Newswire: China and Mongolia

1) Wen Signals Unprecedented Spending Will Drive Chinese Rebound – Bloomberg

China’s Premier Wen Jiabao signaled he will maintain unprecedented
government spending to drive a recovery from the slowest expansion in
almost a decade.

“China’s economic rebound is unstable, unbalanced and not yet solid,”
Wen said yesterday in a speech at the World Economic Forum in Dalian,
a city in northeastern China. “We cannot and will not change the
direction of our policies when the conditions aren’t appropriate.”

To read the full article please visit –
http://www.bloomberg.com/apps/news?pid=20601080&sid=aF3.IaUQ.JEo

2) Standard Bank Borrows $1 Billion From Chinese Banks

Standard Bank Group Ltd., Africa’s largest lender, said the $1 billion
loan facility it signed with four Chinese banks will be mainly used
for clients developing projects on the continent.

“The money will be used mainly to support our Africa business, for
clients wanting to do business in Africa and this would include
Chinese clients,” said Chief Executive Officer Jacko Maree, after
signing the five-year facility in Macau. It will be used mainly to
fund projects, he added.

To read the full article please visit –
http://www.bloomberg.com/apps/news?pid=20601116&sid=aLPkKY95BnaY

3) Mongolia Fund to Manage $30 Billion Mining Jackpot

The Mongolian government will set up a sovereign wealth fund using
mining royalties and tax revenue, and distribute part of the income to
citizens to alleviate poverty, said Finance Minister Sangajav
Bayartsogt.

The fund, to be run by professional managers from 2013, will disburse
part of its annual income to every Mongolian in cash or non-cash
securities to let them own stakes in the country’s mining wealth,
Bayartsogt said. Initial capital will be drawn from Ivanhoe Mines
Ltd.’s $4 billion Oyu Tolgoi copper- gold mine project, estimated to
generate $30 billion in tax revenue over 50 years, he said.

“We’re drafting the idea to implement the proposal, and we’re
studying examples like the Alaskan Permanent Fund,” Bayartsogt said in
a Sept. 9 interview in the capital Ulaanbaatar, declining to specify
the size of the proposed fund.

To read the full article please visit –
http://www.bloomberg.com/apps/news?pid=20601109&sid=aWm8u8kb0R5E

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Newswire: China and friends! From all around the world

“Chinese officials size up long-term potential in Sino-African
economic collaborations” —
[http://english.people.com.cn/90001/90778/90857/90861/6746690.html]

Although Sino-African trade had weakened during the global financial
crisis, Chinese and African enterprises could strengthen their
collaboration and emerge from the downturn together, Chinese trade
officials said at a trade fair Wednesday. Huang Xiwen, chief of Jilin
Province’s Commerce bureau, said at the 2009 China Africa Economic and
Trade Cooperation Seminar that local enterprises had been vigorously
developing business with African companies. He said 19 local companies
had invested ..

China and France seeking to develop bilateral ties —
[http://english.people.com.cn/90001/90776/90883/6746718.html]

“China and France seeking to develop bilateral ties”Vice Premier Wang
Qishan said Wednesday China had always valued its relationship with
France, and said he hoped the two countries could work together to
promote bilateral ties. Wang met Jean-David Levitte, a diplomatic
adviser to French President Nicolas Sarkozy Wednesday. Relations had
developed smoothly on the whole since the two countries forged
diplomatic ties 45 years ago, he said. Wang said he hoped the two
countries could handle the relationship from a strategic and long-term
…

“China, Laos vow to reinforce friendly ties” —
[http://english.people.com.cn/90001/90776/90883/6746699.html]

China and Laos reaffirmed their determination to further advance their
traditional friendly relations as senior leaders of the ruling parties
of the two countries met in Beijing Wednesday. He Guoqiang, member of
the Standing Committee of the Political Bureau of the Central
Committee of the Communist Party of China (CPC), met Sisavath
Keobounphanh, chairman of the Central Committee of the Lao Front for
National Reconstruction. Sisavath Keobounphanh, 81, has visited China
many times over t …

“Japan-China ties to be further promoted following DPJ takes reins:
senior DPJ official” —
[http://english.people.com.cn/90001/90776/90883/6746694.html]

The Democratic Party of Japan (DPJ) Secretary General Katsuya Okada
said Wednesday that the DPJ will continue to advance Japan-China
relations after taking the reins of government. Okada made the remarks
at a symposium to mark the 60th anniversary of the founding of the
People’s Republic of China following the DPJ’s landslide victory over
the ruling Liberal Democratic Party in the lower house election
Sunday. “The DPJ has, as always, attached great importance to
Japan-China relations and …

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Sinopec’s profit soars; announces plans to boost oversea expansion

Sinopec’s (a.k.a China Petroleum & Chemical Corp.) net income rose at least tenfold to 22 billion yuan ($3.22 billion usd) in the second quarter according to this Bloomberg article.

The company has also announced it is planning a “rapid” overseas expansion in order to secure energy supply adequate to feed Chinese demand.

[Sinopec I passed on a bus ride to Shanxi, October – 2006]

The announcement, along with the company’s record gains in profit come as other global giants in the energy industry such as Royal Dutch Shell and Exxon Mobil have seen their earnings decline as prices plummeted and demand waned when the global slowdown ensued at the end of 2008.

According to Bloomberg, Sinopec supplies 80% of China’s fuel needs and is China’s largest refiner of crude oil. The company is looking for new foreign partners, expand its refining capacity and reduce operational costs. The company expects demand will remain strong in China and that oil prices will continue to rise throughout the second half of the year.

Here are a few highlights from the Bloomberg article, “Sinopec to Boost Expansion Abroad After Profit Surges to Record,” which you can access in full by clicking here.

“Sinopec’s main business is refining and it needs to increase its oil reserves and reduce its reliance on other oil producers,” said Larry Grace, an independent oil analyst based in Hong Kong. “There’s a government directive to increase overseas oil and gas assets.”

…

Sinopec gets almost all its revenue from refining and the sale and distribution of fuels. Oil production accounted for just over 2 percent of sales, according to its 2008 annual report. The company imports about 80 percent of the crude it processes.

…

Su said the company will accelerate its “go global” strategy.

Parent company China Petrochemical Corp. said on Aug. 18 it had concluded the C$8.3 billion ($7.7 billion) acquisition of Addax Petroleum Corp. to secure reserves in Iraq and Africa. China Petrochemical has assets in Russia, Angola, Ecuador, Australia, Canada, Kazakhstan and Myanmar.

Sinopec’s parent completed the purchase of Tanganyika Oil Co. for about $1.8 billion in December. Vancouver-based Tanganyika holds stakes in two Syrian production-sharing agreements covering the Oudeh and Tishrine/Sheikh Mansour blocks after expanding from Tanzania in 1996.

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Newswire: China and Commodities in focus

China stops expansion projects in steel industry for three years – Xinhua

China’s Ministry of Industry and Information Technology (MIIT) Thursday announced a three-year moratorium on approvals of new expansion-related proposals in the iron and steel industry, as the government pledges to eliminate outdated capacity.

CISA stance hurts small steel mills – China Daily

China’s top negotiators in the bitter and protracted row over the price of iron ore seem destined never to agree – risking a loss of face that will raise questions about whether they are up to the job and who it is they are actually representing.

Their apparent refusal to compromise is damaging the competitiveness of smaller domestic steel mills, forcing them to buy from their larger counterparts, say analysts. The bigger firms have been content to pay whatever the spot price is for ore and pass on the premiums.

CNPC to speed up oil assets buy plan – Xiao Wan of eChinaCities

China National Petroleum Corp (CNPC), the country’s largest oil and gas producer, will speed up overseas acquisitions in regions such as Africa and South America this year, in a bid to boost China’s quest for energy security.

Coal mines to merge in new plan – China Daily

A large-scale restructuring of the coal industry in China’s major coal-producing province of Shanxi, starting at the end of this month, will reduce accidents and improve efficiency by shutting down small coal mines, officials said.

“The restructuring this time is the largest after years of adjusting the coal industry’s structure,” Miao Huanli, planning section director of Shanxi provincial coal bureau, said yesterday.

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Weekend Newswire: South-South Cooperation

[Brazil – Saudi Arabia] — Saudi Arabia and Brazil are natural allies

By Luiz Inacio Lula Da Silva

This week I will have the honor to be the first Brazilian President to officially travel to Saudi Arabia. I retain fond memories of the visit in 2000 of the then Crown Prince to Brazil. Since then, numerous high level visits have further strengthened the ties between our two countries and peoples.

Brazil prides itself on having roots in the rich cultural heritage of Arab civilization. Successive waves of immigrants from the Middle East have made their way to Brazil in search of a new horizons and a better life. Over the years they have contributed to forging present-day Brazil and to its diverse human landscape. Arab values, tastes and sensibilities are today an integral part of what it means to be Brazilian.

My trip to Saudi Arabia aims to explore and enhance these many-faceted affinities and the opportunities for cooperation that they offer. Much has been achieved over recent years, but much remains to be done if we are to fully realize the potential of two thriving economies that are making their mark on the global scene.

[China – Bahrain] — Bahrain reviews construction ties with China
Co-operation between Bahrain and China in the construction sector was discussed at a key meeting.

Minster of State for Foreign Affairs and Tamkeen chairman Dr Nazar Al Baharna met a Chinese business delegation and discussed various issues of mutual interest.

Development of programmes that can reduce the dependency of construction companies on unskilled labour by introducing machinery and technological solutions was also highlighted.

[India – Kenya] — Kenya, India to beef up ties in small industry sector
In yet another indication of India’s growing interest in the East African region, the country’s National Small Industries Corp (NSIC) has signed an agreement with Kenya Industrial Estates (KIE) to strengthen cooperation in the small scale industry sector.

KIE is a state-run agency of Kenya to promote indigenous entrepreneurship and small and medium enterprises (SME).

According to media reports here, the partnership involves technology transfer, and marks a major step towards improving Kenya’s quality standards in manufacturing, production and human resources.

“The government is keen to forge a viable partnership with friendly countries, particularly in the spirit of south-south cooperation,” Kenyan Industrialisation Minister Henry Kosgey was quoted as saying.

[Asia – Africa] — Asian Foreign Direct Investment in Africa
Foreign direct investment (FDI) in Africa by developing Asian economies is growing and has the potential to reach much higher levels. The present report notes that Africa-bound FDI is still a small percentage of the rapidly climbing foreign investments being made by Asian transnational corporations.

The rapid economic growth in Asia can be expected to lead to increased Asian investments in Africa, in both natural resources and manufacturing. In particular, the rapid industrial upgrading taking place in Asia provides ample opportunities for Africa to attract efficiency-seeking and export-oriented FDI from Asian economies.

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