US Dollar Exchange Rates of 12th
July 2013
China Yuan 6.1296
Report from China
China’s GDP growth in first half meets expectations
On the 15th July the Chinese National Bureau of Statistics
of China released data on growth in the economy in the
first half of 2013.
See
http://www.stats.gov.cn/english/pressrelease/t20130715_4
02910992.htm
This press release identified that in the first half of 2013
the country faced a complicated and volatile economic but,
overall the national economy achieved steady
development and grew at a moderate pace in line with
expectations.
According to preliminary assessments, GDP in the first
half of this year was 24,800.9 billion yuan, a year-on-year
increase of 7.6 percent calculated at comparable prices and
is in line with economists’ expectations.
Growth in the first quarter was 7.7 percent, but dropped to
7.5 percent for the second quarter.
In the first half, total value added (calculated at
comparable price) by industrial enterprises was up by 9.3
percent year-on-year, representing a 0.2 percent decline on
levels in the first quarter.
Added value industrial output encouraging
An analysis of various types of enterprises showed that the
value added growth of the state-owned and state holding
enterprises went up by 5.2 percent; 5 percent for collective
enterprises; 10.9 percent for share-holding enterprises and
7.4 percent for foreign enterprises.
The year-on-year growth of heavy industry was 9.6
percent and 8.4 percent for the light industry. All the 41
industrial divisions registered year-on-year growth.
The quarter-on-quarter growth of GDP in each quarter of
2012 and in the first two quarters of 2013 was 1.5 percent,
2.1 percent, 2.0 percent, 1.9 percent, 1.6 percent and 1.7
percent respectively.
Retail sales contributing more to GDP
In the first half, retail sales of consumer goods reached
11,076.4 billion yuan, an increase of 12.7 percent , or 0.3
percent higher than that in the first quarter but 1.7
percentage points lower than that same period of last year.
June trade data fuels concern on slowing growth
China Customs has released June 2013 trade data which
show an unexpected fall in exports and imports and this
has added to concerns that growth in the economy is
slowing. The Customs data showed that exports fell 3.1
percent in June strikingly down from the forecasts 4
percent rise.
Imports also fell around three quarters of a percent from a
year ago as domestic demand slowed. As reported
previously, the Chinese government is trying to manage a
transition from an economy founded on exports to one
with a better balance between domestic and export
demand.
Analysts expect that the economic reforms being
introduced by the Chinese government will slow growth in
the short-term. At a recent meeting in Washington the
Chinese finance Minister suggested that reforming the
economy and stimulating domestic consumption is more
important to the country than striving for ever higher GDP
growth.
Curbs on credit to dampen growth prospects
Many analysts are forecasting that the Chinese economy is
in for a hard landing as growth slows and the impact of the
massive credit growth (equivalent to 30 per cent of GDP
from 2008 to 2012) begins to take its toll.
The People's Bank of China (Central Bank) moved to
restrict credit growth in June this year, presumably
assessing that loan growth was at risky levels. Any curb on
the availability of credit will, say analysts, result in
lowering GDP growth.
One of the first moves likely to be implemented is further
restrictions on credit to those industrial sectors where there
is overcapacity and businesses are dependant for survival
on cheap credit.
Free convertibility of yuan to be tested at new
business zone in Shanghai
The government has announced the establishment of a
pilot free trade project in Shanghai where trading will be
done with a freely convertible yuan. The use of other
financial products which are currently not available will
also be tested.
While it is not yet clear how the ‘test’ zone will operate it
is expected that companies would be free to import and
export without the having to satisfy the usual Customs and
Central Bank regulations.
In 2009 Shanghai secured government approval to become
an international financial centre and this new initiative will
give another boost to the prospects for Shanghai to
become a highly competitive trade centre.
Popularity of beech spurs investment in beech
planting
During the first quarter of the year China’s beech log
imports amounted to 144,290 cubic metres valued at
US$28.42 million. The average price for beech was
US$197 per cubic metre.
Of the total, beech log imports from the top three supply
countries namely Germany, France and Belgium, were
120,401 cubic metres, making up around 80 percent of the
total.
China’s beech sawnwood imports were 76,021 cubic
metres in the first quarter 2013 and were valued at
US$28.58 million. The average price for sawn beech was
US$376 per cubic metre.
Beech sawnwood imports were mainly from Romania,
Germany and France which together accounted for 63,435
cubic metres of total sawn beech imports.
Beech is a popular wood in China and is widely used for
furniture, doors, window frames and flooring. China’s
timber importers seem to prefer beech from European
suppliers.
Recently, efforts have been directed at establishing beech
plantations in China. The company Jiangsu Suqian City
Sanye Garden Co., Ltd based in Shuyang City, Jiangsu
Province will be planting 1 million beech saplings as a
first phase in its attempt to establish a viable domestic
plantation resource.
China Forestry Group Corporation purchases forest
land in New Zealand
China Forestry Group New Zealand, a subsidiary of a
Chinese state enterprise recently announced that it had
purchased 13,600 hectares of forest land in New Zealand.
The company is forecasting that plantations on its land
will produce around 7 million cubic metres of logs in
2045.
This acquisition provides the China Forestry Group a
permanent base in New Zealand and marks the company's
first foray into buying forest land as it seeks to expand its
overseas operations. The Chinese group is currently one of
New Zealand's largest wood exporters, shipping around
75,000 cubic metres of logs to China every month.
China Forestry Group joins a growing list of offshore
investors interested in land assets in New Zealand. Last
year, Korea's Sunchang Corp. bought 3,000 hectares of
forest land in Marlborough, in New Zealands South Island.
However, purchases of land by foreign companies has
raised concerns that they are pricing local farmers out of
the market. Rural land prices rose 11.3% between March
2011 and March 2013 according to data from the Real
Estate Institute of New Zealand.
New wood processing zone for Puyang
Zhe Yu Wood industry Co., Ltd has invested RMB5
billion yuan to establish a large wood processing zone in
Puyang City of Henan Province.
It has been reported that wood processing, materials R&D
and business services will be concentrated at the new site
which will focus on plywood and added value product
manufacturing.
The investment will be in three phases, RMB1.2 billion
yuan will be invested in the first phase and the value of the
annual output is forecast at RMB3 billion yuan. On
completion of the investment this will be one of the largest
wood processing operations and will extend over an area
of 320 hectares.
Transformation at Taicang Port generates income and
jobs
According to the statistics from Jiangsu Taicang
Inspection and Quarantine Bureau, timber imports through
Taicang Port rose 18 percent to 4.90 million cubic metres
in 2012, elevating the port to the number one in terms of
timber imports.
Sawnwood imports through Taicang Port reached 1.38
million cubic metres or 29 percent of the national total
sawnwood imports in 2012.
Containerised logs imports have increased and in 2012 the
number of containers handled at the port rose over 200
percent to 37,000.
Timber from Russia once dominated the cargo hanled at
the Port but this has changed as more shipments from
more countries are directed through Taicang.
Cargoes of logs from North America rose dramatically in
2012 to 2.91 million cubic metres, accounting for 60
percent of the total log imports through Taicang Port.
Log imports from Southeast Asian and Oceania countries
also increased. There are more than 100 wood processing
enterprises around Taicang Port.
The increased timber imports are generating greater
income for the port authority and Customs and are also
stimulating development of the insurance, warehousing,
processing and transportation sectors.
Reports indicate that as a result of the increased business
through the port more than 1000 jobs have been created.
Special fund for green construction
It has been reported that Guangdong provincial
government will now open its ‘energy-saving special
funds’ to the construction sector in order to promote
energy saving and green house gas emission reduction.
In the past the ‘energy saving special fund’ in Guangdong
Province was only for industrial enterprises and projects
but this year the fund will be extended to the construction
field.
To promote green building the Guangdong provincial
government will provide subsidies for the major projects
after getting third party evaluation.
Reports indicate that subsidies of yuan 25 per square metre
will be granted for a two star ranked building and that the
maximum subsidy will not exceed RMB1.5 million for
one project. Yuan 45 per square metre will be granted for
three star ranked buildings for which the maximum
subsidy will not exceeded RMB2 million for one project.
The subsidies will not exceed 50 percent of investment for
public sector projects and will not exceed 20 percent of
investment for green projects in non public sectors.
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