Jan.1-31 2009 No.60

Jan.1-31 2009 LOGISTICS CHINA No.60

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OVERSEAS BULLETIN Continental Airlines to fly non-stop from Shanghai to NY ...... 1 Korean Air to provide service to over 30 Chinese cities by 2010...... 1 South East Asian Airlines planning flights to Macao ...... 1 Finn Air launches Chinese language website ...... 1 AirAsia stops charging fuel surcharges ...... 2 Kingfisher postpones launch of two flights to HK, Singapore ...... 2 Delta plans new flight to Detroit from China ...... 2 Japanese carriers reduce flights to China ...... 2 Air France halts cargo service to Guangzhou ...... 3 AirAsia to increase services to Macao ...... 3 Airbus to continue with Tianjin ramp-up plan ...... 3 Malaysia expects more flights and shipping routes to China ...... 3 AirAsia expands flights between Tianjin and Kuala Lumpur...... 4

GENERAL EVENTS Q4 business climate index drops on slowing economy ...... 5 Major shipping, aviation funds to boost Tianjin reforms ...... 5 China’s postal industry increases revenues by 15.9% in 2008 ...... 5 NDRC rules out fuel price cuts ...... 6 Exports see 2nd straight monthly fall ...... 6 Auto sector gets a shot in the arm ...... 6 Flight fuel surcharges lifted ...... 7 Ctrip.com forms partnership with Alipay ...... 7 China’s CPI rises 5.9% in 2008...... 7 GDP growth slows to 6.8% in Q4 of 2008 ...... 8

AVIATION Hainan Airlines to add more flights to and out of Xi’an ...... 9 Chinese airlines turn their backs on the banking community ...... 9 China airlines seek 11% rise in passenger volume ...... 10 Orders for aircraft put on hold ...... 10 Vice Premier says aviation sector needs to deepen reform ...... 11 AVIC signs $26b credit agreement ...... 11 AVIC joins hands with Tianjin for helicopters...... 11 Airlines get 3-year grace on fuel surcharge tax ...... 12 Sichuan Airlines launches credit card telephone payment service...... 12 Shenzhen Airlines to launch new carrier in Yunnan ...... 12 12 airlines apply for cross-Straits charter flights ...... 13 Beijing Capital Airport share target cut ...... 13 HK Airlines and United Holidays to open tours to HK ...... 13

chinadaily.com.cnchinadaily.com.cn Record year for BOC Aviation ...... 13 Shenzhen Airport 2008 passenger throughput up 3.8% ...... 14 Price floor to be set for air tickets ...... 14 Tianjin to lure new airlines to increase traffic ...... 14 Guangzhou Baiyun Int’l Airport to upgrade terminal ...... 15 Guizhou Aviation Industry to issue 500m yuan financing bills ...... 15 Cathay Pacific approved to delay terminal construction ...... 15 Baosteel, Chinalco, AVIC ink jumbo aircraft supply deal ...... 16 Hainan Airlines to sell stake in Yangtze River International Leasing ...... 16 Shanghai to develop engines for jumbo planes ...... 16 Chongqing plans Wulong Airport for tourists ...... 16 AVIC to list most of businesses in three years ...... 17 China Aviation Industry Group to form auto corporation ...... 17 Hainan Airlines picks Rockwell Collins to supply avionics for A320s ...... 17 HK’s air cargo drops 3.1% in 2008 ...... 18 Major airlines bleed from fuel hedging losses ...... 18 Hainan Airlines approved for wider business scope ...... 19 Shanghai denies tie-up of two air carriers ...... 19 Lucky Air boosting business via online payment ...... 19 China cuts jet fuel price by 330 yuan a ton...... 19 Shanghai Airlines forecasts heavy loss for 2008 ...... 20 Cross-Straits airfares can ‘be reduced’...... 20 China’s private airline resumes flights ...... 20 AVIC, Airbus to set up JV for A350 ...... 21

China Southern Events China Southern books fuel hedging gain of $6m ...... 23 China Southern offers Hunan-Osaka flight ...... 23 China Southern 2008 passenger numbers up 2.3% ...... 23 China Southern forecasts loss for 2008 ...... 23 China Southern opens office in Taiwan ...... 23 China Southern board chairman appointed ...... 24

Air China Events Air China’s parent to buy East Star ...... 25 Air China books 6.8b yuan fuel-hedging loss ...... 25 Air China strengthens training of newly-employed pilots ...... 25

China Eastern Events China Eastern to cut managerial staff salaries by 10 to 30% ...... 26 China Eastern acquires aircraft from Boeing...... 26 China Eastern sees net loss in 2008 ...... 26 China Eastern to consider selling Yunnan, Joy Air stakes ...... 27 China Eastern obtains 5.55b yuan in loans ...... 27 China Eastern may cancel jet orders on hold ...... 27 China Eastern deals with bank on strategic cooperation ...... 27

chinadaily.com.cnchinadaily.com.cn LAND TRANSPORTATION 1st high-speed railway completed in central region...... 29 China’s northern passenger railway on trial run ...... 29 Guangxi, Vietnam start regular rail service...... 29 Shanghai to build Metro Line 12 ...... 29 Pearl River Delta to expand transportation network ...... 30 Beijing to spend 11b yuan in public transport subsidy ...... 30 Tibet to build first expressway ...... 30 More rural roads planned this year ...... 31 Zhejiang to develop longest rail network ...... 31 Shanghai maglev train project still under discussion ...... 32 MTR to invest in Hangzhou rail line ...... 32 CDB to lend 120b yuan for Qinghai infrastructure ...... 32 China Railway Construction Corp gets railway contract in Libya ...... 33 China’s railways carry 75m holiday passengers ...... 33 Xinjiang to invest heavily in rural highways ...... 33

SHIPPING Shanghai remains world’s No 2 port by throughput ...... 35 Tianjin container traffic set to drop ...... 35 Slowing economy means flat rail cargo volume for 2009 ...... 35 Choppy winds ahead for COSCO ...... 36 Rizhao Port Group to issue 500m yuan in 365-day debt ...... 36 Trade at Shanghai Port declines sharply in December ...... 37 Shipbuilder’s revenue up 26% in 2008...... 37 China’s shipbuilders 2008 profits up 50% ...... 37

EXHIBITIONS & MEETINGS More exhibitions and meetings: ...... 39 More exhibitions and meetings: ...... 40

chinadaily.com.cnchinadaily.com.cn OVERSEAS BULLETIN

Continental Airlines to fly non-stop from Shanghai to NY

(2009-01-03) Continental Airlines of the United States announced it would launch non-stop daily flight OVERSEAS linking Shanghai and New York on March 26. The service will be the only non-stop flight between the Pudong International Airport in Shanghai and New York’s Newark Liberty Inter- national Airport.

BULLETIN The flight will start at 15:45. (Beijing Time) from Pudong and land at the New York at 18:20. (local time). The return flight will be from 11:20 to 13:45 (Beijing Time) the following day. Continental Airlines is the world’s fifth largest aviation carrier. It started Hong Kong-New York " and Beijing-New York non-stop services in 2001 and 2005 respectively.

Korean Air to provide service to over 30 Chinese cities by 2010 ○ ○ ○○○○○○○○○○○○ (2009-01-05)

○ ○ ○○○○○○○○○○○○ Korean Air plans to provide services to over 30 Chinese cities by 2010, especially cities in

less-developed western regions, said J. H. Chae, regional manager of Korean Air’s Beijing ○ ○ ○○○○○○○○○○○○

office. ○ ○ ○○○○○○○○○○○○ The aviation negotiation between China and the Republic of Korea will kick off in January

○ ○ ○○○○○○○○○○○○ 2009. Korean Air expects China to open more cities in the west. Korean Air owns 126 aircraft and is among the top 20 biggest airlines in the world. China has become the most important

○ ○ ○○○○○○○○○○○○ overseas market for the carrier. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ South East Asian Airlines planning flights to Macao

(2009-01-08) ○ ○ ○○○○○○○○○○○○ South East Asian Airlines (SEAir) is planning to start flying to Macao as early as April, and

○ ○ ○○○○○○○○○○○○ despite the spiraling fuel prices and incursion of the major carriers, the airline will acquire

two new airbuses which are scheduled for delivery in the first quarter of this year. ○ ○ ○○○○○○○○○○○○

Avelino Zapanta, SEAir president said in April of 2009, they will fly to Singapore and Macao, ○ ○ ○○○○○○○○○○○○ and to Bangkok and Hong Kong in August. SEAir is owned by foreign partnership of Iren

○ ○ ○○○○○○○○○○○○ Dornier and Nikos Gitsis with 40 percent, and the Filipino group of Tomas Lopez, Jr. with 60

percent. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Finn Air launches Chinese language website

○ ○ ○○○○○○○○○○○○ (2009-01-09) Finn Air has formally launched a Chinese language website to compliment its websites in

○ ○ ○○○○○○○○○○○○ Italian, French, Russian, and Spanish. ○ ○ ○○○○○○○○○○○○ A representative from Finn Air stated that the airline’s fast and convenient non-stop lines

○ ○ ○○○○○○○○○○○○ have been well received by passengers flying between China and Europe and the launch of

the Chinese website will enable them to serve their Chinese passengers better. ○ ○ ○○○○○○○○○○○○ Finn Air believes the newly launched multi-language website will allow over half of their

○ ○ ○○○○○○○○○○○○ foreign passengers to use the company’s website in their native language. ○ ○ ○○○○○○○○○○○○ Finn Air’s online ticket booking service features a total of 11 languages: Finnish, Swedish,

○ ○ ○○○○○○○○○○○○ Spanish, Italian, Japanese, Chinese, Korean, French, German and Russian. Finn Air esti-

mates that by 2010, about one third of its air tickets will be booked online.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 11 OVERSEAS BULLETN

AirAsia stops charging fuel surcharges

(2009-01-10) AirAsia, Asia’s biggest low-fare air company, has stopped charging fuel surcharges from passengers since the end of last year, Kathleen Tan, executive vice-president of AirAsia said OVERSEAS in Guangzhou yesterday, adding AirAsia is the only air company so far in the world to say no to the surcharges. BULLETIN Kingfisher postpones launch of two flights to HK, Singapore

(2009-01-13) India’s second largest carrier by passengers flown, Kingfisher Airlines Ltd, has postponed " plans to start flights to Hong Kong and Singapore from Mumbai this week, and is refunding

customers or transferring them to other airlines. ○ ○ ○○○○○○○○○○○○ Despite an economic slowdown and slowing passenger demand, the airline run by liquor tycoon Vijay Mallya had planned to launch a daily flight to Hong Kong starting yesterday and ○ ○ ○○○○○○○○○○○○

to Singapore on January 16, as part of its overseas expansion plan. ○ ○ ○○○○○○○○○○○○

The airline, which had started taking Hong Kong and Singapore flight booking in December, ○ ○ ○○○○○○○○○○○○

is refunding passengers or transferring them to other flights. ○ ○ ○○○○○○○○○○○○ A Kingfisher Airlines executive, who didn’t want to be named, said the airline may finally launch flights on those routes in mid-February after its flights using Airbus A320 planes to ○ ○ ○○○○○○○○○○○○

Dubai and Colombo take off. One reason for the delay was a glitch in the in-flight entertain- ○ ○ ○○○○○○○○○○○○

ment system, this executive said. ○ ○ ○○○○○○○○○○○○

Delta plans new flight to Detroit from China ○ ○ ○○○○○○○○○○○○ (2009-01-13) ○ ○ ○○○○○○○○○○○○ Delta Airlines reaffirmed its commitment to the Chinese market yesterday by announcing a

new nonstop service between China and the US. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ In addition to its existing Shanghai-Atlanta route, the carrier plans to offer nonstop services between Shanghai and Detroit from June. Delta will operate the Shanghai-Detroit sector ○ ○ ○○○○○○○○○○○○ with Boeing 747-400 aircraft, having 65 lying-flat seats in the business class and 338 coach seats. ○ ○ ○○○○○○○○○○○○

China currently accounts for less than 5 percent of Delta’s global revenue, and the American ○ ○ ○○○○○○○○○○○○

company regards China as a top priority for growth opportunities. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Japanese carriers reduce flights to China ○ ○ ○○○○○○○○○○○○ (2009-01-20)

Japan’s two biggest airlines yesterday announced reductions in their number of flights to ○ ○ ○○○○○○○○○○○○

China, blaming weakening demand amid the global economic slowdown.

○ ○ ○○○○○○○○○○○○ All Nippon Airways (ANA) said it would halt regular flights between Kansai International ○ ○ ○○○○○○○○○○○○ Airport, the gateway to the western Japanese city of Osaka, and the northern Chinese City of

Dalian. ○ ○ ○○○○○○○○○○○○

ANA will also suspend the Kansai-Dalian-Shenyang route, while reducing services be- ○ ○ ○○○○○○○○○○○○ tween Tokyo’s Narita International Airport and Shanghai from the current 21 flights a week to

14, starting in early February. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ Japan Airlines announced separately that it would reduce the number of flights on its Narita-

Beijing route from 19 to 14 per week from February 10 until March 28, and on the Narita- ○ ○ ○○○○○○○○○○○○

Shanghai route from 28 to 21 per week.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 22 OVERSEAS BULLETIN

Air France halts cargo service to Guangzhou

(2009-01-20) Air France-KLM suspended cargo service to Guangzhou City, South China’s Guangdong OVERSEAS Province, from January 1 as cargo volume fell below sustainable levels.

Cargo traffic from Guangzhou to the United States and Europe fell 23 percent in November, compared with a year earlier. Europe’s largest airline expected delivery of a new 777 freighter, BULLETIN but it was delayed due to labor and logistics problems at Boeing. The timing of the delay coincides with the need to cut costs in the face of falling demand worldwide. " Air France may resume service to Guangzhou in the summer if demand picks up. The airline currently provides nine freighter flights per week to Hong Kong.

○ ○ ○○○○○○○○○○○○ AirAsia to increase services to Macao ○ ○ ○○○○○○○○○○○○ (2009-01-21)

AirAsia, the largest low-cost airline in Asia, announced additional flights to Macao to be ○ ○ ○○○○○○○○○○○○ effective from March 1, 2009. AirAsia is currently operating 6 daily flights linking Macao with

○ ○ ○○○○○○○○○○○○ Kuala Lumpur and Bangkok, with 3 daily flights to each of those cities.

○ ○ ○○○○○○○○○○○○ Additional flights to Macao include: *Penang-Macao - New route. ○ ○ ○○○○○○○○○○○○ *Kota Kinabalu-Macao - Reinstate the service;

*Kuching-Macao - Reinstate the service; ○ ○ ○○○○○○○○○○○○

*Kuala Lumpur-Macao - Increase frequency to 4 flights daily; ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Airbus to continue with Tianjin ramp-up plan

(2009-01-21) ○ ○ ○○○○○○○○○○○○ Airbus will pursue plans to increase the production of its new Chinese A320 assembly line, ○ ○ ○○○○○○○○○○○○ but the target of four aircraft a month could be revised if demand from the country’s airlines

softens. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Airbus, which late last year shelved plans to expand single-aisle output beyond 36 a month, is not ruling out cutting production if the global economic crisis bites hard, Airbus executive

○ ○ ○○○○○○○○○○○○ vice-president programs Tom Williams says that the assembly lines in Europe and China

would “share the pain”. ○ ○ ○○○○○○○○○○○○

The Tianjin plant, which can produce the A319 or the A320, began assembly of its first aircraft ○ ○ ○○○○○○○○○○○○

last August and delivery is scheduled by mid 2009, to China’s Sichuan Airlines. ○ ○ ○○○○○○○○○○○○ Output is due to gradually rise to the target of four aircraft a month by 2011, but Williams

○ ○ ○○○○○○○○○○○○ warns that the ramp-up plan “is very much dependent on the volume of aircraft we’re going to be selling in China because we want to be able to match the output of the Tainjin line with

○ ○ ○○○○○○○○○○○○ the output in Europe for Chinese consumption”. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Malaysia expects more flights and shipping routes to China

(2009-01-21) ○ ○ ○○○○○○○○○○○○ Malaysian Transport Minister Datuk Seri Ong Tee Keat said there would be more flights,

○ ○ ○○○○○○○○○○○○ shipping routes and bigger investments in the Tanjung Pelepas port. Ong said the number of flights between Malaysia and China could go up to 125 per week based on the China- ○ ○ ○○○○○○○○○○○○ Malaysia bilateral aviation agreement of 2006.

○ ○ ○○○○○○○○○○○○ “However, we have only used up 106 flights. They include flights by MAS and AirAsia. China

○ ○ ○○○○○○○○○○○○ and Hong Kong, meanwhile, have used up 110 flights,” he added. Ong said that after 2010,

the two countries would fully utilize the rights allowed in their bilateral agreement. ○ ○ ○○○○○○○○○○○○ According to AirAsia director Fam Lee Ee, the carrier would be able to fly to Tianjin five times ○ ○ ○○○○○○○○○○○○ a week, beginning in March. It would increase to daily flights after September.

chinadaily.com.cnchinadaily.com.cn 33 OVERSEAS BULLETN

AirAsia expands flights between Tianjin and Kuala Lumpur

(2009-01-24) AirAsia said it plans to fly between Tianjin and Kuala Lumpur in April and to further expand to Southwest China in 2010. The carrier said it witnessed a rising volume of business travel- OVERSEAS ers as companies cut travel expenditures due to the financial crisis. BULLETIN

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 44 GENERAL EVENTS

Q4 business climate index drops on slowing economy

(2009-01-09) GENERAL China’s business climate index fell for the second quarter in a row during the final three months of 2008 as economic conditions deteriorated sharply, the National Bureau of Statis- tics said. EVENTS The index was 107, versus 128.6 in the third quarter. The index was 137.4 in the second quarter and 136.2 in the first quarter. The index ranges from zero to 200. A reading above 100 shows economic expansion, while a reading below 100 indicates contraction. The survey " began in 1998. The index for industry was 98.5, down 27.3 points quarter-on-quarter. The indices for whole- salers and retailers as well as property developers were slid by 16.4 and 17.2 to 127.2 and 101.7 points respectively. The index for domestic publicly traded companies fell 39.4 points

○ ○ ○○○○○○○○○○○○ to 106.2 and the entrepreneurial confidence index sank 29.2 points to 94.6. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Major shipping, aviation funds to boost Tianjin reforms

(2009-01-12) ○ ○ ○○○○○○○○○○○○ Tianjin will strengthen financial reform and innovation this year and launch two major devel-

○ ○ ○○○○○○○○○○○○ opment funds for the shipping and aviation sectors, in line with it being one of the test beds

for national reform, the municipality’s mayor said yesterday. ○ ○ ○○○○○○○○○○○○

To that effect, the National Development and Reform Commission (NDRC), the country’s ○ ○ ○○○○○○○○○○○○ top economic planner, has approved Tianjin’s application to raise a 20-billion-yuan ($2.93

○ ○ ○○○○○○○○○○○○ billion) shipping industrial fund.

○ ○ ○○○○○○○○○○○○ The fund is now being prepared for launch, said Li Weibin, head of the China Development Bank’s Tianjin branch, adding the planned aviation fund is still waiting for approval from the

○ ○ ○○○○○○○○○○○○ NDRC. ○ ○ ○○○○○○○○○○○○ But the aviation fund might not be approved by the NDRC by this year, given the current

○ ○ ○○○○○○○○○○○○ economic challenges, a Tianjin government official said on condition of anonymity. “There are also difficulties facing the shipping fund because of the current sluggish demand in

○ ○ ○○○○○○○○○○○○ shipping. But it can start low for example, at 2 billion yuan,” the official said.

○ ○ ○○○○○○○○○○○○ The shipping fund is expected to fuel financing for the country’s shipbuilding industry and

facilitate the formation of international shipping and logistic centers such as Tianjin, ana- ○ ○ ○○○○○○○○○○○○

lysts have said. ○ ○ ○○○○○○○○○○○○ Financial innovation holds the key to fueling the development of major projects of Tianjin,

○ ○ ○○○○○○○○○○○○ China Development Bank’s Li said.

○ ○ ○○○○○○○○○○○○ In developed countries, due to the relatively mature fund and capital markets, the proportion

of direct financing is said to be able to reach 50 percent or even higher. But the figure is only ○ ○ ○○○○○○○○○○○○

10 percent in China, analysts said. ○ ○ ○○○○○○○○○○○○ Many consider the problems arising from the lack of direct financing to affect the healthy

○ ○ ○○○○○○○○○○○○ development of the economy, when businesses having financial difficulties cannot obtain

capital effectively. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ China’s postal industry increases revenues by 15.9% in 2008

○ ○ ○○○○○○○○○○○○ (2009-01-13)

○ ○ ○○○○○○○○○○○○ China’s postal industry received 140.7 billion yuan ($20.5 billion) in revenue in 2008, up 15. 9 percent year-on-year, the State Post Bureau said yesterday. The industry includes postal

○ ○ ○○○○○○○○○○○○ services and postal savings. Revenues of postal services, including express mail and

philatelic services, rose 14 percent to 96 billion yuan.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 55 GENERAL EVENTS

State Post Bureau head Ma Junsheng said new services, such as e-commerce, played a key part in driving the industry. Express mail, which accounts for more than 43 percent of the postal industry, took in 40.7 billion yuan last year, up 18.8 percent over 2007. GENERAL The bureau set a goal in 2009 to increase overall business revenue by 13 percent to 159 billion yuan. The express business was expected to rise 18 percent to 48 billion yuan. The bureau is the regulator of China’s postal industry and manages postal enterprises nationwide. The country’s biggest postal service player, China Post, is under the direct EVENTS administration of the bureau.

NDRC rules out fuel price cuts " (2009-01-13)

The National Development and Reform Commission (NDRC) ruled out a further reduction ○ ○ ○○○○○○○○○○○○ in the prices of gasoline and diesel, despite the fall in global crude prices. The NDRC, which

sets energy policy and fuel prices in China, said it would not lower the December ceiling of ○ ○ ○○○○○○○○○○○○

retail oil products. ○ ○ ○○○○○○○○○○○○ The watchdog said it would not be able to reduce prices further as the current adjusted retailing prices are more or less on par with the $80-90 per barrel manufacturing cost after ○ ○ ○○○○○○○○○○○○

refining by China’s oil enterprises. ○ ○ ○○○○○○○○○○○○

In December, the commission had cut the retail price of gasoline by 0.91 yuan per liter, and ○ ○ ○○○○○○○○○○○○ diesel by 1.08 yuan. The reduction in retail prices followed a government announcement that it would cut factory gate prices for gasoline, diesel and jet fuel, and also impose a fuel ○ ○ ○○○○○○○○○○○○

consumption tax from Jan 1 onward. ○ ○ ○○○○○○○○○○○○

The NDRC spokesman said the December price cut and ceiling are based on the averaged ○ ○ ○○○○○○○○○○○○ cost of $80 per barrel. At that time, China’s averaged retail oil prices stood at 4 yuan per liter

while the averaged price now is around 5 yuan per liter. ○ ○ ○○○○○○○○○○○○ The NDRC spokesman admitted that the growing stockpiles, due to declining oil demand brought by economic recession, have already forced retailing companies in many parts of ○ ○ ○○○○○○○○○○○○

China to reduce prices of various grades of fuel.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ Exports see 2nd straight monthly fall

(2009-01-13) ○ ○ ○○○○○○○○○○○○

Exports fell two months in a row for the first time in a decade, reflecting the impact of the ○ ○ ○○○○○○○○○○○○ global financial crisis on the “workshop of the world”. According to Customs figures, exports in December dropped 2.8 percent year-on-year, after falling 2.2 percent in November. ○ ○ ○○○○○○○○○○○○

Imports in December dropped, too, to 21.3 percent year-on-year, after having fallen 17.9 ○ ○ ○○○○○○○○○○○○

percent the previous month. ○ ○ ○○○○○○○○○○○○

But since the drops took place in November and December only, the country will still see an ○ ○ ○○○○○○○○○○○○ impressive 17.2 percent rise in exports and 18.2 percent increase in imports for the whole of last year. The previous year’s records were much more impressive, though, with exports ○ ○ ○○○○○○○○○○○○

and imports both recording a 20-plus percent growth. ○ ○ ○○○○○○○○○○○○

Last month, the exports and imports volumes were $111.2 billion and $72.2 billion, and in ○ ○ ○○○○○○○○○○○○

November, they were $114.9 billion and $74.9 billion. ○ ○ ○○○○○○○○○○○○

Auto sector gets a shot in the arm ○ ○ ○○○○○○○○○○○○

(2009-01-15) ○ ○ ○○○○○○○○○○○○ Sales tax on vehicles with engines of less than 1.6 liters will be halved and exchange of old

vehicles for new ones with smaller engines subsidized to boost the auto industry. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 66 GENERAL EVENTS

A total of 5 billion yuan ($731.45 million) will be set aside for the subsidy to be given to farmers. And sales tax will be cut from 10 percent to 5 percent from Jan 20.

GENERAL The stimulus package for the country’s auto industry, the third largest in the world, was announced by the State Council yesterday after its sales growth fell to a 10-year-low of 6.7 percent last year.

EVENTS The package is expected to boost the steel industry and designed to promote fuel-efficient and low-emission vehicles, too. The government said it would support the alternative-energy vehicle sector by promoting the mass production of electric-powered cars in big and " medium cities. In the next three years, the government will provide 10 billion yuan ($1.5 billion) to automakers

to help upgrade their technology and develop alternative energy vehicles. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Flight fuel surcharges lifted

(2009-01-15) ○ ○ ○○○○○○○○○○○○ China will suspend fuel surcharges on domestic flights from today due to a fall in aviation ○ ○ ○○○○○○○○○○○○ fuel prices, China’s top economic planner and the Civil Aviation Administration of China

(CAAC) jointly announced yesterday. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Future fuel surcharges would be decided on aviation fuel price changes. The National Development and Reform Commission and the CAAC on December 25, 2008 lowered the

○ ○ ○○○○○○○○○○○○ surcharge from 150 yuan ($22) to 40 yuan for flights beyond 800 kilometers, and from 80

yuan to 20 yuan for those under 800 kilometers. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Ctrip.com forms partnership with Alipay

○ ○ ○○○○○○○○○○○○ (2009-01-20) ○ ○ ○○○○○○○○○○○○ Chinese online travel service provider Ctrip.com has formed a partnership with Alibaba’s online payment subsidiary Alipay. The agreement, which makes Alipay the first third-party

○ ○ ○○○○○○○○○○○○ online payment service provider for Ctrip.com, allows users to pay Ctrip.com through Alipay

in addition to using their Alipay account to log on Ctrip.com. ○ ○ ○○○○○○○○○○○○ Prior to this agreement Ctrip.com mainly provided cash on delivery and telephone credit

○ ○ ○○○○○○○○○○○○ card payment services for its air ticket customers. Alipay claims that by October 20, 2008, it ○ ○ ○○○○○○○○○○○○ had had more than 110 million users in China with a daily transaction volume of 550 million

yuan. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ China’s CPI rises 5.9% in 2008

(2009-01-22) ○ ○ ○○○○○○○○○○○○ China’s consumer price index (CPI), the main gauge of inflation, rose 5.9 percent last year ○ ○ ○○○○○○○○○○○○ after price pressures began to ease in May, the National Bureau of Statistics (NBS) said

today. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ The CPI was 1.1 percentage points higher than the level in 2007, which was also the official

target for 2008. Prices rose 6.3 percent during the January-November period. ○ ○ ○○○○○○○○○○○○ The CPI for December 2008 was up just 1.2 percent, the eighth consecutive month of ○ ○ ○○○○○○○○○○○○ deceleration and the slowest rise since July 2006, said NBS director Ma Jiantang. The CPI

was 2.4 percent in November, and it hit a 12-year-high of 8.7 percent in February. The ○ ○ ○○○○○○○○○○○○ producer price index, a measure of inflation at the wholesale level, fell 1.1 percent in Decem-

○ ○ ○○○○○○○○○○○○ ber after rising 2 percent in November.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 77 GENERAL EVENTS

GDP growth slows to 6.8% in Q4 of 2008

(2009-01-22) The country’s gross domestic product (GDP), the most widely watched measure of its GENERAL economic strength, grew 6.8 percent from a year earlier in the fourth quarter of 2008, said Ma Jiantang, director of the National Bureau of Statistics said today.

That marked the slowest pace since 2002, as well as a sharp turn for the worse from a EVENTS growth of 9 percent in the previous three months. For the whole of 2008, the economy expanded 9 percent to 30.067 trillion yuan, according to Ma, the first year of single-digit

growth since 2003 and well below the average rate of 9.8 percent in the past 30 years. "

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 88 AVIATION

Hainan Airlines to add more flights to and out of Xi’an

(2009-01-06) AVIATION Hainan Airlines announced that it would add more flights running between Xi’an and other cities to ease the pressure on air traffic during the Spring Festival travel peak. It will add 325 flights linking Xi’an with other Chinese cities, meaning 6,862 more seats will be available for passengers.

Between January 20 and March 18, it will add the Yinchuan-Xi’an-Haikou flight service. Using Boeing-737, it is a round-trip service operating thrice weekly, on Tuesdays, Thursdays, and Saturdays. The flight numbers are HU7805/6. The flights destined for Yinchuan and " Haikou will depart from Xi’an at 11:10 and 14:50 respectively. From January 11 to March 28, Hainan Airlines will add Xi’an-Haikou, Xi’an-Qingdao-Shenyang and Xi’an-Jinan-Shenyang flights. The new flight HU7224 will run once daily from Xi’an to ○ ○ ○○○○○○○○○○○○ Haikou. Using Airbus 319, it will depart from Xi’an at 18:00.

○ ○ ○○○○○○○○○○○○ The Xi’an-Qingdao-Shenyang flights will run on Mondays, Tuesdays, Thursdays and

○ ○ ○○○○○○○○○○○○ Saturdays. The flight numbers are HU7875/6. Flights from Xi’an to Shenyang via Jinan will

run on Wednesdays, Fridays and Sundays. The flight numbers are HU7865/6. ○ ○ ○○○○○○○○○○○○ An extra Xi’an-Nanjing flight service will be available between January 21 and 24, January 29 ○ ○ ○○○○○○○○○○○○ and February 2, as well as February 10 and 15. The flight number is HU7823/4. Using Airbus

319, the flights will depart from Xi’an at 20:40. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ From January 19 to March 28, more flights will be added to the Lanzhou-Xi’an-Fuzhou and Lanzhou-Xi’an-Xiamen flight services. The Lanzhou-Xi’an-Fuzhou flights will begin running

○ ○ ○○○○○○○○○○○○ on Mondays, Wednesdays, Fridays and Sundays, and Lanzhou-Xi’an-Xiamen flights will start to operate on Tuesdays, Thursdays and Saturdays. Thus, the two flight services will be

○ ○ ○○○○○○○○○○○○ in service daily. ○ ○ ○○○○○○○○○○○○ Between January 6 and March 28, a new flight service running between Urumqi and Sanya

○ ○ ○○○○○○○○○○○○ via Xi’an will be in service, which will operate once daily. The flights numbers are HU7897/

8. The flights to Urumqi and Sanya will depart from Xi’an at 11:55 and 20:05 respectively. ○ ○ ○○○○○○○○○○○○ Grand China Express Airlines, a subordinate of Hainan Airlines, will also commence a flight ○ ○ ○○○○○○○○○○○○ service linking Xi’an with Chongqing. Using EMB190, the flight GS7523 will depart from

Xi’an at 17:50. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Besides, Hainan Airlines will offer discounted airfares to passengers. Presently, the ticket prices of Xi’an-Beijing, Xi’an-Urumqi, Xi’an-Shanghai, Xi’an-Chengdu, Xi’an-Guangzhou

○ ○ ○○○○○○○○○○○○ flights are CNY 210, CNY 620, CNY500, CNY190 and CNY600 respectively. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Chinese airlines turn their backs on the banking community

(2009-01-07) ○ ○ ○○○○○○○○○○○○ Chinese State-run airlines are postponing any decision to mandate banks for airline deliv-

○ ○ ○○○○○○○○○○○○ eries pending an imminent injection of government funding.

○ ○ ○○○○○○○○○○○○ China Eastern Airlines said it is due to receive a capital injection of more than $1billion, in exchange for which it will issue shares into its State-run parent company. Southern China

○ ○ ○○○○○○○○○○○○ and Air China, the nation’s flag carrier, are also set to receive government subsidies. ○ ○ ○○○○○○○○○○○○ Johnny Lau, ICBC Leasing’s head of global aviation, said Chinese airlines will not ap-

○ ○ ○○○○○○○○○○○○ proach the banking community for financing until the details of the government plan and

subsequent impact on balance sheets are disclosed. ○ ○ ○○○○○○○○○○○○ The exact details of the rescue plan and when it will be released are shrouded in secrecy, ○ ○ ○○○○○○○○○○○○ but Lau thinks a decision could be made before the end of the month when the government

is due to take a seven-day leave.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 99 AVIATION

According to an insider, Shanghai Airlines, which the government is reportedly considering merging with China Eastern, is also set to receive short-term capital from the municipal government of Shanghai. AVIATION The government bail-out plan comes as Chinese airlines face falling passenger demand after years of robust growth and the country’s economy slows amid the global recession. The People’s Bank of China said the situation is likely to deteriorate further, as the government pushes through a range of economic programs to boost the flagging economy.

China airlines seek 11% rise in passenger volume (2009-01-07) " Chinese airlines will strive for 11 percent growth in passenger volume this year in compli-

ance with a guideline endorsed by the country’s industry regulator. ○ ○ ○○○○○○○○○○○○

Air China and other Chinese carriers carried 176.24 million passengers from January to ○ ○ ○○○○○○○○○○○○ November 2008, up merely 2.90 percent from the previous year, official data showed, as a slowing economy curbed air travel. Cargo volume climbed 1.6 percent to 3.71 million tons ○ ○ ○○○○○○○○○○○○

over the same period. ○ ○ ○○○○○○○○○○○○

In a statement published on its website, the Civil Aviation Administration of China set 2009’s ○ ○ ○○○○○○○○○○○○ passenger volume target at 220 million and cargo throughput at 4.37 million tons, up 8

percent. ○ ○ ○○○○○○○○○○○○

Fixed asset investment, mostly allocated to bolster the country’s airport facilities, will be ○ ○ ○○○○○○○○○○○○

around 80 billion yuan ($11.71 billion) to 100 billion yuan, the administration said. ○ ○ ○○○○○○○○○○○○

Orders for aircraft put on hold ○ ○ ○○○○○○○○○○○○

(2009-01-07) ○ ○ ○○○○○○○○○○○○

Chinese airlines added 120 aircraft to their fleets last year, 14 fewer than planned, Yang ○ ○ ○○○○○○○○○○○○ Guoqing, deputy chief of the Civil Aviation Administration of China (CAAC), said yesterday, adding the fleets now total 1,254 airplanes. ○ ○ ○○○○○○○○○○○○

Domestic airlines lost more than 7 billion yuan ($1 billion) in the first 11 months of last year, ○ ○ ○○○○○○○○○○○○

according to the CAAC. The industry has been hit hard by the economic slump. Last year, ○ ○ ○○○○○○○○○○○○ Chinese airlines carried 192 million passengers, up 3.3 percent on 2007; and 4.03 million

tons of cargo, up 0.2 percent, the CAAC said. In previous years, growth averaged 15 percent, ○ ○ ○○○○○○○○○○○○

it said. ○ ○ ○○○○○○○○○○○○ The numbers of passengers traveling on international and regional flights to Hong Kong

and Macao were down over previous years, Yang said. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ The CAAC has taken measures to lift the industry out of its difficulties, including controlling

transport capacity, not approving any new airlines before next year, and returning funds and ○ ○ ○○○○○○○○○○○○

taxes already paid by airlines. ○ ○ ○○○○○○○○○○○○ Airlines can save up to 900,000 yuan a month by not buying new aircraft, Li Xiaojin, an

economist of the aviation industry, said earlier. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ While some airlines have responded to the call to delay orders, others have said they will

add to their fleets. Huang Bin, board secretary of Air China, said last month that the airline ○ ○ ○○○○○○○○○○○○ will stick to its schedule for the time being, but will accelerate the phasing-out of older aircraft, and cut some routes and flights. ○ ○ ○○○○○○○○○○○○

An anonymous industry insider said airlines are afraid of lacking capacity when the market ○ ○ ○○○○○○○○○○○○

improves so do not want to cancel aircraft orders. According to airlines’ plans, 241 new ○ ○ ○○○○○○○○○○○○ planes are expected to join the fleets this year, including 16 deliveries deferred from last

year, while 43 planes will be phased out, Yang said. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1010 AVIATION

The CAAC will approve more commuter flights, like the Beijing-Shanghai express, to help airlines compete with high-speed rail services. With the new measures in place, the CAAC expects airlines to carry 220 million passengers this year, up 11 percent on last year; and 4. AVIATION 37 million tons of cargo, up 8 percent.

Vice Premier says aviation sector needs to deepen reform

(2009-01-07) China’s civil aviation sector should deepen reform, enhance management and improve services with priority given to sustained security, Vice Premier Zhang Dejiang said yesterday " at the national civil aviation work conference. Zhang said there have been no accidents for 49 consecutive months in the sector despite growing passenger and cargo transport volume. Transport security has always been the top

○ ○ ○○○○○○○○○○○○ concern of the civil aviation sector, Zhang stressed. ○ ○ ○○○○○○○○○○○○ He noted endeavors should be exerted to ensure the accountability system for security is

○ ○ ○○○○○○○○○○○○ working and supervision of the sector would also be intensified. ○ ○ ○○○○○○○○○○○○

AVIC signs $26b credit agreement ○ ○ ○○○○○○○○○○○○

(2009-01-08)

○ ○ ○○○○○○○○○○○○ Aviation Industry Corp of China (AVIC), the country’s aviation giant, signed a 176 billion yuan ○ ○ ○○○○○○○○○○○○ ($25.81 billion) credit agreement with 10 Chinese banks in Beijing today.

○ ○ ○○○○○○○○○○○○ The government has urged local financial institutions to extend more credit to businesses

and lend more for infrastructure investment amid efforts to support the weakening economy. ○ ○ ○○○○○○○○○○○○ Industrial and Commercial Bank of China, China Construction Bank and China CITIC Bank

○ ○ ○○○○○○○○○○○○ agreed to lend 30 billion yuan each. The other banks are Bank of Communications, Shang- ○ ○ ○○○○○○○○○○○○ hai Pudong Development Bank, China Everbright Bank, China Merchants Bank, Bank of

Beijing, China Minsheng Banking and Industrial Bank. ○ ○ ○○○○○○○○○○○○ State-owned AVIC was created in November 2008 through merging AVIC-I (China Aviation

○ ○ ○○○○○○○○○○○○ Industry Corp I) and AVIC-II (China Aviation Industry Corp II). The merger was intended to boost the organization’s internal innovative capacity and optimize the use of resources to

○ ○ ○○○○○○○○○○○○ sharpen its competitive edge internationally. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ AVIC joins hands with Tianjin for helicopters

(2009-01-09) ○ ○ ○○○○○○○○○○○○ Aviation Industry Corp of China (AVIC), the country’s leading aviation manufacturer, plans to

○ ○ ○○○○○○○○○○○○ set up a helicopter company in Tianjin with the local government in a bid to consolidate its

diverse businesses. ○ ○ ○○○○○○○○○○○○

AVIC will inject its existing helicopter development and manufacturing assets, including ○ ○ ○○○○○○○○○○○○ China Helicopter Research and Development Institute, Harbin Aircraft Industry (Group) Co

○ ○ ○○○○○○○○○○○○ Ltd, Changhe Aircraft Industries Corp, and Baoding Propeller Factory, into the new company,

according to an agreement signed yesterday. ○ ○ ○○○○○○○○○○○○ The company, with a registered capital of 8 billion yuan ($1.17 billion), will be 69 percent ○ ○ ○○○○○○○○○○○○ controlled by AVIC and 31 percent owned by the Tianjin government. AVIC and the Tianjin

government will each invest an extra 4 billion yuan into the new company. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ AVIC’s existing helicopter and parts production facilities at Harbin of Northeast China’s Heilongjiang Province, Jingdezhen in East China’s Jiangxi Province, and Baoding of North

○ ○ ○○○○○○○○○○○○ China’s Hebei Province will remain unchanged.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1111 AVIATION

Tianjin will focus on producing light helicopters for civilian use and host the new company’s headquarters, research and development, sales and service centers. The Tianjin facility is expected to produce two light helicopters in 2009. AVIATION Airlines get 3-year grace on fuel surcharge tax

(2009-01-09) Chinese airlines will be exempted from a tax imposed on fuel surcharges on domestic flights for three years as the government moves to protect the domestic aviation industry amid an economic downturn. " The exemption has been made retroactively from January 1, 2008, which means domestic carriers need not pay the 3 percent tax imposed on fuel surcharges for domestic flights until

the end of 2010, and the tax that has been paid will be cut from future payments, the Ministry ○ ○ ○○○○○○○○○○○○

of Finance said on its website yesterday. ○ ○ ○○○○○○○○○○○○ “The exemption is expected to save airlines 300 million yuan ($43.89 million) in total but it won’t greatly improve their performance,” said Li Lei, an analyst of China Securities Co. ○ ○ ○○○○○○○○○○○○ “China Southern Airlines may save 130 million to 150 million yuan from the tax exemption as it flies more domestic routes than other carriers, while Air China and China Eastern Airlines ○ ○ ○○○○○○○○○○○○

may save 70 million to 80 million yuan each.” ○ ○ ○○○○○○○○○○○○

The tax exemption is part of China’s efforts to bolster the sagging aviation market. The Civil ○ ○ ○○○○○○○○○○○○

Aviation Administration of China has also said it would waive several fees and taxes. ○ ○ ○○○○○○○○○○○○

Sichuan Airlines launches credit card telephone payment service ○ ○ ○○○○○○○○○○○○

(2009-01-09) ○ ○ ○○○○○○○○○○○○

To facilitate passengers to book tickets during the Spring Festival period, Sichuan Airlines ○ ○ ○○○○○○○○○○○○ has launched a credit card telephone payment service in cooperation with the third party

payment service provider YeePay.com. ○ ○ ○○○○○○○○○○○○

The new service, which is applicable to credit cards from more than ten banks, allows ○ ○ ○○○○○○○○○○○○

passengers to book air tickets and complete the payment by making a telephone call. ○ ○ ○○○○○○○○○○○○

By calling Sichuan Airline’s 24-hour service hotline 028-88888888, consumers can make ○ ○ ○○○○○○○○○○○○

inquiry about flight schedules, book an air ticket, and make the payment. ○ ○ ○○○○○○○○○○○○

Shenzhen Airlines to launch new carrier in Yunnan ○ ○ ○○○○○○○○○○○○

(2009-01-12) ○ ○ ○○○○○○○○○○○○ Shenzhen Airlines, China’s fifth largest airline group, said it will soon launch a new carrier based in Kunming, Southwest China’s Yunnan Province. The new carrier, named Kunming ○ ○ ○○○○○○○○○○○○

Airlines, will be 80 percent controlled by Shenzhen Airlines with the remainder owned by a ○ ○ ○○○○○○○○○○○○

local businessman. ○ ○ ○○○○○○○○○○○○ The Civil Aviation Administration of China (CAAC), the industry regulator, posted a notice on its website on January 9 to seek public opinions before issuing operation license to the ○ ○ ○○○○○○○○○○○○

airline. ○ ○ ○○○○○○○○○○○○

Kunming Airlines, with a registered capital of 80 million yuan ($11.68 million), will not only ○ ○ ○○○○○○○○○○○○ operate flights within Yunnan Province, but also routes connecting Kunming and other

cities, an unnamed company official said. ○ ○ ○○○○○○○○○○○○

The airline also plans to fly between Kunming and ASEAN (Association of Southeast Asian ○ ○ ○○○○○○○○○○○○

Nations) countries in the future, the official said.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1212 AVIATION

Shenzhen Airlines will transfer two B737-700 and one B737-800 airplanes as well as 30 pilots and 26 flight attendants to the new airline, according to the notice on the CAAC’s AVIATION website. Yunnan endowed with rich tourism resources, has 11 civilian airports, the largest number among Chinese provinces. The Yunnan subsidiary of China Eastern Airlines, the country’s third largest airline group, controls over 50 percent of the local aviation market.

Hainan Airlines Group, parent of Hainan Airlines and China’s fourth largest airline group, said in 2008 it would create a new carrier in the southwestern province with the local government. The carrier, called Yunnan Airlines, will comprise mainly the assets of Lucky Air, " a Hainan Airlines Group subsidiary launched in 2006 in Yunnan with a fleet of six aircraft.

○ ○ ○○○○○○○○○○○○ 12 airlines apply for cross-Straits charter flights

(2009-01-13) ○ ○ ○○○○○○○○○○○○ The mainland civil aviation regulator has accepted the applications from 12 airlines which

○ ○ ○○○○○○○○○○○○ intend to run direct flights between the Chinese mainland and Taiwan during the Chinese

Lunar New Year. ○ ○ ○○○○○○○○○○○○ The 12 airlines, including seven mainland carriers and five Taiwan airline companies, plan ○ ○ ○○○○○○○○○○○○ to provide more flight services during the period between January 12 and February 9, in a bid

○ ○ ○○○○○○○○○○○○ to meet the growing demand.

○ ○ ○○○○○○○○○○○○ A total of 129 temporary flights are expected to be launched during the period, with 61 flights

run by seven mainland carriers and 68 run by Taiwanese carriers. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Beijing Capital Airport share target cut

○ ○ ○○○○○○○○○○○○ (2009-01-14) ○ ○ ○○○○○○○○○○○○ Beijing Capital International Airport Co’s share price target was cut 37 percent after reducing

the earnings forecasts for 2009 by 98 percent, Macquarie Group Ltd said. ○ ○ ○○○○○○○○○○○○ Beijing Airport’s 12-month share price target was lowered to HK$6.90 (89 US cents) from

○ ○ ○○○○○○○○○○○○ HK$10.90, Macquarie said in a report released yesterday, which kept the stock’s rating at “outperform.” The stock’s earnings-per-share forecast was also lowered 68 percent for

○ ○ ○○○○○○○○○○○○ 2010, the report said. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ HK Airlines and United Holidays to open tours to HK

(2009-01-14) ○ ○ ○○○○○○○○○○○○ The Hong Kong Airlines Limited and the Hong Kong’s tourist company United Holidays

○ ○ ○○○○○○○○○○○○ today announced their cooperation to open tours to Hong Kong.

○ ○ ○○○○○○○○○○○○ Nguyen Tuan Hai, Sales Manager of the Hong Kong Airlines’ Representative Office in Hanoi,

said that through this cooperation, Hong Kong Airlines, for the first time, would organize ○ ○ ○○○○○○○○○○○○

tours for tourists to visit Hong Kong from February 2009. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Record year for BOC Aviation

(2009-01-14) ○ ○ ○○○○○○○○○○○○ Bank of China (BOC) Aviation has concluded its busiest year ever since inception in 1993. ○ ○ ○○○○○○○○○○○○ Last year the company signed leases for 52 aircraft including 20 aircraft acquired via pur-

chase and lease back. A quarter of the transactions were completed in December alone. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Of the 52 leases signed, 32 were for the placement of new aircraft. Four of the 32 aircraft have already been delivered to customers with the remaining scheduled for delivery from

○ ○ ○○○○○○○○○○○○ 2009 through to 2013. The most notable deal was a 10 Boeing 737-700 aircraft transaction ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1313 AVIATION

with Southwest Airlines. Besides Southwest Airlines, other new customers in 2008 included Aeroflot, Air Canada, Shenzhen Airlines and TUIfly.

BOC Aviation is the leading Asia-based aircraft leasing company with a portfolio of 97 mod- AVIATION ern aircraft operated by airlines worldwide. In addition, the company has 71 aircraft on firm order for delivery through 2013.

BOC Aviation has one of the youngest fleets in the industry with an average aircraft age of less than four years. During 2008, BOC Aviation took delivery of 26 aircraft and sold 12.

Shenzhen Airport 2008 passenger throughput up 3.8% " (2009-01-14)

Shenzhen Airport Co Ltd said passenger throughput was 21.4 million in 2008, up 3.8 percent. ○ ○ ○○○○○○○○○○○○ In a statement filed with the Shenzhen Stock Exchange, the company said passenger through-

put totaled 1.88 million in December, up 7.1 percent year-on-year. ○ ○ ○○○○○○○○○○○○

Cargo volume in 2008 fell 2.9 percent to 598,000 tons, while aircraft takeoffs and landings ○ ○ ○○○○○○○○○○○○ totaled 187,900, up 3.6 percent. In December, cargo volume decreased 15.9 percent year-

on-year to 45,800 tons, while aircraft takeoffs and landings rose 5.1 percent to 16,400. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Price floor to be set for air tickets ○ ○ ○○○○○○○○○○○○

(2009-01-14) ○ ○ ○○○○○○○○○○○○ The Civil Aviation Administration of China (CAAC) will set a floor price for seats on 699 flights, and airlines have been ordered not to sell tickets below that figure, said the China Air ○ ○ ○○○○○○○○○○○○

Transport Association (CATA). ○ ○ ○○○○○○○○○○○○

The names of airlines that offer passengers tickets at less than the CAAC minimum will be ○ ○ ○○○○○○○○○○○○

made public every 15 days, and they could face punishments, such as having routes canceled. ○ ○ ○○○○○○○○○○○○ In the past few months, airlines have given big discounts to attract customers in the sluggish market. In the first 11 months of last year, domestic airlines lost more than 7 billion ○ ○ ○○○○○○○○○○○○

yuan ($1 billion). Discounts of 70 to 80 percent have been common over recent months. ○ ○ ○○○○○○○○○○○○

Tianjin to lure new airlines to increase traffic ○ ○ ○○○○○○○○○○○○

(2009-01-15) ○ ○ ○○○○○○○○○○○○

Tianjin Binhai International Airport plans to bring in more passenger and cargo airliners to ○ ○ ○○○○○○○○○○○○

counter the global recession. ○ ○ ○○○○○○○○○○○○ “In 2009, we aim to expand our cargo transportation volume by 30 percent to 240,000 tons while increasing passenger transportation volume by 35 percent to 6 million people,” air- ○ ○ ○○○○○○○○○○○○

port president Shao Dengxiang said, adding in two to three years, the airport will squeeze its ○ ○ ○○○○○○○○○○○○

way into China’s top five in terms of cargo transportation volume. ○ ○ ○○○○○○○○○○○○ China Cargo Airlines has inked a deal with the airport to operate in Tianjin this year, increasing the airport’s cargo capacity by 30 to 40 percent. ○ ○ ○○○○○○○○○○○○

The airport currently has three warehouses for cargo transportation and ranks 11th in China ○ ○ ○○○○○○○○○○○○

in cargo transportation volume. Shao said work is underway on another warehouse. Once ○ ○ ○○○○○○○○○○○○ the expansion is completed, the airport will have an additional cargo transportation capacity

of 50,000 tons per year. ○ ○ ○○○○○○○○○○○○

The move corresponds with the municipal government’s goal to make Tianjin “North China’s ○ ○ ○○○○○○○○○○○○

aviation logistics center”.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1414 AVIATION

In addition, the airport will become a large “portal hub” by inviting more airlines. New mo- mentum for this push has come from the impending arrivals of China Eastern Airlines and AVIATION China Southern Airlines. A new route from the city to the US is in the works and might be operated by a US airline. And no-frills carrier AirAisa might open a new route connecting Tianjin with Kuala Lumpur this March.

Currently, a second runway, customized for exclusive use by Airbus A320s, is under construction. The primary runway and taxiway has been finished. All construction should be " done before April this year, with the runway beginning operation from May 1. Guangzhou Baiyun Int’l Airport to upgrade terminal

○ ○ ○○○○○○○○○○○○ (2009-01-15)

Guangzhou Baiyun International Airport in China plans to invest 300 million yuan ($44 million) ○ ○ ○○○○○○○○○○○○ on the renovation of its current terminal facilities after the Chinese New Year holiday starting

○ ○ ○○○○○○○○○○○○ from the end of this month. The renovation is expected to be completed in October this year.

○ ○ ○○○○○○○○○○○○ Last year Guangzhou recorded 33 million passengers and far exceeded the airport’s designed capacity of handling 25 million passengers. The renovation project will increase the ○ ○ ○○○○○○○○○○○○ number of security check lanes from the current 25 to 67, put currently unused check-in

○ ○ ○○○○○○○○○○○○ counters back into operation and renovate the baggage handling system.

○ ○ ○○○○○○○○○○○○ The airport also plans to renovate the car parking area to increase the number of spaces

from 3,000 to 5,000. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Guizhou Aviation Industry to issue 500m yuan financing bills

○ ○ ○○○○○○○○○○○○ (2009-01-15) ○ ○ ○○○○○○○○○○○○ Guizhou Aviation Industry (Group) Co Ltd announced yesterday that it will issue 500 million yuan ($73.05 million) short-term financing bills with a maturity of 365 days on the interbank

○ ○ ○○○○○○○○○○○○ market on January 19, sources said.

○ ○ ○○○○○○○○○○○○ The company said in a statement that the financing bills will be issued at the face value and the coupon rate will be determined in the process of book building. The bills will become

○ ○ ○○○○○○○○○○○○ tradable on January 21, and both value date and payment due date will start from January ○ ○ ○○○○○○○○○○○○ 20, according to the company.

○ ○ ○○○○○○○○○○○○ The 400 million yuan of the proceeds from the issuance will be used to complement the capital flow in military production and training aircraft purchase, and the remaining 100

○ ○ ○○○○○○○○○○○○ million yuan will be used to pay back matured loans with high interest rates. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Cathay Pacific approved to delay terminal construction

(2009-01-16) ○ ○ ○○○○○○○○○○○○ Cathay Pacific Airways Ltd has announced that its wholly owned subsidiary, Cathay Pacific

○ ○ ○○○○○○○○○○○○ Services Limited (CPSL), has signed a supplemental agreement with the Airport Authority of

Hong Kong (HKAA) to delay the completion of its new cargo terminal. ○ ○ ○○○○○○○○○○○○ Under the agreement, CPSL can delay the completion of the terminal for a maximum of 24 ○ ○ ○○○○○○○○○○○○ months, up to mid 2013. The two parties signed the agreement yesterday. According to

Cathay Pacific, the decision to apply for the deferral of the cargo terminal is in response to ○ ○ ○○○○○○○○○○○○

market conditions resulting from the global economic downturn. ○ ○ ○○○○○○○○○○○○ The Board of the Airport Authority Hong Kong awarded a non-exclusive, 20-year franchise to

○ ○ ○○○○○○○○○○○○ CPSL to operate a new cargo terminal at the airport in March 2008. The new facility was

originally scheduled to be completed in the second half of 2011.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1515 AVIATION

Baosteel, Chinalco, AVIC ink jumbo aircraft supply deal

(2009-01-16) Baosteel Group, Aluminum Corp of China (Chinalco) and Aviation Industry Corp of China AVIATION (AVIC) signed strategic agreements on January 10 with Commercial Aircraft Corporation of China (CACC), to supply materials for the jumbo aircraft project, sources reported.

Baosteel has successfully developed the qualified steel with 300M ultra-high strength and 4 grades of titanium alloy structure for huge air craft undercarriage. Besides, the research and development (R&D) of specialized steel for the aircraft’s engines is under way. Chalco’s subsidiary, the Southwest Aluminum Co Ltd, has earmarked 2 billion yuan to set " up the aluminum alloy plate production line to manufacture supporting materials for large aircraft.

CACC expects to cooperate with the three companies for more innovations and technologi- ○ ○ ○○○○○○○○○○○○

cal breakthroughs in domestic material supply, said Wu Guanghui, vice manager of CACC. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Hainan Airlines to sell stake in Yangtze River International Leasing ○ ○ ○○○○○○○○○○○○ (2009-01-16)

According to a report in Shanghai Securities News, Hainan Airlines said it planned to sell its ○ ○ ○○○○○○○○○○○○ 7.69 percent stake in Yangtze River International Leasing Co to Tianjin Bohai Leasing Co for

45 million yuan ($6.57 million). ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Shanghai to develop engines for jumbo planes ○ ○ ○○○○○○○○○○○○

(2009-01-19) ○ ○ ○○○○○○○○○○○○ The Shanghai government yesterday set up a company to develop engines for its proposed jumbo planes and do away with its reliance on foreign companies. ○ ○ ○○○○○○○○○○○○

With a registered capital of 6 billion yuan ($877 million), AVIC Commercial Aircraft Engine Co ○ ○ ○○○○○○○○○○○○

(ACAE) will “especially focus on engines for 150-seater jumbo aircraft, one of the most ○ ○ ○○○○○○○○○○○○

popular passenger jets”, Zhang Jian, ACAE general manager said. ○ ○ ○○○○○○○○○○○○ However, it is very unlikely that such an engine will be used to propel the country’s first homemade big passenger plane, scheduled for completion before 2020. ○ ○ ○○○○○○○○○○○○

AVIC holds 40 percent stake in ACAE, while power equipment maker Shanghai Electric ○ ○ ○○○○○○○○○○○○

Group and the Shanghai government’s investment arm, Shanghai Guosheng Group, hold ○ ○ ○○○○○○○○○○○○ 15 percent each. The country now makes engines for some military aircraft only, and im-

ports almost all the engines needed for its passenger planes. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Chongqing plans Wulong Airport for tourists ○ ○ ○○○○○○○○○○○○

(2009-01-19)

Southwest China’s Chongqing Municipality has unveiled plans to build a new tourist-ori- ○ ○ ○○○○○○○○○○○○ ented regional airport in Wulong County. They have identified a suitable location at Fair lady ○ ○ ○○○○○○○○○○○○ Mountain and have submitted the proposal to the Civil Aviation Administration of China for

approval. ○ ○ ○○○○○○○○○○○○

If approved, the airport will be the fifth to be established in the province after Jiangbei, ○ ○ ○○○○○○○○○○○○ Wanzhou, Qianjiang and Wushan. Total investment in the project will reach 830 million yuan

($120 million). The airport will feature a 2,800-meter-long and 45-meter-wide runway. Con- ○ ○ ○○○○○○○○○○○○ struction work is expected to start in 2010. ○ ○ ○○○○○○○○○○○○

Remote Wulong County attracts over 2.2 million tourists per year and has been granted ○ ○ ○○○○○○○○○○○○

UNESCO World Heritage status. It has poor road and rail links.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1616 AVIATION

AVIC to list most of businesses in three years

(2009-01-20) AVIATION Aviation Industry Corp of China (AVIC), the country’s leading aviation manufacturer, said that 80 percent of its diversified businesses controlled through numerous units will be listed in three years.

The company has more than 200 subsidiaries around the country. It was launched in No- vember 2008 after a merger between China’s two leading State-owned aviation manufacturers, AVIC I and AVIC II. The company acts as a parent company, under which there are six firms respectively specializing in transporters, airplane engines, helicopters, " general aviation, airborne systems and aviation imports and exports. More than 20 subsidiaries are already listed.

AVIC will list its helicopter business in 2010, Wang Bin, said president of AVIC Helicopter Co

○ ○ ○○○○○○○○○○○○ Ltd. Its general aviation business will be listed in three years. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ China Aviation Industry Group to form auto corporation

(2009-01-20) ○ ○ ○○○○○○○○○○○○ After restructuring the assets of its subsidiary Changhe Auto, Aviation Industry Corp of China

○ ○ ○○○○○○○○○○○○ (AVIC) has started integrating its auto-making operations to form an automobile industry

corporation, said Tan Ruisong, executive vice-president of AVIC. ○ ○ ○○○○○○○○○○○○

Tan said the group has set up a work team in charge of integrating its auto branches. At its ○ ○ ○○○○○○○○○○○○ early stage, the new auto industry corporation of AVIC will consist of Hafei Auto, Changhe

○ ○ ○○○○○○○○○○○○ Auto, Dongan Power and some other companies.

○ ○ ○○○○○○○○○○○○ Meanwhile, AVIC’s auto corporation will also consider introducing strategic investors to expand its auto-making business, which AVIC will continue to develop along with its aircraft- ○ ○ ○○○○○○○○○○○○ making business. Some domestic automakers have attempted to buy out AVIC auto divisions,

but failed. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ In late 2008, Changhe Auto was merged into the new-born AVIC (derived from former AVIC I and AVIC II), a move that is seen as the first step by the Chinese aviation industry giant to

○ ○ ○○○○○○○○○○○○ integrate its auto-making divisions.

○ ○ ○○○○○○○○○○○○ AviChina Industry & Technology Co Ltd, which is controlled by AVIC, will transfer all its auto

operations, including Dongan Power, to the emerging auto corporation and focus on avia- ○ ○ ○○○○○○○○○○○○

tion industry. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Hainan Airlines picks Rockwell Collins to supply avionics for A320s

(2009-01-20) ○ ○ ○○○○○○○○○○○○ Hainan Airlines has selected Rockwell Collins to provide a comprehensive package of ○ ○ ○○○○○○○○○○○○ communication, navigation and surveillance avionics for 13 new Airbus A320 aircraft. Deliv-

eries are scheduled to begin in 2010. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ The Rockwell Collins MultiScan TM Hazard Detection System is among the avionics selected by Hainan Airlines. The MultiScan TM system is the first and only radar that analyzes

○ ○ ○○○○○○○○○○○○ and determines actual weather hazards, not simply atmospheric moisture content.

○ ○ ○○○○○○○○○○○○ The MultiScan TM system is derived from extensive operational experience to create a fully

automatic, hands-free airborne radar system that reduces pilot workload and enhances ○ ○ ○○○○○○○○○○○○ safety and passenger comfort by minimizing unexpected turbulence encounters, and pro-

○ ○ ○○○○○○○○○○○○ vides optimal clutter-free weather displays.

○ ○ ○○○○○○○○○○○○ Other equipment chosen by Hainan Airlines includes the GLU-920 Multi-Mode Receiver, an integrated unit that provides the aircraft’s primary position, velocity and time reference, and

○ ○ ○○○○○○○○○○○○ enables precision landing capability. ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1717 AVIATION

HK’s air cargo drops 3.1% in 2008

(2009-01-20) Air cargo through Hong Kong dropped more than 3 percent last year, airport figures re- AVIATION leased yesterday showed, as the global drop-off in demand for goods hit traffic through the export hub.

The global slowdown devastated freight demand in the second half of the year, resulting in a 3.1 percent fall in volume, compared with 4.5 percent growth in 2007, Hong Kong Interna- tional Airport (HKIA) said in a statement. Last month, cargo throughput plunged 28.2 percent year-on-year to 243,000 tons, the larg- " est single-month drop since the airport opened in 1998, the statement said. Passenger growth was also hit, slowing to 1.7 percent last year compared with a record growth of 7.5 percent in 2007, the figures showed. Annual passenger volume was 48.6 million for last

year. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ The statement said that while passenger traffic maintained a steady growth in the first seven months of the year, it saw a 4 percent drop over the last five months. The volume of ○ ○ ○○○○○○○○○○○○ passenger traffic plunged 5.3 percent year-on-year to 4 million last month, with routes to

and from Southeast Asia, Taiwan, China and North America recording the biggest drops. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Major airlines bleed from fuel hedging losses ○ ○ ○○○○○○○○○○○○

(2009-01-21) ○ ○ ○○○○○○○○○○○○ Air China, the nation’s largest international carrier, said its paper loss from fuel-hedging contracts in 2008 have swollen to 6.8 billion yuan due to the falling global oil prices. Air ○ ○ ○○○○○○○○○○○○ China’s actual fuel-hedging loss in December alone was $52.8 million. Earlier the carrier reported a loss of 3.1 billion yuan by the end of October. ○ ○ ○○○○○○○○○○○○

The airline started to use fuel-hedging contracts as a shield from the impact of possible ○ ○ ○○○○○○○○○○○○

soaring fuel prices since 2001. ○ ○ ○○○○○○○○○○○○

However, as the oil price kept mounting in the first half of 2008, Air China built up a heavy ○ ○ ○○○○○○○○○○○○ reliance on fuel hedging contracts. “Currently, fuel hedging contracts account for 50 percent of our total jet fuel consumption,” said Rao Xinyu, board secretary of Air China. ○ ○ ○○○○○○○○○○○○

In 2007, Air China used up 2 million tons of jet fuel, and the figure for 2008 is still under ○ ○ ○○○○○○○○○○○○

calculation, Rao said. This could also be the first time that Air China is facing losses after it ○ ○ ○○○○○○○○○○○○

was listed on Hong Kong and London bourses in 2004, she added. ○ ○ ○○○○○○○○○○○○ According to the company’s announcement, the contracts leading to the huge loss were signed in July last year, and the latest one is due by 2011, said Yu Jianjun, analyst from ○ ○ ○○○○○○○○○○○○

Huatai Securities. ○ ○ ○○○○○○○○○○○○

Yu stressed that financial institutions and experts were also to blame for the astronomical ○ ○ ○○○○○○○○○○○○ losses as “they predicted in July that oil prices would stay above the $100 per barrel mark for some time. Goldman Sachs had even alerted that crude prices could touch a high of $200 ○ ○ ○○○○○○○○○○○○

per barrel soon.” ○ ○ ○○○○○○○○○○○○ The eagerness to lock future risks coupled with investment suggestions from institutions

drove Chinese carriers to strike fuel-hedging deals involving large sums, added Yu. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ Yao Jun, analyst from China Merchants Securities, said although the paper losses in such contracts could reach a high of 6.2 billion yuan for China Eastern, they did not feel the ○ ○ ○○○○○○○○○○○○ squeeze till now. “As long as the contracts are not ended, the airliners will possibly lose less if the jet fuel price rises later,” said Yao. ○ ○ ○○○○○○○○○○○○

According to Mao Ang, analyst from China Galaxy Securities, the hedging losses would ○ ○ ○○○○○○○○○○○○

wreak further havoc on the already cash-strapped airliners. In 2008, due to unusual natural ○ ○ ○○○○○○○○○○○○ disasters, stringent security checks during the Olympic Games, and the ongoing global financial crisis, the domestic aviation industry experienced a sharp fall in passengers. ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1818 AVIATION

Hainan Airlines approved for wider business scope

(2009-01-21) AVIATION The Central and South Regional Management Bureau of the Civil Aviation Administration of China has completed a preliminary review on Hainan Airlines’ application to expand its business scope.

In accordance with the Public Aviation Transportation Enterprises Operation License Rule, Hainan Airlines will be allowed to engage in international, domestic and regional passenger, cargo and postal services, and services related to aviation transportation after the business " expansion. Previously, Hainan Airlines mainly specialized in domestic passenger and cargo transportation services; scheduled and unscheduled passenger and cargo services between South China’s Hainan Province and Southeast Asian countries and regions; and aircraft mainte-

○ ○ ○○○○○○○○○○○○ nance and related services. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Shanghai denies tie-up of two air carriers

(2009-01-21) ○ ○ ○○○○○○○○○○○○ Sources said that the merger between China Eastern Airlines Co Ltd and Shanghai Airlines

○ ○ ○○○○○○○○○○○○ Co Ltd had been approved by the Shanghai Government, but the latter’s effective controller

ruled out the deal immediately. ○ ○ ○○○○○○○○○○○○

As early as July of 2008, the State-owned Assets Supervision and Administration Commis- ○ ○ ○○○○○○○○○○○○ sion of the Shanghai municipal government, as the effective controller of Shanghai Airlines,

○ ○ ○○○○○○○○○○○○ was reported to give a strong support to this merger scheme.

○ ○ ○○○○○○○○○○○○ Hammered by soaring fuel prices and the decreasing demand last year, the Chinese aviation industry suffered the sharpest decline in history. In the first three quarters of 2008, China ○ ○ ○○○○○○○○○○○○ Eastern Airlines and Shanghai Airlines underwent losses of 2.292 billion yuan ($334.88

million) and 437 million yuan, respectively.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Lucky Air boosting business via online payment ○ ○ ○○○○○○○○○○○○ (2009-01-21)

○ ○ ○○○○○○○○○○○○ Chinese budget air carrier Lucky Air has signed a partnership agreement with China’s third- party payment platform YeePay.com for air ticket distribution to both businesses and con-

○ ○ ○○○○○○○○○○○○ sumers in the Chinese mainland. ○ ○ ○○○○○○○○○○○○ The cooperation is an important part of Lucky Air’s efforts to update its ticket selling service

○ ○ ○○○○○○○○○○○○ via the Internet. When clients use a credit card to book an air ticket from Lucky Air’s website, YeePay.com will first cover the ticket fee, and then collect the money from the air passenger

○ ○ ○○○○○○○○○○○○ later via credit card payment, escrow services, or in-person cash payments.

○ ○ ○○○○○○○○○○○○ This has, to a large degree, solved cash flow issues for air ticket clients. It has also greatly

simplified the payment procedures on Lucky Air’s B2B website by reducing the previous six ○ ○ ○○○○○○○○○○○○ steps to three and making the online payment more accessible. In addition, this will make

○ ○ ○○○○○○○○○○○○ ticket returns more convenient for clients as the refund can be done in real-time. ○ ○ ○○○○○○○○○○○○

China cuts jet fuel price by 330 yuan a ton ○ ○ ○○○○○○○○○○○○ (2009-01-21)

○ ○ ○○○○○○○○○○○○ China National Aviation Fuel Holding, the country’s near-monopoly jet fuel distributor, has cut the price of fuel for domestic airlines by 330 yuan ($48) a ton for the first quarter. This is ○ ○ ○○○○○○○○○○○○ the first cut since China introduced a new pricing and tax regime for refined oil products on

○ ○ ○○○○○○○○○○○○ January 1 that was designed to let local prices move more closely with international rates.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 1919 AVIATION

The Chinese government slashed ex-refinery jet fuel prices by nearly a third, gasoline by 14 percent and diesel by 18 percent on December 19 when it announced the pricing and tax plan. But it did not detail how it set the price other than saying “depending mainly on the changes in international crude oil prices”. AVIATION

The government cut gasoline and diesel prices by a few percent on January 15 but did not change ex-refinery jet fuel prices. Fuel prices paid by airlines, such as China Eastern Air- lines and China Southern Airlines, are based on ex-refinery prices and China National Aviation Fuel Group Corporation (CNAF)’s overall purchasing costs including those im- ported from overseas markets.

Under a mechanism in place since July 2006, CNAF adjusts jet fuel prices on a quarterly " basis, but it is not clear whether such adjustments will accelerate under the new pricing

regime. ○ ○ ○○○○○○○○○○○○

Shanghai Airlines forecasts heavy loss for 2008 ○ ○ ○○○○○○○○○○○○

(2009-01-21) ○ ○ ○○○○○○○○○○○○ Shanghai Airlines, one of China’s local airlines, said losses in 2008 might more than double from 2007 because of weak travel demand and hedging losses, the company said ○ ○ ○○○○○○○○○○○○

in a notice to the Shanghai Stock Exchange yesterday. ○ ○ ○○○○○○○○○○○○

The high oil prices, weak travel demand caused by the global economic slowdown and ○ ○ ○○○○○○○○○○○○ heavy hedging losses led to the loss, the carrier said in the notice. It has lost 170 million yuan ($24.9 million) in the fair value of fuel hedging contracts by the end of 2008. The airline ○ ○ ○○○○○○○○○○○○

posted a net loss of 435 million yuan in 2007. ○ ○ ○○○○○○○○○○○○

Cross-Straits airfares can ‘be reduced’ ○ ○ ○○○○○○○○○○○○

(2009-01-22) ○ ○ ○○○○○○○○○○○○

There is scope for reduction in airfares between the Chinese mainland and Taiwan now, ○ ○ ○○○○○○○○○○○○ since flights are direct and short, and operating them does not cost a lot, said Yang Yi, spokesman of the Taiwan Affairs Office of the State Council. ○ ○ ○○○○○○○○○○○○

He said carriers of both sides will soon be told that travelers are finding cross-Straits flights ○ ○ ○○○○○○○○○○○○

“too expensive”. As of now, a return ticket from Beijing to Taipei costs about 4,000 yuan ○ ○ ○○○○○○○○○○○○

($590). There is usually no discount on air tickets during the festive season. ○ ○ ○○○○○○○○○○○○

China’s private airline resumes flights ○ ○ ○○○○○○○○○○○○

(2009-01-24) ○ ○ ○○○○○○○○○○○○ China’s first private airline, Okay Airways, resumed operation today just ahead of the peak festival traveling season after a seven-week suspension. Six other domestic flights, linking ○ ○ ○○○○○○○○○○○○

Tianjin, the airline’s base in northern China, to other cities including Kunming, Sanya, ○ ○ ○○○○○○○○○○○○

Chengdu, will be resumed in the following week through January 31. ○ ○ ○○○○○○○○○○○○ The board chairman pledged to turn economic loss into profit by building Okay Airways into a sound and sustainable company. Following February 1, all other routes will resume. ○ ○ ○○○○○○○○○○○○

Okay Airways suspended passenger services on December 6, nine days ahead of the ○ ○ ○○○○○○○○○○○○

deadline for suspension set by the Civil Aviation Administration of China. Management ○ ○ ○○○○○○○○○○○○ problems and a lack of capital support from Junyao had been cited as factors in the

suspension. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2020 AVIATION

AVIC, Airbus to set up JV for A350

(2009-01-31) AVIATION Aviation Industry Corp of China (AVIC) has sealed a deal with European aircraft maker Airbus to build a factory in Northeast China to jointly produce composite material parts and compo- nents for the new wide-body A350 aircraft.

The agreement was signed in Madrid yesterday between Airbus China and Harbin Aircraft Industry (Group) Co (HAIG), a company under AVIC, in the presence of Chinese Premier Wen Jiabao and Spanish Prime Minister Jose Luis Rodriguez Zapatero. " The Chinese side would have an 80-percent stake in the new plant in Harbin, capital of Northeast China’s Heilongjiang Province, and the other 20 percent would be held by Airbus, said Beijing-based AVIC.

○ ○ ○○○○○○○○○○○○ The 80-percent stake would be divided, with HAIG holding 50 percent and Hafei Aviation Industry Co Ltd, AVIC China Industry and Technology Co Ltd and Harbin Development Zone ○ ○ ○○○○○○○○○○○○ Heli Infrastructure Development Co Ltd each holding 10 percent. The plant would be com-

○ ○ ○○○○○○○○○○○○ pleted at the end of 2010, according to AVIC.

○ ○ ○○○○○○○○○○○○ The joint venture was part of a 5-percent work package of A350 jets that Airbus had promised for Chinese manufacturers. On November 26, 2007, Airbus signed a memorandum of un- ○ ○ ○○○○○○○○○○○○ derstanding with the National Development and Reform Commission of China to formalize

a commitment to allocate 5 percent of the A350 airframe to the Chinese aviation industry.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2121

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2222 AVATION . China Southern Events

China Southern books fuel hedging gain of $6m

(2009-01-06) AVIATION China Southern Airlines, the country’s largest airline by fleet size, booked cash gain of about $6 million from the settlement of aviation fuel hedging contracts. China Southern A source at the airline’s parent, China Southern Air Holding Co, did not give details on the Events period covered by the settled contracts, other than to say that all fuel options contracts were settled before the end of September.

" China Southern offers Hunan-Osaka flight (2009-01-06) China Southern launched a new direct air route from Changsha, Central China’s Hunan

○ ○ ○○○○○○○○○○○○ Province to Osaka, Japan. There is one flight a week on the new route, aboard an Airbus

A320. ○ ○ ○○○○○○○○○○○○

It is estimated that a round-trip flight between Changsha and Osaka could halve the cost ○ ○ ○○○○○○○○○○○○ and save up to four and a half hours compared to the original eight hours required when

○ ○ ○○○○○○○○○○○○ flying indirectly.

○ ○ ○○○○○○○○○○○○ In 2007, Hunan received 50,000 Japanese tourists. The Hunan provincial tourism bureau said with the opening of the Changsha-Osaka route, the province is expected to welcome

○ ○ ○○○○○○○○○○○○ more than 100,000 inbound tourists from Japan annually. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ China Southern 2008 passenger numbers up 2.3%

(2009-01-13) ○ ○ ○○○○○○○○○○○○ China Southern said it carried 58.24 million passengers in 2008, up 2.3 percent from the

○ ○ ○○○○○○○○○○○○ previous year. In a statement on its website, the airline said it carried 834,700 tons of cargo

in the year, down 4.3 percent. ○ ○ ○○○○○○○○○○○○

It carried 464,340 passengers in December, up 6.2 percent year-on-year. It also carried 65, ○ ○ ○○○○○○○○○○○○

240 tons of cargo in the month, down 16.9 percent. ○ ○ ○○○○○○○○○○○○ The passenger load factor in December was 72.1 percent, down by 0.9 percentage points

○ ○ ○○○○○○○○○○○○ from a year earlier, while the overall load factor was down 4.5 points at 65.3 percent, the airline said. For the whole year, the passenger load factor was 73.8 percent, down 0.7 point,

○ ○ ○○○○○○○○○○○○ while the overall load factor was down 0.7 point at 64.4 percent. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ China Southern forecasts loss for 2008

(2009-01-15) ○ ○ ○○○○○○○○○○○○ China Southern today forecasted a loss for 2008 due to weak travel demand and high oil

○ ○ ○○○○○○○○○○○○ prices. In a statement to the Shanghai Stock Exchange, the carrier said the unaudited loss was due to a marked decline in air travel demand caused by global economic slowdown ○ ○ ○○○○○○○○○○○○ and high domestic fuel prices.

○ ○ ○○○○○○○○○○○○ The airline posted a net profit of 1.852 billion yuan ($271 million), or 0.42 yuan per share, in

○ ○ ○○○○○○○○○○○○ 2007. The airlines faced a tough time in 2008. ○ ○ ○○○○○○○○○○○○

China Southern opens office in Taiwan ○ ○ ○○○○○○○○○○○○ (2009-01-15)

○ ○ ○○○○○○○○○○○○ China Southern opened a representative office in Taipei today, becoming the first Chinese airline to gain a foothold in the Taiwan market. Si Xianmin, chairman of China’s largest

○ ○ ○○○○○○○○○○○○ airline, opened the office in Taipei’s trendy Minsheng East Road.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2323 AVATION . China Southern Events

The office is aimed at promoting China Southern’s business links with Taiwan and will not sell plane tickets, which are sold by Taiwan travel agencies.

China Southern has 342 planes serving 841 destinations worldwide. It ranked as number AVIATION one in Asia and number four in the world in terms of passenger volume in 2008, according to the International Air Transport Association. China Southern Events Taiwan, after having banned air links with Chinese mainland for six decades, launched weekend charter flights with the mainland and allowing Chinese tour groups to enter Tai- wan Province in July 2008 and regular charter flights in December. " China Southern board chairman appointed

(2009-01-20) ○ ○ ○○○○○○○○○○○○ China Southern said its directors approved the appointment of Si Xianmin as board chairman.

The airline also promoted deputy general manager Tan Wangeng to general manager. ○ ○ ○○○○○○○○○○○○ China Southern’s former head Liu Shaoyang was named chairman of China Eastern Air-

lines last month. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2424 AVATION . Air China Events

Air China’s parent to buy East Star

(2009-01-13) AVIATION China National Aviation Holding Co (CNAHC), the parent company of Air China, said it is in talks with Wuhan-based East Star Airlines to acquire all or part of the private carrier’s stakes. Air China CNAHC is making “preliminary communication” with East Star Airlines about the share sale, Events the State-owned aviation group said in a statement to the Hong Kong Stock Exchange.

CNAHC sent representatives to East Star Airlines last week to conduct audits and investiga- " tions for the acquisition, a source from the private carrier said. East Star Airlines, the fourth private carrier in China, launched its maiden flight in 2006. It operates about 20 routes from Wuhan, capital of Central China’s Hubei Province, with nine

leased Airbus A320 family aircraft. ○ ○ ○○○○○○○○○○○○ The airline is owned by China East Star Group, one of the largest private enterprises in ○ ○ ○○○○○○○○○○○○ Hubei. The company is mainly involved in tourism and real estate business. Its chairman,

○ ○ ○○○○○○○○○○○○ Lan Shili, was ranked 136th on Forbes magazine’s annual “China Rich” list last year, down

from 70th in 2005. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Air China books 6.8b yuan fuel-hedging loss

○ ○ ○○○○○○○○○○○○ (2009-01-20)

Air China said its losses in fair value of fuel hedging contracts totaled 6.8 billion yuan ($994 ○ ○ ○○○○○○○○○○○○ million) as of December 31, 2008, the largest among the country’s three leading airline

○ ○ ○○○○○○○○○○○○ groups.

○ ○ ○○○○○○○○○○○○ The actual loss from the settlement of the fuel hedging contracts in December 2008 was $52.8 million, the airline said in a statement to the Hong Kong stock exchange on January

○ ○ ○○○○○○○○○○○○ 16. ○ ○ ○○○○○○○○○○○○ Air China’s fuel hedging contracts were signed in July 2008 when international crude prices

○ ○ ○○○○○○○○○○○○ were hovering at above the $147 per barrel level. These contracts are effective until 2011.

○ ○ ○○○○○○○○○○○○ “If the international crude prices stay at a low level, we will try to offset the losses through the purchase of cheaper spot fuel,” said Huang Bin, board secretary of Air China. Huang said

○ ○ ○○○○○○○○○○○○ fuel costs account for over 40 percent of Air China’s total operating costs. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Air China strengthens training of newly-employed pilots

(2009-01-21) ○ ○ ○○○○○○○○○○○○ In order to ensure flight safety, Air China has gone back to the basics by improving the

○ ○ ○○○○○○○○○○○○ training quality of newly-employed pilots and establishing the unique “Newly-Employed Pilots Quality Control” standard. This undertaking marks a substantial step forward on the

○ ○ ○○○○○○○○○○○○ road to assure the quality of pilots. ○ ○ ○○○○○○○○○○○○ At present, the project has started full implementation inside Air China. This standard will

○ ○ ○○○○○○○○○○○○ contribute to laying a solid foundation for security and ensure flight safety.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2525 AVIATION . China Eastern Events

China Eastern to cut managerial staff salaries by 10 to 30%

(2009-01-10) China Eastern Airlines, one of the country’s three biggest carriers, is expected to cut sala- AVIATION ries of middle and top-level managers by 10 to 30 percent, the company said yesterday in a statement on its website. China Eastern The move takes effect on February 1 despite the fact the company announced it was getting Events a 7-billion-yuan ($1.02 billion) government cash injection in December 2008.

Without giving a specific figure, the airline said salary cuts only make up a small part of management costs. However, it believes the move reflects the board’s attitude towards " overcoming its financial problems together with employees.

China Eastern carried 37.05 million passengers last year, data provided on the company’s

website showed, down 5.4 percent year on year. Cargo volume fell 5.6 percent to 887,000 ○ ○ ○○○○○○○○○○○○ tons during the same period, it said. It also posted a net loss of 2.29 billion yuan in the first ○ ○ ○○○○○○○○○○○○

nine months of 2008. ○ ○ ○○○○○○○○○○○○

China Eastern acquires aircraft from Boeing ○ ○ ○○○○○○○○○○○○

(2009-01-10) ○ ○ ○○○○○○○○○○○○ China Eastern signed an aircraft purchase agreement with Boeing for 30 737NGs yesterday in Shanghai, according to a statement released by the Shanghai Stock Exchange. The ○ ○ ○○○○○○○○○○○○

deal is worth 13.98 billion yuan ($1.94 billion) at list prices, but China Eastern said it will pay ○ ○ ○○○○○○○○○○○○

less. ○ ○ ○○○○○○○○○○○○ Boeing did not acknowledge the specifics of the order, saying only that China Eastern “announced the selection of additional” aircraft and that it will issue a statement “when the ○ ○ ○○○○○○○○○○○○

order process is completed.” ○ ○ ○○○○○○○○○○○○

Although the order will increase its 94.3 percent debt ratio, it noted that it would not affect ○ ○ ○○○○○○○○○○○○ daily cash flow or profitability. China Eastern will take delivery of the aircraft from July 2011 to

November 2015. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ China Eastern sees net loss in 2008 ○ ○ ○○○○○○○○○○○○

(2009-01-12)

China Eastern said it expects a significant net loss in 2008 due to fuel hedging losses and ○ ○ ○○○○○○○○○○○○

weak demand. “A pronounced global economic recession since the second half of 2008 led ○ ○ ○○○○○○○○○○○○ to a drastic decrease in air transportation demand. In addition, the fourth quarter is the traditional off-season,” the company said in a statement filed with the Shanghai Stock ○ ○ ○○○○○○○○○○○○

Exchange. ○ ○ ○○○○○○○○○○○○ In addition, the company said fair value losses on its jet fuel hedging contracts stood at about 6.2 billion yuan ($906 million) at the end of December, further widening from 1.83 ○ ○ ○○○○○○○○○○○○

billion yuan at the end of October. It also incurred a cash loss of $14.15 million from the ○ ○ ○○○○○○○○○○○○

settlement of aviation fuel hedging contracts in December after fuel prices declined further. ○ ○ ○○○○○○○○○○○○ The company said the closing price of the West Texas Intermediate (WTI) crude oil on the New York Mercantile Exchange was $44.60 per barrel on December 31. ○ ○ ○○○○○○○○○○○○

Lower spot prices mean hedging contracts signed when prices were high are further out of ○ ○ ○○○○○○○○○○○○

the money. However, the company said savings on cheaper spot fuel will more than offset ○ ○ ○○○○○○○○○○○○

any hedging losses. ○ ○ ○○○○○○○○○○○○ In 2007, China Eastern booked a net profit of 586 million yuan, or 0.12 yuan per share. It recorded a loss of about 2.29 billion and a gearing ratio of 98.49 percent in the first three ○ ○ ○○○○○○○○○○○○

quarters of 2008. China Eastern is due to release audited 2008 financial results on April 16.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2626 AVATION . China Eastern Events

China Eastern to consider selling Yunnan, Joy Air stakes

(2009-01-14) AVIATION China Eastern may sell a stake in its Southwest China’s Yunnan Province operations and part of its holdings in venture Joy Air, two company officials said. China Eastern The Yunnan government has begun talks about buying a stake in China Eastern’s local unit, Events said the officials, who declined to be identified because the discussions are still at an initial stage. The carrier may sell some of its Joy Air stake to partner China Aviation Industry Corp.

China Eastern needs funds as wrong-way bets on fuel prices and waning travel demand " will likely cause it to report a “significant” loss for 2008, its third unprofitable year in four. The Shanghai-based carrier has already secured a 7 billion yuan ($1 billion) state bailout to help pay debts.

○ ○ ○○○○○○○○○○○○ The branch was formerly a separate carrier, Yunnan Air, which China Eastern’s parent combined with in a 2002 industry wide restructuring. It will be turned back into a standalone ○ ○ ○○○○○○○○○○○○ company as the first part of the sale plan, the airline officials said. The unit has more than 35

○ ○ ○○○○○○○○○○○○ planes, according to its website.

○ ○ ○○○○○○○○○○○○ China Eastern may sell about 30 percent of Joy Air, the officials said. The carrier currently owns 40 percent of the Xi’an, central China-based airline, which was set up last year. The

○ ○ ○○○○○○○○○○○○ venture, 60 percent owned by Aviation Industry Corp of China, is yet to begin services. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ China Eastern obtains 5.55b yuan in loans

(2009-01-16) ○ ○ ○○○○○○○○○○○○ China Eastern said it signed an agreement to obtain 5.55 billion yuan ($805 million) worth

○ ○ ○○○○○○○○○○○○ of short-term loans from its affiliate Eastern Air Group Finance Co Ltd, with the funds supple-

menting working capital. ○ ○ ○○○○○○○○○○○○

The funds were channeled indirectly via the finance company by parent China Eastern Air ○ ○ ○○○○○○○○○○○○ Holding Co. In a statement filed with the Shanghai Stock Exchange, China Eastern said the

○ ○ ○○○○○○○○○○○○ loan term is six months at a rate of 4.374 percent, a discount to the six-month benchmark

lending rate. The funds will come in six tranches. ○ ○ ○○○○○○○○○○○○ Last month, the board of China Eastern approved a revised new-share issue plan involving ○ ○ ○○○○○○○○○○○○ a capital injection of 7 billion yuan from the parent company, up from 3 billion planned

previously. All proceeds were to supplement working capital.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

China Eastern may cancel jet orders on hold ○ ○ ○○○○○○○○○○○○ (2009-01-16)

○ ○ ○○○○○○○○○○○○ China Eastern may scrap as many as 15 Airbus SAS and Boeing Co plane orders as travel

demand wanes. ○ ○ ○○○○○○○○○○○○

The carrier wants to reduce the number of new planes it receives this year to 13 or 14 from ○ ○ ○○○○○○○○○○○○ a planned 29, said a China Eastern executive yesterday, who declined to be identified,

○ ○ ○○○○○○○○○○○○ adding staff will also be offered unpaid leave. ○ ○ ○○○○○○○○○○○○

China Eastern deals with bank on strategic cooperation ○ ○ ○○○○○○○○○○○○ (2009-01-21)

○ ○ ○○○○○○○○○○○○ China Eastern recently signed a strategic cooperation agreement with Shanghai Pudong Development Bank. According to the agreement, the bank will offer comprehensive line of

○ ○ ○○○○○○○○○○○○ credit of 10 billion yuan to China Eastern. ○ ○ ○○○○○○○○○○○○ The cooperation will involve project financing, bond issuance, securitization, international

○ ○ ○○○○○○○○○○○○ settlement, and joint on/off-shore credit extension. Meanwhile, China Eastern will offer all-

round aviation products and services to the bank. ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2727

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2828 LAND TRANSPORTATION

1st high-speed railway completed in central region

(2009-01-01) LAND Construction of the Hefei-Wuhan railway, the first high-speed line in Central China, has been completed after three years, the government of Wuhan City, Central China’s Hubei Province, said recently.

TRANSPORTATION The 350-kilometer line cost 16.8 billion yuan ($2.46 billion). It will reduce travel time from eight and a half hours to two hours. Trains will run at 200 kilometers per hour. The line is the middle part of China’s first east-west high-speed rail link, the Shanghai-Wuhan-Chengdu " Railway. China’s northern passenger railway on trial run

(2009-01-01) ○ ○ ○○○○○○○○○○○○ A 250 kilometer-per-hour passenger railway between the coal-rich Shanxi Province and

○ ○ ○○○○○○○○○○○○ neighboring Hebei Province went into trial operation today. ○ ○ ○○○○○○○○○○○○ The 190-kilometer rail line links Shijiazhuang to Taiyuan, cities of the northern provinces. It

○ ○ ○○○○○○○○○○○○ is estimated to carry 15 million one-way passengers a year in 2020 and more than 25

million a year in 2030. ○ ○ ○○○○○○○○○○○○ The railway would distribute the passenger flow and let the original passenger-goods mixed

○ ○ ○○○○○○○○○○○○ lines carry more coal from Shanxi. ○ ○ ○○○○○○○○○○○○ The 12.64-billion-yuan project ($1.8 billion) began construction in 2005. The line runs through

○ ○ ○○○○○○○○○○○○ 94 bridges and 32 tunnels, including China’s longest mountain tunnel with a length of 27.8

kilometers. ○ ○ ○○○○○○○○○○○○ Another five high-speed passenger lines, mostly in southern China, will go into operation in

○ ○ ○○○○○○○○○○○○ 2009, according to the Ministry of Railways. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Guangxi, Vietnam start regular rail service

(2009-01-02) ○ ○ ○○○○○○○○○○○○ Passenger trains between South China’s Guangxi Zhuang Autonomous Region and Viet-

○ ○ ○○○○○○○○○○○○ nam started regular daily service yesterday.

○ ○ ○○○○○○○○○○○○ The first train began its 400-kilometer long trip from Nanning City, Guangxi’s capital, at 9:38,

and it was expected to arrive in Hanoi, capital of Vietnam, at 22:30. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ The trains, each with eight air-conditioned carriages, can carry up to 249 passengers. Previously, temporary passenger rail service from Nanning to Hanoi only ran on Tuesdays

○ ○ ○○○○○○○○○○○○ and Saturdays. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Shanghai to build Metro Line 12

(2009-01-06) ○ ○ ○○○○○○○○○○○○ Shanghai’s Metro Line 12 has started construction and is expected to open to traffic in 2012,

○ ○ ○○○○○○○○○○○○ said the city’s Metro authority.

○ ○ ○○○○○○○○○○○○ With a total length of 40.4 kilometers, this line is designed to connect Minhang District in southwest Shanghai and the northern part of Pudong New Area after passing through Xuhui, ○ ○ ○○○○○○○○○○○○ Luwan, Jing’an, Zhabei, Hongkou and Yangpu districts.

○ ○ ○○○○○○○○○○○○ The southwest-to-northeast line will boast 31 underground stations from Qixin Road in

○ ○ ○○○○○○○○○○○○ Minhang to Jinhai Road in Pudong.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 2929 LAND TRANSPORTATION

Pearl River Delta to expand transportation network

(2009-01-09) The country pledges to build a highly convenient and efficient transportation network in the LAND Pearl River Delta by expanding capacities of roads, railways, ports and airports over the next 12 years, the National Development and Reform Commission (NDRC), the country’s top economic planner said yesterday. TRANSPORTATION The resolution was made in a 2008-2020 national plan on the development of the Pearl River Delta released yesterday. The plan sets the goal of turning the delta into the most efficient and safest passenger and " cargo transport center in the Asia-Pacific region. The move will help bolster exchange among the country’s booming southern regions including the Pearl River Delta, Hong Kong, Macao

and Taiwan.

○ ○ ○○○○○○○○○○○○ Du Ying, vice-minister of the NDRC said construction on a bridge linking Hong Kong, Macao ○ ○ ○○○○○○○○○○○○ and the Pearl River Delta would be expected to start in 2009 and the central government would offer 5 billion yuan ($730 million) for the construction of its main structure. ○ ○ ○○○○○○○○○○○○

The main structure of the bridge stretches 29 kilometers, the longest in the world. It will ○ ○ ○○○○○○○○○○○○

connect Hong Kong, Macao and Zhuhai of South China’s Guangdong Province. ○ ○ ○○○○○○○○○○○○

According to the plan, operational highways in the region are set to reach 3,000 kilometers ○ ○ ○○○○○○○○○○○○ by 2012, up from the 1,900 kilometers by the end of 2006. Rails are expected to hit 1,100 kilometers by 2012 and 2,200 kilometers by 2020, compared with 287 kilometers by the end ○ ○ ○○○○○○○○○○○○

of 2006. ○ ○ ○○○○○○○○○○○○ Cargo throughput for ports aims to ship 900 million tons by 2012 and is expected to climb to 1.4 billion tons by 2020, up from 630 million tons in 2006. Airports will handle 80 million ○ ○ ○○○○○○○○○○○○

passengers as of 2012 and 150 million by 2020. The figure stood at 45.36 million in 2006. ○ ○ ○○○○○○○○○○○○

The construction would be carried out on an energy-efficient and environment-friendly basis ○ ○ ○○○○○○○○○○○○ by using renewable energy and clean technology, according to the development plan. As of 2020, energy consumption per unit of GDP in the region will be reduced to 0.57 tons of ○ ○ ○○○○○○○○○○○○

standard coal equivalent and 80 percent of industrial water can be reused.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Beijing to spend 11b yuan in public transport subsidy ○ ○ ○○○○○○○○○○○○ (2009-01-13)

Beijing will invest 11 billion yuan ($1.61 billion) in public transport subsidies this year to ○ ○ ○○○○○○○○○○○○ ensure continued low prices for commuters. Yang Xiaochao, director of the municipal finance bureau, said the figure was up 14 percent from last year. ○ ○ ○○○○○○○○○○○○

The funds would be primarily used to cut subway and bus fares, and the low pricing policy ○ ○ ○○○○○○○○○○○○

for mass transit would remain unchanged this year, Yang added. ○ ○ ○○○○○○○○○○○○

Beijing, a city with a population of 17 million, has been trying to boost public transportation ○ ○ ○○○○○○○○○○○○ to ease traffic pressure and improve air quality. To that end, the city has adopted measures including improving public transport structure, slashing bus fares by 60 percent since the ○ ○ ○○○○○○○○○○○○ beginning of 2007 and subway fares by 30 percent since October 2007. Its public transport

system is expected to carry some 28 million commuters daily by 2012. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Tibet to build first expressway ○ ○ ○○○○○○○○○○○○

(2009-01-15) ○ ○ ○○○○○○○○○○○○ Southwest China’s Tibet Autonomous Region has announced plans to build its first expressway this year. The 37.9-kilometer expressway will have two lanes each side allowing ○ ○ ○○○○○○○○○○○○ vehicles to run at 80 to 120 kilometers per hour, said Yao Bohua, an expert of Tibet’s institute

of road survey and design, the designer of the project. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3030 LAND TRANSPORTATION

The east-west traffic link will extend from the suburban Liuwu New District along the Lhasa River to Gongga Airport, in southwestern Lhasa, the regional capital.

LAND Construction is expected to start in April or May if approved by central authorities. On completion in 2011, the expressway would help ease traffic pressure along a section of the No 318 national highway that sees frequent flooding and traffic jams, and improve the airport trans- TRANSPORTATION port links. The project is estimated to cost 1.55 billion yuan ($226.7 million). Solar energy lighting facilities would be used along the freeway. New techniques will be applied in road surfacing to reduce the eroding effects of strong sunlight and extreme temperatures in the high- " altitude region.

Gongga, one of the world’s highest airports and one of four in Tibet, handled 1.05 million

passengers in 2007 and aims to raise the capacity to 1.7 million a year by 2010. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

More rural roads planned this year ○ ○ ○○○○○○○○○○○○ (2009-01-16)

○ ○ ○○○○○○○○○○○○ China will build or renovate 300,000 kilometers of rural roads this year to aid development

in the countryside, Minister of Transport Li Shenglin said yesterday. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Last year, 188.7 billion yuan ($27.6 billion) was spent on building and renovating 391,000 kilometers of rural roads, and the network now serves almost 89 percent of all towns. China

○ ○ ○○○○○○○○○○○○ had 3.68 million kilometers of roads by the end of last year, more than triple what it had in

1978. ○ ○ ○○○○○○○○○○○○ The national expressway network stretches 60,300 kilometers, of which 6,433 kilometers ○ ○ ○○○○○○○○○○○○ were built last year. China has the world’s second longest highway network, after the United

○ ○ ○○○○○○○○○○○○ States. The ministry is currently looking at new ways to fund the construction of roads. ○ ○ ○○○○○○○○○○○○

Zhejiang to develop longest rail network ○ ○ ○○○○○○○○○○○○ (2009-01-17)

○ ○ ○○○○○○○○○○○○ The country’s largest high-speed rail network will be built in East China’s Zhejiang Province by 2012, as part of the efforts to invigorate the local economy, the province’s top official said

○ ○ ○○○○○○○○○○○○ yesterday. ○ ○ ○○○○○○○○○○○○ In his government work report to the provincial people’s congress, Lu Zushan, governor of

○ ○ ○○○○○○○○○○○○ Zhejiang, said they wanted to complete the construction of this modern rail network within

four years. ○ ○ ○○○○○○○○○○○○ Li Zhihai, head of the provincial development and reform commission, said the local govern-

○ ○ ○○○○○○○○○○○○ ment will spend 130 billion yuan ($19 billion) to develop the 1,200 kilometers network, ○ ○ ○○○○○○○○○○○○ which, on completion, will be the longest in the country and account for almost 10 percent of

China’s total railways. ○ ○ ○○○○○○○○○○○○ Trains will run at upward of 200 kilometers per hour on the new lines. The massive invest-

○ ○ ○○○○○○○○○○○○ ment in the transport system will help promote economic development not only in Zhejiang

but the whole of the Yangtze River Delta region.

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ As well as the new rail network, Zhejiang will spend 60 billion yuan on the expansion of its highway system. Both projects are part of an 881 billion yuan investment package designed

○ ○ ○○○○○○○○○○○○ to ensure growth this year and next.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3131 LAND TRANSPORTATION

Shanghai maglev train project still under discussion

(2009-01-18) The magnetic levitation train project linking two airports in Shanghai is still under experts’ LAND discussion and appraisal, Mayor Han Zheng told a press conference in Shanghai yesterday.

The 31.8-kilometer maglev train line, linking the two international airports in Pudong and Hongqiao, is part of the infrastructure network in Shanghai. However, the construction was TRANSPORTATION shelved in May 2007 due to radiation concerns from residents living near the railway. The project met with fierce opposition last year. Construction of another much-discussed maglev railway in the neighboring Zhejiang " Province, which connects the provincial capital Hangzhou and Shanghai, also encountered residents’ opposition. The provincial government announced in August last year that the construction would go ahead in 2010, three years later than the original construction

schedule. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

MTR to invest in Hangzhou rail line ○ ○ ○○○○○○○○○○○○

(2009-01-19) ○ ○ ○○○○○○○○○○○○ MTR Corp, Hong Kong’s subway operator, said it signed an agreement with the government of Hangzhou City, East China’s Zhejiang Province, to operate and invest in a 22-billion-yuan ○ ○ ○○○○○○○○○○○○

($3.2 billion) mass transit rail line. ○ ○ ○○○○○○○○○○○○

MTR will take a 49-percent stake in a venture responsible for the electrical and mechanical ○ ○ ○○○○○○○○○○○○ system of the Hangzhou Metro Line 1, MTR said in a statement on its website on January 16.

Hangzhou Metro Group Co will own the remaining share. ○ ○ ○○○○○○○○○○○○

The joint venture, which will operate the line for 25 years, is set to invest 37 percent of the ○ ○ ○○○○○○○○○○○○

total project cost, or 8.1 billion yuan. ○ ○ ○○○○○○○○○○○○

The line in Hangzhou is the first of eight planned for the coastal city. Hangzhou is the third ○ ○ ○○○○○○○○○○○○ mainland project with direct MTR investment, after ventures in southern Shenzhen and

Beijing. ○ ○ ○○○○○○○○○○○○

Construction of the 48-kilometer Hangzhou Line 1, undertaken by Hangzhou Metro, began ○ ○ ○○○○○○○○○○○○ in March 2007. The construction work will account for 63 percent of the total project cost. The 30-station line, which has underground and elevated sections, is expected to begin service ○ ○ ○○○○○○○○○○○○

in 2012. ○ ○ ○○○○○○○○○○○○

China may triple the length of metropolitan railway lines in operation to 1,500 kilometers by ○ ○ ○○○○○○○○○○○○ 2015 from 440 kilometers at the end of 2006, China Railway Group Ltd, Asia’s largest

construction company, said in its initial public offering prospectus in November 2007. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

CDB to lend 120b yuan for Qinghai infrastructure ○ ○ ○○○○○○○○○○○○

(2009-01-20) ○ ○ ○○○○○○○○○○○○ China Development Bank (CDB) signed an agreement with Northwest China’s Qinghai

Province to provide at least 120 billion yuan ($17.65 billion) in loans to the province before ○ ○ ○○○○○○○○○○○○ 2015. The funds will be used to support infrastructure projects such as highways, airports, railroads and power facilities, the bank said yesterday. ○ ○ ○○○○○○○○○○○○

Loans will also go to industrial projects that draw on the province’s local advantages, such ○ ○ ○○○○○○○○○○○○

as coal and salt lake, and programs involving living standards such as settlement projects ○ ○ ○○○○○○○○○○○○ and environmental protection, CDB said. As of December 2008, CDB had lent 60.6 billion

yuan to Qinghai province, of which 32.4 billion yuan was still outstanding. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3232 LAND TRANSPORTATION

China Railway Construction Corp gets railway contract in Libya

(2009-01-23) LAND China Railway Construction Corp, China’s second-largest State-owned construction company, said one of its units had won an $805 million railway construction contract in Libya. The amount equals to 3.09 percent of the company’s revenue in 2007.

TRANSPORTATION The unit will build a 172-kilometer section of railway in the North African country, the company said. The project is scheduled to complete in 54 months. Analysts estimated the deal would yield a profit of about $80 million.

" China’s railways carry 75m holiday passengers

(2009-01-29)

○ ○ ○○○○○○○○○○○○ China’s railways carried 75.05 million passengers between January 11 and 27, or in the first 17 days of the 40-day Spring Festival travel rush. The figure represents a 17 percent in-

○ ○ ○○○○○○○○○○○○ crease from a year earlier, the Ministry of Railways said yesterday. ○ ○ ○○○○○○○○○○○○ The ministry has ordered to add more transport capacity to provinces and municipalities

○ ○ ○○○○○○○○○○○○ including Sichuan, Chongqing, and Jiangxi to brace for the post-holiday traffic rush. The

regions are home to the largest number of migrant rural workers. ○ ○ ○○○○○○○○○○○○ Hundreds of millions of Chinese went home for family gatherings in the Lunar New Year ○ ○ ○○○○○○○○○○○○ holiday, the most important traditional one in China, creating the world’s largest population

migration. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ In addition, 114.7 million passengers have traveled by road between January 25 and 28, up 5.4 percent from the same period last year. Short trips account for 80 percent of the total in

○ ○ ○○○○○○○○○○○○ the first four days of the seven-day Spring Festival holiday. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Xinjiang to invest heavily in rural highways

(2009-01-29) ○ ○ ○○○○○○○○○○○○ Northwest China’s Xinjiang Uygur Autonomous Region is planning to invest 3.5 billion yuan

○ ○ ○○○○○○○○○○○○ ($512 million) this year in its rural highways, the regional transport department said today.

○ ○ ○○○○○○○○○○○○ The money will be used to build and upgrade 11,000 kilometers highways in rural areas, giving 80 towns access to asphalt roads and connecting 400 villages to the highway network,

○ ○ ○○○○○○○○○○○○ the department said. ○ ○ ○○○○○○○○○○○○ Xinjiang invested 3.2 billion yuan in rural highways last year, and about 2 million herdsmen

○ ○ ○○○○○○○○○○○○ and farmers benefited from that.

○ ○ ○○○○○○○○○○○○ The region has invested 13.4 billion yuan in building and upgrading 55,000 kilometers of rural highways during the past decade. However, many villages in this vast region still have ○ ○ ○○○○○○○○○○○○ no access to highways. Xinjiang plans to spend another 120 billion yuan and build more

than 50,000 kilometers of highways in the coming five years.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3333

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3434 SHIPPING

Shanghai remains world’s No 2 port by throughput

(2009-01-04) SHIPPING Shanghai handled 28 million twenty-foot equivalent units (TEUs) last year, a rise of 7 percent, to retain its No 2 ranking in the world, port officials said, although a research note cautioned of tougher times this year.

The container throughput grew from 26.1 million TEUs in 2007. The 7-percent growth, however, was sharply down from 20.4 percent in the year-earlier period. Government forecast said the growth rate could hit 9 percent last year. Singapore handled 27.9 million TEUs " in 2007 to rank No 1. The Waigaoqiao Port contributed more than 54 percent, or 15 million TEUs, to the total volume last year. This means that Waigaoqiao will stay No 1 in throughput among domestic

ports. ○ ○ ○○○○○○○○○○○○ The throughput of the Yangshan Deep-water Port also rose from the previous year to reach ○ ○ ○○○○○○○○○○○○ 8.2 million TEUs after the last phase of its northern section was completed and became fully

○ ○ ○○○○○○○○○○○○ operational early last month, adding 2.2 million TEUs to its existing handling capacity.

○ ○ ○○○○○○○○○○○○ A China Merchants Securities research report said the container operations of domestic ports will slow in 2009 with the impact of a global turmoil, adding the growth rate of the total

○ ○ ○○○○○○○○○○○○ throughput of domestic ports may fall below 4 percent this year. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Tianjin container traffic set to drop

(2009-01-09) ○ ○ ○○○○○○○○○○○○ Tianjin Port (Group) Co, the operator of northern China’s busiest harbor, expects container

○ ○ ○○○○○○○○○○○○ traffic growth to cool to 12 percent this year because of the country’s exports slowdown.

○ ○ ○○○○○○○○○○○○ The port plans to handle 9.5 million twenty-foot equivalent units this year, according to a

statement on the harbor operator’s website. Container volume jumped 20 percent last year ○ ○ ○○○○○○○○○○○○

to 8.5 million boxes. ○ ○ ○○○○○○○○○○○○ Traffic growth in Tianjin and Shanghai, China’s busiest harbor, has slowed as recessions

○ ○ ○○○○○○○○○○○○ in the US and Europe damp demand for shipments of Chinese-made toys, furniture and

clothes. ○ ○ ○○○○○○○○○○○○

Tianjin Port’s total cargo volume may rise 7.3 percent this year to 380 million tons. Last year, ○ ○ ○○○○○○○○○○○○ the tally surged 15 percent to 354 million tons. Sales this year may total 13 billion yuan ($1.

○ ○ ○○○○○○○○○○○○ 9 billion), according to the statement. ○ ○ ○○○○○○○○○○○○

Slowing economy means flat rail cargo volume for 2009 ○ ○ ○○○○○○○○○○○○ (2009-01-13)

○ ○ ○○○○○○○○○○○○ The Ministry of Railways yesterday forecast rail cargo volume would be flat this year, com-

pared with 2008. The estimate reflected a downturn in demand in the world’s fastest-grow- ○ ○ ○○○○○○○○○○○○

ing economy, according to the ministry. ○ ○ ○○○○○○○○○○○○ The ministry said it would rely more heavily on passenger transport to offset any weakness

○ ○ ○○○○○○○○○○○○ in cargo. The ministry forecast railway passengers would increase about 10 percent to

reach 1.61 billion trips this year, and cargo marketing staff would offer better, simpler services. ○ ○ ○○○○○○○○○○○○

The ministry will also seek new growth in the northeastern and southwestern regions, ○ ○ ○○○○○○○○○○○○ outside of the long-time boom areas in the south and southeast coastal areas. The ministry

○ ○ ○○○○○○○○○○○○ said at the end of last month that about 1.46 billion passenger trips were made last year, up

10.9 percent year-on-year, and 3.3 billion tons of cargo was carried, up 4.9 percent.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3535 SHIPPING

Choppy winds ahead for COSCO

(2009-01-13) Falling business and a gross misjudgment of freight rate movements have dealt a double SHIPPING blow to China’s COSCO Holdings (COSCO), threatening to plunge the world’s largest dry bulk carrier deep into the red.

The company’s outlook for 2009 seems bleak as the global shipping industry is expected to remain in the doldrums for most of the year, if not longer.

Shortly after COSCO announced a surge in profit for third-quarter 2008; it posted a chilling statement on December 16 on the Shanghai and Hong Kong bourses disclosing a 3.95 " billion yuan ($577.07 million) potential loss arising from “misjudgment” in Forward Freight Agreements (FFA). In the disclosure, the company conceded that the situation was “serious”,

setting off a wave of selling of its shares.

○ ○ ○○○○○○○○○○○○ Because of the worldwide trade slump, the Baltic Dry Index (BDI), on which the FFA pricing is ○ ○ ○○○○○○○○○○○○ based, decreased by 85 percent in the first three quarters of 2008 from the average 8,130 points to 1,169 points. Dry bulk cargo shipment contributes more than 60 percent of COSCO’s ○ ○ ○○○○○○○○○○○○

total revenue. ○ ○ ○○○○○○○○○○○○ Analysts said that as the BDI continues to fall, potential losses of the company in FFA

contracts will grow larger than previously expected. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ CITIC Securities Co Ltd estimated that COSCO’s fourth-quarter loss could reach 5 billion yuan, in contrast to a 5.5 billion yuan profit for the previous three months. ○ ○ ○○○○○○○○○○○○

“The shipping industry slump will last for at least one or two years,” predicted Qian Hongwei, ○ ○ ○○○○○○○○○○○○ analyst of China Securities Research Co Ltd, “The fortune of the shipping industry is tied to

the recovery of the global economy, which can be a long time away.” ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○ To conserve cash in these trying times, COSCO has reportedly canceled some shipbuilding orders and requested a delivery delay for others. Those moves have affected orders for 126 ○ ○ ○○○○○○○○○○○○

vessels. ○ ○ ○○○○○○○○○○○○

The company notified the Hong Kong stock exchange on December 22, 2008, that it was ○ ○ ○○○○○○○○○○○○ seeking to raise up to 10 billion yuan of new capital by a bond issue to help fund projected

expenditure in fixed asset investment, fuel, labor and debt servicing. ○ ○ ○○○○○○○○○○○○

The company’s latest financial report showed that it had 10.8 billion yuan in cash at the end ○ ○ ○○○○○○○○○○○○

of September. ○ ○ ○○○○○○○○○○○○

COSCO said it will try to maintain “sound and healthy financial status” by cost control and ○ ○ ○○○○○○○○○○○○ investment compression. It also has planned to reduce container shipping capacity to

Europe and the US and explore potential new markets in Asia. ○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

Rizhao Port Group to issue 500m yuan in 365-day debt ○ ○ ○○○○○○○○○○○○ (2009-01-14)

Rizhao Port (Group) Co Ltd, the parent of Rizhao Port Co Ltd, said it plans to issue 500 ○ ○ ○○○○○○○○○○○○

million yuan ($73.15 million) worth of 365-day debt on January 19. ○ ○ ○○○○○○○○○○○○

In a statement published on the official Chinabond.com website, the company said the yield ○ ○ ○○○○○○○○○○○○ will be set via book-building on that day. Proceeds will supplement working capital and optimize its financial structure, the company said. Agricultural Bank of China will be the lead ○ ○ ○○○○○○○○○○○○

underwriter for the issue

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3636 SHIPPING

Trade at Shanghai Port declines sharply in December

(2009-01-16) SHIPPING The trade volume at the Shanghai Port, which comprises one quarter of China’s total foreign trade, continued to decline in December, according to local Customs data. Imports and exports at the port amounted to $43.48 billion in December, down 8.8 percent year-on-year.

Traffic at the port increased rapidly for the first seven months of 2008, but trade volume started to drop during the last two months. In November, trade volume plunged by 9.7 percent year-on-year, down sharply from the 15.7 percent annual increase in October, mak- " ing it the largest monthly decline since China joined the World Trade Organization in 2001. Trade volume at the port surpassed $600 billion in 2008, up 16.3 percent year-on-year. The increase rate, however, dropped by 5.3 percent from the previous year. Exports were up in

2008 by 19.9 percent to $393.65 billion, and imports were up by 10.3 percent to $213 billion. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ Shipbuilder’s revenue up 26% in 2008

○ ○ ○○○○○○○○○○○○ (2009-01-19)

○ ○ ○○○○○○○○○○○○ China Shipbuilding Industry Corporation (CSIC), one of the country’s largest shipbuilders, recorded 103.2 billion yuan ($15.09 billion) in revenue in 2008, up 26 percent from a year

○ ○ ○○○○○○○○○○○○ earlier, despite the global economic downturn, the company said, adding its profit rose by

20 percent to 6.18 billion yuan. ○ ○ ○○○○○○○○○○○○

Currently, the company has shipbuilding orders of more than 33 million deadweight tons, ○ ○ ○○○○○○○○○○○○ the contract value exceeding 200 billion yuan, which is ample for production during the next

○ ○ ○○○○○○○○○○○○ three years, CSIC said.

○ ○ ○○○○○○○○○○○○ “But we should also get prepared for challenges due to the global financial crisis such as the cancellation of orders and decline of new orders and prices,” said Li Changyin, general

○ ○ ○○○○○○○○○○○○ manager of CSIC. ○ ○ ○○○○○○○○○○○○ The company said it has taken measures to tackle these difficulties, aiming to raise its

○ ○ ○○○○○○○○○○○○ business revenue to more than 120 billion yuan and its profit to more than seven billion yuan

in 2009. ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ China’s shipbuilders 2008 profits up 50%

○ ○ ○○○○○○○○○○○○ (2009-01-29)

Profits of China’s shipbuilders rose 50 percent in 2008 from the same period a year ago, ○ ○ ○○○○○○○○○○○○ despite rising material costs and the appreciation of renminbi, according to data released

○ ○ ○○○○○○○○○○○○ by the Ministry of Industry and Information Technology (MIIT).

○ ○ ○○○○○○○○○○○○ Profits jumped 50.5 percent to 28.34 billion yuan ($4.05 billion). The industry value totaled

118.3 billion yuan, up 61.2 percent year on year. ○ ○ ○○○○○○○○○○○○

The nation’s shipbuilders completed a production capacity of 28.81 million deadweight ○ ○ ○○○○○○○○○○○○ tons (DWT), or 29.5 percent of the world’s total, up from 22.9 percent in 2007, according to

○ ○ ○○○○○○○○○○○○ MIIT figures.

○ ○ ○○○○○○○○○○○○ New orders comprised 37.7 percent of the world’s total, with a production capacity of 58.18 DWT. Current orders accounted for 35.5 percent of the total, with a capacity of 204.6 million ○ ○ ○○○○○○○○○○○○ DWT.

○ ○ ○○○○○○○○○○○○ An official with the MIIT said China’s shipbuilders had remarkably strengthened their capa- bilities in innovation and had improved their techniques notably in making bulk cargo ship,

○ ○ ○○○○○○○○○○○○ oil carrier and container ships.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3737 SHIPPING

They also had the world’s leading techniques in making ships that could meet the standards of the international classification society, according to the MIIT official. SHIPPING He warned, however, that as the global financial crisis begins to take a toll on the shipbuilding sector, the industry could face severe challenges in the coming two-to-three years. He said it has become more difficult for shipbuilders to raise fund as there has been a sharp decrease in new orders and defaults on new orders are on the rise.

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3838 EXHIBITIONS & MEETINGS

More exhibitions and meetings: EXHIBITIONS (2009-01-30) Name Time Venue Contact

Tel: +86- 10- 84496439/84494196 March Shanghai Intertraffic China Fax: +86- 10-84494186 & MEETINGS 18-20, Exhibition 2009 Email: [email protected] 2009 Centre Website:www.china.intertraffic.com th " The 10 Northeast China’s International Shenyang Tel: 86-24-23914926 Logistics March International Fax: 86-24-23922432 Technology & 31-April 3, ○ ○ ○○○○○○○○○○○○ Exhibition Email: [email protected] Transportation 2009 Center Website: www.bfexpo.com.cn/ ○ ○ ○○○○○○○○○○○○ System Exhibition

○ ○ ○○○○○○○○○○○○ 2009 th

The 9 China Qingdao Tel: 86- 532-83613988/ 85019822 ○ ○ ○○○○○○○○○○○○ (Qingdao) April 1-3, International Fax: 86- 532-83613588

○ ○ ○○○○○○○○○○○○ International 2009 Convention Email: [email protected]

Exhibition Centre Website: www.logisticschina.cn ○ ○ ○○○○○○○○○○○○ China Changchun ○ ○ ○○○○○○○○○○○○ International Changchun

○ ○ ○○○○○○○○○○○○ Warehousing April International Tel: 86-431-85834603/ 85834602 Technology

○ ○ ○○○○○○○○○○○○ 21-23, Convention & Fax: 86-431-85834603 Equipment 2009 Exhibition Website: www.cczbh.cn ○ ○ ○○○○○○○○○○○○ Exhibition 2009

Center ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ China Chongqing Chongqing

Tel: 86-23-68670089/89088376 ext 8930 ○ ○ ○○○○○○○○○○○○ Investment and April International Fax:86-23-89088396/89088136 Global Sourcing Fair 23-26, Convention &

○ ○ ○○○○○○○○○○○○ Email: [email protected] (Logistics 2009 Exhibition Website: http://www.wl-qqcg.com

○ ○ ○○○○○○○○○○○○ Exhibition) Center Xiamen ○ ○ ○○○○○○○○○○○○ The 2nd Cross-Straits Tel: 86- 592-3119662/3119622 April International Port Development & Fax: 86- 592-3119768 ○ ○ ○○○○○○○○○○○○ 25-27, Conference & Logistics Service Email: [email protected] 2009 Exhibition ○ ○ ○○○○○○○○○○○○ Exhibition Website: www.cplste.com

Centre ○ ○ ○○○○○○○○○○○○ Around Bohai Sea

○ ○ ○○○○○○○○○○○○ Area (Tianjin) Binhai International Port Tel: 86-22 –27426937/ 13031723211 ○ ○ ○○○○○○○○○○○○ April International Construction, Fax: 86-22- 28280589/ 28362685-86 27-29, Convention & ○ ○ ○○○○○○○○○○○○ Logistics Email:[email protected] 2009 Exhibition Warehousing & Website: www.tjjbexpo.com ○ ○ ○○○○○○○○○○○○ Center

Shipping Industry ○ ○ ○○○○○○○○○○○○ Exhibition 2009

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 3939 EXHIBITIONS & MEETINGS

More exhibitions and meetings: (2009-01-30) EXHIBITIONS Name Time Venue Contact

The 9th China Harbin Harbin International April International Tel :86-451-8238 8901 8238 8902 & MEETINGS logistics technology 28-30, Convention & Fax:86-451-8238 8903 & Transport System 2009 Exhibition Email: [email protected] Exhibition Center " Guangzhou Tel: 86-20-38808367 China (Guangzhou) May Jinhan Fax: 86-20-38913016 International 20-22, Exhibition Email: [email protected] ○ ○ ○○○○○○○○○○○○ Logistics Expo 2009

Center Website: www.logistics-expo.com ○ ○ ○○○○○○○○○○○○ China (Shenzhen) Shenzhen Tel: +86-0755-8358345 /83581276

May ○ ○ ○○○○○○○○○○○○ International Convention & Fax: +86-0755-83581307 23-25,

Material Handling Exhibition Email: [email protected] ○ ○ ○○○○○○○○○○○○ 2009

Exhibition 2009 Center Website: http://www.scmfair.com ○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○

○ ○ ○○○○○○○○○○○○ ○ ○ ○○○○○○○○○○○○

chinadaily.com.cnchinadaily.com.cn 4040