amoy
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African Riot in Guangzhou
http://www.youtube.com/watch?v=t39bwYkCW2M
http://www.youtube.com/watch?v=t39bwYkCW2M
China Economy: News & Discussion
- Thread starter Rage
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never had idea about any such town in china
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all black unkils should be dumped back to Africa.
amoy
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IF China wishes to become a world power, China/Chinese has to open its mind to accomodate black or white (they're colorless in some sense).
Besides Africans in China do bridge China and Africa in trading and cultural ties. In Guangzhou African community also brings opportunities to native Chinese (even lodging...) and makes Guangzhou a hub for export to Africa. Africans there (probably 0.1m) have their own organizations/chambers by country for 'autonomy'.
Besides Africans in China do bridge China and Africa in trading and cultural ties. In Guangzhou African community also brings opportunities to native Chinese (even lodging...) and makes Guangzhou a hub for export to Africa. Africans there (probably 0.1m) have their own organizations/chambers by country for 'autonomy'.
Oracle
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China will become global leader in innovations: Premji
IT czar Azim Premji on Friday praised the way China is being administered, and predicted that the future would witness low-cost innovations from the Communist country flowing into the global market in a big way.
"Don't underestimate China in terms of any opportunity that is coming up in the world," the chairman of the New York Stock Exchange-listed Wipro said while answering questions at an executive committee meeting of Ficci.
"And China is probably the best administered country in the world today," added Premji, who earlier delivered an address on 'Sustainability and Innovation'.
Stating that China is doing some "incredible work" in the field of electric cars, Premji said that the country was "very innovative" with "fundamental R&D" in the solar energy space, and not just a "copycat".
He said that while China does have the world's largest copycat industry worth almost $1 trillion, it has taken up work in areas such as software, automobile engineering and renewable energy as a national programme.
The world can expect China to increasingly cater to countries like India, Africa and even the United States, where customers are looking for high-value products with cheap price tags, Premji said.
India to see renewable energy revolution
India, he said, is heading towards a "renewable energy revolution" of the kind witnessed in the mobile phone space.
Premji argued that India today has a "very low, inadequate, semi-inefficient" installed base on the power generation front, similar to the landline telecom scenario prior to the cellphone revolution.
He said the power capacity requirement in India is so huge that it would kick-start the renewable energy industry, which is enjoying "generous" government incentives.
Drawing a parallel, Premji said the mobile phone revolution in India was triggered by the lack of a landline telecom base and the waiting period of two years to get a connection.
Delivering an address on "Sustainability and Innovation", Premji expressed dismay over climate change and strongly advocated checking "abuse of ecological balance".
"The most frightening thing is water management is not high on the priority of the government," he said and lamented the lack of recycling of water.
Premji expressed anguish over the degradation of water and said tap water is not potable. Wells in villages are polluted, with people falling sick. He said it is going to be a "national crisis" if the government does not take systematic measures on a war-footing to address the issue of water management.
http://business.rediff.com/report/2...ecome-global-leader-in-innovations-premji.htm
IT czar Azim Premji on Friday praised the way China is being administered, and predicted that the future would witness low-cost innovations from the Communist country flowing into the global market in a big way.
"Don't underestimate China in terms of any opportunity that is coming up in the world," the chairman of the New York Stock Exchange-listed Wipro said while answering questions at an executive committee meeting of Ficci.
"And China is probably the best administered country in the world today," added Premji, who earlier delivered an address on 'Sustainability and Innovation'.
Stating that China is doing some "incredible work" in the field of electric cars, Premji said that the country was "very innovative" with "fundamental R&D" in the solar energy space, and not just a "copycat".
He said that while China does have the world's largest copycat industry worth almost $1 trillion, it has taken up work in areas such as software, automobile engineering and renewable energy as a national programme.
The world can expect China to increasingly cater to countries like India, Africa and even the United States, where customers are looking for high-value products with cheap price tags, Premji said.
India to see renewable energy revolution
India, he said, is heading towards a "renewable energy revolution" of the kind witnessed in the mobile phone space.
Premji argued that India today has a "very low, inadequate, semi-inefficient" installed base on the power generation front, similar to the landline telecom scenario prior to the cellphone revolution.
He said the power capacity requirement in India is so huge that it would kick-start the renewable energy industry, which is enjoying "generous" government incentives.
Drawing a parallel, Premji said the mobile phone revolution in India was triggered by the lack of a landline telecom base and the waiting period of two years to get a connection.
Delivering an address on "Sustainability and Innovation", Premji expressed dismay over climate change and strongly advocated checking "abuse of ecological balance".
"The most frightening thing is water management is not high on the priority of the government," he said and lamented the lack of recycling of water.
Premji expressed anguish over the degradation of water and said tap water is not potable. Wells in villages are polluted, with people falling sick. He said it is going to be a "national crisis" if the government does not take systematic measures on a war-footing to address the issue of water management.
http://business.rediff.com/report/2...ecome-global-leader-in-innovations-premji.htm
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guy, at least 20K african blacks now live in Guangzhou...many of them are illegal immiggrant wokers purely for higher income there....
Frankly speaking, I don't want that blacks become the 57th legal ethnic in China.
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never be too serious to what yankees say.
CHina's R&D capacity is there .It never becomes more just because some Yankees praise China. China's R&D capacity never becomes less either,because yankees belittle Chinese R&D capacity.
Oracle
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Premji is an Indian and the owner of Wipro Got you this time ;;D
BG, try taking things more positively in your stride. Just my opinion.
Chinese Economy Treads a Risky Path. (Just Ask Japan.)
BEIJING — The White House dispatched 200 dignitaries to China's capital for relationship-cementing talks this week, a number that bespeaks a world order rapidly turning upside down. From China's threefold economic growth in a decade to today's swarms of five-star hotels and six-figure autos, it is a cliché to say that the world has never before seen anything like this juggernaut.
Enlarge This Image
David Gray/Reuters
Signs of China's economic growth can be seen in Gushi, in Henan Province, where residential buildings have sprouted on land once used for farming.
Actually, the world has. Twenty years ago, Japan was the juggernaut, a silky economic machine poised, according to conventional wisdom and more than a few best sellers, to dominate world trade and global diplomacy in the decades to come. When a flu-ridden President George Bush passed out at a Tokyo state dinner in 1992, vomiting on the leg of the Japanese prime minister, it was widely seen as emblematic of a recession-sapped West supplicating before a rising East.
That it never happened hardly foreshadows China's future prospects. Yet as outsiders behold China's transformation from peasant nation to economic colossus, the risks of extrapolating from China's robust present into an indeterminate future are not to be ignored. China's rise is doubtless an economic miracle. But like Japan's, China's state-driven economic model may prove more useful in earlier stages of development than in guaranteeing sustained growth well into the future.
"Japan had an economic model that worked phenomenally well for, what, 40 years? And then it stopped working," Arthur Kroeber, the managing director of Dragonomics, a Beijing-based economic forecasting firm, said in an interview. "Does that prove the model for the first 40 years was wrong? No — it proves that it was right for that stage of Japan's development."
Many of the complaints that United States officials brought to this week's Strategic and Economic Dialogue in Beijing — about markets closed to foreign competition; about unfairly appropriating hard-won American technologies; about rigged currency values that swell American trade deficits — may ring familiar to those who followed United States-Japan relations two decades ago.
For much of the postwar 20th century, Japan built an empire of private companies closely tied to and favored by the state. It erected a trade colossus whose exports were pumped up — American critics said — by an artificially depressed yen. Japanese manufacturers were accused of arrogating American technologies to churn out low-cost electronics. Japan's retail and financial markets were all but impenetrable to American competitors.
The United States trade deficit with Japan outraged Congress and helped prod Washington in the 1980s to orchestrate a wholesale appreciation of the yen's value against the dollar to help protect American manufacturers.
China today also has a stable of mega-corporations, although unlike Japan's they are explicitly state-owned and often viewed as instruments of government policy. Broad sectors of the economy, including finance, communications, energy and some crucial manufacturing sectors, are effectively off limits to foreigners and even to most domestic competitors.
The renminbi, China's currency, is in global opinion — save in China — held unduly low to keep China's export machine revved up. When Treasury Secretary Timothy F. Geithner arrived here on Sunday, an opening argument to his counterparts was that Chinese rules were forcing American companies to surrender their technological jewels just for a ticket to compete in the Chinese market.
Some of these tactics come straight from the playbook of Japan and other developing nations that have sought to raise their export-driven economies to a higher level.
China is different in two respects that may seem contradictory. On one hand, major industries like oil, telecommunications, banking and aviation are deemed strategic and are under tight state control. Of the 22 Chinese corporations listed on the Fortune Global 500, 21 are controlled by China's central government or state-run banks. Just one, Shanghai Automobile, is run by a local government. None are privately owned.
These "national champions," as the government deems them, are the vanguard of China's push into global markets, and the evangelists of Chinese economic values.
On the other hand, light industry, retailing and the nation's booming export sector are more free to play by Adam Smith's rules. In contrast to Japan, in China Western retailers and consumer goods, from Wal-Mart to Snickers to Tesco, are ubiquitous and compete vigorously with homegrown competitors. And many of China's leading exports, like iPods and Nike sneakers, are manufactured by or for foreign multinationals that retain most of the profits from their sale. By Chinese logic, there is no contradiction. Like free speech, human rights and any number of other societal basics, private enterprise in China is vibrant and open to outsiders, but only as long as it does not threaten the state's interests.
If this formula seems anathema to Western capitalists, Beijing's three decades of jackrabbit growth speak for themselves. Even a senior Treasury Department official in Beijing for this week's meetings said that China's fiscal stewards had basically perfected the art of balancing conflicting forces in an economy of 1.3 billion people.
Less clear, many economists allow, is how long this formula will work. China itself is rapidly changing: already, low-cost competitors like Vietnam are siphoning some of the labor-intensive industries that powered Beijing's rise. The worldwide economic slowdown and the fact that China already dominates some crucial industries suggest that it can no longer count on ever-rising exports as a major source of growth.
Beijing has pledged to ease its reliance on exports by raising domestic consumption. But that requires a turnabout in spending habits by a population accustomed to saving for contingencies, like education and medical care, rather than spending. Turning that around may take time.
And then there is China's debt. Some influential economists argue that China has grown in part by seizing people's savings to finance high-speed trains, steel factories and speculative real-estate investments.
How productive that state-led investment will turn out to be is a matter of debate. It has clearly aided China's development up to now. But just as exports cannot increase endlessly, at some point the returns from building new roads and factories are likely to diminish as well.
The central government has surmounted several debt crises in the past decade, bailing out its banks after unwise investments. Many analysts anticipate more bailouts after the government flooded the economy with cheap money in the wake of the 2008 financial crisis.
Japan's economic miracle ended with the collapse of a phenomenal real-estate bubble and was worsened by a series of policy errors that led to a long period of stagnation. China's economy is still at an earlier stage of development, and its government is likely to seek to avoid the mistakes that exacerbated Japan's slump.
But whether the state-driven investment and export-led development that has made China an economic power can be replaced soon by new sources of growth has become a more pressing question.
"The Chinese fundamentals are good," Huang Yasheng, a professor at the Massachusetts Institute of Technology's Sloan School of Management, said in an interview. "All I am saying is that the policy has not changed. You cannot rely on an artificial external stimulus to keep your economy going."
Clinton and Geithner Face Hurdles in China Talks
BEIJING — China and the United States opened three days of high-level meetings here on Monday meant to broaden and deepen the ties between the world's largest developed and developing economies. But the opening session instead laid bare a recurring theme between Beijing and Washington: the United States came with a long wish list for China on both economic and security issues, while China mostly wants to be left alone to pursue policies that are turning it into an economic superpower.
President Hu Jintao, welcoming the 200-strong American delegation in the Great Hall of the People, praised the "mutually beneficial and win-win cooperation" between the United States and China. Such coordination, he said, had helped speed the recovery from the 2008 financial crisis.
On the crucial issue of China revaluing its currency — something the Obama administration had pushed for — Mr. Hu repeated China's past promises to make its effectively fixed exchange rate respond more to the market, but the fact that the country's top leader mentioned reform at all suggested it is on the leadership's agenda.
Still, Mr. Hu also repeated that Beijing would move "under the principle of independent decision-making, controllability, and gradual progress." Translation: China alone will determine the timing of any such move.
Economists said the deepening debt crisis in Greece, which came up immediately in the discussions on Monday, would make Beijing more reluctant to allow its currency to appreciate in value in the immediate future.
Treasury Secretary Timothy F. Geithner did not mention China's currency in his opening remarks, though he did allude to it in subsequent sessions. The administration has decided not to prod Beijing at this meeting, officials said, concluding that it would resist outside pressure.
The United States is hitting similar hurdles on security issues. Secretary of State Hillary Rodham Clinton pressed China to support measures against North Korea following the strong evidence that it torpedoed a South Korean warship in March. But China has been skeptical of North Korea's role and is reluctant to punish the North, with which it has close ties.
And while China agreed to a watered-down United Nations resolution on Iran's nuclear program, it has not signed off on amendments against specific Iranian citizens and companies. With big planned investments in Iran's oil and gas industry, China may well be in business with some of them.
In her speech to the opening session, Mrs. Clinton cited Iran and North Korea as issues in which Beijing and Washington must find common cause. "Today, we face another serious challenge provoked by the sinking of the South Korean ship," she said. "So we must work together, again, to address this challenge and advance our shared objectives of peace and stability."
A spokesman for the Foreign Ministry, Ma Zhaoxu, was noncommittal, saying of the Korea crisis, "We hope all the relevant parties will exercise restraint and remain cool-headed."
Some of this is cultural, to be sure. Chinese officials tend to speak far less directly than Americans. Mr. Hu did not mention Iran and North Korea, referring to regional "hot spots." The fact that he frankly addressed the exchange rate of China's currency, the renminbi, surprised some observers, and lent itself to varying interpretations.
For some experts, Mr. Hu's pledge to "steadily advance the reform mechanism of the RMB exchange rate," without repeating his previous references to the rate being "basically stable," was a sign of conciliation. "It's important, the fact they haven't mentioned it," said Ben Simpfendorfer, the China economist for the Royal Bank of Scotland.
But others interpreted it as a pre-emptive move to take the issue off the table. Eswar Prasad, an economist at Cornell University, noted that the crisis in Greece had rattled the Chinese on two levels. It was likely to curb their exports to Europe, and it had strengthened the renminbi relative to the swooning euro, which makes Chinese goods more costly in foreign markets.
"That double hit on China's exports almost certainly means that they're not going to move forward unless there is evidence of stabilization in the euro and stabilization in Europe's recovery," Mr. Prasad said.
A senior Chinese official said that Beijing would keep a "high alert and attention on the euro zone sovereign debt crisis." He noted that it could affect not only Europe's economic recovery but also Chinese exports. China exports more to the European Union than to the United States.
The United States needed a 48-vehicle motorcade to ferry its delegation to this second round of the so-called strategic and economic dialogue. Among the prominent names: the chairman of the Federal Reserve, Ben S. Bernanke, the commander of the military's Pacific Command, Adm. Robert F. Willard, and the secretary of health and human services, Kathleen Sebelius.
Some of the topics under discussion veered far from economics and security. Mrs. Clinton singled out Melanne Verveer, the State Department's ambassador at large for women's issues, who is meeting with Chinese women's groups to discuss their progress in women's rights.
Mr. Geithner lobbied against Chinese government procurement rules giving preference to products with intellectual property developed in China. American businesses, particularly in technology, say this handicaps them and deprives China of state-of-the-art products. "Innovation flourishes best when markets are open, competition is fair, and strong protections exist for ideas and inventions," he said.
The Chinese have their pet issues as well: Beijing is pushing Washington to loosen controls on exports of high-technology equipment with potential military applications. A raft of questions from reporters for state-run Chinese media organizations suggested a coordinated campaign.
If American officials seemed likely to leave China with many of their wishes unfulfilled, there was one notable difference in this year's meeting compared to the one last year in Washington: the American economy is growing again, which gave Mr. Geithner a rare chance to crow a bit.
Rather than identify the United States with the troubled economies of Europe, Mr. Geithner said the United States was holding its own with emerging economies like Brazil, India, and China.
"Economic growth in the U.S. and China is broader and stronger than many had anticipated, even a few months ago," he said.
Michael Wines contributed reporting from Beijing, and Keith Bradsher from Hong Kong.
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well, the mayor of Shenzhen city pledged that Shenzhen is to overtake Singapore in 5 years
of course, measured by total nominal GDP.
The mayor said that Shenzhen's per capital nominal GDP is 13K USD and to be 20K+ USD in 2015. Its total nominal GDP is 0.82 trillion RMB( about 0.12 trillion USD) and is to be 1.5 trillion RMB(0.22 trillion USD). then in 2015, Shenzhen's nominal GDP will overtake Singapore and become a moderate developed society.
However, I have to point that even if Shenzhen's per capital nominal GDP were 20K USD, it would be still only 50% of Singapore's. It would take Shenzhen another one decade to overtake Singapore measured by per capital nominal GDP.
of course, measured by total nominal GDP.
The mayor said that Shenzhen's per capital nominal GDP is 13K USD and to be 20K+ USD in 2015. Its total nominal GDP is 0.82 trillion RMB( about 0.12 trillion USD) and is to be 1.5 trillion RMB(0.22 trillion USD). then in 2015, Shenzhen's nominal GDP will overtake Singapore and become a moderate developed society.
However, I have to point that even if Shenzhen's per capital nominal GDP were 20K USD, it would be still only 50% of Singapore's. It would take Shenzhen another one decade to overtake Singapore measured by per capital nominal GDP.
Last edited:
prashantm912
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Will not singapore had gone much ahead till then?
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Singapore's per capital nominal GDP is only 30-35K USD. it can be 40K USD at most in 2015.
Singapore grows much more slowly than SHenzhen.
amoy
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Government confirms subsidies for hybrid and new energy vehicles
2 June 2010 No Comment
XWelcome Googler! If you find this page useful, you might want to subscribe to the RSS feed for updates on this topic.
You were searching forPosts relating to "china subsidy car new energy". See posts relating to your search »« Hide related posts
China mulling subsidies to new energy car buyers
For a long time hybrid vehicles have been overpriced in China, but if the government gets its way then it...
Shenzhen to start hybrid subsidies for private buyers
The previous round of subsidies for hybrid purchases was largely aimed at government departments, in a bid to turn civil...
13 Chinese cities giving hybrid subsidies
In an unprecedented turn, 13 cities have become 'test cities' for the introduction of subsidies for hybrid vehicle purchases. Beijing,...
SAIC to build green energy tech center in Tangshan
SAIC have reportedly chosen Tangshan to be the site of their new New Energy research centre. SAIC have reached an...
Government reveals subsidies of upto 50,000rmb for hybrid purchases
China has been working very hard in the past few years to alter its reputation from being a mass polluter,...
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This is going to be music to the ears of BYD, Chery, and Geely, and all other Chinese car manufacturers that have hybrids and pure electric vehicles in development. Geely might be a big winner from these subsidies if they go through with their plans to make all of their vehicles hybrids via their ISG system, which basically turns them all soft hybrids. BYD are set to become a big winner with their F3DM, which pushes prices down from 160,000rmb to a more affordable 110,000rmb under this scheme.
Electric car buyers to save 60,000 yuan ($8,800) each
* Buyers of plug-in hybrids to save 50,000 yuan each
* Government to invest in electric car infrastructure
* Also offers 3,000-yuan subsidy for fuel-efficient cars (Adds details, analyst comment)
BEIJING/SHANGHAI, June 1 (Reuters) – China said on Tuesday that it would launch a pilot programme in five cities to provide subsidies to buyers of electric and hybrid cars, as the government steps up efforts to cut emissions in the world's biggest auto market.
Residents of Shanghai and Shenzhen, as well as Hangzhou and Hefei in the east of the country and Changchun in the northeast, would receive up to 50,000 yuan ($7,320) in subsidies if they buy plug-in hybrid cars, the Ministry of Finance said on its website.
The maximum subsidy for those who bought fully electric cars was 60,000 yuan, the ministry said.
"The handouts could get people interested in green car models now that the government has come up with a concrete plan and real money to back it up," said Harry Zhao, an analyst with industry consultancy CSM Worldwide. "But it's unrealistic to expect it to work like magic; like tax incentives did last year."
Beijing's tax incentives for small cars and subsidies for vehicle buyers in rural areas helped domestic vehicle sales surge 46 percent last year to 13.6 million units, surpassing the United States as the world's top auto market.
The impact of the new subsidies on green car sales was unlikely to be very large in the short term because of high battery costs and an inadequate charging network, but would make it easier for those interested in cars fuelled by alternative energy to decide to buy such vehicles, analysts said.
HYBRID BANDWAGON
Taking cues from the government, the biggest players in the Chinese auto market, from top state auto group SAIC Motor Corp (600104.SS) to rising star Geely Automotive Holding (0175.HK), have been ramping up efforts to bring low-emission vehicles onto the roads.
SAIC plans to roll out its first hybrid car this year, while Shenzhen-based car and battery maker BYD Co (1211.HK), backed by Warren Buffett's Berkshire Hathaway (BRKa.N), started retail sales of its plug-in hybrid F3DM in March.
The government would also allocate unspecified funding to bankroll the construction of charging stations and battery recovery networks in the pilot cities, the finance ministry added.
Instead of handing out subsidies to consumers directly, the government would allocate the money to carmakers, who would then lower the prices of relevant models accordingly, it said, without indicating when the programme would begin.
The level of handouts would be reduced after carmakers sold a total 50,000 green cars, it said, without elaborating.
The government started to offer subsidies for purchases of cleaner buses in early 2009, as part of another pilot programme in 13 cities.
In addition to the new programme limited to the five specified cities, Beijing would also offer nationwide subsidies of 3,000 yuan on purchases of cars with 1.6-litre engines or smaller and that consume 20 percent less fuel than current standards, it added.
2 June 2010 No Comment
XWelcome Googler! If you find this page useful, you might want to subscribe to the RSS feed for updates on this topic.
You were searching forPosts relating to "china subsidy car new energy". See posts relating to your search »« Hide related posts
China mulling subsidies to new energy car buyers
For a long time hybrid vehicles have been overpriced in China, but if the government gets its way then it...
Shenzhen to start hybrid subsidies for private buyers
The previous round of subsidies for hybrid purchases was largely aimed at government departments, in a bid to turn civil...
13 Chinese cities giving hybrid subsidies
In an unprecedented turn, 13 cities have become 'test cities' for the introduction of subsidies for hybrid vehicle purchases. Beijing,...
SAIC to build green energy tech center in Tangshan
SAIC have reportedly chosen Tangshan to be the site of their new New Energy research centre. SAIC have reached an...
Government reveals subsidies of upto 50,000rmb for hybrid purchases
China has been working very hard in the past few years to alter its reputation from being a mass polluter,...
Powered by WP Greet Box
This is going to be music to the ears of BYD, Chery, and Geely, and all other Chinese car manufacturers that have hybrids and pure electric vehicles in development. Geely might be a big winner from these subsidies if they go through with their plans to make all of their vehicles hybrids via their ISG system, which basically turns them all soft hybrids. BYD are set to become a big winner with their F3DM, which pushes prices down from 160,000rmb to a more affordable 110,000rmb under this scheme.
Electric car buyers to save 60,000 yuan ($8,800) each
* Buyers of plug-in hybrids to save 50,000 yuan each
* Government to invest in electric car infrastructure
* Also offers 3,000-yuan subsidy for fuel-efficient cars (Adds details, analyst comment)
BEIJING/SHANGHAI, June 1 (Reuters) – China said on Tuesday that it would launch a pilot programme in five cities to provide subsidies to buyers of electric and hybrid cars, as the government steps up efforts to cut emissions in the world's biggest auto market.
Residents of Shanghai and Shenzhen, as well as Hangzhou and Hefei in the east of the country and Changchun in the northeast, would receive up to 50,000 yuan ($7,320) in subsidies if they buy plug-in hybrid cars, the Ministry of Finance said on its website.
The maximum subsidy for those who bought fully electric cars was 60,000 yuan, the ministry said.
"The handouts could get people interested in green car models now that the government has come up with a concrete plan and real money to back it up," said Harry Zhao, an analyst with industry consultancy CSM Worldwide. "But it's unrealistic to expect it to work like magic; like tax incentives did last year."
Beijing's tax incentives for small cars and subsidies for vehicle buyers in rural areas helped domestic vehicle sales surge 46 percent last year to 13.6 million units, surpassing the United States as the world's top auto market.
The impact of the new subsidies on green car sales was unlikely to be very large in the short term because of high battery costs and an inadequate charging network, but would make it easier for those interested in cars fuelled by alternative energy to decide to buy such vehicles, analysts said.
HYBRID BANDWAGON
Taking cues from the government, the biggest players in the Chinese auto market, from top state auto group SAIC Motor Corp (600104.SS) to rising star Geely Automotive Holding (0175.HK), have been ramping up efforts to bring low-emission vehicles onto the roads.
SAIC plans to roll out its first hybrid car this year, while Shenzhen-based car and battery maker BYD Co (1211.HK), backed by Warren Buffett's Berkshire Hathaway (BRKa.N), started retail sales of its plug-in hybrid F3DM in March.
The government would also allocate unspecified funding to bankroll the construction of charging stations and battery recovery networks in the pilot cities, the finance ministry added.
Instead of handing out subsidies to consumers directly, the government would allocate the money to carmakers, who would then lower the prices of relevant models accordingly, it said, without indicating when the programme would begin.
The level of handouts would be reduced after carmakers sold a total 50,000 green cars, it said, without elaborating.
The government started to offer subsidies for purchases of cleaner buses in early 2009, as part of another pilot programme in 13 cities.
In addition to the new programme limited to the five specified cities, Beijing would also offer nationwide subsidies of 3,000 yuan on purchases of cars with 1.6-litre engines or smaller and that consume 20 percent less fuel than current standards, it added.
China involves Pak in cross-border trade to internationalize Yuan
BEIJING: China is entering into a new and powerful form of relationship with Pakistan. It has decided to allow Pakistan to participate in cross-border trade using the Chinese Yuan as the base currency in dealing with the western Xinjiang Uyghur Autonomous Region. The central government in Beijing is also encouraging the provincial government of Xinjiang to become an international gateway for trade with Pakistan and Afghanistan that lie across its border.
This is clearly a precursor with a currency swap deal between the two countries running into several billion dollars. China has entered into swap deals with South Korea, Malaysia, Indonesia and Argentina to encourage the worldwide use of the Yuan. The deal involving Argentina last year was worth $10 billion. Pakistan, which receives a lot of financial assistance from China, would easily agree to a swap deal and help in internationalizing the Chinese currency.
Zhou Xiaochuan, governor of the People's Bank of China, has now announced that Xinjiang will be included in the special program for expanding the use of Yuan as a settlement currency instead of the US dollar. The central bank was also ready to assist small and medium sized companies as part of the new development package unveiled by the government for Xinjiang a few days back, he said.
The latest move is bound to expand trade and financial exchanges between Xinjiang and Pakistan. It coincides with a government decision to impose a new tax on the sale of crude oil and natural gas, which will help Xinjiang's local government to mop up huge resources. The tax, which will range between 3% and 3.5% of the value of production, is expected to bring in huge amount of money for further development of the region dominated by a Muslim population.
China has been looking for ways to intensify the process of development in order to counter the influence of Islamic fundamentalism spilling over from bordering North West Frontier Province areas of Pakistan.
Xinjiang has earlier entered into a development agreement with NWFP of Pakistan while the Chinese Communist Party has inked a cooperation agreement with the fundamentalist Jamet-e-Islami. The purpose is to enhance China's influence over the fundamentalists sections in Pakistan and keep the militants at bay instead of solely depending on the central government in Islamabad for this purpose. The government recently said it had announced the special financial package to achieve "leapfrog development and lasting stability in Xinjiang".
Border trade has huge potential for China. Its trade with Mongolia through the land port of Erenhot topped $2.1 billion in 2009. Its border trade with Russia using the same port came to $551 million last year,
Source: Times of India
As i said in the other thread only countries like Pakistan and Zimbawe will accept Yuan.
BEIJING: China is entering into a new and powerful form of relationship with Pakistan. It has decided to allow Pakistan to participate in cross-border trade using the Chinese Yuan as the base currency in dealing with the western Xinjiang Uyghur Autonomous Region. The central government in Beijing is also encouraging the provincial government of Xinjiang to become an international gateway for trade with Pakistan and Afghanistan that lie across its border.
This is clearly a precursor with a currency swap deal between the two countries running into several billion dollars. China has entered into swap deals with South Korea, Malaysia, Indonesia and Argentina to encourage the worldwide use of the Yuan. The deal involving Argentina last year was worth $10 billion. Pakistan, which receives a lot of financial assistance from China, would easily agree to a swap deal and help in internationalizing the Chinese currency.
Zhou Xiaochuan, governor of the People's Bank of China, has now announced that Xinjiang will be included in the special program for expanding the use of Yuan as a settlement currency instead of the US dollar. The central bank was also ready to assist small and medium sized companies as part of the new development package unveiled by the government for Xinjiang a few days back, he said.
The latest move is bound to expand trade and financial exchanges between Xinjiang and Pakistan. It coincides with a government decision to impose a new tax on the sale of crude oil and natural gas, which will help Xinjiang's local government to mop up huge resources. The tax, which will range between 3% and 3.5% of the value of production, is expected to bring in huge amount of money for further development of the region dominated by a Muslim population.
China has been looking for ways to intensify the process of development in order to counter the influence of Islamic fundamentalism spilling over from bordering North West Frontier Province areas of Pakistan.
Xinjiang has earlier entered into a development agreement with NWFP of Pakistan while the Chinese Communist Party has inked a cooperation agreement with the fundamentalist Jamet-e-Islami. The purpose is to enhance China's influence over the fundamentalists sections in Pakistan and keep the militants at bay instead of solely depending on the central government in Islamabad for this purpose. The government recently said it had announced the special financial package to achieve "leapfrog development and lasting stability in Xinjiang".
Border trade has huge potential for China. Its trade with Mongolia through the land port of Erenhot topped $2.1 billion in 2009. Its border trade with Russia using the same port came to $551 million last year,
Source: Times of India
As i said in the other thread only countries like Pakistan and Zimbawe will accept Yuan.
LETHALFORCE
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The title should be changed to China involves Pak in cross-border loans to internationalize Yuan.
nandu
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China's Property Market Freezes Up
China's Property Market Freezes Up
Actions Taken by Economic Planners Worried About a Real-Estate Bubble May Have Gone Too Far
BEIJING—Government policy changes have thrown China's booming property market into a period of paralysis that some industry executives say will last for several months, weighing on global growth prospects already battered by the turmoil in Europe.
A rebound in China's property market has been central to the nation's rapid recovery from the financial crisis, but surging housing prices had led to increasingly open discontent from middle-class families in major cities. After months of indecision, Beijing in mid-April announced a package of policies intended to blow the froth out of the market by restricting speculative purchases.
A laborer works at a residential construction site in Shanghai, which is preparing tough measures to rein in the property market, but that could hurt the global economic recovery.
Officials may have gotten more than they bargained for. Though still too recent for their effect to show up in official economic statistics, early indications are that the new measures have sharply cooled the property market. Arriving around the same time as the debt crisis in Greece, China's new restrictions caused many investors and businesses to question the strength of the global recovery. Domestic steel prices are down 7.4% since the April measures, and as of Thursday China's main stock market index is down 19.4%.
The housing market in many—though not all—Chinese cities seems to have nearly ground to a halt after the government moves. On average, the number of residential property transactions in the four weeks after the restrictions were announced is down 40% compared with the four weeks before the measures, according to figures covering 24 major cities from real-estate consultancy Soufun.com.
China's economic growth was already widely expected to slow in coming months, as the impact of last year's stimulus policies fade. Some forecasters, seeing weaker prospects in a key industry, are now further marking down their numbers for this year. China International Capital Corp. now expects the economy to expand 9.5% in 2010 as a whole, rather than the 10.5% it previously forecast.
But the key variable for how things unfold in coming months is difficult to forecast: What the government will do next. Analysts are divided about whether the government is more likely to take additional measures to push down prices, or start to reverse itself to restore confidence in the market.
Investors are focused on whether the government will impose new taxes on residential property, a move that is being discussed by big cities including Shanghai and Chongqing. On Monday, China's State Council signaled support for such changes, approving a set of economic-reform priorities including "gradually advancing reform of real-estate taxation." Even though no specific plans have been announced, the issue is weighing on markets since higher taxes would push down the value of properties.
"The government has been very ambiguous about the property market," said Li-Gang Liu, China economist for Australia & New Zealand Banking Group. Officials are afraid both of letting a bubble get out of hand, and of cracking down too hard and endangering growth, as happened in early 2008, he said.
The prospect that the rules of the real-estate market may be rewritten have created uncertainties for both buyers and sellers, who are trying to figure out what the government's new attitude means for the market. The April rules raised downpayment requirements and restricted purchases of multiple homes, and were supplemented by other measures that differ from city to city. Yet the subsequent slowdown seems to be greater than can be explained by the number of people directly affected by the changed rules.
"What's really dampened the market is the uncertainty. That overhang is what's driving everyone to wait," said Kevin Yung, executive vice president of IFM Investments Ltd., which runs the Century 21 real-estate agency franchise in China. "We think this could last another three to six months," he said, a rough forecast shared by other industry executives.
Mr. Yung reports that his business is seeing plenty of traffic: People are still looking at apartments and asking about prices. But many are holding off final decisions, and will likely need prices to come down before they take the plunge into home-ownership. "We think prices are going to come down, probably by about 20%, but it will happen over time because this adjustment is driven more by policy than demand," he said.
Quincy Zhao, who works at a consulting firm in Shanghai, is waiting to see if the government's measures really will make a dent in the city's steep prices. Ms. Zhao, 26, now rents an apartment with three friends, but has her eye on a place of her own in the Pudong district that would at current prices cost her 3 million yuan, or about $440,000.
"I have to be super-cautious given that the situation is not so clear at the moment. I am afraid that getting into the market now will lead to a loss if the property price really goes down," Ms. Zhao said. "Personally, I do hope that these policies will work."
http://online.wsj.com/article/SB100...742333032.html?mod=WSJINDIA_hpp_sections_asia
China's Property Market Freezes Up
Actions Taken by Economic Planners Worried About a Real-Estate Bubble May Have Gone Too Far
BEIJING—Government policy changes have thrown China's booming property market into a period of paralysis that some industry executives say will last for several months, weighing on global growth prospects already battered by the turmoil in Europe.
A rebound in China's property market has been central to the nation's rapid recovery from the financial crisis, but surging housing prices had led to increasingly open discontent from middle-class families in major cities. After months of indecision, Beijing in mid-April announced a package of policies intended to blow the froth out of the market by restricting speculative purchases.
A laborer works at a residential construction site in Shanghai, which is preparing tough measures to rein in the property market, but that could hurt the global economic recovery.
Officials may have gotten more than they bargained for. Though still too recent for their effect to show up in official economic statistics, early indications are that the new measures have sharply cooled the property market. Arriving around the same time as the debt crisis in Greece, China's new restrictions caused many investors and businesses to question the strength of the global recovery. Domestic steel prices are down 7.4% since the April measures, and as of Thursday China's main stock market index is down 19.4%.
The housing market in many—though not all—Chinese cities seems to have nearly ground to a halt after the government moves. On average, the number of residential property transactions in the four weeks after the restrictions were announced is down 40% compared with the four weeks before the measures, according to figures covering 24 major cities from real-estate consultancy Soufun.com.
China's economic growth was already widely expected to slow in coming months, as the impact of last year's stimulus policies fade. Some forecasters, seeing weaker prospects in a key industry, are now further marking down their numbers for this year. China International Capital Corp. now expects the economy to expand 9.5% in 2010 as a whole, rather than the 10.5% it previously forecast.
But the key variable for how things unfold in coming months is difficult to forecast: What the government will do next. Analysts are divided about whether the government is more likely to take additional measures to push down prices, or start to reverse itself to restore confidence in the market.
Investors are focused on whether the government will impose new taxes on residential property, a move that is being discussed by big cities including Shanghai and Chongqing. On Monday, China's State Council signaled support for such changes, approving a set of economic-reform priorities including "gradually advancing reform of real-estate taxation." Even though no specific plans have been announced, the issue is weighing on markets since higher taxes would push down the value of properties.
"The government has been very ambiguous about the property market," said Li-Gang Liu, China economist for Australia & New Zealand Banking Group. Officials are afraid both of letting a bubble get out of hand, and of cracking down too hard and endangering growth, as happened in early 2008, he said.
The prospect that the rules of the real-estate market may be rewritten have created uncertainties for both buyers and sellers, who are trying to figure out what the government's new attitude means for the market. The April rules raised downpayment requirements and restricted purchases of multiple homes, and were supplemented by other measures that differ from city to city. Yet the subsequent slowdown seems to be greater than can be explained by the number of people directly affected by the changed rules.
"What's really dampened the market is the uncertainty. That overhang is what's driving everyone to wait," said Kevin Yung, executive vice president of IFM Investments Ltd., which runs the Century 21 real-estate agency franchise in China. "We think this could last another three to six months," he said, a rough forecast shared by other industry executives.
Mr. Yung reports that his business is seeing plenty of traffic: People are still looking at apartments and asking about prices. But many are holding off final decisions, and will likely need prices to come down before they take the plunge into home-ownership. "We think prices are going to come down, probably by about 20%, but it will happen over time because this adjustment is driven more by policy than demand," he said.
Quincy Zhao, who works at a consulting firm in Shanghai, is waiting to see if the government's measures really will make a dent in the city's steep prices. Ms. Zhao, 26, now rents an apartment with three friends, but has her eye on a place of her own in the Pudong district that would at current prices cost her 3 million yuan, or about $440,000.
"I have to be super-cautious given that the situation is not so clear at the moment. I am afraid that getting into the market now will lead to a loss if the property price really goes down," Ms. Zhao said. "Personally, I do hope that these policies will work."
http://online.wsj.com/article/SB100...742333032.html?mod=WSJINDIA_hpp_sections_asia
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http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agH5bsyUCva8
June 2 (Bloomberg) -- Hon Hai Group, the assembler of Apple Inc.'s iPhones, will raise workers' salaries by at least 30 percent, more than indicated earlier, after a series of suicides at the world's largest contract manufacturer of electronics.
Workers with a monthly wage of 900 yuan ($131.77) will be paid 1,200 yuan effective immediately, said Edmund Ding, a spokesman at the Taipei-based flagship company Hon Hai Precision Industry Co. The increase was reported earlier by the Economic Daily News. Hon Hai, also known as Foxconn Technology Group, said on May 28 it might raise pay in China by 20 percent.
"It's been a while since we increased wages, hence the decision," Ding said today by phone. "Raising pay and the suicide issues are two separate matters," he said when asked if the move will reduce suicides at Hon Hai.
Higher wages may help Hon Hai offset negative publicity generated after the worker deaths at its China factories this year, according to Steven Tseng, an analyst at RBS Asia Ltd. Rights group China Labor Watch said wages that are too low to cover the cost of living have put pressure on Hon Hai factory workers, who are "exhausted." Hon Hai chairman Terry Gou has rejected allegations the company is a sweatshop.
"It's hard to assess if the wage rise will stop the suicides, maybe it will help get rid of this negative publicity," Taipei-based Tseng, who rates Hon Hai Precision "buy," said by phone today. The increase, which is higher than Tseng expected, could cut net income this year by up to 6 percent, he said. "They may be able to pass on some of the costs to clients."
'Worst-Case Scenario'
Morgan Stanley analyst Jasmine Lu wrote in a report yesterday that Hon Hai Precision's net income for this year may be cut by 7 percent under a "worse-case scenario" if the company increased workers' salaries by 20 percent. Citigroup Inc. in a May 27 report estimated a 20 percent rise may erode operating profit by 10 percent to 11 percent, and reduced its 2010 earnings estimate for Hon Hai by 11 percent.
Hon Hai dropped to its lowest level in more than eight months in Taipei trading. The stock was 0.8 percent lower at NT$123.5 as of 10:30 a.m. local time.
The shares have declined 17 percent since May 1, compared with a 9.3 percent slump in the benchmark Taiex index. Five of the 10 deaths at the company occurred during May.
'Great Pressure'
At least 10 people have died this year at Hon Hai's manufacturing complex in Shenzhen and police are treating the deaths as suicides, prompting Gou to recruit counselors and install nets on dormitory buildings.
The minimum monthly wage in Shenzhen is between 900 yuan and 1,000 yuan, according to the city government.
Hon Hai "workers have no choice but to work massive amounts of overtime to support themselves and their families, and are always, as workers in the computer production department stated, 'extremely exhausted,' and under 'great pressure,'" Li Qiang, founder and executive director of New York-based China Labor Watch said last week.
Hon Hai's pay raise follows Honda Motor Co., Japan's second largest carmaker, resuming production at a parts plant after workers walked out last week demanding higher wages. Most of the parts factory's 1,900 workers accepted a pay offer of up to 1,910 yuan a month, according to Honda. The employees had demanded between 2,000 yuan and 2,500 yuan.
"It's not just Hon Hai's problem -- it's everyone's problems," Calvin Huang, an analyst at Daiwa Securities Group Ltd., said by phone. "If others don't follow suit and raise wages, they will face suicides or strikes like that at Honda."
Apple, Hewlett-Packard Co. and Dell Inc. said last week they are probing Hon Hai following the deaths. Apple has a team evaluating Hon Hai's countermeasures, it said.
The Shenzhen police are examining the suicides, Li Ping, a spokesman for the municipal government in the southern Chinese city, said May 27. Wang Rong, Communist Party secretary of Shenzhen Municipal Committee, other city officials and labor union officials went to the plant on May 26 to investigate, the government said in a statement on its website May 27.
To contact the reporter on this story: Weiyi Lim in Taipei at [email protected]
June 2 (Bloomberg) -- Hon Hai Group, the assembler of Apple Inc.'s iPhones, will raise workers' salaries by at least 30 percent, more than indicated earlier, after a series of suicides at the world's largest contract manufacturer of electronics.
Workers with a monthly wage of 900 yuan ($131.77) will be paid 1,200 yuan effective immediately, said Edmund Ding, a spokesman at the Taipei-based flagship company Hon Hai Precision Industry Co. The increase was reported earlier by the Economic Daily News. Hon Hai, also known as Foxconn Technology Group, said on May 28 it might raise pay in China by 20 percent.
"It's been a while since we increased wages, hence the decision," Ding said today by phone. "Raising pay and the suicide issues are two separate matters," he said when asked if the move will reduce suicides at Hon Hai.
Higher wages may help Hon Hai offset negative publicity generated after the worker deaths at its China factories this year, according to Steven Tseng, an analyst at RBS Asia Ltd. Rights group China Labor Watch said wages that are too low to cover the cost of living have put pressure on Hon Hai factory workers, who are "exhausted." Hon Hai chairman Terry Gou has rejected allegations the company is a sweatshop.
"It's hard to assess if the wage rise will stop the suicides, maybe it will help get rid of this negative publicity," Taipei-based Tseng, who rates Hon Hai Precision "buy," said by phone today. The increase, which is higher than Tseng expected, could cut net income this year by up to 6 percent, he said. "They may be able to pass on some of the costs to clients."
'Worst-Case Scenario'
Morgan Stanley analyst Jasmine Lu wrote in a report yesterday that Hon Hai Precision's net income for this year may be cut by 7 percent under a "worse-case scenario" if the company increased workers' salaries by 20 percent. Citigroup Inc. in a May 27 report estimated a 20 percent rise may erode operating profit by 10 percent to 11 percent, and reduced its 2010 earnings estimate for Hon Hai by 11 percent.
Hon Hai dropped to its lowest level in more than eight months in Taipei trading. The stock was 0.8 percent lower at NT$123.5 as of 10:30 a.m. local time.
The shares have declined 17 percent since May 1, compared with a 9.3 percent slump in the benchmark Taiex index. Five of the 10 deaths at the company occurred during May.
'Great Pressure'
At least 10 people have died this year at Hon Hai's manufacturing complex in Shenzhen and police are treating the deaths as suicides, prompting Gou to recruit counselors and install nets on dormitory buildings.
The minimum monthly wage in Shenzhen is between 900 yuan and 1,000 yuan, according to the city government.
Hon Hai "workers have no choice but to work massive amounts of overtime to support themselves and their families, and are always, as workers in the computer production department stated, 'extremely exhausted,' and under 'great pressure,'" Li Qiang, founder and executive director of New York-based China Labor Watch said last week.
Hon Hai's pay raise follows Honda Motor Co., Japan's second largest carmaker, resuming production at a parts plant after workers walked out last week demanding higher wages. Most of the parts factory's 1,900 workers accepted a pay offer of up to 1,910 yuan a month, according to Honda. The employees had demanded between 2,000 yuan and 2,500 yuan.
"It's not just Hon Hai's problem -- it's everyone's problems," Calvin Huang, an analyst at Daiwa Securities Group Ltd., said by phone. "If others don't follow suit and raise wages, they will face suicides or strikes like that at Honda."
Apple, Hewlett-Packard Co. and Dell Inc. said last week they are probing Hon Hai following the deaths. Apple has a team evaluating Hon Hai's countermeasures, it said.
The Shenzhen police are examining the suicides, Li Ping, a spokesman for the municipal government in the southern Chinese city, said May 27. Wang Rong, Communist Party secretary of Shenzhen Municipal Committee, other city officials and labor union officials went to the plant on May 26 to investigate, the government said in a statement on its website May 27.
To contact the reporter on this story: Weiyi Lim in Taipei at [email protected]
- Joined
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http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agH5bsyUCva8
June 2 (Bloomberg) -- Hon Hai Group, the assembler of Apple Inc.'s iPhones, will raise workers' salaries by at least 30 percent, more than indicated earlier, after a series of suicides at the world's largest contract manufacturer of electronics.
Workers with a monthly wage of 900 yuan ($131.77) will be paid 1,200 yuan effective immediately, said Edmund Ding, a spokesman at the Taipei-based flagship company Hon Hai Precision Industry Co. The increase was reported earlier by the Economic Daily News. Hon Hai, also known as Foxconn Technology Group, said on May 28 it might raise pay in China by 20 percent.
"It's been a while since we increased wages, hence the decision," Ding said today by phone. "Raising pay and the suicide issues are two separate matters," he said when asked if the move will reduce suicides at Hon Hai.
Higher wages may help Hon Hai offset negative publicity generated after the worker deaths at its China factories this year, according to Steven Tseng, an analyst at RBS Asia Ltd. Rights group China Labor Watch said wages that are too low to cover the cost of living have put pressure on Hon Hai factory workers, who are "exhausted." Hon Hai chairman Terry Gou has rejected allegations the company is a sweatshop.
"It's hard to assess if the wage rise will stop the suicides, maybe it will help get rid of this negative publicity," Taipei-based Tseng, who rates Hon Hai Precision "buy," said by phone today. The increase, which is higher than Tseng expected, could cut net income this year by up to 6 percent, he said. "They may be able to pass on some of the costs to clients."
'Worst-Case Scenario'
Morgan Stanley analyst Jasmine Lu wrote in a report yesterday that Hon Hai Precision's net income for this year may be cut by 7 percent under a "worse-case scenario" if the company increased workers' salaries by 20 percent. Citigroup Inc. in a May 27 report estimated a 20 percent rise may erode operating profit by 10 percent to 11 percent, and reduced its 2010 earnings estimate for Hon Hai by 11 percent.
Hon Hai dropped to its lowest level in more than eight months in Taipei trading. The stock was 0.8 percent lower at NT$123.5 as of 10:30 a.m. local time.
The shares have declined 17 percent since May 1, compared with a 9.3 percent slump in the benchmark Taiex index. Five of the 10 deaths at the company occurred during May.
'Great Pressure'
At least 10 people have died this year at Hon Hai's manufacturing complex in Shenzhen and police are treating the deaths as suicides, prompting Gou to recruit counselors and install nets on dormitory buildings.
The minimum monthly wage in Shenzhen is between 900 yuan and 1,000 yuan, according to the city government.
Hon Hai "workers have no choice but to work massive amounts of overtime to support themselves and their families, and are always, as workers in the computer production department stated, 'extremely exhausted,' and under 'great pressure,'" Li Qiang, founder and executive director of New York-based China Labor Watch said last week.
Hon Hai's pay raise follows Honda Motor Co., Japan's second largest carmaker, resuming production at a parts plant after workers walked out last week demanding higher wages. Most of the parts factory's 1,900 workers accepted a pay offer of up to 1,910 yuan a month, according to Honda. The employees had demanded between 2,000 yuan and 2,500 yuan.
"It's not just Hon Hai's problem -- it's everyone's problems," Calvin Huang, an analyst at Daiwa Securities Group Ltd., said by phone. "If others don't follow suit and raise wages, they will face suicides or strikes like that at Honda."
Apple, Hewlett-Packard Co. and Dell Inc. said last week they are probing Hon Hai following the deaths. Apple has a team evaluating Hon Hai's countermeasures, it said.
The Shenzhen police are examining the suicides, Li Ping, a spokesman for the municipal government in the southern Chinese city, said May 27. Wang Rong, Communist Party secretary of Shenzhen Municipal Committee, other city officials and labor union officials went to the plant on May 26 to investigate, the government said in a statement on its website May 27.
To contact the reporter on this story: Weiyi Lim in Taipei at [email protected]
June 2 (Bloomberg) -- Hon Hai Group, the assembler of Apple Inc.'s iPhones, will raise workers' salaries by at least 30 percent, more than indicated earlier, after a series of suicides at the world's largest contract manufacturer of electronics.
Workers with a monthly wage of 900 yuan ($131.77) will be paid 1,200 yuan effective immediately, said Edmund Ding, a spokesman at the Taipei-based flagship company Hon Hai Precision Industry Co. The increase was reported earlier by the Economic Daily News. Hon Hai, also known as Foxconn Technology Group, said on May 28 it might raise pay in China by 20 percent.
"It's been a while since we increased wages, hence the decision," Ding said today by phone. "Raising pay and the suicide issues are two separate matters," he said when asked if the move will reduce suicides at Hon Hai.
Higher wages may help Hon Hai offset negative publicity generated after the worker deaths at its China factories this year, according to Steven Tseng, an analyst at RBS Asia Ltd. Rights group China Labor Watch said wages that are too low to cover the cost of living have put pressure on Hon Hai factory workers, who are "exhausted." Hon Hai chairman Terry Gou has rejected allegations the company is a sweatshop.
"It's hard to assess if the wage rise will stop the suicides, maybe it will help get rid of this negative publicity," Taipei-based Tseng, who rates Hon Hai Precision "buy," said by phone today. The increase, which is higher than Tseng expected, could cut net income this year by up to 6 percent, he said. "They may be able to pass on some of the costs to clients."
'Worst-Case Scenario'
Morgan Stanley analyst Jasmine Lu wrote in a report yesterday that Hon Hai Precision's net income for this year may be cut by 7 percent under a "worse-case scenario" if the company increased workers' salaries by 20 percent. Citigroup Inc. in a May 27 report estimated a 20 percent rise may erode operating profit by 10 percent to 11 percent, and reduced its 2010 earnings estimate for Hon Hai by 11 percent.
Hon Hai dropped to its lowest level in more than eight months in Taipei trading. The stock was 0.8 percent lower at NT$123.5 as of 10:30 a.m. local time.
The shares have declined 17 percent since May 1, compared with a 9.3 percent slump in the benchmark Taiex index. Five of the 10 deaths at the company occurred during May.
'Great Pressure'
At least 10 people have died this year at Hon Hai's manufacturing complex in Shenzhen and police are treating the deaths as suicides, prompting Gou to recruit counselors and install nets on dormitory buildings.
The minimum monthly wage in Shenzhen is between 900 yuan and 1,000 yuan, according to the city government.
Hon Hai "workers have no choice but to work massive amounts of overtime to support themselves and their families, and are always, as workers in the computer production department stated, 'extremely exhausted,' and under 'great pressure,'" Li Qiang, founder and executive director of New York-based China Labor Watch said last week.
Hon Hai's pay raise follows Honda Motor Co., Japan's second largest carmaker, resuming production at a parts plant after workers walked out last week demanding higher wages. Most of the parts factory's 1,900 workers accepted a pay offer of up to 1,910 yuan a month, according to Honda. The employees had demanded between 2,000 yuan and 2,500 yuan.
"It's not just Hon Hai's problem -- it's everyone's problems," Calvin Huang, an analyst at Daiwa Securities Group Ltd., said by phone. "If others don't follow suit and raise wages, they will face suicides or strikes like that at Honda."
Apple, Hewlett-Packard Co. and Dell Inc. said last week they are probing Hon Hai following the deaths. Apple has a team evaluating Hon Hai's countermeasures, it said.
The Shenzhen police are examining the suicides, Li Ping, a spokesman for the municipal government in the southern Chinese city, said May 27. Wang Rong, Communist Party secretary of Shenzhen Municipal Committee, other city officials and labor union officials went to the plant on May 26 to investigate, the government said in a statement on its website May 27.
To contact the reporter on this story: Weiyi Lim in Taipei at [email protected]
