Monday, December 25, 2006

Chinese Economy Update

  • Technical Barriers Cause Huge Losses to Chinese Exporters. Technical barriers caused a total materialized damage of 69.1 billion US dollars and losses of trade opportunities worth 147 billion US dollars to Chinese exporters in 2005, according to a report released by China's Ministry of Commerce on Dec 25.
  • China is set to raise resource prices in efforts to promote conservation, efficiency, and environmental protection. The pricing scheme for oil, natural gas, electricity, coal, water and land will be reformed, taking environmental costs into account. The government is to charge higher fees on waste discharge, sewage treatment and garbage disposal.

Tuesday, December 05, 2006

Beijing's tallest serviced apartments priced at 70,000 yuan per square meter

The serviced apartments suited at 50th-58th floors of Beijing Yintai Center complex's 63-story tower are labelled with a start price of 70,000 yuan per square meter (US$ 835 per square feet), another stunning price tag in China's white-hot property markets, local media reported. The tallest hotel/apartment building in Beijing is located at the core area of the central business district.

Finance of Beijing's gigantic public transit system

Beijing has issued over 5 million public transportation payment cards (RFID technology-based) in eight months since April this year. The city's public transportation carrier charges 20 yuan for purchase of each card. This has generated a total revenue of over 100 million yuan. The card is virtually a debit card. Assuming a commuter deposits 70 yuan (I guess this is a conservative estimate) in his/her card once a month, the public transit carrier could receive a total of 350 million yuan (in advance) a month. This would greatly increase the carrier's cash liquidity and thus allows it to charge the transport fare at a discount of 20% because it can benefit from the increase in holdings of cash assets. At the same time, the change gives the carrier more financial resources to upgrade its bus/train fleet.
In addition, the speculation about cancelation of monthly pass (card-based as well) was reignited yesterday. Souces said the cancelation may result in a further discount on the bus fare paid with regular card.

How efficient is China's R&D investment?

According to a report by the OECD, China's research and development (R&D) investment in 2006 is expected to reach US$136 billion, overtaking Japan to become the World's second largest R&D spender, just far behind the US. Although many foreign companies have established substaintial R&D capacities in China, a large part of coutry's indigenous R&D expenditure is likely to remain inefficient. A significant number of the applicants and users of R&D funds took the money with little output. The country is far from being a R&D power.

Saturday, December 02, 2006

Is financial expansion likely to be China's next step of "go global" strategy?

Industrial & Commercial Bank of China (ICBC), the largest lender of the world's most populous country, was reported to have been preparing for acquiring Bank Halim, a much smaller Indonesian bank. This move, together with smilar activities by other state-controlled commercial banks that have run IPOs in recent years, may implies a start of potential international expansion by the Chinese banking giants, just following the coutry's efforts in hunting for energy assets around the globe, from the Middle East to west Asia and Africa, despite the apparant weakness in the country's banking system. Why? One of the reasons might be the close relationship between finance and energy.

Friday, December 01, 2006

Chinese Economy Update Dec. 1, 2006

  • China's unemployment statistics to cover rural areas (accounting for almost two thirds of the country's population) for the first time, but the data are likely to be far from accurate.
  • China's Engel Coefficients for the year of 2005 (36.7% in urban areas and 45.5% in rural areas) calculated by the National Bureau of Statistics are widely questioned.
  • China's southern coastal province Guangdong witnesses a new wave of industrial shift, characterized by moving-in of technology-intensive industries from America and Europe
  • DB greater China economist Ma Jun says an overspeed growth in China's trade surplus is to bring about six major risks: dramatic changes in foreign exchage rates (particularly the greenback) and in global economy; increasing trade frictions; excess liquidity and ineffectiveness of monetary policy; bubbling of financial markets and property market; a contradiction between low yield of forex reserves and much higher rate of return on FDI in China; increasing possibility of a sudden correction of RMB's value, which may shock other economics (mainly the Asian ones) and global commodity markets.
  • WB's report shows that a third of global anti-dumping claims target China.
  • S&P predicts it will take at least five years before the newcome foreign-funded banks could make substaintial profits in China.
  • Brilliance China Automotive signed a contract to export 158,000 sedans to Germany in next 5 yrs, representing Chinese automakers' ambition to penetrate into the industrialized world.
  • China Post Group incorporated on Nov 29 with a registered capital of 80 bln yuan.

Thursday, November 30, 2006

Chinese Economy Update Nov. 30, 2006

  • Chinese economy enters into a correcting phase
  • Chinese economy risks an overall overcapacity - NDRC economist Ma Xiaohe
  • Chinese yuan (RMB) climbed 400 basis points in six days (nevertheless, RMB is depreciating against China's trade-weighted currency basket in real term)
  • 5 bln yuan of private capital from Shanghai poured into three northeastern provinces
  • Property prices in Beijing's downtown core area top 14,000 yuan
  • Institutional investors' stock holdings jump 60 bln yuan in October
  • Morgan Stanley covets 49 pct stake in Shenyang Machine Tool
  • Arcelor-Mittal sees backsets in buying a 38 pct stake in Laiwu Steel
  • China sees natural gas shortage of 20 bln cubic meters in next 4 yrsCNPC reported to form its second JV in Russia