Passenger numbers at Hong Kong International Airport (HKIA) grew faster last year than at Shenzhen airport. The Airport Authority said the number of passengers at Chek Lap Kok rose 5.9% last year to a record 53.9 million, while cargo volume dropped 4.6% to 3.9 million tons. By comparison, Shenzhen saw a 5.7% rise in passengers, to 28.2 million, and a 2.4% increase in cargo volumes to 828,400 tons. Thirteen airlines began operations at Chek Lap Kok last year, including Indonesia AirAsia, Air Busan and MIAT Mongolian Airlines. Total aircraft movements rose 8.9% to 333,760 take-offs and landings, while Shenzhen saw a 3.4% rise, to 224,300 movements. Hong Kong Airport Authority Chief Executive Stanley Hui said: “Looking ahead, passenger volume and aircraft movements will likely continue their growth trend, though at a slower pace. Cargo tonnage may decline further due to the slowdown in global trade but the pace of decline will likely be less than what we have seen in 2011. Notwithstanding worldwide economic uncertainty in the near term, we are confident about the medium and long-term growth prospects of HKIA.” Brendan Scobie from the Singapore office of the Center for Asia Pacific Aviation, said that growth at Shenzhen airport may have been constrained last year because it had only one runway until mid-2011. “The second runway which opened at Shenzhen last year is allowing Shenzhen Airlines and other carriers to accelerate their growth,” he said. “With that bottleneck removed – they were at capacity with the single runway – I wouldn’t be surprised if Shenzhen growth takes off and is higher than the annual growth at HKIA these next few years,” the South China Morning Post reports.

Chinese Vice President Xi Jinping will meet U.S. President Barack Obama in the White House on February 14. Invited by U.S. Vice President Joe Biden, Xi will also visit Iowa and California. The leaders would “discuss a broad range of bilateral, regional and global issues”, a White House statement said. “No matter what changes affect the international situation, our commitment to developing the Sino-U.S. cooperation should never waver in the face of passing developments,” Xi said at a Beijing gathering to mark 40 years since U.S. President Richard Nixon made his historic trip to China. “In dealing with major and sensitive issues that concern each side’s core interests, we must certainly abide by a spirit of mutual respect and handle them prudently, and by no means can we let relations suffer major interferences and ructions,” Xi added. Military issues and the strategic situation in the Asia-Pacific are expected to feature heavily in Xi’s discussions.

Foreign trade

• Taiwanese President Ma Ying-jeou said a free trade area would be set up soon in the south, as the government began moves toward joining the Trans-Pacific Partnership (TPP) in 10 years. He said some free trade areas had to be set up on the island before the long-term goal of joining the TPP could be reached. The TPP is being negotiated by the U.S. as well as Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.
• Hong Kong’s exports grew 7.4% in December to HKD271.8 billion after a 2% increase in November, while imports rose 8.1% from a year earlier, leaving a trade deficit of HKD48.9 billion, the highest since at least 1952.
• China overtook Japan as the world’s top coal importer for the first time last year. Japan had held the top position since at least 1975, the International Energy Agency (IEA) said. China, also the world’s biggest coal producer and consumer, imported 182.4 million tons of the fuel last year, 10.8% more than in the previous year.
• Sino-African trade rose more than 23.5% to over USD160 billion in 2011, up from USD129.6 billion in 2010. China overtook the United States as Africa’s biggest trading partner in 2009. China’s cumulative investment in Africa totals USD40 billion, including USD14.7 billion of direct investment, with more than 2,000 Chinese-invested firms.

Macro-economy

• Hainan province waived CNY540 million in business taxes last year, benefiting 180,000 taxpayers. The provincial government cut business and income taxes for cultural and industrial companies, as well as small and medium-sized enterprises.
• More than half the people in Wuxi, Jiangsu province, who travelled for the Lunar New Year holiday chose to leave the country, indicating rising purchasing power in the city. The destinations included Hong Kong, Macao, and countries in Southeast Asia, though about 70% of the city’s tourists who took long-distance trips went to North America or Saipan.

Real estate

• At least 473 property developers in Beijing cancelled their registration last year after policy tightening by the central government to curb the booming real estate market. There are now about 3,000 registered developers in the capital. In 2010, only 185 developers cancelled their registration.
• Chinese real estate investor Gaw Capital Partners is in talks to buy Goldman Sachs’ London headquarters in Fleet Street for about GBP300 million. The 370,526 sq ft property was put on the market after the former owner, Canadian developer Jesta Group, defaulted on debt repayments. A neighboring Goldman Sachs-occupied block has been bought by Hong Kong-based Chinese Estates Holdings.
• In the first 11 months of last year, 22,243 people were investigated in 18,273 cases of corruption in construction projects, including 16,472 cases of bribery. The Ministry of Housing and Urban-Rural Development said that in the first nine months, police uncovered 184 cases of collusion in tendering for construction projects, 28.7% more than the previous year, and solved 120 cases.
• Tom Cheung, Manager of Hui Xian Reit, owner of Beijing Oriental Plaza, expects rents to grow despite the global downturn. Monthly rental for its office space in Beijing surged from more than CNY200 per square meter in 2010 to between CNY400 and more than CNY600 last year. He expected growth in rents when the leases on about 120,000 sq m of space expired this year, as there was insufficient new supply.

Retail

• Spanish clothing retailer Mango plans to open a further 800 stores in China as part of a global expansion program. The fashion label already has 200 stores in China and is reported to be targeting a 10% contribution to its total global revenue from China by next year. C&A is also expanding aggressively in China. It has already opened 11 stores and plans to have 150 stores all over the country by 2015.

Science & technology

• China has denied a report that the country’s first fast-neutron reactor, operating in a military facility near Beijing, had to shut down after an accident late last year. Wan Gang, Director of the China Institute of Atomic Energy (CIAE) – which built the experimental fourth-generation nuclear reactor – described a Japanese media report about the China Experimental Fast Reactor (CEFR) as “extremely inconsistent with the facts”. CEFR hasn’t been operating since July last year, he added.

Travel

• Major tourism attractions in Beijing received more than 1.16 million visitors on January 23 – the first day of the Year of the Dragon – with a large number of people arriving from outside Beijing. More than 70,000 people went to pray for luck and good fortune at the Lama Temple, while other sites, including Ditan and Chaoyang parks, hosted temple fairs.
• Passengers traveling on the high-speed railway line between Guangzhou, Shenzhen and Hong Kong that is due to open by 2016 will be able to transfer to trains bound for Xiamen in Fujian province at Humen station in Dongguan. About 680,000 passengers travelled on the new high-speed train services between Guangzhou and Shenzhen in the past month.
• Changsha’s city government spent CNY50 billion to boost tourism last year, with the number of tourists rising by 23.4% to more than 60 million, and revenue increasing 23.8% to CNY58.2 billion. The city hopes to receive 71 million tourists this year and generate CNY70 billion in revenue.

VIP visits

• German Chancellor Angela Merkel will be in Beijing this week for talks with President Hu Jintao and Premier Wen Jiabao and to give a key speech at the Chinese Academy of Social Sciences (CASS) on finance and currency issues. Wen will then accompany her on a trip to Guangzhou, where they will participate in an economic forum and meet German and Chinese business leaders.
• Jia Qinglin, Chairman of the Chinese People’s Political Consultative Conference (CPPCC), inaugurated the USD200 million headquarters of the African Union at the opening ceremony of the 18th African Union (AU) summit in Addis Ababa. The headquarters, now Addis Ababa’s tallest building, was funded by China. Most of the building materials used were imported from China.

One-line news

• Macao’s overall casino revenue rose to a record MOP267.87 billion (Macao pataca), up 42.2% from 2010 and more than five times the casino revenue of the Las Vegas Strip. VIP baccarat accounted for 73.2% of all casino revenue, a segment dominated by junket agents, whose numbers rose to 219 at the end of last year compared with 193 at the end of 2010. Macao had 34 casinos at the end of last year.
• Chinese investors are buying New Zealand farmland for the first time. New Zealand’s government approved the sale of 16 dairy farms to a company controlled by Shanghai Pengxin Group, run by property developer Jiang Zhaobai. Pengxin’s total investment will be more than USD164 million.
• The Hebei Provincial Higher People’s Court has ordered Shanxi Bokang Pharma-ceutical to pay CNY5 million compensation to North China Pharmaceutical in Shijiazhuang for trademark infringement. North China discovered that Shanxi Bokang was producing injection fluid using its trademark in 2009 and sued a year later.

The European Council on Foreign Relations and Asia Centre have published China Analysis: Facing the Risks of the ‘Going Out Strategy’, the latest edition of China Analysis. China is transforming itself from a major exporter of goods to a major exporter of capital. By 2009, Chinese investors had established more than 13,000 companies abroad, and China was one of the world’s leading global investors. But China’s external financial flows are often opaque: the three main global destinations for Chinese FDI are the British Virgin Islands, the Cayman Islands and Luxembourg. “Facing the risks of the “going out strategy””, the latest edition of ‘China Analysis’, explores Beijing’s foreign financial footprint and highlights the concerns of Chinese investors and political analysts. Click here for a pdf copy of China Analysis: Facing the Risks of the ‘Going Out Strategy’

The National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) jointly issued a new guideline for foreign investment, moving “finished car manufacturing” from the “encouraged” list to the “approved” list, but the move will not affect existing Sino-foreign joint ventures in China’s auto sector. An NDRC official explained that the move was the result of excesses in both production capacity and finished automobile companies in China. “It was a normal adjustment in light of the development of China’s auto industry,” said the official with the NDRC’s Department in charge of foreign investment, who declined to be named. “There is no issue of tightening up, nor will it affect the operations of existing joint ventures in China,” added the official. China has been the world’s largest auto producer and market by volume since 2009. Sales hit 18.06 million units in 2010, while output rose to 18.26 million units. The country has more than 130 finished automobile producers, more than any other country, but the companies are scattered and not strong enough, as mergers and acquisitions (M&As) have been slow. The government has controlled approvals of new finished auto projects more rigorously in the past two years to curb overcapacity. About 70% of domestically made cars are produced by Sino-foreign joint ventures in China.