Moutai to raise price by 13% next year

Moutai to raise price by 13% next year

Kweichow Moutai Co plans to raise the price of its liquor by an average of 13 percent starting Jan 1 because the cost of raw materials increased, the company said in a statement issued Dec 7.
The wholesale price for 53% (V/V) is to rise more than 60 yuan ($8.78) to about 563 yuan per bottle. The wholesale price is usually 300 yuan lower than the retail price.
Kweichow Moutai has been expanding its productivity by 2,000 tons every year since 2005. Because all its products must be cellared for five years, the increased productivity will turn into revenues starting next year. The company’s productivity, which was 4,000 to 5,000 tons in 2001, is to hit 20,000 tons this year.
National alcohol production increased 25.8 percent in October and the annual output totaled 5.5 million tons by October, up 24 percent over the same period last year.
An analyst with Shenyin &Wanguo Securities told cnstock.com that alcohol sales are likely to surge in coming months on rising consumption driven by a recovering economy and the narrowing decline of the consumer price index.
Kweichow Moutai’s advances payment from customers indicate a rise in sales for the fourth quarter of this year over a year ago, cnstock.com said.
However, tight supervision on drunk driving could deal a heavy blow to sales of middle and high-end alcoholic beverages, as wealthy alcohol drinkers may change their drinking habits, Yan Yalei, a Bohai Securities analyst, told cnstock.com.

Tibets biggest thermal power plant starts operation

Tibet’s biggest thermal power plant starts operation

 

The first phase facilities of Tibet’s largest thermal power plant started production on Saturday to help relieve the winter power shortage on the chilly plateau.[Xinhua]
The first phase facilities of Tibet’s largest thermal power plant started production on Saturday to help relieve the winter power shortage on the chilly plateau.
To bridge a 30 percent of gap between demand and supply in the region, the China Huaneng Group, the nation’s leading power generator, invested 300 million yuan ($43.94 million) in building up contingency projects in Lhasa and Ngari.
The projects involved nine sets of diesel generators with a capacity of 100,000 kW in Lhasa and 10,000 kW in Ngari.
After the first four sets of equipment start working, the other five will function as of the Lunar Spring Festival and the Tibetan New Year, or Losar, which will fall on Feb 14, the company said.
All the facilities will be transferred to the Tibet autonomous regional government after the project is completed. By then, Lhasa will not suffer blackout anymore.

Subsidies drive sales of minivans

Subsidies drive sales of minivans

 

A familiar site in China’s countryside but not for much longer as farmers turn to four-wheeled forms of transport thanks to generous government support. [CFP]
Zhang Jilong’s new year resolution is to buy a light-duty truck, taking advantage of the government’s stimulus measures on vehicle purchase in rural regions.
“I didn’t expect the government to prolong the favorable policy and raise the subsidy,” said the owner of a small brickyard in Yancun village, Weinan, Shaanxi province.
“But thanks to it, purchasing a light-duty truck to replace my three-wheeled carrying vehicles will be a good buy.” Zhang bought a Hafei Minyi minivan last May, saving more than 4,000 yuan, thanks to the government subsidy from the 30,000 yuan deal.
“I hesitated for two years over whether I should change the old three-wheeled vehicles. Now, a golden opportunity has come along,” he said.
Zhang said that since the government launched the policy to encourage farmers to buy vehicles last March, more than half of his fellow villagers have rushed to dealers to buy cars, minivans or light trucks.
“In recent years, farmers’ incomes have increased rapidly,” he said. “They have almost doubled. We can afford new vehicles and can consider replacing the outdated and unsafe three-wheeled farming machines we have been using. For us farmers, several thousand yuan is a fortune, and also the tipping point in helping us make a decision.”
Xu Wangju, who has a 15-mu orchard in Liquan, Shaanxi province, a famous apple growing area, said: “In the past, the three must-haves for marriage in the countryside were a television, refrigerator and washing machine. However, when the government last year began to subsidize the auto industry heavily, vehicles became popular as betrothal gifts in our area.
They suggested a bright future after marriage.
“It makes a huge difference. Instead of waiting here at our orchards for the fruit dealers, we now transport the apples directly to the wholesale market. The difference in price can be more than 300 percent.
“Although we will have spent money on buying a vehicle, we earn much more profit through this convenient and direct transportation. This initiative also helps us farmers get out of our villages.”
Last January, the central government announced that it would provide 5 billion yuan to subsidize rural residents’ automobile and motorcycle purchases by 10 and 13 percent respectively of the total price.
The government also halved purchase tax on vehicles with engines of 1.6 liters or less. They make up more than half of the market and are mainly bought by people living in the countryside.
In March, the Ministry of Finance issued an order that farmers who buy light-duty trucks and minivans from March 1 to Dec 31 should get a 10 percent discount, with a subsidy ceiling of 5,000 yuan.
Further subsidies of 2,000 and 3,000 yuan respectively can be used to replace old three-wheeled and four-wheeled farming vehicles with small, 1.3-liter or less engines.
The stimulus immediately boosted auto sales across China’s vast rural regions and gave the country’s auto industry a shot in the arm.
It helped China’s automobile sales to exceed an unexpected 13 million units last year, enabling the country to surpass the US as the world’s biggest auto market.
In the first 11 months, domestic minivan sales surged more than 80 percent year-on-year. It was the fastest growing segment of China’s automobile industry.
Analysts forecast that the total sales of minivans, the model most subsidized by the government, would reach 2 million units for the whole of 2009.
Industry analysts also predicted the trend would continue this year with an increase of at least 15 to 25 percent on last year.
“We have never before experienced as good a time as last year,” said Xiao Zhang, a salesman for Changhe minivan in Xianghe, Hebei province.
“The policy changed our sales behavior from heavily promoting our products to just waiting here in the dealer stores for the customers to stream in.”
Xiao told China Daily that sales in his store more than doubled in 2009 from a year earlier.
“Although we saw on the television that the automobile industry suffered a tough year in the West, brisk sales here in China provided me with a busy but happy year with the highest salary and bonus since I sold my first vehicle three years before,” he said.

Economists differ on credit expansion

Economists differ on credit expansion

China’s unusually high lending growth last year has sparked differences among the country’s top economists as the central bank seems to be taking new measures to contract credit and control inflation.
While many economists believe that control of credit is a must to prevent serious inflation and ensure stable growth, some hold that too drastic a contraction could lead to stagflation.
“Currently the government shouldn’t steer off the easy monetary policy track to avoid possible stagflation, which is symbolized by not only inflation but high unemployment,” said Li Yining, professor and dean emeritus of Guanghua School of Management of Peking University.
China may get stuck in stagflation even with a mild GDP growth like 6 percent year-on-year, given the huge unemployment pressure caused by its large population, said Li, one of the most influential economists in China.
He made the remarks on the 11th annual China economic forum held by the school.
He warned that too early an exit strategy could affect employment and increase the possibility of stagflation at a time when the country’s economic recovery is still not solid enough.
China initiated a massive 4-trillion yuan ($586 billion) stimulus package in late 2008 to overcome the fallout of the global financial crisis. Its new lending was expected to amount to 9.5 trillion yuan in 2009, almost double the previous year. The ample liquidity, while helping the country meet its GDP growth target of about 8 percent in 2009, has triggered concern that the menace of serious inflation may loom large this year.
Zhang Weiying, economics professor and dean of the Guanghua school, warned that excessive credit expansion and low interest rates are the root of all financial crises in history and cause high inflation and massive toxic assets.
“We need to notice that this round of credit surge (in China), boosted by the 4-trillion-yuan stimulus plan, comes on the back of continually strong economic growth for many years,” said Zhang. That means the scale of credit last year was exceptionally large.
The People’s Bank of China, the central bank, raised the 3-month central bank bill issuing rate last week – for the first time since August 2009 – by 4 base points to 1.3684 percent.
The move, which was accompanied by the biggest weekly net drain from money markets in 11 weeks, prompted concern that the central bank could be heading for policy tightening and may raise benchmark lending rates in the coming months.
But Li said he believes that economic restructuring, which will make the Chinese economy less investment-dependent, more consumption-driven and energy-efficient, is more important than control of credit expansion.
“Readjustment in the economic structure is the key,” he said.

Shopping for energy efficiency

Shopping for energy efficiency

 

Customers select energy-saving products in a supermarket in Beijing. Schneider Electric is funding a project for providing energy efficiency solutions for the country’s retail sector. [Asianewsphoto]
Schneider Electric, the global specialist in energy management, recently initiated a groundbreaking collaboration with industry bodies and leading international research laboratories to analyze the potential for energy efficiency in China’s retail sector.
The retail sector is the biggest energy consumer of all large public buildings. The collaboration aims to conduct research, make recommendations and eventually draft a tentative policy for government decision-makers.
“This is an exciting opportunity to be part of a pioneering project that will change the face of energy efficiency for buildings in China. Not only is retail a sector with an enormous energy-savings potential, but it is also an area that has not been studied deeply in the past. We at Schneider Electric are proud to collaborate with such prestigious partners in this promising project,” said Noel Girard, Schneider Electric China’s vice-president for strategy.
The joint project brings together Schneider Electric and the research centers of Lawrence Berkeley National Laboratory in the United States, the Energy Research Institute of China’s National Development and Reform Commission and Tsinghua Building Energy Research Center, as well as industry players such as Swire Properties, Bureau Veritas and Carrefour.
These parties are leaders in their fields, bringing a global perspective to energy efficiency and technology tin China’s shops.
Schneider Electric is instigating and funding the project, working in conjunction with research bodies that will execute the project, and retail bodies that will provide raw data.
The three-year project will develop benchmarking and financial tools to assess the benefits of retrofit projects, as well as research new forms of financing to boost investment in this sector.
The research will be used to gain a full picture of retail bulidings’ energy consumption, assess current technologies and then provide recommendations.
“The retail sector is a big segment for energy efficiency. There is huge potential for China to save electricity consumption if everybody in the sector can get involved,” said Girard.
“We at Schneider Electric always believe that through an optimized power application, supervision and control of energy consumption, a 30 percent energy saving can be implemented.”
Schneider Electric has helped French retail chain Carrefour boast China’s first energy-efficient supermarket following a government appeal for energy savings in the retail sector.
To meet its energy intensity target, the Chinese government, in its 11th Five-Year Plan (2006-10), said it wanted to cut energy consumption per unit of gross domestic product by 20 percent from 2005 levels. The Ministry of Commerce in 2007 called for an energy saving initiative for supermarkets, shopping malls and other retail stores with an area of more than 10,000 square meters.
“The chain store business is a low profit sector. However, if a supermarket can invest 1 yuan in energy saving equipment, its electricity cost will be cut by 100 yuan,” said Girard.
In late 2007, Carrefour and Schneider Electric started to cooperate on the rebuilding and redesigning of Carrefour supermarkets to save energy.
The two parties aimed to cut the energy consumption of Carrefour’s old stores by 15 percent and newly-opened stores by 20 percent.
Carrefour’s supermarket in the Wangjing district of Beijing, the retail conglomerate’s 109th store in China, was the first project for Schneider Electric in the initiative.
Schneider Electric spent a year establishing an expert group to do the onsite audit, tailoring a power solution, and implementing and testing it.
The solution included building power control, light control, energy inspection mechanisms, electricity systems, and changing some power distribution equipment.
“Under our power solution, the lights and air conditioner in the office area of the supermarket can be turned on and off using sound. If staff leave the office to go to the store, after 10 seconds, the light and air conditioner will turn off automatically,” said Girard.
The company also designed a long-distance meter reading system for Carrefour. The chain’s control center in Shanghai can easily read the power consumption data of all its stores across China every day and react accordingly.
Since the first project, Schneider Electric has helped Carrefour to rebuild the power control systems in more than 50 supermarkets.
According to Carrefour, it spent 2 million yuan on rebuilding the power system of its Wangjing store. Now the store can save 15 to 20 percent of its previous consumption, enabling it to recoup the cost within three years.

Longer cars demanded by Chinese

Longer cars demanded by Chinese

Bigger is better say drivers who want more leg room in their autos.
China’s luxury sedan market has some peculiarities all its own in one respect.
Customers like a long wheelbase on their cars, indicated by the letter “L” in the name of the model.
“If the car body has not been extended to provide enough inside space, it’s almost impossible for a luxury sedan to survive in China’s high-end vehicle market, especially the official car market,” said Jia Xinguang, an independent auto analyst based in Beijing.
“If someone is spending half a million yuan to buy a car, why choose a smaller one?” asked An Li, a 53-year-old civil servant who is considering buying a BMW 530Li. “A big car not only brings me comfort, but also indicates my taste and wealth.”
German luxury car brand Audi has been the biggest winner with its long wheelbase strategy in China.
Its flagship model Audi A6L, the first luxury car tailored for the Chinese market since 2000, has helped Audi maintain its dominant position in the sector, with around a 40 percent market share. Its major rivals BMW and Mercedes-Benz lag far behind with a market share of no more than 25 percent each.
The 10-centimeter longer Audi A6L harvested extraordinary sales of 25,368 units in 2005. In 2006, sales more than doubled to 57,350 units.
In 2007, no more than two years after the first extended version hit the market, the 100,000th Audi A6L rolled off the production line.
In 2008, the A6L model became the first luxury car to break the 200,000 sales barrier.
“The success of the A6L is a typical example of the automaker having to consider the demands of local consumers,” said Jia.
“The key to winning in China’s official and high-end limousine market for automakers is to provide what is required of an official car. It’s something that reflects Chinese consumers’ philosophy when purchasing vehicles,” agreed Xiang Hansong, an auto marketing expert.
Bigger is better
“In China, bigger is better. It reflects prestige. In particular, when buying a luxury car, affluent Chinese and officials like to show off their wealth and social status by having a bigger car. For them, a big car indicates luxury and displays their difference from ordinary men in the street. The extended version brings them more psychological satisfaction than any requirement for comfort.”
Because most official cars and those owned by businessmen are chauffeur-driven in China, the space and comfort for rear-seat passengers is a top priority when purchasing luxury sedans.
The longer wheelbase lends the model an especially roomy feel and makes getting into the rear seats easier. In addition, the longer wheelbase is of particular benefit to rear-seat passengers, who can enjoy more leg room.
“Most Chinese are on their first car and it’s for the use of all the family. Space and comfort for their family members are more important than the pleasure of driving, something that western people attach more weight to,” added Jia.
China is the most important luxury sedan market in the world for global automakers. Last year, when the financial crisis hit the high-end limousine market heavily in western countries, China’s luxury car market, in contrast, increased dramatically by 20 percent on average.
Many luxury carmakers, such as Mercedes-Benz, enjoyed a more than 50 percent sales jump in rural China.
Analysts believe that the growth will continue over the coming years. They see huge potential for the fastest-developing country.
“Then, nobody will be able to ignore the requirements of Chinese consumers, no matter how unique they are,” said Jia. “The market response has proved that the long wheelbase strategy is necessary for luxury car producers.”
In 2006, BMW launched its elongated 5 Series in China, with a wheelbase 14 centimeters longer. The extended version increased the 5 Series’ sales by 50 percent that year.
Last year, Audi launched the lengthened A4L, with high hopes of replicating the success of the A6L.
“The long-wheelbase version of the Audi A4 is being produced exclusively in China for the Chinese market. With this premium product, we chose to go even further than elsewhere in the world to meet the requirements of our Chinese customers,” said Peter Schwarzenbauer, a member of the board of management for marketing and sales at Audi AG.
“With the customized Chinese A4L, which we subjected to rigorous testing in China, we are impressively demonstrating our market leadership in China’s premium segment. The extension will definitely increase the competitiveness of our A4L model.”
According to Audi, many years of feedback and customer surveys found more than 70 percent of luxury auto users hope to obtain a medium-sized luxury car combining sportiness and comfort with ample rear space.
Developed by more than 2,000 Chinese and German technicians over three years, Audi found that for a luxury medium-level model like the A4L, 60mm strikes a perfect balance between sportiness and comfort.
Following the trend after seeing the huge success of other carmakers in building unique limos for the country, Volvo launched the long wheelbase version S80L sedan last year, only for the China market. It demonstrated the importance of the Chinese market to global carmakers as well as the unique forces and demands within that market.
Even the conservative and prudent German premium car brand Mercedes-Benz cannot ignore the special demands of Chinese consumers. It will locally produce the extended version of the New E Class this year in Beijing.

3D TVs to boost TV market in 2010

3D TVs to boost TV market in 2010

File photo shows participants wearing special glasses for a 3D TV watch a 3D movie through LG Electronics’ 3D TV during the company’s 3D television strategy presentation at LG Electronics’ R&D centre in Seoul December 15, 2009. (Xinhua/Reuters File Photo)
Many TV giants are displaying a new generation of TVs — the 3D TVs, in one of the biggest electronic shows in the world, the Consumer Electronics Show in Las Vegas, to boost the market, according to news reports on Monday.
Panasonic expects to sell 1 million 3D TVs in 2010, hoping the new technology will satisfy consumers’ latest curiosity.
“It’s a challenging market. We need something to kick us out of this,” said Panasonic’s Elsuke Tsuyuzaki.
Many CTOs eye this year as really a breakthrough year for the 3D screen technology, as the latest 3D movie “Avatar” has topped world box office for weeks since its release.
According to statistics from the movie industry, this year around 20 out of 170 movies will be made in 3D, double the number from last year.  set
TV corporations will not stand aside and see the boom in the 3D movie market, as pointed out by Jeffrey Katzenberg, the head of Dreamworks Animation, “While 3D has taken many years to penetrate in the movie theatres, I believe 2010 is the year it will begin to enter the living rooms.”

Fujian builds new nuclear generator

Fujian builds new nuclear generator


The ceremony marking the start of building its third generator of Ningde nuclear power plant is held in Ningde, southeast China’s Fujian Province, Jan. 8, 2010. Ningde nuclear power plant, the first in Fujian, started building its third generator Friday. With an investment of 50 billion yuan (6.8 billion U.S. dollars), the Ningde plant would be equipped with four 1-million-kilowatt generators in the first-phase construction. Its first generator would be installed in 2012. (Xinhua/Hu Su)
Ningde nuclear plant, the first nuclear power station in east China’s Fujian Province, started building its third generator Friday.
With an investment of 50 billion yuan (6.8 billion U.S. dollars), the Ningde plant would be equipped with four one-million-kw generators in first phase construction. Its first generator would be installed in 2012, said Li Yinong, general manager of Ningde Nuclear Power Company Ltd.
When the first phase project is completed, the station could generate up to 30 billion kwh of power every year to ease the power shortage in Fujian. It would also help reduce coal consumption by 12 million tonnes, thus cutting greenhouse gas emission by 27 million tonnes, he said.
China will have an installed nuclear power capacity of 40 million kw by 2020, accounting for 4 percent of the country’s total power generation.

Millions of Taiwanese tour mainland in 2009

Millions of Taiwanese tour mainland in 2009

A total of 4.45 million trips were made from Taiwan to the Chinese mainland in 2009, a year-on-year increase of 1.5 percent, according to a report by China’s National Tourism Administration, xinhuanet.com reported.
The report said that the improvement of the cross-Straits relations and the Taiwanese belief in the mainland’s fast economic recovery are fuelling an increase in trips.
Cross-Straits direct flights have increased landing on more cities, which brought more tourists to the mainland and improved the cooperation between Taiwan and the mainland.
Mainland tourists to Taiwan totaled 639,991 trips with 24,564 tour groups between July 2008 and December 18, 2009, bringing direct revenue of $1.13 billion to Taiwan, the report said.

Chinese auto market takes over US

Chinese auto market takes over US

 

China’s passenger vehicle market ended last year with a 59 percent year-on-year sales increase to surpass the United States as the world’s largest auto market for the first year, thanks to the central government’s stimulus package.
The domestic sales of cars, sports-utility vehicles (SUV), minivans and multi-purpose vehicles (MPV) hit 10.26 million units last year, surging from 6.4 million units in 2008, said Rao Da, secretary-general of the China Passenger Car Association on Friday.
The growth is also the highest in the country’s auto history, with total automobile sales expected to surge 44 percent year-on-year to 13.5 million units in 2009.
Statistics from the US consulting institution Center for Automotive Research showed that new car sales in the US last year plunged 21 percent year-on-year to a 27-year low of 10.43 million units, more than 3 million behind China.
The China Association of Automobile Manufacturers (CAAM) is expected to release detailed market figures of the country’s automobile industry on Monday.
The spike in vehicle sales was largely boosted by the government’s stimulus policies for lifting market demand, which included tax cuts on small-displacement automobiles, subsidies for trade-ins and subsidies for farmers to buy vehicles.
A low comparative base in 2008, when car sales growth slowed to 6.7 percent with 9.38 million vehicles sold, also helped boost 2009 figures.
To further support the world’s fastest growing auto market, the Chinese government said last month it will extend stimulus measures in the automobile industry for one more year.
The purchase tax for smaller cars will be lifted from the current 5 percent to 7.5 percent of the total vehicle price. The government also decided to raise the subsidy for trade-in cars from between 3,000 and 6,000 yuan ($440 to $880) to between 5,000 yuan and 18,000 yuan per vehicle.
The government’s continued support for the industry promises to fuel its rise for the coming years.
Automobile industry consulting firm Sinotrust predicted that vehicle sales will reach 15.13 million units this year, with a year-on-year growth rate of 15.2 percent.
According to the Ministry of Public Security, until the end of last year, almost 200 million Chinese people are able to drive a vehicle, making up about 15 percent of the country’s 1.3 billion population.
“Natural demand will continue to expand in the next few years,” said Lang Xuehong, chief auto industry analyst at Sinotrust.
Chinese automakers launched a record 221 new passenger vehicle models last year, with a majority of them upgraded models and less than half being new ones, according to the latest statistics from the CAAM.
Chinese automakers are expected to launch about 100 new models this year.
The brisk sales have also brought challenges to China’s appeal for a green society.
However, a number of analysts said the sales may also speed up automakers’ efforts to develop next-generation energy-efficient and emission-free vehicles.
Moreover, “the revised policy for this year, with tripled subsidies to encourage the replacement of outdated vehicles with high emissions and unstable driving performance, will contribute to an environmentally friendly society in which the automobile industry has a heavy responsibility,” said Yale Zhang, director of the Greater China Vehicle Forecasts for US auto industry consultancy CSM Worldwide.
Still, Chinese cities may face worsening traffic as the car boom puts an increasing number of people behind the wheel, with a number of local governments already expressing concern about the rising number of cars.
Zhang Gong, director of Beijing’s municipal commission of development, said the capital will enter the “automobile age” when every 100 families own 66.1 cars.
The capital is rated in a Sohu.com survey of more than 5,000 Web users as the most crowded Chinese city in November.