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Government spending advances rebar futures

The volume of steel reinforcement-bar futures traded on the Shanghai Futures Exchange advanced to a record on speculation that new infrastructure projects in China will increase demand.

A total of 6.01 million lots of the most-active, January delivery contract were traded on Monday, up from 5.9 million lots on Sept 7, the previous high, according to the exchange. One lot equals 10 metric tons.

Futures climbed for a third day, closing 2.7 percent higher at 3,497 yuan ($551) a ton as open interest rose 15,028 lots to 1.38 million lots.

China, the world's largest steel producer, has been ramping up infrastructure spending to counter a slowdown in economic growth that could result in the weakest annual pace in more than two decades. The government approved plans for 2,018 kilometers of roads last week, as well as sewage plants, port and warehouse projects and subways. Rebar prices have fallen 17 percent this year.

ZTE says 4G handset report inaccurate

ZTE Corp, China's second-largest maker of phone equipment, denied a report that it won part of an order from China Mobile Communications Corp for handsets after its shares rose the most in more than a month.

The company won part of China Mobile's first tender for fourth-generation handsets, valued at several billion yuan, along with Huawei Technologies Co and China Wireless Technologies Ltd, Hong Kong-based Apple Daily reported on Monday, citing Sharp Daily.

"The report is not accurate," Rena Qin, a spokeswoman for Shenzhen-based ZTE, said by phone on Monday. She declined to comment further, referring queries to China Mobile. Zhang Xuan, a Beijing-based spokesman for the carrier, said in an e-mail that additional information wasn't immediately available.

ZTE rose 6.3 percent, the most since Aug 7, to close at HK$10.42 in Hong Kong. Before the company's denial, the shares had risen as much as 7.1 percent.

Weak data lifts gold to near six-month high

Gold, trading near a six-month high, may gain for a third day on speculation that central banks from the United State to China will add to stimulus as economic data disappoints.

The US economy added 96,000 workers last month compared with 130,000 forecast by economists in a Bloomberg survey, adding to speculation that the Federal Reserve might announce more measures this week. Reports on Sunday showed China's industrial output grew at the slowest pace in three years, and President Hu Jintao said that economic expansion faces "notable downward pressure", signaling more stimulus efforts may be needed.

"Friday's poor payrolls report strongly raises the likelihood of the Fed announcing quantitative easing," Edel Tully, an analyst at UBS AG, said in a report on Monday, raising the bank's one-month gold forecast to $1,850 an ounce. "This sets the stage for the continuation of the precious metals rally."

Equities advance on stimulus speculation

Mainland stocks rose to the highest level in almost a month on speculation the government will take steps to boost economic growth after trade data missed estimates and industrial output grew at the slowest pace in three years.

The Shanghai Composite Index added 0.3 percent to 2,134.89 at Monday's close, the highest since Aug 14. The measure extended a 3.7 percent jump on Friday that was the biggest gain in eight months. The CSI 300 Index rose 0.4 percent to 2,326.67. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong fell 0.2 percent.

"Data still show the economy hasn't rebounded from the bottom," said Wu Kan, Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million. "Policy easing will continue but it will likely be at a moderate pace."

Nation's soybean imports slump in August

Soybean imports by China fell by 25 percent in August to the lowest level in six months after a drought in the US sparked a record rally in Chicago, increasing costs for the world's biggest buyer and user. Shipments were 4.42 million metric tons, from July's 5.87 million tons, and were the least since February, according to the General Administration of Customs on Monday.

Last month's imports were also lower than 4.51 million tons a year earlier. Imports rose 17 percent to 39.3 million tons in the first eight months compared with the year-earlier period, according to Customs.

Soybeans rallied to a record on Sept 4 after the drought cut output in the US. Reduced purchases by China, which accounts for about 60 percent of the globally traded volume, may restrain the rally, said Cao Yanhui, director of research at Guoxin Futures Co.

Slowing economic growth lifts Treasuries

Treasuries rose the most in a week on signs of slowing economic growth in China and Japan, following a smaller US jobs gain than analysts expected.

The employment report increased speculation that the Federal Reserve will boost its bond purchases possibly this week as it strives to support the world's biggest economy with quantitative easing. Money market yields show traders expect the US central bank to hold its benchmark interest rates close to zero percent until the middle of 2015.

"Worldwide, the economic data are bad, not just in the US," said Hajime Nagata, who helps oversee the equivalent of $131.8 billion as an investor in Tokyo at Diam Co, a unit of Dai-ichi Life Insurance Co, Japan's second-largest life insurer.

China's industrial output rose 8.9 percent in August from 12 months earlier, the slowest pace in three years, data from the National Bureau of Statistics showed on Sunday.

New platform for foreign brands urged

The Chinese mainland should build a "direct-purchase type of distribution platform" for foreign brands, so high-grade imported goods can smoothly enter the mainland and lower prices, said an official from the Ministry of Commerce..

With a direct-purchase distribution platform, producers sell their products directly to consumers without middlemen, cutting the cost of high-value products.

Many overseas brands have monopolistic intermediate suppliers on the mainland who largely determine the price of the article. If China introduces more overseas luxury brands to improve competition, intermediate suppliers would have to cut their prices, Wang Shouwen, director of the department of foreign trade at the ministry, told China National Radio.

Chinese tourists bought nearly 300 billion yuan ($47.4 billion) of goods overseas last year, China National Radio reported on Sunday.

If overseas luxury brands sell products directly on the mainland, local people will benefit, domestic consumption will be expanded and employment will be promoted, said Ma Guangyuan, an economy and finance observer.

Statistics show luxury goods on the mainland cost on average 70 percent more than in France, 50 percent more than in the United States and 45 percent more than in Hong Kong.

Economic slowdown cools labor market

China's economic slowdown is starting to have an impact on the labor market, a human resources official said on Monday.

In early August, a survey of companies' employment levels and of migrant workers' returning home was done in 20 provinces, mainly large labor-exporting or labor-receiving provinces. More than 680 companies and migrant workers from 464 villages participated in the survey.

The surveys showed that the growth of newly created jobs has been decelerating since April, especially in the more developed regions. Labor demand and the number of job seekers are declining in more than 100 labor markets in China, according to the survey.

"These are all indicators of the economic slowdown, and worthy of further attention," said Xin Changxing, vice-minister of Human Resources and Social Security.

NBS says 'worst is over' for real estate developers

China's real estate development index, a key barometer of the country's property market, rebounded slightly in August after sliding 14 months in a row, the National Bureau of Statistics said on Monday.

The index stood at 94.64 last month, up 0.07 points compared with July. Though it is still below 100, which means the market is still bearish, the rebound indicates that the worst time for property developers is over, said Chang Qing, an analyst at Homelink, a real estate consultancy in Beijing.

Property investment for the first eight months of the year was 4,368.8 billion yuan ($689 billion), up 15.6 percent compared with the same period last year, the NBS said.

China tops Asia's retail property markets

China takes a lion share in the retail projects under construction in Asia, remaining the most popular entry point for international retailers, according to a report released on Monday.

Of the 27.87 million square meters of retail projects under construction in Asia, 82.4 percent are in China, a report on the shopping center industry by US real estate services company Cushman & Wakefield.

The Asia-Pacific's promising retail future has led to significant new development, with 27.87 million square meters of retail projects in the first half of 2012, according to data from 42 major cities in the region, 20 of them in China, the report said.

"While the China shopping center market in some ways is still in its infancy, it is growing fast. There is still strong demand from a range of fast-growing retailers and very high levels of development activity," said James Hawkey, Cushman & Wakefield's executive director retail services in China.

First low-altitude tourism plan gets green light

A proposal to let tourists see parts of Hainan province aboard aircraft flying at low altitudes has passed an examination by authorities, Shanghai Securities News reported on Monday.

The proposal is the first specifically concerning "low-altitude tourism" in China and comes in response to the Several Opinions of the State Council on Promoting the Development of Aviation Industry, released in July.

Sanya, in Hainan province, will build an international seaplane center and work to combine the general aviation and tourism industries, according to the plan.

China's aviation industry is expected to develop extensively in the next three to five years, according to some business insiders.

Regulatory reforms concerning low-altitude airspace are expected to be introduced by 2015 and completed by 2020, Du Qiang, deputy director of the office of the National Air Management Traffic Committee, said at the Beijing International Business Aviation Show on Sept 4.

China Daily - Agencies

(China Daily 09/11/2012 page14)