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Nanjing, Hefei and Nanchang forge new alliance:

The three provincial capital cities of Jiangsu (Nanjing), Anhui (Hefei) and Jiangxi (Nanchang) signed a memorandum on 22 May to forge a strategic regional development alliance. According to the memorandum, the cities will plan intercity expressway and rail networks and co-ordinate industrial development.
A degree of inter-dependence already exists, according to Nanchang’s vice mayor Zeng Guanghui. “Some of the copper parts needed by the major domestic appliances manufacturers in Hefei are produced in Nanchang and the aeroplane industry in Nanchang relies on research and development capabilities in Nanjing,” he was quoted as saying. The alliance will also allow Hefei and Nanchang, the two major cities in central China, to be the preferred destinations for Shanghai and Nanjing to transfer some of their non-core industries further away from the coast.
In a separate move, Nanjing government announced on 25 May that the city would issue residence cards to Chinese scholars returning from abroad, either with a foreign citizenship or an overseas permanent residence. These people will have access to a special innovation and enterprise fund that encourages them to settle in the city. They will also enjoy the same treatment as local residents in terms of social security and housing subsidies, and their children will have free education up to secondary school level.

Wuhan to start direct shipping service to Taiwan:

Regular container services to Taiwan could start by end of this year according to the general manager of Wuhan International Container Transhipment Corporation, the operator of Wuhan’s Yangluo container terminal. A few shipping lines have already performed their site visits, said Xie Bingmu. Last year, Wuhan sent 40,000 teu to Taiwan via Shanghai.
A shuttle service between Yangluo, Wuhan and Yangshan in Shanghai was resumed only two months ago, which has reduced the journey time from seven days to five days. The regular service from Yangluo to Shanghai’s Waigaoqiao terminal takes longer due to the unreliable shuttle service between Waigaoqiao and Yangshan.

Jiangyin enjoys boom in vessel stripping:

Jiangyin Yangtze Vessel Strip Yard is reporting record business due to the continued downturn in the shipping market. The strip yard dissembled 44 vessels in the first quarter of 2009, with nine more in the process of being stripped. Another five vessels were scheduled to enter the yard by the end of May.
The vessels that have been taken to pieces were largely large bulk carriers, container carriers, ro-ro vessels and oil tankers from Europe and Japan. In normal circumstances they might have had another three to five years of service but they were withdrawn early because of severe lack of cargo in the international market and the high cost of anchoring and maintenance.
The Jiangyin yard in Jiangsu province currently has 11 teams working extra shifts to cope with the high workload. Local marine safety authorities have vowed to increase the number of inspections to the yard and tighten the monitoring of the entire stripping process to ensure that the booming business will not lead to any pollution.

Business tax exemption for Yangshan:

Mr Song Dexing, Director of the Waterway Department of the Ministry of Transport, said in an interview with China Waterway Newspaper on 25 May that companies involved in international shipping business and registered at Yangshan Bonded Terminal in Shanghai will be exempt from business tax as part of government measures to help the sector survive the current worldwide economic downturn.
The ministry will ban any international vessels from entering the domestic market. He didn’t spell out the definition of ‘international vessels’ but was most likely referring to Chinese vessels plying international routes. He predicted that the downturn in the international shipping market, particularly in the container sector, would continue for the foreseeable future but that the domestic shipping market would recover much faster due to a basket of measures that the central government is taking to keep this year’s GDP growth level at eight per cent.

Zhangjiagang reports 30% throughput growth in April:

Zhangjiagang terminal, part of the Suzhou port, reported a 29.7 per cent increase of throughput in April to 13.57m tons, up nearly 21 per cent over March. Throughput during the first four months exceeded 44m tons, up 3.4 per cent over the same period last year. Foreign trade-related throughput hit 13.67m tons, representing a year-on-year growth of 32.9 per cent.
The five major types of cargo handled by the terminal continued to grow in the first four months, with iron ore at 14.61m tons, iron and steel products at 6.8m tons, chemicals at 3.7m tons, timber at 1.64m tons and grain at 1.51m tons. They accounted for 60 per cent of the total throughput. Chemicals recorded the largest sector increase, rising 35.5 per cent over the same period last year.
Zhangjiagang, Changshu and Taicang all fall under the administrative umbrella of Suzhou port.

Government allocates Rmb270 for infrastructure spending:

China’s central government has allocated Rmb270bn for infrastructure investment so far in 2009, according to an official from the country’s top economic planning body, the National Development and Reform Commission (NDRC).
That amount is part of a planned total of Rmb367.6bn in this year’s central budget. Adding a further Rmb30bn from the 2008 budget means that the country had already allocated Rmb300bn to infrastructure investment since the fourth quarter of last year, NDRC vice director Mu Hong was quoted as saying by China Daily.
The money is part of the Rmb4,000bn, two-year stimulus plan announced late last year in response to the economic downturn.

Urban rail network to be extended:

Urban rail transit construction is to be accelerated following a decision by the National Development and Reform Commission to approve the plans of 19 Chinese cities. Some 2,100km of lines will be laid and operational by 2015 in these cities at a cost of at least Rmb800bn, according to Mr Dou Hao, deputy general manager of China International Engineering Consulting Corporation (CIECC), which has been tasked by the NDRC to assess the cities’ metro planning.
The urban rail projects are bigger than anticipated last year, when 15 cities were given approval to build railway systems, totalling about 1,700km at a cost of Rmb600bn. The decision to increase spending is a result of government measures to boost the economy.
Currently, 14 cities are building 46 urban rail lines, totalling 1,212 km, said Jiao Tongshan, vice-chief of China Communications and Transportation Association. Ten cities — Beijing, Shanghai, Guangzhou, Tianjin, Chongqing, Nanjing, Wuhan, Changchun, Shenzhen and Dalian — now have 29 urban rail routes, with a combined operational length of 778km.

New marshalling yard for Wuhan:

Wuhan North Marshalling Yard, one of the largest yards in Asia, has started operations in Hubei province.
Nearly 10,000 rail freight cars will be diverted to the yard every day instead of travelling across the city centre via the Wuhan Yangtze River Bridge. The yard is capable of separating and classifying 22,000 cars daily from Jingguang line, Hewu line and other trunk routes.

Share placement for Nanjing Iron & Steel:

Nanjing Iron & Steel plans to issue 2bn shares in a private placement to finance a proposed Rmb8.6bn asset acquisition. The new shares will be placed with parent Nanjing Iron & Steel Union, although the plan still needs regulatory and shareholder approval. Proceeds will be used to buy stakes in 10 companies.
The company’s net profit plunged 94 per cent in the first three months of the year to Rmb12.4m on weak demand and falling prices.

Inflated bill for water diversion project:

China had set aside Rmb53.87bn for the huge south-to-north water diversion project by the end of April, according to the head of the project office Zhang Jiyao. That figure was Rmb8.2bn more than the previously announced total of Rmb45.67bn given last November.
Zhang said several key projects along the eastern route had already been completed. The Danjiangkou Dam in Hubei province, the source of diverted water along the central route, is still under construction. About 330,000 people in the reservoir area will be relocated to neighbouring places.
The huge water diversion project is designed to divert water from the Yangtze River and its tributaries to the dry north. It consists of an eastern, central and western route; the eastern and central routes are already under construction, while the most controversial western route is still at the planning stage.
Construction on the eastern route began in December 2002, and on the central route in December 2003. The eastern route should be ready for water diversion to Jiangsu and Shandong provinces in 2013, and the central route will be ready to pump water to Beijing a year later, according to the project office.

Ikea closes regional sourcing offices:

Ikea is to close its sourcing offices in Chengdu, Wuhan and Xiamen as part of a plan to better integrate its sourcing businesses in China. The Swedish retailer plans to lay off about 70 employees in the three offices and it will also shed staff in Shanghai, Guangzhou and Qingdao.
Currently, Ikea sources 30 per cent of its 9,500 products from Asia, led by China with 21 per cent. It has seven retail outlets on the mainland.

Subway opens third restaurant in southwest:

Fast food franchising giant Subway has opened its third restaurant in southwest China. The outlet in Hongyadong, Yuzhong district, Chongqing, complements one in Chengdu and another in Chongqing.
Subway said it decided to open the restaurant at Hongyadong because of the strong performance of a Starbucks outlet in the same area. Two more restaurants in Chongqing will open before the end of this year.

Sanquan sets up food base in Chengdu:

Zhengzhou-based frozen food company Sanquan Foods plans to invest Rmb500m to build its southwestern manufacturing base in Chengdu, Sichuan province, reported China Retail News. The wholly-owned subsidiary will be mainly engaged in the production and sale of frozen food, instant food and fresh food.
Sanquan Foods said that the reason for building the manufacturing base in Sichuan is to cut the distance between its manufacturing base and the local market.
Sanquan, Synear and Longfong are the top three frozen food brands in China, with a combined market share of some 60 per cent.

Investment success for Wuxi:

Two high-tech companies have decided to set up operations in Wuxi, Jiangsu province.
The US-based circuit protection products company Littelfuse is to consolidate its Taiwan wafer fabrication facility into Wuxi. The Taiwan plant was acquired as part of Littlefuse’s acquisition of Concord Semiconductor in 2006 and the move is part of a global consolidation and job reduction exercise. These restructuring activities are expected to be fully complete by the end of 2010 and will realise savings of about US$7m a year. Across its worldwide operations, the company is looking to reduce the number of its sites, shift activities to low-cost locations and move to a leaner and flatter organisational structure.
Meanwhile, the Korean semiconductor company Hynix has announced plans to build a semiconductor back-end joint venture in Wuxi with Wuxi Industrial Development Group.
In 2005, Hynix established a joint venture, Hynix-Numonyx Semiconductor, with STMicroelectronics. With the founding of the back-end plant in Wuxi, Hynix will have a complete product range from front-end to back-end facilities in China, which is expected to yield significant production and distribution cost savings.
Hynix Semiconductor is one of the world’s leading memory semiconductor manufacturers, supplying dynamic random access memory chips, flash memory chips and CMOS image sensors.


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