Manufacturing maintains growth arc
July 2, 2009
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China’s Trade Numbers at January
February 18, 2009
Last week’s trade numbers from China could not have been more dismal. After declining by 2.8 per cent year on year in December, China’s exports plummeted 17.5 per cent in January, placing huge pressure on the country’s manufacturing sector. Already unemployment in China is surging.
Chinese import numbers are even more dismaying. After dropping 21.3 per cent in December, imports fell a staggering 43.1 per cent in January.
At first glance there seems to be a silver lining in the export numbers: they are not as bad as those reported by some other Asian countries. In December, for example, Taiwan’s exports fell by 42 per cent, South Korea’s by 17 per cent and Japan’s by 35 per cent, capping many months of contraction. Less developed Asian countries also performed worse than China, which suggests China may have increased its competitive edge over its trading rivals. But it is precisely this relative outperformance that indicates the severity of the adjustment yet to take place. China’s trade surplus for January was a mind-blowing $39.1bn (€31.1bn, £27.4bn), just under November’s all-time high of $40.1bn and edging out December’s $39bn for second place. In comparison, in the first half of 2008 China’s average monthly trade surplus was an already high $16.7bn. In the second half it surged to $32.9bn.
Pls read the rest of article at Financial Times
Tags: South Korea, Asia, ChinaRelated Posts:
Industrial output grows less than 2007
January 25, 2009
CHINA’S industrial output rose 12.9 percent year on year in 2008, or 5.6 percentage points less than the previous year, the National Bureau of Statistics said yesterday.
Output climbed 5.7 percent in December, up slightly from the 5.4-percent growth rate in November. However, the December figure was 11.7 percentage points lower than a year earlier, and it was also much lower than any of the first 10 months of 2008.
Output of state-owned enterprises and shareholding companies rose 9.1 percent and 15 percent, respectively. These figures include companies with annual sales of at least 5 million yuan (US$731,283), the point at which companies in China are classified as medium to large-scale.
Output of companies funded by foreign investors or investors from Hong Kong, Macau and Taiwan rose 9.9 percent.
Heavy industrial output rose 13.2 percent, while that of light industry gained 12.3 percent.
The bureau’s data showed aggregate industrial profits hit 2.4 trillion yuan in the first 11 months of last year, up 4.9 percent compared with the same period in 2007. However, the growth rate fell a sharp 31.8 percentage points from a year earlier.
Of 39 industries surveyed, 31 reported year-on-year profit growth. The five fastest growth rates were recorded by petroleum and natural gas extraction, coal mining, transport equipment manufacturing, chemical production and metals processing.
Industrial production growth slowed along with a weakening global economy, which reduced market prices as well as domestic and foreign demand, analysts said.
“Weakening demand, especially overseas, was a major cause of China’s slowdown, as more than 30 percent of GDP comes from trade-related industries,” said Tang Min, deputy secretary of the China Development Research Foundation.
He forecast the economy would begin to improve in the second or third quarter as a national 4-trillion-yuan stimulus package took effect and boosted domestic demand for industrial products.
Ma Jiantang, the bureau’s head, called the December rebound a “positive sign” for China’s industrial production.
“The growth rate of industrial output was 0.3 percentage point higher than November. Small as it is, it’s an important change in industrial activity” and could help China’s economy to rebound, he said.
Ma said 16 of the 39 industries surveyed had shown a month-on-month rise in output growth.
A survey conducted by the bureau earlier this month showed steel, coal, ferrous metal and chemical product prices began to rebound after prolonged declines during the second half of 2008, Ma said.
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Relocation of Factories in China
January 14, 2009
Chinese factories is in process of relocation toward the second and third tier cities to cut costs and reinforce competitiveness. Here is one example for the process:
To broaden sources of income and reduce expenditure, Taiwan-based technology manufacturing group Hon Hai Precision Industry Company is planning to implement large-scale employee relocations to third-tier Chinese mainland cities that can offer preferential tax policies in addition to reducing its operating budget for 2009 by 20%.
According to reports from Taiwan local media, the company, which is the parent company of Foxconn, will reduce the number of its employees in the Shenzhen Longhua plant from 260,000 to 100,000 and will transfer its focus to inland areas such as Wuhan, Hubei province and Jincheng, Shanxi province. Edmung Ding, a spokesperson from Hon Hai, said facing the severe global economic situation, Hon Hai started to re-deploy its human resources around China two years ago.
But Ding points out that the company has no layoff plan in its Longhua plant, contrary to news from published reports. In addition, he emphasizes that the 20% budget reduction will be carried out in accordance with the actual situations of different units and will not be enforced under a unified standard.
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Qi says hard times for steel to continue
December 8, 2008
For the buyers importing steel from China or having domestic demand to Chinese suppliers must keep on suppliers. Here is the latest news from Chinese supliers:
CHINA’S steel industry has entered a hard time after seven years of rapid expansion, and a turnaround is unlikely until the second quarter of next year, according to Qi Xiangdong, deputy secretary with China Iron and Steel Association.
Slackening demand at home and overseas has hit the country’s 71 major steel makers, said Qi.
Their profit totaled 126.8 billion yuan (US$18.5 billion) during the January-October period, down 0.93 percent from a year earlier.
Forty-two large or medium-sized steel companies posted losses in October. The combined losses reached 7.8 billion yuan.
The proactive fiscal policy and moderately loose monetary policy as well as the central government’s efforts to boost domestic demand and fixed asset investments would all have a positive impact on the development of the steel manufacturing industry in 2009, Qi said.
Last month, China unveiled an estimated 4-trillion-yuan stimulus package as part of its bid to offset adverse global economic conditions by boosting domestic demand.
The money is to be spent over the next two years to finance programs including low-income housing, rural infrastructure, water, electricity, transportation, the environment, technological innovation and rebuilding from several disasters, most notably the May 12 earthquake.
Although the elimination of export duties on 67 types of steel from December 1 would help cut the cost of exports, Qi expected steel exports to slump next year due to dwindling global demand.
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