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China-based tyre manufacturers are advised to set up operations in Malaysia to avoid the extra duty imposed on their products when exporting to the United States.

Malaysian-China Chamber of Commerce (MCCC) Liew Choon Kong made this remark here on Saturday in the interview with Bernama, the country\’s national news agency.

The United States recently imposed a punitive tariff of 35 percent on Chinese-made tyres imported by the U.S.

The practise of trade protectionism by the U.S. has led to strong objection by the China-based tyre manufacturers.

According to Liew, tyres produced in Malaysia would not be classified as Chinese made, allowing the tyre makers to save on taxes if their products were made in and exported from Malaysia.

Moreover, China bought a lot of rubber from Malaysia for tyre production, elaborated Liew.

Liew noted that amidst the current economic situation, the move would create more opportunities for business communities from both countries to collaborate.

He also said local food and beverage producers could tap the large market in China, especially the exports of coffee, a product China found difficult to obtain.

(Xinhua News Agency September 26, 2009)

China\’s consumer price index (CPI), a major inflation gauge, might begin to see growth since November, said Stephen Green, head of research for Standard Chartered Bank in Shanghai on Saturday.

China\’s CPI halted its enlarging declining pace since March due to the government\’s stimulus measures and the CPI might rise around 4 to 5 percent in 2010, said the bank in its recent research report.

The CPI of the world\’s third largest economy dipped 1.2 percent in August from a year earlier, China\’s National Bureau of Statistics figures revealed. The rate of decline was 0.6 percentage points lower than that in July.

The Asian Development Bank earlier this week estimated China\’s CPI would fall 0.5 percent from a year earlier in 2009 and rise 3 percent in 2010.

China can accept an inflation rate slightly higher than 2 percent, Zhou Xiaochuan, governor of the People\’s Bank of China, the central bank, said earlier this week.

(Xinhua News Agency September 26, 2009)

Xiaowan hydro station, a keystone power generation project in southwest China\’s Yunnan Province, became operational Friday, according to a statement from the China Huaneng Group.

Built on the Lancang River since 1999, the first generating unit of the power station is now pumping out 700,000 kilowatts of electricity an hour while five other units of the same capacity are under construction.

The overall investment in the power station is 40 billion yuan (5.86 billion U.S. dollars). Its six generating units will have an annual capacity of 19 billion Kwh.

Another unit will be put into production by the end of 2009 and the remaining four will become operational in 2010.

The reservoir is designed to provide balance between rain and drought seasons, ensuring a stable output, the group said.

In addition to generating power, the station, whose reservoir will throughput a total of 14.9 billion cubic meters of water a year, will help improve flood control, irrigation and water transportation.

The group said the station\’s arch dam was the world\’s tallest and many technical obstacles were tackled during its construction in a quake-prone area but gave no further information.

(Xinhua News Agency September 26, 2009)

HSBC Group announced Friday that it would relocate its Group Chief Executive from London to Hong Kong in February, a move in line with its strategy to focus on emerging markets.

\”The move further positions the group for the shift in the world\’s center of economic gravity from West to East,\” said the HSBC in a statement.

Stephen Green, Group Chairman of HSBC, told a Xinhua reporter in a phone interview that the decision came from the expectation that China mainland as well as Hong Kong and Taiwan in particular and Asia in general, are set to be the best source of growth over the next decade or more for HSBC.

According to Green, HSBC\’s business in Hong Kong and the mainland accounted for one third of the bank\’s world business.

\”But we do expect the percentage to increase over time because we expect the economy, particular of the mainland, to continue to be, probably, the fastest growing economy in the world,\” he said.

The Group Chief Executive Michael Geoghegan will move to Hong Kong from Feb. 1, 2010, but will also maintain an office and a regular presence in London, according to the statement.

The relocation is aimed to fully realize growth potential of \”the group\’s strategically most important region\” for the Group Chief Executive to operate from Hong Kong, the hub for HSBC\’s Asia-Pacific business, said the bank.

HSBC Holdings PLC, the holding company of the HSBC Group, however, would remain domiciled in the United Kingdom and has no plans to move, according to the statement.

Founded in Hong Kong and Shanghai in 1865, the London-based HSBC Group is the largest international bank in the Asia-Pacific region, with total assets worth 2.4 trillion U.S. dollars at the end of June.

\”The additional management presence in Hong Kong and focus on HSBC\’s faster-growing markets is absolutely right for HSBC and entirely consistent with the strategy set out in 2006,\” said Green.

\”The move of HSBC does not mean the bank is pulling away from London, but operating from the two equally strategically important centers, i.e. Hong Kong and London,\” he said.

According to Green, there will be a very close-working relationship between London and Hong Kong, which, he said, \”is essential to the successful development of the HSBC group over the long term\”.

The HSBC will focus primarily on the emerging markets, particularly Asia, the Middle East and Latin America, and also look at growing its business in Africa which is at the moment very small, he said.

Green said that the move is not linked to HSBC\’s possible listing in China\’s security market. But he said that HSBC would be very interested in listing in Shanghai if and when the Chinese authorities permit foreign companies to list there.

The bank said Michael Geoghegan will also become Chairman of the Hong Kong and Shanghai Banking Corporation Limited, the bank\’s Asian unit, to succeed Vincent Cheng on 1 February 2010.

Cheng, who has chaired HSBC\’s Asia business since 2005, will continue to report to the Group Chairman, and he remains an executive director and will continue to help the bank develop its businesses in the Chinese mainland, Hong Kong and Taiwan, according to the statement.

(Xinhua News Agency September 26, 2009)

.S-based Ford Motor Co. began building a new plant in China\’s southwest Chongqing city Friday, mainly to produce the next generation Focus car.

Covering about 100 hectares with a total investment of 3.34 billion yuan (490 million U.S. dollars), the plant is being jointly built by the Changan Ford Mazda Automobile Co. Ltd., a joint venture of Ford; Chongqing-based Chana Auto Co. Ltd. and Japan\’s Mazda Motor Corp..

The plant, the second in Chongqing and third in China, will have an annual output of 150,000 cars after completion in 2012.

\”China is one of Ford\’s most important markets in the world and also the fastest growing market,\” said Ford\’s CEO Allan Mulally at the foundation stone laying ceremony of the new Ford plant.

\”The new plant in Chongqing is an important step for Ford to expand its business in China,\” he said.

Ford will introduce four new models to China in the next three years. Ford\’s new engines and new energy aotomobiles will also be introduced to the Chinese market gradually, he said.

\”I believe that with concerted efforts from all sides, Changan Ford Mazda cars will win consumers\’ favor with excellent products and services, and the joint venture will become a model for China\’s auto market,\” said Xu Liuping, board chairman of Changan.

Changan Ford Mazda Automobile Co. Ltd has sold 144,601 cars under the Ford brand in the first eight months of 2009, up 30 percent on the previous year.

Ford is recovering rapidly from the global financial crisis. It is speeding up the restructuring and integration of its global resources in order to turn losses into gains in 2010, said Mulally.

(Xinhua News Agency September 26, 2009)

Oil prices continued a week-long slump Friday after government reports showed the US continues to sit on a huge petroleum surplus as the driving season comes to a close.

Benchmark crude for November delivery gave up 19 cents to $65.70 a barrel on the New York Mercantile Exchange. In London, Brent crude fell 25 cents to $64.57 on the ICE Futures exchange.

Prices rebounded early Friday when President Barack Obama and the leaders of France and Britain issued a stern warning to Iran, demanding the country come clean on its nuclear program.

\”Iran is breaking rules that all nations must follows,\” Obama said at the opening of the G-20 economic summit in Pittsburgh.

Iran is OPEC\’s second-largest oil producer after Saudi Arabia, and its southern border lies along the crucial Strait of Hormuz, where supertankers carry crude from the Persian Gulf to the rest of the world.

Any saber rattling toward Iran tends to boost oil prices. Still, the effect on Friday was relatively mild with oil producers exporting much less because of a drop in world demand.

\”There\’s a lot of countries that would be more than happy to go over their quotas and make up for Iran\’s production,\” said Phil Flynn, an analyst with PFGBest.

Oil prices also got a boost from Bernanke, who said he continues to support the expensive Term Asset-Backed Securities Loan Facility. The program, which gives loans to investors and is meant to spark bank lending, is seen as inflationary and has driven investors to commodities like oil.

Meanwhile, a Tesoro refinery in Los Angeles caught fire early Friday. The 300-acre (121-hectare) facility in Wilmington refines 97,000 barrels of oil per day. That may have had a larger impact on oil prices if demand for gasoline was not so weak.

In other Nymex trading, gasoline for October delivery lost 2 cents to $1.6171 a gallon, and heating oil for October delivery lost a penny to $1.6711 gallon. Natural gas gave up 4.7 cents to $3.91 per 1,000 cubic feet.

(China Daily September 26, 2009)

The third summit of the Group of 20 (G20) kicked off in Pittsburgh, Pennsylvania, on Thursday evening. The leaders are expected to coordinate their positions on global economic recovery, financial regulatory reform and world trade issues during the two-day meeting.

A year after global finance crisis erupted, as countries claw back from recession, leaders of G20 is to decide when to pull the plug on state stimulus packages and how to coordinate that move.

Early this month, G20 finance ministers and central bank governors reached a consensus that, although the darkest time of global economic recession in the past 70 years has passed, the stimulus policy should continue until recovery is confirmed.

Leaders from the G20 will also coordinate on their macro economic policies to ensure the world economy will grow on a sustainable and more balanced pattern.

\”In Pittsburgh, we will work with the world\’s largest economies to chart a course for growth that is balanced and sustained,\” said US President Barack Obama on Wednesday.

The summit will be key for financial reforms, said German Chancellor Angela Merkel on Thursday before departing for Pittsburgh, warning that efforts to make the world less prone to financial disasters may lose momentum.

White House spokesman Robert Gibbs also said on Thursday that financial regulatory reform is the most important topic for the summit.

\”I think quite frankly it will be financial regulatory reform,\” said White House spokesman Robert Gibbs when asked to describe the most vital item for G20 action.

It\’s still unclear if Obama would reach agreement with his European counterparts on regulatory reform as EU leaders seek to put on tough rule in financial regulation.

Meanwhile, leaders from developing countries are expecting a stronger voice for developing countries in steering the world economy.

\”If richer countries, such as the United States want the developing world\’s help in sorting out the financial crisis, then those nations are going to have to cede some of their controlling stake in the institutions devoted to the task, such as the International Monetary Fund,\” Brazilian President Luiz Inacio Lula da Silva told the United Nations on Wednesday.

India has urged the G20 summit to come out strongly against protectionism in trade while continuing reform of international financial institutions to give greater voice to developing countries.

As dozens of poor countries are still mired in an economic downturn and struggling to finance key needs, the summit will also talk about how to help them out of economic recession.

The G20 have advanced in some areas, but have not reached agreement on a number of issues. It need move faster, said Russian President Dmitry Medvedev earlier this week.

G20 Pittsburgh Summit 

(Xinhua News Agency September 25, 2009)

China Investment Corporation (CIC), the nation\’s sovereign wealth fund, has agreed to buy 1.9 billion U.S. dollars of debt from Indonesian coal miner PT Bumi Resources to increase its access to commodities, sources with CIC said Thursday.

The deal came days after CIC reaching an agreement to take stake in the Hong Kong-based commodities trader Noble Group for approximately 850 million U.S. dollars.

In July, CIC invested 1.5 billion U.S. dollars in Tech Resources Limited of Canada.

\”These deals show that CIC is attaching more attention to commodities and intends to diversify its assets arrangement,\” said Zhuang Jian, a senior economist with the Asian Development Bank.

Bumi Resources, Indonesia\’s largest thermal coal producer, said in a statement that CIC has purchased the firm\’s debt-like instruments for 1.9 billion dollars, with 600 million U.S. dollars repayable in four years, 600 million U.S. dollars in five years and 700 million U.S. dollars in six years.

Bumi said that CIC\’s cash injection would enable it to grow quickly and give it a stable capital structure, and the partnership with CIC would create a platform for both sides to jointly pursue investment opportunities.

CIC would receive a return of 12 percent each year and a total internal rate of return of 19 percent, said Burmi.

\”Under the forecast of excessive fluidity and devaluation of the U.S. dollars under global economic stimulus policies, CIC\’s investment in commodities will be a better option to mitigate risks in China\’s huge foreign exchange reserves,\” said Zhuang.

CIC\’s investment in natural resources also matches China\’s long-term strategy for resources security, according to Liu Yuhui, researcher with the Institute of Finance and Banking of the Chinese Academy of Social Sciences.

\”As the world\’s largest manufacturer, China is becoming more and more sensitive to price fluctuations of commodities in the global market,\” he said.

Indonesia is the world\’s largest exporter of thermal coals, while China is the largest coal consumer. China imported 11.5 million tonnes of coal from Indonesia in 2008, accounting for one quarter of its total coal imports.

\”CIC slowed its investment pace since July 2008 in the face of the global economic downturn. But as the world economy improves, CIC would become more active investing overseas,\” said a senior official with CIC when the sovereign fund released its 2008 annual report in August.

CIC has made investment in fields beyond resources. In September, it helped bail out the company behind London\’s Canary Wharf property development and bought into an Australian real-estate trust for 200 million Australian dollars.

\”Opportunities emerge in crisis. Investment in assets with better quality and better prospects may bring profits in the long run,\” said Liu.

\”Investment decisions in 2009 demonstrate CIC is more mature and makes more efforts in assets diversification,\” said Zhuang Jian.

Since it was launched in September 2007 with a registered capital of 200 billion U.S. dollars from China\’s huge foreign exchange reserves, CIC has been criticised for suffering book value losses after it purchased stakes in Blackstone Group and Morgan Stanley in 2007.

(Xinhua News Agency September 25, 2009)

A Chinese company has offered sprint star Usain Bolt a staggering deal that could see the Jamaican reap more than $115 million in the next five years.

Ajani Williams, chief executive officer with Anza Marketing Group (AMG), yesterday confirmed that the organization, which has the sole rights to market Bolt in China, received the offer after \”Lightning\” struck twice at last month\’s Berlin World Championships – winning both the 100 m (9.58) and 200 m (19.19) in world-record times.

While Williams was reluctant to reveal the 23-year-old\’s potential suitor, he said the offer could not only change the face of track and field but sport in general.

The potential deal is understood to include a base salary \”in the teens (between 13 and 19 million)\” plus a licensing deal that could see Bolt reap $60-70 million during the five years.

Also, Bolt would get the opportunity to set up his own branch of the unnamed firm, which would put him in the stellar range of sports entrepreneurs that includes basketball\’s Michael Jordan and golf\’s Tiger Woods.

\”This is unprecedented in terms of (track and field) base salary and the licensing deal and could change the whole landscape. It\’s a trailblazer,\” said Williams, who is a former NBA player and the current president of the Jamaica Basketball Association.

\”We (Anza) have done our bit; we have handed in a 15-page evaluation and it\’s now up to Usain – he\’s the boss – and the people around him,\” he said. \”I would not like to put a betting figure on whether he accepts it or not but it is a great deal and very hard for other companies to match.\”

Before signing on the dotted line with the Chinese company, Bolt will have to find a way out of current sponsorship deals with companies including Puma, Gatorade, Texaco and Digicel.

\”Although I don\’t want to reveal the name or nature of the company, there may be possible conflicts and legal ramifications,\” Williams said. \”However, this very well-established company in China has stated it is willing to buy out current sponsors.\”

While the AMG boss was upbeat, \”Team Bolt\” remains coy and issued a statement saying, in part: \”The Management wishes to make it clear that it respects the terms of the valid contract which it has with Puma, wherein its terms restrict the Management from having any direct contact with a competitor of Puma – the shoe contract sponsor, until after 2010 when the present contract ends.\”

He said the Chinese company may be willing to wait.

\”(The company) came to me after his second race in Berlin with the offer. There have been no negotiations. I am waiting on word from Usain and his people and then, if they are interested, I will go forward with a counter proposal,\” he said.

According to reports in Jamaica, that reply could double the original figures.

Also potentially adding to the Olympic medalist\’s fortune is a possible deal with sina.com, host of one of the biggest blogs in China.

While no official deadline has been set for the \”major\” Chinese deal, Williams believes the company wants an answer by the end of next month.

(China Daily September 25, 2009)

China started building a 5.4 million cubic meter strategic oil reserve in the far western Xinjiang region Thursday in the latest effort to ensure its energy security.

The project in Dushanzi, Karamay City, is part of the country\’s second phase of strategic oil reserves with a planned total storage capacity of 26.8 million cubic meters.

Sun Longde, vice president of PetroChina Co., said construction on the first phase of the reserve base, with a capacity of 3 million cubic meters, is expected to be finished in October 2010.

The first phase costs 2.65 billion yuan ($388 million) and covers 95 hectares.

The 30 oil tanks, with each having a capacity of 100,000 cubic meters, will be filled up mainly by the crude from Kazakhstan and Russia, Sun said.

PetroChina Dushanzi Petrochemical Co. has earlier built a 1.4-million-cubic-meter commercial oil reserve.

China had filled up the first phase of four strategic oil reserves in Zhenhai, Huangdao, Dalian and Zhoushan by earlier the year, according to the National Energy Administration.

The government plans to build up oil reserves amounting to the equivalent of 100 days of imports by 2020 after finishing filling up the second and third phases of strategic oil reserve bases.

China also started building another six energy projects in Xinjiang on Thursday, including three power plants, a power grid, an LNG (liquefied natural gas) plant, and a coal mine.

Zhang Guobao, head of the National Energy Administration, said the seven projects have a total investment of more than 23 billion yuan and will create 6,000 jobs and generate 2 billion yuan in profits and taxe revenues annually.

(Xinhua News Agency September 25, 2009)