Archive for ‘global supply chain’

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23/04/2020

China Focus: China-Europe freight trains help stabilize global supply chain

SHENYANG, April 23 (Xinhua) — With trucks standing bumper to bumper and large cranes loading containers on the train, work returned to normal at a logistics base in northeast China’s Liaoning Province.

The base, where the China-Europe freight trains are set to depart in Shenyang, the provincial capital, has seen stable departures since early April as the novel coronavirus epidemic ebbs away.

With the global supply chain being affected by restrictions in air, land, and port travel due to the global pandemic, China-Europe railway has been playing a more important role, experts say.

“The train was operated by staff in different sections, which means it does not require cross-border personnel health inspections, giving it advantages during the pandemic,” said Shan Jing, an industry insider who wrote a book on China-Europe freight trains.

In March, a total of 809 China-Europe freight trains carrying 73,000 containers were sent across China. Both numbers hit a monthly record.

At the Shenyang logistics base, trains depart to travel through Russia, Belarus, Poland and finally reach Germany in around 18 days. As of April 13, a total of 130 trains carrying 11,200 standard containers had departed from the base.

“The province sends a stable number of five trains each week,” said He Ruofan, a business manager with the Shenyang branch of China Railway Container Transport Corp., Ltd, operator of the trains.

The stable operation has made the route a top choice for many Chinese enterprises, said Yao Xiang, a manager with logistics group Sinotrans’s northeast company.

“Many shipping routes have been canceled, and the rest are more and more expensive amid the epidemic,” said Yao, noting the price for air cargo surged 5 to 10 times the normal price as flights decreased from China to Europe.

With increasing departing trains, returning trains on the route have also been increasing, Yao said.

Among the 130 trains that have been sent from the Shenyang base so far this year, 33 returned, carrying construction materials, car parts, mechanical equipment, and daily products.

“These goods provide supplies to large companies like BMW and Michelin’s Shenyang factories,” Yao said.

Medical supplies have also been sent to hard-hit Europe to fight against the coronavirus pandemic.

As of April 18, a total of 448,000 pieces of medical supplies weighing 1,440 tonnes had been sent to European countries via the route, according to China State Railway Group Company, Ltd.

“China-Europe freight trains have shown great service capabilities during the epidemic,” said Shan, the industry insider. “It serves as a new choice for European enterprises, and I believe more people will come to realize the importance of the route.”

Source: Xinhua

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29/03/2020

Coronavirus: Xi Jinping’s visit to Zhejiang sends ‘clear message’ it’s time to get the economy back on its feet, state media says

  • Chinese president is fighting ‘two tough battles’ to reboot industry and defeat Covid-19, Xinhua says
  • Choice of industrial powerhouse for official visit shows the importance Xi gives to reviving the economy, observers say
Chinese President Xi Jinping chats to workers and officials at Ningbo port in east China on Sunday. Photo: Xinhua
Chinese President Xi Jinping chats to workers and officials at Ningbo port in east China on Sunday. Photo: Xinhua
Chinese President Xi Jinping

visited the industrial powerhouse of Zhejiang province on Sunday in a move state media described as a clear message the country was ready to get the economy back on track amid the “new normal” of dealing with the coronavirus.

The trip, to Ningbo – one of the world’s busiest ports and a trade hub for eastern China – was Xi’s first outside Beijing since he visited Wuhan, the initial epicentre of the Covid-19 outbreak, earlier in the month.

As well as a visiting the port, he spoke to workers at an industrial zone for car part manufacturers, where he learned about the latest efforts to restart production, Xinhua said in a brief report.

The visit came after two months of almost total lockdown in many parts of the country that disrupted businesses, transport and people’s daily lives, and ground the economy to a near standstill.

While local transmissions of the coronavirus in China appear to be under control, Beijing has implemented strict measures to prevent imported cases, including slashing international flights and banning most foreigners from entering the country.

In a separate report, Xinhua said Xi’s visit sent “a clear message” that China was resuming its industrial production and social activities, and described the fight against the coronavirus as the “new normal”.

Reviving the economy and battling a deadly disease were Xi’s “two tough battles”, it said.

Xi’s choice of destination was a clear message that restarting the economy is a top priority. Photo: Xinhua
Xi’s choice of destination was a clear message that restarting the economy is a top priority. Photo: Xinhua
Zhejiang is something of a power base for Xi, who spent nearly five years there during his climb through the ranks of the Communist Party.

One of the country’s biggest trading hubs, the province generated 3 trillion yuan (US$423.2 billion) in foreign trade last year, or more than 13 per cent of the national total, according to official figures.

“It’s a highly export-oriented economy … which has made it crucial not only to China’s development plan but also to safeguarding the stability of the global supply chain,” Xinhua said.

Observers said Xi’s visit was evidence of Beijing’s determination to get the economy back up and running as soon as possible.

Zhao Xijun, an economics professor at Renmin University, said Ningbo was a key part of the export economy and a base for many local and foreign entrepreneurs.

“It is a clear signal that China, after getting domestic infections under control, is now prioritising economic growth,” he said.

“It also shows the country will keep developing its economy and opening up its markets.”

But hopes of a quick recovery for the Chinese economy have been dashed by the spread of the coronavirus across Europe and the United States, causing a sharp decline in demand for Chinese goods.

Xi spent five years in Zhejiang while climbing the ranks of the Communist Party. Photo: Xinhua
Xi spent five years in Zhejiang while climbing the ranks of the Communist Party. Photo: Xinhua
In a meeting on Friday, the Communist Party’s Politburo said it would step up macroeconomic policy adjustments and pursue a more proactive fiscal policy while optimising measures to control the coronavirus to speed up the restoration of production, doing whatever it could to “minimise the losses caused by the epidemic”.

“China has successfully reopened much of its economy from the extremes of the coronavirus lockdown, but now faces a new problem: an impending collapse in demand for its exports as its customers go into lockdowns of their own,” Gavekal Dragnomics said in a research report.

“That shock to industry and manufacturing employment means that China will not enjoy the hoped-for V-shaped recovery in growth.”

Source: SCMP

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21/02/2020

Coronavirus: China’s car sales collapse, as officials warn of sharp trade decline to come

  • China Passenger Car Association said sales fell to just 4,909 units in the first 16 days of February, from 59,930 in the first quarter of 2019
  • The growth rate for China’s imports and exports is expected to decline sharply in the January-February period
Commuters make their way along an expressway during rush hour in Beijing. Photo: AP
Commuters make their way along an expressway during rush hour in Beijing. Photo: AP

A 92 per cent drop in car sales in China in the first half of February provided the first real indicator of the economic impact of the coronavirus epidemic, with officials also warning of a sharp decline in Chinese exports and imports for the first two months of the year.

The China Passenger Car Association (CPCA) on Friday said that sales dropped to just 4,909 units in the first 16 days of the month, down from 59,930 vehicles in the same period a year earlier.

“Very few dealerships opened in the first weeks of February and they have had very little customer traffic,” said the CPCA.

China’s car market is likely to see sales slide more than 10 per cent in the first half of the year due to the outbreak, and around 5 per cent for the whole year, provided the virus is effectively contained before April, the country’s top industry body, the China Association of Automobile Manufacturers (CAAM), said last week.

Chinatowns around the world feel effects of coronavirus fears
The sector was already under pressure from the cooling economy, with car sales falling 3 per cent in 2018 in the first sales contraction since the 1990s, and 8.2 per cent in 2019, CAAM said.
“We must firmly believe that China’s auto market still has great development space and potential, and the automobile consumption demand is still strong,” Wang Bin, vice-director of the commerce market operation department at the commerce ministry, said on Thursday.
To stabilise the market, in which more than 25 million vehicles were sold last year, China’s commerce ministry said it will introduce more measures to boost consumption.
Li Xingqian, head of foreign trade at the Ministry of Commerce, said the growth rate for China’s exports and imports would decline sharply in the January-February period due to a collapse in logistics and the delayed start of work following the extended Lunar New Year holiday, which was aimed at controlling the coronavirus outbreak.
“The impact of the epidemic on the first quarter is here objectively, should not be underestimated, but [growth] is still within the tolerable range,” he said on Friday. “As the prevention and control [measures] achieve new staged results, foreign trade will inevitably resume its growth. China’s foreign trade development is expected to remain within a reasonable range throughout the year.”
China cancelled the release of its January trade data, with the General Customs Administration of China saying it will combine January and February’s data in an effort to remove seasonal volatility from the Lunar New Year period. Statistics will be released in early March.
Trade is traditionally volatile over the first two months of the year in China. Shipments are heavily affected by the Lunar New Year break, with this volatility to be exacerbated by the coronavirus outbreak, which causes the disease officially known as Covid-19.

Zong Changqing, head of the commerce ministry’s foreign investment department, also conceded the virus could hit inward investment over the entire first quarter of 2020. Zong claimed the impact would only be temporary, and that China remained an attractive environment for foreign investment.

Foreign direct investment (FDI) in China in 2019 rose 5.8 per cent from a year earlier to 941.5 billion yuan (US$134 billion), according to the commerce ministry. FDI in China also saw a steady year-on-year increase of 4 per cent last month, compared with a growth of 4.8 per cent registered in January 2019.

The impacts of the outbreak on foreign investment have begun to show, and are expected to become greater in February and March. Zong Changqing

“The impacts of the outbreak on foreign investment have begun to show, and are expected to become greater in February and March,” Zong said.

He confirmed that the ministry asked local authorities in Shandong province to push all 32 South Korean-owned car parts companies to restart production by the end of last week to keep the global supply chain stable.

He also said that over 80 per cent of key foreign-owned enterprises in Shanghai, Shandong and Hunan province had reopened, with most regions expected to restore production by the end of February, provided the spread of the virus is contained.

However, a survey by the American Chamber of Commerce in Shanghai, released earlier this week, found that in the vast majority of cases, factories that have reopened are running at a fraction of their production capacity.

Source: SCMP

Posted in car sales collapse, China Association of Automobile Manufacturers (CAAM), China Passenger Car Association, China Passenger Car Association (CPCA), Chinatowns, coronavirus epidemic, exports and imports, Foreign Direct Investment (FDI), foreign trade development, General Customs Administration of China, global supply chain, Hunan Province, lunar new year, Ministry of Commerce, prevention and control [measures], seasonal volatility, shandong province, Shanghai, sharp trade decline, South Korean-owned car parts companies, Uncategorized | Leave a Comment »

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