Weak Economy Cuts China’s Ansteel 2008 Net Profit 55%
January 31, 2009
China’s Angang Steel Co. Ltd. (Ansteel) said Wednesday net profit fell 55 percent last year to an estimated 3.42 billion yuan (about US$500 million) Ansteel prices plunged.
Ansteel, one of the country’s top three steel producers, issued the estimate in an unaudited statement to the Shenzhen Stock Exchange, where it is listed.
The final figure indicates a loss of 4.83 billion yuan in the fourth quarter, as previous company data show net profits in the first three quarters totaled 8.25 billion yuan.
The decline reflected steep falls in steel prices and slow inventory movement starting in the second half, said the northeast-based company.
Steel prices in China plummeted in the second half as the deepening world economic slowdown weakened industrial growth and steel demand in the country.
The price of 6.5 mm carbon steel wire rods, a major steel product, was down more than 40 percent since June, Jia Yinsong, a Ministry of Industry and Information Technology official, told a forum earlier in January. Market data show the product was sold at about 3,400 yuan per ton.
The company also attributed the weak performance to the costs of buying raw materials and fuel at high prices earlier in 2008.
World crude oil prices are down more than 70 percent since peaking at 147 U.S. dollars per barrel in July. Earnings per share were estimated at 0.47 yuan in 2008, down 58 percent from in 2007, Ansteel said.
The company didn’t give a date for the release of its audited results, which under Chinese rules must be done within six months.
Source: Xinhua News Agency
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New Development Zone to Take Shape Near Beijing
January 31, 2009
China’s port construction, steel and power giants will pour 192.9 billion yuan (28 billion U.S. dollars) for infrastructure construction in Caofeidian, an island-turned development zone in the Bohai Bay in north China, according to the city government of Tangshan, which administrates the zone.
Xinhua’s source with the government said on Wednesday that 65 billion yuan of the investment will be used for 105 infrastructure projects this year.
The 50-sq km development zone in Hebei Province is 220 km to the east of Beijing. It has been designated as a model of China’s environment-friendly industrial base.
The projects under construction this year will equip the zone with 200 million tons of port handling capacity and an initial industrial production condition for key companies, such as the Beijing Capital Iron and Steel Group’s steel plant, which moved from the capital city’s urban area to Caofeidian in 2007.
The Caofeidian industrial zone was put on China’s list of pilot areas for recyclable economy in October 2005. Chinese President Hu Jintao and Premier Wen Jiabao both paid visits to the zone. They expect it to become a demonstration area for scientific development and recyclable development.
Caofeidian has been mapped to become the country’s largest steel production base by 2010. An evaluation by the country’s environmental watchdog shows the steel plant will ensure 99.5 percent of solid waste and 97.5 percent of waste water are recycled.
State-owned giants like Petro China and Huadian Power Group have also made the zone their energy base.
Caofeidian, once a small sand spit in the Bohai Bay, has extended into a land of more than 50 square km through sea fillings since 2003. The frame of a modern city is beginning to take shape here as crowds of elite technicians and industrial workers swarm to the zone.
Source: Xinhua News Agency
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Indicators point to signs of recovery
January 24, 2009
SEVERAL economic indicators for December have shown signs of recovery, though China’s fourth-quarter growth slowed, said the head of the National Bureau of Statistics.
“Last December, the economy was hit quite hard by the global financial crisis, but the December figures also began to show some positive changes and these changes are very important for us,” Ma Jiantang said.
The rebound in money supply, which rose 17.8 percent, the quickest in seven months, and loan growth in December means that the moderate monetary policy has been effective, Ma said.
Retail sales jumped 17.4 percent last month in annualized terms, up from 16.6 percent in November, with a rebound in goods like cars, garments and cosmetics. Ma also pointed out that there was a pick-up in investment sentiment citing an ING report which said investor confidence in China rose to 103 in the fourth quarter from 88 in the third.
“Almost all major monthly indicators point to a recovery,” driven by rising domestic demand – a result of aggressive fiscal and monetary stimulus – and stable exports, Merrill Lynch’s economist Ting Lu said.
Crude steel production, a major indicator of industrial activities, rose to 37.79 million tons in December from 35.19 million tons in November, after China in November announced the 4-trillion-yuan (US$585 million) fiscal stimulus package to support growth.
China has raised export tax rebates by several steps to help revive exports. In December, the government increased export tax refunds on 3,770 tariff lines including mechanical and electrical products, or 27.9 percent of all exports. Exports shrank 2.2 percent in November, the first drop in seven years.
Goods that are eligible for export tax refunds saw positive export growth of 4.8 percent in December, against an overall negative growth of 2.8 percent, Ma said. “This means our export policies have started to show results,” he said.
Ma said the government would wait and see whether these positive changes are sustainable or just temporary. “But such positive changes are just like sunshine in cold winter and light at the break of a dawn, and also little sparks that can ignite a flame,” he said, adding he has confidence in China’s economy.
China’s gross domestic product growth slowed to 6.8 percent in the fourth quarter from 9.0 percent in the third as the global financial crisis deepened into domestic economy.
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China’s economy grows 9% in 2008
January 22, 2009
CHINA’S gross domestic product (GDP) reached 30.0670 trillion yuan (US$4.4216 trillion) in 2008, up 9 percent year on year, said the National Bureau of Statistics (NBS) today.
The growth was the slowest since 2001, when an annual rate of 8.3 percent was recorded, and the first time below a double-digit level since 2003.
The overall national economy maintained the good developing momentum of fast growth, stable prices, optimized structures and improved welfare, said Ma Jiantang, director of the NBS, at a press conference.
The annual growth rate for the fourth quarter dipped to 6.8 percent from 9.0 percent in the third quarter and 9.9 percent for the first three quarters, according to Ma.
“The international financial crisis is deepening and spreading, while its negative impact on domestic economy is continuing,” said Ma.
Despite the fourth-quarter slowdown, Ma said the 9-percent pace was “still a high figure”.
China’s performance was better than the average growth of 3.7 percent for the world economy last year, 1.4 percent for developed countries and 6.6 percent for developing and emerging economies, he said, citing estimates of the International Monetary Fund.
“With a 9-percent rate, China actually contributed to more than20 percent of the global economic growth in 2008,” said Ma.
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Yuan-settlement test to start
January 15, 2009
China started to allow national currency renminbi use in settlement of overseas trade in a limited conditions. Here is the news about it:
Source: China Daily
CHINA’S central bank said yesterday that it plans to implement a pilot program that would settle overseas trade with the Chinese currency instead of the US dollar.
The People’s Bank of China will expand financial cooperation with overseas economies and “properly deal with the global financial crisis,” the central bank said.
“We’ll actively join international efforts to tackle the global financial crisis while safeguarding national interests,” the central bank said.
It pledged to implement a pilot program that the State Council announced last month.
China will allow the yuan to be used for settlement between Guangdong Province and the Yangtze River Delta, China’s two economic powerhouses, and the special administrative regions of Hong Kong and Macau, according to the central bank.
Meanwhile, exporters in the Guangxi Zhuang Autonomous Region and Yunnan Province in southwestern China will be allowed to use the yuan to settle trade payments with members of the Association of Southeast Asian Nations.
Those moves are expected to facilitate overseas trade, as Chinese exporters might face losses if they continue to be paid in US dollars, analysts said.
The dollar’s exchange rate has become more volatile since the global financial crisis began.
The central bank said it will make the exchange rate of the yuan more flexible and keep it “basically stable on a reasonable, balanced level.”
There has been speculation that the yuan’s appreciation will slow down, which would help Chinese exports maintain price advantages in overseas markets.
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