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Rare earth exports drop 40 percent in first half

Rampant smuggling and weak demand have led to a large decrease in the amount of rare earths exported from China through legal channels.

In the first half of the year, the amount of rare earths legally exported from China decreased 42.7 percent year-on-year, falling to 4,908 metric tons, according to statistics from customs officials.

If the trend continues, fewer than 10,000 tons of rare earths will be legally exported from China this year, far less than the 31,130 tons that can be exported under a quota set by the Ministry of Commerce.

Since 2007, China has strengthened both its rules governing the production of rare earths and its export regulations and has set quotas every year to limit exports of the materials. Companies without specific production permits have been prohibited from mining rare earths.

Surging grain imports could discourage farmers

China's grain imports grew substantially in the first half of the year and the country's reliance on overseas markets hit a new high, raising concern about food security and that farmers may reduce the area they plant.

Imports of all kinds of grain grew 41.2 percent to 40.85 million metric tons in the first half of the year, according to the General Administration of Customs.

Corn imports hit 2.4 million tons, a 65-fold increase over the same period last year. Other major grain imports also grew significantly. Wheat imports surged 295 percent and rice 227 percent.

A drop in the quality of some grain and higher prices for domestic grain fueled China's appetite for the imports, experts said. Domestic corn prices are among the highest in the world.

Guangdong companies hit hard in first six months

Many economic indexes decreased substantially in the first half of the year in Guangdong province, one of the country's economic powerhouses.

According to The Report on Guangdong's Economic Development in the First Half of 2012 and the Implementation of Social Development Plans, the amount of the province's exports to the European Union decreased 5.3 percent in the first six months of the year. That rate of decrease was 4 percentage points greater than in the first three months of the year.

Meanwhile, many import-and-export companies said they processed fewer export orders in the first half.

Medical care expenses to increase steadily

China's medical care expenses are likely to continue to increase at an annual rate of 20 percent in the coming years as private hospitals gain more business opportunities amid the country's medical reforms, officials said.

In 2011, China spent about 2.4 trillion yuan ($375.5 billion) on medical care, an increase of 400 billion yuan from the previous year. And those expenses are likely to continue showing an annual rate of increase of 20 percent into the near future, according to Lei Haichao, deputy director of the Beijing Municipal Bureau of Health.

The rapid increase seen in residents' incomes in recent years is the biggest cause of China's quickly rising medical expenses, said Yao Hong, director-general of the Department of Medical Insurance of the Ministry of Human Resources and Social Security.

MTU Aero raises forecasts after sales beat estimates

MTU Aero Engines Holding AG, the German company helping develop engines for China's planned C919 airliner, raised full-year earnings and sales forecasts after beating analysts' first-half revenue estimates.

MTU now expects adjusted operating profit this year of 370 million euros ($446 million) and sales of 3.3 billion euros, the Munich-based company said on Wednesday. That would amount to a 13 percent increase in earnings, compared with MTU's earlier forecast of 8 percent to 10 percent growth, and a 12 percent gain in sales, versus a "mid single-digit" percentage prediction.

Commercial-plane engines and maintenance revenue "can be expected to increase as predicted", while military sales will rise "slightly" instead of remaining unchanged, Chief Financial Officer Reiner Winkler said.

Overseas share deals will rebound: JPMorgan

Mainland companies' overseas share sales will rebound next year as regulators root out fraud and misconduct that contributed to erasing $6.4 billion in value for mainland firms listed in the United States, a senior investment banker in China for JPMorgan Chase & Co said.

There will be "a flurry of deals" once foreign investors' confidence in mainland companies' returns, Fang Fang, chief executive officer of China investment banking for New York-based JPMorgan, said in an interview in Beijing on Tuesday. The bank has been ranked third among managers of overseas share sales by mainland companies since the start of 2010.

"I'm hopeful that sometime in the second half, investors will come back to the table," he said. "Investors will eventually see the value and have to do something."

China's steel exports hit two-year high in June

China, the world's biggest steel producer, is exporting at the highest level in two years, exacerbating a global glut that may affect competitors from ArcelorMittal to US Steel Corp.

Monthly shipments abroad rose to 8.7 percent of domestic output last month, the highest proportion since July 2010. Chinese steel mills, set for a record production in 2012, are ramping up overseas sales to avoid a softer domestic market, where prices for the commodity have dropped to a two-year low.

Cypriot bank confirms talks with Chinese investors

Cyprus Popular Bank PCL, the island's second-largest lender, confirmed media reports that the bank's management has held talks with unnamed investors from China on possible participation in the bank's share capital.

The talks were held in the last two weeks of June, the Nicosia-based lender said in an Athens bourse filing on Wednesday.

Yuan touches 10-month low as eurozone worries grow

China's yuan fell to the lowest level since September as the central bank weakened the currency's reference rate for a third day amid concern economic growth will moderate further on the eurozone debt crisis.

The International Monetary Fund said China's slowing economy faces significant downside risks and repeated an assessment that the yuan is "moderately" undervalued.

The Dollar Index, which tracks the greenback against six major currencies, climbed for a fourth day after estimates by Markit Economics on Tuesday showed that eurozone services and manufacturing contracted for a sixth month. The People's Bank of China set the yuan's fixing at the weakest since Nov 30.

China Daily-Agencies

(China Daily 07/26/2012 page14)