Mongolia’s new investment law: deterrent or clarification?
Mongolia has been something of a frontier Mecca for mining investors over the last several years. Drawn by the country’s vast untapped resources and proximity to China, the world’s biggest consumer of commodities, investors have poured billions of dollars into Mongolia’s tiny economy. In 2011, foreign investment constituted a whopping 62 per cent of Mongolia’s $8.6bn GDP.
But could that be about to change? Continue reading »
China property: better than it seems
Beijing’s efforts to cool the property market are having an effect: China’s National Bureau of Statistics said on Tuesday that new home prices fell in 46 out of 70 cities in March from the previous month.
It’s the fifth consecutive month that more than half of the cities monitored by the NBS reported a decline in housing prices from the previous month. But some economists see room for optimism. Continue reading »
China’s latest scare: poisonous teas
Care for some pesticides with your tea? That’s what tea drinkers in China, the world’s biggest consumer of tea, are asking themselves after the latest revelation of toxic tea leaves for sale across the country.
On Wednesday, a report from Greenpeace outlined the pesticides — including carcinogenic and banned chemicals — found in 18 Chinese teas, including some of the country’s best-known brands. Continue reading »
China’s power problems
The trouble with being the world’s biggest energy user and sprawling across 9m square kilometers is that it is often hard to get the power where you need it.
In China, the trials and travails of the national electrical grid usually go unnoticed. The utility companies that produce China’s power and run the grid include some of the biggest companies in the world by asset size but they often fall below the radar screen since they are state-owned and primarily domestic. Continue reading »
Rare earths: high prices boost Baotou
China dominates the world’s rare earths production, accounting for more than 95 per cent of global supply – a situation that has often sparked complaints from foreign manufacturers who rely on Chinese rare earths.
But some companies are benefitting in a big way: China’s biggest producer of rare earths, the Shanghai-listed Inner Mongolia Baotou Steel Rare Earth Hi-Tech Co, announced on Tuesday that its net profit in 2011 quadrupled from a year earlier, rising to Rmb3.5bn ($552m). The jump in profits, which exceeded Baotou’s earlier guidance, sent the share prices up 8.4 per cent during trading. Continue reading »
Sinopec: refining woes dampen profits
Few companies embody the sheer size and ambition of the Chinese state-owned enterprise like Sinopec, China’s biggest oil and gas refiner. Not only is Sinopec one of the world’s biggest oil companies by asset size, it is also the single most acquisitive Chinese state-owned company, having invested more than $35bn in overseas deals since 2009.
But for Sinopec Group’s Hong Kong-listed subsidiary, which is majority-owned by Sinopec Group, the past year has not been smooth sailing. Continue reading »
Chinese solar panels: temporary relief
Phew. Chinese solar panel stock prices jumped after news that the US had imposed a lower-than-expected import tariff on Chinese solar panels.
Solar panel makers in China have breathed a sigh of relief at the low tariff rate, which has a maximum rate of 4.73 per cent. However the relief is likely to be only temporary as the panel makers await a second verdict, expected in May, that will determine whether antidumping tariffs are heaped on top. Continue reading »
Slower China: end of the super-cycle?
Few issues exercise the minds of commodities analysts like China. The world’s biggest consumer of copper, iron ore, coal and other raw materials, China is the single biggest driver for commodities markets – and for the profits of global miners like BHP Billiton, Rio Tinto, Vale and Xstrata.
But as China’s economy slows and shifts toward “greener” growth, analysts are divided over the outlook for commodities. So divided in fact that Credit Suisse has released which, instead of hewing to a single conclusion, just lays out the conflicting views of its research teams. Continue reading »
The cost of China’s pollution
China’s surging economy has made it the world’s biggest energy consumer and by some measures its biggest polluter. Now a former senior official has put a price tag on the cost of that pollution: between 5 and 6 per cent of GDP last year, equal to some Rmb2.6tr – or $410bn, an eighth of the country’s gargantuan currency reserves. Continue reading »
Chengdu’s charm offensive: fondue and foie gras for hacks
Last weekend while Beijing’s rubber-stamp congress was in full swing, one event stood out among the press conferences and endless speeches that characterise the annual confab. The Chengdu government hosted a champagne brunch – for foreign journalists. Continue reading »
Inflation hedge: China scrambles for egg futures
China, the world’s biggest consumer of many commodities, has its eye on one more: the humble egg. China’s egg market is worth some Rmb180bn ($28.5bn) annually, and China consumes about 23m tonnes of eggs a year, or 384bn eggs.
But the egg market is missing one thing: futures trading. The Dalian Commodity Exchange, China’s third-largest by number of trades last year, is determined to set this right. Continue reading »
Keeping Beijing’s taxis on the streets
Chinese leaders have become increasingly sensitive to public unrest and labour disputes as the frequency of incidents grows. So sensitive in fact, that China’s latest strike – by Beijing’s taxi drivers – barely happened at all. Continue reading »
Bit of a squeeze in Ulan Bator
While the rest of the world talks about monetary easing, in Mongolia, the resource-rich nation of 3m, there is a credit crunch.
Mongolia’s GDP grew at more than 15 per cent last year, sparking fears of overheating and inflation concerns that have prompted the government to tighten monetary policy. As a result, banks have faced a liquidity crunch since last autumn and commercial loans are hard to come by in Ulan Bator these days. Continue reading »
Glencore Xstrata: the view from China
As all eyes focus on the Glencore Xstrata deal announced on Tuesday, what does their biggest customer think about it?
China, a voracious consumer of commodities from iron ore to copper, is already Glencore’s biggest client and a major customer of Xstrata. If the merger goes through, the combined company would be the world’s fourth-largest miner by market value and the leading producer of zinc, lead and ferrochrome, according to FT estimates – and China would likely still be the combined company’s biggest market . Continue reading »
Beijing’s smog is appmakers’ gain
Microsoft’s Beijing office handed out a curious Chinese New Year’s gift to its staff a few weeks ago: a heavy-duty gas mask. Other global companies have also been distributing face masks to their Beijing staff, including electronics maker LG.
Why such a morose gift during a holiday season? Air pollution and its health impact is becoming a bigger concern in China’s smoggy capital. Continue reading »
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