China Pulse April 2013 The Monthly China Journal of ... Pulse April 2013.pdf · CNOOC's $15.1 billion takeover of Canadian oil and gas company Nexen Inc, Haier Group Corp's offer

April 2013

India & China India-China trade (Jan –March 2013)

http://www.customs.gov.cn/publish/portal0/tab1/info424739.htm

China EconomyChina’s external trade (Jan –March 2013)

Trade Value $ billion Change Total trade 974.67 13.4%Exports 508.87 18.4%Imports 465.8 8.4%Trade surplus 43.07

http://fangtan.customs.gov.cn/tabid/78/Default.aspx?interviewid=14

China's foreign trade growth continued to pick up in the first quarter, as the country's supportive policies initiated last year began to take effect amid the improving economy. In the first quarter, China's foreign trade increased 13.4% to $974.67 billion, faster than the country's 6.2% trade growth for 2012. Trade surplus expanded to $43.07 billion from $210 million during the same period last year. In March alone, China's exports increased 10% YOY, while imports growth bounced back to 14.1% following a 15.2% drop in the previous month (More). China has fixed a target to increase its foreign trade volume by around 8% for the year 2013.

Inflation drops to 2.1% in March China's consumer price index (CPI) grew 2.1% YOY in March, compared to 3.2% in February, mainly due to 2.9% drop in food prices in March. China aims to hold this year's consumer inflation at around 3.5% (More).

FDI and ODIChina attracted $111.7 billion in FDI in non-financial sectors in 2012, down 3.7%. FDI inflow into China is expected to grow 1.2% in 2013 to $113 billion. The non-financial outward direct investment (ODI) of China surged 28.6% to $77.2 billion in 2012 and it is expected to grow by 15% to $88.7 billion in 2013 with the adoption of a more proactive opening-up policy (More).

China unveils ambitious transport, energy plansPremier Wen Jiabao announced ambitious plans to develop projects in transport and energy sectors as part of efforts to accelerate the country's industrial transformation and upgrading. The proposed transport projects in 2013 include putting into operation more than 5,200 km of new railway lines, building an additional 80,000 km of highways, and putting into service 100 seaport berths for 10,000-ton class or larger ships, as well as 10 new civilian airports. Government will actively develop clean energy and increase installed power generating capacity of hydropower by 21 million kilowatts, nuclear power by 3.24 million kilowatts, wind power by 18 million kilowatts, and photovoltaic power by 10 million kilowatts.

Outbound M&A activity mounts up The value of outbound M&As by Chinese mainland companies grew on an annual basis by 54% to reach a new record high of $65.2 billion in 2012. One of the largest POEs deals in 2012 came when Chinese entertainment conglomerate Dalian Wanda Group Corp paid $2.6 billion for AMC Entertainment Holdings Inc, the world's second-largest theater chain. Other large outbound M&A deals included CNOOC's $15.1 billion takeover of Canadian oil and gas company Nexen Inc, Haier Group Corp's offer of $702.7 million in September to buy Fisher & Paykel Appliances Holdings Ltd and Wanxiang Group's bid of $260 million for the assets of US-based car-battery maker A123 Systems Inc (More).

China to ‘firmly rein’ in property speculationThe Chinese government will "firmly rein in" speculative and investment-driven housing demand and to promptly improve the accountability system for stabilizing housing prices, Wen Jiabao said in his government work report. This year, 4.7 million government-subsidized urban housing units should be basically completed, construction of another 6.3 million units should begin, and renovation of dilapidated rural houses should continue, report said.

Trade Value $ billion Change Total trade 15.229 -8.2%Imports from China 10.770 3.4%Exports to China 4.458 -27.8%Trade deficit 6.312

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China PulseThe Monthly China Journal of Confederation of Indian Industry April 2013- Volume 10 No 4

April 2013

China’s defense budget to grow 10.7% in 2013China plans to raise its defense budget by 10.7% to 720.2 billion yuan ($114.3 billion) in 2013. In 2012, China spent 650.6 billion yuan, 1.25% of GDP, on national defense, an increase of 11.5% than the previous year.

China exports more mechanical, electronic products in 2012 China increased the value of its exports of mechanical and electronic products to $1.18 trillion in 2012, taking up a greater share of the global market. The 8.7% growth brought the global share achieved by products from China to 16.1% in the first 11 months of last year. The combined import and export volume of the products rose 6.7% to $1.96 trillion. Exports of mechanical and electronic products, accounting for 57.6% of China's total exports, reached more than 230 countries and regions in the world and grabbed 29.1% of market share in emerging economies (More).

China to be global premium car leader China is expected to become the world's largest premium car market, overtaking the US and selling more than 2.3 million premium cars by 2016, according to a report of McKinsey & Co. The market for premium cars in China has accelerated by 36% a year over the past decade, against 26% annual growth in the overall Chinese passenger vehicle market during the same period. Sales of premium cars in China reached 1.25 million vehicles in 2012, making it the world's second-biggest market after the US (More).

China on way to become largest oil importer China could overtake the United States as the world's largest oil importer earlier than expected, while net oil imports by the US continue to drop due to its booming domestic supply. In 2012, China's net oil imports were still lower than the US' by about 1 million barrels a day. China's net crude oil imports were 5.40 million barrels a day in 2012, where as in the same period, US average oil imports were 7.41 million barrels a day which also included imports of petroleum products. China’s dependence on imports is expected to reach 59.4% in 2013 (More).

China’s semiconductors hold 50% of global marketChina's semiconductor market now probably accounts for more than 50% of the global market, according to PricewaterhouseCoopers (PCW). At the end of 2011, China's semiconductor market contributed 47% to the global market, from 19% at the end of 2003. China has also launched ambitious policy initiatives to develop specific next-generation technologies. In the past four years, China's semiconductor market grew 34% double the global growth rate (More).

Government & PoliticsXi promises benefits to people in realizing 'Chinese dream'Chinese President Xi Jinping in a keynote speech delivered at a session of National People’s Congress (NPC) on 17 March pledged to rely on the people and bring benefit to the people in achieving the "Chinese dream." He said 1.3 billion Chinese people should bear in mind the mission, unite as one, and gather into an invincible force with the wisdom and power (More).

President Xi Jinping on 4-nation tour Chinese President, Xi Jinping, paid state visits to Russia, Tanzania, South Africa and the Republic of Congo on from 22-30 March 2013. This visit of Xi Jinping to the four countries is significant as it was undertaken immediately after his becoming the President of China in early March and signals China’s policy to deepen engagement with African countries and Russia. Xi also attended the 5 th leaders' summit of BRICS countries, held from March 26 to 27 in Durban, South Africa. During the visit of Xi Jinping, China signed several agreements with Russia, Tanzania, South Africa and the Republic of Congo.

China ups investment in Africa's bank sector The Industrial and Commercial Bank of China (ICBC) concluded the largest FDI deal in South African history six years ago when ICBC paid $5.5 billion for a 20% stake in Standard Bank, Africa's largest bank. Bank of China, which has a presence on the continent since 1997, and China Construction Bank, which arrived in 2000, are also expanding their operations. China Exim Bank and China Development Bank (CDB) have also bankrolled some of the major infrastructure projects on the continent over the past decade. CDB has provided $16 billion loans to African governments and $700 million loans to African SMEs (More).

Brazil-China sign currency deal Brazil and China on March 26 signed a currency swap agreement to facilitate trade between the two countries. This agreement will be valid for three years with the option of an extension, and allows for up to 60 billion Brazilian reals or 190 billion Chinese yuan of trade in their respective currencies (More).

Premier Li Keqiang’s debut press conferenceThe newly-elected Chinese Premier Li Keqiang hosted a press conference at the Great Hall of the People in Beijing on March 17, 2013 (More). On March 20 while speaking at the first plenary meeting of the new cabinet, he announced that the transformation of government functions is the first task for the new State Council. He asked all departments to act conscientiously to achieve various tasks concerning transforming government functions within the time limit, urging them not to be superficial in the reform by only "changing the liquid but not the drugs" (More)

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April 2013

China offers Bangladesh $133 million for government office linking projectChina will provide $133 million soft loan to Bangladesh for the Development of National ICT Infra-Network Phase II project aimed at bringing all government offices across the country under one network, according to an agreement signed in Dakha on 13 March 2013. China is providing financial assistance to Bangladesh for its various projects, out of which the most important are six friendship bridges (More).

NDRC drafts guidance for 7 strategic areasNational Development and Reform Commission (NDRC) of China on March 7 published a catalogue for guidance that specifies about 3,100 products and services in 125 sub-categories in China's seven strategic emerging industries including energy-saving and environmental protection, information technology, biology, high-end equipment manufacturing, new energy, new materials and new-energy vehicles. China had issued a development plan last year to promote these seven strategic industries (More).

China joins top 5 global arms exportersChina has replaced Britain as the world's fifth-largest arms exporter, while the US and Russia still dominate global arms sales, according to a report of Stockholm International Peace Research Institute's (SIPRI). China's share of global weapons exports increased from 2% to 5% from 2008 to 2012. 55% of China's exports went to Pakistan, followed by Myanmar with 8% and Bangladesh with 7% (More).

Invest in Beijing and obtain a Beijing hukouExecutives, with an investment of more than 30 million yuan in total fixed assets in Beijing or with their enterprises reporting more than 300 million yuan in annual operating revenue for two years running since 2000 can register for a permanent residence permit or hukou. 45 people including 14 corporate executives and their family members obtained their Beijing hukou in 2012 (More).

Family planning policy to remainThere will be no change in China’s family planning policy as the pressure facing residents and resources still persists in the country with such a huge population, according to Wang Feng, deputy head of the State Commission Office for Public Sector Reform. The country will keep its basic state policy on family planning after the creation of a new commission through the merging of the health ministry with the National Population and Family Planning Commission (More).

China increases national basic education fundsIn 2012, China’s spending on education amounted to 4% of GDP, up 0.07 percentage points from 2011, with the majority of the additional funds used to make improvements in basic education. Basic education includes compulsory education, school dormitories and subsidies for college students (More).

China to build unified low carbon certification system China will build a unified certification system for low carbon products as part of its efforts to boost the consumption of green goods, according to NDRC. The certification scheme is being piloted in the provincial regions of Guangdong, Chongqing and Hubei. By the end of 2015, China aims to lower its energy consumption per unit of GDP by 16% from 2010 and lower its carbon dioxide emissions per unit of GDP by 17% (More).

Business & IndustryUS court accepts Sany lawsuit against ObamaChina's Sany Group said on March 3 that its core request in the lawsuit against US President Barack Obama has been accepted. The Chinese company's US-based subsidiary Ralls Corp in 2012 had filed a complaint against Obama and the Committee on Foreign Investment in the United States for blocking its ownership of four wind farms in Oregon (More).

Tangsteel acquires 10% Swiss stakeTangshan Iron and Steel Group Co, (Tangsteel) has acquired a 10% stake in Switzerland's Duferco International Trade Holding, the world's biggest steel trader, to further expand its overseas market. The two companies also signed a steel products structural payment agreement worth $1.2 billion (More).

China's solar panel maker giant declares bankruptcyWuxi Suntech, one of China's leading solar panel makers and a major subsidiary of the New York listed Suntech Power, on March 20 declared bankruptcy. Founded in 2001, Wuxi Suntech accounts for more than 95% of the Suntech Power's product capacity, with annual solar module production volume of 2.4 GW in 2012 (More).

Overseas boom for buildersOverseas business by Chinese contractors registered 10% growth in 2012, with the total value of their new contracts reaching $156.5 billion despite sluggish global market demand. By the end of 2012, Chinese construction groups signed overseas deals cumulatively worth $998.2 billion, of which 66.7% have been completed (More).

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April 2013

First India-China JV in Australia sets up edible oil refineryThe first India-China joint venture in Australia, Riverina Oils and Bio Energy Pty Ltd (ROBE), has developed a 170,000 ton oilseed crushing and edible oil refining plant with an investment of A$150 million in Wagga Wagga in New South Wales. The plant will also produce 105,000 tons a year of vegetable protein meal for use in the Australian poultry, dairy and animal feed industry. ROBE's key partners and shareholders include SP Chemicals, China, Asiawide Holdings, Singapore, Lotus Ventures, New York and India's leading transport and energy company, Bhoruka Industries (More).

CII India OfficeU. D. Bhatkoti, Advisor

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