China June car sales up 48.5% on year
July 9, 2009
China’s passenger car sales rose 48 per cent in June from the same month last year, consolidating a remarkable recovery that has catapulted China to top position in the world vehicle market so far this year, according to semi-official data released on Thursday.
The strength of China’s vehicle sales – total vehicles sales rose 18 per cent for the first half year to 6.1m from the same period last year – has surprised auto market analysts, government officials and even the country’s automakers, many of whom are scrambling to produce enough vehicles to meet demand. Some auto dealerships have reported shortages of vehicles and western automakers, such as Volkswagen and General Motors, have had to sharply increase production at their Chinese joint ventures to meet local demand.
Like other sectors of the Chinese economy, car industry growth this year was jump-started by the government, which in January announced tax breaks on small cars and subsidies for vehicle purchases in rural areas.
But car segments that were not targeted by tax breaks or subsidies also saw strong growth in sales, auto industry analysts said on Thursday.
High levels of bank lending are also believed to have helped spur demand. China on Wednesday announced that new lending in the first half was Rmb7,400bn ($1,084bn), up 201 per cent year-on-year and equal to 150 per cent of full-year lending in 2008.
Lending for car purchases had not risen – most Chinese buyers buy vehicles with cash – but higher levels of liquidity in general fed through to more corporate purchases of vehicles, analysts said.
General consumer confidence was also a strong factor in sales growth, said Mike Dunne, of the auto consultancy JD Power in Shanghai.
“The government is putting out a strong message that the financial crisis is concentrated in the US, but we in China are doing just fine. The world might be hurting, but not us,” he said.
He added that the impact of that message on car buyers “should not be underestimated”.
JD Power recently revised its 2009 forecast for Chinese passenger car sales to 7m, from 5.8m at the beginning of the year, and said that a further upward revision is possible.
Total vehicle sales rose 36 per cent in June year-on-year, the official Xinhua news agency said on Thursday, quoting figures from the China Association of Automobile Manufacturers.
It was the fourth month in a row that sales had exceeded 1.1m units.
The strength of the Chinese market is providing a rare ray of hope for western automakers already operating in China, and attracting companies like Fiat, long a laggard in China, to the market.
Earlier this week, Fiat signed a joint venture agreement with Guangzhou Automobile Group to make cars and engines in China from 2011. Fiat and GAC said the venture would have the capacity to produce 140,000 cars and 220,000 engines per year initially, but could later be expanded to produce as much as 250,000 cars and 300,000 engines annually.
Tags: small car, pass, ImpactRelated Posts:
China Shipping Container Lines Raises Rates
July 7, 2009
China Shipping Container Lines Co. said it’s hard to predict if rates will keep rising because fees reflect demand.
By staff reporter Zhou Lingling
(Caijing.com.cn) Signs of a recovery in demand have prompted some global shipping firms, including China Shipping Container Lines Co. (SSE: 601866; HKSE: 02866), to raise rates on selected routes effective July 1.
CSCL’s investor relations office told Caijing that the carrier raised rates on China-Europe and China-Mediterranean routes by US$175 per twenty-foot equivalent unit to about US$400, with a further US$50 hike from July 15 in the pipeline. CSCL also raised rates on routes to Australia, Africa and the west coast of South America, the official said.
Meanwhile, container lines participating in the North Asia/New Zealand Discussion Agreement – an alliance formed as ‘a voluntary discussion forum’ – said rates on services linking China and South Korea with New Zealand will rise US$250 per TEU from July 15.
The Canada Westbound Transpacific Stabilization Agreement also said its members raised rates for dry containers by US$160 per TEU, effective July 1.
Neither organization disclosed the new rates.
Several container shipping lines had to abandon planned rate hikes in April amid a sluggish market.
According to the Shanghai Shipping Exchange, China’s export container shipping index closed at 769.05 points on July 3, up 0.8 percent week-on-week, ending several weeks of declines.
The exchange said in a report that traffic on routes to Europe grew significantly in the run-up to the traditional July-August peak season as domestic manufacturers accelerated production and shipments. But the exchange also said that current rates don’t cover shipping firms’ operating costs on services to Europe.
Li Pan, an analyst at Bank of China International, said in a recent report that shipping firms are expected to raise rates to offset rising costs during the peak season and into the third quarter.
With oil prices inching higher, shipping lines’ fuel surcharges are also rising.
An official from CSCL said the company will raise fuel surcharges on services to Europe and the Mediterranean by US$75 per TEU this month. The Asia-West Coast South America Freight Conference also said it will raise its bunker surcharge to US$522 from US$450, beginning July 15.
CSCL said it’s hard to predict if rates will keep rising because fees reflect demand. The global downturn has driven down container shipping traffic and rates.
CSCL’s net profit fell 96 percent last year to 131 million yuan, and it reported a net loss of 1.2 billion yuan in the first quarter of this year.
In Hong Kong on July 7, China Shipping Container was up 0.49 percent at HK$2.05, while in Shanghai its A shares were up 1.11 percent at 4.54 yuan.
China Shipping Container Lines Co. said it’s hard to predict if rates will keep rising because fees reflect demand.
By staff reporter Zhou Lingling
(Caijing.com.cn) Signs of a recovery in demand have prompted some global shipping firms, including China Shipping Container Lines Co. (SSE: 601866; HKSE: 02866), to raise rates on selected routes effective July 1.
CSCL’s investor relations office told Caijing that the carrier raised rates on China-Europe and China-Mediterranean routes by US$175 per twenty-foot equivalent unit to about US$400, with a further US$50 hike from July 15 in the pipeline. CSCL also raised rates on routes to Australia, Africa and the west coast of South America, the official said.
Meanwhile, container lines participating in the North Asia/New Zealand Discussion Agreement – an alliance formed as ‘a voluntary discussion forum’ – said rates on services linking China and South Korea with New Zealand will rise US$250 per TEU from July 15.
The Canada Westbound Transpacific Stabilization Agreement also said its members raised rates for dry containers by US$160 per TEU, effective July 1.
Neither organization disclosed the new rates.
Several container shipping lines had to abandon planned rate hikes in April amid a sluggish market.
According to the Shanghai Shipping Exchange, China’s export container shipping index closed at 769.05 points on July 3, up 0.8 percent week-on-week, ending several weeks of declines.
The exchange said in a report that traffic on routes to Europe grew significantly in the run-up to the traditional July-August peak season as domestic manufacturers accelerated production and shipments. But the exchange also said that current rates don’t cover shipping firms’ operating costs on services to Europe.
Li Pan, an analyst at Bank of China International, said in a recent report that shipping firms are expected to raise rates to offset rising costs during the peak season and into the third quarter.
With oil prices inching higher, shipping lines’ fuel surcharges are also rising.
An official from CSCL said the company will raise fuel surcharges on services to Europe and the Mediterranean by US$75 per TEU this month. The Asia-West Coast South America Freight Conference also said it will raise its bunker surcharge to US$522 from US$450, beginning July 15.
CSCL said it’s hard to predict if rates will keep rising because fees reflect demand. The global downturn has driven down container shipping traffic and rates.
CSCL’s net profit fell 96 percent last year to 131 million yuan, and it reported a net loss of 1.2 billion yuan in the first quarter of this year.
In Hong Kong on July 7, China Shipping Container was up 0.49 percent at HK$2.05, while in Shanghai its A shares were up 1.11 percent at 4.54 yuan.
Tags: prices, Shanghai, ExchangeRelated Posts:
Taxes cut in effort to lift exports
June 23, 2009
CHINA will reduce or eliminate export taxes on nearly 100 categories of goods including some agricultural products and fertilizers starting next month in its latest move to help the country’s flagging trade sector.
The cuts are the first outright tax reductions since December 2008 and follow seven increases in export tax rebates since August.
While the policies give at least some relief to the nation’s struggling exporters, they contribute little to fixing the main problem: restoring external demand, industry analysts said.
The Ministry of Finance said yesterday that 31 types of goods such as wheat, rice and soya beans will be exempted from export taxes starting July 1.
Direct, effective
Large tax reductions will apply to another 60 categories of products, including fertilizer and chemicals. The tax on phosphate fertilizer, for instance, will be cut from 75 percent to 10 percent.
“The move, similar to the previous increases in export tax rebates, is an obvious bid to counter the falling trade,” said Xue Jun, an analyst at Changjiang Securities Co. “A tax cut is more direct and effective than rebates and enhances cash flow.”
A tax cut is immediate, while exporters have to wait to receive a tax rebate.
“The frequency of these moves illustrates that the Chinese government still attaches great importance to exports, though domestic demand is considered key to the country’s economic recovery,” Xue said.
China’s May exports fell 26.4 percent from a year earlier to US$88.8 billion, the worst drop in at least 14 years. Last month, China announced it would raise tax rebates on more than 600 types of exports, including machinery, toys, plastic products and steel. Total rebates amounted to 102.9 billion yuan (US$15.1 billion) in the first quarter, up 18.4 percent from a year earlier.
Vice Commerce Minister Zhong Shan said China will spare no effort to protect the country’s share of the global market.
“China’s trade will suffer a retreat this year and experience slow growth in the coming years,” Zhong said in an article published in the Economic Daily yesterday. “We should go all out to stabilize trade. The focal point should be to avoid losing share in the global market. It is of great importance to keep companies alive and make jobs available, which lays the foundation for the expansion of domestic demand.”
Despite falling volume, Zhong said it may be possible for China to raise its share of global trade.
He said Chinese exports last year accounted for 8.86 percent of the world’s total exports in terms of value, still below the level of export giants Germany and the United States, which each hold around 12 percent of global market share.
At a time when people are slashing spending, China should be able to benefit because the country sells more necessities than luxuries.
CHINA will reduce or eliminate export taxes on nearly 100 categories of goods including some agricultural products and fertilizers starting next month in its latest move to help the country’s flagging trade sector.
The cuts are the first outright tax reductions since December 2008 and follow seven increases in export tax rebates since August.
While the policies give at least some relief to the nation’s struggling exporters, they contribute little to fixing the main problem: restoring external demand, industry analysts said.
The Ministry of Finance said yesterday that 31 types of goods such as wheat, rice and soya beans will be exempted from export taxes starting July 1.
Direct, effective
Large tax reductions will apply to another 60 categories of products, including fertilizer and chemicals. The tax on phosphate fertilizer, for instance, will be cut from 75 percent to 10 percent.
“The move, similar to the previous increases in export tax rebates, is an obvious bid to counter the falling trade,” said Xue Jun, an analyst at Changjiang Securities Co. “A tax cut is more direct and effective than rebates and enhances cash flow.”
A tax cut is immediate, while exporters have to wait to receive a tax rebate.
“The frequency of these moves illustrates that the Chinese government still attaches great importance to exports, though domestic demand is considered key to the country’s economic recovery,” Xue said.
China’s May exports fell 26.4 percent from a year earlier to US$88.8 billion, the worst drop in at least 14 years. Last month, China announced it would raise tax rebates on more than 600 types of exports, including machinery, toys, plastic products and steel. Total rebates amounted to 102.9 billion yuan (US$15.1 billion) in the first quarter, up 18.4 percent from a year earlier.
Vice Commerce Minister Zhong Shan said China will spare no effort to protect the country’s share of the global market.
“China’s trade will suffer a retreat this year and experience slow growth in the coming years,” Zhong said in an article published in the Economic Daily yesterday. “We should go all out to stabilize trade. The focal point should be to avoid losing share in the global market. It is of great importance to keep companies alive and make jobs available, which lays the foundation for the expansion of domestic demand.”
Despite falling volume, Zhong said it may be possible for China to raise its share of global trade.
He said Chinese exports last year accounted for 8.86 percent of the world’s total exports in terms of value, still below the level of export giants Germany and the United States, which each hold around 12 percent of global market share.
At a time when people are slashing spending, China should be able to benefit because the country sells more necessities than luxuries.
Tags: United States, Yuan, TradeRelated Posts:
Credit Crunch effects in China
May 6, 2009
The FT story makes the following key points:
– A rapid deterioration in the ability of Chinese companies to pay their suppliers “is significantly increasing the risk of doing business in China.”
– Chinese companies are facing “a liquidity crunch” due to China’s plummeting exports. “Many of them were also unable to access bank loans to tide them over the tough times, especially if they were small to medium-sized private businesses.”
– Though Chinese banks have “ample liquidity,” they usually do not lend to small private companies.
– Many Chinese companies have turned to their suppliers for credit, “thus forcing the pain up the supply chain.”
– Chinese suppliers are extending credit now more than a year ago. This is “bad credit management.” “Now is not the time to extend credit, it is time to restrict it.” “Most Chinese suppliers, however, have never experienced such a downturn.” “A lot of these companies never had to deal with the problem of not getting paid, because sales had always been increasing,” he said, “There’s not enough financial resource, not enough management.”
Tags: business in china, chinese banks, exportsRelated Posts:
Hong Kong, Mainland to Connect Payment Network
April 4, 2009
Beginning March 16, Hong Kong and the rest of the mainland will link their foreign-currency payment and clearing systems to reduce cross-border payment risks and costs.
Mainland Chinese banks can now make cross-border payments and settlements in Hong Kong dollars, United States dollars, euros and pounds through the network.
More currencies will be accommodated depending on market demand. According to Shanghai Daily, the linkage will improve multi-currency payment efficiency while also facilitating capital turnover efficiency of participating banks.
Cross-border settlements will be carried out by the mainland banks; China Construction Bank, the Bank of China, the Industrial and Commercial Bank of China, and Shanghai Pudong Development Bank.
The Hong Kong agent banks for the mainland one will also be China Construction Bank, the Bank of China, the Industrial and Commercial Bank of China and Citibank.
Source: China Briefing
Tags: commercial bank of china, chinese banks, ChinaRelated Posts:
