Policy

Tianjin guideline the latest bid to restrict new car sales

Date Aug 12 2013 15:52:39
Aug.12,2013(SHMET)--

Growing ranks of cities to limit new license plates

As pressure mounts on infrastructure and the environment, Tianjin will become the latest in a string of cities to restrict automobile purchases.

On August 6, the Tianjin municipal government released a guideline that said "responding to the increasingly congested traffic in the city, Tianjin will consider restricting car purchases and use in proper time to prevent the too-fast growth of the number of motor vehicles".

The government also said in the document that it will build more parking garages, reduce parking on the streets and encourage residents to use public transport.

Statistics from the municipal traffic administration show that Tianjin had about 2.4 million vehicles on the road by the end of January. More than 70 percent of newly registered vehicles in the city last year were privately owned.

Earlier local newspaper reports cited officials at the Tianjin Environmental Protection Bureau saying tailpipe exhaust has become a "major factor" affecting the city's air quality. Pollutants from automobiles in the city total about 500,000 tons every year, the bureau said.

Without a specific timetable, the guideline is widely seen as a declaration that the Tianjin municipal government will curb car purchases.

But the announcement might cause panic buying in the short term and is not good for a healthy development of the auto industry, said Zeng Zhiling, director of LMC Automotive Asia Pacific Forecasting.

Zeng said restricting car use instead of purchases is a more effective way to ease traffic because congested cities already have a large number of vehicles on the road.

Limiting new car sales is not a good way to reduce pollution either, because pollutants mostly come from old cars on the roads, he added.

Clear trend

Despite such questions, the trend is clear that more cities are following the lead of Beijing, Shanghai, Guangzhou and Guiyang to limit car buying.

Just two months ago, the government of Shijiazhuang, capital of Hebei province, announced it would prohibit families from buying a third car starting at the end of this year. The city government vowed to prevent the number of cars on the road from exceeding 1.9 million this year and to keep it to a maximum of 2.1 million by the end of 2015.

Last month, the China Association of Automobile Manufacturers told the media that more cities including Chonggqing, Chengdu, Hangzhou, Shenzhen, Qingdao and Wuhan are likely to adopt similar policies.

Edited by SHMET

Private-bank policies take time to emerge

Date Aug 09 2013 09:46:53
Aug.09,2013(SHMET)--

Those who dream of running private-sector banks in Wenzhou, Zhejiang province, will have to be patient, as the detailed policies that will allow them to move forward are taking time to emerge.

In 2010, the State Council, China's cabinet, issued an advisory that was intended to encourage the sound development of private investment by introducing private capital into the financial field.

In 2012, the China Banking Regulatory Commission released a document in which it supported the entry of private capital on an equal footing with other funding into the banking industry.

It was about that time when Lyu Weiguo, the former chairman of the Wenzhou Chamber of Commerce in Shijiazhuang, Hebei province, got the idea to launch a privately owned bank in his hometown.

"We submitted our first draft in June 2012 to Wenzhou's financial office, expressing our plans to help more small and medium-sized enterprises with financial problems.

"We had noticed that there was a ray of light in the window that would allow us to have a privately owned bank," said Lyu, who is the general manager of the Wenzhou Merchants Joint Investment Center.

He's also in charge of applications for private-sector banks proposed by 12 Wenzhou-area chambers of commerce.

Lyu added that it took only two weeks for the chambers to hold final discussions on a proposal for a private-sector bank in the city. But more than one year later, all they have to show for their efforts is a reply from the city's financial office, which said that the proposal had been submitted to the appropriate department in the central government.

Wenzhou, China's hotbed of private capital, was selected for a pilot private-sector banking project in March 2012. At that point, many local entrepreneur had defaulted on their debts and fled the city. The wave of defaults followed a September 2011 move by State-owned banks to tighten loan terms for smaller enterprises.

Under a 12-point financial reform plan for Wenzhou, the city was urged to set up an authorized system to facilitate and monitor private lending.

"We wanted to follow the model of a village bank, which was permitted under the Wenzhou financial reforms, to launch a private bank in the city by providing lower-cost loans to small enterprises," said Lyu.

Edited by SHMET

Govt spending regulation well implemented

Date Aug 09 2013 09:43:20
Aug.09,2013(SHMET)--A regulation proposed by Chinese Premier Li Keqiang on major measures to slash government spending has been properly and effectively implemented, the government said on Thursday.

However, violations have not been eliminated, according to the statement, which added that the State Council, or China's cabinet, will work with relevant authorities to intensify supervision and investigate problems related to the implementation of the regulation.

The regulation, announced by Li at his press debut as premier in March, includes a halt to new government building construction and a reduction in spending on both government employees and official receptions, vehicle and overseas trips.

"The regulation is a solemn promise that the new government made to society with concrete measures to advance the building of a clean government," the statement said, adding that spending on government buildings has largely been contained.

Since March, local governments have issued their own regulations to reduce new government building construction, including stopping approvals for the construction, expansion, restoration and purchase of new government offices and training centers.

All new projects approved after the new government was installed must be stopped, while problems with projects approved prior to March should be promptly rectified, it said.

To expose and handle violations swiftly, some local authorities have set up inspection organs and formulated regulations concerning government information transparency, as well as the petitioning and reporting systems.

Moreover, central authorities have strengthened management over funds used by central government departments, as well as carried out strict audits and final accounting in order to rein in spending.

The General Office of the State Council organized an inspection in May and published information concerning the violations uncovered during the inspection in July.

The cost of supporting the employees of government departments and government-funded institutions has been strictly managed, the statement said.

The central government has set caps for the number of government-supported personnel that can be employed by local administrative agencies, the government said, adding that the caps have largely been observed.

In recent months, central and local governments have worked to control their total number of staff and improve the efficiency of their current staff, the statement said.

No new employees will be added to government departments that are already overstaffed and measures have been taken to deal with "freeloaders" in government agencies and government-funded organizations, the statement said.

Both central and local governments have cut their spending on government employees and official receptions, vehicles and overseas trips this year, according to the statement.

Such spending by central government departments has dropped 1.6 percent year on year so far this year, with planned spending on receptions down 4.3 percent from 2012, it said.

Information on official receptions has been digitized for better supervision.

Edited by SHMET

Yards chart new course with State Council policy

Date Aug 06 2013 15:18:49
Aug.06,2013(SHMET)--

Moves announced recently by the State Council for upgrading the shipbuilding industry by 2015 will accelerate shipyards' integration and help the sector to navigate its difficulties, said experts.

The measures were released as the industry grapples with an unprecedented mix of challenges: low demand, declining orders, sliding prices and oversupply. The goal is to get Chinese shipbuilders back to sustainable development through restructuring and upgrading, said the State Council

"The new measures look to resolve overcapacity and low demand in the short term and set clear, long-term targets for industrial upgrading," said Yang Xinfa, deputy secretary-general of the China Association of the National Shipbuilding Industry.

The shipbuilding industry is directly related to 113 of the nation's 135 industries, and its health has an impact on key sectors including steel, equipment manufacturing, electronic information and others.

Huang Jin, deputy regional manager of DNV Maritime of China, part of the consultancy DNV Maritime and Oil & Gas Classification, said the council's plan showed the industry's importance. He said that he is looking forward to detailed measures from industry regulators and local governments.

The State Council plan urges local governments to support shipbuilders' innovation, strictly control new capacity, promote high-end products and stabilize the industry's international market share with greater funding support, according to the statement dated July 31.

Besides restricting new shipbuilding capacity, the government is encouraging mergers and acquisitions and pooling of resources in the industry, the statement said.

"Chinese shipbuilders are less competitive than their South Korean peers because they are less creative and less capable in meeting market requirements and client demand. The new measures recognize this weakness," said Huang.

But private-sector shipbuilders complain their financing difficulties persist.

Shipowners will get more favorable financing terms for placing orders for Chinese-made vessels, engines and axles, and some key companies will be allowed to issue bonds, according to the cabinet's announcement.

"Shipowners only have to make a small down payment for ship orders. Shipbuilders have to provide the rest of the financing during construction. Therefore, to my understanding, shipowners have better financing conditions than shipbuilders," said Li Aidong, president of Jiangsu Daoda Marine Heavy Industry Co Ltd.

According to Li, high financing costs have hurt private-sector shipbuilders' profit margins.

"Privately owned shipbuilders' financing costs are more than double those of State-owned companies, but I do not find any favorable policy in the document to help us in financing," said Li.

Su Baoliang, a CITIC Securities Co Ltd analyst, said support policies are less needed during a down market.

"The shipbuilding industry has entered into a low market cycle, and it is impossible to stop uncompetitive companies from going bankrupt. Instead, it is advisable to let the market play its full function and let the fittest survive."

Figures from the Ministry of Industry and Information Technology show only 20.6 million deadweight tons of orders were completed in the first half nationwide, down 36 percent year-on-year.

Chinese shipbuilders' orders in hand dropped 13.4 percent to 108.98 million dwt as of the end of June.

Public information also shows the 80 major shipbuilding companies' core business revenue declined 22.4 percent to 84.1 billion yuan ($13.7 billion) from January to May.

Edited by SHMET

China to float 40b yuan in e-savings bonds

Date Aug 06 2013 08:27:23
Aug.06,2013(SHMET)--

BEIJING -- The Ministry of Finance (MOF) announced Monday that it will issue two batches of electronic savings bonds worth up to 40 billion yuan ($6.48 billion).

The two batches will be the seventh and eighth issuances of such bonds this year, according to a ministry statement.

The seventh batch is worth 24 billion yuan and carries a term of three years with a fixed annual interest rate of 5 percent. The eighth issuance of five-year bonds is worth 16 billion yuan at a fixed annual interest rate of 5.41 percent, the MOF said.

The bonds will be issued from August 10 to 19. Interest will be calculated from August 10 and paid annually, the statement said.

The bonds will be available to individual investors at counters of the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and China Guangfa Bank, it said.

Electronic savings bonds are considered more convenient than other types, as interest can be paid directly into the investor's account.

Edited by SHMET