Crackdown on highway tolls to lower transport costs
Jun-30-2011 By : agxadmin
Five ministries have launched a joint crackdown on exorbitant highway tolls after state media accused operators of earning staggering profits and adding to inflation by pushing up transport costs. Many expressway companies are jointly owned by regional authorities, which have resisted the central government’s crackdowns as they consider the tolls to be an important revenue source. Logistics costs in China last year accounted for about 18% of gross domestic product (GDP), twice the average for developed countries. Last year, the average profit margin of 19 highway companies listed on the Shanghai stock exchange was 35.5%, according to their annual reports. That ranks them alongside oil companies, securities firms and real estate developers. The average income of employees of the Ningbo-Shanghai expressway is about CNY8,000 a month, several times the local average. Its gross profit margin on highway tolls last year was 74%. Professor Zhao Jian of Beijing Jiaotong University said that the government “should change the highway companies […] to special enterprises with little or no profit, as roads and transport infrastructure shouldn’t be a private tool for money making.”
Short news
By : agxadmin
Airlines & airports
- Hong Kong Aircraft Engineering Co (Haeco) is “actively considering” the development of a fourth maintenance hangar at Chek Lap Kok airport. The facility would be at least half the size of Haeco’s 15,750 square meter third hangar. Other expansion options were also being assessed.
- Eternity Logistics Co has been ordered to pay CNY2.83 million by the Pudong New Area People’s Cour to Sinotrans Air Transportation Development Co for chartering a Zimbabwe-registered MD-11 jet ― even though the aircraft crashed at Shanghai and its cargo was destroyed. Eternity had a freight forwarding agreement with Sinotrans under which Eternity was in charge of transferring goods to Sinotrans and applying for customs clearance while Sinotrans would deliver goods to airlines. Eternity received compensation for the cargo from Avient Aviation but refused to pay the fee for chartering the aircraft and the operation fee to Sinotrans.
Express delivery
- More than 90% of Shenzhen’s couriers face a big challenge during a ban on electric bikes in the city from June 6 until December 5. Large courier companies have addressed the problem by buying small vans or opening more sorting stations, but some smaller firms or freelance couriers will likely opt to pay fines. Electric bikes are banned throughout the city except in remote sub-districts. Riders violating the restriction will be fined CNY200. Industry insiders argue that motorcycles used in the courier and catering industries should be exempted.
Inland river transport
- Luzhou, a port upriver of Chongqing, last year handled about 80,000 TEU, but with expansion projects underway at Luzhou and other ports in the upper reaches, capacity would reach 7 million TEU in 2015, compared with forecast throughput of 2.2 million TEU. Xu Weiping, General Manager of Luzhou Port Group and Sichuan Changtong Port, said the port had a capacity of 200,000 TEU, but work was underway to expand capacity to 1 million TEU and the aim was to double this to 2 million TEU. He noted it cost CNY2,800 to transport a container by ship from Luzhou to Shanghai compared with CNY6,400 by rail.
Ports & sea transport
- The price of carrying containers to northern European ports from Shanghai has dropped to USD874, the lowest since July 2009. The peak was USD2,164 in March last year, according to data from the Shanghai Shipping Exchange.
Two foreign banks allowed to underwrite corporate debt
Jun-27-2011 By : agxadmin
The China units of HSBC Holdings and Citigroup have won initial approval by China’s National Association of Financial Market Institutional Investors (NAFMII) to underwrite corporate debt in China, paving the way for them to be the first foreign banks to win licenses. The two banks will still have to register with the People’s Bank of China (PBOC) before they can start operations. Analysts said the move marks a significant breakthrough for foreign banks in China. “The corporate debt market is one of the fastest-growing in China’s financial industry. It offers huge growth potential,” said Sheng Nan, Banking Analyst at UOB Kay Hian in Shanghai. Currently, only domestic banks in China are allowed to underwrite corporate debt such as short-term bills and medium-term notes on the interbank market. Regulators had previously allowed some foreign banks to underwrite government bonds as well as those issued by policy lenders, but the corporate debt market is potentially much more lucrative. The outstanding issuance of short-term bills and medium-term notes totaled CNY2.29 trillion as of the end of May, the China Daily reports.
Tight monetary policy affects foreign banks’ loan business
By : agxadmin
Three quarters of foreign banks in China said tighter monetary policies have curbed their loan business, according to a PricewaterhouseCoopers (PwC) survey. Tight liquidity, the need to keep the loan-to-deposits ratio under 75% by the end of this year and credit controls from regulators are cited as three major curbs on loan growth. Since October, China has raised interest rates four times and raised the reserve requirement ratio (RRR) nine times. Banks in China issued a combined CNY17.6 trillion of new yuan-backed credit in 2009 and 2010. New yuan loans totaled CNY3.6 trillion in the first five months of this year, down 12% from the same period last year. Meanwhile, overseas lenders said the regulatory environment, high turnover rate and competition from domestic rivals are the biggest challenges of doing business in China. Pwc”s annual survey of 42 foreign banks also found that domestic Chinese banks are posing less of a competitive threat than before. There were 127 foreign banks operating in China, and their total assets represented 1.83% of total Chinese banking assets, PwC said. Forty foreign banks have opted to be locally incorporated. They made up 87% of all foreign banking assets.
Dow Chemical to raise China investment
By : agxadmin
Dow Chemical Co will increase investment in China by double-digits this year, said Peter Sykes, President of Dow Greater China. “In addition to our current multi-billion dollar coal-chemical project in Shaanxi province, our investment in the country will total several hundred million dollars this year.” China contributed 42% to its Asia-Pacific sales revenue in the first quarter of this year. “China is the second-largest global market for Dow Chemical,” said Sykes. “Since 2000, the company has achieved 20% annual growth in China with more than USD4 billion in total sales revenue last year.” In addition to the joint venture coal-chemical project with Shenhua Group, the U.S. company has also partnered with Haier Group to deliver a new series of energy-efficient refrigerators and freezers.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world