Your Daily Scan of the New Global Economy

China

Intel China

  • Auto parts makers optimistic on China

    Auto parts suppliers are optimistic about the Chinese car market, as well as new opportunities created by advances in e-mobility and autonomous driving, industry representatives said at the ongoing Shanghai International Automobile Industry Exhibition.German automotive and industrial supplier Schaeffler expects its China business to double in the next five to seven years and has been readying itself for a transformation in transportation and mobility services. Matthias Zink, CEO of Automotive OEM at Schaeffler, told reporters the company expects to prepare for the technology shift by offering bottom-up upgrades and solutions and addressing safety concerns in autonomous driving. Schaeffler China President Zhang Yilin said half its China business comes from local automakers and while the market saw a dip last year, it has not reached its peak. Strong trend to e-mobilitySchaeffler is presenting an extensive range of products for application in various types of powertrains at the exhibition.It also announced the start of production of axles for electric SUVs at its plant in Taicang, eastern Jiangsu Province. Germany’s leading mechatronics provider, Brose, is eying an investment of at least 300 million euros (US$339 million) in the next three years to expand production capacity and strengthen R&D. Kurt Sauernheimer, CEO of Brose Group, said last year China sales grew 5 percent against an overall drop in the market. “We expect China to represent 30 percent of our global business very soon and we will grow our customer portfolio in Asia, and especially China,” he said. The trend toward e-mobility will bring new opportunities for Brose’s mechatronics offerings, said Brose China President Jenny Xiang in an interview. Brose also noted increasing local demand for comfortable, functional and tailor-made interiors and it will continue to roll out localized product offerings for the domestic market.The China Association of Automobile Manufacturers estimates that new-energy vehicle sales in the country are set to reach 1.6 million units this year.NEV sales in China are soaring as the overall market falls, surging 85.4 percent year on year in March, compared with a 6.9 percent decrease in total sales.Faurecia, another leading automotive technology supplier, plans to double its sales in China over the next four to five years, thanks to growing demand for sustainable mobility and personalized on-board experiences.“China is one of Faurecia’s key and strategic markets, and represented about 15 percent of the group’s sales last year,” Li Jingcheng, vice president of strategy and development at Faurecia, told Shanghai Daily. “We expect this figure to exceed 20 percent within the next four to five years.”Meanwhile, parts giant Continental will invest heavily in new Chinese production sites in coming years, including a “sharp expansion” in powertrain production capacity in Tianjin and Changzhou. It expects “diversified demands” from the Chinese market, despite the recent slump.

    Posted: by Shanghai Daily

  • China sees brighter outlook for yuan and foreign investment as US-China trade war deal nears

    The odds of capital exodus from China and of a slide in the value of the yuan exchange rate have diminished thanks to China’s steady domestic growth, progress in trade talks with the United States and the decision by the US Federal Reserve to halt its interest rate increases, China’s foreign exchange regulator said on Thursday.The US Federal Reserve’s announcement that it no longer plans to raise interest rates this year will mean that the difference between US and Chinese interest rates will…

    Posted: by South China Morning Post

  • China’s first-quarter GDP up 6.4% on industrial growth, consumer demand

    CHINA’S economy remained stable in the first quarter, with the gross domestic production posting a faster-than-expected growth year on year, as industrial production jumped sharply and consumer demand showed signs of improvement.

    The GDP rose from a year earlier to 21.34 trillion yuan (US$3.19 trillion) in the first three months, up 6.4 percent, which was unchanged from the fourth quarter of 2018 and higher than the expected 6.3 percent, according to the National Bureau of Statistics.

    On a month-on-month basis, the GDP grew 1.4 percent in the first quarter as expected, retreating slightly from the 1.5 percent growth posted in the previous quarter — a new low since the first quarter of 2018.

    The bureau said the market expectations have markedly improved and confidence in development had increased.

    China’s economy operated within a reasonable range in the first quarter. The positive factors gradually increased, laying a good foundation for steady economic development throughout the year, said Mao Shengyong, spokesperson for the NBS.

    However, the acute structural imbalance and downward pressure still exist, Mao said, adding that greater efforts should be made in further promoting reforms.

    China has rolled out many policies to support growth — the key is to implement them, Mao said.

    The value-added industrial output of designated large enterprises — with an annual turnover of at least 20 million yuan — grew 6.5 percent year on year in the first quarter, dipping 0.3 percentage points from the same period last year.

    The figure was up 1.2 percentage points compared with the January-February figure, and was 0.8 percentage points faster than the fourth quarter last year.

    Share markets and most currencies in Asia rose in relief. The yuan rose 0.4 percent to a 7-week high, Reuters reported yesterday.

    For March, the value-added industrial output of major enterprises grew 8.5 percent year on year, 3.2 percentage points faster than the January-February period, and rose 1 percent from the previous month.

    The March year-on-year pickup was mainly driven by the mining and manufacturing sectors, according to Nomura, where industrial output growth rose to 4.6 percent year on year and 9.0 percent, respectively, in March from 0.3 percent and 5.6 percent in the January-February period.

    Industrial output growth in the utilities sector also rose last month, albeit less significantly, to 7.7 percent from 6.8 percent in the first two months.

    By industry, output in the mining sector grew 2.2 percent year on year in the first quarter, that in the utility sector rose 7.1 percent and the manufacturing sector rose by 7.2 percent.

    Of note, the industrial high-tech sectors jumped 7.8 percent in the first three months from the same period last year, 1.3 percentage points faster than the overall figure for the industrial production of major enterprises.

    The emerging industrial sectors also rose at a 0.2-percentage-point faster pace than the headline industrial output figure, rising 6.7 percent from a year earlier.

    The service sector expanded steadily by 7 percent year on year in January-March to 12.23 trillion yuan.

    Among them, the leasing and business service sector increased by 8.3 percent year on year, the financial sector up 7 percent, the accommodation and catering sector grew 6 percent, and wholesale and retail sales advanced by 5.8 percent, all higher than the pace in the fourth quarter of last year.

    The information transmission, software and information technology service industry extended its rapid growth, jumping 21.2 percent.

    Fixed-asset investment grew by 6.3 percent year on year in the first quarter, an acceleration of 0.2 percentage points compared with January-February, but fell from the 7.5 percent year-on-year growth in the first quarter last year.

    Retail sales growth ticked up to a stronger-than-expected 8.7 percent year on year in March from 8.2 percent in January-February. However, passenger car sales growth was deep in the negative category, dropping by 11.7 percent in March from a year earlier, against the 9.7 percent year-on-year decline in January-February.

    Sales growth of property-related products rose broadly, mainly led by home-use electronics and furniture sales, growth of which jumped to 15.2 percent year on year and 12.8 percent, respectively, in March from 3.3 percent and 0.7 percent in January-February.

    “The improved sales of property-related products was largely due to the ongoing recovery of the property sector in big cities, although we believe it is likely to be moderate and short-lived,” Nomura said in a note.

    “We remain cautious on property markets of lower-tier cities, as downside pressures still loom, especially from tapering pledged supplementary lending, contracting land sales and rising bond repayment pressures amid mounting outstanding debt for developers. This does not bode well for consumption growth in upstream and downstream industries of the property sector in coming quarters,” said Lu Ting, chief China economist of Nomura.

    “As the growth momentum of the Chinese economy picks up, we believe that policymakers will re-assess the need for further stimulus. The government will maintain a counter-cyclical stance, which will primarily be expressed through measures that support structural transformation,” according to the Australia and New Zealand Banking Group.

    The ANZ Group expected a recovery in the second quarter to be largely domestically stimulated, with investment being the first sector to signal a rising trend. They also revise their GDP forecast to 6.4 percent for full-year 2019, from 6.3 percent previously.

    The National Development and Reform Commission had approved 800 billion yuan of FAI projects in December 2018, equivalent to the amount of all projects approved in January-November 2018. Local governments have also started intensive issuance of special local government bonds amounting to 539 billion yuan in the first quarter of 2019.

    “Despite the limited room for easing, Beijing might still need to continue its easing stance for a while. We expect Beijing to especially push forward its non-conventional policy easing measures, such as providing special support to the private sector, cutting taxes and deregulating the property markets in big cities,” Nomura’s Lu said.

    Posted: by Shanghai Daily

  • China’s stock benchmark drops from one-year high as carmakers weigh on sentiment

    China’s stocks fell from a one-year high, as carmakers ran out of gas following a rally spurred by speculation about government stimulus to bolster car salses.The Shanghai Composite Index dropped 0.4 per cent, or 12.92 points, to 3,250.20 at the close on Thursday after rising to the highest level since March 2018 a day earlier. A gauge tracking auto stocks slumped 1.9 per cent after surging 7 per cent over the past two days, according to data provider Shanghai DZH. Hong Kong’s Hang Seng Index…

    Posted: by South China Morning Post

  • Intel drops 5G smartphone modems

    US electronics giant Intel has said it was withdrawing from the 5G smartphone modem business, hours after Apple and American microchip manufacturer Qualcomm announced they had clinched an agreement to end a battle over royalty payments.Smartphone modems were at the center of the battle between Apple and Qualcomm.Intel said on Tuesday it will “complete an assessment of the opportunities for 4G and 5G modems in PCs, Internet of Things devices and other data-centric devices,” while pursuing investment opportunities in its 5G network infrastructure business.“5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property,” CEO Bob Swan said in a statement. “We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”Intel will meet commitments to customers for its 4G smartphone modem products, though it has no plans to launch 5G smartphone modem products, including those previously set to premiere in 2020.

    Posted: by Shanghai Daily

  • Leica Camera backs away from promotional video depicting ‘Tank Man’ in Tiananmen Square

    Leica Camera AG has sought to distance itself from a promotional video – depicting photographers covering the deadly Tiananmen Square crackdown three decades ago – that has landed the German company in hot water in China.The five-minute promotional video, “The Hunt”, depicts various dark moments of war and conflicts through the lenses of photojournalists. But its main plot follows a Western journalist inside a Beijing hotel in 1989, who tries to go outside to document the shooting but is…

    Posted: by South China Morning Post

  • Measures to reduce MSEs’ financing costs

    CHINA will work to further reduce financing cost of micro and small enterprises, with an aim to increase outstanding loans offered by five large state-owned commercial banks to MSEs by more than 30 percent this year comparing with 2018, the State Council executive meeting chaired by Premier Li Keqiang decided yesterday.

    Premier Li pointed out repeatedly that it is imperative to take a multi-pronged approach to significantly ease the financing woes MSEs face, and set out clear goals for cutting their financing cost. “Lowering the MSEs’ financing cost is a prominent issue in our economy today,” Li said. “Our prudent monetary policy should be eased or tightened to the right degree to keep liquidity reasonably sufficient. We need to exercise well-timed regulation, rather than flood the economy with stimulus measures.”

    It was decided at the meeting that the government must make flexible use of various monetary policy instruments. The scale of re-lending and rediscount will be expanded and more targeted cuts in the required reserve ratio for small and medium-sized banks will be made. A policy framework for applying a fairly low RRR for small and medium-sized banks will be established, as was urged at the meeting. Funds that are newly freed up from these measures will be used for lending to private companies and MSEs.

    Bond financing support instruments will be promoted to see that the scale of both bond financing by private firms and special bonds issued by financial institutions for MSEs exceed the 2018 level.

    Banks need to improve the evaluation and incentive mechanism to strengthen their confidence, readiness and capacity lending to MSEs, the meeting urged. The government will support banks in formulating inclusive finance plans dedicated to MSEs and guide banks toward proper pricing of lending.

    Posted: by Shanghai Daily

  • Shanghai’s housing index rises on sales

    SHANGHAI’S existing housing index rose last month for the first time in over a year as sales rebounded.

    The index, which tracks month-over-month price changes in 130 areas across the city, gained 0.52 percent, or 22 points, to 3,905 in March, the Shanghai Existing Housing Index Office said in its latest report.

    Citywide, about 25,930 pre-occupied homes changed hands, an increase of 167.1 percent from February and 50.1 percent from the same period a year ago, the office’s data showed.

    Pre-owned homes costing less than 3 million yuan (US$447,020) accounted for 66.6 percent of the total. Those worth 5 million yuan or more made up 10.5 percent. Prices of pre-occupied homes climbed in 95 areas, fell in 16 and were flat in 19.

    Pujiang in Minhang District, Sanlin and Shangnan in the Pudong New Area were the three most sought-after areas in March, with sales of 660, 634 and 567 pre-used homes.

    Posted: by Shanghai Daily

  • Taiwan presidential run by Terry Gou creates ‘uncertain’ future for Foxconn, analysts say

    Foxconn chairman Terry Gou’s decision to make a run for Taiwan’s presidency creates “uncertainty” for the world’s largest iPhone assembler, and could threaten Apple’s long term relationship with the company, analysts said.The 68-year-old Gou, Taiwan’s richest man with a net worth of US$7.6 billion, said on Wednesday that he would take part in the opposition Kuomintang’s (KMT) primaries for the 2020 race to challenge current president Tsai Ing-wen.In a statement, Foxconn said that Gou wished to …

    Posted: by South China Morning Post

  • Tencent wins approval to distribute Nintendo Switch video game in China

    China’s biggest game publisher Tencent Holdings has received approval to distribute a Nintendo Switch game on the mainland, paving the way for the Japanese video game maker to bring its latest console to the world’s biggest gaming market.Tencent has been given permission to distribute Nintendo’s “New Super Mario Bros. U Deluxe” game, according to an announcement on the website of Guangdong Provincial Department of Culture and Tourism on Thursday.Nintendo has submitted a request to the Chinese…

    Posted: by South China Morning Post

We are using cookies to give you the best experience. You can find out more about which cookies we are using or switch them off in privacy settings.
AcceptPrivacy Settings

GDPR

  • By using this site, you agree to our Terms of Service and Privacy Policy

By using this site, you agree to our Terms of Service and Privacy Policy

Please read our Privacy Policy and our Terms of Service before Accepting agreement.