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China Expected to Issue Support Plan for Renewable Energy Development

The Chinese government is working on a support plan for the renewable energy industry aimed at raising the countrys wind power capacity to 100-150 million KWh by 2020, sources close to the plan making told Xinhua on May 5.

Shi Dinghuan, member of energy research commission with Chinese Academy of Sciences, said the support plan would come out “in nearfuture” without giving a specific date.

The National Development and Reform Commission, Chinas top economic planner, is in charge of designing the renewable energy support plan, for which a draft has already been formed, according to Shi.

The plan would be based on a mid-to-long term planning on Chinas renewable energy development issued in 2007 with major adjustment in key indices, said Shi Pengfei, vice director with Chinese Wind Energy Association.

“China originally planned to achieve a wind capacity of 30 million KWh by 2020. The target could be hit in 2011,” Shi said.

Statistics showed total wind capacity amounted to 12.15 million KWh in 2008 with newly installed capacity at 6.25 million KWh, up 89 percent from a year earlier.

According to the current planning, the country is expected to have by 2020 a hydropower capacity of 300 million KWh, biomass power capacity of 30 million KWh, and solar power capacity of 1.8 million KWh.

The State Council has issued support plans for 10 key industries such as automobile, steel, textile and garment sectors since January in a bid to stimulate Chinas economy, whose year-on-year growth slowed to a seven-year low of 9 percent in 2008.

China Car Sales Grew for Fifth Month in April, Set New Record

Chinas automobile sales probably reached a record high of 1.15 million units in April as the governments stimulus plans began to pay off, estimates from the China Association of Automobile Manufacturers (CAAM) indicated on May 7.

Assuming the CAAM figures are borne out by official data, April would be the fifth straight month of growth for the industry.

China unveiled a support package for the auto industry early this year, cutting purchase taxes for cars with small engine capacities and providing subsidies to rural purchasers.

The auto market boom showed that the stimulus policies had greatly boosted consumer confidence, said Huang Yonghe, an expert at the China Automobile Technology and Research Center.

According to CAAM, sales of minivans and economy cars surged in April, with SGMW and Chang An, Chinas two largest minivan makers, recording sales gains of more than 50 percent from last year.

Sales of Chinas Chery, which makes cars with small engine capacities, hit a record high of more than 42,000 units in April.

Chinas March auto sales grew 5 percent from a year earlier to 1.11 million units.

China Issues Detailed Plan to Boost Equipment Manufacturing Sector

China provided further details on May 12 on a three-year plan to stimulate the equipment manufacturing industry.

A report from the State Council, or Cabinet, said the industry lacked innovative ability and had underdeveloped technology.

The report expands on a plan approved by the Council on Febuary 4, which aims to raise the market share of the domestic industry to 70 percent and make research breakthroughs. The current market share was not announced.

Under the plan, major projects would be launched in high-efficiency clean power generation, super high-voltage power transmission, coal and metal mining equipment, natural gas and liquid gas pipelines, high-speed trains, urban rail equipment, agricultural and environmental equipment, infrastructure-related machines and high-technology equipment.

The plan also calls for unspecified higher rebate rates for certain high-tech and high value-added equipment and policies to support imports of key components or raw materials.

Efforts should be made to develop fully-integrated group corporations and highly-specialized companies, according to the plan.

The State Council has announced stimulus or support plans for 10 industries, including machinery, since January.

WB Lends $80 Mln to Finance Coal-bed Methane Project in N China

The World Bank said on May 19 it approved a loan of 80 million US dollars to help China to increase the development and utilization of coal-bed methane to meet a growing demand for energy and reduce greenhouse gases and local air pollutants associated with coal combustion.

The Shanxi Coal Bed Methane Development and Utilization Project will help north Chinas Shanxi Province to develop and implement an integrated coal-bed methane development plan and policy framework, said the World Bank.

Methane produced by underground coal seams is called coal-bed methane, which is 21 times more potent than carbon dioxide as a greenhouse gas but also highly explosive. It must be drained during coal mining operations to make working conditions safe.

Shanxi Province produces one quarter of Chinas coal and has one-third of the countrys estimated coal-bed methane resources.

According to the World Bank, the project will finance the exploration and development of about 350 vertical coal-bed methane production wells with an estimated annual production capacity of 250 million cubic meters.

It will also fund the construction of a liquefied natural gas plant consisting of four modules with individual production capacity of 50,000 tons per year.

East China Reports Higher Industrial Output Growth in April

Chinas eastern region, the powerhouse of the countrys economy, reported 6.7 percent of growth in industrial output in April, according to figures released by the Ministry of Industry and Information Technology (MIIT) on May 20.

The growth rate is three percentage points higher than that of the first quarter, showing a positive trend, said the ministry.

In April, the growth of industrial output in the coastal province of Shandong was up 7.6 percentage points from the first quarter, and that for Jiangsu climbed 3.8 points, and up 2.6 points for Guangdong.

Zhejiang Province saw industrial production increase 0.2 percent, reversing a 5.6 percent decline in the first quarter.

Industrial output of these four provinces accounted for 42.3 percent of the nations total, said the ministry.

The export-led eastern region looked to the domestic market for growth after foreign trade tumbled due to sluggish overseas demand.

The ministry predicted national industrial output growth will exceed 10 percent in the second half of this year, buoyed by the governments stimulus package and growing domestic demand.

The government this year has announced specific plans to support 10 industries, including textiles, petrochemicals and logistics.

National industrial output gained 8.3 percent in March and 7.3 percent in April, after falling 3.8 percent in the first two months.

“The rapid pace of decline in production in some regions and industries has slowed, while companies have become more responsive to the economic downturn and market fluctuations,” the ministry said without elaborating.

Despite an optimistic outlook, the ministry also warned that the basis for a broad-based recovery was not on solid footing and many uncertainties and difficulties persisted because of weak export demand and overcapacity in the worlds third-largest economy.

China Promotes Consumption of Green Home Appliances with Price Cuts

China is reducing prices for energy-efficient home appliances, the National Development and Reform Commission (NDRC) said in a statement on May 20.

Price cuts went into effect on May 20 and will last three years. The program is sponsored by the NDRC and the Ministry of Finance.

Consumers will find prices lowered between 300 yuan to 850 yuan (USD 44 to 125) on energy-efficient air-conditioners, refrigerators, television sets, washing machines and motors.

Cost reductions are expected to generate 400 billion to 500 billion yuan (USD 58. 6 billion to 73.3 billion) of consumption demand and save 75 billion kwh of power. It could also have the environmental impact of cutting carbon dioxide emissions by 75 million tons annually, said Xie Zhenhua, deputy director of NDRC.

Manufacturers of energy-efficient products are also eligible for subsidies although specifics were not released by the NDRC.

“Energy-efficient products now occupy only 5 percent to 15 percent of the domestic market share. After the implementation of the price cuts, their market share was expected to be raised to 30 percent,” Xie said.

China Unveils First Sovereign Credit Rating Standards

China unveiled on May 23 credit rating standards for the sovereignty entity of a central government, the first sovereign credit rating standards in China, aiming broader participation in global credit rating.

The standards were announced by Dagong Global Credit Rating Co., Ltd, one of the first domestic rating agencies in China.

The sovereign credit rating standards would be able to evaluate the willingness and ability of a central government to repay its commercial financial debts as stipulated in contracts, said the company.

The rating results could reflect the relative possibility of a central government to default as a debtor, and the rating is based on the countrys overall credit value, according to Dagong.

Elements of credit risks will include the countrys political environment, economic power, fiscal status, foreign debt and liquidity, said the company, adding that it judges the credit of a sovereign entity on the basis of a comprehensive evaluation of its fiscal strength and foreign reserves.

Compared with other rating agencies, Dagong pays more attention to the different economic stage of each country, and examines the features of its credit risks in a holistic and systematic view, according to Dagong.

Jiang Yong, director of the Center for Economic Security Studies under the China Institutes of Contemporary International Relations, said the financial crisis exposed a risk of the international society relying solely on the credit rating institutions of a single country, which is the largest risk of the world economy.

Luo Ping, head of the training center under China Banking Regulatory Commission, said the launch of the sovereign credit rating standards would help improve the transparency of credit rating information, and would strengthen Chinas position in the international financial arena.