Industrial output continues to expand
China’s manufacturing sector showed no signs of cooling in May as output increased 18.1%, the China Economy reported. National Bureau of Statistics figures showed growth was up on the 17.4% recorded in April. Premier Wen Jiabao said a more stringent monetary policy was needed. But a Sydney-based economist said it was too early for recent monetary tightening to have had an impact. “Strong industrial production in China signals strong external and internal demand,” he said. A Hong Kong-based economist told the newspaper that increases in lending rates and reserve ratios “should help stabilize fixed-assets investment and industrial production this year”. The Chinese government has also launched a number of non-monetary initiatives to rein in the economy, such as tightened approvals for new projects and cuts to export tax rebates.
BoC to target wealthier customers
Shanghai-based Bank of Communications plans to double to 200 within 12 months the number of its nationwide outlets carrying its premium wealth management services, the Shanghai Financial News reported. The bank’s wealth management services are designed for clients with US$65,500 (RMB500,000) in cash. The bank anticipates that its premium outlets will account for 15% of its network in one or two years. The bank has more than 2,800 outlets in almost 150 cities in China. HSBC, which owns a 19.9% stake in the bank, is a major factor behind the banks wealth management service offerings.
Green policy may benefit relevant companies
The central government’s energy efficiency and pollution reduction policies are likely to benefit listed companies working in related fields, the China Economy reported. A policy released Wednesday, called China's Scientific and Technological (S&T) Actions on Climate Change, has reiterated goals such as reducing energy consumption 20% by 2010 and has reconfirmed tax allowances and preferential treatment for related industries. The government has also demanded an urban sewage treatment ratio of 90% in Beijing when the Olympics kick off next year. Among the possible beneficiaries are auto parts suppliers favoring clean technology as China moves towards tougher emission standards equivalent to those in Europe. Furthermore, the government has introduced new regulations cracking down on unproductive polluting power plants, which will be required to meet standards or close.
Continental AG to build Changshu auto plant
Automobile parts supplier Continental AG will invest US$89.5 million to set up a new production base in the city of Changshu, in Jiangsu province to the northwest of Shanghai, the Nanjing-based Yangzi Waobao reported. The 70,000 square meter plant will manufacture hydraulic brake components and brake boosters for automakers in China, Japan and South Korea. It is slated to begin operating in late 2008 and will be capable of making two million brake boosters and 4.6 million brake calipers per year by 2011.
DC obtains new business license
Fujian DaimlerChrysler Automotive (FJDC) said it had gained a business license to build a plant to produce Mercedes-Benz Vito, Viano and Sprinter vehicles, China Auto News reported. FJDC was founded by Fujian Motor Group, DaimlerChrysler and China Motors with a total investment of US$265 million. The new plant is expected to start operating in 2009, the automaker said. DaimlerChrysler, which first came to China two decades ago with Jeep, hopes to speed up its localization strategy for China to help it expand and snatch a larger market share. It also has a joint venture with Beijing Automotive Industrial Corp producing Mercedes-Benz and Chrysler 300C models.
SAIC raids smaller competitors
Shanghai Automotive Industry Corp (SAIC) said it will pay US$192 million (RMB1.48 billion) to buy a commercial vehicle maker and an auto components supplier, China Auto News reported. Once the deal is signed, SAIC – China’s No 1 automaker – will wholly own Shanghai Wanzhong Car Components Co Ltd and Shanghai Huizhong Automotive Manufacturing Co Ltd. Huizhong currently produces almost 6,000 trucks and 10,000 minivans annually. The buyout means SAIC will produce an extra 40,000 heavy trucks per year following the completion of a new factory in 2008. SAIC has put a priority on production of commercial vehicles, such as trucks, in its current five-year plan, which ends in 2010. More than two million commercial vehicles were produced last year, up 14% year-on-year, while sales of heavy trucks soared 31% to almost 307,300 units. The China Business Post reported SAIC will invest RMB210 million to establish a research center for commercial vehicles.
Henderson plans Shenyang skyscraper
Henderson Land Development Co is considering property projects in Shenyang, northeastern Liaoning province, worth around RMB6 billion, the 21st Century Business Herald reported. Henderson plans to invest RMB4 billion in a 400-meter-tall office tower in Shenyang’s central business district measuring 430,000 square meters in floor area. The developer will also invest RMB2 billion in an apartment project with a floor area of 460,000 square meters.