South East Motor recalls Lingyue sedans

South East Motor recalls ‘Lingyue’ sedans

China’s quality watchdog said Tuesday that China’s South East (Fujian) Motor Co., Ltd. would recall its “Lingyue” sedans because of engine flaws.
The General Administration of Quality Supervision, Inspection and Quarantine (GAQSIQ) said that 2,056 vehicles, produced between July 17 and September 5, would be involved.
A company statement said improper anti-rust oil was used in the engine, which may obstruct heat dissipation for water tank under extreme circumstances, and lead to engine overheating.
The manufacturer will, from Tuesday on, check and clean defective parts for free. Owners can dial the company’s hotline for consultation, or log on the GAQSIQ website for more information.

52 new-type rural financial bodies open

52 new-type rural financial bodies open

China opened 52 new-type rural financial institutions in western areas by the end of June, accounting for 44 percent of the total that newly opened nationwide in the first half year.
The China Banking Regulatory Commission (CBRC), China’s banking regulator, announced at a press conference in Beijing?Monday.
The 52 institutions include 41 rural banks,?three lending firms and?eight rural funds cooperative agencies, according to the CBRC.
The loan balance in the western areas totaled 6.58 trillion yuan ($964 billion) by the end of June, while the total deposit balance at the same period was 9.45 trillion yuan.
The commission said that it will step up effort to encourage lenders to open rural financial institutions in the west to enhance credit support in the areas.

Jumbo jet design center established

Jumbo jet design center established

China’s Research and Design Center for Commercial Aircraft, has been established in Shanghai. What this means is the country’s jumbo jet program is now in full swing.
The center’s set to design a regional jet, the ARJ-21, and a jumbo jet, the C-919. The center has completed preliminary plans for the C-919. The plane’s maufacturer, the Commercial Aircraft Corporation of China, has signed a memorandum of understanding with nine domestic airframe suppliers. The 150 seater is due to make its maiden flight in 2014 and will be available for delivery to customers in 2016.
Guo Bozhi, President of Shanghai Aircraft Design & Research Institute, said, “We have been doing well in many areas of technology research, dealing with such issues as reducing the plane’s air resistance and making the engine more efficient. We have reached the same level as other planes that we are using. It was a hard work to do this in only one year.”

Direct-selling industry expands

Direct-selling industry expands

The sales revenue of the direct-selling industry on the Chinese mainland will grow more than 30 percent this year to 60 billion yuan ($8.79 billion), according to several high-ranking industry leaders attending the first session of the 14th Academic Symposium on Direct Selling in Beijing Friday.
Li Wencheng, assistant to the general manager of the New Era Health Industry Group, one of the 24 licensed direct-selling companies on the Chinese mainland, said that his company will grow by an even larger margin than the average industry growth rate.
Many participants attending the symposium consider the controversial industry, which is still under strict regulation from the Chinese government, to be a miracle at a time of economic downturn.
Andy Tsui, a postgraduate of Peking University, who studied the sales growth rate of Amway, a leading direct-selling company, and the world economy growth rates from 1971 to 2008, found that when the world economy went downturn, Amway’s sales went upturn.
Huang Yonggang, general manager of New Era, attributed the sales increase of his company in the past ten months to new comers who had become jobless due to the economic crisis and turned to be direct selllers.. He says that when people become unemployed they may try to find some new ways to survive and direct-selling is proving a choice for many.
According to his assistant Li, even with only 10 percent of the new direct-sellers becoming successful, they boost the company sales and also find a way to support themselves. In 2008 the sales volume increased so much, his company hired 20 new employees to do market research, website maintenance and public relations. So far this year they have hired 15 new employees.
“Direct selling can benefit the whole society and may also do great havoc to people,” said Professor Chen Derfa, a direct selling scholar in both Taiwan and the Chinese mainland, who organized the Academic Symposium.
“Most direct selling companies mainly teach and train their direct sellers how to make money and do not teach them the decent concept of direct selling and as a result, the direct sellers may run the business in a wrong way,” added Chen.
Whilst those struggling during the economic crisis may be finding a new source of income through direct-selling, some are still skeptical and see no difference between this growing phenomenon and the banned pyramid schemes.
Wang Pu, the co-founder of the Alliance PKU Management Consultants said that a direct selling company must realize its social responsibilities by teaching and training its direct-sellers to be honest.
Chen added that this year’s Symposium only accepted eight pieces of academic research papers on direct-selling from authors, most of them postgraduates, in the Chinese mainland, while last year the Symposium accepted 19 pieces of papers from authors both in the Chinese mainland and Taiwan.
He hoped more scholars could do research on direct-selling and help the public differentiate direct selling from illegal pyramid schemes, which always disguise themselves in the form of direct-selling.
The second session of the 14th Academic Symposium on direct-selling will be held on Dec 16 in Taoyuan county in Taiwan.

Chinas credit card debt continues to expand

China’s credit card debt continues to expand

Credit card debt at least six months overdue in China rose 126.5 percent year-on-year in the first three quarters of 2009 to 7.43 billion yuan ($1.09 billion), the People’s Bank of China, the central bank, said Monday.
Debt overdue by six months or more accounted for 3.4 percent of the total outstanding credit card debt at the end of the third quarter, up 0.3 percentage points from the end of the second quarter.
The bank warned of potential risks of increasing overdue credit card debt as banks expanded credit card business.
By the end of Sept 30, China’s banks had issued 175 million credit cards, up 33.3 percent from the same period last year.
In the second quarter of 2009, credit card debt at least six months overdue rose 131.3 percent from a year earlier to 5.77 billion yuan.
In the first quarter of 2009, credit card debt at least six months overdue rose 133.1 percent from a year earlier to 4.97 billion yuan.

Telecom operators to cut links to WAP porn

Telecom operators to cut links to WAP porn

China’s major wireless telecom companies, all State-owned enterprises, are coming under pressure to eradicate access to porn through wireless application protocol (WAP) sites on mobile phones.
“The telecom operators collect fees from mobile WAP services and these operators will take most of the profits generated by porn content on WAP sites,” Wang Song, an official with the multi-sector Office Against Pornographic and Illegal Publications, told Xinhua. “So the operators should take responsibility (for cutting the links).”
However, most Internet supervisory bodies had no effective equipment to monitor mobile WAP sites, and the manual checks currently employed were slow, Wang said.
Many pornographic sites took advantage of this to flood WAP sites with lewd materials that would have been filtered if it had been on the Internet.
China’s three major wireless carriers, China Mobile, China Telecom and China Unicom, offer WAP services to about 192 million mobile phone users, more than half of the total Internet users in China.
The China Internet Illegal Information Reporting Center said on Tuesday that it was receiving a growing number of tip-offs about porn WAP sites.
On Nov 16, the Office Against Pornographic and Illegal Publications announced a crackdown on the creation and distribution of lewd materials, which focused on Shanghai, Beijing, Guangzhou, Zhejiang, where many WAP sites are registered.
It ordered local authorities to “fully clean up” such WAP sites and shut down those with “serious violations.” The office said the campaign was launched due to concerns over minors having access to pornography.
In a survey of 235 middle school students conducted by the office in north China’s Shanxi province, 173, or 74 percent, had mobile phones and 142 had logged on to WAP sites. Of the 199 senior high school student respondents, 83 percent knew that some WAP sites had pornographic content.
“Children and adults alike can easily log on to such WAP sites, ” said Li Qiang, PhD, Chinese Academy of Social Sciences, who has initiated several reports against WAP site service providers.
China Mobile, China’s largest wireless telecom operator, has suspended cooperation with more than 460 business promotion partners since Nov 16 when the crackdown was launched.
On Friday, it announced it would invest 100 million yuan ($14.7 million) in development of new technologies to filter out porn content on WAP sites.
It followed an announcement by the Ministry of Industry and Information Technology, the telecom operator’s governing body, that all WAP sites carried by mobile providers would be required to sign information safety management contracts, under which operators were liable to cut any link with lewd materials.

Chinas industrial profits down 3.4% Jan-Oct

China’s industrial profits down 3.4% Jan-Oct

China’s industrial profit in 22 provinces and regions across the country declined 3.4 percent year on year in the first 10 months, but the rate of decline was slowing, figures show.
A statement posted on the website of the National Bureau of Statistics (NBS) Monday said industrial profits reached 1.79 trillion yuan (261.6 billion U.S. dollars), but the rate of decline was 5.7 percentage points lower than that for the first nine months.
Main business revenue in the 22 provinces and regions was 32.48trillion yuan for the same period, up 5 percent year on year, and 1.6 percentage points higher than in the first nine months.
From January to October, industrial profits were up for manufacturers of rubber products by 61 percent, chemical fibres by143.8 percent, and transport equipment by 33.7 percent.
Manufacturing profits also rose 28.4 percent in the food sector,19.1 percent in pharmaceuticals, and 24.2 percent in plastics.
Meanwhile, profits were down for oil production by 65.5 percent, steel making by 53.7 percent, and electronics by 23.9 percent.
The 22 regions and provinces excluded Beijing, Inner Mongolia, Chongqing, Tibet, Yunnan, and the southern provinces of Hunan, Guangdong, Anhui and Hainan.

Chinas shipping industry woes

China’s shipping industry woes

Hu Keyi is one of China’s shipbuilders in the eye of the storm of the economic crisis.

The 47-year-old is chief engineer at Jiangnan Shipyard, one of China’s oldest shipbuilders based in Shanghai.
The company, which employs 10,500, has seen its gross profits on its ships fall by 75 percent since the beginning of the economic crisis.
Jiangnan is far from alone. In the first nine months of this year, new orders received by China’s shipbuilding yards were 16.9 million deadweight tons, a massive 70 percent drop from 57.2 million tons in the same period last year, according to the China Association of the National Shipbuilding Industry.
Hu said new orders from shipping lines from around the world have all but dried up.
“We almost don’t have any orders from abroad at the moment. We still have orders coming in from domestic State-owned companies and also from some private companies. They are trying to grab good ships at historically low prices,” he said.

China’s shipbuilding industry has been hit hard by the slump in world trade. According to the World Trade Organization, international trade in and out of China fell by 20 percent in the first nine months of this year and by 17 percent across the globe.
According to the Chinese Ministry of Transport, container throughput into the country was down 7 percent from 126 million teus (container units) last year to 117 million teus this year.

A cold wind is also blowing across the 3 sq km shipyards at Liaoning Marine and Offshore Industrial Park on the western edges of Yingkou City in Liaoning province.
“China’s shipbuilders need to hug to keep warm. We need to come together and cut costs so as to continue our operations,” said Sun Jimin, the general manager of the company.
“Shipbuilders now have great capital problems. I hope the government can come up with a policy to promote buyers’ credit so that they can make orders. I am waiting for a big order of four ships from Britain. It would be good if our government could lend money to our buyers,” Sun said.
Slashing prices
Meanwhile, Liaoning is slashing the price of its ships by as much as 40 percent in a bid to find orders.
“We are reducing the price of ships sharply in a bid to find new buyers. Ships that might have cost $50 million are now being priced at $30 million, but still we don’t have any orders right now,” Sun said.
He said the current situation is in huge contrast with last year, when trade was booming.
“We were very busy then, but now it is very different. It is no longer a problem of how to make money but about how to reduce losses,” Sun said.
Analysts estimate that the combined losses this year of shipping lines will be some $20 billion.
Losses in the first six months of this year already make depressing reading for the carriers. The Japanese shipping line NYK has reported a net loss of $694 million, the German Hapag-Lloyd line $680 million, China’s State-owned giant Cosco $671 million and APM-Maersk of Denmark $706 million.
The number of ships laid up in locations around the world, including a whole ghost fleet off the coast of Singapore, is now attracting international attention.
As of October, it was estimated that some 10.7 percent of the world’s container capacity is now laid up, a total of some 500 ships. Some in the industry have called for drastic emergency measures to breathe new life into the shipbuilding industry.
Gao Yanming, chairman of Hebei Ocean Shipping Co, based in Qinhuangdao in Hebei, said he believes the world’s shipping industry is on a precipice.
Gao recently told the World Shipping Summit in Qingdao that the Baltic Dry Index (BDI), the measure that tracks world shipping prices and which has recently rallied to above 4,300, must not fall further.
“If the BDI falls below 3,000, the market will fall into hell, ” he said.
And he called for all ships more than 23 years old to be scrapped in order to reduce capacity and give new life to shipbuilders.
Scrapping ships
“The more we scrap, the better the market will be,” Gao said.
The major problem facing world shipbuilders is what to do with the capacity they have built up over recent years.
Global shipyard capacity is set to increase by 161 percent from 26 million compensated gross tons (cgt) in 2005 to 68 million cgt in 2011.
The problem is even worse in China, with capacity set to increase by 525 percent over the same period from 4 million cgt to 25 million cgt.
Arthur Bowring, managing director of the Hong Kong Shipowners Association, said the industry has been hit by a massive “double whammy” of overcapacity combined with the most severe economic crisis in 70 years.
“We have had a rapid build-up of world trade over the past few years, which resulted in fantastic returns for those operating ships. Because of the massive amounts of cargo being moved, new ships were ordered which encouraged shipyards to increase capacity,” he said.
“Then, of course, we had the economic crisis, which has led to a total drying up of export credit. The two things coming together has led us all into a bit of a mess.”

Chinese banks increase overseas loan activity

Chinese banks increase overseas loan activity

Foster’s Group Ltd, Australia’s biggest brewer, never borrowed from China until this year, when Bank of China helped arrange $500 million in loans to refinance debt.
Chinese lenders are “injecting large amounts of liquidity”, said Peter Kopanidis, group treasurer at Melbourne-based Foster’s.
The combination of the world’s fastest-growing economy and “a very different deposit base” is helping Bank of China “contribute more at a time when some banks may be capital-constrained”, he said.

The Industrial and Commercial Bank of China,the world’s largest bank by market value, is making more overseas loans. [Agencies]
Industrial &Commercial Bank of China (ICBC) and Bank of China underwrote $25.6 billion of syndicated loans in the Asia-Pacific region outside Japan this year, or 14.5 percent of the total, up from 4.9 percent a year earlier, data compiled by Bloomberg show.
They’re providing capital as Western banks from New York-based Citigroup Inc to Royal Bank of Scotland Group Plc in Edinburgh retrench after global financial institutions took $1.7 trillion of write-downs and losses since the start of 2007.
China’s banks boosted overseas syndicated loans to $4.9 billion in the first 10 months of this year, up from $3 billion in the same period of 2008. In fact, their growth in the market is the biggest of any nation, Bloomberg data showed. Meanwhile, the US and European banks’ Asia-Pacific share slumped to 14.3 percent, down from 30 percent in 2008.
Lending encouraged
In the United States, about $111 billion of leveraged loans, or those made to speculative grade borrowers, have been made in 2009, down from $804.9 billion in the comparable period of 2007.
The State Administration of Foreign Exchange in Beijing is encouraging lenders to make yuan-denominated loans overseas to reduce exposure to consumers amid concerns that too much cash may cause the nation’s stock and real estate markets to overheat.
The Shanghai Composite Index of stocks has climbed about 82 percent this year, compared with 21 percent for the Standard &Poor’s 500 Index.
The Banking Regulatory Commission told city banks last month to avoid the “blind” pursuit of size after domestic lending surged to a record 8.9 trillion yuan in the first 10 months of 2009, up from 3.7 trillion in the same period a year earlier.
China may need to rein in credit growth to stem inflationary pressures and reduce banks’ risks of future bad loans, the Paris-based Organization for Economic Cooperation and Development stated in a recent report.
“We are seeing signs of potential asset bubbles” in Asia, said Ronald Arculli, chairman of Hong Kong Exchanges &Clearing Ltd.
‘Over-allocated’
Offering credit to companies outside China is also a way for the nation to invest its $2.27 trillion of reserves without buying treasuries.
China’s holdings of US government debt swelled to $798.9 billion in September, up from less than $100 billion in 2002, according to the US Treasury Department.
China, the biggest lender to the United States, is “shouldering its responsibilities” to restore stable global growth, Premier Wen Jiabao said on Nov 12.
“Chinese banks have an incentive to lend offshore,” said Viktor Hjort, a Hong Kong-based credit strategist for Morgan Stanley, an adviser on global takeovers. “China is sitting on large dollar reserves over-allocated to US Treasuries that it wants to reduce.”
Seven Chinese banks made syndicated loans abroad in the first 10 months of this year, compared with three in the same period of 2008, Bloomberg data showed.
A syndicated loan is when a group of lenders or financial institutions provide a credit facility to a borrower.
Global integration
Beijing-based ICBC, the world’s most profitable bank, loaned $790 million to borrowers ranging from Australian supermarket chain Woolworths Ltd to Dutch commodities trader Trafigura Beheer BV and the Dubai Civil Aviation Authority, the data showed.
“China’s economy is more and more integrated into the global economy, and through this crisis we saw demand from Europe and the US decline but demand from the emerging markets, particularly Asia and Africa, rise,” ICBC Chairman Jiang Jianqing said.
Royal Bank of Scotland, which is selling or shutting businesses in two-thirds of the 54 countries in which it operates after posting the biggest loss in British corporate history last year, has made $2.1 billion syndicated loans in Asia-Pacific excluding Japan this year, down from $7.8 billion in the same period of 2008, Bloomberg data show.
Citigroup has made $11.6 billion US leveraged loans this year, down from about $25 billion in 2008 and $103 billion in 2007, Bloomberg data show.
‘Long haul’
Australia’s APA Group, whose roots stretch back to 1841 when gas lamps first lit the streets of Sydney and which now transports more than half of Australia’s natural gas, never borrowed from a lender in Asia until Bank of China offered cash, according to Chief Financial Officer Peter Fredricson.
“They’ve got the liquidity, but they also want to show they’re here for the long haul,” Fredricson said after Bank of China contributed to the company’s A$1.03 billion ($953 million) of loans in September.
“What we all need to understand is that China is a huge and growing economy on the world scene, so we should expect to see them more,” Fredricson said.
Deposits at ICBC, Bank of China, China Construction Bank and Bank of Communications – China’s four largest publicly traded banks — grew by 4.3 trillion yuan to 26.2 trillion yuan in the first half of 2009, up from 18 trillion yuan in June 2007, according to Bloomberg data.
Capital base
“Our funding sources and capital base at this moment are even stronger than some of the foreign banks,” said Andy Lee, head of credit for Beijing-based Agricultural Bank of China’s Hong Kong branch.
“China’s economy is growing, and many foreign companies would like some mainland foothold. We can provide the introductions and connections,” Lee said.
China’s economy grew 8.9 percent in the third quarter from a year earlier, the fastest pace in a year, as stimulus spending and record lending growth helped the nation lead the world out of recession.
The median projection of economists surveyed by Bloomberg News is for GDP to increase more than 10 percent in the final three months of 2009.
Chinese households’ savings as a percentage of income rose to 37.5 percent last year, up from 27.5 percent in 2000, according to Stephen Roach, chairman of Morgan Stanley Asia Ltd in Hong Kong. The rate of US household savings was 3.3 percent in September, the US Commerce Department reported.
“Borrowers see these huge hoards of cash available at relatively decent prices and it makes sense to knock on their doors,” said Amit Khattar, Singapore-based head of non-Japan Asia loan syndication at Credit Suisse Group AG, Switzerland’s largest bank.
“But that doesn’t mean the doors are open for everybody, at least not yet,” Khattar said.
Standard Bank Group Ltd worked on four transactions this year involving Chinese banks and foreign borrowers that haven’t come to fruition, said Les Collett, head of Asia-Pacific loan syndication in Hong Kong for Africa’s largest lender.
“While Chinese lending has really taken off in the last 18 months, they prefer not to go in too long too early,” he said.

Shipping industry woes

Shipping industry woes


Hu Keyi is one of China’s shipbuilders in the eye of the storm of the economic crisis.
The 47-year-old is chief engineer at Jiangnan Shipyard, one of China’s oldest shipbuilders based in Shanghai.
The company, which employs 10,500, has seen its gross profits on its ships fall by 75 percent since the beginning of the economic crisis.
Jiangnan is far from alone. In the first nine months of this year, new orders received by China’s shipbuilding yards were 16.9 million deadweight tons, a massive 70 percent drop from 57.2 million tons in the same period last year, according to the China Association of the National Shipbuilding Industry.
Hu said new orders from shipping lines from around the world have all but dried up.
“We almost don’t have any orders from abroad at the moment. We still have orders coming in from domestic State-owned companies and also from some private companies. They are trying to grab good ships at historically low prices,” he said.
China’s shipbuilding industry has been hit hard by the slump in world trade. According to the World Trade Organization, international trade in and out of China fell by 20 percent in the first nine months of this year and by 17 percent across the globe.
According to the Chinese Ministry of Transport, container throughput into the country was down 7 percent from 126 million teus (container units) last year to 117 million teus this year.
A cold wind is also blowing across the 3 sq km shipyards at Liaoning Marine and Offshore Industrial Park on the western edges of Yingkou City in Liaoning province.
“China’s shipbuilders need to hug to keep warm. We need to come together and cut costs so as to continue our operations,” said Sun Jimin, the general manager of the company.
“Shipbuilders now have great capital problems. I hope the government can come up with a policy to promote buyers’ credit so that they can make orders. I am waiting for a big order of four ships from Britain. It would be good if our government could lend money to our buyers,” Sun said.
Slashing prices
Meanwhile, Liaoning is slashing the price of its ships by as much as 40 percent in a bid to find orders.
“We are reducing the price of ships sharply in a bid to find new buyers. Ships that might have cost $50 million are now being priced at $30 million, but still we don’t have any orders right now,” Sun said.
He said the current situation is in huge contrast with last year, when trade was booming.
“We were very busy then, but now it is very different. It is no longer a problem of how to make money but about how to reduce losses,” Sun said.
Analysts estimate that the combined losses this year of shipping lines will be some $20 billion.

The newly built Jiangnan Shipyard on Shanghai’s Changxing Island is ready for new business. “The shipyard is poised to accept the order of building China’s first aircraft carrier, and with our own intellectual property rights,” said Nan Daqing, general manager of Jiangnan Shipyard (Group) Co Ltd. [CFP]
Losses in the first six months of this year already make depressing reading for the carriers. The Japanese shipping line NYK has reported a net loss of $694 million, the German Hapag-Lloyd line $680 million, China’s State-owned giant Cosco $671 million and APM-Maersk of Denmark $706 million.
The number of ships laid up in locations around the world, including a whole ghost fleet off the coast of Singapore, is now attracting international attention.
As of October, it was estimated that some 10.7 percent of the world’s container capacity is now laid up, a total of some 500 ships. Some in the industry have called for drastic emergency measures to breathe new life into the shipbuilding industry.
Gao Yanming, chairman of Hebei Ocean Shipping Co, based in Qinhuangdao in Hebei, said he believes the world’s shipping industry is on a precipice.
Gao recently told the World Shipping Summit in Qingdao that the Baltic Dry Index (BDI), the measure that tracks world shipping prices and which has recently rallied to above 4,300, must not fall further.
“If the BDI falls below 3,000, the market will fall into hell, ” he said.
And he called for all ships more than 23 years old to be scrapped in order to reduce capacity and give new life to shipbuilders.
Scrapping ships
“The more we scrap, the better the market will be,” Gao said.
The major problem facing world shipbuilders is what to do with the capacity they have built up over recent years.
Global shipyard capacity is set to increase by 161 percent from 26 million compensated gross tons (cgt) in 2005 to 68 million cgt in 2011.
The problem is even worse in China, with capacity set to increase by 525 percent over the same period from 4 million cgt to 25 million cgt.
Arthur Bowring, managing director of the Hong Kong Shipowners Association, said the industry has been hit by a massive “double whammy” of overcapacity combined with the most severe economic crisis in 70 years.
“We have had a rapid build-up of world trade over the past few years, which resulted in fantastic returns for those operating ships. Because of the massive amounts of cargo being moved, new ships were ordered which encouraged shipyards to increase capacity,” he said.
“Then, of course, we had the economic crisis, which has led to a total drying up of export credit. The two things coming together has led us all into a bit of a mess.”