July 2011

China Pulse

The Monthly China Journal of Confederation of Indian Industry July 2011- Volume 8 No 7

India & China India-China bilateral trade (Jan-May 2011) Trade Value Change Total trade $29.3 bn Up 17.1% India’s imports from China $18.5 bn Up 24.7% India’s exports to China $10.8 bn Up 6.1% India’s deficit $7.7 bn Source: http://www.customs.gov.cn/publish/portal0/tab1/info304902.htm

CII & China CII IBF China organizes a session on China's 12th Five-Year Plan

CII IBF China on 2 June 2011 organized an interactive session on China's 12th Five-Year Plan in Shanghai. Ms Mary Boyd, Director, Shanghai Corporate Network, Economist Intelligence Unit, the Economist Group was the guest speaker at this session. She spoke on important aspects of future development and the impact on key industries that foreign companies have set up in China. Her presentation also focused on various developmental policies China will be adopting during the 12th plan period. The discussions generated lot of interest among the participants. Around 50 representatives of various Indian companies attended the session.

Ms Mary Boyd, Director, Economist Intelligence Unit, The Economist Group Shanghai speaking at the session on China's 12th Five Year Plan, Shanghai, June 2, 2011

6th China-South Asia Business Forum

A CII delegation led by Mr Sandipan Chakravortty, Past Chairman, CII (ER) participated in the 6th South Asia Business (CSAB) Forum on June 5-6, 2011 in Kunming, Yunnan. CII in association with CCPIT Yunnan also organized an exclusive session on “Doing Business in China” during the CSAB Forum meeting. Mr Chakravortty made a detailed presentation on the booming Indian economy and the investment potential for Chinese companies in various sectors in India. He also invited Chinese enterprises to participate at the Biz Bridge – the largest engineering & manufacturing trade fair in East Region of India organized by CII. Mr I M Pandey, Consul General of India in Guangzhou in his address said that infrastructure, power, and automobile were some of the important sectors amongst others that the Chinese companies could consider for investing in India. Mr Sandipan Chakravortty, Past Chairman, CII (ER) speaking at the China South Asia Business Forum, Kunming, June 5, 2011

India- China Business & Investment Seminar in Yangzhou Consulate General of India, Shanghai jointly with Municipal Government of Yangzhou and CII organized ‘‘India-China Business & Investment Seminar- Opportunities in IT, Engineering & Allied Sectors’’ on June 11, 2011 at Yangzhou, Jiangsu. The primary objective of the Seminar was to address Chinese companies interested in investing in India and to give them an overview of FDI policy, basic tax and business laws, financing options etc. in India. Consul General Mrs. Riva Ganguly Das led a delegation of Indian companies and banks located in Eastern China Region to Yangzhou. The delegation was received and hosted by Mr. Xie Zhengyi, Mayor of Yangzhou. Consul General expressed the hope that the seminar would result in greater business links between Indian companies and financial institutions and Yangzhou based Chinese companies. Mr. Wen Daocai, Vice Mayor of Yangzhou said that the joint initiative offered a unique opportunity to Yangzhou based companies to engage with Indian companies.

1 July 2011

Senior representatives of Deloitte, State Bank of India, Thermax and NIIT made presentations at the Forum. About 80 participants from more than 50 Yangzhou based companies, government officials and media representatives participated in the Seminar.

Participants at ‘‘India-China Business & Investment Seminar” with Consul General Mrs. Riva Ganguly Das, Yangzhou, 11 June 2011

China’s Economy China economic indicators (May 2011) CPI Up 5.5% (34-month high) Retail sales of consumer goods Rose 16.9% to 1.47 trillion yuan Up 6.8% PMI manufacturing sector Dropped to 52% PPI

Imports (Jan-May) $689.412 billion, up Industrial value- Up 13.3% 29.4% added output Exports (Jan-May) $712.375 billion, up Fixed asset Rose 25.8% to 9.03 trillion 25.5% investment (Jan-May) yuan Total trade (Jan-May) $1401.787 billion, up New bank lending Shrank to 551.6 billion yuan 27.4% Trade surplus (Jan-May) $22.963 billion, down Fiscal revenue Up 34% to 1.061 trillion yuan 35.1%

FDI (last one decade) $653.14 billion, up FDI (May) $9.225 billion, up 13.43% @9.5% p.a.

23% of FDI in China went into property in 2010 Twenty three percent of FDI in China went into the real estate sector in 2010. The ratio of FDI in the property sector remained well above 10% over the past 10 years (More). FDI in China over the past one decade reached $653.14 billion at an annual growth rate of 9.5%. In 2010, FDI was $105.7 billion, up 125% from 2001 (More).

Service trade in China to reach $600 billion by 2015 China is drafting a five-year plan to promote trade in its service sectors, with a projected service trade volume of $600 billion by 2015. China's service trade reached $362.4 billion in 2010, doubling that of 2005 and ranking fourth in the world. In 2010, the proportion of service trade to the country's overall foreign trade was 10.9%, compared to the global average of around 20%. According to the WTO statistics, the global trade in services expanded from $4.9 trillion to $7.2 trillion over the past five years, with an average annual growth rate of 8% (More).

China aims for 10-gigawatt solar power capacity in 2015 China's overall solar power capacity will reach 10 gigawatts by 2015, according to the China National Energy Administration. China’s installed solar photovoltaic generating capacity increased by 580,000 kilowatts in 2010 to 860,000 kilowatts (More).

2 July 2011

Yuan to play big role in Central Asia Yuan should play a bigger role than the US dollar in trade settlements in Central Asia in order to boost regional trade, according to Li Ruogu, president and chairman of the China Eximbank. He said that China should continue to push the internationalization of yuan and expand cooperation with neighboring countries to settle trades in the currency. China Eximbank has already started to provide yuan-denominated loans to banks in neighboring countries and the lender is also keen on extending loans to members of the SCO (More).

China’s showbiz market expected to grow to $96 billion China is expected to overtake Germany this year to become world's third-largest entertainment and media market with spending hitting $96 billion. China’s overall spending on entertainment and media grew by 13.9% to $85.5 billion in 2010 (More).

China to cut import tariffs on mid-range, high-end products China will further cut import tariffs on certain items, including certain mid-range and high-end products, according to the Ministry of Commerce of China. China’s economic growth mainly relies on domestic demand, especially on the demand for final consumption. According to the recent Hurun White Paper on Chinese Luxury Travelers, tourists from the Chinese mainland accounted for 17% of the global luxury spending, ranking first in the world. Watches and jewelry led the list of Chinese tourists’ favorite products, accounting for 31% of their overseas purchases, followed by clothing and fashion accessories, which accounted for 29% (More).

Government & Politics China keeps on high-speed rail extension China's high-speed trains will extend to far longer routes as Beijing has not altered its massive buildup plan for the next five years China will construct 30,000-km new lines by 2015. Total investment in railways during the coming five years is put at $430 billion, an increase of 41.5% from 2006-2010 (More).

China, Italy sign deals worth $3.3b Chinese and Italian companies signed 16 agreements worth $3.3 billion on 3 June during the visit of Chinese vice president, Xi Jinping to Italy. 14 agreements were signed by China Development Bank, China National Petroleum Cooperation, Huawei, Guangzhou Auto and other Chinese companies with Italian companies, covering areas including telecommunications, medicine, finance, automobiles and new energy (More).

China, Cuba sign host of cooperation deals China and Cuba signed 13 agreements during the visit of the Chinese Vice President Xi Jinping on June 5. The agreements included a MoU on bilateral economic relations over the next five years (More).

China, Chile sign 9 agreements China and Chile signed nine agreements in the agricultural, banking, mining and telecommunication sectors on June 9, 2011 during the visit of Chinese Vice President Xi Jinping to Chile (More).

China's millionaires hit 1.11 million The number of millionaire households in China increased by 31% to 1.11 million in 2010 as a result of country's rapid economic growth, rising savings and a stronger currency. China ranked third in terms of number of millionaire households, following the United States' 5.22 million and Japan's 1.53 million (More).

China ups holdings of US debt in April China's holding of US debt rose $7.6 billion to $1.15 trillion in April - the first month-on-month increase since its holdings reached $1.18 trillion in October. Japan remained the second-largest foreign buyer of US debt, holding $906.9 billion at the end of April, down $1.0 billion in March (More).

China opens world's longest sea bridge China opened the world's longest cross-sea bridge, 36.48 kilometers long Bridge in Qingdao, east China's Province on 30 June 2011. The bridge will shorten the route between the two centers by 30 km, cutting travel time down from over 40 minutes to around 20 minutes. Stretching across the wide blue waters of Jiaozhou bay, the vast Y-shaped bridge connects the booming Northern port city of Qingdao with an airport built on a nearby island and the industrial suburb of Huangdao. Built in just four years at a cost reported by the Chinese state media as £1.42 billion, the bridge stands on 5,200 pillars and was entirely designed by Chinese engineers at the Shandong Gausu Group (More).

Beijing - Shanghai high speed line opens The world's longest high speed line was inaugurated with simultaneous departures from Beijing and Shanghai at 15.00 on June 30, as part of events marking the 90th anniversary of the . Construction of the Beijing - Shanghai Passenger-Dedicated Line officially began on April 18 2008, and the 1 318 km route has been completed in less than 3½ years at a cost of 220·9 billion yuan. It is hoped the line will carry 80 million passengers per year. The fastest end-to-end journey time will be under 5 hour. The alignment is designed for 350 km/h operation, but the ministry of railway has determined that trains will be limited to two speeds, 300 km/h and 250 km/h (More).

Business & Industry Huawei enters into tablet PC market The Huawei Technologies on June 20 unveiled a 7-inch Android-based tablet computer in Singapore, throwing itself into a market competition with Apple and Samsung. Huawei is also developing a larger 10-inch tablet PC with plans to become one of the top five handset producers within three years (More). 3 July 2011

China's gold output ranks first for consecutive four years in world China has become the world's largest gold producer for consecutive four years. With explored gold reserve of 6,328 tons, China ranks third in the world. In 2010, all kinds of gold products in Shanghai Gold Exchange reached 6046.064 tons. In 2010, China's gold output reached nearly 341 tons, while the world's gold demand was 2,778.6 tons, of which India accounted for 783.4 tons, ranking first in the world, China, 571.51 tons, ranking second and the United States, 180.9 tons, ranking third (More).

Lenovo is buying majority stake of Medion to expand in Europe Lenovo, China's largest PC maker, intends to double its market share in Germany by acquiring Medion AG, a multimedia and consumer electronics maker. Medion is one of the top 5 vendors in Germany. Lenovo estimated that after the acquisition, it will become the third-largest PC maker in Germany, Europe's largest PC market. It will have more than 14% of the German and 7.5% of the Western European PC market share (More).

Rare earth giant takes over 35 smaller miners Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co, the world's largest rare earth producer, will consolidate 35 local rare-earth miners by June and will further unify the distribution and processing of the metals. Inner Mongolia Autonomous Region, world's largest rare-earth producer and the site of 97% of China's reserves, has drafted a plan to concentrate all rare-earth resources under Baotou Steel Rare-Earth (More).

POSCO to build new plant in China South Korea's top steel producer Posco will build a joint-venture plant in China's northeastern province of Jilin to meet booming demand from the region's auto industry. The new plant, to be located in a special economic zone in Huinan County of Jilin Province, will produce 200,000 tons of auto steel panels annually. Construction will begin in August and be completed by July 2012. Construction finished at Posco's thick steel plates plant in Dalian, Liaoning Province this month. The plant will be able to process 400,000 tons of steel annually for the local shipbuilding industry (More)

Contact: CII China Office U. D. Bhatkoti, Advisor E B Rajesh, Chief Representative Confederation of Indian Industry Confederation of Indian Industry The Mantosh Sondhi Centre Room No 11A47/49, Shanghai Mart, 23 Institutional Area, Lodi Road, New Delhi-110003 2299 Yan'an Road (West), Shanghai 200336, China Tel: 91-11-2462 9994-7; Fax: 91-11-24601298 Tel: +86 (21) 62360969; Fax: +86 (21) 32283510 Email: [email protected]; Website: www.cii.in Email: [email protected]; Website: www.cii.in

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Disclaimer: The main purpose of this publication is to provide basic information & news, it is not meant as substitute. The views expressed in this publications are those of the authors and do not necessarily reflect the position or policy of the Confederation of Indian Industry (CII).”

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