Index declines to 14-month low
Shanghai's key stock index yesterday dropped to a 14-month low on gloomy sentiment ahead of the week-long holiday next week, with railway firms and property developers declining.
The Shanghai Composite Index dipped 1 percent to 2,392.06 points, the lowest since July 2010.
'China's market will remain weak before any stimulus from policy makers,' said Chen Yong, an analyst at Lianxun Securities. The Shanghai market will be closed from Saturday to October 9 for the National Day holiday, and reopens on October 10.
UBS Securities said in a report on Tuesday that the slump in the Chinese stock market will continue into the fourth quarter of this year as listed companies are likely to see weaker earnings prospects.
Railway-related shares dropped after the Ministry of Railways decided to postpone the sale of 20 billion yuan (US$3.1 billion) in corporate bonds until October 12 due to tight market liquidity.
Concerns over railway safety deepened after two subway trains collided in Shanghai on Tuesday. The signaling system provider, Casco Signal Ltd, was also blamed for causing the fatal bullet train collision in Wenzhou on July 23, killing 40 people.
Railcar makers CSR Corp and China CNR Corp both sank by 1.7 percent to 4.64 yuan and 4.70 yuan respectively. China Railway Construction Corp lost 0.9 percent to 4.44 yuan. --(9/29)
Launch time set for Tiangong unmanned module
China's unmanned space module Tiangong-1 will blast off tomorrow between 9:16pm and 9:31pm when weather condition is forecasted as suitable for the launch, an official at the Jiuquan Satellite Launch Center said today.
The unmanned Shenzhou 8 spacecraft which will dock with Tiangong-1 in the space is due to be launched on November 1, said Cui Jijun, commander-in-chief for the launch and the center's director.
Tiangong means 'palace of heaven' in Chinese.
The launch team for China's first space laboratory has drawn up about 200 contingency plans and held many rehearsals to detect any error of the spacecraft, Wu Ping, the mission's spokeswoman, told a press conference this afternoon.
Tiangong-1 has technological and cost advantages over spacecraft made by the United States and Russia, Wu said.
Tiangong-1 will remain in orbit for two years. During which, it will dock with China's Shenzhou 8, 9 and 10 spacecraft. Unmanned docking procedures will be an essential step toward achieving China's goal of establishing a manned space station around 2020. --(9/28)
Yuan at record high against the dollar
The yuan hit a new record high yesterday after the central bank said it favored a more flexible exchange rate and would push for greater convertibility of the Chinese currency.
The People's Bank of China set the central parity rate at 6.3735 against the US dollar, down from Friday's 6.384. It is the strongest since yuan was allowed to be traded in 1994.
'China's currency policy will not be affected by a global economic slowdown and the yuan is highly relevant to China's international balance of payments,' said Zhou Xiaochuan, governor of the central bank, at meetings of the IMF's International Monetary and Financial Committee in Washington at the weekend.
Li Daokui, an adviser to the central bank, reiterated that the yuan may be fully convertible in five years at a forum during the meetings.
The appreciation negated earlier speculation that China would resume the yuan's peg to the dollar amid an uncertain global economic outlook, analysts said.
'The government has not changed its stance on gradual appreciation of the yuan,' said Li Wei, an economist with Standard Chartered Bank. 'A peg to the US dollar will add to the political pressure facing China and will do nothing good to the country's economic reform.'
In 2005, China introduced a floating exchange rate regime under which the yuan would be managed in relation to a basket of currencies. But China halted a three-year, 21 percent advance in the yuan in July 2008 to help exporters.
The peg was ended last June when the world's economic situation picked up and when China pledged to change its economic structure from one that relied on labour-intense export-oriented industries to one sustained by technology and consumption.
'If the peg is to be resumed, all the efforts that the country has made to improve its economic structure will end in vain,' Li said.
'Besides, the government must have realized that the global economy is more dependent on the performance of emerging countries, including China. A stronger yuan will do good to the world.'
Economists widely believe that the yuan will climb to 6.3 against the dollar by the end of the year.
However, analysts also warned that the yuan is still under pressure in the short term.
'Investors are extremely risk averse after the disappointments of the US Federal Reserve's unclear attitude for printing money alongside an escalating sovereign debt crisis in Europe, which will hurt China's exports,' the DBS Bank said in a report.
'The market conditions will continue to be volatile between now and the G20 summit on November 4, when the eurozone is expected to deliver a plan to contain its crisis.'
The yuan weakened 0.09 percent against the dollar last week, and fell 0.18 percent to 6.4006 yesterday during over-the-counter trading, the weakest since August 12.
The yuan is allowed to be traded at 0.5 percent on each side of the central parity rate.
'In a longer-term perspective, this does not necessarily indicate that the market is bearish on the yuan,' the DBS Bank said. 'The yuan's growing appeal to foreign governments as an alternative reserve currency also underscores China's relative robust economic performance.' --(9/27)
Food safety tip-off reward raised
Shanghai is looking to increase rewards paid to people who report breaches in food safety.
The sum paid out will not be less than 500 yuan (US$78) and there is no upper limit, the city's food safety authorities said over the weekend.
The money will come from the city's revenue, according to the Shanghai Food Safety Commission.
If members of the public can name the people they are reporting and can help officials investigate the case, they can receive between 2 and 5 percent of the money involved. Those unable to help the investigation will receive between 1 and 2 percent.
Officials are keen to hear about the illegal addition of prohibited chemicals and non-edible substances, recycling expired food, excessive use of food additives and the use of swill oil.
The commission said people reporting food safety concerns must not blackmail, threaten or cheat the people involved.
Officials are currently seeking the public's views on the proposed reward system. The draft document is available at the official website of Shanghai Food and Drug Administration www.shfda.gov.cn, but only in Chinese.
The reward system is intended to help improve the city's food safety condition.
In recent years, food safety scandals, such as melamine-polluted baby formula and recycled expired buns, have hit consumer confidence in domestically produced food, officials said.
In 2007, the Shanghai Food and Drug Administration issued a regulation saying reports of illegal food production could lead to rewards of up to 50,000 yuan.
However, this proved unsuccessful, with claims the sum wasn't enticing enough to the high-ranking company managers who most likely have information. --(9/26)
Apple fans flock to first HK store
Apple Inc opened its long-awaited first store in Hong Kong yesterday, with thousands of fans of the computer and gadget maker pouring in on the first day.
Some Apple enthusiasts had camped out for nearly two days to be among the first to see the new store.
The store is located on two floors linked by a glass spiral staircase in International Financial Center Mall, in the central business district.
The Cupertino, California-based company's products are wildly popular in China. The Hong Kong store follows the opening of a third Shanghai store on Friday as the company boosts its presence in a key market. It also has two stores in Beijing.
"I've always wanted to participate in this kind of event, to enjoy the atmosphere. It's cool," said 17-year-old Liu Jia-rong, a high school student from Shenzhen, Guangdong Province, which is neighboring to Hong Kong. Liu said he had been waiting for the day that an Apple store would open near his home. He was one of the first to enter the store after joining the line at about 4pm on Friday.
Free T-shirts were given to the first 5,000 people in line.
Company executives said earlier that China was "very key" to Apple's record earnings and revenue in the quarter that ended in June. --(9/25)
Refineries run at low levels
The run rate at China's major refineries has fallen to its lowest level of the year as companies undertake heavy maintenance on their plants, the latest industry survey showed.
The rate fell to 77.59 percent in the two weeks ending Thursday, down 2.06 percentage points from the previous two weeks, according to a biweekly report yesterday by Chinese industry portal Oilchem.net. The previous low was 78.46 percent, recorded at the end of June.
The report was based on a survey of 35 refineries with a combined capacity of 363 million tons a year, or 72 percent of the nation's total capacity.
The decline in utilization was most significant in east and central China, it said.
Sinopec Shanghai Petrochemical Co, a unit of Asia's top refiner, Sinopec, on September 17 shut an 8 million ton-a-year facility for a month-long maintenance, Oilchem said.
Utilization at China's biggest refineries is expected to rebound to 81-83 percent in late October as repairs finish, the report said.
For the entire June-September period, Chinese refineries have shut facilities for heavy maintenance. Because of that and higher demand during harvest season, the country was a net importer of diesel last month. --(9/24)
National Day train craze
People line up to buy tickets which started selling train travel for October 1, the National Day. Officials said tickets for some long-distance routes were sold out within minutes of going on sale. The weeklong holiday break is one of the peak travel seasons in China. --(9/23)
Strong yuan brings 72% increase in hot money
China is attracting a rising amount of speculative capital, or hot money, as investors bet on the nation's growth and prospects for gains in the yuan.
The central bank said yesterday that financial institutions' influx of foreign capital jumped by 72 percent in August from July.
Their yuan positions saw a net gain of 376.94 billion yuan (US$59.1 billion) last month, the biggest increase in five months, according to the People's Bank of China's monthly report.
In July, inflows of capital shrank 20.8 percent from a month earlier to 219.6 billion yuan. Average monthly yuan foreign exchange purchases last year were about 272 billion yuan.
Part of the foreign capital comes into the country in the form of foreign direct investment and trade, both easily tracked. The rest is usually considered hot money since it is hard to monitor.
FDI in China expanded 11.1 percent from a year earlier to US$8.45 billion in August, the Ministry of Commerce said last week. Last month's FDI growth, however, eased from 19.8 percent in July.
Meanwhile, better-than-expected imports helped reduce China's trade surplus to US$17.7 billion last month.
This means a total of US$32.95 billion in August could be hot money.
'The attraction of China is not only in the prospects of a rising currency but also stable economic performance and higher investment returns,'Shen Jianguang, a Hong Kong-based economist with Mizuho Securities Asia Ltd, said yesterday. 'US Treasuries yield is now below 2 percent and Europe is facing a crisis, so China offers stability and better returns in addition to the prospect of yuan appreciation.'
The International Monetary Fund on Tuesday lowered its growth prospect for China to 9.5 percent from 9.6 percent earlier this year, compared with 1.5 percent prospect for the United States and 1.6 percent for the 17 euro countries.
The yuan has appreciated more than 6.7 percent since last June, when the yuan's two-year de facto peg against the dollar ended. It advanced to its strongest level in three weeks yesterday on signs policy makers will tolerate currency gains to fight inflation in China. The central bank set the reference rate 0.17 percent stronger at 6.3772 per dollar, the highest since 2005.
Most economists say the yuan could appreciate to 6.30 against the dollar by the end of the year.
The rising amount of inflow capital, however, could compromise efforts to bring down high inflation and contain bubbles in some areas such as real estate industry.
'The authority is not likely to allow the yuan to see a further quick rise right now given the financial troubles in overseas countries,'Wang Guobin, an analyst with Northeast Securities, said. 'The rising forex purchase reflects the result of yuan's quick appreciation in August.' --(9/22)
Child compensation payout hike
Compensation payment limits for city children killed or injured in accidents will increase by almost 50 percent under proposed new regulations.
However, the latest draft of the amendment to regulations on school student accidents does not make a provision for compensation for mental trauma.
Under the amended rules, payments of up to 636,760 yuan (US$99,723) could be made if a child is killed or injured in an accident.
The current compensation standard is 440,800 yuan if a child dies in an accident and up to 399,600 yuan if they are injured.
But local legislators point out that compensation, which covers medical bills, nutrition fees, salary losses for parents and transport expenses, fails to include compensation for mental anguish.
Lawmaker Li Ming told Shanghai Daily that this was a vital category, bearing in mind that most families have only one child.
If a child dies or is seriously injured in an accident, the blow would be all the worse for parents if they were unable to have another child, he said.
'Their mental state would be a result of what happened and we should offer them some help,'Li added.
But fellow lawmaker Hu Yanzhao said a mental compensation clause should not be included, arguing it was difficult to measure.
While injuries are straightforward to detail, 'mental compensation is not so easy to gauge,'said Hu.
And officials from the city's education authority said they did not approve mental compensation as they thought it would be difficult to assess.
The draft for the first time offers the same compensation standard to families from rural areas of Shanghai. Presently, they only receive up to two-thirds of the amount paid to urban residents as the current formula is based on living costs.
In 2001, the city introduced insurance companies to deal with compensation. Children pay a small amount into the fund every year.
A total of 2,506 accidents related to schools were reported between 2001 and last semester, and 21.69 million yuan has been offered to families.
Families also have the option of pursuing compensation in court. --(9/21)
Exhibition on World Expo opening drawing near
A trial operation began this morning at a memorial exhibition on the World Expo 2010 that will officially open on Sunday in the former Urban Footprint Pavilion in Puxi.
Tickets will cost 30 yuan (US$4.69), while students, military personnel, senior citizens and children can enter for 15 yuan.
The 20,000-square-meter exhibition to be held for about two years is expected to attract 10,000 visitors per day and twice that much on peak days, said Liu Xiuhua, director of the Expo Museum, which is in charge of the exhibition.
The exhibition will feature a 3-dimensional movie named "Expo Honor." Visitors need to reserve tickets for the film at the entrance of the exhibition center, because the cinema can only accommodate 1,500 visitors every day.
"More than 14,000 exhibits have been collected from over 200 Expo pavilions for the exhibition, which will definitely remind visitors of the 184-day Expo," said Yu Li, chief designer of the memorial exhibition.
Exhibits will be rotated throughout the run of the exhibition to ensure that all 14,000 exhibits can be displayed.
When the display opens, the "Miguelin," the Spain Pavilion's 6.5-meter animated baby, as well as an animated show about the Expo that is similar to the China Pavilion's "Along the Riverside During the Qingming Festival," will be among featured items.
The exhibition also includes 3D movies filmed during the Expo, as they were always among the biggest attractions at pavilions, Yu said.
The exhibition will be open daily from 9am to 5pm, except on Mondays. The China Pavilion, meanwhile, will remain open on October 9 with an admission price of 20 yuan. --(9/20)
Bank's credit card bills found dumped
At least 500 credit card bills were found dumped at a recycling station in the Pudong New Area yesterday, raising concerns over a possible leak of bank customers' personal information.
The bills, in more than 10 bunches of 50 each, were from the Shanghai Pudong Development Bank.
The bank and the Pudong post office are investigating but the bank said its preliminary investigation found the post office to be responsible for the incident.
The director of the Pudong post office hung up on a Shanghai Daily reporter when asked about the find.
The problem came to light when a resident living near the recycling station in Nanhui area posted photos of the dumped bills online.
It was not known whether the bills were current or months old.
According to a bank insider, the bank would get back bunches of bills from time to time ¡ª usually rejected mail.
The bank generally keeps the bills for six months in case any customers come to claim them.
Once that period ends, the bank will ask local authorities to help destroy the bills in a safe way.
Guo Wei, a 28-year-old business owner, worried that people's individual information could be leaked.
'Anyone can reach the information if it's randomly dumped,'he said.
'If I did not receive the bill, I would worry more about my personal information than the bill itself.¡±
He said that he and many others he knew had often received marketing phone calls from real estate agents, insurance firms and other companies that seemed to be able to discover their identity, even though they were not the firms' customers. --(9/19)
Car plate prices hit 45-month high
Car plate prices in Shanghai rose to the highest in 45 months to 52,622 yuan (US$8,222) on average in September, prompting some complaints.
With automobile demand still solid, many car buyers said the license plates are turning into a hedging product, especially if the market remains robust.
This month's average plate price was 394 yuan more than in August, according to auction organizer Shanghai Commodity International Co.
The average price was the third highest ever. The all-time high of 56,042 yuan was set in December 2007, while the price hit 54,317 yuan in November of the same year.
Some potential license plate buyers expressed their concerns about the price, which has risen about 35 percent since the beginning of this year.
'I think the price is unreasonably high,'a netizen wrote on his microblog at weibo.com. 'A license plate is even more expensive than the small compact car Chery QQ, which sells for 51,000 yuan.¡±
The lowest plate price for this month jumped 1,200 yuan to 52,200 yuan.
The city government offered a record 9,500 plates this month, 500 more than in August in an attempt to ease demand.
But this month's auction attracted 22,268 bidders, 9 percent more than last month.
Shanghai is the only city nationwide that auctions car plates in an attempt to limit vehicle numbers.
A car owner surnamed Zhang said he would prefer to buy a plate now rather than wait because he thinks prices will continue to go up in the future.
'With the growth in vehicle sales and worsening traffic, I don't think there is much possibility that the government will loosen its control on the car plates,'said Zhang. --(9/18)
Chinese interest in London up
Leading independent global property consultancy Knight Frank yesterday said it expects transaction value of newly-built properties in London sold to Chinese mainland buyers to double in the next 12 months.
The London-based company, which has sold about 15 million pounds (US$23.71 million) worth of new properties in London over the past 12 months, has just set up a full-fledged International Project Marketing division in its Shanghai office to tap the rapidly-growing demand from Chinese mainland investors.
"We've noticed a dramatic increase in the percentage of newly-built property in central London going to Chinese mainland buyers over the past year and a half," said Seb Warner, Knight Frank's Asia-Pacific regional director of international project marketing. "We're pretty confident that the figure could double to 30 million pounds in the next 12-month period."
Knight Frank said the surge is mainly driven by a favorable exchange rate and London's status as a top destination for international property purchases.
In particular, about 10 percent of Chinese mainland buyers are keen on the super-prime market while the majority seems to be most interested in properties with a price tag of between 2 million yuan (US$313,480) and 10 million yuan, according to Knight Frank research. --(9/17)
Centers of innovation set up
Shanghai and the United Nations yesterday jointly unveiled two high-tech industrial centers that will help the city boost innovation, develop its key emerging industries and encourage cooperation between emerging markets.
The International Industry and Information Technology Promotion Center has released a cooperation framework between the BRICS countries ¡ª Brazil, Russia, India, China and South Africa ¡ª to promote technology cooperation between government institutions and enterprises.
The center intends to cooperate fully in key areas that include green technology and sustainable development, smart city and emerging industries of strategic value.
The Shanghai High-tech Innovation and Development Center will connect innovative programs and financial institutions as well as boost the convergence of industrial and information technologies. It will match start-up firms with institutions, including China Everbright Group, which will provide venture capital that could act as an incubator for them.
The centers are supervised by the United Nations Industrial Development Organization and will serve as a platform to promote the application of new technologies and cooperation between nations and enterprises.
The centers were unveiled during the Global CEO Conference organized by UNIDO and the UN South-South Cooperation Development Center in Shanghai yesterday.
Shanghai has picked nine key emerging industries, including new energy, new energy vehicles, advanced major equipment, civil aviation manufacturing, new materials, software and information, and biopharmaceutical.
The industrial production of the city's key emerging sectors may hit 1 trillion yuan (US$156 billion) this year from 886 billion yuan in 2010, said Shang Yuying, vice director of Shanghai Municipal Commission of Economy and Information. --(9/16)
Stocks end a three-day decline
Shanghai's key stock index rose yesterday, ending a three-day decline, after Premier Wen Jiabao pledged confidence in China and in Europe's economy.
The Shanghai Composite Index rose 0.6 percent to 2,484.83 points, halting a three-day, 1.8 percent decline.
The index has slumped 12 percent this year, extending last year's 14 percent plunge, as the government took steps to cool inflation that's at an almost three-year high. The gauge is valued at 11.5 times estimated profit, the lowest on record, according to weekly data compiled by Bloomberg News dating back to January 2006.
Wen told a World Economic Forum meeting in Dalian yesterday that China will maintain its 'active and prudent'fiscal and monetary policies to curb inflation while forging ahead with structural reforms and boosting domestic consumption to sustain long-term economic growth.
He said China is confident Europe can solve its problems and China will increase investment there.
Du Liang, an analyst with Shanxi Securities, said: 'Investors' confidence was lifted by Wen's remarks but the thin turnover showed caution is still heavy in the market. Growth is not likely to last long and will fluctuate at the current level.¡±
China Coal Energy, the country's second-largest coal producer, led a rally in the sector, gaining 1.9 percent to 9.64 yuan (US$1.51). The company said sales in August rose 18 percent from a year earlier.
China Shenhua Energy, the nation's largest, rose 0.6 percent to 25.64 yuan.
Cai Hongyu, an analyst with China International Capital Corp, said coal prices are likely to be supported by increasing demand from power firms and steel makers. --(9/15)
Fiscal revenue surges 34%
China's fiscal revenue surged 34.3 percent from a year earlier to 754.6 billion yuan (US$117.9 billion) in August, the Ministry of Finance said yesterday.
The rise was better than the 26.7 percent in July and 27.6 percent in June because the country benefited from the 52.9 billion yuan in the special oil gain levy for April to June.
'If we exclude the effect of the special oil gain levy collected last month, the growth would be around 25 percent, showing a consistent trend of easing,'the ministry said. 'With the personal income tax threshold being higher from this month, we are likely to see revenue moderate further.''
China raised the personal income tax threshold to 3,500 yuan from 2,000 yuan from September 1, a move which exempted millions from having to pay tax but would trim government revenue.
In August, personal income tax receipts, which took up 6 percent of China's fiscal revenue last year, rose 32.6 percent annually to 48.3 billion yuan.
China's cooling economy may also cut the government's fiscal revenue. The State Information Center, a research unit under the National Development and Reform Commission, forecast the economy to grow 9.2 percent annually in the third quarter, down from 9.5 percent in the second quarter and 9.7 percent in the first three months.
Corporate income tax added 17.9 percent annually to 49.5 billion yuan in August, from July's 34.4 percent rise. Business tax receipts jumped 23.4 percent to 93.9 billion yuan while collections from value-added tax rose 18.1 percent to 195.9 billion yuan, the ministry said.
In the first eight months, China's fiscal revenue gained 30.9 percent annually to 7.43 trillion yuan.
August's fiscal spending increased 25.9 percent from a year earlier to 807.6 billion yuan. --(9/14)
Imports hit record high
China's trade surplus narrowed in August for the first time in six months as imports increased to a record high, exceeding expectations.
Imports expanded 30.2 percent from a year earlier to US$155.6 billion last month, up from July's pace of 22.9 percent. Exports rose 24.5 percent to US$173.3 billion, also stronger than July's 20.4 percent.
The value of imports in August broke the previous record of US$152.2 billion set in March, the General Administration of Customs said yesterday.
Better-than-expected imports helped reduce the trade surplus to US$17.7 billion last month, down from July's US$31.5 billion and June's US$22.3 billion. But it was higher than May's surplus of US$13 billion.
Between January and August, China's trade surplus contracted 10 percent from a year earlier to US$92.7 billion.
"China's trade performance shows resilience amid global economic woes," said Xue Jun, an analyst at CITIC Securities Co. "However, with demand in major trading partners likely to wane, China should prepare for a possible trade slowdown in the near future."
World Bank President Robert Zoellick said in Beijing last week that China should press ahead with reforms to promote domestic consumption and reduce reliance on exports and investment.
Sun Chi, a Nomura Securities economist, said exports may weaken in the coming months because the index of new export orders showed contraction in August, indicating slower exports in the months to come.
The declining trade surplus in August helped reduce pressure over a stronger yuan, some analysts said. Zhou Xiaochuan, governor of the central bank, denied media reports of full yuan convertibility before 2015.
Weaker trade with countries hit by government debt crises still prevailed. Bilateral trade between China and the United States expanded 17.8 percent year on year between January and August, moderating further from the pace of 18.5 percent in the first seven months and much slower than China's overall trade growth of 25.4 percent in the year to August.
Deals with Europe grew 21.8 percent to US$372.1 billion during the period and remained China's largest trading partner. --(9/11)
Full moon may be missing at festival
People may miss the full moon at this year's Mid-Autumn Festival, as cloudy to overcast skies are expected that day, next Monday.
Before that, rain is expected to hit the city starting today and lasting until Sunday, forecasters said yesterday.
Today, the maximum temperature is expected to hit 31 degrees Celsius. Cooler days should follow, with highs in a range of 27 to 29 degrees from Friday through Monday. The lows during the period will be 23 to 24 degrees, said the Shanghai Meteorological Bureau.
Forecasters said that although the city has been cooling down, people still have to wait some time before the fall comes meteorologically.
Fall's arrival is signaled when the daily average temperature drops to under 22 degrees for five straight days, the bureau said.
But the average in Shanghai is lingering around 26 degrees.
Usually Shanghai welcomes the season in late September or early October.
However, people should be aware that temperature changes within a day will increase as the Chinese solar term Bailu, or White Dews, arrives today.
Solar terms come from the ancient Chinese calendar. Forecasters said yesterday that people often catch colds around White Dews time, and should take care to wear more clothes in the mornings and evenings. --(9/8)
Fourth day of falls as market awaits figuresLydia Chen
Shanghai stock market yesterday fell for a fourth day as concerns about China's growth continued to sour sentiment ahead of the release of a raft of economic data on Friday.
The Shanghai Composite Index slid 0.3 percent to 2,470.52, the lowest since July 16, 2010.
'The market is not likely to stabilize in the short term,'said Wang Liemin, an analyst at Guosen Securities. 'Only if the authority eases its grip on liquidity would a rebound be in sight.¡±
But this seems unlikely. China International Capital warned on Monday that liquidity would remain tight in stock markets for the rest of the year as China is unlikely to switch policy unless the economy falls sharply.
The investment bank maintained its forecast of 9.2 percent growth this year but expected growth to slow to 8.4 percent next year, 0.3 points below its previous estimate.
The cement sector, a benchmark tracking the country's economic performance, was one of the biggest drags on the market.
Anhui Conch Cement, -China's biggest producer of the material, plunged 5.2 percent to 18.69 yuan (US$2.92), the lowest since January 25. The stock has fallen 28 percent over the past month.
Credit Suisse yesterday cut its target price for the Hong Kong shares of Anhui Conch to HK$28 (US$3.59) from a previous estimate of HK$37 to reflect a weakening outlook and a downside risk to margins next year.
Auto stocks also slumped. SAIC Motor, the country's largest automaker, sank 4.2 percent to 14.75 yuan. --(9/7)
Planners lower height on planned Bund complex
Shanghai's urban planning authorities yesterday lowered the height of a modern high-rise complex planned on the historic Bund to make it more harmonious with the rest of the Bund's architecture.
The heights of three side buildings of the planned Bund International Financial Service Center complex were reduced to less than 80 meters ¡ª 15 meters lower than the previous design, the Shanghai Municipal Bureau of Planning and Land Resources said on its website yesterday. It is soliciting public opinion.
The side buildings will be used for offices, businesses and hotels. However, the plan has not been changed for the main part of the complex, two 180-meter-tall twin towers. The bureau said they will be farther away from the historic Bund scenic area and therefore received approval.
The green-capped Fairmont Peace Hotel is now the tallest among Bund buildings at 77 meters.
The bureau publicized an initial plan for the complex in July and changed the plan amid public opinions that the buildings would ruin the historic Bund scenery.
'The developer fully supports the new plan and welcomes further public opinions,'Wang Fujie, deputy chairman of the board of directors of the Shanghai Zendai Property, told Shanghai Television Station yesterday.
Construction will begin at the end of the year on the complex which will be a comprehensive venue for business, finance, offices and cultural uses, Wang said. --(9/6)
China's auto sales set to slow
Growth in China's auto sales will slow to 3 percent to 5 percent this year after government incentives that boosted deliveries in 2010 were removed, according to a senior official at the State Information Center.
Deliveries will likely be about 19 million units this year, according to Xu Changming, a research director, whose center is a unit of the National Development and Reform Commission, China's top economic planning agency.
'The third quarter may be better than the second as September and October are traditionally hot seasons for auto sales but I don't expect a big improvement,'Xu said in an interview in Tianjin, where he was attending an auto industry forum. 'I don't expect any more stimulus policies from the government in the near future.¡±
China's auto sales have slowed this year after surging 32 percent in 2010 to a record, as the government phased out sales tax breaks and rebates for rural purchases. Total vehicle deliveries rose 3.2 percent in the first seven months, according to the China Association of Automobile Manufacturers.
Xu's forecast is in line with the association, which lowered its previous estimated 10 percent to 15 percent growth this year to 5 percent in July.
The center is conducting research on consumer acceptance of electric vehicles to see whether and under what circumstances buyers will opt for the alternative-energy cars, he said.
The State Council, or the Cabinet, is reviewing a 10-year development plan for energy-saving and alternative energy vehicles, the Securities Times said last Tuesday.
China aims to have 1 million units of electricity-powered vehicles running on roads by 2015, according to the Ministry of Science.
There are now 10,000 alternative energy and energy-saving vehicles in use in 25 designated trial cities, of which 1,000 are privately owned, according to the Ministry of Industry and Information Technology. --(9/5)
Warning over small aircraft
Shanghai's military aviation control authority and police warned yesterday that all small aircraft should get approval before taking off after several paragliders were operating without authorization, which affected commercial flights at the city's two airports.
The airforce based in Shanghai said yesterday that nine people and three paragliders had disturbed 39 flights in the city on Thursday.
The military alerted police after detecting the unauthorized activity at 10:38am around the bay area of suburban Fengxian District.
Zhong Weihong, a military official, said that the people operating the paragliders had not 'applied for permission nor reported in advance.¡±
'The flying severely affected flights at Shanghai's two airports,'Zhong said.
Police seized the paragliders and said the operators would be punished, without elaborating.
It was not immediately known whether the people had acquired flying licenses for paragliders.
With a boom in civilian aircraft activities, such incidents are on the rise, said the authorities. Air traffic control to prevent crashes and other accidents has became more urgent as the air force has agreed to open the low altitude space gradually to encourage private planes and commercial flights.
Xiang Jijie, chief of staff with the airforce in Shanghai, said: 'Small aircraft moving at slow speeds and at low altitudes are a great danger, especially when they are near airports where commercial planes are about to take off and land.'
Also on Thursday, a flight that was scheduled to land in Jiangsu Province's Nantong airport was diverted to Hongqiao International Airport in Shanghai after a powered parachute flew above the airport for hours. No one was detained or punished for the incident, according to reports.
People who fail to get approval for small aircraft flights can be fined up to 50,000 yuan (US$7,800). Those causing serious consequences face even harsher penalties, according to existing aviation regulations. --(9/4)
Overseas real estate in demand
About 60 high-end property developments from both China and abroad are taking part in the ongoing China International Luxury Property and Home Decor Show in Shanghai with overseas developers and estate agents showing keen interest in tapping ever-growing enthusiasm among wealthy Chinese investors.
The three-day event, being held at the Expo Center through tomorrow, has attracted more overseas participants this year as Chinese mainlanders emerge as increasingly important global property investors, according to the YUBO Group, organizer of the show.
"About two-thirds of the projects displayed this year are from overseas while some renowned domestic developments like Star River are also participating," said Frank Gu, YUBO general manager.
In fact, a couple of factors, including rising wealth, stable investment returns on overseas properties, and the Chinese government's efforts to rein in investment in domestic properties, have helped accelerate interest in real estate abroad.
"We finally sold about 20 units to Chinese buyers after introducing one apartment development in London at CILPS last year, and we expect an even warmer response from the market this year," said Louise Yan, a marketing manager at the international properties division of Colliers International, which is marketing three residential projects in London at this year's show, again for the Berkeley Group, one of the United Kingdom's largest real estate companies.
Some newcomers have also expressed optimism over the China market.
Dave Lee, a marketing director at Huttons Real Estate Group from Singapore, which has brought six projects to this year's event for the first time, said he has perceived rising interest from Chinese buyers over the past few years as stable political and economic environment, well-known educational resources, and reliable investment returns for real estate has made the city-state a more popular destination for property investment.
"It is always good to be closer to our potential customers and we think this might be a good platform," Lee said. --(9/3)
Longer visa-free stays?
A 48-hour policy to allow travelers on layovers in Shanghai between international flights may be improved and may spread to nearby cities, local government officials said yesterday.
Shanghai Tourism Administration officials said they are applying to the central government to approve the new policy to extend the allowed visa-free stay in Shanghai from 48 hours to a longer period of time.
They are also appealing to the state authority to include other cities in the Yangtze River Delta Region to boost tourism and make the area more attractive to foreign travelers.
Shanghai now allows citizens from 40-plus countries to land at either of the city's airports without an entry visa. They can stay in Shanghai for up to 48 hours before flying out of the country again.
In other big cities, the same policy is restricted to 24 hours, immigration police officers said.
But even 48 hours may not be enough for some travelers who would like to visit more places in town or go to nearby tourism cities, said local tourism authorities.
'Integration of traffic connections in the Yangtze River Delta Region is improving quickly. In near future, it will take less than three hours to travel between any two cities in the area,'said Dao Shuming, the tourism administration director.
Details of the proposal have not been announced, including how long the non-visa stay would be extended or names of the foreign countries that could participate. --(9/2)
Lucky 13 get PBOC licenses
China's central bank yesterday approved the second group of 13 non-financial institutions, including ChinaPay and Union Mobile Pay, to operate third-party payment services.
Most of the 13 institutions are located in less developed inland regions or provinces such as Inner Mongolia and Sichuan and they handle prepayment card services.
The first batch of 27 companies acquired the licenses to run third-party payment services in June.
'Price competition among companies offering third-party payment services will be fiercer and companies have to diversify their target and services,' said Zhang Meng, a researcher at Analysys International.
In the second quarter, third-party payment spread to new areas such as education, funds, and logistics services, Zhang added.
The total size of China's online payment market was worth 460.9 billion yuan (US$72.3 billion) in the second quarter, 16 percent higher than the first quarter and 95.3 percent higher than last year. Alipay has 45.5 percent of the market, Tenpay's 21.2 percent and China UnionPay's 11.1 percent, Analysys International said.
Analysts forecast the annual transaction volume for third-party payments will exceed 3 trillion yuan in the next three years.
The People's Bank of China ruled last June that all third-party payment service providers must gain a new business license from it by yesterday. Failure to do so will see the services shut down.
But analysts estimated that the PBOC may postpone the deadline and offer more licenses 'gradually.'
'More than 170 companies have gone through the procedures by August 30 but only 13 were approved this time,' said Zhang.
'The central bank is short of time to examine and approve all the applications,' he said. --(9/1)
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