Housing prices go on rising

Housing prices go on rising

The cost of the average home in China rose by 5.7 percent year-on-year in November, continuing an escalation that pundits think could carry into next year, despite new policies from the State Council aimed at reining in speculative deals.
The rise last month was 1.8 percentage points higher than the jump in October, according to a statement from the National Statistics Bureau.
It was the ninth consecutive month that house prices rose in the survey of real estate across 70 major Chinese cities.
The sharp increase in house prices came despite the efforts of the Central Economic Work Conference, which concluded on Monday, and the annual work conference of the National Development and Reform Commission (NDRC), which both tried to pour cold water on the red hot property market.
Delegates at the Central Economic Work Conference decided to increase the supply of ordinary houses and support the public’s demand for more non-market housing.
Zhang Ping, minister of the NDRC, said during the commission’s national conference on Wednesday that more affordable housing would be made available for middle- and low-income families, and efforts would be stepped up to curtail speculation in the housing market.
Members of the State Council, the country’s top administrative authority, decided during the council’s executive meeting on Wednesday that individuals will need to own their homes for five years before they will be eligible for sales tax exemption. The increase from the previous minimum of two years was aimed at making it harder for speculators to flip houses in short-term deals.

Despite the efforts, analysts predicted that house prices will remain high during the coming months and said they could rise even higher.
“It is not possible that house prices will fall significantly in the coming months,” said Carlby Xie, an associate director with Colliers’ North China Division.
New apartment prices rose by 6.2 percent year-on-year in November, the National Statistics Bureau said. That increase was 2.2 percentage points higher than the rise in October.
Prices of ordinary apartments rose by 7.8 percent year-on-year in November, much faster than the 4.1 percent rise in the cost of high-end apartments.
Xie said demand remained strong and developers were financially secure because the country had made huge amounts of liquidity available through its efforts to counter the global financial crisis.
He said that will mean developers will be unlikely to slash house prices in the coming months, even if demand weakens.
State Council policy will dampen demand for second-hand houses, said Yin Bocheng, director of the Real Estate Center of Fudan University.
“But it will not fundamentally change the expectation for further rises in house prices.”
The authorities should adopt a multi-layered approach to ensure healthy development of the market, he said, agreeing that the NDRC’s plan to increase the supply of affordable houses was a good one.

Copper imports to fall slightly in Nov

Copper imports to fall slightly in Nov

China’s November imports of unwrought copper and semi-finished copper products are expected to be flat, or fall slightly from the previous month, limited by strong London Metal Exchange (LME) prices and abundant domestic supplies.
Imports of refined copper, the most popular type of copper in international and Chinese markets, dived 40 percent to 169,374 tons in October from the previous month, much lower than the 230,000 tons expected by traders and analysts, thanks to delays in contracted shipments.
“Imports are unlikely to recover in November, given poor margins throughout the month,” said Zhu Yanzhong, an analyst at Jinrui Futures, a subsidiary of top smelter Jiangxi Copper.
Traders said most delayed shipments would arrive between December and February next year.
November’s inflows of refined copper are seen at the 160,000-ton level, or falling to just above 150,000 tons, traders estimated.

Refined copper imports took up 64.4 percent of October’s inflows of unwrought copper and semi-finished copper products. Based on that ratio and estimated refined copper imports of 160,000 tons, the data to be released on Friday may show imports of copper and products of 248,447 tons.
A sales manager at another large trading house said few delayed shipments had arrived in November, limiting imports since the arbitrage window for buying from the LME and selling to the Chinese market was still closed.
“Only some small-term cargoes arrived to us in November. Our feeling is that imports were less than October,” a warehouse source in Shanghai said.
Reduced imports and increased exports, which jumped to above 18,000 tons in October, more than a third of the year-to-date total, have reduced stocks in bonded warehouses in Shanghai, traders said.
Some 200,000-250,000 tons of imported refined copper cathode were estimated to lie in Shanghai’s bonded warehouses versus more than 250,000 tons a month earlier.
That stock level was still high as owners were unwilling to sell the metal on to the domestic spot market in which copper has traded below the cost of imports for much of the past three months.
Copper prices were steady yesterday. Three-month LME copper rose $23 to $7,022 a ton in early trade. The benchmark third-month copper futures contract on the Shanghai Futures Exchange was little changed to close at 55,600 yuan a ton.

China rolls out steel tax on US

China rolls out steel tax on US

China, the world’s largest maker and consumer of steel products, fired back Thursday at the United States for its anti-dumping measures against Chinese steel exports, launching its own punitive taxes on steel from US as well as Russia.
The Ministry of Commerce said Thursday on its website that US and Russian steelmakers must pay anti-dumping duties as high as 25 percent beginning today. The US steel industry must also tack on a 12 percent tax when it exports its products to China.
The announcement comes after a series of damaging measures against Chinese steel exports launched by the US and Europe in recent months. China’s provisional duties will hurt steel exporters from the US and Russia, said a Chinese steel expert.
“Investigations showed that steelmakers from the US and Russia had dumped flat-rolled electrical steel products in China,” said the ministry’s statement. “And American steelmakers also received a certain amount of subsidies from the US government. These moves have damaged the Chinese steel industry.”
This is the first time that China has launched these specific anti-subsidy investigations. Flat-rolled electrical steels are high-end steel products, and they are mainly used for generators and power transformers.
Bloomberg said the move will “escalate a trade spat started in September.”
But according to the Chinese World Trade Organization expert Zhou Shijian, the investigations and the ruling are both “in line with WTO rules.”
“Chinese companies are correctly leveraging rules under the WTO framework to protect themselves. We needn’t make a fuss about it,” Zhou said.
Currently, few steel manufacturers in China, including Baosteel and Wuhan Iron &Steel, have the capability of making flat-rolled electrical steel products. About 50 percent of these products are imported from overseas, said Yu Liangui, vice-director of Mysteel Research Institute, a steel consultancy based in Shanghai.
According to the institute, US and Russia in 2008 exported a combined $602 million in steel products to China.
“The news will certainly cut down on imports, but benefit local steelmakers,” Yu said.
Yesterday, Baoshan Iron &Steel, the listed unit of Baosteel, fell 1.3 percent to close at 9.12 yuan. Wuhan Iron &Steel gained 3 percent to 8.57 yuan. Both are listed on the Shanghai Stock Exchange and were not available for comment.
China has been the target of trade protectionism since late last year. According to the ministry’s statistics, by the end of October, a total of 19 nations and regions have initiated investigations on 101 trade remedy cases against Chinese exports, involving a sales volume of $11.68 billion. The US and Europe are among them the most aggressive initiators.
This year, the US and the Europe have slapped tariffs and filed complaints against Chinese steel products to the WTO.
“Chinese steelmakers were deeply affected by the rulings and cases,” Yu said.
The tire case initiated by the US in September has sparked a series of trade remedy investigations and rulings aimed at China.
But Zhou said “Chinese exporters are now using WTO rules well to fight against the trade protectionist measures.”

China ripe for new BlackBerries

China ‘ripe’ for new BlackBerries


Canadian smartphone maker Research In Motion (RIM) said yesterday it would launch a customized version of the BlackBerry that supports China’s home-grown 3G standard, as part of its latest efforts to expand in the world’s largest mobile phone population.
The world’s second largest smartphone vendor signed an agreement with China Mobile to deliver a BlackBerry model that supports China Mobile’s TD-SCDMA network.
The new handset, which would start shipping “soon”, will be targeted at Chinese small companies and individual consumers, according to RIM.
“We view China as a strategic market. And China Mobile is by far the largest mobile carrier in the world,” said Jim Balsillie, the company’s co-chief executive.
Balsillie said the new BlackBerry handset would support China Mobile’s wireless services such as the China Mobile’s App Store and the instant messaging service Fetion. RIM is also planning to bring its own App Store, “App World”, to China next year, Balsillie said.
The partnership with China Mobile came shortly after RIM reached agreement on Monday with one of the country’s largest IT products distributor, Digital China, to sell phones in China.
Previously, BlackBerries were only officially available in China for corporate users through China Mobile’s sales channels. Balsillie said yesterday that the company plans to expand to tap individual consumers and small businesses.
The Chinese government issued the 3G license earlier this year to major Chinese telecom operators, attracting cellphone makers such as Apple Inc, RIM and Nokia.
China Unicom last month introduced the Apple iPhone in China, but its high price proved to be prohibitive. Some experts said this would provide an opportunity for companies such as RIM.
Wang Jianzhou, chairman of China Mobile, said yesterday that the company would release a cheaper package for the new BlackBerry model to attract individual consumers. He said China Mobile currently has more than 4 million 3G users and the number is expected to reach 5 million by the end of the year.
China Mobile is the only carrier to adopt the TD-SCDMA around the world, making it reliant on the support of major handset makers. The company announced earlier this year it would give 600 million yuan in subsidies to cellphone makers to develop TD-SCDMA handsets.
In 2006, RIM signed a partnership with China Mobile to launch BlackBerries for corporate clients, especially multinationals, in China. However, the deal has not been productive because China Mobile failed to introduce any new models over the following three years.
China Mobile current only provides one old BlackBerry model, with service packages ranging from 398 to 598 yuan per month.
Balsillie said yesterday that RIM was investing in manufacturing and research and development in China. He said the company procured $2 billion worth of goods in China for its global operations this year.
RIM and China Mobile also announced yesterday they would join hands in developing BlackBerry models that support TD-LTE, China’s home grown fourth generation (4G) technology.

Chinas farm produce prices up 1%

China’s farm produce prices up 1%

Prices of edible farm produce in 36large and medium-sized Chinese cities rose 1 percent in the week from Nov. 30 to Dec. 6, compared with the previous week, according to figures released by the Ministry of Commerce (MOC) Tuesday.
Forty-three out of 57 kinds of farm produce saw week-on-week price hikes, while prices of nine types saw slumps, said a report on the MOC website.
Vegetable prices climbed the most by 6.2 percent week on week. Aquatic product prices and egg prices expanded 0.1 percent. The wholesale prices of pork and mutton rose 1.4 percent and 0.3 percent respectively.
Production materials prices rose 0.1 percent week on week.
Forty-nine out of 112 kinds of production materials saw week-on-week price increases including non-ferrous metal, chemical products and minerals, while prices of 16 types saw slumps including liquefied gas and diesel.

Chinas auto sales, output exceed 1 mln in Nov.

China’s auto sales, output exceed 1 mln in Nov.

China’s auto production and sales almost doubled the previous year figures to reach 1.39 million and 1.34 million units in November, the China Association of Automobile Manufacturers (CAAM) said Tuesday.
Overall auto production topped 12.27 million units in the first11 months, up 41.59 percent from the same period last year; auto sales stood at 12.23 million in the January-November period, up 42.39 percent year on year.
The association forecast sales and output for 2009 would both surpass 13 million units.
The country’s largest auto maker, the Shanghai Automotive Industry Corporation, sold about 2.43 million auto units in the first 11 months, up 54.51 percent year on year.
The association attributed the increases to a series of government stimulus measures to boost domestic consumption.
China in January halved the purchase tax on passenger cars to five percent for models with engine displacements of less than 1.6liters, a move to shore up domestic auto consumption.

Removal of subsidy caps to boost sales

Removal of subsidy caps to boost sales

The Chinese government’s recent efforts to encourage sales of high-end electronic products in rural markets may encourage computer makers from home and aboard to increase their presence in Chinese counties and villages.
Wang Zhong, general manager, Desk Computer Marketing, Lenovo Group, said though demand for high-end computers is high amongst rural consumers, sales have been limited by the current price cap in the rural electronic subsidy program.
“According to our estimates, nearly 62 percent of the rural consumers in China want to purchase computers priced above 4,000 yuan,” he said. “If the price caps are lifted, I think rural consumers will have more choices.”
The Chinese government launched the program earlier this year by offering 13 percent subsidy to electronics buyers in rural areas to stimulate the economy. But the subsidy was offered only for purchase of computers priced below 3,500 yuan.
According to figures from the Ministry of Commerce, sales of rural computers through the government’s subsidy program reached 792,766 units from January to October this year, compared with the 40 million annual PC shipments in the country each year. Lenovo had a 40 percent share of the market while foreign players like Hewlett-Packard and Dell had less than 3 percent market share.
Some critics say the price cap has severely limited the effects of the subsidy program.
Last month, Zhao Bo, a deputy director of China’s Ministry of Industry and Information Technology, said at an industry seminar in Wuhan that the government is working on new measures to consummate its consumer electronics subsidy program.
The measures, which will be published by this month, will lift the current product price cap in the program and encourage sales of high-end electronic products in rural areas.
“China has a huge geographic diversity and some rural consumers in southern and eastern provinces actually have a very strong purchasing power,” said Simon Ye, analyst from research firm Gartner Inc. “I think the lifting of the price cap will boost China’s PC market, which has already started showing signs of recovery.”
According to figures from research firm Gartner, the PC market in China is estimated to have grown 39 percent during the third quarter of this year, compared with a worldwide average growth of 0.5 percent in the same period.
The recovery, according to Ye, was largely due to the increasing demand for laptops in urban areas as well as the desktop sales surge in rural market.
Weekee Yeo, director of the HP’s consumer PC business in China, said the company is planning to introduce more high-end products in rural areas.
“Last year, we have expanded our network to over 2,000 Chinese counties,” he said, noting that the lifting of price cap in the subsidy program will further stimulate the rural market.

Bank lending to be cut back next year

Bank lending to be cut back next year


A worker cleans a Bank of China branch in Guangzhou. Credit growth is supposed to be tightened moderately next year. [CFP]
Chinese banks are set to cut back lending in 2010 but the number and size of loans will still be instrumental in supporting the nation’s economic growth and industrial restructuring drive, senior experts and industry insiders said.
Despite the government’s pledge to maintain a moderately loose monetary policy next year, the credit flood this year could not be repeated, a top executive at Bank of China told China Daily on condition of anonymity.
“The regulator has ordered banks to control the pace of lending next year, and credit growth is likely to be maintained at about an annualized 17 percent,” he said.
During the three-day Central Economic Work Conference, the annual gathering to lay out economic policy for the coming year, that ended yesterday, the government promised to “maintain the continuity and stability of the economic policy”.
Experts said it did not indicate a continued galloping credit expansion in 2010.
“Credit growth is supposed to be tightened moderately next year, but it will not derail the nation from the road of economic restructuring,” said Li Jianwei, a senior economist at the Development Research Center, a think tank affiliated to the State Council.
Research conducted by his team said credit growth of some 17 percent and 20 percent would be sufficient to support the economy growing beyond 9 percent next year.
In response to a government call to spur domestic consumer demand and restructure the industrial landscape, Bank of China, the nation’s third largest lender, said it would adjust its loan portfolio to support the nation’s economic restructuring drive and enhance personal financing services.
“The bank will continue to fund the key projects on the top of the government’s agenda, such as energy saving and low-cost housing projects, as well as give loans to small and medium-sized companies,” it said.
“As for those projects that do not comply with the country’s industrial and environmental policy, the bank will cut lending and seek an exit from these projects,” the bank said in a statement on its website.
Chinese banks had advanced 8.9 trillion yuan in new loans as of the end of October with an annualized loan expansion rate of above 30 percent in an effort to shore up the slowing economy.
The total new loans are likely to hit 10 trillion yuan this year, nearly tripling the amount extended by Chinese banks in 2008.

Ratings for online games urged

Ratings for online games urged

Young Internet users may soon find their access to violent online games unplugged.
Under a system similar to film classification, the Ministry of Culture is planning to introduce a rating system for online content, including games, that would only allow players older than a certain age to join in.
“We will ask the game operators to improve the rules of their game, adjust product structure and crack down on vulgar style. We need to raise the cultural content in online games,” said Tuo Zuhai, deputy director of the marketing department at the ministry.
“Enhancing the content of online games is the current focal point of our work,” he said at China’s Seventh International Digital Content Expo.
Some netizens, however, have questioned the feasibility of the ministry’s plan and the likelihood of it accomplishing its goals.
“I wonder if it’s possible,” a netizen named Flowerci posted on the game section of Tianya.cn, a popular online forum.
“The film classification system has not even been successfully implemented in China, and the Internet is even more complicated than film,” Flowerci said.
China’s Internet industry has developed rapidly in the last decade. According to research from the Ministry of Industry and Information Technology, the number of China’s netizens has surpassed 300 million. More than half of them are younger than 25 years old.
Those younger netizens are the targeted group of online games, which explains why sociologists and other professionals are insisting on a classification system to limit the youths’ access to bloody, violent and obscene content, just as the film classification system attempts to do.
“In the period of immaturity, youths are particularly curious about sex,” Tao Hongkai, a guest professor of Huazhong Normal University, said on a Topics of Focus program on State broadcaster CCTV on Nov 6.
“Even if there are no graphic rape pictures and scenes in the game, the design of the woman characters with scanty clothes also stimulates the youths,” he said.
He has heard of cases where online players later meet in real life and their online relationship affects how they expect the other person to behave, potentially leading to problems.
While experts say keeping young people away from certain sites is a positive move, netizens wonder how the system would actually keep them from accessing the sites.
“How can the Internet classification be possible without a working real-name system? Who knows my age on the Internet? I may even use my parents’ ID to pass the check during the registration,” another netizen named Talenteer questioned.
The number of online players in China has reached 217 million and the sales revenue has reached 20.8 billion yuan ($3 billion) in 2008, making China the world’s second largest online games market after the United States.
Unlike their players, however, at least one operator of an online game is welcoming the government initiative.
“This is a very welcome system,” said Serena Shao, a game planner at Our Game Co, Ltd.
“It even helps us to satisfy our customers. For example, we will be able to add different elements depending on the age of our players,” Shao said.
“Some elements may not be suitable for youths but OK for adults,” she explained. “In this case, the playability of online games could be raised as well.”
China’s online game market has benefitted from the rapid development of the Internet as well.
China’s online game revenues are expected to hit 73.1 billion yuan ($10.7 billion) in three years, driven by growing Internet penetration in the world’s most populous country, reported Reuters.
The Ministry of Culture also posted a statement on its website on Nov 13, ordering the online game operators to limit virtual marriages and player-versus-player combat content. Ministry officials asked them to enhance socialist values in the games.

China leads the world in auto sales, production

China leads the world in auto sales, production

China’s passenger vehicle production and sales in November both more than doubled from a year earlier, continuing the robust growth and causing China’s auto market to lead the global industry for the whole year.
It’s also the first time the domestic monthly production and sales broke the 1 million units barrier.
Sales of passenger vehicles, including cars, multi-purpose vehicles (MPVs), sports-utility vehicles (SUVs) and minivans, reached 1.01 million last month, surging 103.7 percent year-on-year, and increased 9.5 percent from October, Rao Da, secretary-general of China Passenger Car Association, said yesterday.
The total output of the sector hit 1.08 million units, 101 percent higher than that of November 2008.
“It is strong evidence of how hot automobile sales are in China, despite the oil price hike and bad snow which had an impact on logistics in November,” said Rao.
He predicted that the market performance of the passenger vehicle segment would continue to hit record highs in December, with production and sales figures 80,000 to 10,000 units more than those in November.
“And the sales peak is coming in January,” he added.
“It will be unprecedented in any country’s auto industry that the monthly sales continued to break records for seven months in a year,” said Rao.
China’s total vehicles sales exceeded 12 million in the first 11 months, retaining its lead as the world’s top auto market since January, reported Xinhua News Agency, citing the China Association of Automobile Manufacturers.
The association is going to release the details this week.
Boosted by government stimulus measures such as tax cuts and subsidies for trade-ins, sales of all automobiles for the whole year are set to break the 13 million barrier, compared with 9.38 million units last year.