A group of shipping companies has extended, for another year, a voluntary scheme to use low-sulphur fuel to reduce air pollution from emissions while ships are berthed in Hong Kong. But they warned they could end the initiative, called the Fair Winds Charter, if “there is no substantial progress towards mandatory regulation by December 31, 2013”. The firms, who are members of the Hong Kong Liner Shipping Association (HKLSA) or the Hong Kong Shipowners’ Association (HKSOA), also urged the government to improve and simplify the incentive scheme launched by the Environmental Protection Department in September. Nearly 570 ships have been registered for the scheme, which gives a 50% reduction in port- and navigation-related charges for oceangoing ships using low-sulphur diesel. Tim Smith, Chairman of the HKLSA, said the incentive scheme covered only part of the extra cost of using the more expensive cleaner low-sulphur fuel. He said the actual proportion varied among shipping companies but for Maersk Line, where Smith is Chief Executive for north Asia, the cost was between USD1.5 million and USD2 million. Hong Kong’s Undersecretary for the Environment Christine Loh said legislation requiring oceangoing ships to use low-sulphur fuel was expected to be lodged with the Legislative Council after the summer recess. Loh hoped it could be approved by Legco “sooner rather than later”. Secretary for the Environment Wong Kam-sing said mandatory fuel switching at berth was the government’s “near-term target”, while an internationally recognized emission-control area covering the whole Pearl River Delta “is a long-term goal”. Preliminary discussions with officials in Guangdong and the Ministry of Transport in Beijing to create the emission-control area had begun, the South China Morning Post reports. If all container lines calling at Hong Kong switch to the cleanest fuel available, sulphur dioxide emissions from shipping will drop 80%.

Airlines & airports

• China’s first homegrown army transport aircraft, the Y-20, has successfully completed its maiden flight and will now undergo further experiments and test flights. The Y-20, or Transport-20, is a huge, multifunction freighter similar in size to the Russian IL-76 but smaller than the United States’ C-17. The giant aircraft makes China the fourth country in the world, following the U.S., Russia and Ukraine, to develop a jumbo airfreighter. The aircraft can handle a payload of up to 66 tons. The Y-20 program is part of an effort to develop an indigenous long-range jet-powered heavy transport aircraft.

Logistics industry

• Shanghai will more than double its bonded warehouse space this year amid speculation the world’s biggest harbor will be the site of China’s first delivery point approved by the London Metal Exchange. Shanghai will add 80,000 to 90,000 square meters by the middle of this year to an existing 50,000 sq m, said Eric Ni, Business Development Manager at Shanghai Free Trade Zones United Development Co. Record copper inventories forced warehouses to stack stocks outdoors last year.

Port & sea transport

• About 464 shipyards in China won 18.7 million DWT of orders worth USD14.3 billion last year, the lowest since 2004, according to Clarkson. That compares with contracts for 14.6 million tons worth USD29.6 billion received by 88 yards in South Korea, the world’s second-biggest shipbuilding nation. 38% of yards in China did not get contracts for new vessels last year, and 10% had no deliveries scheduled beyond year-end, the London-based shipbroking unit of ICAP said last month.
• China Shipbuilding Industry Corp recorded higher revenue and profits in 2012. Revenue increased 7.7% year-on-year to CNY175 billion, while profits increased more than 7% from a year earlier. China Shipbuilding attributed the increases to its strategy of diversifying and adjusting its products. To reduce its business risks, the company devoted more of its resources in 2012 to various non-marine products, such as equipment needed for offshore oil exploration and the generation of wind power. Such products are likely to be the source of more than half of our sales revenue over the next few years. During the first 10 months of 2012, the Chinese shipbuilding industry’s revenue declined by 5% year-on-year to CNY41.3 billion.
• Zhang Zhirong, one of the richest men in China, gave up his controlling stake in China Rongsheng Heavy Industries Group Holdings, the country’s largest shipbuilder outside state control, which he co-founded. The former Chairman has reduced his interest to 29.32% from almost 48% in two transactions, according to a filing to the Hong Kong stock exchange.
• Orient Overseas Container Line said revenue from its container shipping division rose 6.7% to USD5.9 billion last year following a 3.7% rise in box volumes to 5.2 million TEU. But Barclays Analyst Jon Windham said fourth-quarter revenue dropped 10.9% compared with the third quarter after container volumes saw a quarter-on-quarter fall of 6.7%.

How did Belgian companies perform in China in 2012?

To answer this question, the Flanders-China Chamber of Commerce, together with the Benelux Chamber of Commerce and Moore Stephens Verschelden are conducting the Sino- Business Survey 2013.

The survey tries to study the performance of Belgian companies in the right context. When we talk about the growth of our business in China, are we comparing apples to apples, or are we comparing apples to oranges? Equally important, how do we feel about the future of our business in China as we enter the Year of the Snake (2013)?

 We keep the survey simple; with just 15 concise questions we aim to be precise and to the point.

Please take a few minutes to fill out this survey. Click here to take the survey.

Save the date: the survey results will be shared in panel discussion events composed of industry leaders in Beijing (March 14), Brussels (April 24) and Shanghai (April 10).

China VAT Reform: Separating Myth From Reality? 6 February 2013, 11.00 am CET
Host: Kendra Hann Presenters: Robert Tsang, Sarah Chin

In 2012, the China VAT pilot programme was introduced in Shanghai, then expanded to Beijing; plans are for expansion to other provinces and cities. What practical issues arise from the programme’s implementation and what will future VAT reforms mean for your organization in China? We’ll discuss:
Experiences of the programme’s introduction.
Key issues in practice and steps businesses can take to manage them.
Techniques and action plans for a smooth transition from a business taxpayer to a VAT payer.
Future developments – a look ahead at what may be next in VAT.
Learn about what the changes mean for your business and partners, suppliers, and clients or customers in China.

Tax Risk Management – 10 practical ideas to get you started February 6, 2013 12:00 p.m. till 12:45 p.m., Time zone Brussels, Copenhagen, Madrid, Paris

Contact Information: Katrien Lauwers, Tel : +32 2 600 66 69, Fax : +32 2 600 67 01
E-mail: academy@deloitte.be

Swedish truck manufacturer Volvo has signed an agreement with Dongfeng Motor Co (DFG) to set up a joint venture in which it will have a 45% stake. After the deal, Volvo will become the world’s largest manufacturer of heavy-duty trucks. Dongfeng Commercial Vehicles (DFCV) will combine Dongfeng’s know-how and strong position in China with the technical expertise and international experience of Volvo, according to Volvo CEO Olof Persson. The deal still needs approval from the Chinese authorities and anti-trust bodies. Volvo expects all procedures to be completed within one year. Volvo, which also manufactures trucks in Ghent, will pay €670 million for its stake. Volvo is already the world’s third largest manufacturer of heavy-duty trucks. It sold 180,000 units in 2011. Dongfeng was the second largest in 2011, selling 186,000 heavy-duty trucks. About 142,000 of those were manufactured by the company which will become part of DFCV.