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Business ❘ 09 CONTACT US AT: 8351-9185, [email protected] Thursday November 9, 2017 Exports growth slows as economy cools THE country’s exports rose at a slower pace in October as expected, but imports growth beat forecasts in a sign domes- tic demand remained robust despite the crackdown on pollu- tion that analysts say will reduce factory output and crimp overall economic growth. October exports rose 6.9 per- cent from a year earlier, slightly lagging analysts’ forecast of a 7.2-percent increase, compared to the 8.1-percent growth in September, official data showed yesterday. Imports grew 17.2 percent year on year in October, beating a forecast of 16-percent growth but slightly slower than the 18.7- percent rise in September. That left the country with a trade surplus of US$39.17 bil- lion for the month, according to a media calculation using data from the Administration of Customs. Analysts had expected China’s trade surplus to have widened to US$39.5 billion in October from September’s US$28.61 billion. The Asian giant’s trade with its largest export market, the United States, is in the spotlight this week as U.S. President Donald Trump arrived in Beijing yes- terday for his first visit to China. China’s trade surplus with the United States in October was US$26.62 billion, based on media calculations of offi- cial data, down from US$28.08 billion in September, even as its overall surplus with the rest of the world widened. The weaker trade comes amid expectations of a renewed effort by policymakers to reduce debt risks and tighten rules to bring polluting factories to a heel, though also reflect weaker exter- nal demand, say analysts. “The big picture is that both outbound and inbound ship- ments have softened recently, a trend that continued last month,” Capital Economics China economist Julian Evans- Pritchard wrote in a note. “We suspect that this reflects a slight easing of growth in other emerging markets along with weaker domestic demand as a result of slower infrastructure spending.” Even with some loss of momentum in the fourth quar- ter of the year, the country’s eco- nomic growth is still expected to easily meet or beat the govern- ment’s full-year target of around 6.5 percent. (SD-Agencies) LI RUIPENG’S phone has been ringing off the hook with factories and hotels looking to get their hands on prompt sup- plies of gas. “Orders started to shoot up from September. Some are asking for deliveries the very next day,” said Li, a manager at privately-run Huapu Gas, which delivers super- chilled gas by truck to customers within a 500-km radius of its base in Tangshan, east of Beijing. Huapu is one of the fast grow- ing bands of trucking companies that are transforming China’s domestic spot market for gas into a unique and bustling busi- ness as the government pushes to wean the country off coal. Hotels, hospitals and factories have been required to swap their coal-fired boilers for gas ones this year, creating thousands of new standalone gas customers thirsty for the clean fuel. But with inadequate pipelines and storage tanks, users in the world’s second-largest liquefied natural gas (LNG) importer are scrambling for supplies of imported and locally produced gas from dealers like Li. He’s currently dispatch- ing nearly 40 trailers a day, each carrying 20 tons of LNG. That’s double the number six months ago. “Inflexible pricing for pipeline gas, insufficient grid network and lack of storage facilities ... make trucked LNG a unique business in China,” said Chen Zhu, managing director of con- sultancy SIA Energy. The trend is a major break from the global industry norm, where buyers and sellers are locked into long-term contracts — some as long as 20 years — and rely on pipeline grids to deliver the fuel. China’s first gas trailer hit the road in 2003 as trucks run by companies like Guanghui Energy traveled for over a week to ship gas from remote northwestern onshore fields to factories 5,000 kms to the south. Now, Li and his peers are expected to play a critical role in keeping the world’s most popu- lous nation fueled this winter as it embarks on an experiment to heat homes in nearly 30 northern cities with gas. Gas hauled by trailers could make up a tenth of China’s total gas consumption of around 240 billion cubic meters (bcm) in 2017, compared with 5.6 percent in 2014, said Chen. And China aims to lift gas to supply 15 percent of its total energy demand by 2030, more than double the current 6 percent. Gas distributors like the coun- try’s largest player ENN Energy Holdings and niche dealers like Huapu have spent heavily this year expanding their fleet of trail- ers, each costing nearly 1 million yuan (US$150,300). Zhangjiagang-based cryogenic equipment maker Santum, controlled by CIMC Enric, the country’s top producer of LNG trailers, sold 600 vehicles in the first nine months of the year, up from 410 in 2016. (SD-Agenies) Truckers scramble to meet LNG demand THE government has raised its 2018 crude oil import quota for “non-State trade,” or inde- pendent refiners, by 55 percent over 2017, raising the clout of the smaller refiners in the global market after a setback this year. The move took market partici- pants by surprise after China cut the quotas to independent refin- ers, also known as “teapots,” for 2017. The annual quota setting, announced earlier than usual, is a sign that the government is relaxing its policies towards the independent refiners after imposing cuts and banning them from exporting fuel this year. The Ministry of Commerce said yesterday that companies can start applying for quotas for 2018 totaling 142.42 mil- lion tons, or about 2.85 million barrels per day (bpd), up from 91.73 million tons for 2017. The ministry did not provide a detailed breakdown of quota recipients, but they should include mostly independent refiners, which in 2017 made up around two-thirds of total refiners. The announcement follows a recent media report that China’s increasingly influential inde- pendent refineries have sought changes to oil quota polices to help them plan procurement and production in advance. Quotas for some of these tea- pots were cut by nearly 17 percent in 2017 versus 2016 because they under-used the earlier permits. “Teapots like us may get a bit more quota next year after Com- merce Ministry cut back our vol- umes in 2017,” said a procurement manager with Shouguang Luqing Petrochemical Co., a teapot based in the eastern province of Shan- dong, home to a number of the independent plants. “It’s an improvement to set the annual volumes earlier. But the volumes are much larger than expected,” said Harry Liu of consultancy IHS Markit. The new quotas are equal to about a third of China’s imports during the first nine months of the year. The Commerce Ministry said the quotas will be issued in batches, with the first lot based on companies’ actual purchases during the January to October period this year. Companies without any import record will be banned from new quotas for 2018 and those which under-use quotas are required to return the unfinished permits. (SD-Agencies) Import quota for teapot refi ners raised Workers get ready to pump lique- fied natural gas into a gas trailer at CNPC Caofei- dian terminal in Tangshan, Hebei Prov- ince, in this file photo. Gas hauled by trailers could make up a tenth of China’s total gas consump- tion of around 240 billion cubic meters in 2017. SD-Agencies SMARTPHONE maker Xiaomi Inc. launched sales in Spain on Tuesday, its first foray into Western Europe as it revs up a stalled global push into other developed markets in Europe and the United States. Xiaomi started to sell its flag- ship Mi A1 smartphones, priced at 229 euros (US$265.85) in Spain from yesterday as well as Wi-Fi-connected products including scooters, air purifiers and coffee makers. “It’s proof that we are very, very serious about becoming a global company, not just a Chinese company, and not just working in developing countries,” Wang Xiang, head of Xiaomi’s global business, said ahead of the launch. “We want to expand our ambitions to developed areas like Western Europe, and that’s just the first step.” Xiaomi, which in 2014 was briefly the world’s most valuable startup, saw sales stall in 2016 amid an unwieldy international expansion and intense compe- tition from local rivals Huawei Technologies, Vivo and Oppo. At the time it pulled back from several overseas markets including Brazil and Indonesia, but this year it has launched and re-launched sales in dozens of countries such as Indonesia, Vietnam, Russia, the United Arab Emirates and Ukraine. “We are more focused now,” said Wang, who added the com- pany has learnt lessons from previous failed entries and was now hiring heavily overseas. Wang took over the role ear- lier this year when high-profile executive Hugo Barra left the company to join Facebook Inc.’s augmented reality team. In July, Xiaomi secured a US$1 billion loan to drive its overseas expansion and help roll out brick-and-mortar stores. Xiaomi’s sales have also been recovering this year, and it has overtaken Apple Inc. to become China’s fourth-largest smart- phone vendor by sales, driven in part by a focus on offline stores, according to research firm Canalys. (SD-Agencies) Xiaomi reignites global push with Spain launch SALES of passenger vehicles rose for the sixth straight month in October, with General Motors Co. and Honda Motor Co. sell- ing more models adapted for the world’s largest auto market. Retail sales of cars, sport util- ity vehicles (SUVs) and multi- purpose vehicles increased 2.7 percent to 2.3 million units last month, the China Passenger Car Association said in a statement yesterday. Deliveries rose 1.4 percent to 18.9 million units in the first 10 months of this year. “Joint venture brands, espe- cially for the Japanese cars, are performing well,” said Cui Dongshu, secretary-general of the China Passenger Car Association, referring to car models manufactured in China with local partners. “They are improving their competitive- ness by introducing more new models from China that suit the local market, especially SUVs.” Cui spoke before the association released the figures. Car sales in China have picked up in recent months as automak- ers offered larger discounts and introduced more new prod- ucts to entice customers. General Motors’ China sales increased 10.7 percent in Octo- ber from a year ago to 382,723 units, led by growth in its Baojun and Cadillac brands. Honda sold 132,807 cars last month, a gain of 14 percent, benefiting from new models including the Avan- cier and UR-V full-size SUVs. (SD-Agencies) Passenger vehicle sales increase 2.7 percent on new models
