China Trade Information

Shanghai Jiading New Town, which has been listed as one of the three main new towns in Shanghai during the 11th Five-Year Plan Period, will also become the first pilot wireless zone in mainland China. Read the rest of this entry »

Jack Ma, chairman and CEO of Alibaba Group, said at a recent meeting that Alibaba would spend RMB10 billion in the coming three to five years in e-commerce industry supply chain services. Read the rest of this entry »

In view of its huge development potential, more and more foreign companies have been showing a keen interest in entering China’s coal industry.At the China (Taiyuan) International Coal & Energy New Industries Expo 2007, many foreign companies have showcased their projects or objectives in the nation.In view of its huge development potential, more and more foreign companies have been showing a keen interest in entering China’s coal industry. Read the rest of this entry »

Reporter: China’s domestic shipbuilding industry realized a combined profit of nearly 850 million US dollars in the first six months of this year, a 150 percent increase year-on-year.

Nie Lijuan is Vice Secretary General of the China Association of National Shipbuilding Industry.

“In the first half of this year, new ship orders hit a record of more than 42 million deadweight tons, and existing orders exceeded 100 million for the first time.”

China has become the world’s No. 3 shipbuilder, after Japan and South Korea. Its shipbuilding industry accounts for 20 percent of the global market.

Yao Weifu, manager of the Shanghai Shipping Exchange’s information division, says the shipbuilding boom is fueled primarily by soaring global demand.

“Orders mainly come from the companies engaged in the international bulk dry-cargo business.”

According to Yao, shipping demand in the international bulk dry-cargo market has risen by over five percent this year, while capacity has only grown three percent.

Poor capacity has resulted in a continuous rise in shipping charges, and shipping companies have hence earned a lot.

“The growth of the world economy is the main engine to drive the shipping market, which will surely boost prosperity in the shipbuilding sector.”

China’s leading ship maker, COSCO Shipping, will build four 27,000 deadweight ton multi-purpose ships worth over 120 million US dollars.

China Shipping Development also plans to build four crude oil tankers worth 460 million dollars.

The heat has been conducted to the iron and steel industry, as the demand for steel plates keeps rising.

Chen Qixiang is deputy general manager of the Jinan Iron and Steel Group.

“We’ve rolled 850,000 tons of ship plates in the first eight months of the year - an increase of nearly 300,000 tons, or more than 50 percent, compared with the whole year of 2006.”

While shipbuilding is expected to continue the upbeat momentum in the next few years, the Chinese government is currently taking measures to further standardize the industry.

The Commission of Science Technology and Industry for National Defense has said the country will implement a shipbuilding license system to encourage Chinese shipyards to adopt advanced equipment and technologies, as well as modern management methods.

The commission has published the draft of the Shipbuilding License Management Law, seeking public comment.

Shares of Australia’s Oil Search Ltd (OSH.AX: Quote, Profile , Research) jumped 12 percent after a report that oil giant PetroChina (0857.HK: Quote, Profile , Research) may make a US$5 billion takeover bid to secure more gas reserves for the world’s fastest-growing major economy.

PetroChina (0857.HK: Quote, Profile , Research) is buying supplies of liquefied natural gas (LNG) to feed China’s voracious energy demand and has already struck two deals this month for other Australian projects that could be worth almost US$50 billion, which analysts said showed it was prepared to pay a market price for the first time.

“The world is energy hungry, and the Chinese are hunting,” said Shaw Stockbroking analyst Luke Maffei in Melbourne.

PetroChina was considering bidding for Oil Search via CNPC Exploration, a joint venture with its state-owned parent CNPC, Monday’s South China Morning Post said, citing unnamed sources. Some European firms were also considering bidding, it added.

Oil Search is Australia’s third biggest listed exploration and production firm and operates all the oil and gas production in Papua New Guinea, where it also has roughly 30 percent stakes in early-stage LNG projects led by Exxon Mobil (XOM.N: Quote, Profile , Research) and BG Group (BG.L: Quote, Profile , Research). It said it had had no formal approach from anyone.

“PetroChina has some interest in expanding overseas but for any specific project, until it’s signed, we have no comment,” a PetroCHina spokesman said.
 
The report of a possible bid drove Oil Search’s shares up as much as 19.4 percent in early trade, but they gave up some gains to trade up 11.7 percent at A$4.30 by 0827 GMT. The broader market <.AXJO> was down 0.6 percent. Petrochina fell 0.5 percent.

The reported bid would value Oil Search at A$5.31 a share, compared to an all-time high of A$4.64, based on shares on issue.

PetroChina ended 0.5 percent lower in a broader Hong Kong market <.HSI> that fell 1.2 percent.

FUELLING THE DRAGON

China, which is fighting worsening air pollution from burning coal and oil, wants to triple use of cleaner-burning gas by 2020. But it faces a supply gap from around 2012, the same period when Oil Search’s LNG plans in Papua New Guinea would come onstream.

“For China it makes sense, definitely,” said JP Morgan analyst Brynjar Eirik Bustnes. “It’s probably not super-lucrative for PetroChina shareholders, but it’s better than letting the money sit in the bank.”

PetroChina, which is readying a $6 billion domestic share issue, this month agreed LNG deals with Royal Dutch Shell (RDSa.L: Quote, Profile , Research) and Woodside Petroleum (WPL.AX: Quote, Profile , Research).

The LNG plans that Oil Search is involved in are still far from that stage. The BG plan has yet to confirm it has enough gas supplies to go ahead and Exxon’s more advanced scheme has yet to complete the design stage. Still, other parties are circling.
 
“We have had discussions with a number of people who are interested in participating in the gas venture in PNG,” said a spokeswoman for Oil Search, which is 17.6 percent-owned by the government of Papua New Guinea.

Exxon’s plan would require a $9-$10 billion investment to produce 6-7 million tonnes per year (mtpa). BG’s plan would produce 7.2 mtpa, almost enough to cover a market such as Taiwan, a big LNG buyer.

Oil Search also has projects in Yemen, Egypt, Libya and Iraq, with proven and probable oil reserves of 1.43 billion barrels at the end of 2006. But the oil is not the main draw for PetroChina.

“Of course what they’re going after is the LNG assets in Papua New Guinea,” said Bustnes.
Costs of making LNG have soared over the past three years as prices for steel and labour rocketed and the wilting value of dollar-denominated sales eroded expected profit margins.

Like other LNG suppliers, Oil Search needs buyers to commit to long-term deals to make the super-cooled gas economic. China’s renewed interest has boosted the chances of turning projects into reality, and strong demand means it is now a sellers’ market.

“There are players who are happy to put capital in to get some of these projects off the ground and speed them up,” said Maffei. “Demand is strong in that part of the world.”

For a story about the effect of Chinese demand on Australian LNG projects, please click on [ID:nSYD93496]

($1=A$1.19)

PetroChina, the nation’s largest oil company, plans to use proceeds from an upcoming domestic share sale on a huge refinery project in the country’s resource-rich northwest, the government said Tuesday.

This is one of six projects to receive funds raised in the massive Shanghai initial public offering (IPO), said the State Environmental Protection Administration, which must assess the ecological impact.
 
The refinery in Dushanzi in northwest China’s Xinjiang region will be the country’s largest refinery and petrochemical complex after expansion financed by the IPO, the administration said in a statement on its website.

It will have oil processing capacity at 10 million tons a year, and facilities to produce one million tons of ethylene products annually, it said.

PetroChina will also expand an ethylene project owned by PetroChina unit Daqing Petroleum Chemical Co, which will double its capacity to 1.2 million tons per year, the administration said.

The administration’s statement, which said all six projects met the country’s environment protection standards, represented the first time details of the company’s IPO-funded investment program have been released.

State media reported earlier that PetroChina could raise 40 billion yuan (5.3 billion dollars) via the Shanghai share sale, expected to be completed next month at the earliest.