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Monday 15 December 2008
China’s Fuel Tax Launch Boosts Fuel-Efficient Car Competition
The national fuel tax reform has finally been given a launch date of January 1, 2009, and will have a profound influence on China’s auto industry, regardless of possible changes to implementation rules.
China’s Fuel Tax Launch Boosts Fuel-Efficient Car Competition
CSC staff, Shanghai 15 December 2008
The national fuel tax reform has finally been given a launch date of January 1, 2009, and will have a profound influence on China’s auto industry, regardless of possible changes to implementation rules.
The government concluded its consultation process last Friday. It is widely believed in the auto industry that the new policy is aimed at high emission vehicles while offering producers of medium and low emission vehicles, diesel vehicles, and new energy vehicles a precious opportunity.
Auto industry analysts say the new fuel tax is good news for diesel vehicles, which have consumption savings of over 30% compared to gasoline-burning vehicles.
The new consumption tax rate for diesel is lower than for gasoline according to the scheme that has been revealed. Although fuel supply is still a bottleneck for the nationwide promotion of diesel vehicles, Rong Huikang, vice-director of the Expert Committee of the China Association of Automobile Manufacturers, still believes the reform will promote the development of advanced diesel engine technology.
Volkswagen, never passing up an opportunity to promote diesel vehicles in China, looks now to be a gainer. Volkswagen (China) Vice-President Zhang Suixin admitted that the fuel tax reform scheme is very good for the promotion of advanced oil-saving diesel engine technology.
The reform is even more generous to hybrids and electric cars, and is timely for BYD, which has just launched its hybrid F3DM. “BYD’s F0 and F3DM are both low oil consumers. The reform is good news to BYD, as it is working to develop energy-saving and environmentally friendly vehicles,” said Wang Jianjun, assistant to general manager of BYD.
“The general principle is higher tax for higher oil consumption, and will certainly enlarge the market share of hybrid vehicles,” said a Toyota official. Having suffered low sales in China, Toyota’s hybrid is seeing a brighter future.
With the launch of the reformed fuel tax and tightening resource supply, automakers realize that acquiring key technology for environmentally friendly vehicles means more power in the next round’s market competition. However, there’s still a long way to go, and no company wants to fall behind at the very beginning.
Earlier, government auto industry administration departments approved ten types of new energy cars, among which three are hybrids made by Dong Feng Motor Corporation. New energy cars made by China FAW Group and Chana Auto Company (Changan) have also gained licenses for mass production. Changan has established a new energy car subsidiary and will launch several hybrid types by 2012.
SAIC Group has not only launched its own “Shanghai” brand hybrid, but has also founded a new subsidiary with a 2 billion yuan investment. Now its business includes hybrids, electric cars, and alternative fuel vehicles.
Despite different technical levels, every auto company hopes to take a share of the market for new energy cars. Besides launching a hybrid in the first half of this year, Great Wall Motor Company is to finish designs for four types of alternative energy cars by the end of 2009. BYD’s F3DM hybrid, launched on December 15, is also drawing much attention.
“The launch of fuel tax is a good chance for the development of hybrid cars,” Ming Ouyang, professor at Tsinghua University, told China Business News. In the past, fuel prices only affected consumers’ choices when they reached 8 yuan per liter or higher. But the new fuel tax will push this point down considerably.
NEW YORK - Private overseas investors were big buyers of US securities amid a credit crisis and a steep recession worldwide, triggering a record capital inflow into the world's largest economy, Treasury department data showed on Monday.
Foreigners snapped up a net US$286.3 billion in US securities in October, including short-term instruments such as Treasury bills. It was higher than September's revised inflow of US$142.6 billion and more than enough to cover the month's US$57.2 billion trade deficit.
However, net long-term capital inflows, excluding swaps, fell to US$1.5 billion in October, compared with revised inflows of US$65.4 billion the previous month.
Analysts said the only reason there was still an inflow of long-term capital was a large repatriation of US assets from abroad, with US$14.5 billion in bond repatriation and US$21.8 billion in equity flows coming back into the United States.
Equity inflows were mostly a result of European stocks, they added.
'The main conclusion is that dollar strength in October was built on short-term flows, which is a poor foundation for long-term strength,' said Alan Ruskin, chief international strategist, at RBS Global Banking and Markets in Greenwich, Connecticut.
'The unwind of some of these flows may well be a factor in the most recent weakness and the latest data will at the margin further undermine dollar sentiment.'
The dollar reacted little to the data, given that the report is two months old. The euro was still up big on the day, rising 1.4 per cent to US$1.3554.
Private flows totalled US$274.5 billion in October, up from US$125.3 billion the previous month. Official flows slipped to US$11.9 billion from US$17.3 billion in September.
Foreigners sold US $50.22 billion in agencies in October, a reversal from purchases of US$6.17 billion the previous month, when the US government announced it would take over mortgage finance agencies Fannie Mae and Freddie Mac.
They also sold corporate bonds totalling US$13.10 billion, compared with sales of US$8.4 billion in September.
Foreign investors also sold US equities amounting to US$6.12 billion compared with inflows of US$11.52 billion in September.
But foreigners continued to buy US Treasuries, with purchases totalling US $34.67 billion compared with inflows of US$20.74 billion the previous month.
China, the largest holder of US Treasury securities, raised its holdings of government bonds in October. It held US$652.9 billion, up from US$587.0 billion in September.
Japan, the second-largest holder, raised its total to US$585.5 billion from US$573.2 billion the previous month. -- REUTERS
2 comments:
China’s Fuel Tax Launch Boosts Fuel-Efficient Car Competition
CSC staff, Shanghai
15 December 2008
The national fuel tax reform has finally been given a launch date of January 1, 2009, and will have a profound influence on China’s auto industry, regardless of possible changes to implementation rules.
The government concluded its consultation process last Friday. It is widely believed in the auto industry that the new policy is aimed at high emission vehicles while offering producers of medium and low emission vehicles, diesel vehicles, and new energy vehicles a precious opportunity.
Auto industry analysts say the new fuel tax is good news for diesel vehicles, which have consumption savings of over 30% compared to gasoline-burning vehicles.
The new consumption tax rate for diesel is lower than for gasoline according to the scheme that has been revealed. Although fuel supply is still a bottleneck for the nationwide promotion of diesel vehicles, Rong Huikang, vice-director of the Expert Committee of the China Association of Automobile Manufacturers, still believes the reform will promote the development of advanced diesel engine technology.
Volkswagen, never passing up an opportunity to promote diesel vehicles in China, looks now to be a gainer. Volkswagen (China) Vice-President Zhang Suixin admitted that the fuel tax reform scheme is very good for the promotion of advanced oil-saving diesel engine technology.
The reform is even more generous to hybrids and electric cars, and is timely for BYD, which has just launched its hybrid F3DM. “BYD’s F0 and F3DM are both low oil consumers. The reform is good news to BYD, as it is working to develop energy-saving and environmentally friendly vehicles,” said Wang Jianjun, assistant to general manager of BYD.
“The general principle is higher tax for higher oil consumption, and will certainly enlarge the market share of hybrid vehicles,” said a Toyota official. Having suffered low sales in China, Toyota’s hybrid is seeing a brighter future.
With the launch of the reformed fuel tax and tightening resource supply, automakers realize that acquiring key technology for environmentally friendly vehicles means more power in the next round’s market competition. However, there’s still a long way to go, and no company wants to fall behind at the very beginning.
Earlier, government auto industry administration departments approved ten types of new energy cars, among which three are hybrids made by Dong Feng Motor Corporation. New energy cars made by China FAW Group and Chana Auto Company (Changan) have also gained licenses for mass production. Changan has established a new energy car subsidiary and will launch several hybrid types by 2012.
SAIC Group has not only launched its own “Shanghai” brand hybrid, but has also founded a new subsidiary with a 2 billion yuan investment. Now its business includes hybrids, electric cars, and alternative fuel vehicles.
Despite different technical levels, every auto company hopes to take a share of the market for new energy cars. Besides launching a hybrid in the first half of this year, Great Wall Motor Company is to finish designs for four types of alternative energy cars by the end of 2009. BYD’s F3DM hybrid, launched on December 15, is also drawing much attention.
“The launch of fuel tax is a good chance for the development of hybrid cars,” Ming Ouyang, professor at Tsinghua University, told China Business News. In the past, fuel prices only affected consumers’ choices when they reached 8 yuan per liter or higher. But the new fuel tax will push this point down considerably.
US Oct net inflows soar to record US$286.3 bln
December 15, 2008
NEW YORK - Private overseas investors were big buyers of US securities amid a credit crisis and a steep recession worldwide, triggering a record capital inflow into the world's largest economy, Treasury department data showed on Monday.
Foreigners snapped up a net US$286.3 billion in US securities in October, including short-term instruments such as Treasury bills. It was higher than September's revised inflow of US$142.6 billion and more than enough to cover the month's US$57.2 billion trade deficit.
However, net long-term capital inflows, excluding swaps, fell to US$1.5 billion in October, compared with revised inflows of US$65.4 billion the previous month.
Analysts said the only reason there was still an inflow of long-term capital was a large repatriation of US assets from abroad, with US$14.5 billion in bond repatriation and US$21.8 billion in equity flows coming back into the United States.
Equity inflows were mostly a result of European stocks, they added.
'The main conclusion is that dollar strength in October was built on short-term flows, which is a poor foundation for long-term strength,' said Alan Ruskin, chief international strategist, at RBS Global Banking and Markets in Greenwich, Connecticut.
'The unwind of some of these flows may well be a factor in the most recent weakness and the latest data will at the margin further undermine dollar sentiment.'
The dollar reacted little to the data, given that the report is two months old. The euro was still up big on the day, rising 1.4 per cent to US$1.3554.
Private flows totalled US$274.5 billion in October, up from US$125.3 billion the previous month. Official flows slipped to US$11.9 billion from US$17.3 billion in September.
Foreigners sold US $50.22 billion in agencies in October, a reversal from purchases of US$6.17 billion the previous month, when the US government announced it would take over mortgage finance agencies Fannie Mae and Freddie Mac.
They also sold corporate bonds totalling US$13.10 billion, compared with sales of US$8.4 billion in September.
Foreign investors also sold US equities amounting to US$6.12 billion compared with inflows of US$11.52 billion in September.
But foreigners continued to buy US Treasuries, with purchases totalling US $34.67 billion compared with inflows of US$20.74 billion the previous month.
China, the largest holder of US Treasury securities, raised its holdings of government bonds in October. It held US$652.9 billion, up from US$587.0 billion in September.
Japan, the second-largest holder, raised its total to US$585.5 billion from US$573.2 billion the previous month. -- REUTERS
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