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Foreign Trade 1 Edition 03 / 2018 Foreign Trade Dear Readers, The figures for Q4/2018 are not out yet, but the downward trend is obvious although not dramatic. In the automotive industry a huge contrast can be seen between the market of traditional combustion engine vehicles and new energy vehicles (NEV). The Chinese Association of Automobile Manufactures (CAAM) reported, that in the first 11-month of 2018, China made 1.05 million NEV’s and sold 1.03 million, up 63.6% and 68%. In the same period, the production and sales of automobiles in China were 25.33 million and 25.42 million, down 2.6% and 1.7%. Due to the cooling down of the economy in 2018, the infrastructure sector also showed a weak growth. However, positive signals were given by the state council that a new round of infrastructure investment financing would come. The steel industry seems to perform quite well, the price rises due to capacity control brought the steel companies high profit rate than ever. However, this also cause cost stress for the downstream industries. VDMA China: 2018 at a Glance 2018 has been an eventful year for the VDMA China. We tried new event formats to better serve our member companies and formed a VDMA China Advisory Board to increase the visibility of the VDMA in China and improve performance. Following the highlights of 2018: 17 sector-specific China Management Meetings (CMM’s) 8 cross-sector events like CEO Briefings on IT Security Briefing, Trade & Export Financing and Made in China 2025 Foundation of the VDMA China Advisory Board with 12 board members 1st Industry 4.0 Flagship Conference with 200 participants 7th VDMA China Mechanical Engineering Summit Four (4) member surveys on the overall business climate, the Impact of the Sino-Us Trade War on our member companies in China and the Impact of new Chinese policies and regulations VDMA Marine Equipment Delegation visiting 2 Shipyards in Shanghai More than 200 individual company inquiries We would like to take this opportunity to wish you a wonderful and successful new year! Like always, we can celebrate twice in China, the Chinese New Year, the year of the pic, starting on February 5th. According to Chinese saying, pigs have great concentration: once they set a goal, they will devote all their energy to achieving it. 2019 marks the 70th anniversary of the founding of the PR China. Chinas goal is to counter the downward trend and stabilize economic growth and overall demand. Enjoy reading! Yours sincerely, Chief Representative Claudia Barkowsky 2 Content 1）Country News.......................................................................................................................... 3 1.1. Macro Economy .............................................................................................................. 3 1.2. Environmental Protection ................................................................................................ 4 1.3. Belt&Road ....................................................................................................................... 5 1.4. MIC 2025 ......................................................................................................................... 6 1.5. IPR and Standardization ................................................................................................. 6 2）China Macro Economic Figures ............................................................................................. 7 3）Industry News ......................................................................................................................... 9 3.1. Automobile ...................................................................................................................... 9 3.2. Infrastructure ................................................................................................................. 12 3.3. Energy and Chemical Industry ..................................................................................... 13 3.4. Steel .............................................................................................................................. 14 3.5. Aviation Industry ........................................................................................................... 15 4）M&A Information ................................................................................................................... 16 5）SOEs Introduction ................................................................................................................. 17 6）Our Resources ...................................................................................................................... 19 7）Calendar of Events 2019 ...................................................................................................... 20 8）Services of VDMA China Office ............................................................................................ 21 3 1) Country News General Administration of Customs published statistics on October 12. It shows that during the first three quarters of this year, China’s total value of foreign trade reached 2.8 trillion Euro, up by 9.9% year on year. The import and export value increased quarter by quarter, and the year- on-year growth rate in the third quarter was significantly higher. To be specific, during the first three quarters, the growth rate of import and export of private enterprises reached 2.9%, contributing 49.9% to China’s total value of foreign trade. Import of mechanical and electrical products increased by 7.8%, accounting for 58.3% in China’s gross export value, up by 0.6% year on year. This year, China proactively increases import. Statistics show that during the first three quarters, China’s total imports reached 1.3 trillion Euro, up by 14.1% year on year. The growth rate of imports is 7.6% higher than that of exports. 1.1. Macro Economy The CIIE show as one part of Belt and Road Initiative China’s first international import expo was announced by Xi at the ‘Belt and Road’ forum in May 2017. It was part of China's effort to transition to consumption-led growth and a more balanced trade structure; it is also packaged as a global public good to promote economic globalization in an era of rising protectionism. A total of 170 companies from Germany will attend the first China International Import Expo (CIIE), according to Simone Pohl, delegate and chief representative of the Delegation of German Industry & Commerce in Shanghai. China's first International Import Expo started 5 November 2018 in Shanghai. Xi pledged in his opening remarks that China would continue to • unlock its import potential • relax market access restrictions by o further liberalizing the financial sector • build world-class business environment by o accelerating the legislation of foreign investment law o promoting the pre-establishment national treatment plus negative list system o offering equal treatment to all enterprises registered in China o introducing a punitive system for intellectual property infringements • deepen free trade zone (FTZ) reform by o supporting innovation in FTZs o studying the feasibility of building Hainan into a free trade port • promote bilateral and multilateral cooperation by o supporting WTO reforms o accelerating negotiation o advancing the Belt and Road Initiative • give full play to Shanghai’s role in opening up by o adding new districts to the Shanghai pilot FTZ o Establishing a ‘technological innovation board’ in Shanghai Stock Exchange promoting integrated development of the Yangtze River Delta by making it a national strategy. 4 MIIT: Between January to September, manufacturing industry’s investment increased 8.7% year on year “During the first three quarters, industrial added value above the national scale increased 6.4% year on year, higher than the full-year forecast. Manufacturing industry’s investment increased 8.7% year on year, representing an increase for six consecutive months. Information and communication industry kept a sound development momentum. Profits of companies constantly improved. Over the past eight months, industrial enterprises above the national scale achieved a year-on-year increase of 16.2%. During the first three quarters, high-tech industry and equipment manufacturing industry respectively increased by 11.8% and 8.6% year on year, faster than the overall industrial growth rate of 5.4% and 2.2% respectively. High-tech industry and equipment manufacturing industry respectively accounted for 13.4% and 32.3% in industrial added value above the national scale. Investment of manufacturing industry represented an increase of 8.7% year on year, accelerating for 6th consecutive months. Investment of high-tech manufacturing grew by 14.9%, and investment of technological transformation upgraded by 15.2%, 9.8% faster than that in the overall industrial sector. In July, August and September, growth of industrial added value above the national scale slowed down month by month. There are many reasons including subjective factors of active structural adjustment and objective effects of tightening external environment. PBoC governor speaks out to boost dropping market confidence China's stock and forex markets have been in constant decline since June. In October, People’s Bank of China (PBoC) pumped 95 billion Euro net liquidity with 1 % reserve requirement lowering to prop up the stock market, which failed as indices continued to drop. Dropping stock market values and economic uncertainties are motivating major financial policymakers to try
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