Tengzhong wants Hummer despite setback: reports

Tengzhong wants Hummer despite setback: reports

Chinese machinery maker Tengzhong is still working to close a deal with General Motors Co to buy the US automaker’s Hummer brand after a regulatory setback, Chinese media reported on Monday.
GM is selling its Opel, Saab, Saturn and Hummer brands as well as closing down its 83-year-old Pontiac division as it strips back operations in the face of the sector’s worst ever downturn.
China’s Ministry of Commerce, the regulator who must approve the Hummer acquisition, had turned back the application because it was lacking detail, the Legal Evening News reported.

“We are still trying hard,” an unnamed spokesman for Tengzhong was quoted as saying in response by China News Service.
The deal would mark the first major Chinese acquisition of a distressed US auto asset during the current economic downturn.
Sichuan Tengzhong Heavy Industrial Machinery, a little-known firm based in land-locked southwest China, raised eyebrows when the deal for the premium off-road Hummer brand came to light three months ago.
It was not GM’s only surprise move, however, with tiny Swedish supercar maker Koenigsegg now in talks to buy Saab.
Swedish State Secretary Joran Hagglund told Reuters on Monday that Koenigsegg had presented a new plan for financing the deal.
German Economy Minister Karl-Theodor zu Guttenberg said on Monday he hoped GM’s board would make a clear decision on the future of Opel when it meets on Tuesday.
The German government has come out strongly in favour of Canadian auto parts group Magna’s bid for Opel.
Tengzhong’s bid for Hummer requires approval in China from both the commerce ministry and the National Development and Reform Commission, a powerful planning agency.
The company’s lack of experience in the car industry has stirred doubts, while state media said the Chinese government would likely harbour objections to taking over a gas-guzzling SUV.
Opposition has quietened down in recent weeks after China’s commerce ministry sounded a more positive note on the deal, saying Tengzhong’s move was normal for a company seeking to take advantage of the global downturn.
GM and Tengzhong have said they will not disclose the financial terms of the deal.
Bankers familiar with the situation have said Hummer could fetch about $100 million in cash in addition to other commitments — far less than the $500 million GM had expected Hummer to bring when it went on a sale in June 2008.

Liu Chuanzhi picked as Legend Holdings chairman

Liu Chuanzhi picked as Legend Holdings’ chairman

Former Lenovo Chairman Liu Chuanzhi was elected the company’s parent Legend Holdings’ new president to replace Zeng Maochao, according to a news briefing by Legend on Tuesday.
Legend Holdings’ new board of directors will consist of Liu Chuanzhi, Deng Maicun, Zeng Maochao, Lu Zhiqiang and Zhu Linan.
The company also announced at the news briefing that China Oceanwide Holdings Group became its third largest shareholder by buying 29 percent of its stake.
After Oceanwide bought into Legend Holdings, the Chinese Academy of Sciences Holdings’ share in the company was reduced from 65 percent to 36 percent, and shares held by employees remain at the current proportion of 35 percent.

Huang asset freeze is extended

Huang asset freeze is extended

A Hong Kong court yesterday extended an order freezing US$214 million of assets owned by one of China’s richest men amid an ongoing corruption probe in China’s mainland.

The assets owned by Huang Guangyu and his wife have been frozen since early August after an application by Hong Kong’s Securities and Futures Commission.

Huang is founder and ex-chairman of China’s leading home appliance chain, Gome Electrical Appliances. He is being investigated by Chinese mainland authorities in connection with a corruption probe that has already ensnared government officials. He is accused of stock price manipulation and other crimes.

His wife, Du Juan, also under investigation, is reportedly being detained on the mainland.

The court order in Hong Kong serves to prevent Huang, Du and the two companies through which Huang holds his stake in Gome from removing and dealing with the assets while SFC is investigating a share repurchase allegedly planned by Huang.

The regulator alleged that Huang had used the proceeds of the buy-back of Gome shares worth HK$2.2 billion (US$284 million) between January and February 2008 to repay a personal loan of HK$2.4 billion to a financial institution.

The dealings caused Gome and its shareholders to lose HK$1.6 billion, the SFC has said. The commission is also seeking a ruling that the couple pay unspecified damages to Gome and restore the financial positions of any parties involved.

The order will remain in force until Huang’s trial for organized securities fraud, Judge Susan Kwan said yesterday. A trial date hasn’t been set yet as the SFC is still investigating.

Gome said its assets are not subject to the court order and that its businesses have not been affected by it. But analysts said the case could affect investor confidence in the company’s management.

“It may raise concerns from lenders and suppliers. As a result, the company may face cash pressure if lenders reduce loans to it or suppliers stop providing products,” said Liang Ying, an analyst at China Merchants Securities.

Gome shares fell 1.8 percent to HK$2.19 yesterday, compared with a gain of 2.14 percent in the Hang Seng Index.

Unilever launches global R&D center in Shanghai

Unilever launches global R&D center in Shanghai

Unilever, the world’s second-largest consumer goods maker, Tuesday in Shanghai launched its sixth global research and development center.
    
About 450 research staff from 15 countries will work at the 50-million-euro R&D center that focuses on products development and basic research, said Paul Polman, Unilever’s chief executive. He said Unilever had invested in China because it was a huge market.

First Solar to build huge Chinese solar plant

First Solar to build huge Chinese solar plant

First Solar Inc said on Tuesday it plans to build the world’s largest solar plant in China in the first major foray by a US company into the Asian nation’s fast growing alternative energy sector.
Under a memorandum of understanding with the Chinese government, First Solar will build a 2 gigawatt power plant, enough to power about 3 million Chinese households, at Ordos City, in Inner Mongolia and consider building a new manufacturing plant in China.
The announcement comes as the solar industry struggles to emerge from a year-long slump that saw financing for new projects dry up and reduced subsidies in Spain create a glut of unsold cells and panels.
The project is part of China’s program to generate 10 percent of its energy from renewable resources by 2010 and 15 percent by 2020 to help meet its growing energy appetite that has made the country the world’s leading emitter of carbon dioxide.
First Solar will begin constructing a 30 megawatt demonstration project in June 2010 in Ordos. The second and third phases call for 100 megawatt and 870 megawatt projects that will be completed in 2014. A final 1,000 megawatt installation will be finished in 2019.
Solar projects have so far been built on a smaller scale, and the First Solar project will be a test of whether the technology behind the plant — which will be 30 times the size of the largest current plant — can be scaled up.
“In most people’s heads, (solar) is a nice little niche thing,” First Solar Chairman and Chief Executive Michael Ahearn told Reuters. “Having a demonstration of something that’s nuclear plant size will begin to change that image.”
Such a project would cost about $6 billion to build in the US Southwest, but First Solar expects lower costs in China.
The agreement hinges on signing contracts with a power generator to operate the project in China, as well as Beijing’s approval of a feed-in tariff mandating utilities pay a premium for solar power, similar to supports in place in Germany.
That tariff is expected to be enacted by the end of the year, with a support likely in the range of 15 to 25 cents per kilowatt hour, Ahearn said.
“If they set the feed-in tariff in China to enable any kind of solar market for any group of manufacturers, it will work for us because we have the lowest cost,” Ahearn said.
LOWEST COST PRODUCER
First Solar is the world’s lowest-cost producer of photovoltaic modules, which turn sunlight into electricity, with a manufacturing cost for its cadmium telluride-based modules of about 87 cents per kilowatt.
The Tempe, Arizona-based company has long been a favorite of alternative energy investors, and is about 40 percent owned by heirs to John Walton, founder of Wal-Mart.
The announcement could also quell complaints that Beijing’s support for its solar manufacturers was giving companies such as Suntech Power Holdings, Trina Solar and Yingli Green Energy an unfair trade advantage over European and US companies vying for market share in the global sector.
“It kind of debunks some of the thinking that non-Chinese companies could never participate in the market, regardless of how the law might read nominally,” Ahearn said.
On Monday, Ahearn and Chairman Wu Bangguo of the Standing Committee of the National People’s Congress of China toured the company’s headquarters in Tempe.
The scale of the project would present numerous technical hurdles, but it could offer the chance to reduce costs, especially for installation, which now run about $1.50 per watt.
“If we can take that to $1 or below then you’ve got something pretty interesting. That’s solar power at 10 cents a kilowatt hour or less,” he said.

Chinese resources company plans expansion

Chinese resources company plans expansion

CITIC Resources Holdings, China’s sixth-largest oil producer by output, aims to buy oil and resource assets in Central Asia, Africa and China, China Daily reported Tuesday.
The newspaper quoted the company’s chief executive Sun Xinguo as saying that CITIC Resources is eyeing “high-quality, profitable and good assets” with 4.3 billion Hong Kong dollars (about 554.8 million U.S. dollars) of cash on hand.
CITIC Resources is the oil and metals unit of CITIC Group, China’s top financial conglomerate. It has oil assets in Kazakhstan, Indonesia and the Hainan-Yuedong Block in China.
The company posted a first-half net loss of 307.3 million Hong Kong dollars from a net profit of 520.1 million Hong Kong dollars a year earlier because of weak demand and falling prices, according to a company statement released late Sunday.

Tech firm spurns Aussie charges

Tech firm spurns Aussie charges

Reports that a Chinese networking equipment maker was employing technicians in Australia with direct links to the People’s Liberation Army and was under investigation by Australian security agencies were flatly denied by the company Tuesday.
Huawei Technologies spokesperson Ross Gan said the firm has not been contacted by the Australian Security Intelligence Organization. Gan did say that Huawei officials met with the ASIO in June for a routine briefing that the firm provides to all levels of government as well as to the networking equipment industry and customers.

Huawei is China’s biggest telecommunications equipment maker. An Australian newspaper, without citing any of its sources, said the ASIO made the claim that Huawei is hiring employees connected to the PLA.
The Chinese networking firm reportedly dismissed “several dozen” of its Australian-born workforce, replacing them with Chinese nationals.
These Chinese nationals have allegedly been spotted meeting officials at Chinese embassies and consulates in Canberra, Sydney and Melbourne, according to the report.
The news comes at a time when four Shanghai-based employees of the Australian iron giant Rio Tinto are awaiting trial on charges of stealing trade secrets and being involved in briberies.
The Chinese government arrested the Rio Tinto employees in July and accused them of selling information that Chinese authorities believe put its steel makers at a disadvantage in iron ore price talks with the world’s second largest iron ore supplier.
Founded by a former China’s PLA official, Huawei has become one of the world’s largest telecom operators in recent years.
The company announced earlier that its contract value reached $15.7 billion in the first half of this year, an increase of 28 percent over the same period of last year.
But most of the company’s overseas expansions, especially to developed countries, have been stymied by security concerns.
Last year, the company’s $2.2 billion joint bid with Bain Capital for the computer-gear maker 3Com Corp was withdrawn amid concerns from the US government that China would gain access to 3Com’s anti-hacking technology used by the US Department of Defense.
Huawei employs 120 workers in Australia, 100 in Melbourne and the rest in Sydney.

Rio Tinto employee seeks bail

Rio Tinto employee seeks bail

Detained Rio Tinto employee Wang Yong has applied for bail and the decision from Shanghai authorities could come as early as today.
Wang is among four Shanghai-based employees of the Australian iron giant who are awaiting trial on charges of stealing trade secrets and involvement in bribery.
The men are accused of selling information that Chinese authorities believe put its steel makers at a disadvantage in iron ore price talks with the world’s second largest iron ore supplier.
“We are not at liberty to explain the details of a bail application for our client, given the sensitivity of the case. We are waiting for the authority’s response to our request,” Zhang Peihong, one of two lawyers representing Wang from Zhai Jian Law Firm, said yesterday.

Charged persons can apply for bail as they wait for their trial. If granted, they are usually released on conditions that restrict their freedom and require a guarantee of at least 1,000 yuan ($146).
The decision to grant bail rests with the Shanghai public security bureau.
The three remaining suspects have not applied for bail and they remain in police custody in Shanghai.
Their lawyers said they are still considering whether to apply for bail and that the final decision will be made by their clients.
Lawyer Zhang Peihong also said investigations into the case may have no breakthroughs in the coming days and the lawyers will probably not meet with Wang again until next month.
After the disputes with Chinese steel makers, Rio Tinto executives said earlier that iron ore suppliers and China have broken off price talks and it is unclear when they will resume.
“At this point in time, we’re not negotiating,” Sam Walsh, chief executive of Rio’s iron ore business, said last Friday in the western Australian city of Perth. He said talks might resume.
“I expect they will, but I don’t know when,” he said.

WB chief wants CIC in Africa

WB chief wants CIC in Africa

Robert B. Zoellick, the president of the World Bank, has spent half of his time during his latest trip to China in persuading local companies including the country’s sovereign fund to invest in Africa.
He said an asset management operation under the bank’s private sector investment arm, the International Finance Corporation (IFC), would probably complete its first private equity fund this autumn.
During his trip to Beijing, Zoellick met with managers from China’s sovereign fund, the China Investment Corp (CIC), on possible investment in the fund.
“We have also received interest from another East Asian country, some Gulf countries, and a pension fund in the region,” said Zoellick in an exclusive interview with China Daily.
“They have recognized from the financial crisis that developed markets could be risky too. But there are still good long term returns in the developing counties.”

The World Bank president cited the sound investment record of IFC in the past decades to persuade sovereign and pension funds that there are good opportunities in developing countries, such as Africa.
“The rate of return of IFC’s private sector projects has been 20 percent over the past 25 years. It is a pretty good return,” he said.
Zoellick said the World Bank is seeking several approaches to cooperate with CIC. For instance, the sovereign fund could invest in infrastructure, debt restructuring, equity investment as well as healthcare and financial sectors in Africa, Zoellick said.
He pointed out that through the World Bank network in over a hundred countries, CIC would have better access to local markets.
“No matter it be the CIC, Deutsche pension fund, or Gulf sovereign funds. Most of them are unaware on where to invest due to lack of information, transaction or infrastructure. These are something that the IFC can provide. We operate in over a hundred countries and we know these markets well,” he said.
The president emphasized that the cooperation is not for CIC to make contributions; rather, it is for the CIC to consider it as diversified investment.
During his meetings with Chinese leaders he constantly raised the issue of investment in other developing countries.
Even on his trip to Anhui, where he visited some World Bank agriculture and forestry projects, an energy-efficient cement plant and a science and technology university, the president said he wants to introduce the experience in China to the rest of the developing countries.

“A big area of my trip is to take China’s experience and some of its business and help connect it to the rest of the world.”
Zoellick said the world could no longer rely on the American consumer alone. Developing countries in places like Africa can become future regions of growth.
“For every hour that I spend discussing ways that we could help China’s development, we probably also spend an hour discussing ways we can work with China in supporting development elsewhere,” he said.

Traffic jams good for China TransInfo

Traffic jams good for China TransInfo

Traffic jams that can be a daily nightmare for big city commuters are proving a business opportunity for China TransInfo Technology Corp.
China TransInfo, a leading provider of public transportation information systems technology in China, recently launched China’s first multi-city, real-time traffic website and mobile phone software.
Initial coverage for the traffic website, called PalmCity, is in the cities of Beijing, Shanghai and Chongqing, as well as in the Sichuan province city of Chengdu and Wuhan in Hubei province.
PalmCity provides real-time traffic conditions, as well as traffic events and street closure information to the five cities.
Chengdu will become the first of the five cities to also receive information about available parking spaces, according to the company.
Real-time information
China TransInfo also recently introduced the multiple-city, real-time Traffic Jam Index, which will classify each city’s traffic as seriously congested, congested, mildly congested, smooth or very smooth.
“With the dramatic increase in the numbers of China’s car owners and mobile phone users, we recognized a golden opportunity and bright future in the transportation information technology segment,” said Li Gang, general manager of PalmCity.
“We believe that China’s intelligent transportation information service market will mature in 2011 and then boom beginning in 2012,” Li said.

China TransInfo CEO Xia Shudong said his company is the first to offer real-time traffic services for multiple cities in China.
China TransInfo’s proprietary technology, based mainly upon GPS (Global Positioning System) sensors installed in fleets of taxis and also roadside sensors, offers the most accurate real-time traffic data and the largest urban coverage in China, Xia said.
“We are now making efforts to cooperate with more taxi companies to collect road information, which can help us update the data every five minutes,” said Li of the company’s PalmCity division.
In conjunction with the website launch, the company also introduced the first software in China that enables motorists to check real-time traffic conditions in multiple cities via their mobile phones.