Economy

ECFA

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At a recent American Enterprise Institute discussion of Taiwan and the ECFA, Council for Economic Planning and Development Minister Christina Liu said it would be full steam ahead if markets were reaping economic benefits and the ECFA was the right policy.  Things would completely change however, if Taiwan moved toward independence, but this probably wouldn’t be the case as most Taiwanese want to maintain the status quo which might translate to her saying the ECFA wouldn’t be accepted under Taiwanese independence or that China would withdraw benefits in such a situation.


 

MoU and KPC

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The recent partnership agreement between MoU and KPC comprises: upstream, downstream businesses; R&D in HR and planning and energy security.  At the signing various official dignitaries from Kuwait and the UK were in attendance.  Malcolm Brinded, an executive director at Shell noted how this milestone is “further cementing our partnership with Kuwait.”  There are plans to develop Kuwait’s Jurassic gas fields through developing capacity of Shell and Kuwait Oil Company (KOC) staff.  As the chair and MD of Shell companies in Kuwait Ahmed Mouti noted, that since the company is known for being a “leading gas company” building a partnership with KOC will only be mutually beneficial to the two companies.  Training will be needed because of “unique geological challenges” gas developments encounter today that require specific technology.

 


 

Air Transport, Solar and Wind Power News

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 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.

Substantial Drop in Asian Shares

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Recent world events – New Zealand earthquake, Japan’s credit rating downgrade and continued Middle East and Libyan unrest – led to a significant drop in stock markets across Asia.  For example, South Korea’s Kospi, the Nikkei 225 stock and Hong Kong’s Hang Seng index all plummeted around 2 percent.  As well, Japan had trouble dealing with its huge debt following Moody’s Investors Service downgrading its outlook for the country’s credit rating, citing “increasing uncertainty” over Japan’s capacity to effectively deal with rising debt.  This doesn’t spell good news for the country which only last month had its sovereign debt rating cut by Standard & Poor.  Australia, China, Singapore and Taiwan are currently in the same boat vis-à-vis stock markets. The only good news for the region of late has been the increase in oil prices.

 

Chinese Economy and Grain Production

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Although it seems like inflation is sky-rocketing in China due to its escalating consumer price index, according to chairman of the leading food enterprise COFCO Ning Gaoning, grain prices will be stabilized because of the country’s “substantial reserves.”  While corn will probably drop, rice and wheat – two of the country’s major grains – will remain in high supply this year.  Indeed last year the country’s grain output increased nearly 3 percent with its rice inventory-to-consumption ratio being around 18 percent higher than anywhere in the world.  

Ning claimed that the escalation in world food prices was due to “global demands and extreme weather in major grain producing areas” along with general inflation and speculation.  He dismissed the claim that the price of agricultural products were behind global inflation since the recent peaks in farm produces occurred way later than those of other industrial products.  Ning also  predicted a high inflation in the next second months with a weakening from July to the end of 2011 but claimed that expectations were weaker this month because of various governmental measures to ensure market supply.  

As well, Ning noted how China still potentially has the capacit to increase the amount of grain it produces due to better rural infrastructure, and more low-yield farmland productivity.  Farmers are being encouraged to increase production and the government has invested significant funds in rural water conservation and farm irrigation projects.

 

Wall Street News

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Stock markets and oil prices in Asia recently saw an increase, indicating the demand for the latter could be improving.  As well, makers of electronics increased between 0.9 and 2.8 percent in Tokyo.  IN Hong Kong the Hang Seng index rose 0.4 percent but South Korea’s Kospi index was “nearly flat.”  While Australia’s S&P/ASX200 slightly increased, BHP Billiton Ltd. Saw a hit of 1.8 percent which was a marked difference from the company’s claim of over 70 percent net profit increase from last July to December.  The Dow Jones industrial average encountered its second straight day of losses on Tuesday with the Dow falling 0.3 percent.  Nasdaq fell 0.5 percent as did Standard & Poor’s 500 index which dropped 0.3 percent.  On the New York Mercantile Exchange delivery increased 35 cents a barrel in electronic trading.
 

TAITRA News

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The upcoming 2011 Renewable Energy Exhibition (Lyon, France), will be privy to the latest green products’ catalogs from Taiwan as well as a demonstration of Taiwantrade.  Taiwantrade is a powerful B2B website, developed by the Taiwan External Trade Development Council (TAITRA) and e-sourcing platform providing clients with tons of information on current trade events, industries news and more. It assists Taiwanese companies with all sorts of developments and is a quality product at a reasonable price.  In terms of its green products, this is not new to a country rated number four in the world of solar modules manufacturing and solar cells.  As well it was rated number 6 in the world for green-energy technology and number two in Asia as an eco-solutions developer.
Also at the exhibition, there will be an attempt to develop cohesion in business with French and European companies while educating on the 50 Taiwanese green suppliers.  TAITRA “will be providing the most comprehensive sourcing services.”
 

South Korean Economics

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If stock prices plummet and interest rates increase, South Korean households will suffer.  The Samsung Economic Research Institute (SERI)’s recent report showed a huge increase in individual debts, following the global financial crisis and a peak in loans.  But loans are not the answer since they are often based on the “floating interest rate system rather than fixed rates, which means debt levels rise when there is an increase in interest rates.” 


Figures show that South Koreans’ debts have basically increased at a steady pace in the last two years.  The government’s plan to help (debt-to-debt income ratio) is not a “proper” solution, according to the SERI report, which found that “the strict loan regulations should be regarded as part of policies to boost financial soundness of banks.”  While there has been a cap on this loan, in 2010 the government decided to raise this in an attempt to “revive the sluggish market.”  But because of the bullish stock market, assets and incomes are on the rise which has resulted in “an immediate household debt crisis.”


The report also predicted that if there is a 2% increase in interest rates, there will be an increase from 11.7 trillion to 16.1 trillion per quarter.  An increase in household debts will have to inevitably result in less spending money and thus a severe dent in the region’s economic growth.

 


 

Maruti Suzuki Sales Increase 14.74 percent at 109,743 Units

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India’s automobile major Maruti Suzuki, the Indian  clocked a 14.74 percent rise in its sales that measured at 109,743 vehicles in January as opposed to 95,649 units during the like period of 2010.

9,321 units of these sales are exports, Maruti Suzuki said in a statement.

Maruti Suzuki’s A2 compact cars such as Alto, Wagon-R, Estilo, Swift, A-Star and Ritz witnessed a rise in sales of 23.8  percent equalling 72,479 cars as opposed to the same period in 2010 that witnessed the selling of 58,540 units.

The A3 sedan type cars also witnessed parallel trends in growth. These cars include the SX4 and Dzire which rose 32.6 percent. These cars’ sales equalled 11,930 unitsopposed to 8,995 units in December 2010.

Singapore’s Budget Stretches Its Wings

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Tharman ShanmugaratnamSingapore’s Finance Minister Tharman Shanmugaratnam assured that his country’s soon to be released budget has “something good for Singapore.” As of yesterday he insisted that the budget “is likely to benefit more than just low-income groups.”

Shanmugaratnam made it clear that Singapore’s government is “not just focused on one group of Singaporeans.” He insisted that the government aims to include all sectors in Singapore into consideration when it deliberates its annual budgets.

Pointing out “that inflation has risen across the region, most obviously in China, India and Indonesia,” he insisted that Singapore’s inflation has been slower to rise because of its strong currency ratings.

Tharman Shanmugaratnam added: “It’s uncomfortable for many people and we know that, and we’ll make sure we help families where we can.”