Thread: China's general economy info

http://en.chinabroadcast.cn/2238/2006-2-9/64@298112.htm

2006-2-9 13:58:38 CRIENGLISH.com

A report released by the State Oceanic Administration on Thursday reveals that the oceanic industry in China saw rapid growth in 2005 and predicts a smooth development this year.

The figures show that the added value of the oceanic industry reached 720 billion yuan, or about 89 billion US dollars, last year, up 12 percent over 2004.

The output value of coastal tourism, marine fisheries and maritime transportation lead the top three in the oceanic industry, accounting for three fourths of the total output amount.

The marine pharmaceutical industry also saw dramatic growth last year.

http://news.xinhuanet.com/english/20...nt_4168432.htm

www.chinaview.cn 2006-02-12 11:27:20

HOHHOT, Feb. 12 (Xinhuanet) -- All villages North China's Inner Mongolia Autonomous Region, including those in the most remote areas, now have access to telephones, local authorities said.

Connecting telephones to every village in the vast and sparsely populated region is no easy job, said Ao Daming, head of the region's telecommunication administration.

The region, China's third largest, covers an area of 1.18 million square kilometers and has only 20 people for every square kilometer.

Since the "telephone for all villages" campaign was launched in 2004, 3,556 villages have been connected to the phone grid. In all 13,120 villages in the region now have access to telephones, Ao said.

Fiver major telecom operators including China Netcom and China Mobile took part in the campaign. Enditem

http://english.people.com.cn/200602/...10_241471.html

International trademark applications from developing countries rose significantly in 2005, with China topping the list of filers, the World Intellectual Property Organization (WIPO) announced here on Thursday.

China made 1,334 applications under the Madrid system for the international registration of trademarks, the largest filer among developing countries, whose overall applications increased by 30.6 percent last year, the Geneva-based organization said.

Other outstanding developing countries include the Republic of Korea and Singapore, who made 148 and 137 applications respectively.

In 2005, China also became the most designated country in trademark applications, a position held by Switzerland since 1997.

This showed that China's market is the most attractive, according to Ernesto Rubio, WIPO assistant director general for trademark affairs.

Other countries which have moved up in the ranking of most designated countries compared to 2004 are the United States, Japan, Turkey, Norway etc.

A designated country refers to the country in which trademark applicants want their trademark to be protected. The amount of designation usually reflects the attractiveness of a country's market.

A total of 33,565 international trademark applications were received in 2005 by the WIPO under the Madrid system, which represents a 13.9 percent increase on figures for 2004.

The largest share of the applications was filed by Germany (5, 802 or 17.3 percent of the total), followed by France with 3,497 applications (10.4 percent) and the United States 2,847 (8.5 percent).

Administered by the WIPO, the Madrid system is a user-friendly and cost-effective service for the international registration of trademarks.

The overall current membership of the Madrid system is 78 (77 countries plus the European community).

Source: Xinhua

http://www.todayonline.com/articles/98589.asp

Increasingly reliant on imports for its energy needs, China's domestic output of oil increased to 183 million tonnes last year, an increase of 18 million tonnes since 2000, state press reported..

In 2005, oil made up 22.7 percent of the nation's total energy needs compared with 16.6 percent five years ago, according to the National Development and Reform Commission (NDRC), carried by the official Xinhua news agency.
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Although the nation's net imports of crude and refined oil dropped 5.3 percent year-on-year in 2005, the world's second biggest consumer of oil, imported a record 130 million tonnes of crude in 2005, up 3.3 percent from the previous year.
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Meanwhile, the output of natural gas last year rose to 47.5 billion cubic meters, up from 27 billion cubic metres produced in 2000

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Natural gas totalled only 2.6 percent of the energy-hungry nation's needs, compared with 2.1 percent five years ago and despite a strong push by the government to increase the use of the cleaner resource.
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China became a crude oil importer in 1993 and has since been racing to secure resources abroad to power its booming economy as domestic production has fallen into an overall decline.
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China's largest oilfield, Daqing in the northeast, is gradually being exhausted, although officials hope the northwestern region of Xinjiang can become an alternative as it sits on 30 percent of the nation's total oil reserves and 34 percent of its natural gas.
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By the end of 2005, China had signed more than 200 contracts with foreign oil partners and attracted 9.3 billion dollars in overseas capital for related energy projects, the report said. — AFP

http://en.chinabroadcast.cn/2238/200...135@296232.htm

2006-1-29 20:35:28 CRIENGLISH.com

Northwest China's Xinjiang Uygur Autonomous Region pumped out 10 billion cubic meters of natural gas in 2005, becoming an important supplier of clean energy in the nation.

According to the regional development and reform commission, the Tarim Oilfield company under the China National Petroleum Corp., one of the country's two major onshore oil and gas producers, provided 24 million cubic meters of natural gas every day for the west-to-east gas transportation program.

Meanwhile, Yakera-Dalaoba oil/gas field in Tarim, developed by Sinopec, another major onshore oil/gas producer of the nation, started operation last September.

In early December, construction began on the Tarim Yingmaili gas-field group, so far the largest group of condensed gas fields in China, indicating the west-to-east gas transportation program entered the second stage.

The gas-field group will take a total investment of 5.26 billion yuan (648.6 million U.S. dollars) and is due to come on stream in December 2006.

Xinjiang plans to produce 15 billion cubic meters of natural gas this year. It is estimated that Xinjiang is blessed with natural gas resources of 10.3 trillion cubic meters, or 34 percent of the nation's total.

(Source: Xinhua)

http://english.people.com.cn/200602/...13_242383.html

Chery is doing pretty good in the auto industry even it has a very short history. Very impressive progress. Chery is owned by local gov of Anhui province and some private investers.

The A520 carrying the 2.0L engine independently developed by Chery was officially released in Beijing on Jan.10. Price at 88,888 yuan, it for the first time reduced the price of 2.0L cars below 100,000 yuan. So it is quite surprising that Chery's planned sale of the product is only 30,000 units.

"We want to change our past practice. The marketing of A520 might take our planned marketing rhythm rather than the market demand as guidance". Li Feng, general manager of the Chery Sales, said the purpose is to build up confidence among the consumers. A520 is a very competitive product, Li Feng believed, but of course about thirteen or so domestic mid-market models are sharing the same market segment with it.

Chery will release six new models ¨C A5, S21, A18, V3, S22 and S12 in 2006. Meanwhile, it will launch the upgraded QQ, setting the target of annual sale at 281,000 units. Obviously, QQ which has made distinct contributions to Chery, will still shoulder the task of driving sales in 2006. "Without QQ's annual sale of over 100,000 units there would not have been the second and third model which can top annual sale of 100,000 units". Li Feng believed the second model to catch up with QQ in sale might be Qiyun and the next is A5 series.

Tiggo and Orient Son are the high-end products among Chery's existing models. However, sales of the two models were no quite satisfactory last year. Li Feng believed the world auto industry has its labor of division and it is hard for the growing proprietary brands to make eye-catching performance on the high-end auto market. All the same, it is hard for Benz and BMW to enter the market segments of less than 300,000 yuan. Chery will fortify its brand building and marketing of Tiggo and Orient Son in 2006. In the meantime, engines of existing models as a whole will no longer rely on outsourcing.

By People's Daily Onlilne

China's Geely targets 2006 sales of 200,000 units

http://www.forbes.com/business/feeds...fx2519840.html

Geely is a private-owned auto company in China.

BEIJING (AFX) - Geely Holdings Group, China's largest privately-owned automaker, said it has targeted sales of 200,000 units this year, compared with more than 150,000 units in 2005.

According to a company statement, Geely will also launch two new models this year, the FC-1 and LG-1, both with a 1.8 liter engine.

Geely said last week that it exported around 7,000 units in 2005, up over 60 pct from a year earlier.

It sold 20,282 cars in January, surging 96.13 pct year-on-year.

http://www.mercurynews.com/mld/mercu...l/13861269.htm

scene was pure Silicon Valley: a throng of venture capitalists and entrepreneurs schmoozing and noshing on caviar appetizers and chilled sauvignon blanc at a s****y Palo Alto bistro.

But the talk was pure China. And many of the 200 guests at the capitalist lovefest two weeks ago at Zibibbo were entrepreneurs from Beijing and Shanghai.

Silicon Valley venture capitalists are placing more bets on China, accelerating a trend that began about three years ago. China's swelling consumer market and turbocharged growth rate are capturing the eyes and dollars of such top-tier VC firms as Draper Fisher Jurvetson, Kleiner Perkins and Gobi Partners.

China's ability to attract Silicon Valley's leading venture firms, which have been instrumental in transforming the Bay Area into the world's leading technology center, raises questions about the valley's prospects of maintaining its competitive edge. Already, the infatuation with the Middle Kingdom is causing changes in the Bay Area.

``There's no doubt that any dollars or resource of time that goes toward Asia takes away from the region,'' said Kevin Fong, a managing director of Mayfield Fund, which invested in an $80 million China fund run by its partner, GSR Ventures. Venture capitalists such as Fong invest in private companies in exchange for an equity stake. ``Maybe that's also a sign that there's too much money and competition in the valley.''

Most venture investments in China are in high-tech companies serving the ballooning Chinese domestic market.

Growth potential

Last year, $1.05 billion in venture capital flowed to China, with 30 to 40 percent of that coming from Silicon Valley, estimates Gavin Ni, chief executive of Zero2IPO, a venture research firm in Beijing. The percentage coming from Bay Area firms has doubled from just three years ago, he said.

That $300 million to $400 million is small compared with the $7.69 billion in overall venture money that flowed into Bay Area companies in 2005.

But a string of eye-popping public offerings, most recently of Beijing-based Baidu, which has been described as China's Google, will help China net more Silicon Valley dollars. Baidu's shares skyrocketed 354 percent on its public offering day.
Seven Chinese firms went public last year on the Nasdaq Stock Market. Their total worth today is about $7.6 billion -- the equivalent of the top 12 U.S. firms that also went public in 2005.

``You are following the money,'' said venture capitalist Tim Draper of Draper Fisher Jurvetson, one of the earliest big-name firms to invest in China. The firm's $14 million investment in Baidu has swelled to $325 million. ``The great minds and the capital will move to the places that are the most aggressive, most active and where the growth rate is highest.''

Over the next year or two, Draper and others say, bigger and better deals will increasingly come out of China, not Silicon Valley. That anticipated shift has already brought about behavior changes.

Entrepreneurs and venture capitalists agree that some start-ups are more likely to get funding if they are Chinese-based companies serving the Chinese market, as opposed to Silicon Valley-based firms.

AMEC, a Shanghai-based semiconductor equipment company whose 18 founders all left Silicon Valley to start the firm in China, ``never'' would have received funding if it were based in Silicon Valley, said Hina Group's chief executive, Hong Chen. Hina, the Chinese equity investment firm that hosted the Zibibbo party, brokered the $30 million deal and AMEC eventually received funding from several Silicon Valley venture firms, including a handful of China first-timers.

``No one would fund a start-up in Silicon Valley that's going to compete with Applied,'' said Chen, of Santa Clara-based semiconductor equipment giant, Applied Materials. ``But . . . you get a lot of attention and traction from Silicon Valley VCs if you have a presence in China.''

More consumers

Start-ups in wireless, mobile phone services and semiconductor design may also have better chances at funding if they are China-based. China has eclipsed the United States as the largest consumer of integrated circuits, used in many electronic products.

And Silicon Valley venture firms may be more willing to assume more risk in Chinese investments because their dollar goes further. ``Ten million allows you to make a lot of mistakes in China,'' Chen said.

Because it's relatively cheap to get a Chinese company running, the standards used to judge whether a company is a good investment may be lower in China, others said. On the upside, the venture capitalists get larger stakes of the company because Chinese entrepreneurs are hungry for money.

Too distant for some

But not everyone is betting on China. The partners of Tallwood Venture, which invests its $180 million fund only in semiconductor start-ups, went on an exploratory trip to China in late 2004. They decided to hold off. The primary reason: The investment across the Pacific would require a more passive approach. Along with putting money into its start-ups, the firm joins the board and takes on a full-fledged coaching role.

``We work with them a lot between board meetings. That's the kind of active involvement we take,'' said Ron Yara, a partner. ``You can't do that if you have to hop on a plane.''

China is attracting not just Silicon Valley money but also its talent. Many of the Chinese-based firms with Silicon Valley funding proudly tout executives from the valley. Baidu's chief executive, Robin Li, left valley firm Infoseek to found Baidu.
``Being able to speak the language of Silicon Valley to venture capitalists is very important,'' Li said from his Beijing office.

About 70 percent of Silicon Valley firms' investments in China are in companies with an executive from the Bay Area, estimates Tony Luh, co-founder and managing director of DragonVenture, which has been in China since 1999.
All three of the poeple who served as presidents of Hua Yuan Science and Technology Association, a Bay Area group that attracts mainland Chinese, have returned to China to start firms in the venture investment arena. Min Zhu, current president of Hua Yuan and co-founder of WebEx, was tapped by New Enterprise Associates to run its China fund.

It's difficult to predict what the long-term impact of this movement of money and brains away from Silicon Valley will be. Venture capitalists say innovative start-ups will continue to get funded in the valley. Most don't believe a ``brain drain'' will occur because the area's acclaimed business schools will continue to attract top students from around the world.

``Some people will look at it as a zero-sum game,'' said Marc Verissimo, Silicon Valley Bank's chief strategy officer. ``That's a limiting view. India and China will be competitors in one sense. But valley companies can get something from working with them.''

Foot in both worlds

What may emerge is a ``hybrid'' model, businesses that capitalize on the best that both sides of the Pacific offer.

One example is Anda Networks, a Sunnyvale telecommunications equipment manufacturer that was struggling to improve its margins. It acquired a Chinese firm in 2000 and moved most of its operations and manufacturing to China. The firm recorded a profit for the first time last year.

``It was a good marriage,'' said Charles Kenmore, Anda's chief executive. ``I think it is reasonable that by 2010 virtually all infotech companies in the valley will have made the transition.''

The shift to China, most say, will force Silicon Valley entrepreneurs to focus on what's made Silicon Valley stand apart: innovation.

``The valley's still the best place to start a business anywhere in the world,'' said Richard Lim of GSR Ventures. ``Because of China, the valley will be less dominant, but it will still remain important.''

http://www.chinadaily.com.cn/english...ent_520806.htm

By Wang Ying (China Daily)
Updated: 2006-02-16 07:21


The nation's biggest nuclear reactor builder, China National Nuclear Corp (CNNC), will join with one of the country's top five power majors, China Huadian Group, to build a nuclear power plant in East China's Fujian Province.

It is the first nuclear project co-operation between China Nuclear and a State-owned power major whose core business is not nuclear power development, China Nuclear said.

The two State-owned electricity generation giants yesterday signed a framework agreement for the construction of the new nuclear facility, which could sit as many as six 1,000-megawatt (MW) reactors.

The new nuclear plant will be located in Hui'an, in the southeast part of the province near Quanzhou.

"The Hui'an nuclear project has been included in China's 11th Five-Year Plan (2006-10) (a national blueprint in which China's key projects are scheduled), and the signing of the framework agreement represents the official start-up of the nuclear programme," CNNC said in a statement yesterday.

According to the agreement, the two Beijing-based conglomerates will create a joint-venture company for the plant.

China Nuclear will be the majority shareholder of the project, and is responsible for constructing and operating the plant. China Huadian will be the second owner, participating in decision-making and project management.

A CNNC company official yesterday told China Daily that the agreement signed yesterday is only the start of their partnership.

"Further details such as specific shares, total investment as well as the size of the plant in the initial phase will be discussed in further talks," the official said.

Technology for the new plant will be decided through international bidding, which means the two firms can choose between Chinese or foreign technologies, another company source yesterday said.

"The coming together of the two companies is the beginning of our long-term co-operation in the energy sector, fuelling the country's fast-growing economy," Kang Rixin, president of China Nuclear, said at the signing ceremony yesterday.

Kang said China Nuclear's rich experience in building nuclear reactors will combine with Huadian's strong expertise in power project management, making the partnership a "win-win" deal.

By the end of last year, China Huadian boasted a total installed power-generating capacity of 38.81 gigawatts (GW), Huadian's president He Gong said.

As much as 80.9 per cent of Huadian's power facilities are coal-fired, the remaining hydropower.

The company plans to increase the capacity to 60 GW within the next five years and to 100 GW by 2020, Huadian said on its website.

Only two companies, China Nuclear and China Guangdong Nuclear Power Group, are authorized to build nuclear plants in China. But other power firms such as Huadian and China Power Investment Corp are also striving to gain a share in the huge market, by taking a stake in partnerships with the two nuclear builders.

China plans to build as many as 32 more nuclear reactors within the next 15 years, supplying 6 per cent of the country's total power demand, China Nuclear's Kang said. Currently the proportion is about 2 per cent.

http://www.bloomberg.com/apps/news?p...efer=australia

Feb. 16 (Bloomberg) -- Steelmakers in China, the world's biggest buyer of iron ore, need to play a bigger role in pricing the raw material, the nation's Ministry of Commerce said.

``China should have a bigger say in deciding international iron ore prices as its iron ore imports make up 43 percent of the world's seaborne trade'', the ministry said in the statement on its Web site today, citing an unidentified official in charge of foreign trade.

China boosted ore imports 32 percent to 275 million metric tons last year, the customs have said. Soaring demand from China helped contract iron ore prices jump a record 71.5 percent, boosting profit at Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton, which account for 75 percent of global exports.

A further increase in costs may crimp earnings at steelmakers as steel prices, which fell 31 percent last year in China, may extend their declines as the country's production outpaces demand.

China's ore importers should be aware of ``risks of blind imports'' as spot prices for the steelmaking ingredient may fall further because of high stockpiles, the commerce ministry said in the statement. China has piled up 47 million tons of iron ore altogether at ports, steelmakers and miners, enough to meet two months' demand, it said.

Baosteel Group Corp., China's biggest steelmaker, is conducting separate talks with the suppliers for 2006 ore prices in Shanghai as Japan's steelmakers including Nippon Steel Corp. are holding negotiations in Tokyo.

Ore Prices

China's spot ore prices, which include cost, insurance and freight charges, have fallen 22 percent to $66 a metric ton from a year earlier, the ministry said. The government will also try to curb demand for the raw material by closing obsolete small mills and prevent steel production capacities from increasing too fast, the statement said.

China is considering shifting imports from some Latin American nations because long distances have added freight costs by as much as $16 a ton for iron ore shipments, the statement said, without identifying the countries.

Exports from Australia, India and Brazil account for 86 percent of China's iron ore purchases by volume.

http://www.chinaknowledge.com/news-detail.aspx?id=2131

Feb. 17, 2006 (China Knowledge) – According to Chairman of the Hong Kong Chinese Enterprises Association Qin Xiao, Mainland China has become a major source of direct investment in Hong Kong, as reported by the Chinanews.com.

Chinese-based companies account for 30% of Hong Kong’s direct investment inflow, the report quoted Qin as saying.

In 2005, the Chinese Mainland approved 253 companies to invest in Hong Kong, an increase of 58% over 2004. The Mainland was the largest investment source of Hong Kong in 2004, with up to HK$62 billion flowing into Hong Kong.

As of now, there are about 2,000 Chinese-based companies operating in Hong Kong, with a total asset value of US$220 billion, said Qin.

http://www.iht.com/articles/2006/02/17/asia/auto.php

CHONGQING, China, Feb. 16 — China is pursuing a novel way to catapult its automaking into a global force: buy one of the world's most sophisticated engine plants, take it apart, piece by piece, transport it halfway around the globe and put it back together again at home.

In the latest sign of this country's manufacturing ambitions, a major Chinese company, hand-in-hand with the Communist Party, is bidding to buy from DaimlerChrysler and BMW a car engine plant in Brazil.

Because the plant is so sophisticated, it is far more feasible for the Chinese carmaker, the Lifan Group, to go through such an effort to move it 8,300 miles, rather than to develop its own technology in this industrial hub in western China, the company's president said Thursday.

If the purchase succeeds — and it is early in the process — China could leapfrog competitors like South Korea to catch up with Japan, Germany and the United States in selling some of the most fuel-efficient yet comfortable cars on the market, like the Honda Civic or the Toyota Corolla.

The failure of China to develop its own version of sophisticated, reliable engines has been the biggest technical obstacle facing Chinese automakers as they modernize and prepare to export to the United States and Europe, Western auto executives and analysts said.

Buying that technology from overseas would not only remove this obstacle but would also plant China's auto industry solidly in a position to produce roomy cars that can also get more than 30 miles to the gallon.

The engine plant is one of the most famous and unusual in the auto industry. Built in southern Brazil in the late 1990's at a cost of $500 million by a 50-50 joint venture of Chrysler and BMW, the Campo Largo factory combines the latest American and German technology to produce the 1.6-liter, 16-valve Tritec engine.

Lifan says it is the sole bidder for the factory and wants to bring it here to start producing engines in 2008. Though China's Communist Party is actively behind the effort, the bold moves are being driven by one of China's remarkable entrepreneurs: Yin Mingshan has become one of China's most successful and most politically connected corporate executives, with a hardscrabble upbringing that included spending 22 years of his earlier life in Communist labor camps and prison as punishment for his political dissent.

Now the enormously wealthy and prominent president and principal owner of Lifan, Mr. Yin has his sights on exporting to Europe in 2008 and the American market in 2009.

Trevor Hale, a DaimlerChrysler spokesman, and Marc Hassinger, a Bayerische Motoren Werke spokesman, each said separately that their companies were assessing their options for when their joint venture legal agreement expires at the end of next year, but that it was premature to provide details.

The Tritec engine is one of the most technologically sophisticated and fuel-efficient car engines in the world, said Yale Zhang, an analyst in the Shanghai office of CSM Worldwide, a big auto consulting company based in the Detroit suburbs. Mr. Yin said he wanted to rebuild the factory on vacant land next door to his car assembly plant here. His goal is to understand the technology thoroughly so that he can supply engines not only for Lifan but also for other Chinese automakers.

In an interview on Thursday in a glass-walled conference room overlooking his recently completed car assembly plant, Mr. Yin, 67, said that while Lifan would pay for the factory, the Chinese negotiating team is being led not by a Lifan official but by a senior Chinese Communist party official, Huang Zhendong.

Mr. Huang, 65, is a member of the party's powerful Central Committee and led the party's Chongqing branch until December, when he became a senior member of the influential legal committee of the National People's Congress in Beijing.

Mr. Yin's deputy, Yang Jong, Lifan's chief executive, has accompanied Mr. Huang on a visit to Brazil. "Everyone knows you need government support — the government may provide land," Mr. Yin said.

Any attempt to buy a comparable factory in the United States might be blocked. But Mr. Yin said that Brazil did not have comparable restrictions on the export of high technology.

Lifan, already one of the world's largest motorcycle manufacturers with sales in 112 countries, is about to start exporting its remarkably well-built, $9,700 midsize sedans to developing countries in Asia, the Mideast and the Caribbean. But several more years of work is needed before the company is ready to compete in industrialized countries, Mr. Yin said.

"Chairman Mao taught us: if you can win then fight the war, if you cannot win, then run away," he said. "I want to train my army in these smaller markets, and when we are ready, we will move on to bigger markets."

Accustomed to producing lightweight, fuel-sipping cars for cost-conscious Chinese families, Chinese automakers want to use that expertise as a competitive advantage around the world while oil prices stay high. Geely, a separate Chinese carmaker that surprised American and European manufacturers by announcing plans at Detroit's auto show last month to enter the American market in 2007, was emphasizing gas mileage even before oil prices surged in the last two years.

When crude oil prices were much lower than they are today, Geely switched from an inexpensive electronic engine control and fuel injections system made by Denso of Japan to a more expensive but more fuel-efficient model made by Bosch of Germany, said Lawrence Ang, an executive director of Geely.

Multinational automakers have struggled in China to keep up with the public's growing appetite for fuel-efficient models. Chinese carmakers like Chery and Geely captured a quarter of the Chinese market last year, up from less than 10 percent just two years earlier, said Michael Dunne, the president of Automotive Resources Asia, a consulting firm.

"Why the spurt? Small cars powered by gas-sipping engines that start at $4,000," Mr. Dunne said.

Raymond Bierzynski, the president of the Pan Asia Technical Automotive Center of General Motors in Shanghai, said that gasoline costs were more important to consumers in China than elsewhere because these costs represent a higher share of the low household incomes in China. G.M. sells its Buick Excelle compact sedan with special, low-rolling-resistance tires in China, which it does not do in any other market and which increases gas mileage by up to 2 percent, he said.

Chrysler and BMW began construction of the Campo Largo factory in April 1998, a month before Daimler-Benz began a takeover of Chrysler that it completed in November of that year. Heralded in the automotive press at the time as arguably the most advanced engine factory ever built, the factory had already become a corporate orphan by the time production began in September, 1999.

The Brazilian auto market had entered a slump by then and Daimler already had ample engine manufacturing capacity of its own and was uncomfortable collaborating with its longtime German rival, BMW.

BMW installs its half of the engines from the factory in its award-winning Mini Coopers. But it has already announced that future engines for these cars will come from a factory in France that is owned and operated by PSA Peugeot Citroën.

Chrysler used to put the Brazilian-made engines in its Neon compact cars and the PT Cruiser. But it is now selling its half of the engines to Lifan and to Chery Automotive and a Chinese joint venture by Mazda.

Mr. Yin and spokesmen from DaimlerChrysler and BMW declined to comment on the price under negotiation for the factory.

Lifan made its debut into the car market just last month with the introduction of the Lifan 520 sedan, assembled in the company's sprawling new assembly plant here, where the conveyor belt is bright red and the giant clamps holding unfinished cars are bright yellow — the colors of China's flag. Lifan models itself on Honda, another motorcycle manufacturer that entered the car market, and shares Honda's emphasis on efficient, energy-saving designs.

Lifan has also copied Honda's focus on quality. Huge characters of Mr. Yin's sayings adorn a Lifan motorcycle engine factory inside and out; an illuminated board over the assembly line reads: "Whoever wrecks Lifan's brand, Lifan will wreck that person's rice bowl."

A test drive here of the Lifan 520 sedan showed it to have an impressively sturdy body with no rattles or wiggles even when traveling over very rough pavement — although this is no guarantee of long-term reliability. There is ample headroom in the front seats and even the rear seats for a 6-foot-4 occupant.

The $9,700 price tag includes leather seats, dual air bags, a huge trunk and a DVD system with a video screen facing the front passenger — a combination that could cost twice as much in a comparably equipped midsize sedan in the United States.

Wages of less than $100 a month have helped control the cost. The assembly plant is better organized than many Chinese factories, although it still maintains large inventories of parts and materials awaiting assembly, incurring interest charges to finance these supplies.

Mr. Yin has no doubts that China can also compete with the United States.

"Americans work 5 days a week, we in China work 7 days," he said. "Americans work 8 hours a day, and we work 16 hours."

CHONGQING, China, Feb. 16 — China is pursuing a novel way to catapult its automaking into a global force: buy one of the world's most sophisticated engine plants, take it apart, piece by piece, transport it halfway around the globe and put it back together again at home.

In the latest sign of this country's manufacturing ambitions, a major Chinese company, hand-in-hand with the Communist Party, is bidding to buy from DaimlerChrysler and BMW a car engine plant in Brazil.

Because the plant is so sophisticated, it is far more feasible for the Chinese carmaker, the Lifan Group, to go through such an effort to move it 8,300 miles, rather than to develop its own technology in this industrial hub in western China, the company's president said Thursday.

If the purchase succeeds — and it is early in the process — China could leapfrog competitors like South Korea to catch up with Japan, Germany and the United States in selling some of the most fuel-efficient yet comfortable cars on the market, like the Honda Civic or the Toyota Corolla.

The failure of China to develop its own version of sophisticated, reliable engines has been the biggest technical obstacle facing Chinese automakers as they modernize and prepare to export to the United States and Europe, Western auto executives and analysts said.

Buying that technology from overseas would not only remove this obstacle but would also plant China's auto industry solidly in a position to produce roomy cars that can also get more than 30 miles to the gallon.

The engine plant is one of the most famous and unusual in the auto industry. Built in southern Brazil in the late 1990's at a cost of $500 million by a 50-50 joint venture of Chrysler and BMW, the Campo Largo factory combines the latest American and German technology to produce the 1.6-liter, 16-valve Tritec engine.

Lifan says it is the sole bidder for the factory and wants to bring it here to start producing engines in 2008. Though China's Communist Party is actively behind the effort, the bold moves are being driven by one of China's remarkable entrepreneurs: Yin Mingshan has become one of China's most successful and most politically connected corporate executives, with a hardscrabble upbringing that included spending 22 years of his earlier life in Communist labor camps and prison as punishment for his political dissent.

Now the enormously wealthy and prominent president and principal owner of Lifan, Mr. Yin has his sights on exporting to Europe in 2008 and the American market in 2009.

Trevor Hale, a DaimlerChrysler spokesman, and Marc Hassinger, a Bayerische Motoren Werke spokesman, each said separately that their companies were assessing their options for when their joint venture legal agreement expires at the end of next year, but that it was premature to provide details.

The Tritec engine is one of the most technologically sophisticated and fuel-efficient car engines in the world, said Yale Zhang, an analyst in the Shanghai office of CSM Worldwide, a big auto consulting company based in the Detroit suburbs. Mr. Yin said he wanted to rebuild the factory on vacant land next door to his car assembly plant here. His goal is to understand the technology thoroughly so that he can supply engines not only for Lifan but also for other Chinese automakers.

In an interview on Thursday in a glass-walled conference room overlooking his recently completed car assembly plant, Mr. Yin, 67, said that while Lifan would pay for the factory, the Chinese negotiating team is being led not by a Lifan official but by a senior Chinese Communist party official, Huang Zhendong.

Mr. Huang, 65, is a member of the party's powerful Central Committee and led the party's Chongqing branch until December, when he became a senior member of the influential legal committee of the National People's Congress in Beijing.

Mr. Yin's deputy, Yang Jong, Lifan's chief executive, has accompanied Mr. Huang on a visit to Brazil. "Everyone knows you need government support — the government may provide land," Mr. Yin said.

Any attempt to buy a comparable factory in the United States might be blocked. But Mr. Yin said that Brazil did not have comparable restrictions on the export of high technology.

Lifan, already one of the world's largest motorcycle manufacturers with sales in 112 countries, is about to start exporting its remarkably well-built, $9,700 midsize sedans to developing countries in Asia, the Mideast and the Caribbean. But several more years of work is needed before the company is ready to compete in industrialized countries, Mr. Yin said.

"Chairman Mao taught us: if you can win then fight the war, if you cannot win, then run away," he said. "I want to train my army in these smaller markets, and when we are ready, we will move on to bigger markets."

Accustomed to producing lightweight, fuel-sipping cars for cost-conscious Chinese families, Chinese automakers want to use that expertise as a competitive advantage around the world while oil prices stay high. Geely, a separate Chinese carmaker that surprised American and European manufacturers by announcing plans at Detroit's auto show last month to enter the American market in 2007, was emphasizing gas mileage even before oil prices surged in the last two years.

When crude oil prices were much lower than they are today, Geely switched from an inexpensive electronic engine control and fuel injections system made by Denso of Japan to a more expensive but more fuel-efficient model made by Bosch of Germany, said Lawrence Ang, an executive director of Geely.

Multinational automakers have struggled in China to keep up with the public's growing appetite for fuel-efficient models. Chinese carmakers like Chery and Geely captured a quarter of the Chinese market last year, up from less than 10 percent just two years earlier, said Michael Dunne, the president of Automotive Resources Asia, a consulting firm.

"Why the spurt? Small cars powered by gas-sipping engines that start at $4,000," Mr. Dunne said.

Raymond Bierzynski, the president of the Pan Asia Technical Automotive Center of General Motors in Shanghai, said that gasoline costs were more important to consumers in China than elsewhere because these costs represent a higher share of the low household incomes in China. G.M. sells its Buick Excelle compact sedan with special, low-rolling-resistance tires in China, which it does not do in any other market and which increases gas mileage by up to 2 percent, he said.

Chrysler and BMW began construction of the Campo Largo factory in April 1998, a month before Daimler-Benz began a takeover of Chrysler that it completed in November of that year. Heralded in the automotive press at the time as arguably the most advanced engine factory ever built, the factory had already become a corporate orphan by the time production began in September, 1999.

The Brazilian auto market had entered a slump by then and Daimler already had ample engine manufacturing capacity of its own and was uncomfortable collaborating with its longtime German rival, BMW.

BMW installs its half of the engines from the factory in its award-winning Mini Coopers. But it has already announced that future engines for these cars will come from a factory in France that is owned and operated by PSA Peugeot Citroën.

Chrysler used to put the Brazilian-made engines in its Neon compact cars and the PT Cruiser. But it is now selling its half of the engines to Lifan and to Chery Automotive and a Chinese joint venture by Mazda.

Mr. Yin and spokesmen from DaimlerChrysler and BMW declined to comment on the price under negotiation for the factory.

Lifan made its debut into the car market just last month with the introduction of the Lifan 520 sedan, assembled in the company's sprawling new assembly plant here, where the conveyor belt is bright red and the giant clamps holding unfinished cars are bright yellow — the colors of China's flag. Lifan models itself on Honda, another motorcycle manufacturer that entered the car market, and shares Honda's emphasis on efficient, energy-saving designs.

Lifan has also copied Honda's focus on quality. Huge characters of Mr. Yin's sayings adorn a Lifan motorcycle engine factory inside and out; an illuminated board over the assembly line reads: "Whoever wrecks Lifan's brand, Lifan will wreck that person's rice bowl."

A test drive here of the Lifan 520 sedan showed it to have an impressively sturdy body with no rattles or wiggles even when traveling over very rough pavement — although this is no guarantee of long-term reliability. There is ample headroom in the front seats and even the rear seats for a 6-foot-4 occupant.

The $9,700 price tag includes leather seats, dual air bags, a huge trunk and a DVD system with a video screen facing the front passenger — a combination that could cost twice as much in a comparably equipped midsize sedan in the United States.

Wages of less than $100 a month have helped control the cost. The assembly plant is better organized than many Chinese factories, although it still maintains large inventories of parts and materials awaiting assembly, incurring interest charges to finance these supplies.

Mr. Yin has no doubts that China can also compete with the United States.

"Americans work 5 days a week, we in China work 7 days," he said. "Americans work 8 hours a day, and we work 16 hours."

Iran, China near deal on $100 billion oil project
Reports say both sides hurry to beat sanctions


By ELAINE KURTENBACH
Associated Press

SHANGHAI, CHINA - China and Iran are close to setting plans to develop Iran's Yadavaran oil field, according to published reports, a multibillion-dollar deal that comes as Tehran faces the prospect of sanctions over its nuclear program.

The deal is thought potentially to be worth about $100 billion.

According to Caijing, a respected financial magazine, a Chinese government delegation is due to visit Iran as early as March to formally sign an agreement allowing China Petrochemical Corp., also known as Sinopec, to develop Yadavaran.

The Wall Street Journal also reported in Friday's editions that the two sides are trying to conclude the deal in coming weeks before potential sanctions are imposed on Iran for its nuclear ambitions. The report cited unnamed Iranian oil ministry officials familiar with the talks.

In exchange for developing Yadavaran, one of Iran's largest onshore oil fields, China would agree to buy 10 million tons of liquefied natural gas a year for 25 years beginning in 2009, the Caijing report said, citing Sinopec board member Mou Shuling.

Chinese and Iranian officials in Beijing said they could not confirm the report.

China, seeking oil and gas to fuel its booming economy amid stagnant production at home, has been snapping up energy resources in places as far flung as Venezuela, Kazakhstan, Nigeria and Australia. Its investments in Iran and Sudan have prompted complaints it is undermining diplomatic efforts to bring recalcitrant regimes in line.

Beijing has strongly urged that a diplomatic solution be found to the impasse over Iran's nuclear program.

Iran is negotiating with other Asian nations. India and Pakistan said they are committed to securing their energy sources by building a $7.4 billion gas pipeline from Iran.

Pakistan and India need the pipeline to fulfill the South Asian nations' fuel needs, Pakistani Oil Minister Amanullah Jadoon told reporters in New Delhi during a visit Friday. India's prime minister, Manmohan Singh, said his country's vote against Iran's nuclear program at a Feb. 4 meeting of the International Atomic Energy Agency would not obstruct the pipeline project.

Bloomberg News contributed to this report.

http://www.chron.com/disp/story.mpl/...y/3668287.html

http://news.xinhuanet.com/english/20...nt_4200203.htm

www.chinaview.cn 2006-02-19 15:42:14


BEIJING, Feb. 19 (Xinhuanet) -- China is trying to enhance its railway freight transportation capacity by 16.7 percent through upgrading freight trains with 70-ton ones, the Shanghai Securities News reported on Sunday.

From this year, all the newly-built freight trains in China will be 70-ton trains, which will gradually replace the outdated 60-ton trains widely used in China, the Ministry of Railways told the newspaper.

The new-type 70-ton freight trains, designed with China's own intellectual property right, can carry more weight and run at a speed of 120 km per hour. While the 60-ton freight trains speed at about 80 km per hour.

In 2005, about 2,000 70-ton freight trains were firstly used in China on the railways connecting western coal-rich Shanxi Province and Qinhuangdao, a port city in the North China's Hebei Province.

The wide use of such new freight trains is expected to further alleviate China's transportation crunch, the Ministry of Railways said. Enditem

Chinese Railways: charging ahead on the fast track

http://www.financialexpress.com/fe_f...tent_id=117923

Unlike Indian Railways, China followed a pragmatic policy shorn of ideological baggage

RAGHU DAYAL
Posted online: Saturday, February 18, 2006 at 0000 hours IST


Despite the travails of World War II and India’s partition, the post-Independence Indian Railways was ahead of Chinese Railways in terms of size, technology, and overall traffic volumes. Today, in comparison, Indian Railways has run out of steam, while Chinese Railways surges ahead.

China has announced the commissioning of a 1,118 km new rail line connecting Golmud in the north-western Qinghai province with Lhasa at the roof of the world. The line is an extension of the 845-km Xining-Golmud section opened to traffic in 1984 as phase I, one of the world’s most ambitious and challenging rail projects.

With 75,000 route-km of rail lines, China now has the world’s third largest rail system after those in America and Russia. It extended its rail network by 13,800 km, or 24%, during the decade 1992-2002 when Indian Railways’ network over the period grew by a mere 1%, or 682 route-km.

It is not only the expansion of the rail system in China, but also the frenetic speed in the execution of its rail projects that has overawed the world. China’s Tenth Plan (2001-2005) provides for an investment of $42 billion for rail construction and modernisation. It further envisages $240 billion schemes to expand the rail infrastructure, to 100,000 km by 2020.

Though China Railways continued to expand, it kept losing market share. In 1990, it enjoyed 53% share of total passenger km and a dominant 71% share of total freight tonne km; by 1995, these figures dropped to 39% and 54% and, lately, to 36% and 40%, respectively. The demand from trade and industry is far more than what it is currently able to meet. It made a profit on transport operations between 1986 and 1992.

The situation changed in 1993, when it reported a loss, which prompted former Prime Minister, Zhu Rongji’s far-reaching reforms. It returned to profit after five years of losses, one-year ahead of the target.

Chinese Railways has been steadily restructured with a three-fold objective: separate government functions from rail enterprise responsibilities; rail system to become a commercially-driven undertaking with the government assuming only policy and regulatory responsibilities; and making the transport enterprises responsive to market demands, rather than specific production targets.

Chinese Railways was divested of the social support; manufacturing and construction activities; five railway corporations, one each for industry, engineering, construction, goods and materials, communications and signalling, were brought into effect as autonomous entities as per a three-year contract.

There is a great lesson for Indian Railways in the way China followed a policy of pragmatism shorn of any baggage of ideology or dogma, enabling it to focus on its core activities, organisational restructuring, hiving off non-core activities, relieving it of ‘social’ activities and obligations.

Contrary to the measure taken by Indian Railways to increase the number of zonal administrations, Chinese Railways has embarked on a rationalisation scheme, projected to reduce the number of regional administrations from the existing 14 to an optimal number, likely to be only five.

The 10th plan, forming a part of a 15-year strategy, emphasises expansion as much as modernisation of the system: construction of high-speed corridors with a 14,000-16,000-km exclusive express passenger network, some prominent corridors, like Beijing-Guangzhou and Beijing-Shanghai, being served by China’s first high-speed rail services, like TGV or Shinkansen type or the transrapid Maglev; creating an express freight network initially between 30 major cities; raising capacity on busy routes.

An interesting evaluation carried out by World Bank for the railways in China and India during the 1992-2002 decade reveals that, notwithstanding the network in the two countries being almost of similar size at the beginning of the period, Chinese Railways’ total traffic output is 2.5 times that of Indian Railways; both carry almost similar volume of passengers in terms of passenger km but freight output on Chinese Raiwlays is 4.5 times that of Indian Railways.

Chinese Railways accounts for one-fourth of the global rail transport volume. Density of its traffic exceeds twice that of Indian Railways. Its output per locomotive, per freight car, and per passenger coach is among the highest in the world. Its’ operating ratio is far better than India’s, with the latter’s staff cost accounting for 53% of working expenses versus 25% on Chinese Railways.

The World Bank appraisal lauds Chinese Railways for its clear focus, relative freedom, management-related autonomy to achieve agreed objectives together with associated accountabilities, large-scale restructuring including separation of non-core activities, outsourcing, and, above all, substantial reduction of staff, by as much as half.

China has encouraged local authorities to build and operate their own railway lines, each up to 2,000 km length. It has permitted foreign investment in railways, in fact, encouraged foreign capital in Chinese rail market, with a special attraction for new line constructions.

http://www.thedailystar.net/2006/02/19/d60219050145.htm

Jasim Uddin Khan

China has emerged as number one import source for Bangladesh, beating India for the first time.

Bangladeshi import from China amounted to Tk 3,214 crore during July-September period of the current fiscal against Tk 2,708 crore import from India during the same period, according to the statistics of Chief Controller of Import and Export (CCIF).

Textile fabrics, capital machinery and dyeing chemicals are some of the major items that helped China become the top source of Bangladesh's import in the first three months of the 2005-06 fiscal.

"China is set to dominate Bangladesh market as the importers here are shifting from India," said a top commerce ministry official.

Bangladesh imported textile products worth Tk 1,654.24 crore from China while import from India was Tk 526.31 crore during the period. China exported capital machinery worth Tk 659.77 crore while import from India was Tk 334.64 crore for the same category. Besides, dyeing chemicals worth Tk 373.45 crore were imported from China against Tk 252.69 crore from India.


On the other hand, iron products, vehicles and spare parts, and mineral products are some of the major items imported more from India than China, CCIF sources said.

Bangladesh imported iron products worth Tk 228.38 crore from India while the amount was Tk 100.20 crore from China. Spare parts of different vehicles worth Tk 159.39 crore were imported from India while Tk 65.52 crore from China. The country imported mineral products worth Tk 130.29 crore from India against Tk 86 crore from China during the same period.


"Chinese products are cheap compared to the same standard products of India," said an importer at Polwel Market in the capital.

Both the countries stand almost equal in selling such goods as food stuff, plastic and rubber goods, wood and wooden products, raw hides, pulp and papers to Bangladesh.

China offers goods with wide price range and importers become interested in China due to its easy trade procedure and speedy shipment, the importer explained.

China usually sends its products to Bangladesh within 25 days on an average by completing all the formalities while import from India takes 35 days.

Bangladesh's import from India was Tk 12,333 crore in the 2004-05 fiscal while the amount was Tk 9,905 crore from China during the same period.

India exported goods worth Tk 9,420 crore in the 2003-04 financial year while China exported products worth Tk 6,676 crore to Bangladesh in the same fiscal.

India was the top source of Bangladesh's import in the 2002-2003 fiscal exporting goods worth Tk 7,845.35 crore against Tk 4,521 crore from China.