China’s Factor Sector Drops to Three-Year Low

China’s factory sector decreased dramatically, the most in 32 months, in fact, as the economy continues to weaken and concerns regarding a global recession heighten.

The severe fall in the HSBC flash PMI from 51 to 48 this past month reflects domestic weakness as a result of less output and new orders, even as exports increase. The flash PMI was the lowest since 2009. Added to the already unstable world economy, the news has sent financial markets into a quiet frenzy.

“I’m not sure if it (PMI) is a tipping point, but I think it adds to the evidence,” said HSBC economist Qu Hongbin. Beijing has initiated several measures already, aimed at helping small businesses, to support the economy. The sharp drop in inflationary pressure shows that the city still has hope if it brings in additional, special measures.

“There remains no need to panic,” Hongbin said. “Easing inflation provides room for more easing measures, which will keep China on track for a soft landing.”

Air Transport, Solar and Wind Power News

 A Japanese airline (a conglomeration of All Nippon Airways and ANA) will begin low cost domestic flights in November and services to China next year.  According to the Civil Aviation Administration of China (CAAC) over 5 million passengers were transported during the Spring Festival through domestic carriers, organizing close to 40,000 flights to meet increased holiday travel demand.  Services will be expanded between Dalian in China’s Liaoning Province and Toyama, Japan to Beijing.  Turkish airlines has grown, as well as Air China, the latter which transported 102,500 tons of mail and cargo.  Hong Kong-based Cathay Pacific Airways – with its subsidiary Dragonair – last month transported 2.24 million passengers, 6.8 percent higher than last year.  China Southern Airlines and China Eastern Airlines likewise reported a significant increase in passenger transportation over the last year.  Spring Airlines will be using AsiaPay’s payment processing solution for its online flight booking, enabling clients to pay for tickets in local currencies.


In terms of airline partnerships, news is that first, China Harbor Engineering Company Ltd (CHEC, a subsidiary of China Communications Construction Company Ltd.) just clinched a US$1.22 billion deal for the construction of a new international airport in Khartoum, Sudan.  Second, China Telecom Corporation Limited has entered into a strategic partnership with Hainan Airlines potentially enabling the latter to be “China’s first air carrier to provide in-flight phone calls and Internet.” New services will be added to Italian airlines too and a Tibet-based air carrier (Tibet Airlines) will be the first air-carrier in the region and will start its operation launching a Lhasa-Beijing service.
 

News from solar power is that China Solar Energy Holdings Ltd. will be acquiring domestic thin-film solar photovoltaic module maker Target Samoa for US$45 million in stock and convertible notes enabling the addition of amorphous silicon thin-film module production.  Taiwanese Neo Solar Power Corp (NSP) said its revenues last month escalated over 150 percent and this trend looks set to improve.  Volthaus GmbH (German solar power developer) is due to receive 20 MWp of solar modules in an agreement with EGing Photovoltaic Technology (Chinese module maker).  There is good news in the solar cell market too in the country, with the use of Maple solar cell technology (broader and flatter silicon cells with fewer grain boundaries).


There is work on potential wind power projects via China Resource New Energy which recently stated it would put US$728 million to US$984 million in wind power developments in pursuit of 150 gigawatts of overall installed capacity by 2020.  A US company CleanTech Innovations informed of its striking a wind tower supply deal from power producer China Guodian.