IN BRIEF (Page 18)

Economy

Production to slow down: HSBC

China's manufacturing sector will likely see the slowest expansion in three months in December because of lower output growth, HSBC Holdings Plc said on Dec 16.

A preliminary reading of the Purchasing Managers' Index for the manufacturing industry edged down to 50.5 in December from 50.8 in November, the lowest level since October, the bank said in a report. The production output sub-index slipped to 51.8 in December from 52.2 in November, pressuring the index.

Meanwhile, the new orders sub-index hit a nine-month high of 51.8 in December, compared with 51.7 in November, while the new export orders sub-index rose to 50.3 from 50.2 last month, suggesting stable market demand.

Finance

Slower growth seen for insurance industry

China's insurance industry is likely to grow at a slower pace and face lower profit margins next year because of fierce competition, industry observers have said.

"Insurers are no longer just focusing on pure growth. Many players are becoming more profit oriented, with a higher awareness of risk management and willingness to diversify into new product areas," said Standard & Poor's credit analyst Connie Wong. "And that should mean more sustainable growth in the longer term."

Fitch Ratings' analysts also believe that life insurers' increasing product diversity and greater emphasis on margin improvement, instead of market share, will support quality growth in the sector in 2014.

Customs duties to be adjusted starting in Jan

China is planning to adjust its customs duties from Jan 1, 2014, to help economic restructuring, support emerging industries and drive balanced foreign trade, the Ministry of Finance said on Wednesday. Duties on about 760 imported goods will be reduced by an average of 60 percent, including raw materials for emerging industries. Meanwhile, provisional annual tariffs on products will not be introduced in 2014. The ministry said that to promote ecological development, provisional export tariffs on coal, crude oil, fertilizer and titanium will stay in place, while export tariffs for fertilizer will be lowered. In general, after the adjustment, import and export tariff items will be increased to 8,277 from 8,238 in 2013. Newly added products include 3-D printers, crystal and welding robots.

Resources

Steel sector still faces profitability problems

Chinese steelmakers' profits will remain low next year as output remains high and demand growth slows, said industry experts.

The ratings agency Moody's Investors Service said on Wednesday that its outlook for the Asian steel and coal sectors is negative for 2014.

According to its just-released report 2014 Outlook - Asian Steel and Coal, Oversupply and Weak Prices Drive Negative Outlooks - demand for steel will increase a modest 2 to 3 percent next year as the Chinese government tolerates slower GDP growth and shifts economic growth drivers to domestic consumption from infrastructure spending.

A severe overcapacity problem has been the biggest obstacle for China's steel industry, which has affected steelmakers' profits in the past few years.

Copper output rises to record on high fees

Copper production in China, the world's largest user, climbed to a record in November as high treatment and refining fees encouraged smelters to process more material. Refined-copper output rose 28 percent from a year earlier to 654,000 metric tons, according to data from the National Bureau of Statistics.

That was 2.7 percent higher than the previous record of 637,000 tons a month earlier. Production was also lifted by rising availability of scrap copper imports as a government operation to stop illegal imports of solid waste came to an end last month.

Chinalco copper mine starts production

Chinalco Mining Corp International said its Toromocho copper project has started production. The mining project, in central Peru, is expected to achieve full capacity in the third quarter of next year and will turn out 220,000 metric tons of refined copper a year, accounting for 18 percent of China's total copper resources, the statement said. Toromocho will also produce molybdenum and silver. But unreliable power supplies will hit output and copper production for 2014 is likely to be lowered by 20 percent, according to the statement.

Auto

Daimler to end rebates on Mercedes vehicles

Daimler AG, the third-biggest maker of luxury cars, is working to end rebates on its Mercedes-Benz vehicles in China, including pricing of its C- and E-Class sedans, while matching the premium segment's growth next year. "We're not aiming for volume at any price," Hubertus Troska, head of Daimler's operations in China, said at a news briefing late Wednesday near the manufacturer's headquarters in Stuttgart, Germany.

"We're first tackling the positioning of the E- and C-Class. The success of Mercedes-Benz in China doesn't depend on the sales volume of 2014."

Company

Han's Laser takes over Israel-based Nextec

Han's Laser Technology Co, based in Shenzhen, Guangdong province, a Chinese supplier to Apple Inc, bought Israel's Nextec Technologies to expand in the market for laser measurement devices used in the auto and aircraft industries.

Gao Yunfeng, president of Han's Laser, said the company paid "a few million US dollars" for privately held Nextec, without elaborating further. Danny Shacham, president of Nextec, declined to comment by phone.

Logistics

UPS to deliver more parcels in China

United Parcel Service Inc, the world's largest package delivery company by revenue, is looking to keep an upper hand in the Chinese market by adding 14 inner-city express services next year.

UPS began domestic courier services in 2012, when it was granted seven licenses by the State Post Bureau of China. With more goods circulating in the world's most populous market, it expanded to 19 first- and second-tier cities this year and expects to reach 33 cities in 2014.

Scott Davis, chief executive officer of UPS, said that China's middle class will grow significantly over the next 20 years and more delivery services will be needed, so the company wants to expand its network in the country.

"China will be an important market for UPS in the future and we want to have the ability to serve this marketplace," he said.

Davis believes that China does a better job in foreign trade than most of the world and that the nation is keen to sell more goods through diversified channels.

China Daily Agencies

(China Daily Africa Weekly 12/20/2013 page18)