-on-year. Of this total, the value of imports and exports in the first quarter down 24.9 percent, second quarter down 22.1 percent, and third quarter down by 16.5, with obviously narrowed declining rate. In the first three quarters of this year, the value of exports was US$ 846.6 billion, down by 21.3 percent; the value of imports was US$ 711.2 billion, down by 20.4 percent. The trade surplus was US$135.5 billion, down by US$ 45.5 billion year-on-year.

7. The income of urban and rural residents continued to grow with rapid increase in transfer income. In the first three quarters of this year, the per capita income of urban households was 14,213 yuan. Of this total, the per capita disposable income of urban population was 12,973 yuan, a year-on-year growth of 9.3 percent, or a real growth of 10.5 percent after deducting price factors. Of the total per capita income of urban households, the income from wages and salaries was up 10.2 percent year-on-year; transfer income was up 15.7 percent; net operating income up 5.0 percent; the property income up 12.3 percent. The per capita cash income of rural population was 4,307 Yuan, up by 8.5 percent year-on-year, or a real growth 9.2 percent after deducting price factors. Of this total, the income from wages and salaries was up 9.9 percent; income from the sale of agricultural products up by 4.0 percent; income from production operation in secondary and tertiary industry up by 10.5 percent; property income up by 11.7 percent; transfer income up 26.4 percent.

8. The money supply grew rapidly with continued increase in loans of financial institutions. By the end of September, the supply of broad money (M2) was 58.5 trillion yuan, a year-on-year growth of 29.3 percent, which was 11.5 percentage points higher than that at the end of last year; that of the narrow money (M1) was 20.2 trillion yuan, a rise of 29.5 percent, or 20.5 percentage points higher; the cash in circulation (M0) was 3,678.8 billion yuan, up by 16.0 percent, or 3.3 percentage points higher. The amount of outstanding loans of all financial institutions was 39.0 trillion yuan, increased by 8.7 trillion yuan over that at the beginning of this year, or an increase of 5.2 trillion yuan as compared with the same period last year. The amount of outstanding deposits of all financial institutions was 58.4 trillion yuan, an increase of 11.7 trillion yuan over the beginning of the year, or 5.2 trillion yuan more than the same period last year.



At present, it’s the crucial stage for the national economy to realize a stable growth, yet the basis of the economic recovery still needs to be consolidated, and the insufficient external demand is still severe, with the arduous task of expanding domestic demand and adjusting the structures. In the following period, we should continue the implementation of the scientific outlook on development, maintain the consistency and stability of the macro-economic policies in accordance with the central government’s decisions and deployment of economic activities, insist on the proactive fiscal policies and moderately lenient monetary policies, fully implement, enrich and optimize the arrays of plans and policy measures to deal with the international financial crisis. At the same time, we should improve the relevance, flexibility, effectiveness and consistency of the macro-policies, and strive to realize stable and fast development of the national economy.

http://www.businessinsider.com/chine...-in-q3-2009-10

[z0rg]

China's Stimulus-Based Rally Is Just Beginning

If you think the stimulus based rally in the United States is impressive you should see the stimulus in the pipeline in China. A recent report from Nomura Securities says the stimulus based recovery is only just getting started and is likely to peak in mid to late 2010. That means the liquidity fueled rally in stocks might not be close to finished and adds credibility to SocGen’s theory that China will be a bigger bubble than Japan.

Many investors have voiced concerns over the front-loaded package, but the 4 trillion RMB package will actually pay more in 2010 than it did in 2009 as it the stimulus is drawn out over a longer timeframe. Nomura details the investment:

China’s investment stimulus is unlikely to fade soon because much of the investment is for massive multi-year government infrastructure projects. The amount of funds in motion is much larger than the originally mooted RMB4.0trn. The calculations are straightforward: According to the original plan, RMB1.7trn was to be funded by central and local governments, while the other RMB2.3trn was to be largely financed by the banks (see “China’s stimulus: A confusing package”, Global Weekly Economic Monitor, 20 March 2009). Since the plan was to be implemented over a two-year horizon (2009-10), this means that a maximum of RMB1.15trn in additional bank loans per year would be needed to reach the original planned target. Yet loan growth in the first eight months of this year has already exceeded RMB8.0trn, of which RMB4.0trn was on medium- and long-term corporate loans (compared with only RMB1.9trn for the whole of 2008). As private sector investment is known to have been lacklustre so far this year, the majority of these bank loans can therefore be expected to be directed at stimulus projects. Based on these numbers, we estimate that the total planned investment amount of the stimulus projects started so far exceeds RMB7-8trn. These projects will likely last longer than the originally slated two years. So will the investment boom, in our view…. and a massive amount remains in the pipeline.

Although the monthly injections are set to peak in 2009 the annual payment in 2010 will actually be about 40% larger in 2010 than it is in 2009:



Adding fuel to the fire are signs of life in the global economy. Private sector investment is starting to pick-up in recent months and could only add to the investment boom.

In addition to strong public investment, private sector investment has also begun to pick up recently. For example, property investment growth surged to 34.6% y-o-y in August from 19% in July (and from 1% in January), returning to its growth range in 2007 and 1H 08. Meanwhile, FDI inflows into China rose by 7.0% y-o-y in August after falling for seven months in a row, reflecting renewed confidence on the part of foreign investors as the V-shaped recovery unfolds. We expect the recovery to gain more momentum, forecasting real GDP growth to reach 11% y-o-y in 4Q 09 and 13% in 1Q 10. As it does, and more demand for consumer and capital goods is created in the process, we believe that private sector investment should pick up further.

If you think the stimulus based boom in the U.S.A. has been impressive just wait until the Chinese stimulus plan picks up full steam in 2010. The 82% rally in the Shanghai Index is likely to continue as government stimulus expands. The outperformance of the emerging markets and the reflation trade could very well have fuel well into 2010. After that, governments and central bankers will likely be forced to deal with an asset bubble and the extraction of liquidity on a scale that is truly unprecedented…..The global printing press isn’t only causing massive potential problems in the U.S.A. - this is a global issue. Let’s just hope that the boom/bust policies of the Federal Reserve and the Chinese government don’t lead to massive long-term problems. I fear we’re quickly approaching the point of no return with regards to extracting government liquidity…..

http://www.businessinsider.com/china...inning-2009-10

[big-dog]

I guess the government will start to reduce lending to prevent inflation. So the 4th quarter growth is not likely to surpass 10%.