News Briefs

Chinese banks active in transacting yuan cross-border settlement

Chinese banks have been active in transacting yuan cross-border settlement after the first deal was made on July 6.

The Industrial and Commercial Bank of China (ICBC) said on July 7 that it had dealt with yuan cross-border settlement totaling 17 million yuan (USD 2.49 million) in two days.

Many banks in Guangdong Province were active in dealing with yuan cross-border settlement. The Bank of China Guangdong branch transacted yuan cross-border settlement totaling 7.96 million yuan (USD 1.17 million) on July 7.

“Guangdong Province has a large economic scale and is highly dependent on foreign trade. Yuan cross-border settlement could help enterprises avert exchange rate risks and reduce costs,” said Cao Licong, deputy director of the BOC Guangdong branch.

“The service is favored by enterprises and will be promising in the future,” said Hu Ye, deputy director of the ICBC Guangdong branch.

China launched its first yuan cross-border settlement on July 6.

China’s State Council, or Cabinet, announced in April a pilot program to allow exporters and importers in Shanghai, and southern Guangzhou, Shenzhen, Zhuhai and Dongguan cities to settle cross-border trade deals in Renminbi (RMB), or yuan.

China last week issued detailed regulations for the pilot program for cross-border trade settled in yuan. The rules specified how to make transactions using yuan to settle trade with Hong Kong and Macao and regional trade partners.

China State Construction gets IPO approval, plans to raise 42.6 bln yuan

China State Construction Engineering Corporation (CSCEC), China’s construction and real estate giant, has obtained regulator approval to get listed in Shanghai stock market.

The China Securities Journal reported June 11 that the CSCEC would become the fifth company to start initial public offering (IPO) on the Chinese mainland since the China Securities Regulatory Commission (CSRC) resumed IPO in June.

The prospectus was published on July 13. The company planned to issue 12 billion shares, raising 42.6 billion yuan (USD 6.26 billion), the largest flotation among the five, said the newspaper.

The CSCEC is China’s largest home builder, with business ranging from housing construction, international project contracting, real estate developing, and infrastructure building.

Profits of China’s SOEs down 27% in H1

Profits of China’s state-owned enterprises (SOEs) slid 27 percent year on year in the first half of the year, but the decline rate started to narrow in the second quarter as the industrial expansion is gradually recovering.

Their profits totaled 553.4 billion yuan (USD 81.38 billion) between January and June, according to the Ministry of Finance on July 16.

The decline was 3.3 percentage points smaller than the figure for the first five months.

Sales revenue fell 5.9 percent year on year to 9.79 trillion yuan (USD 1.43 trillion).

Profits of the 138 central government-administered SOEs decreased 20.9 percent to 416.4 billion yuan (USD 60.95 billion).

China’s SOEs have seen a smaller profit decline for four months as the economy started to rebound in the second quarter from the worst growth in a decade.

The industrial output tumbled to 3.8 percent in the first two months, but bounced back to 8.3 percent in March as the government’s 4-trillion yuan stimulus package started to take effect.

The industrial output rose 7.0 percent in the first half, according to the figure released by the National Bureau of Statistics on July 16.

China sees new home prices rise in June

Prices of China’s new homes in 36 large and medium-sized cities rose 6.25 percent from a year ago in June, as bank loans surged in the first half of this year, according to the National Development and Reform Commission (NDRC) on July 20.

The average price of new homes in the 36 cities rose to 6,554 yuan (USD 959.4) per square meter, the (NDRC) said on its Website.

The June figure was 1.09 percent higher than May, the NDRC said.

Government data showed bank lending hit a record 7.37 trillion yuan (USD 1.08 trillion) in the first half, as the government looked to a moderately easy monetary policy to support economic recovery. The figure exceeded the full-year target of 5 trillion yuan (USD 732.03 billion).

Home prices in 70 large and medium-sized Chinese cities rose for the first time this year by 0.2 percent year on year in June, the NDRC said on July 10.

In the first six months, a total of 341.1 million square meters of homes were sold, up 31.7 percent from a year earlier. Sales values surged 53 percent from a year ago to 1.58 trillion yuan (USD 231.32 billion), the National Bureau of Statistics said on July 10.

The NDRC said home prices are expected to continue the upward trend amid vibration.

 To prevent possible risks on the property market posed by a surge of bank loans, the China Banking Regulatory Commission said in a statement on July 19 that lenders should stick to rules on mortgage for second home buyers and step up scrutiny over approvals. Down payments on second homes are currently set at no less than 40 percent of the price.

China’s Baidu says Q2 profit up 53%

Baidu.com, China’s search engine portal, said on July 24 that its second quarter profit surged 53 percent year on year to 422.8 million yuan (USD 62.18 million) backed by active online marketing.

Its sales revenue hit 1.1 billion yuan (USD 161.02 million) in the same period, up 36.7 percent year on year, the company said after it provided online marketing service to 203,000 customers, up 12.2 percent from a year ago.

The profit increase is driven by continuous technology improvements to meet customer’s varied demands, said Robin Li, the chief executive officer of the company.

The Beijing-based company expected the third-quarter profit will grow by 15 percent to 18 percent from the second quarter.

China has the world’s biggest population of Internet users, with 338 million people online by the end of June.

China’s power generation down 1.7% year on year in H1

China generated about 1.64 trillion kwh electricity in the first half of this year, according to the Country’s economic planner on July 26.

The figure represented a decline of 1.7 percent over the same period last year, compared with a growth rate of 12.9 percent in the same period last year, said the National Development and Reform Commission (NDRC) in a report on its website.

As a result of economic growth slowdown, power consumption of the whole society down 2.24 percent in the first half over the same period last year.

Industry power consumption alone dropped 5.9 percent year on year.

The NDRC figures also showed, China’s power industry saw profits stand at 19.1 billion yuan (USD 2.80 billion) in the first five months, up 12.5 percent over the same period last year.

China’s coal ouput up 8.7% in H1, profit growth sharply down

China’s coal production continued to ease in the first half of this year on flat domestic demand amid the economic slowdown.

The crude coal output increased 8.7 percent year on year to 1.36 billion tons in the first six months, but 6.1 percentage points lower than the same period a year ago, data released by the National Development and Reform Commission (NDRC) has shown.

The industry reaped a revenue of 67.8 billion yuan (USD 9.93 billion) through Jan-May, up 4.2 percent year on year, but the growth rate was almost half of the figure for the first two months.

The coal inventory at the northern China’s Qinghuangdao port, a major Chinese port, was 6.47 million tons at the end of June, up 730,000 tons from the beginning of the year.

The thermal coal reserve remained at normal level, with 33.08 million tons in storage, up 11.34 million tons year on year, according to the NDRC data.

But there are also signs that the demand is gradually recovering as customs figure has shown China’s net coal import was 36.60 million tons in the first half, which is in contrast with a net export of 3.94 million tons a year earlier.

Audi to open 100,000-vehicle assemble plant in China

German luxury carmaker Audi AG, which is owned by Volkswagen Group, plans to open a new 100,000-vehicle assemble plant in September in China to meet growing demand in the world’s biggest auto market, reported on July 27.

The 1-billion-yuan plant will be in the northeastern city of Changchun. It will double Audi’s production capacity to 200,000 units a year, the newspaper said, citing Zhang Xiaojun, executive deputy general manager of the Audi Sales Division at Sino-German car joint venture FAW Volkswagen Automobile Co Ltd.

The first two models to roll off the new assembly line will be the Audi A4L sedan and Q5 SUV. The A4L is now made at an existing 100,000-unit factory in Changchun that also produces the Audi A6L sedan. Production of the Q5 will begin at its new plant at the end of this year.

The new facility is seen as a strategic move by Audi, the biggest premium carmaker in China, to meet its sales target of 200,000 vehicles annually by 2015. It sold nearly 120,000 vehicles last year.

Zhang said the brand will introduce eight all-new and upgraded models in the second half of this year, including the locally made A4L 1.8TFSI AND 2.0TFSI, the A6L 2.7TDI and the Q5 2.0T as well as the imported Q5 3.2, Q7 3.0TDI, Q7 V12TDI and R8 5.2FSI Quattro.

The carmaker will also aggressively expand its sales network, increasing the number of authorized dealerships to more than 210 in 100 Chinese cities before 2012.

Audi currently has 146 dealerships on the mainland, most of them in first-tier cities such as Beijing, Shanghai and Guangzhou.

Audi is also building more so-called “Terminal” showrooms in China styled like airport hangars that will be the global architectural hallmark of its brand. The number of these “Terminal” showrooms will exceed 30 next year, up from 13 at present.

Philippine Airlines opens direct flight from Hangzhou to Boracay

A flight with 144 passengers took off from Hangzhou Xiaoshan International Airport on July 27, meaning the start of regular Hangzhou-Philippine Boracay direct flight. This is the first regular direct flight from Mainland China to Boracay Island.

Boracay Island lies in the middle of the Philippines. It is reputed as the “world’s third largest island” featured with snow-white beach, azure seawater and warm sunshine. Hangzhou is the fourth city where Philippine Airlines opened direct flight in Mainland China. The first three are Beijing, Shanghai and Xiamen.

The round-tip flights between Hangzhou and Boracay can be available on Monday and Friday each week.