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September 2009 Ferro Corporation, the US-based supplier of materials for fabricating photovoltaic silicon solar cells, has started production of solar aluminium paste at its expanded Suzhou facility.
The 16,500 square metre plant has room for future expansion to manufacture products such as silver pastes, surface technology products, electronic glass and precious metal powders.
Air China Cargo has begun a three-times-a-week service to Vienna International Airport with a Boeing 747 Freighter. This is the first air cargo service between China and Austria and the third between China and Europe, following services from Beijing to Frankfurt and Copenhagen.
According to Xinhua, the new service operates from Shanghai to Milan, via Beijing and Vienna, and back to Shanghai.
The aircraft has a single carriage capacity of 110 tonnes.
Set up in 2003, Air China Cargo operates nine B747-400 freighters. It flies to 81 cities in China and 44 destinations around the world.
The Chinese joint venture of Canadian plane and train manufacturer Bombardier has won a contract to build 80 high-speed trains for China’s Ministry of Railways, the Wall Street Journal reported.
Bombardier Sifang will manufacturer 80 ZEFIRO high-speed trains that can reach top speeds of 380 kph. A total of 1,120 rail cars will be built for China’s 6,000km of new high-speed railways. The first train is due to be delivered in 2012 and the final one should be completed by 2014.
Construction began on 26 September of the Chongqing North Railway Station-Fuling section of the second line of the Chongqing-Huaihua Railway.
Capacity on this 98km section will double after the line’s completion in 2011. Passenger trains will be able to run at 120 kph.
China’s container shipping business is starting to recover for the first time since the start of the global financial crisis, according to a report by China Daily. By 11 September, the Chinese Container Freight Index had risen to 941.9 points, an increase of 23 per cent compared with a low point in June.
Ren Minqiang, head of Qingdao Qianwan Container Terminal, was quoted as saying that freight volumes were up nearly 9 per cent in the first two weeks of September, compared with the same period in 2008.
As business improves, shipping lines and ports are raising their prices, particularly as a previous removal of capacity by carriers in the Asia-Europe trade has led to certain capacity shortages. Luo Xiong, an analyst with Merchants Securities, said freight prices have passed the break-even point at shipping lines. By contrast, at the low point of the current slump, some companies were losing up to US$600 per delivered container.
The container throughput of Ningbo port in Zhejiang province reached a new monthly high of 998,600 teu in August, up 0.3 per cent year-on-year. This was the fourth month in a row that the port recorded a month-on-month increase in its container volume.
Water quality levels in 30 per cent of China’s major river sections are below standard, according to officials at the Ministry of Environmental Protection. Sections of the Haihe River in Inner Mongolia, the Liaohe River in Jilin province, the Yellow River in Shanxi province and Dianchi Lake in Yunnan province all failed to pass recent environmental checks.
China has set a goal of improving water quality in 115 key river sections during the current five-year plan (2006-10). Eighty river sections were rated as ‘qualified’ in the inspections carried out by eight ministries over the past three months. The remaining 35 river sections failed the check due to inadequate investment in pollution prevention projects, poor sewage treatment facilities or high levels of ammonia nitrogen pollution. Build-ups of ammonia nitrogen are a result of industrial sewage discharge or excessive use of fertiliser. The reservoir area of the Three Gorges dam and the middle and upper reaches of Yangtze River also contain a high level of ammonia nitrogen, which is toxic to aquatic life.
A second round of checks will take place next February. Local government officials in charge of river sections that do not pass the next checks will be denied promotions until the problems are remedied, said the ministry.
One reason for continued high levels of pollution in China’s rivers is the shortage of funds available for water treatment projects. About 60 per cent of the government’s previously designated water pollution treatment projects remain unfinished, said an official from the ministry.
Statistics from the Ministry of Transport show that 488m people are expected to use roads and railways during the eight-day National Day holiday period, up 6.8 per cent year-on-year. Nearly 7.4m people are expected to use the waterways, equivalent to a daily volume of 920,000, up four per cent year-on-year.
Popular tourist destinations will bear the brunt of the traffic surge. Beijing alone is anticipating an increase of 16 per cent.
The third phase of the multi-million dollar dredging project at the mouth of the Yangtze that aims to increase water depth to 12.5 metres has started its ‘final push’ ahead of schedule, according to the Yangtze River Administration. The original plan was to reach a depth of 11.3 metres by the end of October. But by 16 September, a water depth of 11.62 metres had already been achieved. According to the plan, the final push will start in October and last until March 2010, when the 12.5 metre target will be achieved.
This 120km section of the river’s lower reaches accounts for more than 60 per cent of all traffic along the Yangtze trunk line. Every extra metre in water depth typically allows the passage of another 1,000 teu, thus reducing shipping costs significantly.
Dredging work began in 1998 on the first phase after the Ministry of Transport and the Shanghai municipal government agreed to fund the project to allow third- and fourth-generation container vessels to sail in and out all year round. The first phase was completed in 2002, leaving a 74km stretch of the northern channel at the mouth with a depth of 8.5 metres. The second phase was completed in 2005 when the water depth reached 10.5 metres.
Figures released by the Yangtze River Administration under the Ministry of Transport showed a year-on-year increase of 15.2 per cent in general cargo throughput to 98m tons in the first 26 days of September. In the year up to 26 September, cargo throughput along the Yangtze trunk line amounted to 820m tons, up 6.6 per cent over the same period in 2008.
In September, container volumes rose by 2.5 per cent year-on-year to 620,000 teu. For the first nine months, container throughput reached 4.84m teu, representing a decrease of 7.4 per cent over the same period last year.
During the first nine months, 37 accidents occurred on the Yangtze, claiming 33 lives and sinking 27 vessels. Direct losses amounted to nearly Rmb31m. Compared with the same period last year, the death toll was 8.3 per cent lower and the number of sunken vessels was down by nearly 13 per cent; however, overall direct losses increased by 23 per cent.
The Liberian chemical tanker ‘Cyrano’ broke down recently on the Yangtze River near Zhenjiang Runyang Bridge on its way from Jiangyin to Nanjing, according to a China News Services story. The LNG carrier was drifting dangerously downstream in an area where there is also a common-user vehicle ferry.
Zhenjiang Marine Safety officials activated the emergency rescue code, dispatched a rescue team to the tanker and alerted all vessels in the vicinity to watch out and give way. The rescue team managed to secure the vessel and within half of an hour of the breakdown, the engine was repaired and the vessel was taken to a safe anchorage for further examination.
Zhenjiang maritime authorities have reported an unprecedented increase in the number of international chemical carriers calling at the local port in recent months. In September alone, 117 international vessels arrived in Zhenjiang carrying dangerous goods, up 58 per cent year-on-year and 7.3 per cent over the previous month.
Beijing-based Wumart remains in talks to acquire Jiangsu province-based retailer Times, reported Caijing magazine. The same source also ruled out the possibility of one of Wumart’s rivals, such as Wal-Mart, Carrefour, Lotus or Lianhua Supermarket, entering into acquisition talks with Times.
Times recorded a net profit of Rmb78m in the first half of 2009, down 13 per cent from a year earlier. The Wall Street Journal reported on 25 August that its parent company planned to sell Times for not less than US$560m.
Wumart is China’s fourth-largest retailer with 400 outlets, while Times has 65 stores in Jiangsu province.
The Ministry of Railways has begun the process of raising Rmb30bn in bonds to support railway construction in China, reported Xinhua.
The funds are to be used to construct 32 new lines, including a high-speed passenger line linking the two northeastern cities of Dalian and Harbin. Last year, the National Development and Reform Commission gave permission for the ministry to issue Rmb100bn of bonds, mainly to facilitate construction of 43 railway construction projects and rolling stock purchases.
China plans to extend its rail network to 100,000km by 2020 from 76,600km in 2006, at an estimated cost of Rmb2,000bn.
The number of passengers flying on China-based airlines rose 42 per cent year-on-year in August, while cargo and mail traffic grew 18 per cent, according to the General Administration of Civil Aviation of China. Shanghai International Airport Co said that its own passenger traffic for the month rose 32 per cent to 3m, while cargo traffic fell 0.3 per cent to 225,400 tonnes.
China’s domestic aviation industry, which includes carriers, airports and related services, booked first-half 2009 profits of nearly Rmb4.9bn, compared with a loss of more than Rmb20bn in 2008, the regulator said.
Cities across China encouraged residents to leave their cars in the garage on Tuesday 22 September as part of the global car-free day. Some of the schemes were more ambitious than others.
In 2007 Kunming, capital of Yunnan province, was the first city in China to hold monthly no-car days but the policy was suspended in 2008 due to the renovation of the city’s second ring road.
Kunming’s no-car days prohibited private cars from being driven within within the first ring road – and sometimes up to the second ring road – on the last Saturday of each month. The ban earlier this week was the first to be held on a weekday. Between 8:00am and 8:00pm, buses and taxis were the only motorised vehicles allowed inside the city’s first ring road.
According to local media, Kunming has one of the highest car ownership rates and some of the worst traffic among Chinese cities.
By contrast, Shanghai’s car-free day scheme was much more modest. Despite earlier reports indicating that the ban would cover 5 sq km over a 12-hour period, it actually only applied to a section of Nanjing Road West between Shimen Er Road and Huashan Road between 8:00am and 10:30am.
China’s State Council has issued a new regulation covering the prevention and clearing up of marine pollution caused by vessels, reported Xinhua. It is set to take effect on 1 March 2010.
The regulation stipulates that transportation departments under the State Council should compile emergency plans to deal with pollution caused by ships or related activities. Marine management institutions should cooperate with other departments to improve monitoring and supervision of ships and the pollution that they cause.
Professional teams to deal with emergencies, specialised equipment and facilities should be organised, according to the regulation.
Official statistics reveal that 733 ship pollution accidents occurred between 1998 and 2008 in China’s coastal waters. The regulations will apply to all types shipping, except military.
China’s refrigerated warehouse sector is expected to grow by an average of 24 per cent in each of the next five years, according to a Jones Lang LaSalle report. A change in eating habits and greater awareness of food safety standards are boosting domestic demand for cold storage logistics, said the real estate services provider.
According to one estimate, only 15 per cent of products in China that should be temperature-controlled are currently handled properly. This is because of inadequate regulations that involve supervision by multiple authorities and an underdeveloped infrastructure. Too few quality refrigerated vehicles, railcars and containers and a small amount of refrigerated warehouse space have hindered development of the industry, according to Shanghai Daily.
However, investment is starting to appear in the industry. For example, Preferred Freezer Services, a US-based cold storage specialist, began construction in July on a refrigerated warehouse in Shanghai’s Lingang Logistics Park.
Changan Ford Mazda, a joint venture between Chongqing Changan Automobile, Ford and Mazda will start building its third plant in Chongqing on 25 September in response to growing sales in the China market.
The new plant is designed to produce 100,000 vehicles a year initially with the potential to expand to 300,000 units in future. Due to be completed in the first half of 2010, the plant will mainly produce SUVs, crossovers, Focus and Mondeo models.
The joint venture’s existing two plants are located in Chongqing and Nanjing, with capacities of 250,000 and 160,000 units respectively.
Changan Ford Mazda sold 144,601 Ford brand cars during the first eight months of 2009, up 30 per cent year-on-year. In the month of August, Ford car sales surged 111 per cent to 21,127 units.
A Korean vessel carrying 30,211 tons of iron ore arrived at Rugao terminal in Nantong, Jiangsu province, on 21 September. With a draught of 10.86 metres, it is the largest ship to have ever called at the terminal. Prior to the vessel’s arrival, local maritime safety officials visited the terminal operator three times to make sure that all security precautions had been taken and front-line workers were trained to unload cargo from such a large vessel.
The furthest downstream terminal in Nantong, Rugao serves the extensive local chemicals and petrochemicals industries with three dedicated quays and two floating quays accommodating vessels of 50,000 dwt. Three more quays are being built, making a total of four common-user 50,000 dwt berths.
The Nanjing section of the Riverside Highway was completed on 20 September, complementing the existing Shanghai-Nanjing Expressway and 312 National Highway, which runs from Shanghai to Xinjiang in the far west of China.
The four-lane section of road, connecting Nanjing and Zhenjiang, is 12.9km long and has a maximum speed of 80kph. According to a local evening newspaper, there are no toll stations along this section. In contrast, there is a local toll of Rmb50 on the Shanghai-Nanjing Expressway and Rmb20 on the 312 National Highway.
Wuhan government announced on 21 September that work will start on four intercity railway lines within the year, connecting the city with Huangshi (58km away), Huanggang (63km), Xiaogan (33km) and Xianning (51km).
A total of 33 stations will be built, including 16 in Wuhan alone. Each station will cost an estimated Rmb150m to construct.
In addition to tighter shipping security in the Three Gorges area ahead of the National Day holidays, China is strengthening safety checks on letters and parcels sent to addresses in Beijing, the Ministry of Public Security announced.
Between 15 September and 8 October, transport and logistics companies, freight and passenger transport stations, and international freight forwarders are required to check all items sent to Beijing and record the identification number of the delivery service, the ministry said on its website.
Postal and express mail service providers should also check the names and identification numbers of the consignors and addressees to prevent the delivery of banned materials.
The Yangtze River Administration issued a circular on 11 September, saying that between 21 September and 10 October, the anti-terrorist code will be activated in the Three Gorges Reservoir and all vessels passing the shiplocks will be checked. Those vessels carrying insufficient documentation or people other than crew would not be allowed to pass the shiplocks.
In addition, between 28 September and 8 October, all Grade 1 dangerous goods will be banned from passing the shiplocks, in a move to reduce safety risks around the National Day holidays, the navigation authority said.
Police patrol and monitoring measures with advanced equipment have been intensified in the Three Gorges area. The Three Gorges project, initiated in 1993, is a multi-functional water control system built on the upper and middle reaches of the Yangtze River. Its main components include the dam, a five-step shiplocks system, and 26 hydropower turbo-generators. Its key functions are flood control, power generation, and improved shipping and water supplies.
Volkswagen Group says it plans to invest a total of €4bn in new products and expand production capacities in China. Output at both the Nanjing and Chengdu plants is to be boosted to 300,000-350,000 units by 2012.
"Demand for our models is growing so dramatically that our capacities in China are no longer sufficient," said Professor Dr Martin Winterkorn, VW Group CEO and Chairman.
The new investment will involve creating new body, paint and assembly plants at Nanjing and Chengdu, and three new models will be assembled at Nanjing from 2012, with two at Chengdu.
Volkswagen’s Nanjing facility is the result of a 2008 acquisition of the former Fiat and Nanjing Auto plant.
Two international airfreight routes connecting Chongqing and Europe have been initiated by Jade Cargo International Airlines, according to the municipal government. The routes are Dubai-Chongqing-Hong Kong-Brescia-Frankfurt and Dubai-Chongqing-Hong Kong-Chongqing-Vienna-Amsterdam.
The new services are designed to promote international trade and improve the development of Chongqing’s new bonded port zone.
Founded in October 2004, Jade Cargo is a joint venture between Shenzhen Airlines, Lufthansa Cargo and the German development finance institute DEG-Deutsche Investitions.
Guangxi autonomous region in southern China has introduced a toll reduction scheme that has saved truck companies a total of Rmb168,700 between 10 and 31 July, Xinhua reported.
The scheme was introduced this summer to stimulate growth in the regional economy. The savings apply to container trucks travelling on expressways and highways to or from seaports and overland customs checkpoints. Guangxi has a 1,000km-long border with Vietnam.
Throughput at Dalian port in Liaoning province between January and August 2009 increased 12 per cent year-on-year, according to operator Dalian Port (PDA) Co. However, container volumes stayed flat over the eight-month period.
The company said container and general cargo volumes have improved over the course of this year, and that it is proceeding with several infrastructure-related projects, especially in the areas of iron ore and oil handling.
Shanghai, China’s largest port, recorded an August container throughput of 2.19m teu, the highest monthly total of the year so far. This represented an increase of 2 per cent over the previous month, but down 14.4 per cent over the same month last year.
The performance of the southern port of Shenzhen has also been a source of encouragement for the battered shipping sector. Container throughput at the port grew to 1.8m teu in August, an increase of 19 per cent from July, according to a JP Morgan report quoted by South China Morning Post. Average daily throughput was 59,000 teu, higher than the 47,000 teu from May to July and 44,000 teu in March and April, the report added. However, it should be noted that August is a traditionally busy month for Shenzhen and other Chinese coastal ports, with many containers holding products destined for US and European shops this Christmas.
Global pharmaceutical and chemical company Merck has acquired Suzhou Taizhu Technology Development, a supplier of effect pigments located in the Yangtze port city of Taicang, Jiangsu province. With 2008 revenues of €14m and 300 employees, Taizhu is one of the largest effect pigments companies in China.
The acquisition will increase Merck’s presence in the value-for-money pigments sector. Merck is one of the world’s leading suppliers of effect pigments for the coatings, plastics, printing, cosmetic, food and pharmaceutical industries.
A paper mill in Chongqing faces the prospect of closure next year if it continues to fail to clean up its waste water as requested by the local authorities, reported China Daily. Chongqing Hengfeng Paper Co in Liangping county discharges tons of polluted water into Changshou Lake, a major source of drinking water for Changshou district.
The polluted waste industrial water was held to have been held partially responsible for the death of 15,000 kg of fish in the lake earlier this month.
The municipal government has set a March 2010 deadline for polluters to bring their processes up to standard, or face closure. The mill, which has been the target of many pollution complaints since 2006, has the capacity to produce 15,000 tons of paper a day.
Jiangsu public health authorities said on 15 September that the province had recorded 505 cases of the H1N1 virus, otherwise known as swine flu, by 9 September. Out of this total, 198 had fully recovered, 206 were still in hospital and 101 were being looked after at home.
No deaths have yet occurred in the province. The major Jiangsu cities that have reported incidents include Nanjing, Yangzhou, Nantong, Suzhou, Zhenjiang and Wuxi.
Nantong maritime safety officials received a circular from their Fujian counterparts on 8 September, informing them that a Singapore flagged vessel carrying 9,000 tons of palm oil heading for Nantong collided with a Chinese fishing vessel two days earlier and fled the scene. When the vessel in question arrived in Nantong, city maritime officials went on board only to find that it had been painted over in an attempt to eradicate evidence of the collision. After several days of investigation by the officials, the captain admitted the offence and on 14 September instructed his lawyer to fax to the authorities that he accepted full responsibility for the accident.
It is not yet known how the officials will conclude the case.
In the first eight months of 2009, the Ministry of Railways invested Rmb1.35bn in 11 railway projects in Yunnan, one of the provinces least served by the national rail system. Among Yunnan’s 16 major cities, only seven are connected by railway lines.
The MOR has prioritised the Yunnan building projects and plans to add 1,780km of tracks by 2020, bringing the total to more than 4,000km. By then, the provincial capital Kunming will become a rail hub with eight lines, connecting it to major cities such as Shanghai, Chongqing and Chengdu, and four lines linking it with Vietnam, Laos, Burma and India.
Currently, 10 of the 11 projects are still under construction and three new ones are scheduled to start within a year.
One of the most important is the Dali extension project, which has been completed and is expected to enter service by 1 October. This is an extension of the existing Guangzhou-Dali line that will connect to the Yunnan-Tibet Line currently under construction. Costing Rmb4.5bn, the project is technically very demanding. The line is 164km long, but nearly 100km is comprised of bridges and tunnels. The original plan was to finish construction by June 2008 but the difficulties encountered during construction meant that completion had to be delayed until September this year.
At 6:45am on 8 September, two men from Xuba town in Tongling used their own unlicensed wooden motor boat to ferry 38 farmers to their harvesting jobs in a nearby town. It capsized within 20 minutes of the start of the journey, about five metres from shore. All 40 people on board fell into the river. Among the 20 rescued, 16 were women.
By 6pm on 10 September, 19 bodies were found, 17 of whom were women above 45 years old. One person was still missing.
Mr Tang Guanjun, Director of the Yangtze River Administration, headed the rescue efforts. More than 90 vessels were involved in looking for the victims.
The Development and Reform Commission of Hubei province has given the go-ahead to a new terminal project at Taipingxi in Yichang, Hubei province. Located in Yiling district, the new terminal will be 4.7km upstream of the shiplocks.
According to the plan, there will be 22 berths to cater for a variety of cargo such as ro-ro, containers, coal and agricultural produce, with a total annual throughput capacity of 60m tons. The project is estimated to cost Rmb6.2bn and construction will start within a year.
The Yangtze Waterway Bureau has announced a series of measures to ensure shipping safety on the Three Gorges reservoir. They include deploying four large dredgers to work on six shallow spots in the area and having another five on standby. More resources will also be spent on monitoring and analysing the changes in the riverbed, particularly concentrating on the heavily-silted upper reaches of the reservoir and the shallow channels of the middle and lower reaches of the Yangtze.
The Three Gorges releasing cycle starts in January when the Yangtze enters its dry season. In recent years, this cycle has started earlier to help alleviate drought conditions in the middle and lower reaches of the river. The water level is gradually reduced to 145 metres by the end of May or beginning of June.
The State Council has approved the plan for the Three Gorges Dam to start, from 15 September, the cycle of storing flood water to the maximum level of 175 metres for the first time. According to the plan, the water level in the reservoir will reach 158 metres by the end of September and 175 metres by the end of October or November. This heralds the completion of the whole project, which has taken 17 years to complete.
During the storage phase, the water level will rise no more than three metres a day, taking into consideration the need to balance anti-flooding, power generation and shipping on the Yangtze. The highest water level reached so far in the reservoir was 172.8 metres last summer, when results showed the dam and hydropower generators functioned well.
China had relocated 1.27m people by the end of June to make way for the dam project, a government official said recently. The relocation task was now “almost complete”, according to Lu Chun, deputy head of the office of the Three Gorges Project Construction Committee under the State Council. A total of 1,632 industrial and mining enterprises have also been shut down or moved, he said.
L'Oreal China president Paolo Gasparrini and three of his senior managers met with the Communist Party Secretary of Yichang on 10 September and pledged to increase investment at annual rate of 69 per cent over the next three years to turn its plant in Yichang, Hubei province, into L’Oreal’s largest production facility in Asia.
In 2004, the France-based cosmetics and beauty giant bought the Hong Kong-based skincare company Mininurse, which was running a plant in Yichang. Today, the factory produces a range of products under the L’Oreal and MiniNurse brands. Mininurse is a leading name in China’s mass market skincare sector and is especially popular in the western region.
The plant’s output in 2008 exceeded Rmb80m and is expected to reach Rmb130m in 2009.
Yichang, situated in the west of Hubei, is the gateway to the Three Gorges Dam area.
Nanjing government has signed an agreement with Sharp of Japan and the state-owned China Electronics Technology Group to jointly set up an eighth-generation LCD panel plant in the Jiangsu capital. Sharp will also build an LCD research and development centre to support the project, reported China Daily.
The agreement also enabled a joint venture between Nanjing Panda Electronics and CETC to take over the running of Sharp’s sixth-generation LCD panel plant, in which the Japanese company will provide the core technology.
Nanjing government hopes to complete construction of two advanced LCD production projects and three supporting industrial parks in five years.
Investment in the panel plants, along with the R&D centre, will total RMB65bn. The Panda plant should be operational by March 2011.
METRO Cash & Carry will open four new stores in China this year including one on the Yangtze port city of Changshu in Jiangsu province, said Tino Zeiske, president of the company’s China operations. The other three locations are also in the Yangtze River Delta region – Kunshan, Cixi and Hangzhou. The expansion will increase to 42 the number stores in China operated by the Germany-based company.
METRO’s main customers are hotels, restaurants and caterers, and small and medium-sized retailers.
Construction of Chongqing’s third railway station will start this year, said Zhang Yuan, chief planner of the municipality’s urban planning bureau. Situated in Shangqiao district, the new station will cover an area of 120,000 sq metres and will become the largest railway station in Chongqing. In future it will serve trains on major north-south routes such as the Lanzhou-Chongqing and Chongqing-Guizhou lines.
Mr Zhang also said that the second runway of Chongqing Jiangbei International Airport would be operational later this year.
Construction on the Chengdu-Lhasa railway will not start this month, said the Ministry of Railway in response to recent contradictory state media reports.
Planners and engineers are still examining the difficult geological conditions that exist along the proposed route, according to a ministry spokesman quoted by Xinhua. No official start date has been set, the spokesman said.
China plans to impose a tax on exhaust emissions in a bid to get the worst polluting vehicles off the roads, reported China Daily.
The government will gradually push for the removal of some 18m high-emission vehicles after 1 October, said Ren Hongyan, an official from the department of pollution protection under the Ministry of Environmental Protection.
High-emission cars and trucks make up 28 per cent of all vehicles in China, but account for 75 per cent of emission pollutants, according to the ministry.
China Shipping Container Lines recorded a 51.5 per cent fall in revenue to Rmb8.92bn in the first half of 2009 compared with the same period in 2008. Container volume dropped 11.4 per cent to 3.18m teu.
Net loss attributable to equity holders for the period amounted to Rmb3.41bn. This was despite the adoption of various cost-saving measures that reduced its outgoings by nearly 30 per cent year-on-year. For example, the company has cut the number of transhipment lanes and port calls and repositioned containers from Europe and the US to Asia, where storage costs are lower. Port and stevedore charges decreased by 32 per cent compared with the same period last year.
The company’s performance is set in the context of an industry that continues to suffer from the global economic downturn. Chinese ports recorded a container throughput of 66.7m teu between January and July, down 9.9 per cent year-on-year, Xinhua reported. However, cargo tonnage rose 3.5 per cent to 2.7bn tonnes.
The State Reform and Development Commission has agreed in principle to include the development of Chengdu-Chongqing economic region in its 12th five-year plan (2011-16), according to a prominent scholar. Academician of the Chinese Academy of Sciences and President of China’s Geologists Society, Professor Lu Dadao said that he had submitted a proposal to the SRDC to develop Chengdu and Chongqing as an integrated economic region. Several experts under his wing have already been involved in the development planning of the region.
Professor Lu said the move is significant because it means that both cities will try to complement rather than compete with each other in developing their industries. Integration and co-ordination in transport infrastructure investment will also bring about greater efficiency and an improved allocation of resources. More important perhaps, the Chengdu-Chongqing region will be the focus for developing China’s southwest and northwest regions. Some major cities in the region will be reachable within an hour of each other.
Taiwan Fuxing Airlines started a new direct service between Wuhan and Taiwan on 22 August. Before then, only China Eastern Airlines offered a regular service, with six flights a week. By the end of September another carrier, Taiwan Lirong Airline, will also operate services, with eight flights a week between the two destinations.
These passenger flights are also allowed to carry cargo, according to an official agreement signed by the governments of both sides of the Taiwan Straits.
The Yangtze dry bulk index reached 803.47 in August, up 0.76 per cent over the previous month. Coal and metal ore were the commodities most responsible for the slight increase. A recent rise in coal imports has had an impact on coal shipping prices, with the August coal index reaching 666.94, up 1.02 per cent over July. The August metal ore index stood at 844.47, up 1.26 per cent.
Demand for container shipping increased in August. However, the return to operations of some of the suspended capacity of major barge operators has had an even greater impact on shipping prices, with the result that the Yangtze container index fell 0.31 to 922.53 in August. The index for the upper reaches declined by 0.65 per cent to 947.01, while the indices for both the middle and lower reaches remained the same as in July, at 894.61 and 908.46 respectively.
Statistics from the Yangtze River Administration, the Ministry of Transport, show that throughput along the Yangtze in August increased 12.7 per cent to 101m tons over the same period last year. Out of this total, foreign-trade related throughput increased by 18.2 per cent to 12.8m tons. Container throughput climbed by nearly 14 per cent year-on-year to 70,000 teu.
For the first eight months of 2009, throughput of general cargo stood at 719m tons, up 5.7 per cent year-on-year, while throughput for containers was unchanged at 4.62m teu.
Odfjell Jiangyin Terminal, the largest liquid chemical storage tanker terminal in the middle and lower reaches of the Yangtze, recently passed an official inspection by the Jiangsu provincial transport authorities.
A joint venture between Odfjell (55 per cent) and Garson (45 per cent), the Jiangyin terminal is located about 200km downstream of Nanjing and 160km upstream of Shanghai. It went into pilot operation in November 2007 and provides 100,000 cubic metres of storage capacity. The Rmb187m facility has 22 tanks with a handling capacity of 6.9m tons.
The Three Gorges Administration of Navigational Affairs has clarified the procedures involving applications to pass the shiplocks, following a major accident in early August when 12 chemical containers together with 50 others fell into the reservoir. The new circular says that all GPS-equipped vessels carrying First Grade dangerous goods will need to claim the dangerous goods as their main cargo, no matter what volume is carried. All vessels containing any amount of First Grade dangerous goods in a container are to be treated as a special dangerous cargo vessel when it comes to applying for passing the shiplocks.
The GPS system in the Three Gorges has been integrated with the systems of major barge operators along the Yangtze, amounting to a combined GPS-equipped fleet of more than 2,600 vessels. More than 80 per cent of the vessels passing the shiplocks every day use the system to apply for a passing permit. The technology has enabled vessels to estimate more accurately their time of arrival at the shiplocks, thus allowing the authorities to manage the time slots more efficiently. Consequently, the average waiting time has been slashed to just below four hours from 24 hours.
In a separate development in Nanjing, a vessel carrying 12 portable tanks of isobutyl aldehyde and general cargo was severely reprimanded for breach of existing rules. Nanjing Maritime Safety officials went on board the vessel bound for Gezhouba Dam last week and discovered that the portable tanks carrying the inflammable liquid chemical were stored in the hold of the vessel rather than above deck. The crew were told to make the necessary change straight away.
Construction of a US$450m solar power project has begun in Wuhan, capital of Hubei province. A joint venture between Greenway Solar-Tech (China) and Evergreen Solar of the US, the project will manufacture products related to solar power industry. It is scheduled to go into production 2012.
Evergreen Solar manufactures solar power products, including solar cells, panels and systems. Greenway is wholly foreign-funded enterprise, specialising in energy-saving solar photovoltaic products and solar systems.
Shanghai-based China Energy Recovery, a company that specialises in waste heat energy recovery, has decided to build a new manufacturing plant in the Yangtze port city of Yangzhou, Jiangsu province. It will make large-sized and sophisticated waste heat recovery systems and other equipment related to energy efficiency.
The first phase of the plant will be completed in late 2010 and it will have its own railway line extending direct to the plant, an important advantage in the transportation of very large items. The local government is giving the company an option on a second plot of land on the banks of the Yangtze to facilitate the future transportation of products by waterway for the export market.
Construction of the Sichuan-Tibet railway will begin in September, according to a Sichuan-based news site. Trains running on the line will have a designed speed of 200 kph and will take eight hours to complete the 1,629km-long trip between Lhasa and Chengdu. However, the task of constructing the line will be onerous, due to the mountainous terrain, cold weather, a lack of oxygen and frequent rockslides.
The existing rail journey between the two cities, via Shaanxi and Qinghai, takes around 45 hours. The only other land-based transport alternative is via the No 318 national highway, where the journey time is around three days.
The first railway line to Tibet opened in July 2006, when the line from neighbouring Qinghai became operational.
Wuhan-based private airline East Star Airlines has officially become bankrupt after its restructuring application was rejected by the city’s Intermediate People’s Court, reported a Hubei government website.
The Beijing-based investment company ChinaEquity had promised to invest up to Rmb300m in the restructuring plan but it did not specify the source of the funding and failed to provide relevant documentation, the court said.
East Star was founded in May 2005, making it China’s fourth private carrier after Okay Airways, United Eagle Airlines and Spring Airlines. It operated more than 20 domestic passenger routes with a fleet of nine aircraft and held about 10 per cent of the market share in Wuhan.
On 13 March, the airline rejected a government-initiated takeover by the parent group of Air China. Two days later, its operations were suspended by the General Administration of Civil Aviation of China, due to prolonged financial and management problems.
Air China will accelerate talks with Cathay Pacific Airways regarding the formation of an air cargo joint venture based in Shanghai, South China Morning Post reported. The venture is meant to pose a stronger challenge to China Eastern Airlines and Shanghai Airlines, which are set to merge later this year.
Air China posted a net profit of US$424m in the first half of 2009, up 155 per cent year-on-year thanks to higher domestic demand and lower fuel costs. Board secretary Huang Bin said that international demand had recovered on most routes, apart from those involving North America. However, despite large price cuts for business class tickets, this market has yet to show any signs of recovery.
China Cosco Holdings reported a US$672m net loss in the first half of 2009, Bloomberg reported, the second consecutive interim loss for the shipping company. Its business has been badly affected by the downturn in world trade as its container volume fell 22 per cent to 2.35m teu in the first half.
The loss has put pressure on the company to cancel further orders for new container vessels after earlier cancelling a US$299m contract for eight dry-bulk ships and postponing the delivery of three other vessels.
The first bonded warehouse in the Three Gorges Reservoir area was officially opened on 28 August. Situated in Tuokou Container Wharf in Chongqing’s Wanzhou district, Wangang Jitian Bonded Warehouse aims to improve the business environment of export and import enterprises in the area, and reduce trade costs and exchange rate risk.
Chongqing’s 186km-long outer ring expressway will be opened to traffic at the end of 2009, according to local media. It will comprise three lanes each way and will link the districts of Beibei, Yubei, Jiangbei, Banan, Jiangjin, Jiulongpo and Shapingba.
Elsewhere in the municipality, construction of Jiayue Bridge should be completed at the end of this year, with its opening slated for before the 2010 Spring Festival, according to Chongqing Construction Engineering Group. The cable-stayed bridge is 778 metres long and is made up of two layers, one for vehicles and the other for pedestrians. Jiayue Bridge will be one of the main river crossings in central Chongqing, connecting Yuelai in Yubei district with Caijia in Beibei district.
Statistics from Suzhou Vehicle Administration Authorities show that by end of July, the total number of cars registered in the city reached 925,500, an increase of 98,800 compared with the end of 2008. Just over three-quarters of the total, or 704,400 cars, were privately owned, making Suzhou number one in Jiangsu province in terms of car ownership. The number of cars in the city has increased seven-fold in as many years.
Car ownership levels have continued to grow across China, and particularly in the interior. This has boosted the financial performance of major domestic carmakers such as Chongqing Changan Automobile, whose net profit in the first half of 2009 rose 18.4 per cent year-on-year to Rmb533m. During the period, it sold 660,219 vehicles, up 35 per cent from a year earlier, higher than the national industry growth of 17.7 percent.
Statistics from the Maritime Safety Authorities in Jiangyin, Jiangsu province show that between January and August this year, the number of international vessels entering and departing the city’s port exceeded 3,400, up 45 per cent over the same period last year.
Foreign trade-related throughput reached 10.94m tons, an increase of 56 per cent year-on-year. Driven by imported steel, metal ores and chemicals, the average monthly throughput related to foreign trade has exceeded 1.2m tons.
Deputy Minister of Railways Mr Hu Yadong has recently written to his staff in charge of Urumqi Railway Bureau, instructing them to provide priority and flexibility in transporting Xinjiang cotton pickers and reporting the train schedules to the regional government. After the recent riot in the region, the MOR is treating the issue with special care and sensitivity.
Xinjiang has about 1.5m hectares of cotton fields this year, 13 per cent less than last year, and the harvest is expected to total 2.6m tons. The region relies on temporary cotton pickers from around the country and they depend on the railway system to reach their destinations in Xinjiang.
By 14 September, the MOR will have put on nine special routes for Xinjiang-bound cotton pickers involving 173 train services, each comprising at least 18 coaches.
Work to lay epoxy asphalt on the surface of the Shanghai Yangtze Bridge was completed on 27 August, which means that the bridge is ready for traffic, according to China Transport Newspaper. The main stay of the bridge is 1,430 metres long, making it the largest epoxy asphalt project so far in China. Epoxy asphalt is a flexible and extremely durable overlay for concrete or steel bridge decks.
Part of a major project to link mainland Shanghai with its Congming and Changxin islands, the bridge and the approaches at both ends measure 16.63km, with six lanes each way. Space has also been reserved for future rail tracks on both sides of the bridge.
The central government has allocated a new budget of Rmb984m for 12 dredging projects in the Yangtze trunkline, according to the Yangtze River Administration under the Ministry of Transport. Most of the projects are scheduled to be completed by 2012.
At least 150 vessels containing a combined 75,000 tonnes of steel products have clogged up the Grand Canal near Hangzhou in Zhejiang province, because buyers refused to receive orders they had made before a sudden slump in prices, reported the Hangzhou-based newspaper Daily Business.
Spot steel prices in China fell sharply in the last two weeks of August after reaching a 10-month high early in the month after analysts said prices were ahead of levels that could be justified by domestic demand.
Some merchants who had ordered steel products in July in the expectation that prices would remain strong in August, failed to accept the now high-priced goods as they were being delivered. This led to unclaimed goods at the ports and in vessels, and a long line of carriers along stretches of the canal, unable to unload their cargo.
Shanghai’s shipbuilding industry has bottomed out, according to the border inspection agency at Waigaoqiao. The area under its jurisdiction usually accounts for half of all export orders in Shanghai. Its statistics show that during the first six months of the year, 23 new vessels were delivered to foreign buyers, compared with a mere seven in the second half of last year.
Shanghai International Port Group (SIPG) is to invest in one of the most westerly ports on the Yangtze trunkline, Yibing, according to the city’s government.
Yibing is located in Sichuan, further west than Luzhou, at the intersection of the Yangtze River and its tributaries the Ming and Jinsha. Four terminals containing 11 quays are planned. Container throughput is expected to reach 4m teu by 2030. In December 2008, construction started on the largest terminal in Yibing, Zhicheng, involving an estimated investment of Rmb1.3bn.
SIPG is by far the largest investor in the Yangtze. Its strategy is to secure a lion’s share of container volumes to feed its deepwater Yangshan bonded terminal.
The group posted a 30 per cent fall in first-half profit to US$252m due to reduced cargo throughput as a result of the global downturn, Shanghai Daily reported.
Revenue declined 13.6 per cent to US$1.2bn during the period. The group handled 11.67m teu, a decline of 15.5 per cent year-on-year, while cargo throughput fell 10.8 per cent to 169.5m tonnes.
On a more positive note, container throughput rose 7.9 per cent between the first and second quarters, and cargo throughput increased 24.32 per cent.
China’s cargo throughput increased 3.5 per cent year-on-year to 3.88bn tons in the first seven months of 2009, according to the Ministry of Transport. First-half growth was 2.6 per cent year-on-year, indicating a strong July performance.
Container throughput totalled 66.7m teu by the end of July, down 9.9 per cent from a year ago. Once again this was an improvement on the half-year performance, when the figure was 52.4m teu, down 10.9 per cent on year.
Foreign trade-related dry bulk goods totalled 1.2bn tons at the end of July, up 1.9 per cent from a year ago.
The departure from Nantong on 25 August of a Taiwan-bound bulk carrier loaded with 21,200 tons of cement took total throughput on the newly opened route to more than 500,000 tons, according to the China Waterway Transport newspaper.
Since the direct route opened in February, Nantong has received 75 vessels from Taiwan carrying a wide range of cargo ranging from chemicals to industrial equipment and semi-finished industrial products.
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