China, Saudi Arabia: New Best Friends
- Chinese to build $5 billion alumina plant in Saudi Arabia
BEIJING, May 25 (AFP) May 25, 2007
Two Chinese companies have signed a framework agreement to build two
aluminium processing plants and related facilities worth nearly five
billion dollars in Saudi Arabia, state media said Friday.
According to terms of the agreement signed in April, the two Chinese
contractors will help the Saudi company Western Way for Industrial
Development Co. obtain funds equivalent to half of the project costs
from Chinese policy banks, the China Securities Journal said.
The China Nonferrous Metal Industries Foreign Engineering and
Construction Co (NFC) will build an alumina plant and an electrolytic
aluminium plant in the southeastern Saudi city of Jazan, the report said.
China National Machinery Industry Corp will construct a dock and a power
plant supporting the plants, it added.
No other details on the Saudi company were provided.
The alumina plant will have annual output of 1.6 million tonnes while
the capacity of the electrolytic aluminium plant will be 660,000 to
700,000 tonnes. Total investment in the two plants alone will be about
three billion dollars.
The report said the NFC has formed a strategic partnership with a US
metal trading company in hopes of taking a stake up to 25 percent
stake in the two plants.
With domestic alumina running short and prices surging, the Chinese
government has been encouraging local companies to seek overseas supplies.
In March, Beijing approved a plan to form a 651-million-dollar joint
venture with an Indian company to produce aluminium in west India.
China wins US$1.9 billion Saudi Arabia railway contract
Sun, 8 Apr 2007 09:17:47 -0700
Apr. 5, 2007 (China Knowledge) - The Saudi government has awarded a
contract to an unnamed Chinese-led consortium to construct a
440-km-long railway for Saudi Arabian riyal (SAR) 1.963 billion. Saudi
Arabia recently awarded three contracts totaling US$1.9 billion for
the construction of railways covering 1,766 km. In addition to the
Chinese-led consortium's contract,
Saudi billionaire buys hotel in China
By Sean Cronin
April 5 (Bloomberg) -- Saudi billionaire Prince Alwaleed bin Talal's
Kingdom Hotel Investments said it paid $58 million for its first hotel
The 387-room hotel is located in Kunshan, an industrial center near
Shanghai, Dubai, United Arab Emirates-based Kingdom Hotel Investments
said today in a statement distributed by the U.K. Regulatory News Service.
"China is the world's fastest growing economy," Prince Alwaleed said
in the statement. "With the number of business and leisure travelers
to the Yangtze River Delta continuing to increase, we will be well
positioned to capitalize on the region's economic growth."
The purchase follows acquisitions in Asia by the group this year in
Malaysia, the Philippines and Vietnam.
The statement didn't specify who sold the hotel to Kingdom Hotel
Airbus starts construction of China assembly plant for A320
15 May 2007
TIANJIN, China: Airbus Industries broke ground Tuesday on a major new
factory near this Chinese port city, the first outside Europe for the
aerospace giant, which has high hopes for China's booming market.
The Airbus A320 assembly line in the Tianjin Binhai New Area is expected
to start operating in August next year and have an annual capacity of
nearly 50 aircraft by 2011, Airbus chief operating officer Fabrice
Bregier told AFP.
Bregier hailed the launch of construction, 110 kilometres (68 miles)
east of Beijing, as "a major step forward" for the company and China's
"This not only represents a new level of mutually beneficial
industrial cooperation between China and Airbus but also demonstrates
our long-term commitment to the development of the Chinese civil
aviation industry," he said.
"The launch of construction of this final assembly line in China will
lead to the commencement of its operations by August 2008 as planned.
We will begin to deliver the first aircraft assembled in China in the
first half of 2009."
Airbus' commitment to the project reflects the high-stakes battle for
dominance in one of the fastest-growing and largest aircraft markets
in the world, where it faces stiff competition from US rival Boeing.
Airbus estimates China will need 2,650 passenger planes from 2006 to
2025 and hopes to garner a major part of that market with the A320,
the short-haul workhorse model of its offerings.
"For at least the next five, six or seven years, the customers will be
mainland Chinese airlines," said Marc Bertiaux, an Airbus China vice
"But it is clear that when possible or if needed, this final assembly
line will be open to all Asian airlines."
China, however, also plans to build large aircraft of its own so that
it will not be dependent on Airbus or Boeing and sees the project as a
key part of its broader aerospace ambitions.
Airbus will hold a majority 51 percent stake in the Tianjin assembly
facility, while the rest will be held by newly formed Tianjin
Zhongtian Aviation Industry Investment Co., Xinhua said.
A formal contract for the joint venture will be signed next month,
said Feng Zhijiang, chairman of Tianjin Zhongtian Aviation Industry
Investment Co. ...
China to let its Banks buy shares overseas
Fri, 11 May 2007
By Luo Jun and Zhao Yidi
May 11 (Bloomberg) -- China will let its banks buy shares overseas for
the first time, diverting some of the country's 35 trillion yuan ($4.6
trillion) of savings from a local stock market where trading has
Commercial banks can invest as much as 50 percent of funds in the
qualified domestic institutional investors program, or QDII, in
overseas stock markets, the China Banking Regulatory Commission said
on its Web site today. Investors need at least 300,000 yuan to buy
such financial products, the regulator said.
This will help ``cool the very hot domestic stock market a bit,'' said
Gabriel Gondard, who oversees $3.5 billion in Shanghai as a fund
manager at Societe Generale venture Fortune SGAM Fund Management.
``Don't expect it to trigger a crash. Investors are still reluctant to
invest overseas with booming stocks and expectations of currency
appreciation at home.''
China wants more money to be invested abroad to slow the growth in the
country's $1.2 trillion in currency reserves, which are flooding the
domestic market with cash. Local investors have shunned QDII because
they had been limited to lower yielding fixed-income and money-market
``The government is easing restriction on capital controls so that the
central bank won't be the only institution to deal with the flood of
foreign exchange coming in,'' said Tao Dong, Credit Suisse Group's
China economist. ``The QDII was introduced to help mop up excess
liquidity in the system.''
China's CSI 300 Index has surged 81 percent this year, after more than
doubling in 2006, as investors seek higher returns than the 2.79 percent
one-year savings rate at banks. The surge has prompted officials
including People's Bank of China Governor Zhou Xiaochuan to warn of a
stock market bubble.
Daily turnover jumped almost sevenfold from 2006 to 131.6 billion yuan
in the first three months, as investors opened 8.7 million new
accounts to trade shares, the People's Bank of China said in its
first-quarter monetary policy report yesterday.
The market boom and improving social security protection will boost
spending in an economy that expanded 11.1 percent in the first
quarter, according to the report.
The government has granted a total of $13.4 billion in QDII quotas to
15 commercial banks.
At the end of November, Chinese banks sold less than 3 percent of
their QDII quotas. U.S. 10-year government bonds are yielding 4.62
percent a year, while the yuan has appreciated 4.3 percent against the
dollar in the past twelve months. ...
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