Chinese manufacturer develops its own excavator after foreign rejection

A gigantic digging machine has flown off the production line this April in east China’s Jiangsu province. The machine can shovel 50 tons of coal in one go, and is China’s largest hydraulic excavator that is 100 percent domestically produced.

The machine is able to compete with world-class players, not only in terms of its eye-catching look, but also in the 52 self-developed technologies used to make it, said a person working for its manufacturer Xuzhou Construction Machinery Group Co., Ltd. (XCMG).

The enormous machine is designed to excavate at least 30,000 tons of material per day and operate safely for no less than 60,000 hours. Without a high-standard chassis that level of performance would be unlikely.

XCMG had thought about buying core technologies, such as the chassis, from overseas companies, but none of them were willing to sell, fearing the Chinese company would catch up with them. Then XCMG decided to develop a chassis independently.

Five years later, they succeeded.

Buying one chassis could cost upwards of 15 million yuan. But according to Zhang Hong, deputy general manager of XCMG excavating machinery division, manufacturing a chassis on their own costs about 5 million yuan.

This excavator makes China the fourth country to develop and manufacture hydraulic digging machines independently, after Germany, Japan and the US, said Xu Donghai, deputy mayor of Xuzhou, where the headquarters of XCMG are located.

Another core part of the excavator, the hydrocylinder, is also self-developed. The hydrocylinder has not only broken the monopoly of foreign companies, but also helped to lower prices of their products.

Before, importing a 700-ton hydrocylinder cost 3 million yuan, but now the price is reduced to around 2 million, said Chen Dengmin, head of XCMG Hydraulics Co. Ltd.

China wants 40 percent of necessary parts and machinery to be supplied domestically in the aerospace, telecommunications, power generation and machine industries by 2020, according to the Made in China 2025 initiative.

Core technologies are not to be borrowed or bought. XCMG makes sure that every part of the machine is self-made, so that they won’t concede to foreign companies, Chen Dengmin said.

XCMG Chairman Wang Min said the target of China’s engineering machinery is to become medium-and high-end, and to be high-end, the country must achieve self-innovation. XCMG spends over 5 percent of the total sales revenue on research and development.

In the past, Chinese companies like XCMG spent as much as 40 percent of their manufacturing costs on importing foreign parts, giving 70 percent of profits in the industry to foreign providers.

But the situation is changing. Presently, XCMG products are being exported to 158 countries and regions around the world. In 2017, the company saw substantial growth in exports to countries along the Belt and Road.

China should ramp up investment and channel more energy into research and development to spur the development of the equipment manufacturing sector, Chinese President Xi Jinping said when visiting XCMG in December 2017.

Dandong firms lack talent, funds; their progress hindered by inadequate R&D

Dandong in Northeast China’s Liaoning Province is a city characterized by a large number of small and medium-sized enterprises, but a lack of talent and capital is now hindering their growth.

Established four years ago, ZXRAY Technology Co, an X-ray instrument maker in Dandong, has grown into a company with more than 30 employees and sales revenue of 30 million yuan ($4.72 million) in 2017.

However, the company is still at the stage of imitating advanced products from developed countries and regions, with its core parts imported from the US and Switzerland, Guan Hongzhi, manager of the inspection technology department at ZXRAY Technology Co, told the Global Times on Sunday.

Dandong’s industrial X-ray sector plays a leading role in China, with widespread applications in detecting flaws in cores of automobiles, vessels and aircraft.

“We are developing high-end CT [computer tomography], but the project is advancing slowly due to a lack of research and development [R&D] talent,” Guan noted.

The talent drain from the city has inhibited Dandong companies’ competitiveness and restricted the city’s sustainable industrial development, a Dandong-based economic observer surnamed Xu told the Global Times on Sunday.

Huanghai Bus is one of the larger companies in Dandong, but its competitiveness has been declining due to low R&D investment and inadequate management, according to Xu.

Despite the country’s favorable policies for R&D, companies in Dandong can’t be revitalized without sufficient capital and the city’s industrial basis is weak, Xu said. “Suppose the country offers 100 yuan for corporations in eastern coastal areas; the firms may generate revenue of 200 yuan. But the same investment may be lost if it is put into companies in Northeast China.”

A businessman named Li Chongdong, who has been engaged in the precision parts processing industry for more than a decade, told the Global Times on Sunday that he once thought about upgrading and transforming, possibly by designing products and selling them online, but he encountered severe capital problems.

Some processing factories in Dandong have successfully developed into bigger companies making products like turbochargers and X-ray equipment, but it is challenging because of the small market in Dandong, said Li.

Li said his firm gets orders worth 2 million yuan from foreign-backed companies annually. But it’s hard to find workers now because of low salaries in the sector, which directly limits the growth of the factory, he said.

Promising signs

Fortunately, some positive changes have emerged. The Dandong city government has pledged to accelerate the development of the local advanced manufacturing industry, according to the local government’s 2018 work report released in January.

In 2018, substantial progress should be achieved in revitalizing Dandong as a famous light industry city, and improvements should be made in the construction of the automobile manufacturing base as well as the measurement and control base, the report said.

Dandong’s major corporations’ industrial value-added increased 5.1 percent year-on-year in 2017, with 20 out of 34 industries maintaining growth, data from the Dandong statistics department showed.

Source: Global Times

 

China-Indonesia ties stronger as Li Keqiang’s visit set to build new agreements

Graphics: GT

An official visit by Chinese Premier Li Keqiang to Indonesia began on Sunday and will run until Tuesday, and the two countries are expected to further promote pragmatic economic cooperation, experts said.

“China will support Indonesia in building regional economic corridors and upgrading its infrastructure and industrial development to make the maritime bond between the two countries even stronger,” Li wrote in a signed article entitled “Embarking on a new voyage of China-Indonesia friendly cooperation,” published on Saturday in the Jakarta Post, a leading Indonesian newspaper.

Xu Liping, a senior research fellow at the Chinese Academy of Social Sciences, told the Global Times on Sunday that Premier Li’s visit is expected to lead to a series of strategic agreements through the integration of the 21st Century Maritime Silk Road and Indonesia’s “Regional Comprehensive Economic Corridors.”

“The agreements are likely to be in areas such as industrial parks, production capacity cooperation, agriculture and maritime logistics,” Xu said.

There are likely to be discussions about the Jakarta-Bandung high-speed railway project in Indonesia, a transportation infrastructure project under the B&R framework, during the visit.

“The China Development Bank [CDB], the loan provider for the project, is likely to add more financing,” Xu noted.

In May 2017, the CDB signed a loan agreement with Indonesia-China High Speed Rail Co to provide $4.5 billion in loans.

In recent years, economic and trade ties between the two countries have seen rapid development, and China has been Indonesia’s largest trading partner for seven years in a row. In 2017, the bilateral trade volume reached $63.3 billion, up 18.3 percent on a yearly basis, data from gov.cn showed.

Investment growing

China has been Indonesia’s third-largest source of investment since 2016. Last year, the investment volume from the Chinese mainland into Indonesia reached $3.4 billion, up 30.8 percent year-on-year.

Tianjin Julong Group, a major Chinese palm oil producer and distributor, entered the Indonesian market in 2006, and so far it has invested more than 10 billion yuan ($1.57 billion) in the country.

Sun Weijun, vice president of Julong Group, told the Global Times on Sunday that the company is very optimistic about the bilateral economic and trade ties, given the complementarity of the two countries’ economies.

“China imports about 6 million tons of palm oil annually, with 40 percent coming from Indonesia,” Sun said. “Indonesia’s abundant agricultural resources can find a huge market in China while China’s infrastructure experience and high-tech commodities are liked at the Indonesian market. It’s a two-way flow that brings economic benefits,” he noted.

Chinese investment in Indonesia will focus on infrastructure and production capacity cooperation, Xu said.

Leading Chinese machinery producer Sany Heavy Industry Co has participated in Indonesia’s infrastructure construction projects since 2004, helping build ports, roads and industrial parks.

It has also bought land in the country and plans to invest $30 million in a project there, according to a note Sany sent to the Global Times on Sunday.

“The market has huge potential and we plan to complete CKD and SKD production lines by 2019 to realize some local production,” said the note.

Source: Global Times

 

Xiaomi files for IPO in Hong Kong

Chinese smartphone maker Xiaomi filed on Thursday an application for an IPO on the Hong Kong Stock Exchange, the most anticipated public offering by a Chinese technology company since Alibaba’s IPO in 2014.

The IPO aims to raise up to $10 billion, and may be finalized by July this year, according to media reports.

In its filing, Xiaomi provided its first detailed financial statements. The Beijing-based company posted revenue of 115 billion yuan ($18 billion) in 2017, up 67 percent year-on-year, and operating profit of 12 billion yuan, a whopping 134 percent increase.

The document was prefaced by a letter to investors by Xiaomi founder and CEO Lei Jun, who reaffirmed his recent commitment to cap profit margins on Xiaomi’s hardware at 5 percent.

Lei also promised to maintain the business model of selling hardware at low prices to strengthen the user base and make the bulk of profits through sales of internet services.

The IPO comes after a year of strong growth for the company, which has rebounded from a lackluster 2016 and is betting on further growth. Neil Shah, research director at Counterpoint Research, said in an interview with the Global Times that Xiaomi must raise capital to scale up its services ecosystem and invest more in intellectual property and technical research.

Xiaomi has also been investing heavily in overseas expansion, especially in India where it’s the smartphone market leader with a 31 percent share, according to Counterpoint’s research.

“India is the bright spot for Xiaomi, its biggest contributor to revenue and shipment growth,” said Shah. “We believe Xiaomi will continue its ‘India first’ strategy and use the momentum of its smartphone sales to build up its services ecosystem and other Xiaomi hardware, which should sell well in the price-sensitive Indian market.”

Xiaomi’s IPO is important not only for its size but also for its location. Xiaomi will be the first large technology company based in the Chinese mainland to choose Hong Kong for its IPO.

Baidu in 2005 and Alibaba in 2014 chose New York to hold IPOs. The move by Xiaomi follows a change of listing rules in Hong Kong that were announced on April 24.

Hong Kong “missed Alibaba because it wouldn’t allow companies with weighted voting rights (WVR),” said a Chinese investor who deals in Hong Kong shares. Companies with WVR structures issue two or more classes of stock, with different categories having different voting rights and thus differing abilities to influence management.

“WVRs are a very mature structure across the world, and among internet companies it is almost universal,” Sean Song, head of research at Hina Group, an investment bank in China, told the Global Times.

“Since the Hong Kong Stock Exchange opened up and the new rules took effect on Monday, we expect that Hong Kong, with its geographical advantage, will become the place of choice for most internet companies from Chinese mainland to go public,” Song said.

Some observers said the Xiaomi IPO would be a symbol of progressing financial reform in China, following other regulatory changes to attract Chinese companies to list their shares domestically, such as the recently approved Chinese Depository Receipts (CDRs).

Lei called CDRs “a great policy innovation” in a recent interview with Bloomberg. “Thanks to these reforms, investors can help fast-growing new-economy companies succeed in their local environment and share the fruits of their success with their users and shareholders in China,” said Song.

Source: Global Times

Thailand becomes hottest destination for Chinese tourists

Data provided by a travel service platform indicates that air tickets to Bangkok saw the largest number of bookings when compared to other overseas destinations during the three-day May Day holiday.

The Grand Palace in Bangkok

For two consecutive years, Bangkok has replaced London and Paris to become the most frequented tourist destination in the world, according to MasterCard International. In 2016, the city welcomed 194 million tourists from around the world.

Having lots of fun with less money is one travel draw for Chinese tourists holidaying in Thailand. The average person will spend around 3,000 yuan ($473) in the country, which is even cheaper than the cost of some hot Chinese destinations.

Thailand was one of the earliest countries open to Chinese tourists, and it has always been a hot travel destination for Chinese tourists, said a developer of travel itineraries in Southeast Asia.

Thailand is a country you will never tire of visiting, said one travel enthusiast. Moreover, the country offers a visa-on-arrival policy for Chinese tourists, which is more convenient than visa application processes in other countries.

At the beginning of this year, the number of Chinese tourists arriving in Thailand hit 350,000, an increase of 113.8 percent from the previous year, according to statistics. That figure was more than a quarter of the total outbound Chinese tourism during the same period.

In 2017, Chinese tourists brought more than 520 billion baht in revenue to Thailand, becoming the largest contributor to the country’s tourism sector in terms of the number of arrivals and the size of profit, said Pongpanu Svetarundra, Permanent Secretary of Thailand’s Ministry Of Tourism and Sports.

China becoming a global leader in innovation

China is becoming a global leader in innovation, which can be demonstrated by its achievements in the areas of ultra-high voltage transmission, high-speed rail and nuclear power, cctv.com reported.

The Tianwan Nuclear Power Plant

The Tianwan Nuclear Power Plant in eastern China’s Jiangsu Province, one of the three major plants in China, was jointly built by China and Russia. According to the agreement, the latter was in charge of overall technology, engineering design, equipment supply and technical debugging of the plant.

However, when the voltage changer malfunctioned before being put into operation in 2007, the Russian side refused to offer a helping hand because they believed there were no problems with their products.

The Chinese team then had to dismantle and investigate the transformer imported from Russia. Finally, after one month of research, the team solved the technical problem.

Wu Wei, vice general manager of the Tebian Electric Apparatus Stock Co., Ltd (TBEA) noted that they not only domestically fixed all defective products before they were put into operation, but made a decision not to rely on importing products from other countries.

From then on, China was no longer content with development by following other countries, but through independent innovation. In 2014, the country set up the world’s first standard system of ultra high voltage and the worldwide industry standard.

Apart from the field of ultra high voltage, China’s high-speed trains also demonstrated its achievements in innovation.

In 2006, China purchased 280 high-speed trains from Japan, France and Germany. The trains, each with their own advantages, can be used in different areas with diverse geological conditions.

However, China has a complicated environment in different areas, which means the high-speed trains need to both fit widely changing temperatures and run normally against extremely strong wind.

Fortunately, after lots of efforts, China has made it through innovation.

Currently, more than 1 billion people travel by high-speed train in China each year. China now has more than 1,500 high-speed trains, which cover over 19,000 kilometers in total at an average speed of 350 kilometers per hour, which is the first of its kind in the world.

Doctors working on reason why pandas’ black eye markings have turned white

A doctor says his team have conducted health checks on giant pandas whose black eye markings are fading. He said the reason for the illness has yet to be worked out, but there are human diseases with similar symptoms.

“Xiao Ya”

Pictures posted online recently show the black fur around the eyes of several pandas at Chengdu Research Base of Giant Panda Breeding has turned white. The pictures went viral and have caused major concern among the Chinese public.

A famous eye doctor in China, Luo Qingli, said he and his colleagues have conducted health checks on the animals and submitted their results to the Chengdu panda base.

The base said it is taking measures to find out what had caused the fading of black fur, and it will find an effective treatment for the disease as soon as possible.

After checking the eyes of two bears named “Yong Yong” and “Xiao Ya”, the experts said the two bears had not caught Vogt-Koyanagi-Harada, a human disease.

The specific reason for the illness is still to be announced by the Panda base.

China still has long way to go in recovering stolen relics

Due to an ineffective international treaty and unsound laws and regulations, China still has a long way to go to recover all of its looted relics that have wound up overseas, the Liberation Daily, an official daily newspaper of China, reported.

A visitor takes photo of the gold ornaments French collectors handed over to China, July 20, 2015. [Photo/Xinhua]

A rare, 3,000-year-old bronze vessel thought to have been ransacked from the Old Summer Palace in Beijing in 1860 fetched 410,000 pounds ($581,000) at auction in Kent, in the south of England on April 11, which attracted attention on the fate of stolen Chinese relics overseas.

Statistics issued by the China Cultural Relics Academy indicate that over 10 million snatched Chinese cultural relics were shipped to European countries, America, Japan and Southeast Asian countries since the Opium War, around 1840. More than 1 million of these items are grade 1 and 2 cultural relics of China.

Chinese cultural relics were lost in many ways, such as being raided during war, foreign institutions’ and individuals’ purchasing, illicit smuggling as well as legal trade.

For example, numerous Chinese cultural relics were taken in the 1840s from the Old Summer Palace during the Opium War, in 1900 when China was invaded by the Eight-Power Allied Forces and during the Sino-Japanese War of last century.

Early in 2002, China’s State Administration of Cultural Heritage set a special fund for purchasing Chinese cultural relics with high artistic value. In the same year, a law protecting cultural relics was also revised to allow individuals to collect works of art, which promoted recovery of looted Chinese cultural relics overseas.

In addition, many Chinese non-governmental organizations stepped up efforts to recover the relics.

Despite efforts made in the past decade, China still faces barriers including the laws surrounding recovery of relics.

Although the first international treaty dedicated to the fight against illicit trafficking of cultural property was adopted by UNESCO in 1970, and over 90 countries have become parties of the treaty, it is a pity that the treaty is not internationally binding to former illegal acts and non-convention countries like Britain, which currently houses many Chinese cultural antiques.

Moreover, as it has been a long time since the relics were originally taken, it is hard for China to collect the evidence needed to recover the artifacts.

What made things even worse is that 19 foreign museums and institutions including the Louvre Museum in Paris and the Metropolitan Museum of Art in the U.S. announced in 2002 their refusal to return cultural relics to their original home countries.

These cultural antiques can be recovered in many ways, including purchasing at a high price.

In 2002, the state-owned China Poly Group acquired the bronze heads of an ox, tiger, and monkey at an auction that were originally removed from the Old Summer Palace fountain, spending tens of millions of yuan. However, the country would be overburdened if it were to recover all of its relics by auction.

Xie Chensheng, honorary president of the China Society of Cultural Relics noted that China is supposed to recover such relics through legal avenues under the framework of international conventions, instead of purchasing, which will only make the illegal activity legal.

Xie also stressed that not all cultural relics need to be recovered but those with high artistic values that were stolen during war times were especially important.