Archive for April, 2008

Hunan, the late real estate market trend will slow down

Hunan Provincial Construction Department statistics, the province a quarter of total investment in real estate development completed 14.38 billion yuan, an increase of 32.3 percent. Second quarter and the coming period, real estate investment growth will further slow down. The current number of outstanding issues of concern and resolve.
First, housing supply conspicuous structural contradictions. From the investment amount, a quarter of the province and below 90 square meters of residential investment in all residential investment accounted for only 11.6 percent from the construction area, 90 square meters and the province following the construction of residential housing construction accounts for only all Area of 10.1% from the completion of the area and the proportion of sales area, they only accounted for 6.56 and 7.0 percent. From the 70% target still a big gap between.
Second, the real estate market order to be further standardized. Because of the inadequate management of the market, the number of non-normal factors to the tight supply has created pressure on the market, further boosting prices higher, housing prices continued to rise led some developers to take Wu-availability approach to hoarding, pushed the prices , To seek higher profits. According to statistics, by the end of March this year, the vacancy period in 2001 within the area of commercial housing reached 217,000 square meters, an increase of 49.6 percent, its share from 8.65 percent a year earlier to 16.0% , An increase of 7.35 percentage points. (Ding Wenjie)

Wuhan expo highlights industry shift to central China

    WUHAN, April 28 (Xinhua) — The third Expo Central China concluded on Monday in Wuhan, capital of central China’s Hubei Province, with business people from 113 countries and regions signing agreements with six central provinces on projects valued at more than 300 billion yuan (42.9 billion U.S. dollars).

    Minister of Commerce Chen Deming said at the three-day event that China welcomed business people from around the world to invest in central China and encouraged foreign investors to take over smaller state-owned enterprises there or to help revitalize them through taking stakes.

    According to Chen, overseas investors are also encouraged to establish manufacturing bases, investment companies and development and research centers in central China.

    The region considered to be central China spans six provinces: Shanxi, Anhui, Jiangxi, Henan, Hubei and Hunan. It covers 1.03 million square kilometers and its population accounts for 28 percent of the total. Its provincial economies make up 20 percent of the national total. It is a major grain production base, an important transport hub and a leading energy and raw materials supplier.

    Pressured by limited resources and mounting production costs, some developed countries, as well as companies from eastern China, have transferred their operations to the relatively less developed central region of China at an accelerating pace in recent years.

    Wuhan, poised as the “bridgehead” of central China, has seen annual growth of 30 percent in investments from other parts of the country and abroad over the past three years. More than 70 “Fortune 500″ companies have built manufacturing facilities, research and development centers or China headquarters here.

    Noting these trends, some foreign financial institutions looked around central China in 2006 and 2007, preparing to open branches and offices in Wuhan or in Changsha (capital of Hunan), Nanchang (capital of Jiangxi) and Zhengzhou (capital of Henan).

    In 2005, the central government drew up a strategy for development of the central region and in April 2006, it determined a policy framework for this purpose.

    To this end, Wuhan has been built up as the country’s fourth railroad and aviation hub after Beijing, Shanghai and Guangzhou. Construction of infrastructure — including transport, communications and energy services — is under way around the six central provinces.

    The third Expo China Event had as its theme “accepting industrial transfers and promoting rise of central China.” Its organizing committee said that 673 projects involving foreign direct investment were concluded, involving 16.17 billion U.S. dollars in foreign capital. The expo also saw 766 projects with investment from other part of China signed, valued at 245.12 billion yuan.

    The deals involved new and high-technologies, environmental protection, tourism, financial services, machinery and engineering, vehicle manufacturing and auto parts.

    ”The Chinese government’s regulatory support of the central regions is very attractive,” said Bob Hart, head of manufacturing department of the Britain-based Proven Energy, which came to China for the first time.

    He said that central China had developed manufacturing, easy access and huge market potential, and that was why his company had come.

Survey: U.S.-based companies mostly positive about China prospects

    BEIJING, April 28 (Xinhua)– The majority of U.S.-based companies are positive about business prospects in China, with 89 percent characterizing their five-year outlook as optimistic or cautiously optimistic, according to a survey released here on Monday by the American Chamber of Commerce.

    The findings of the 2008 Business Climate Survey revealed that U.S. companies remained bullish in China as an investment destination, with many planning to expand.

    However, despite the positive outlook and improved operating margins, competitive forces and rising costs are increasingly affecting these companies, according to the survey.

    While China’s continued growth is playing an important role in investment decisions and expansion throughout the country, the rapid growth of the domestic economy has also created a fiercely competitive business environment that is driving significant cost increases, according to the survey.

    ”Accessing the China market continues to be the primary goal and strategy for U.S. companies operating in China,” said the survey.

    According to the survey, more than half of the respondents have already established a presence in a second- or third-tier city.

    The outlook of U.S. businesses in China is tempered by operating challenges, especially shortages of qualified staff and continuing regulatory challenges, such as difficulty in achieving consistency of administration and enforcement.

    With rapid economic development and increasing foreign investment, the demand for Chinese managers of international caliber has also increased significantly. In 2007, difficulty in attracting, developing and retaining managers and technical staff, along with increasing salary and wage expenses, remained the top operating challenges for U.S. companies, the survey shows.

    According to the survey, the companies continue to see China as a strategically important manufacturing base due to its domestic market potential, but more than two-thirds agreed that China was losing some of its competitive advantage in global markets due to rising costs.

China to transport grain from northeast to south to stabilize prices

    BEIJING, April 28 (Xinhua) — China will accelerate shipment of grain from the grain-rich northeast to the country’s south to ease supply imbalances and stem price rises, the Ministry of Railways (MOR) said.

    The ministry has ordered railway authorities in the northeast provinces to improve efficiency and send 10 million tonnes of grains out of the northeast to the south from May 1 to June 30.

    MOR will coordinate with departments concerned to prioritize grain shipment, said Liu Zhijun, the minister of railways.

    The northeast of China, namely the Heilongjiang, Jilin and Liaoning provinces, has 16 percent of the country’s arable land and contributes 16.6 percent of the national grain output, or 83.1billion kilogrammes annually.

    Transportation bottleneck restrained the transport of local quality rice to the south, where short supply has pushed up prices.

    Rice prices had begun to drop remarkably in the northeast since last fall, said Li Binglong, professor with the China Agriculture University.

    The State Administration of Grains (SAG) predicted that price stability can be ensured thanks to abundant grain reserves.

China records urban unemployment ratio of 4.0% at Q1 end

    BEIJING, April 28 (Xinhua) — China had a registered unemployed population of 8.25 million in urban areas at the end of the first quarter of this year, according to latest data the ministry of human resources and social security released on Monday.

    The ministry said the nation’s urban registered unemployment ratio was 4.0 percent at the end of the quarter.

    Between January and March, 3.03 million urbanites found a job nationwide, or 30 percent of the annual goal of 10 million. Meanwhile, 1.28 million layoffs were re-employed, or 26 percent of the annual target of 5 million.

    The three months also saw 204.7 billion yuan (29.2 billion U.S. dollars) gained on China’s basic pension fund, a growth of 31.9 percent on the same period of last year.

    The total included 60.1 billion yuan gained on basic medical insurance fund, up 34 percent, 11.6 billion yuan on unemployment insurance fund, up 23.1 percent, 4.5 billion yuan on work injury insurance fund, up 45.8 percent, and 2.4 billion yuan on maternity insurance fund, up 47.2 percent.

    The national basic pension fund covered 205 million people at the end of March, an increment of 3.32 million over the level at the end of last year.

    The total included 234 million people covered by basic medical insurance, up 10.61 million, 118 million covered by unemployment insurance, up 1.07 million, 124 million by work injury insurance, up 2.32 million, and 79.88 million by maternity insurance, up 2.13 million.

    The ministry added that at the end of March, 40.88 million migrant workers were covered by work injury insurance nationwide, up 1.22 million from the end of last year, and 33.61 million migrant workers by the basic medical insurance, up 2.3 million.

Hong Kong stocks gain 0.97 pct near 26,000 mark

    HONG KONG, April 29 (Xinhua) — Hong Kong stocks rose 0.97 percent on Tuesday and moved one step closer to the key 26,000 mark.

    The benchmark Hang Seng Index edged down 4.33 points, or 0.02 percent, to open at 25,661.96, just off the day’s lowest 25,633.47,but gained momentum from blue-chip companies.

    The index once jumped as much as 372.29 points, or 1.45 percent, above the key 26,000 level to intra-day high 26,038.58 before trimming the gains to 247.86 points, or 0.97 percent, to close at 25,914.15.

    Turnover rose to 88.68 billion HK dollars (11.37 billion U.S. dollars) from Monday’s 73.74 billion HK dollars (9.45 billion U.S. dollars).

    Market heavyweight HSBC, which accounts for the largest weighting of the Hang Seng Index, went up 0.83 percent to 134.4 HK dollars, lifting the index by 31.63 points alone.

    China Mobile, the largest mobile phone operator in the country and the market’s largest stock measured by market value, inched up0.22 percent to 136 HK dollars.

    Energy companies all rose amid surging global oil prices. PetroChina, the country’s largest oil producer, bounced 0.86 percent to 11.7 HK dollars. Sinopec, Asia’s largest refiner, recovered 1.99 percent to 8.22 HK dollars. CNOOC, China’s largest offshore oil producer, continued to advance 2.01 percent to 14.2 HK dollars, elevating the index by 21.75 points alone.

    Hong Kong’s property companies were all higher. SHK Properties, the largest house developer in Hong Kong, added 0.88 percent to 137.2 HK dollars. Cheung Kong, one of the biggest housing companies held by tycoon Li Ka-shing, went up 0.65 percent to 123.2 HK dollars. Sino Land rose 2.71 percent to 20.5 HK dollars. Henderson Land moved up 0.75 percent to 60.6 HK dollars. Hang Lung increased 1.11 percent to 32 HK dollars. New World Development added 2.99 percent to 20.65 HK dollars.

    Hong Kong Exchanges and Clearing Limited, the market’s sole operator, recovered 0.31 percent to 161.8 HK dollars.

    China Enterprise Index, or H-shares, which was composed of 43 companies registered on the Chinese mainland, rebounded 101.17 points, or 0.71 percent, to close at 14,297.83.

    China’s banking companies listed in Hong Kong were mixed. Heavily traded ICBC, China’s largest lender, stood unchanged at 6.2 HK dollars. Bank of China, the country’s second largest bank, added 1.54 percent to 3.95 HK dollars. China Construction Bank, the third largest bank in China, advanced 2.03 percent to 7.05 HK dollars after its better-than-expected quarterly result. Bank of Communications gained 1.42 percent to 11.46 HK dollars. China Merchants Bank rose 1.41 percent to 32.45 HK dollars.

    China’s insurers were mixed after Monday’s losses. China Life, the country’s largest life insurer, rebounded 1.5 percent to 33.75HK dollars. Ping An bounced 2.55 percent to 72.5 HK dollars. PICC P&C continued to weaken 0.9 percent to 7.74 HK dollars. (7.8 HK dollars = 1 U.S. dollars)     

Chinese share prices up slightly on rises of power, energy sectors

    BEIJING, April 29 (Xinhua) — Chinese shares concluded Tuesday trading slightly higher, with brokers, power, energy sectors leading the upward movement.

    But the impending unlocking of large amount of non-tradable equities dampened market sentiment and drove the upward adjustment to a halt, market observers said.

    In May, there will be formerly non-tradable shares valued at 230 billion yuan (32.9 billion U.S. dollars) becoming negotiable, which will add to pressure on liquidity and threaten investors’ enthusiasm, the observers added.

    On Tuesday, China Aluminum Industry, one of the top 10 heavyweights, lost 1.36 percent to 21.11 yuan, as it will have 2.5billion non-tradable shares to become negotiable on Wednesday.

    However, Bank of China and PetroChina, also included in the top10, performed well on release of their quarterly corporate results.

    Bank of China, a leading commercial bank, reported a 78 percent growth in net profits for the first quarter of this year, while PetroChina, the nation’s largest oil producer, unveiled higher-than-expected quarterly earnings — though its net profits declined 29 percent, its earnings per share stood at 0.14 yuan, higher than the market-anticipated 0.08 yuan.

    The bank rose 2.41 percent to 5.09 yuan, while the oil company, up 1.31 percent to 17.06 yuan.

    Meanwhile, the broker, power and energy sectors performed in an impressive manner.

    Guojin Securities and Jidian Electricity rose by the 10-percentdaily limit. Changjiang Securities gained 9.98 percent and Pacific Securities increased by more than eight percent. Huaneng International, a leading power supplier, went up 8.04 percent, and Guodian Electricity, soared 8.86 percent.

    On Tuesday, the benchmark Shanghai Composite Index ended the daily trading at 3,523.41 points, 48.68 points, or 1.40 percent, higher than the previous close.

    The Shenzhen Component Index for the smaller stock exchange in Shenzhen gained 98.38 points, or 0.77 percent, to close at 12,880.88 points.

    Combined turnover on the two bourses shrank further to 145.42 billion yuan (20.8 billion U.S. dollars), down from 161.2 billion yuan for the previous trading day.

    Gains outnumbered losses by 582 to 229 in Shanghai and by 443 to 186 in Shenzhen.

Hong Kong sees strong retail sales growth in March

    HONG KONG, April 29 (Xinhua) — Hong Kong continued to record a sustained upbeat consumer sentiment in March, with its total retail sales value growing 20 percent year on year to 22.6 billion HK dollars (about 2.9 billion U.S. dollars), revealed the Census and Statistics Department here Tuesday.

    According to the Census and Statistics Department’s latest statistics, the total retail sales volume also rose 13 percent from the same period of last year.

    Looking forward, the department expected the firm labor market conditions, rising income, and further growth in inbound tourism to continue providing support to the retail trade.

    But the department said the society need to stay alert to the impact of the unfolding global financial turbulence and the U.S. economic slowdown on the economy and consumer sentiment.

    Rolling out the latest retail sales figures here Tuesday, the department said total retail sales rose 17.5 percent in value and 11.6 percent in volume in this year’s first quarter.

    Analyzed by type of retail outlet, the sales volume of motor vehicles and parts led the growth by surging 29 percent, followed by sales of electrical goods and photographic equipment with a 22.1 percent upsurge.

    Apparel, furniture and fixtures, miscellaneous consumer goods, footwear, jewelry, watches and clocks and other valuable gifts also saw a double-digit growth in sales ranging from 19 percent to10.7 percent.

Baosteel Q1 net profit up 16% on stainless steel rebound

    BEIJING, April 29 (Xinhua) — China’s largest steel provider, Baoshan Iron and Steel Co., Ltd., reported its first quarter net profit rose 16 percent over the same period last year on better performance from its stainless steel sector.

    The profit reached 4.26 billion yuan (609 million U.S. dollars), with earnings per share valued at 0.24 yuan, according to the quarterly report released by the Shanghai-based company on Monday.

    Baoshan’s total profit soared 71 percent, or 2.41 billion yuan, to 5.82 billion yuan compared with the previous quarter. The improved performance came despite rising costs due to the severe power supply shortage and a transport strain caused by the snow disaster in south China starting in late January, as well as price increases in raw materials and fuel.

    Analysts attributed the leap to its recovering stainless steel business, whose gross profit declined 17 percent in 2007 as nickel prices fluctuated violently. The sales rebound in the sector reduced the impairment of assets by 370 million yuan in the first quarter compared with the same period last year.

    Baosteel’s 2007 total profit rose 0.5 percent to 19.31 billion yuan. Its sales revenue stood at 191.56 billion yuan last year and was expected to reach 200 billion yuan in 2008.

    The company was also included in the Fortune 500 list for the fourth straight year in 2007. It ranked the 307th among the 500 tops companies, and sixth among all steel companies.

    Its shares rose 1.01 percent to 12.90 yuan on the Shanghai Stock Exchange on Monday.

Oil duo’s profits plunge

PetroChina Co will build a 10-million-ton-a-year oil refinery in the northeastern Liaoning Province, the local government has said.
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    BEIJING, April 29 — PetroChina, the nation’s largest oil producer, said its first-quarter profit fell 31.5 percent as refining losses and windfall taxes cut its earnings from record crude prices.

    Net income dropped to 28.9 billion yuan (4.12 billion U.S. dollars) from 42.1 billion yuan a year earlier, Beijing-based PetroChina said in a statement yesterday. The company’s revenue for the first quarter was 259 billion yuan, an increase of 41.9 percent.

    Because of the gap between high crude prices abroad and government-controlled low refined oil prices at home, the company’s refining business “saw big losses in the first quarter,” said the company statement.

    China has kept down the domestic prices of refined oil products despite the surge in international crude price to nearly $120 per barrel in the first quarter, which has resulted in big losses for domestic refiners.

    The country’s largest refiner, Sinopec, said its first-quarter net profit decreased by 65.78 percent to 6.7 billion yuan, border=0>

China Petroleum and Chemical Corporation (Sinopec), the country’s largest oil refiner, predicted its net profit to decrease by more than 50 percent in the first quarter of 2008 from a year earlier. (File Photo)
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    Sinopec’s refining business saw 20.64 billion yuan in losses in the first quarter, compared with a profit of 4.38 billion yuan a year earlier, said a company statement.

    ”As fuel prices are controlled by the government, Sinopec cannot pass the rising crude costs to end users,” said Liu Bo, an analyst with Sinolink Securities in Shanghai.

    Sinopec’s revenue for the first three months was 332 billion yuan, an increase of 19.8 percent, said the statement.

    The company processed 41.89 million tons of crude in the first quarter, an increase of 9.57 percent, it said.

    Since April 1, Sinopec and PetroChina, the country’s two largest oil companies, are being subsidized for their losses in oil processing.

    The government will give “appropriate monthly subsidies”, Sinopec and PetroChina had said earlier. However, the two companies didn’t say how much they would get as subsidies every month.

    Earlier in April, the Ministry of Finance said the government would refund value-added taxes on 3.5 million tons of gasoline and diesel imported by Sinopec and PetroChina in the second quarter. Analysts said the 17 percent tax rebate would mitigate to some extent the refining losses.

    (Source: China Daily)