Medium-sized Banks Lead Satisfaction Survey in China

     Chinese customers feel more satisfied with services from medium-sized banks than with the country’s top three State banks, according to a national survey of 4,684 customers conducted by marketing information firm Market Probe China.

     China Merchants Bank, a mid-sized lender based in Shenzhen, took the crown as the bank customers are most satisfied with, according to the survey.

     Industrial and Commercial Bank of China (ICBC), the world’s largest bank by market value, failed to make the top ten in Market Probe’s banking customer satisfaction list. The other two of China’s top three banks, China Construction Bank (CCB) and Bank of China (BOC), tied for seventh place.

     Although independent surveys of customer satisfaction have become industry standards in most developed countries, they are rarely seen in China.

     Market Probe’s survey is the first independent and unbiased survey of customer satisfaction in China’s banking industry. Xu Jingkui, president of Market Probe China, said his company plans to conduct such surveys every year. It asked customers to rate seven different categories of retail banking services in Chinese banks: branch experience, credit card, personal loan, wealth management, private banking, telephone banking and Internet banking.

     Medium-sized banks such as China Merchants Bank, Shanghai Pudong Development Bank and Industrial Bank topped Market Probe’s customer satisfaction list in all categories.

     Market Probe’s survey is based on answers from Internet users through Chinese Internet portal Sohu.com’s finance section from Dec 15, 2008 to March 28, 2009.

China’s Holdings of US T-Bonds Rise by $4.6 bln

     China’s holdings of US Treasury Bonds (T-Bonds) increased despite the drop in its foreign exchange reserves during the first two months of this year.

     According to Shanghai Securities News, China’s holdings of US Treasury Bonds (T-Bond) increased despite the drop in its foreign exchange reserves during the first two months of this year. The official Web site of the US Treasury Department released the latest statistics on April 15, showing that China’s holdings of US treasury bonds hit 744.2 billion US dollars by the end of February, about 4.6 billion more than it was a month ago.

     According to the Web site, China’s holdings of US T-Bonds have constantly increased since February 2008, with a growth of 267.3 billion US dollars over the last year.

     In contrast, China’s foreign exchange reserves increased by only 7.7 billion US dollars in the first quarter of this year, about 146.2 billion US dollars less than the growth during the same period last year. As for monthly statistics, China’s foreign exchange reserves dropped by about 32.5 billion US dollars in January, compared with that at the end of December. In February, the decline reduced to 1.39 billion US dollars.

     Based on the drop in China’s foreign exchange reserves and the increase in its holdings of US T-Bonds, some analysts have come to the conclusion that US T-Bonds are sill one of best foreign exchange reserves investments.

     Hu Xiaolian, administrator of the State Administration of Foreign Exchange (SAFE), said recently that China would not adjust its foreign exchange reserves policies because of the short-term fluctuations in the forex market. She said that China would constantly buy US T-Bonds considering the lower overall credit risk.

     Statistics show that in addition to China, various countries and regions also increased their holdings of US T-Bonds in February. By the end of February, Japan remained the second largest creditor of the US government, with 661.9 billion in its treasury holdings.

China Launches Early Rice Futures Trading

     China started the trading of early rice futures contracts at 9 am at Zhengzhou Commodity Exchange on April 20, with September contract ER909 opening 110 yuan (USD 16.1) higher at 2050 yuan (USD 300.2) per ton.

     Early rice is a major grain product in China. The move means futures trading at the exchange now covers all major farm produces of the country.

     China Securities Regulatory Commission (CSRC) would “shift its work focus to improve existing futures contracts rather than listing new farm produce,” CSRC Chairman Shang Fulin said at the opening ceremony.

China Steel Makers Report Losses as Output Rises

     Chinese large and medium-sized steel makers lost 3.31 billion yuan (484.6 million US dollars) in the first quarter as overall steel output increased, China Iron and Steel Association (CISA) announced on April 22.

     The losses in March alone stood at 1.79 billion yuan (USD 262.1 million), CISA vice president Luo Bingsheng told a work conference.

     “The increased steel output in the first quarter is the major reason for the losses,” he said.

     In the first quarter, 20 out of 72 large and medium-sized member steel makers reported losses, while during the same period last year, the steel sector reported profits of 47.16 billion yuan (USD 6.91 billion)

     Crude steel output rose 1.74 million tons year on year in the first quarter to 124.7 million tons. Daily steel output stood at 1.41 million tons, which was equivalent to 517 million tons a year, significantly higher than the annual goal of 460 million tons.

     Steel prices had fallen to the 1994 level, Luo said.

     Steel exports fell 50 percent year on year to 5.14 million tons in the first quarter, and “steel for export was sold on the domestic market, which played a big role in the supply increase,” he said.

     CISA honorary president Wu Xichun blamed the increased capacity on small and medium-sized steel producers.

     “Seventy-two CISA members reduced steel output from an average of 1.14 million tons per day to 1.11 million tons, but the small and medium-sized companies increased daily production from 290,000 tons to 340,000 tons,” he said.

He called for the elimination of companies using outdated technologies.

Central China Expo Starts in Anhui

     China’s central region should speedup construction of its grain production base, infrastructure facilities and transportation bubs, a senior official said on April 26 in Hefei, capital of Anhui Province.

     Chinese Vice Premier Wang Qishan made the remarks at the 4th Central China Expo which opened on April 26.

     “Economic development of the central region has kept good momentum despite the global financial downturn,” said Wang, adding that in the past 15 months, the region has enjoyed higher GDP growth rates than the country’s average.

     He attributed the advantages to the region’s abundant resources, broad markets and convenient transportation facilities.

     Wang, also a member of the Political Bureau of the Central Committee of the Communist Party of China, urged the region to optimize investment environment, speed up international exchanges and explore the rural market.

     The Expo attracted 16,000 business people despite the global financial crisis, including representatives from 300 of the world’s top 500 multinational corporations such as Carrefour and IBM.

     Also present were foreign officials, including Noli De Castro, vice president of the Philippines; Yok Mu-ming, New Party chairman from Taiwan; and chief executives of the Hong Kong and Macao special autonomous regions Donald Tsang and Edmund Ho Hau Wah.

     China’s vast central region, comprising Shanxi, Henan, Hunan, Hubei, Jiangxi and Anhui provinces, covers more than 10 percent of the country’s land territory and 28 percent of population.

     The previous three sessions, held in the capitals of Hunan, Henan and Hubei provinces, had attracted more than 30 billion US dollars of foreign investment.

China’s Military Equipment Firm Says Q1 Sales Rise 8.4%

     China South Industries Group Corporation (CSIGC), one of the country’s military firms, said on April 26 that its first-quarter sales rose 8.4 percent year on year to 38.99 billion yuan (USD 5.73 billion).

     The company pocketed 710 million yuan (USD 104 million) in profits in the first three months, with monthly profits increasing month on month, according to statistics released by the company. It did not give annual comparative figures for first-quarter profits.

     CSIGC is a manufacturer of special equipment for the country’s armed forces, and also produces equipment for civilian uses.

     The company’s products include special equipment, automotive spare parts, motorcycles, and equipment for power transmission and transformation, new energy and the fiber-optic industry.

     In the first quarter, the company sold 300,000 sets of vehicles, up 13.2 percent year on year, according to the centrally administered state-owned enterprise. The growth was more than 9 percent higher than a 3.88-percent growth in the country’s overall domestic auto sales in the same period.

     It said sales from its power transmission and transformation, as well as new-energy sectors, jumped almost 60 percent year on year to 3.44 billion yuan (USD 504 million). The company’s sales of transformers surged 73 percent.

     It did not offer figures on other categories of products.

Shanghai to Issue Consumption Coupons to Boost Tourism

     Shanghai will issue discount vouchers worth about 900 million yuan (USD 131.8 million) to boost local tourism that were affected by the global economic downturn, a tourism official said here on April 26.

     The Pudong New District will give out 310,000 pamphlets of consumption coupons between April 28 and mid May to residents of Shanghai and two neighboring provinces of Jiangsu and Zhejiang, said Li Zhengming, deputy director with the tourism and exhibition department of the economic committee of Pudong.

     Domestic tourists can enjoy up to 40 percent price off in 12 scenic spots, 32 restaurants, 29 hotels and 9 travel agencies while traveling in Pudong between May to August, saving more than 3,000 yuan (USD 439.4), Li said.

     The vouchers are expected to incur up to 5 billion yuan (USD 732.6 million) in domestic consumption and attract more visitors to the main venues of the Shanghai Expo, which is set to be held in Pudong between May 1 to Oct. 30 next year, Li added.

     The coupons will be released via tourist consultation centers and banks in Shanghai, Jiangsu and Zhejiang.

     Affected by the global financial crisis, tourist arrivals and star hotel occupancy rate in Shanghai dropped by 9.34 percent and 10 percent respectively in the first quarter of the year as to compare with the same period of last year, according to the municipal tourism bureau.