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TBG News Flash for January 17-23, 2009
Stories from the Chinese media:
Policy and Economy
Automotive
Financial Services
Industrials
Mining, Oil & Gas
Real Estate
Policy and Economy
China CPI rises 5.9% in 2008
The National Bureau of Statistics (NBS) said Thursday that China's consumer price index (CPI) rose 5.9% last year. The CPI was 1.1 percentage points higher than in 2007, but was down from the 6.3% for the January-November period. The CPI climbed 2.4% in November from a year earlier, easing for the seventh month in a row and down from a 12-year-high of 8.7% in February. (Summarized from Xinhua News, January 22, 2009)
China allows listed commercial banks to resume exchange-based bond trades
According to the China Banking Regulatory Commission (CBRC), China's listed commercial banks will be allowed to trade bonds on the country's exchanges for a trial period of unspecified length. But banks will need approval from CBRC and then apply to stock exchanges for such trading. Since the ban was imposed in 1997, banks have conducted bond trading through the interbank market. The move represents an attempt to expand the bond market and sources of financing for businesses. (Summarized from Xinhua News, January 20, 2009)
Automotive
Dongfeng to launch first own-brand PV in March
China Business News reported Monday that Dongfeng Passenger Vehicle Company would launch its first Dongfeng-brand PV model in March. Dongfeng Passenger Vehicle Company was founded in July 2007 as a division to fulfill Dongfeng Motor Group's dreams of building its own-brand passenger vehicles, an ambitious project that the group has invested RMB3.6 million (US$530,000 ) for the first phase. The initial production capacity will reach 120,000 passenger vehicles. (Summarized from Gasgoo.com, January 19, 2009)
Financial Services
VC investment in China hits new high
According to a report released Monday by market researcher Zero2IPO Group, venture capital(VC)'s investment in China's mainland hit its highest level in 2008 to reach US$7.31 billion, up 33.3 % over a year earlier. 81 VC domestic and foreign companies raised 116 funds in China's mainland, doubling the fund number from 2007. Renminbi funds were quite active with total investment reaching US$1.394 billion, accounting for 33.1% of total investment by VC. (Summarized from China Daily, January 19, 2009)
Industrials
Weak economy cuts China's Ansteel 2008 net profit 55%
China's Angang Steel Co. Ltd. (Ansteel) said Wednesday its net profit fell 55% last year to an estimated RMB3.42 billion ( US$500 million). The decline reflected steep falls in steel prices and slow inventory movement starting in the second half. Steel prices in China plummeted in the second half as the deepening world economic slowdown weakened industrial growth and steel demand in the country. Ansteel is one of the country's top three steel producers. (Summarized from Xinhua News, January 21, 2009)
China's cotton imports down 14% in 2008
According to China Customs, China imported 2.11 million tons of cotton in 2008, down 14.1% from 2007. The imported volume in December 2008 dropped 47.7% year-on-year to 168,000 tons. China Cotton Association predicted that the cotton planting area in China would dwindle in 2009. China is the world's largest cotton importer, with the US, India and Uzbekistan as the main suppliers. (Summarized from China Daily, January 20, 2009).
Mining, Oil & Gas
Jiangxi Copper predicts 2% growth in demand
Jiangxi Copper predicted that consumption for refined copper products would grow by 2% this year. It said, 2008 refined copper output would rise 6.7% to 3.68 million tons and copper concentrate production would rise 8.4% to 920,000 tons. China's copper smelters which use primary material as an input will run at full capacity in 2009. Commodity analysts said higher processing fees offered by foreign smelters would encourage production and ease the squeeze on Jiangxi Copper's profit margins by rising costs and bloating inventory. (Summarized from China Daily, January 20, 2009)
For more resource news, read the weekly TBG Resource Flash
Real Estate
Beijing property prices predicted to fall
According to the Beijing Academy of Social Sciences, the average house price in Beijing will plummet by as much as 20% as buyers snap up cut-price homes. The average cost could even reach as low as RMB8,000 (US$1,170) per square meter in the coming months. The stagnant housing market during the financial crisis and the influx of cheap price-limited condos are the main reasons for the drop. (Summarized from China Daily, January 22, 2009)
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