Dragonlady Blog

Market news

China’s Stocks Fall Most in 6 Weeks on Fed Reserve Speculation

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aII0A_.5FXXo

China’s stocks fell the most in six weeks as commodity and consumer companies dropped on concern recent gains were excessive and speculation the size of a possible U.S. asset-purchase program may disappoint investors. Jiangxi Copper Co. and PetroChina Co. lost more than 2 percent as the Wall Street Journal reported the Federal Reserve may next week announce a program of U.S. Treasury purchases worth a few hundred billion dollars. Gree Electric Appliances Inc. paced declines for consumer companies. China Vanke Co., the biggest developer, rose 2.6 percent as Citigroup Inc. said property curbs will only have a temporary effect on demand.

1,181 listed firms post 48% rise in net profit

http://www.chinadaily.com.cn/business/2010-10/27/content_11466813.htm

A total of 1,181 publically listed companies that have released the third quarter report posted total revenue of 2.74 trillion yuan ($410 billion), up 34.35 percent year-on-year, according to the statistics from the China Securities Journal. These listed companies achieved 249.98 billion yuan of operating profit and 197.7 billion yuan of net profit, rising 44.59 percent and 48 percent, respectively.

 

Industry news

Beijing Plans to Boost Product-Safety Rules

http://online.wsj.com/article/SB10001424052702303891804575576272885290234.html

China’s consumer-safety agency, at the urging of U.S. and European officials, plans to tighten product-safety regulations in an effort to stamp out defective and dangerous exports and to ease trade tensions between China and the U.S. Chinese manufacturers will be held accountable for the safety of their products, said Zhi Shuping, head of the Administration of Quality Supervision, Inspection and Quarantine, in a meeting Tuesday with European and U.S. counterparts.

EU Pushes China to Open Bidding

http://online.wsj.com/article/SB10001424052702303341904575576271333538184.html

Seeking Access to Public Contracts, Bloc Urges Beijing to Sign 1996 Treaty. Amid the global brawl over Beijing’s exchange-rate policy, the European Union is leading a push against China on another front: public contracts. China restricts bidders on most public contracts to companies whose trademark and technology are registered in China, a category that includes many foreign companies, but one that can also be used as a tool to keep them out.

Hot Potato in China’s Rising Food Costs

http://online.wsj.com/article/SB10001424052702304173704575577582904282968.html

China’s hunger is cascading across global markets, pushing prices of food commodities sharply higher lately. Back home, this boom is becoming a source of worry. Over the next decade, China’s annual grain demand is likely to reach 573 million tons, which is above its current production levels.

Smaller firms to benefit from new definition of SMEs

http://www.chinadaily.com.cn/business/2010-10/27/content_11463340.htm

China is revising the definition of small and medium-sized enterprises (SMEs) to give smaller companies wider access to policy and financial support worth tens of billions of yuan. Wang Lijian, spokesman for the Ministry of Industry and Information Technology, told China Daily that the ministry is working on the revision, but did not elaborate.

Investors flocking to central area

http://www.chinadaily.com.cn/business/2010-10/27/content_11463248.htm

Labor costs, infrastructure and market attracting firms to region. BEIJING – Cheap and qualified workers as well as a growing consumer market and maturing infrastructure are helping to turn China’s central region into a popular destination for foreign and domestic investment, many companies have said. Earlier this month, Pfizer, the world’s largest pharmaceutical company, announced that it will set up a research and development (R&D) center in Wuhan, capital of Hubei province.

Soaring coal prices set to hit power generators

http://www.chinadaily.com.cn/business/2010-10/27/content_11463311.htm

Many State-owned enterprises in sector suffering from 50 percent losses this year. BEIJING – Chinese power generators are likely to suffer losses this year as higher coal prices continue to erode profit margins, industry figures showed. Hong Kong-listed Huaneng Power International, China’s largest electricity provider, said on Monday that its third quarter profit fell by nearly half from the figure a year ago due to higher costs in power generation.

Hong Kong’s Luxury Home Prices Surpass 1997 Peak

http://noir.bloomberg.com/apps/news?pid=20601089&sid=a2RdvPW6PcNk

Hong Kong luxury home prices have exceeded the previous peak of 1997, fueling speculation the government may introduce further steps to prevent the housing bubble from bursting. Prices of apartments with an area of at least 100 square meters (1,076 square feet) are 13.8 percent higher than in the third quarter of 1997, the Hong Kong Monetary Authority said in a slide presentation posted on its website yesterday.

 

 

Company news

SAIC Motor Third-Quarter Profit Jumps 47% on GM, VW

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aRT98fkW.acE

SAIC Motor Corp., China’s largest domestic automaker, boosted third-quarter profit 47 percent as it sold more cars with partners General Motors Co. and Volkswagen AG in the world’s biggest auto market. Net income for the quarter climbed to 3.7 billion yuan ($554 million) from 2.53 billion yuan a year earlier, the Shanghai-based automaker said in a statement to the city’s stock exchange today. Sales more than doubled to 81.6 billion yuan.

Bank of China Profit Gains 29% on Demand for Credit

http://noir.bloomberg.com/apps/news?pid=20601089&sid=atf130bKOOeg

Bank of China Ltd., the nation’s fourth-largest lender by assets, said third-quarter profit gained a more-than-estimated 29 percent as economic growth bolstered demand for loans and it reduced provisions. Net income climbed to a record 27.2 billion yuan ($4.1 billion), or 0.1 yuan a share, from a restated 21.05 billion yuan, or 0.08 yuan, a year earlier, the Beijing-based bank said in a statement today. Profit beat the 23.9 billion yuan median estimate of nine analysts surveyed by Bloomberg News.

Apple Launches Chinese App Store

http://online.wsj.com/article/SB10001424052702303341904575577211480252000.html

Apple Inc. announced Tuesday that it launched an online store and a simplified-Chinese version of its App Store for customers in China, the latest move in an aggressive expansion by the company after years of neglecting the market. Chinese customers can now order Apple products, including the iPhone 4 and the iPad, online and have the products delivered. Prior to this move, iPhone buyers had to order the devices on Apple’s Chinese website and pick them up at one of Apple’s four mainland Chinese Apple Stores in Beijing and Shanghai.

Zurich to Invest $420 Million in New China Life

http://online.wsj.com/article/SB10001424052702304173704575577563519877910.html

Zurich Financial Services AG Wednesday said it will spend as much as $420 million to participate in the capital raising of unlisted New China Life Insurance Co., or NCI, a move aimed at maintaining the Swiss firm’s foothold in one of the world’s fastest-growing insurance markets.

Talks to Sell United Biscuits to Bright Food Falter

http://online.wsj.com/article/SB10001424052702303341904575576443453275682.html

Negotiations to sell United Biscuits to China’s Bright Food Group are near collapse, people familiar with the matter say, dealing a blow to efforts by a pair of private-equity firms to unload the U.K. snacks maker, known for its Carr’s crackers. Blackstone Group and France’s PAI Partners had entered into exclusive talks with Shanghai-based Bright Food for a deal could have been valued at more than £2 billion ($3.2 billion).

PetroChina Net Beats Estimates as Prices, Output Rise

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aRD5WJrlxe5k

PetroChina Co., Asia’s biggest company by market value, posted a 13 percent gain in third- quarter profit, beating estimates, as the oil and gas producer increased output to benefit from higher crude prices. Net income rose to 34.7 billion yuan ($5.2 billion), or 0.19 yuan a share, from 30.8 billion yuan, or 0.17 yuan, a year earlier, China’s largest oil and gas producer said in a statement to the Shanghai stock exchange today. This compares with a mean estimate of 33.6 billion yuan in a Bloomberg survey of seven analysts.

Market news

China Benchmark Stock Index Falls as Economic Growth Slows

http://noir.bloomberg.com/apps/news?pid=20601089&sid=awj5Km_CXN6g

hina’s benchmark stock index dropped the most in a month as banks and industrial companies fell after government data showed consumer price growth accelerated and economic expansion slowed. Agricultural Bank of China Ltd. tumbled the most since its July debut. An index tracking bank shares snapped an 11-day winning streak as the fastest inflation in 23 months fueled concern policy makers will add to this week’s interest-rate increase. Sany Heavy Industry Co. and China Railway Erju Co. slumped more than 2 percent after the economy grew 9.6 percent in the third quarter, the smallest gain in a year.

China’s Economy Slows

http://online.wsj.com/article/SB10001424052702304011604575564001925040186.html

China’s gross domestic product rose 9.6% from a year earlier in the third quarter, slowing from 10.3% growth in the second quarter, official data issued Thursday show, as the government withdrew stimulus and took measures to cool sectors such as the property market. The moderation in economic growth was in line with economists’ expectations. Given the central bank’s surprise decision to raise benchmark interest rates earlier this week, the data likely indicate the authorities are comfortable with the current slowdown and are more concerned about rising inflation and property prices.

 

China 9.6% Growth Adds Weight to Calls for Yuan Gains

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aXFisq5p1EA8

China’s economy grew 9.6 percent in the third quarter and inflation accelerated to the fastest pace in almost two years, adding weight to calls for the engine of the global recovery to let its currency appreciate more rapidly. Growth exceeded the 9.5 percent median estimate of economists in a Bloomberg News survey. Consumer prices jumped 3.6 percent in September from a year earlier, the statistics bureau said in Beijing today. That matched the median forecast.

China’s September CPI rises 3.6%

http://www.chinadaily.com.cn/business/2010-10/21/content_11439301.htm

China’s consumer price index (CPI), a major gauge to measure inflation, rose by a 23-month high of 3.6 percent in September from one year earlier, the National Bureau of Statistics (NBS) said Thursday.

The growth rate was 0.1 percentage point higher compared with that in August, the NBS said. On a month-on-month basis, China’s CPI grew 0.6 percent in September from August. In the first three quarters China’s CPI grew by 2.9 percent, the NBS said.

China’s Sept PPI up 4.3%

http://www.chinadaily.com.cn/business/2010-10/21/content_11439544.htm

China’s producer price index (PPI), a major measure of inflation at the wholesale level, increased by 4.3 percent year-on-year in September, the National Bureau of Statistics (NBS) announced Thursday.

On a month-on-month basis, China’s PPI grew 0.6 percent in September from August, the NBS said.

China’s Jan-Sept fixed asset investment grows slower

http://www.chinadaily.com.cn/business/2010-10/21/content_11441741.htm

The growth of China’s fixed assets investment during the first nine months shows signs of slowing, according to figures released by China’s statistics authority Thursday. The country’s total fixed assets investment rose 24 percent for the January-September period year on year to 19.22 trillion yuan ($2.89 trillion), the National Bureau of Statistics (NBS) said in a statement published on its website.

Urban household income grows to 15,756 yuan in Jan-Sept

http://www.chinadaily.com.cn/business/2010-10/21/content_11439640.htm

In the first nine months of this year, the per capita income of urban households totaled 15,756 yuan ($2,369) and of which, the disposable income was 14,334 yuan, up 10.5 percent year-on-year. The real growth is 7.5 percent after deducting price factors, the National Bureau of Statistics (NBS) announced Thursday.

Zhou Wrestles With BRIC Capital Inflow Dilemma: China Credit

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aFy9TfMXrECs

China’s surprise decision to raise interest rates this week highlights the challenges facing the world’s developing nations as they struggle to keep capital inflows from destabilizing their economies. The increase in borrowing costs, the first since 2007, comes after policy makers ordered the largest banks last week to set aside more funds as reserves for the fourth time this year and allowed the fastest pace of yuan gains since 2005 in September. Government data today showed economic growth slowed in the third quarter as inflation accelerated to a 23-month high.

Beijing, Fighting Traffic, Considers Car Limits

http://blogs.wsj.com/chinarealtime/2010/10/21/china-fighting-traffic-considers-car-limits/

Beijing officials are mulling limiting the number of cars on city roads in order to ease worsening traffic congestion, according to state media (report in Chinese). At a forum on urban development, Liu Yumin, deputy director for the Beijing Planning Commission, said, “Traffic problems will not be resolved by gains made in other areas.

 

Industry news

Chinese home buyers heading overseas

http://www.chinadaily.com.cn/business/2010-10/21/content_11438599.htm

Individual Chinese investors are quickening their expansion into the overseas property market as tightening measures on the sector at home continue to restrict their opportunities. So far, 13 local governments have rolled out policies to restrict the number of homes that a family can purchase. The further increase in down payments for both first and second homes has also raised the cost of investment.

Rare-Earth Prices Soar as China Quotas Hit Manufacturers Abroad

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aAEXcbYs4CCg

Rare-earth prices have jumped as Chinese export quotas crimped worldwide supplies for the elements used in the manufacture of disk drives, wind turbines and smart bombs. Prices have climbed sevenfold in the last six months for cerium oxide, which is used for polishing semiconductors, and other elements have more than doubled, according to Metal-Pages Ltd. in London, which tracks rare-earth prices.

 

Company news

Sinohydro Group boosts African stakes

http://www.chinadaily.com.cn/business/2010-10/21/content_11438559.htm

Sinohydro Group, a leading State-owned group in hydropower construction, will increase its investments in Africa, said a senior company official. “We are conducting a series of projects in some African countries, including a copper and cobalt mine in the Democratic Republic of Congo, and two hydropower stations, one in Mozambique, and the other in Zambia. We are also looking closely at investment opportunities in Liberia,” said Ding Zhengguo, assistant president in charge of overseas projects for Sinohydro Group, on Tuesday.

Shenzhen Zhongjin Shuts Zinc Smelter on Toxic Leak

http://noir.bloomberg.com/apps/news?pid=20601089&sid=a25rC9pKioNA

Shenzhen Zhongjin Lingnan Nonfemet Co., China’s third-largest zinc producer, suspended output at its Shaoguan smelter after authorities found that excessive levels of thallium were discharged by the plant into a river. Operations at the smelter were halted from today with the stoppage estimated to reduce the company’s net earnings by about 27 million yuan ($4.1 million) a month, according to a company statement to the Shenzhen stock exchange. The effects of the toxic spill into the Beijiang River have been controlled and measures have been taken to ensure the safety of drinking water, the company said.

Facebook Game Makers Kabam, Zynga Turn to China for Development

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aIDTCAfLJ4LQ

Facebook Inc. game developers Kabam and Zynga Game Network Inc. said they will increasingly turn to Chinese software designers to make games for the website, tapping engineering talent in the Internet’s largest market. Kabam, maker of the Facebook game “Kingdoms of Camelot,” set up a Beijing studio in May that has two unannounced titles under development, as many as are in progress at the company’s U.S. studios, Andy Lee, Asia managing director for Redwood City, California-based Kabam, said in an interview yesterday. Zynga, maker of the “FarmVille” and “Mafia Wars” games on Facebook, said it wants to harness China’s faster pace of innovation.

 

Market news

China’s Stock Index Climbs After Rate Increase; Insurers Gain

http://noir.bloomberg.com/apps/news?pid=20601089&sid=adKdFlPKxyTU

China’s benchmark stock index rose to a six-month high on speculation the nation’s first interest- rate increase since 2007 will help tame inflation and contain asset bubbles. China Life Insurance Co. and Ping An Insurance (Group) Co. rose more than 4 percent after Mirae Asset Securities said insurers will outperform in a rising rate environment. Liquor maker Kweichow Moutai Co. and Tsingtao Brewery Co. led gains among consumer stocks that are less dependent on the economy. China Vanke Co. and Poly Real Estate Group Co. slumped at least 6 percent as higher borrowing costs may deter demand for housing.

Most Asia Markets Fall on China Move

http://online.wsj.com/article/SB10001424052702304510704575562950317517416.html

Most Asian markets ended lower Wednesday after a surprise interest rate increase by China late Tuesday sparked a sell-off in global equity and commodity markets. But Chinese shares ended a bit higher after a drop in the opening minutes of trade, on hopes the mainland economy would continue to grow at a fast clip and that fund inflows would keep equities supported. The recovery helped South Korean and Taiwanese shares erase initial declines and some other markets pare losses.

China Rate Move May Lure Capital, Complicating Policy

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aKR30gtTlQyA

China’s decision to raise interest rates to combat inflation may have the opposite effect by luring more capital into the world’s fastest-growing major economy. The central bank yesterday unexpectedly raised borrowing costs for the first time since 2007, lifting the benchmark one- year lending rate to 5.56 percent from 5.31 percent. The deposit rate was increased to 2.5 percent from 2.25 percent.

Buy China Stocks on ’Dips’ After Rates, Goldman Says

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aX9i.J0h50jQ

Investors should buy Chinese stocks on any “dips” following an interest-rate increase in the nation, Goldman Sachs Group Inc. said. Higher rates are a “positive” signal for equities, JPMorgan Chase & Co. said. The central bank yesterday unexpectedly raised borrowing costs for the first time since 2007, lifting the benchmark one- year lending rate to 5.56 percent from 5.31 percent. The deposit rate was increased to 2.5 percent from 2.25 percent.

 

Industry news

China becomes global leader in clean energy: study

http://www.chinadaily.com.cn/business/2010-10/20/content_11434384.htm

China has become a leader in clean energy efforts, outstripping the United States and Japan, and leaving Australia lagging far behind, a study commissioned by the Australia’s Climate Institute showed on Tuesday. Global research unveiled countries including Britain, China and the US already have set up a higher direct and indirect carbon pricing.

Housing market hit by new rules

http://www.chinadaily.com.cn/business/2010-10/20/content_11433761.htm

14 cities put caps on purchases for residents and on housing loans. GUANGZHOU – Property sales have seen a sharp drop and there’s been an increase in the number of cancellations of home orders in Chinese cities that have introduced regulations to limit purchases of property. [Property tycoons suffer decline in their wealth] Dalian, in Liaoning province, is the latest to join in this move to control the rampant property market. On Tuesday, it suspended second-home purchases for families who are residents, while denying new home loans for migrant families who have not worked in the city for at least one year, said a local official.

Hedge Funds Eye Japan, China, Australia for Distressed Assets

http://noir.bloomberg.com/apps/news?pid=20601089&sid=acFcqkWLOve8

Hedge funds seeking distressed assets in Asia may find the best opportunities in Japan, China and Australia next year as banks sell soured loans, and small and medium-sized businesses struggle to attract funding. Japan, China and Australia form the bulk of the $1 trillion of corporate debt that is distressed or stressed in Asia as banks balk at lending to smaller companies and sell non- performing loans, Robert Appleby, chief investment officer at ADM Capital, said at a conference in Hong Kong yesterday.

China to boost natural gas pipelines network

http://www.chinadaily.com.cn/business/2010-10/20/content_11435212.htm

China will triple the total length of its natural gas pipelines in the next five years to meet rising demand, said industry insiders. The total length of natural gas pipelines in the country will reach 100,000 km by the end of 2015, compared with 36,000 km by the end of 2010, said Yang Jianhong, deputy director of the oil and gas pipeline department at the China Petroleum Planning and Engineering Institute.

 

Company news

Li Ka-Shing Said to Drop Out of U.K. Rail-Link Bid

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aH8Z.TkyZA9I

Hong Kong billionaire Li Ka-Shing’s Cheung Kong Infrastructure Holdings Ltd. dropped out as a potential bidder for Britain’s high-speed rail link to the Channel Tunnel, said two people with knowledge of the matter. Cheung Kong Infrastructure, which has studied the asset and expressed initial interest, decided it probably won’t make a formal bid, said the people, who declined to be identified because the discussions are private. Final offers are due by the end of the month, one of the people said.

China Mobile Reports 3.9% Rise in Net Profit

http://online.wsj.com/article/SB10001424052702304741404575563673479886104.html

China Mobile Ltd., the world’s largest mobile carrier by subscribers, said Wednesday its net profit for the January-September period rose 3.9% from a year earlier because its third-generation mobile services business grew, though competition intensified. The wireless operator’s net profit for the nine months ended Sept. 30 was 87.25 billion (US$13.13 billion), up from 83.94 billion yuan.

China Overseas Q3 operating profit nearly doubles

http://www.chinadaily.com.cn/business/2010-10/20/content_11436169.htm

China Overseas Land & Investment Ltd, the country’s top developer by market value, posted a near doubling of operating profit in its third quarter and appears on track to achieve its full-year sales target despite tightening policies, Reuters reported on Wednesday. China Overseas Land reported an operating profit of HK$3.4 billion ($436 million) in the July-September period, up 89 percent from HK$1.8 billion from a year earlier, according to company figures.

Fonterra plans dairy farm in Hebei

http://www.chinadaily.com.cn/business/2010-10/20/content_11435662.htm

New Zealand’s Fonterra Cooperative Group Ltd, has agreed to develop a dairy farm in Yutian, Hebei province to expand milk production in China, Bloomberg reported on Wednesday. The farm will hold 3,000 cows imported from New Zealand, the world’s largest dairy exporter said in a statement. Fonterra will invest NZ$42 million ($31 million) in the project, it said.

Ad sellers claim Google’s compensation

http://www.chinadaily.com.cn/business/2010-10/20/content_11433845.htm

Ad resellers threaten action over ‘lost compensation’ claims. BEIJING – Seven Google advertising resellers in China said on Tuesday that they will take “legal action” against the search engine if it does not fulfill their demands, which include compensation and an investigation into alleged internal corruption concerning the company’s employees. The dispute underlines the growing tensions between Google and its domestic advertising distributors, which arose after the United States-based company changed its strategy in China earlier this year and redirected users to its Hong Kong site.

China Southern Rises on 15-Fold Profit Jump Forecast

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aNXp57cvIJI4

China Southern Airlines Co., the nation’s biggest carrier, led airlines higher in Shanghai trading after saying nine-month profit probably rose more than 15-fold. The airline rose 1.8 percent to 11.45 yuan at the close of trading, after earlier gaining as much as 8.1 percent. China Eastern Airlines Corp. climbed 2.2 percent to 8.97 yuan. Air China Ltd. jumped 1.8 percent to 15.79 yuan.

NetSpend IPO Beats a China One

http://online.wsj.com/article/SB10001424052702304510704575562043516188972.html

Initial public offering investor expectations were upended Tuesday when a Chinese deal that was highly anticipated declined during its debut and a U.S. debit-card company that was dogged by its bank partner’s regulatory issues made trading gains. Shanghai-based ShangPharma Corp. traded down while U.S. debit-card company NetSpend Holdings Inc. rose on their first day as public stocks in the U.S. Both companies priced their IPOs at the midpoint of their expected ranges.

China Market news

China Stocks Climb to Six-Month High; Consumer Companies Gain

http://noir.bloomberg.com/apps/news?pid=20601089&sid=a2aqB2IJApuw

China’s stocks gained, driving the benchmark index above the 3,000 level for the first time since April, as technology and consumer companies rose on speculation the industries will gain from the country’s next five-year plan. Tsinghua Tongfang Co., a computer manufacturer, jumped by the 10 percent daily limit and Sanan Optoelectronics Co. gained 4.7 percent after the government said information technology will form a bigger part of the economy. Gree Electric Appliances Inc. and SAIC Motor Corp. paced gains by companies reliant on consumer spending after the ruling party pledged to increase household incomes as part of the next economic plan.

China Anoints Its Next Leader

http://online.wsj.com/article/SB10001424052702304410504575559623101416204.html

China’s Communist Party appointed Vice President Xi Jinping to a key military post, cementing his status as heir apparent to president and party chief Hu Jintao and removing much of the uncertainty surrounding the country’s leadership succession. The appointment comes at a pivotal time for China as its economic and military might grows. Many inside and outside the party will now be looking for signals as to whether Mr. Xi stands closer to Premier Wen Jiabao and others who appear to be pushing political reform, or to more conservative leaders, thought to include President Hu.

China Raises Interest Rates

http://online.wsj.com/article/SB10001424052702304510704575561780406217028.html

China’s central bank Tuesday raised interest rates for the first time in nearly three years, the strongest move yet by Beijing to withdraw stimulus that helped the economy weather the global slump but now threatens to fuel inflation. The People’s Bank of China said in a statement it will raise the one-year yuan lending rate to 5.56% from 5.31%, and the one-year yuan deposit rate to 2.5% from 2.25%.

China sets growth goal for new strategic industries

http://www.chinadaily.com.cn/business/2010-10/19/content_11427572.htm

China announced plans Monday to develop new strategic industries, the value-added output of which is expected to account for 8 percent of the country’s GDP by 2015. The industries include alternative energy, biotechnology, new-generation information technology, high-end equipment manufacturing, advanced materials, alternative-fuel cars and energy-saving and environmental protection, the State Council, or China’s Cabinet, said in a statement on its website, www.gov.cn.

Profits of China’s SOEs up 46% in first 9 months

http://www.chinadaily.com.cn/business/2010-10/19/content_11430683.htm

Profits of China’s state-owned enterprises (SOEs) hit 1.44 trillion yuan ($216.4 billion) in the first nine months, up 46.2 percent year on year, figures released Tuesday by the Ministry of Finance show. Combined profits of China’s SOEs grew 6.8 percent in September compared to August, according to a statement from the ministry.

World Bank Makes Case for Stronger Yuan

http://online.wsj.com/article/SB10001424052702304410504575561040281071232.html

China could help stem the rising inflation it is likely to face in the short term by guiding the yuan higher, the World Bank said in a report issued Tuesday. While further asset-price increases would pose a risk to China’s rapidly growing economy, “a gradual rise” in the Chinese currency’s nominal exchange rate could “help stem price pressures,” the Washington-based international financial institution said.

PBOC’s ‘Vicious Cycle’ Worsened by Fed, Yu Says: China Credit

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aLwwhtJSRueo

Moves by the U.S. Federal Reserve to print cash would spur capital flows into China, hampering the Asian nation’s efforts to damp inflation and counter yuan gains, said Yu Yongding, a former central bank adviser. The People’s Bank of China sold a net 209.7 billion yuan ($32 billion) of bills during the last nine months, following net redemptions of 579.5 billion yuan in 2009. It raised the reserve-requirement ratio last week for six banks, including the largest four, by half a percentage point for the fourth time this year, a move China Securities Co. estimated will cut lending by 170 billion yuan.

 

Industry news

China to reduce rare earth export quotas

http://www.chinadaily.com.cn/business/2010-10/19/content_11427356.htm

Concerns over declining reserves prompt government to act. Beijing – China will further reduce quotas for rare earth exports by 30 percent at most next year to protect the precious metals from over-exploitation, said an official from the Ministry of Commerce. He added that the country is now facing the possibility that reserves of medium and heavy rare earths might run dry within 15 to 20 years if the current rate of production is maintained.

Silver Exports From China May Slump by 40% This Year

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aBn0hFGHN_3Q

Silver exports from China, the world’s largest, may drop about 40 percent this year as domestic demand from industry and investors climbs, according to Beijing Antaike Information Development Co. Shipments may decline from about 3,500 metric tons in 2009, said Feng Juncong, chief analyst at the state-owned Antaike, without providing a specific forecast. Customs data show exports plunged almost 60 percent to 970 tons in the first eight months. Cancellation of an export rebate in 2008 is also hurting shipments, she said.

Unconventional gas demand set to soar by 2020

http://www.chinadaily.com.cn/business/2010-10/19/content_11427918.htm

Development of sector fits well with nation’s move to use cleaner energy. BEIJING – China, which now relies on coal for around 70 percent of its energy use, will see rapid growth in the consumption of unconventional gas including coalbed methane, shale gas and flammable gas in the next decade, a senior expert said on Monday. The country’s consumption of coalbed methane is expected to be 23 billion cubic meters (cu m) in 2020, which would account for 0.7 percent of its energy mix, Zhang Hongtao, chief engineer at the Ministry of Land and Resources, told an energy conference on Monday.

Hong Kong Lobbies for Time for Hedge Funds to Meet New EU Rules

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aLydYykByweg

Hong Kong’s government is in talks with the European Union to help hedge-fund managers in the city cope with proposed regulations that may make it harder to raise assets in Europe. Hong Kong is lobbying the EU for a “dual regime” which would allow the current system under which they raise assets to continue for “a number of transition years” before complying with Europe’s “passport regime,” said Julia Leung, Hong Kong’s undersecretary of financial services and the treasury.

 

Company news

BMW surpasses annual sales target

http://www.chinadaily.com.cn/business/2010-10/18/content_11424752.htm

Automaker will expand production after record growth. BEIJING – German luxury automaker BMW Group reported sales of more than 120,000 cars in the first three quarters this year on the Chinese mainland, accomplishing its expected annual target three months ahead of schedule. The group said in a recent statement that it sold 121,826 units of BMW and MINI brand cars on the Chinese mainland between January and September this year.

Li Family’s PCCW, Hutchison to Unveil Co-Network Plan

http://noir.bloomberg.com/apps/news?pid=20601089&sid=aOzqUDwdFd4c

PCCW Ltd., Hong Kong’s biggest phone company, plans to roll out a faster wireless network that’s jointly built with a unit controlled by the chairman’s father, Li Ka-shing, to meet demand from smartphone users. Details about the proposed fourth-generation network built by Richard Li’s PCCW and rival Hutchison Telecommunications Hong Kong Holdings Ltd. will be announced in the “next few weeks,” PCCW Managing Director Alex Arena said in an interview in Hong Kong yesterday, declining to elaborate.

Boeing to Test China Biofuel

http://online.wsj.com/article/SB10001424052702303496104575559752812658526.html

Boeing Co., in cooperation with Air China Ltd. and others, plans to test a commercial-jet biofuel in China produced from a locally grown plant by the middle of next year—part of an effort to commercialize cleaner fuels world-wide and bolster China’s potential as a biofuel provider. Boeing first tested a biofuel on a Virgin Atlantic Boeing 747 jet in early 2008 in London. It has since conducted similar tests a few more times, each time experimenting with different types of biofuels on different engines.

Rakuten, Baidu Open Online Mall in China

http://online.wsj.com/article/SB10001424052702303496104575559990958857942.html

Japanese e-commerce company Rakuten Inc. on Tuesday opened an online shopping mall in China with China’s Baidu Inc., attempting to tap the nation’s burgeoning Internet sector.

Rakuten will provide e-commerce expertise, while Baidu’s marketing presence as China’s dominant Internet search engine will help generate traffic, Rakuten Chief Executive Hiroshi Mikitani said at a news conference in Tokyo.