Thread: China's general economy info

http://www.fibre2fashion.com/news/te...?news_id=13397
February 28, 2006

In the wake of its strategic move, China Texmatech is to open its first after sales service centre for its textile machinery in India on March 1, 2006.

The company has selected Coimbatore to open the centre and there would be similar centres near Mumbai and New Delhi.

A senior official of the company informed that the idea would be a great success as Indian manufacturers fail to supply the demand of 4 million spindles because they are able to manufacture only half of the current demand.

China Texmatech also plans to start a pilot spinning project in Coimbatore by August 2006 as it considers possibility of assembly or manufacturing operations in India.

China Texmatech started marketing its machinery in India in July 2005 and has already received orders worth $40 million for spinning machinery and $30 million for fibre plant machinery.

China Texmatech is the overseas marketing section of the state-owned China Hengtian Group.

http://www.thecouriermail.news.com.a...E13360,00.html

THE announcement that Chinese aluminium company Chalco is preparing to invest $3 billion in Queensland's bauxite and alumina industries is welcome news.

After a tortured recent past, it now appears that real progress will soon be made to exploit the long identified bauxite reserves at Aurukun, developing much needed industry for the Cape York Peninsula and delivering on the long-cherished ambition of downstream processing of the state's natural resources.

Chalco has been identified as sole bidder, and will prepare a final proposal for the State Government to develop the giant Aurukun bauxite reserves, including a mine and washing plant.

In addition, the company is prepared to commit to a refinery to turn the bauxite into alumina at either Bowen, Townsville or Gladstone.

The Chalco investment is highly significant on two fronts. Firstly, it represents the beginning of what could become a tidal-wave of direct Chinese investment in the Queensland resource sector.

As China scours the world for resource projects to underpin its dramatic economic transformation it is only natural that Queensland should be a key partner.

The China boom, through deals like this one, has the potential to underpin the financial well-being of the state for future generations. Secondly, it will deliver what words and good intentions alone will never achieve, real jobs to lift the life circumstance for communities on the Cape York Peninsula.

http://metalsplace.com/metalsnews/?a=4128

Alumina|Bauxite CatalogChina's alumina production capacity is expected to rise to 21 million metric tons by the end of 2010, due to 'blind' investments and development in new projects, the National Development and Reform Commission said in a report this week.

China's top economic planner said investments in expanding the country's alumina production capacity were made without regard for environmental issues and other factors like power constraints.

Alumina is the raw material used to produce aluminium.

The NDRC estimates the capacity of ongoing alumina expansion projects is 12.15 million tons, involving investments totaling about CNY55 billion (around US$6.84 billion).

An additional 3.2 million tons of alumina production capacity is being planned, but construction has not yet begun, said the report.

Based on these numbers, the NDRC said China's total alumina production capacity will hit 11.3 million tons this year and 17.5 million tons in 2007.

http://www.shanghaidaily.com/art/200...auto_sales.htm

Jin Jing
2006-03-04
CHERY Automobile Corp moved up three notches in China's car sales ranking last month - the first time a domestic automaker has unseated a foreign joint venture to break into the top three.

Chery sold 21,000 vehicles in February, a 130-percent jump from the same period a year ago, following Shanghai Volkswagen with 23,600 units and Shanghai General Motors Corp with 22,800.

In January, the top three sales leaders were Shanghai GM, Shanghai VW and First Automobile Works' joint venture with VW.

Chery's sales boom - prompted by its highly popular QQ and three new models that hit the streets in January - moved the company up from No. 6 in January, when it sold 17,000 vehicles.

"The central government's efforts to encourage the sale of small cars to help energy conservation was important for Chery," said Sun Muzi, an auto analyst at Sinotrust Marketing Research and Consulting Ltd.

"This private company is good at offering inexpensive self-designed cars at a very attractive price to China's cost-sensitive consumers," he said.

In January, China's central authorities ordered local governments to lift roadway restrictions on small cars by the end of March in an effort to ease tight energy supplies, protect the environment and nurture China's independent auto brands. In the past, cars with small engines were banned from some highways.

The new policy primarily benefited domestic manufacturers of economy cars, including Geely Group and Changan Automobile Co.

"But Chery also needs to improve in developing models to extend its presence into the middle and high-end markets, not only to be a successful car producer but also for profitability," Sun told Shanghai Daily.

Chery's most popular small car, the QQ, priced around 40,000 yuan (US$4,950), generates only a 500 yuan profit, while cars in the mid and upper ranges can be marked up 20,000 yuan or more.

Last year, the company's profit fell to 95 million yuan from 188 million yuan in 2004 despite a 118 percent sales surge to 185,000 units.

In comparison, sales in China's auto market grew 26 percent overall last year.

http://www.theaustralian.news.com.au...E36375,00.html

John Reed, London
March 06, 2006
A MURAL in the art deco headquarters of Angola's Benguela Railway shows Africa's colonial rail network in fading tones of sepia and black. During Portuguese rule the line led 1304km east from the coast to the mines of the interior, now Zambia and the Democratic Republic of Congo.

Completed by British engineers in 1929, Benguela Railway was bombed and dynamited beyond use during Angola's civil war. Today its longest working stretch ends 150km east of the coast, in the town of Cubal.

Passengers ride in or on the roofs of open boxcars on a four-times-daily shuttle between Benguela and Lobito, a coastal city nearby. Now the railway is due for an overhaul costing $US300 million ($405 million) to $US500 million, financed by a new foreign partner, China.

Three tidy fenced tent camps housing Chinese workers have already sprung up in the muddy fields alongside the line.

Ground is due to be broken on the railway's "expedited rehabilitation" this month, with completion planned for August 2007.









"We hope to move 30 million tonnes of goods and 4 million passengers every year," says Daniel Quipaxe, the railway's director.

The project is just one example of China's expanding influence in Africa, which has rich reserves of many of the raw materials China's booming economy needs. In Angola alone, Chinese engineers are refurbishing two other rail lines, government buildings and a new airport in Luanda, with the help of a $US2 billion credit for infrastructure from China's Eximbank approved in 2004.

President Jose Eduardo dos Santos, who last stood for election in 1992, said recently that his Government needed to rebuild Angola's road and rail networks before holding elections.

Angola never held a donors' conference to gather pledges for aid to rebuild infrastructure ruined in the war, which lasted with interruptions from 1975 until 2002. Last November, Finance Minister Jose Pedro de Morais admitted it was probably now "too late" to hold one.

Angola lacks a financing agreement with the International Monetary Fund, in part because of IMF misgivings about how it accounts for the massive revenues it receives from oil. China is a more supportive and less critical partner, providing financing and skills to a country that lost many educated people to post-colonial emigration and war.

For China, Angola's chief attraction is its oil. China rivals the US as the largest importer of this. State-owned petroleum firm Sinopec picked up a share in offshore Block 3 last year when Angola refused to renew a concession held by France's Total.

No reason for the non-renewal was given but some analysts linked it to a criminal case in France that had aired corruption allegations against Angolan officials.

Refurbishing the railway will require replacing its rails and substituting concrete sleepers for the colonial-era wooden ones, rebuilding 37 bridges and building new stations.

http://www.stats.gov.cn/english/news..._402308116.htm

The full report from National Bureau of Statistics of China

China's National Economic and Social Development in 2005

http://english.people.com.cn/200603/...05_248027.html

Following are the main targets for China's economic and social development in 2006, revealed in the report on the work of the government delivered by Premier Wen Jiabao Sunday at the annual session of China's national legislature:

-- GDP should grow about 8 percent, and energy consumption per unit of GDP should fall by about 4 percent.

-- The rise in consumer prices should be kept under 3 percent.

-- Urban employment should increase by 9 million persons, and the urban registered unemployment rate should be kept under 4.6 percent.

-- The equilibrium in the balance of payments should stay basically balanced.

-- The government plans to issue 60 billion yuan worth of long- term treasury bonds, 20 billion yuan less than last year, while increasing regular construction investment from the central government budget by 10 billion yuan.

-- The deficit in the central government budget is projected to be 295 billion yuan, 5 billion yuan less than last year.

Facts and figures: China´s drive to build socialist new countryside
http://english.cctv.com/english/20060305/100545.shtml

Following are the main facts and figures about China's drive to "build a socialist new countryside",revealed in the government work report delivered by Premier Wen Jiabao on Sunday at the annual session of China's national legislature:

-- Central government budget expenditures for agriculture, rural areas and farmers this year will total 339.7 billion yuan, 42.2 billion yuan more than last year;

-- China will completely rescind the agricultural tax throughout the country in 2006, a tax that China has been collecting for 2,600 years. The reform of rural taxes and fees has greatly benefited farmers by eliminating 33.6 billion yuan of agricultural tax and over 70 billion yuan of various sorts of fees and charges.

-- Starting this year, the government will appropriate over 103 billion yuan annually to ensure the normal operation of town and township governments and meet the needs of rural compulsory education. This figure is comprised of more than 78 billion yuan in transfer payments from the central government budget and over 25 billion yuan from local government budgets.

-- This year the central government will allocate 71.6 billion yuan for investment in science and technology, a year-on-year increase of 19.2 percent.

-- Over the next two years, the government will completely eliminate tuition and miscellaneous fees for all rural students receiving compulsory education. The Central government budget expenditures for compulsory education will increase by 218.2 billion yuan over the next five years.

-- The state will spend more than 20 billion yuan over the next five years on renovating hospital buildings in towns and townships and in some counties and upgrading their equipment.

-- China will speed up the establishment of a new type of rural cooperative medical care system by extending the scope of current trials to 40 percent of the counties in China this year and by increasing the allowances paid by the central and local governments to farmers participating in the system from 20 yuan to 40 yuan. An additional 4.2 billion yuan will be allocated from the central government budget for this program.

1

http://today.reuters.com/news/articl...HINA-STEEL.xml

By Niu Shuping

BEIJING (Reuters) - Beijing will shut small steel mills and encourage big and mid-sized domestic mills to merge, but would not look as kindly at acquisitions by foreign producers, a senior industry official told Reuters on Sunday.

China plans to use new environmental, energy and water consumption and product quality standards to close 30 percent of the country's shoddiest steel capacity, said Luo Bingsheng, secretary general of the China Iron and Steel Association.

"Foreigners taking a controlling stake in our major steel mills is against our iron and steel development policy. We have a batch of competitive steel mills, which can play an important role in the restructuring of the industry."

The new regulations, yet to be issued, will force outdated, polluting steel capacity to shut, Luo said.

"The top priority is legally eliminate steel mills with heavy pollution and high energy consumption."

The association opposes any foreign efforts to take a controlling stake in a Chinese mills, Luo said, citing Mittal Steel's talks with Baotou Iron and Steel (Group) Co. for a 49 percent stake.

He said Arcelor would have difficulty getting central government approval of a recently signed deal to take a 38.41 percent stake in Laiwu Steel Corp. Ltd.

Arcelor's share is equal to that of Laiwu's state-owned parent, although a provincial investment body owns another 1.19 percent.

Mittal, the world's largest steel firm, has launched a hostile takeover bid for Arcelor, the second-largest.

Beijing is promoting cooperation between China's largest mill, Baosteel Group and Bayi Iron and Steel Co. in Xinjiang.

It is also urging the merger of Shougang Group in Beijing with Hebei's Tangshan Iron and Steel Group, and of Wuhan Iron and Steel Co. with Liuzhou Iron & Steel Group in Guangxi.

Luo forecast profit growth for the industry of between 5 percent and 7 percent this year.

SHUTDOWNS

China's steel industry produced a surplus of 45 million tonnes of steel in 2005, driving down prices and making it harder for the newly expanded mills to pay their debts.

"The overcapacity problem has provided a very good opportunity to promote restructuring in the steel industry," Luo said.

Local governments, which built steel mills to profit from China's booming economy, are expected to combat efforts to shut down their major employers and taxpayers.

The steel association targets steel output growth of 10 percent this year, after nearly 25 percent growth last year.

"If we produce more than the target, the output will exceed demand, which will hurt everybody's interests," Luo said.

"This year we will actively push for mills to produce only what they know they can sell."

Chinese industry is resisting any rise in iron ore prices during the year beginning April 1.

China won the right to a bigger role in the talks with iron ore suppliers after Chinese mills bitterly resented a 71.5 percent hike in prices last year. Talks are traditionally led by Japanese steel mills, the world's biggest term iron ore buyers.

"Talks are in a tough period," Luo said, adding that China's representative, Baosteel, is still pushing for a price cut.

The association has threatened to punish any steel mills that hold separate talks with miners, by not issuing them iron ore licenses this year.

Luo said Chinese mills have stockpiled enough iron ore to face down miner's demands for a higher price.

Port stocks of iron ore are at about 35 million tonnes, steel mills hold 22 million tonnes of inventory and domestic miners hold another 5 million tonnes, Luo said.

"If there are no iron ore imports for two months, steel mills will not be hurt."

http://www.autonews.com/apps/pbcs.dl.../1003&refsect=

SHANGHAI -- Recent moves by some major players signaled the beginning of a new era for China's electronics industry.

China no longer is merely a place to churn out low-tech, high-labor components. It is fast becoming an important source of automotive electronics for the global market.

Some signs of the change:


Late last year, General Motors moved its global electronics purchasing office to Shanghai.


Visteon Corp. announced recently that its global electronics group will be headquartered here.


TRW has more than 40 people on a purchasing team in Shanghai.


"On the electrical mechanical side, in the future, I see a huge increase in sourcing from the Asia Pacific region," says Edward Carpenter, vice president of Asia Pacific for TRW Automotive Inc.

China is the center of that effort. Carpenter worked in TRW's purchasing office in the United States for five years before relocating to Shanghai last October. TRW's regional headquarters is in Shanghai, along with its regional research and development center.

Hurdles remain
There are hurdles to overcome. Chinese engineers lack auto-electronics design experience, and local suppliers lack manufacturing and technical finesse.

But China already has a thriving consumer electronics business, as a major producer of CD players, computers and other mass-market items. There also is a growing semiconductor manufacturing sector.

Those skills can be adapted to automotive electronics -- with help from foreign companies.

"China's development capabilities are now reaching a critical mass in quantity and quality, which will allow China's importance as a global electronics source to grow rapidly in the future," says Steve Meszaros, vice president of global electronics for Visteon Corp.

TRW currently sources electric motors, electrical control units, printed circuit boards, complex connectors and forgings from its China operations.

TRW declined to provide exact figures, but its biggest export is electric control units for airbags, which go to Europe, Japan, Thailand and Malaysia.

At TRW's r&d center, four of the 80 engineers had been devoted to automotive electronics; eight more were hired recently, and more are coming. "The plan is to have 25 by the end of 2006," says Kevin Elgood, engineering director at TRW's Shanghai r&d center.

49% jump
China exported $1.49 billion worth of automotive electronics and electrical instruments in 2005, up 49.0 percent from 2004, according to figures compiled by China supplier Asimco Technologies Ltd., based on government figures.

That number includes navigational radios, speedometers and the like -- but not tiny electrical motors, lighting or many other components. Complete figures for automotive electronics do not exist.

The majority of the automotive electronics exports are coming from foreign-invested firms rather than fully domestic companies, because most domestic companies lack the necessary advanced technology.

Even for foreign firms, there are limits to what kind of electronic products China can produce, says Douglas Brandt, director of business planning and sales operations for electronic and safety at Delphi Asia Pacific.

"There isn't a lot of core design experience in China," he says. But foreign firms' engineering centers -- such as Delphi's 350-engineer tech center in Shanghai -- are helping engineers gain that experience.

A shortage of qualified second-tier suppliers will impede the growth of China's automotive electronics imports, says Sun Jian, a principal with consultants A.T. Kearney in Shanghai. Currently, local suppliers' defect rates are higher than those in more developed markets, he says.

But foreign companies are putting time and money into developing a local supplier network. TRW has 18 people on its supplier-development team, for example.


Skills rise with volume
The fast growth of China's car market also speeds up suppliers' development. Car sales grew by 27.0 percent to 3.1 million units in 2005. Similar growth is expected again this year.

"You have a learning curve," says Sun. "You have to hit the first 1 million units before you get the quality level. With a big volume, you hit that point earlier."

That level is approaching quickly. Magneti Marelli Holding S.p.A. of Italy figures to export 800,000 to 1 million partially assembled instrument clusters from its plant in Guangzhou in southern China by 2007, says Luca Biagini, country manager, China for the Italian supplier. The components will go to Italy, France and Brazil.

Magneti Marelli also manufactures body computers, lighting, and fuel and speed sensors in China.

Says Biagini: "China will completely become a source of worldwide electronics."

http://news.xinhuanet.com/english/20...nt_4298828.htm

www.chinaview.cn 2006-03-13 16:33:23

Special Report: NPC & CPPCC Sessions 2006

BEIJING, March 13 (Xinhuanet) -- The eye-catching Qinghai-Tibet railway, which will begin its trial runs this July, is expected to be further extended from Lhasa, capital of Tibet Autonomous Region, to Xigaze City in the southwestern part of the region, according to Tibetan chairman Qingba Puncog.

The projected section between Lhasa and Xigaze is expected to be completed in the period of the 11th Five-Year Plan for National Economic and Social Development (2006-2010), Puncog said Saturday in an exclusive interview with Xinhua on the sidelines of the annual session of the Tenth National People's Congress (NPC), China's top legislative body.

The 1,142-kilometer-long Qinghai-Tibet railway, which runs across the frozen tundras of the Qinghai-Tibetan plateau and links Golmud of Qinghai with Lhasa, is the first railway connecting Tibet with other parts of China.

"The world's highest railroad is expected to help further boost economic development in Tibet and bring more benefits to local people," Puncog said.

Upon completion, the line will link Tibet to China's extensive rail network, with the journey from Beijing to Lhasa - in pressurized aircraft-like carriages - taking 48 hours. Noting that protection of the ecological environment was an essential concern in the design of the Qinghai-Tibet Railway, Puncog said the routes were selected so that they would keep away from the major habitats of wild animals.

As for the so-called "ecological disaster" that some foreign media reports have played up, Puncog stressed that the Qinghai-Tibet Railway has never caused and will never cause any side effects on the ecological environment. Enditem

http://en.chinabroadcast.cn/855/2006.../501@61362.htm

2006-03-13 16:33:03 Reuters

BEIJING - China State Shipbuilding Corp., whose new orders increase 86 percent by tonnage in 2005 from 2004, is considering raising capital to help fund some $2 billion in planned shipyard construction.
The world's third-largest shipbuilder secured orders for 8.56 million deadweight tonnes (dwt) in 2005, taking orders on its books to 17 million dwt worth 100 billion yuan ($12.4 billion) and filling its slate until 2009, Chen Xiaojin said in a document prepared for Reuters.

Now, the firm may sell additional shares in mainland-listed units -- such as Hudong Heavy Machinery Co. Ltd. or Jiangnan Heavy Industry Co. Ltd. -- or initiate "a massive capital exercise" to bankroll some $2 billion of planned yard construction.

It is also open to foreign investment, though Chen would not elaborate.

Despite predictions that the global shipping cycle had peaked and demand could slow, Chen said he was optimistic.

"Our main yards are fully booked until 2009," he said in a statement prepared in response to Reuters' questions.

"We remain upbeat on the outlook for this year," he said. Demand "in the shipbuilding industry remains strong, domestically and internationally."

China's enormous appetite for energy and bulk mineral resources has spurred shippers around the globe to expand fleets.

Spillover orders from China poured into yards around the region, helping fuel a sector revival in countries such as Singapore, where shipbuilding had been considered a sunset industry as shipping lines sent more business to lower-cost yards in China, India and the Middle East.

China State Shipbuilding is the world's top builder of ocean-going vessels after Hyundai Heavy Industries Co. and Japan's Imabari Shipbuilding Co. Ltd., as ranked by capacity, according to shipbrokers Clarkson Plc..

South Korea and Japan control about 70 percent of the global shipbuilding market, with China and the European Union roughly splitting the remainder, state media say.

Analysts reckon Chinese yards are some five years behind in terms of technology, but charge about 20 percent less.

"It's a common practice to enter the international market by competitive pricing. China's price gap against other major ship building countries has been closing fast," Chen said.

AMBITION

China State Shipbuilding floated unit Guangzhou Shipyard International Co. Ltd. in Hong Kong and Shanghai in 1993. Its shares closed at a post-1997 high of HK$3.225 last Friday, having more than doubled so far this year.

The state firm built 5.13 million dwt in 2005, up 44 percent from 2004, for a 7 percent worldwide market share, Chen said.

Chen would not say if the company was in actual discussions with potential investors. His firm needs to fund the construction of multi-billion dollar yards in Shanghai and Guangzhou, he added.

The company wants to become the world's largest shipping group by 2015 when it is due to complete the construction of a new base in Shanghai, which will have annual capacity of about 8 million dwt.

The first phase of that project alone, with capacity of 4.5 million tonnes, would cost over 10 billion yuan to build, according to the document.

Beijing also recently approved its plans to invest nearly 6 billion yuan in a new shipyard in Guangzhou -- quadrupling its capacity at Guangzhou to 2 million dwt when completed in 2007.

(US$1=8.05 yuan)

http://www.iht.com/articles/2006/03/...ss/chicars.php

By Keith Bradsher The New York Times

MONDAY, MARCH 13, 2006


CHONGQING, China Volkswagen and other carmakers used to prosper by sending outdated factory equipment to China to produce older models no longer salable in the West.

But competition has become so fierce here that Honda Motor is about to introduce its latest version of the Civic only a matter of months after it went on sale in Europe, Japan and the United States. Toyota Motor, meanwhile, is assembling its Prius gasoline-electric sedan only in Japan and China.

When Ford Motor opened its first production line here in western China just three years ago, it used a layout copied from a Ford factory in the Philippines to produce 20,000 sedans a year based on a small car design taken from Ford operations in India.

But this winter, Ford opened a second production line next door that is practically identical to one of its most advanced factories, the Saarlouis operation in southwestern Germany. The new line produces the Focus, the same small car it builds in Germany (but different from the Focus sold in the United States). And with continuing improvements to the first line, it will bring total capacity here to 200,000 cars a year by June.

But the Chinese managers are not even satisfied with that.

"I want to learn from Germany and then improve on it," said Li Jianping, the factory's vice director of manufacturing.

Ford's success in rapidly expanding the scale and sophistication of its Chongqing operations illustrates how quickly the auto industry is expanding and modernizing in China.

One requirement for a country to become an automobile exporter is to develop a highly competitive domestic market that demands quality and efficiency, and China has managed to create just such a market.

American and European carmakers, including Ford, General Motors, DaimlerChrysler and Volkswagen, as well as Toyota, Honda and Nissan of Japan, are introducing their best technology to their plants in China, and not only to compete against one another. They also face rapidly growing competition in the Chinese market from purely local companies like Geely, Chery and Lifan.

These Chinese automakers captured 28.7 percent of the market in January, the first time in many years that Chinese brands have been pre-eminent - ahead of brands from Japan (27.8 percent), Europe (19 percent), the United States (14 percent) and South Korea (10.3 percent), according to Automotive Resources Asia, a consulting firm in Shanghai.

The multinationals "really have to bring their latest models," said Yale Zhang, an analyst in the Shanghai office of CSM Worldwide, an auto consulting company based in the Detroit suburbs. "Even average consumers understand if this is not the latest model."

Multinational joint ventures in China produced a total of 2.3 million family vehicles last year.

In the race to be No. 1 in China, the world's fastest-growing car market, multinationals from the United States, Japan and Europe are falling over one another to share their latest designs, technology and manufacturing expertise with Chinese partners. But industry specialists say the sharing has helped China prepare to become a major car exporter within four years, increasing the pressure on GM, Ford and other industry giants, which are already losing sales and market share to foreign rivals.

Few auto executives now doubt that the successful Chinese companies that emerge from the free-for-all in their home country will be ready to tackle world markets.

"I've seen the Chinese vehicles in China from various, various brands, and I've said it's a threat that will come to the U.S., I think, by the end of the decade," said Thomas LaSorda, the Chrysler chief executive.

All of the multinationals rapidly expanding in China say their main goal lies in serving the Chinese market and not in exports. Still, Honda is already exporting small cars from China to Europe, while DaimlerChrysler is negotiating to build very small cars in China for sale in the United States, probably under the Dodge brand.

Until the past few years, China's main advantages in the global auto manufacturing market were in its cheap labor and its talent for copying older Western designs, often while avoiding licensing fees, a practice that cut research and development costs to almost nothing.

Wages of less than $200 a month remain a big advantage for China, but it is developing another. Domestic and foreign automakers are starting with clean slates to build new operations, using efficient approaches and advanced management methods. It is similar to the way German and Japanese companies built new and more efficient factories starting in the 1980s, mostly in the American South, helping them to leap beyond Detroit's expertise.

GM and its local partner, Shanghai Automotive Industry, built an extensive vehicle design and engineering studio in Shanghai that has just finished a redesign of the Buick LaCrosse for the Chinese market.

In the central city of Wuhan, Honda has just finished quadrupling the capacity of its joint-venture factory with Dongfeng Motor Group, to 120,000 cars a year. It is also starting to build the Civic there. The expansion, costing $350 million, took just a year.

Perhaps most tellingly, on Dec. 15 Toyota began assembling Prius hybrids in the northern city of Changchun. The world's multinationals had long been wary of transferring proprietary technology to make hybrid gasoline-electric engines in China for fear that it would be copied. While Toyota is still cautious, China is nonetheless the only place besides Japan where Toyota is assembling the Prius, arguably its most important car in a decade.

Furthermore, Volkswagen said in September that it would jointly develop a hybrid minivan for the Chinese market with Shanghai Automotive - a project that is likely to give the Chinese automaker a significant understanding of the technology.

The risk for the multinationals is that their inventions may be turned against them. When GM followed Volkswagen into the Chinese market in the mid- 1990s, it was assigned the same partner: Shanghai Automotive, which announced plans on Feb. 23 to begin assembling and selling its own brand of cars in China while retaining the joint ventures.

Jeremy W. Peters contributed reporting from Detroit.

CHONGQING, China Volkswagen and other carmakers used to prosper by sending outdated factory equipment to China to produce older models no longer salable in the West.

But competition has become so fierce here that Honda Motor is about to introduce its latest version of the Civic only a matter of months after it went on sale in Europe, Japan and the United States. Toyota Motor, meanwhile, is assembling its Prius gasoline-electric sedan only in Japan and China.

When Ford Motor opened its first production line here in western China just three years ago, it used a layout copied from a Ford factory in the Philippines to produce 20,000 sedans a year based on a small car design taken from Ford operations in India.

But this winter, Ford opened a second production line next door that is practically identical to one of its most advanced factories, the Saarlouis operation in southwestern Germany. The new line produces the Focus, the same small car it builds in Germany (but different from the Focus sold in the United States). And with continuing improvements to the first line, it will bring total capacity here to 200,000 cars a year by June.

But the Chinese managers are not even satisfied with that.

"I want to learn from Germany and then improve on it," said Li Jianping, the factory's vice director of manufacturing.

Ford's success in rapidly expanding the scale and sophistication of its Chongqing operations illustrates how quickly the auto industry is expanding and modernizing in China.

One requirement for a country to become an automobile exporter is to develop a highly competitive domestic market that demands quality and efficiency, and China has managed to create just such a market.

American and European carmakers, including Ford, General Motors, DaimlerChrysler and Volkswagen, as well as Toyota, Honda and Nissan of Japan, are introducing their best technology to their plants in China, and not only to compete against one another. They also face rapidly growing competition in the Chinese market from purely local companies like Geely, Chery and Lifan.

These Chinese automakers captured 28.7 percent of the market in January, the first time in many years that Chinese brands have been pre-eminent - ahead of brands from Japan (27.8 percent), Europe (19 percent), the United States (14 percent) and South Korea (10.3 percent), according to Automotive Resources Asia, a consulting firm in Shanghai.

The multinationals "really have to bring their latest models," said Yale Zhang, an analyst in the Shanghai office of CSM Worldwide, an auto consulting company based in the Detroit suburbs. "Even average consumers understand if this is not the latest model."

Multinational joint ventures in China produced a total of 2.3 million family vehicles last year.

In the race to be No. 1 in China, the world's fastest-growing car market, multinationals from the United States, Japan and Europe are falling over one another to share their latest designs, technology and manufacturing expertise with Chinese partners. But industry specialists say the sharing has helped China prepare to become a major car exporter within four years, increasing the pressure on GM, Ford and other industry giants, which are already losing sales and market share to foreign rivals.

Few auto executives now doubt that the successful Chinese companies that emerge from the free-for-all in their home country will be ready to tackle world markets.

"I've seen the Chinese vehicles in China from various, various brands, and I've said it's a threat that will come to the U.S., I think, by the end of the decade," said Thomas LaSorda, the Chrysler chief executive.

All of the multinationals rapidly expanding in China say their main goal lies in serving the Chinese market and not in exports. Still, Honda is already exporting small cars from China to Europe, while DaimlerChrysler is negotiating to build very small cars in China for sale in the United States, probably under the Dodge brand.

Until the past few years, China's main advantages in the global auto manufacturing market were in its cheap labor and its talent for copying older Western designs, often while avoiding licensing fees, a practice that cut research and development costs to almost nothing.

Wages of less than $200 a month remain a big advantage for China, but it is developing another. Domestic and foreign automakers are starting with clean slates to build new operations, using efficient approaches and advanced management methods. It is similar to the way German and Japanese companies built new and more efficient factories starting in the 1980s, mostly in the American South, helping them to leap beyond Detroit's expertise.

GM and its local partner, Shanghai Automotive Industry, built an extensive vehicle design and engineering studio in Shanghai that has just finished a redesign of the Buick LaCrosse for the Chinese market.

In the central city of Wuhan, Honda has just finished quadrupling the capacity of its joint-venture factory with Dongfeng Motor Group, to 120,000 cars a year. It is also starting to build the Civic there. The expansion, costing $350 million, took just a year.

Perhaps most tellingly, on Dec. 15 Toyota began assembling Prius hybrids in the northern city of Changchun. The world's multinationals had long been wary of transferring proprietary technology to make hybrid gasoline-electric engines in China for fear that it would be copied. While Toyota is still cautious, China is nonetheless the only place besides Japan where Toyota is assembling the Prius, arguably its most important car in a decade.

Furthermore, Volkswagen said in September that it would jointly develop a hybrid minivan for the Chinese market with Shanghai Automotive - a project that is likely to give the Chinese automaker a significant understanding of the technology.

The risk for the multinationals is that their inventions may be turned against them. When GM followed Volkswagen into the Chinese market in the mid- 1990s, it was assigned the same partner: Shanghai Automotive, which announced plans on Feb. 23 to begin assembling and selling its own brand of cars in China while retaining the joint ventures.

Jeremy W. Peters contributed reporting from Detroit.

http://www.peopleandplanet.net/doc.php?id=2690

by Yingling Liu

The opening of Beijing's 16- kilometre Rapid Transit bus system has begun to transform communications in that crowded city, says Yingling Liu, and is a sign that the Chinese Government has now accepted the merits of public transport.
Rush hour is usually a nightmare for Beijing's bus commuters. Squeezed from all sides, riders endure polluted air and chilly winter winds that seep in through gaps in the windows, or suffer en masse in the scorching summer sun. They look down in envy at their fellow residents, zipping through the traffic in air conditioned cars. But with the opening of Beijing's first Bus Rapid Transit (BRT) line on December 30, car owners may soon be jealous of bus riders.

The new 18-metre-long BRT buses traverse a 16-kilometre, 17-stop route, dubbed Southern Axis BRT Line One. It links eight residential areas, with a total population of 200,000, and four bustling commercial circles in the city's southern districts.


In its two months in service it has attracted overwhelming ridership, with daily passenger flows averaging around 80,000 commuters. Officials originally expected the peak flow —estimated at around 150,000 passengers per day —to occur in 2007, but on the third day of operation, passengers already neared 130,000.


"It's very likely the flow will exceed 150,000 during the golden week of the Labour Day," noted Yan Yabin, Vice President of Beijing BRT Company, Ltd., which manages the line, referring to the seven-day holiday in early May when Beijing sees a huge influx of tourists and commercial activity.


Right-of-Way


Bus Rapid Transit, the term for a high-speed bus system that operates within an exclusive right-of-way, was first developed in Brazil in the 1970s. But it has quietly taken hold in China, where more than 20 cities, including Shanghai, Chongqing, Chengdou, and Shenyang, are now constructing or designing BRT systems.


BRT combines the single-corridor quality of rail transit with the flexibility of buses. It is also considerably cheaper than rail, at one-tenth the construction and operational costs, and takes less time to set up — typically less than three years from design to completion.


Beijing BRT Company currently operates more than 40 buses and is expecting another 50 by April, bringing the total fleet to 90. According to Yan, the major attraction of the new line is that it is convenient, cheap, comfortable, and fast — taking 37 minutes to complete what is usually a one-hour journey.


The 18-meter buses are equipped with an electronic stop announcement system and air conditioning, which most regular city buses don't have. And the buses' low entry step allows access for wheelchairs, a feature that Beijing only recently began incorporating into city transport. "We are trying to make BRT into 'luxurious sedans for common residents,'" Yan proclaimed, expressing his pride and confidence in the new system.


Successful model


He Dongquan, programme officer for transportation with the Beijing office of The Energy Foundation, believes that the southern-axis BRT line is a very successful technical model. A second line, the Chaoyanglu Line, is currently under construction in Beijing's eastern districts, and two more lines cutting across the north and the west are in the planning stages. All three lines are scheduled for completion by 2008, in time for the Beijing Summer Olympics, and will extend the total distance covered by BRT routes to 60 kilometres.


According to He, BRT is a good way to tackle colossal urban transportation problems. "Many people don't realise that it's a dead end to develop small automobiles," he said. The city of Beijing, with a population of 14 million, is now home to around 2.8 million cars, or an average of roughly 20 cars per 100 people. More than 20 per cent of city residents use cars to get around — roughly the same number as those who use public transport — while more than 40 per cent rely on bicycles or walk.


As Beijing continues its rapid expansion, residents of the city's older core districts will increasingly be pushed out into the suburbs, making it nearly impossible for them to bike or walk to workplaces and other destinations in the city centre. Most of these people end up being dependent on public transport. Yet over the past decade, the lion's share of Beijing's transport dollars has gone to expanding roads, crossroads, and parking lots, which mainly benefit car users. "The problem is, the wider the streets become, the more cars they will attract," said He.


Vicious circle


An influx of cars inevitably slows down traffic, while inadequate investment in public transport leads to decaying services and a shrinking customer base. In Beijing and throughout China's cities, many former bus riders have been forced to resort to cars to avoid increasingly long bus rides and exhausting walks to local stops—only adding to the worsening road congestion. To break this vicious circle, cities will need to invest in highly efficient public transport, such as BRT.


BRT construction will inevitably go against the interests of current car users, since it requires an exclusive right-of-way. But it doesn't just involve the construction of a few roads; it calls for a fundamental change in how people think about their right to mobility. "Transportation is indeed a political issue," explained He. "It requires the redistribution of benefits among different groups."


Fortunately, China's government now recognizes the value of public transportation and has made it a long overdue priority. In 2005, six departments of the central government issued a joint document promoting BRT construction. Beijing's inaugural southern line has received a green light and strong government support ever since it was first proposed.


The Chinese public should recognise the relative freedom it enjoys in choosing from a variety of transportation modes. People will increasingly need to weigh their own comfort and privacy against the benefits of mobility and speed. "Beijing's BRT system gives attention to both fairness and efficiency for all," said He. "We have to guarantee the mobility of the city first, then consider how to assign the remaining resources to small cars."


Source: Worldwatch Institute/Global Environment Institute China Watch project

http://news.xinhuanet.com/english/20...nt_4307232.htm

www.chinaview.cn 2006-03-15 21:57:15

BEIJING, March 15 (Xinhuanet) -- The added value of China's large-and medium-sized industrial enterprises recorded 16.2 percent year-on-year growth to 1111.3 billion yuan (139 billion U.S. dollars) in the first two months, said a monthly report of the National Bureau of Statistics (NBS) on Wednesday.

The output value of the textile industry grew 15.3 percent and the raw chemical materials and chemical products rose 19.1 percent.

The output value of nonmetal mineral products and the smelting and pressing of ferrous metals grew 22 percent and 8.1 percent respectively during the January-February period this year.

Meanwhile, the general-purpose equipment manufacturing sector rose 21.2 percent and transport equipment manufacturing, 21.3 percent.

Communication equipment, computers and other electronic equipment production witnessed a year-on-year increase of 25.3 percent, and the power and heat production and supply sector rose 11.7 percent during the period.

In terms of products, the output of coal went up by 9.6 percent, electricity, up 2.5 percent and crude oil, up 11.2 percent.

The output of pig iron, crude steel and steel rose 19.9 percent, 16.8 percent and 21.3 percent, respectively, the NBS said.

Besides, the production of cement increased by 21.3 percent andthat of automobiles, 40.6 percent, with the output of sedan cars growing 83.1 percent.

The first two months of the year also witnessed a 24.2-percent growth in the value of goods for export delivered by large-and medium-sized enterprises, at 745.4 billion yuan (93 billion dollars).

The sales ratio of industrial goods dropped by 0.28 percentage points year-on-year to 96.99 percent.

Large-and medium-sized enterprises comprise all state-owned ones and non-state owned ones whose annual sales exceed 5 million yuan (625,000 dollars). Enditem