FOOTWEAR FRENZY: Employees at a shoe plant in Jinjiang, southeast China's Fujian Province, waste no time working to fulfill export orders. Shoe exports of Jinjiang in the first half of this year grew 6.8 percent year on year to $1.1 billion (LAI JIANQIANG)
Numbers of the Week
China's crude steel output in the first half of the year hit 323 million tons, up 21.09 percent year on year, said the National Bureau of Statistics.
Trade between the Chinese mainland and Macao in the first half of the year rose 9.3 percent year on year to reach $1.07 billion, said the Ministry of Commerce.
TO THE POINT: The manufacturing sector of the country loses some steam as indicated by the slowing PMI in July. China Investment Corp. reaped a bumper harvest from investments overseas last year, drawing strength from the global economic recovery. Chinese automaker Geely completed its purchase of Volvo, a landmark step toward making a global footprint. The aviation industry witnesses a substantial turnaround with air traffic surging in the first half of 2010. Meanwhile, 264 firms listed on the Chinese mainland reported a combined profit of 22.8 billion yuan ($3.4 billion) in the first half of this year, growing nearly 50 percent from a year earlier. IMAX is increasing its presence in the Chinese market where the movie industry is burning hot.
By HU YUE
The momentum of the manufacturing sector showed signs of wearing off in July, raising concerns over an economic slowdown.
The purchasing managers index (PMI), a comprehensive gauge of industrial activity, eased 0.9 percentage points from a month earlier to 51.2 percent in July, said the China Federation of Logistics and Purchasing.
A reading above 50 points indicates expansion, and it has stood above 50 points for 17 straight months. However, the index is down for the third consecutive month and is at its lowest since February 2009, when it fell below 50.
CIC Fares Well
The China Investment Corp. (CIC), the $200-billion sovereign wealth fund, is cashing in on the global economic recovery.
The investment powerhouse logged a net profit of $41.66 billion in 2009, almost double that in 2008. The return on capital stood at 12.9 percent, surging from 6.8 percent the previous year. This was the second annual financial report since it was established in September 2007.
By the end of 2009, CIC had invested $79 billion in overseas assets, including 36 percent of equities, 32 percent of cash funds, 26 percent of fixed-income securities and 6 percent of alternative investments. The return on the overseas portfolio for 2009 was 11.7 percent, compared to negative 2.1 percent in 2008.
"We have significantly diversified investments with an emphasis on publicly traded equities and debt securities as well as a series of direct investments in high-quality companies, including interests in infrastructure and clean and renewable energy projects," said Lou Jiwei, Chairman and CEO of CIC. "The good return is a testament to such strategies and we have confidence for a rosy outlook though uncertainties are clouding global markets."
In its latest move, it bought $1.58 billion worth of shares in the U.S. AES Corp., a global power company, in March. CIC paid $12.60 for each share. The deal gave CIC a seat on the company's board of directors.
Geely Buys Volvo
After months of waiting, Chinese automaker Geely Holding Group has completed its purchase of Volvo Car Corp. from Ford Motor Co., marking the biggest overseas acquisition in China's auto industry.
The final deal is reportedly valued at around $1.5 billion, lower than an earlier price of $1.8 billion agreed in March.
"Volvo should enjoy a much better position in the global market given its quality, technology, research and development abilities, and its brand value," said Li Shufu, Geely's Chairman of the Board, at the handover ceremony.
As part of its business plans, Li said, Volvo will strengthen its presence in Europe and North America while also taking advantage of growth opportunities in China.
Volvo will remain headquartered in Gothenburg, Sweden, with management having autonomy to execute its own business plan, he said.