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Monday July 10, 2017

GLOBAL sewage and water treatment fi rms are eyeing opportunities in China, the world’s most populous nation.

The country has been for years battling contamination from fertilizer runoffs, heavy metals and untreated sewage. A survey in 2015 showed nearly two-thirds of China’s underground water and a third of its surface water was unfi t for human contact.

To reverse this, China has pledged to lay 126,000 kilo-meters of new sewage pipes by 2020, enough to circle the globe three times, and raise urban wastewater treatment by 50 million cubic meters a

day, equal to 20,000 Olympic-size pools.

This has opened the fl ood-gates to sewage specialists, like Israel’s Emefcy, RWL Water — controlled by Ron Lauder from Estee Lauder and France’s Veolia, who want to grab a share of the market with China’s annual environmental spend estimated at 3 trillion yuan (US$441 billion) over the next fi ve years.

China’s latest fi ve-year plan released in 2016 emphasizes tackling pollution, while in an action plan published in 2015 the government vowed to improve water quality nation-wide by 2030, pledging to spend billions of dollars.

Local offi cials will be forced to improve sewage capacity under new legislation that make them directly responsible for water quality. Cities need to hike treatment rates to 95 percent by 2020 from 92 percent in 2015, while rural regions in central and western China need to reach 50 percent.

“The market is massive,” said Yong Wong-jin, CEO for Emefcy’s China division, which estimates the potential market opportunity in Beijing and nearby provinces at over US$1 billion.

Foreign players have been in China for a while, such as Veolia that has water projects across

the country, but the focus on a large-scale cleanup has gained impetus recently.

Emefcy plans to put eight small-scale sewage treatment units into operation in China by the end of this year and is currently building a local fac-tory. It has installed a mobile plant around the size of a van at a school in southern Changzhou and runs another at a sewage works in Wuxi.

Emefcy said its small-scale units can treat 20,000 liters a day, take two months to install and have signifi cantly lower energy costs, making them ideal for the rural market.

RWL Water venture is set

to merge with Emefcy in July to “accelerate penetration” in China’s rural wastewater sector.

They will be competing with local players such as Beijing Enterprises Water Group and China Water Investment, and others like Beijing Sound Environment and Kangda International.

Stricter environmental stan-dards are drawing in companies of all sizes, but big State-owned fi rms still dominate major proj-ects, said Xue Xiaohu, general manager at Jiangsu Greenway that sells water treatment tech-nology to the textiles industry.

(SD-Agencies)

Global sewage fi rms eye opportunities in China

Faulty Takata air bags force industry-wide recallsFAW Car Co., a partner of Japan’s Mazda Motor, will recall over 680,000 Mazda cars due to issues with air bags that were supplied by embattled Japanese auto parts supplier Takata Corp.

The recall includes Mazda 6 vehicles manufactured in China between September 2008 and January 2016, the General Administration of Quality Supervision, Inspection and Quarantine said Friday.

The regulator said the issue was related to dangerous

defects in the air bag infl ator on the passenger side, and fol-lows an earlier recall of 280,000 Mazda 6 models manufactured between 2003 and 2008 for a similar issue.

The General Administration of Quality Supervision, Inspec-tion and Quarantine has also asked foreign fi rms General Motors, Daimler’s Mercedes-Benz and Volkswagen to fulfi l their obligations to recall vehi-cles in China affected by faulty Takata air bags.

The three foreign carmakers have to date only proposed recalling a small number of vehicles for testing and analysis instead of providing recall plans, the regulator said Friday.

Takata fi led for bankruptcy in Japan and the United States last month, burdened with tens of billions in liabilities related to a decade of recalls and law-suits over faulty air bags sup-plied to some of the world’s biggest auto brands.

On Friday, the Chinese regu-

lator said that it estimated that more than 20 million cars in China were equipped with the air bags made by Takata, which have been linked to at least 16 deaths and 180 inju-ries around the world.

Of 37 car manufacturers affected by the faulty air bag issue in China, 24 had already recalled 10.59 million cars by the end of June while another fi ve had made plans to recall a further 1.26 million vehicles, it said. (SD-Agencies)

At a Glance

COMAC productionCOMMERCIAL Aircraft Corp. of China Ltd. (COMAC) has received approval to begin mass production of its ARJ-21 jet, Xinhua said yesterday.

The State-owned plane-maker received a production certifi cate from the Civil Avia-tion Administration of China, Xinhua said. Shanghai-based COMAC last year said that orders for the twin-engine jet had reached 413 from 19 customers. COMAC is also developing a bigger C919 jet as part of its efforts to compete against Boeing and Airbus in the lucrative narrow-body market. The C919 had 24 customers and 600 orders, COMAC said in June.Funding channelsCOMPANIES are too reliant on bank fi nance because of their lack of capital market access, China’s vice fi nance minister has said, promis-ing to continue pushing the fi nancial sector to deleverage while developing alternative sources of fi nance.

Zhu Guangyao also said China was closely monitoring the global spillover from the U.S. Federal Reserve’s ongo-ing normalization of interest rates, promising continued “sound cooperation” with the U.S. monetary authority.Economic growth THE economy will main-tain steady and improving momentum in the second half of this year, but it still faces many diffi culties, Premier Li Keqiang told a meeting Friday.

China’s economic achievement in the fi rst half was “hard won,” Li said. “We should fi rm our confi -dence, but also prepare to cope with challenges,” he said. China will maintain proactive fi scal policy and prudent monetary policy and keep policies stable, Li said. The government would expand effective investment, especially pri-vate investment, he added.

Ford Taurus cars are seen during a presentation at the 16th Shanghai International Automobile Industry Exhibition in Shanghai in this fi le photo. Ford Motor said its China sales surged 15 percent in June, their strongest pace of the year. SD-Agencies

VIRTUAL currencies like bitcoin are assets but bitcoin in itself does not have the fundamental attributes needed to be a cur-rency that could meet modern economic development needs, a central bank adviser said.

Sheng Songcheng, adviser to the People’s Bank of China, made the comments in an interview with China Business News.

“Bitcoin does not have the fundamental attributes needed to be a currency as it is a string of code generated by complex algorithms ... But I do not deny that virtual currencies have technical value and are a type of asset,” he said.

His comments come after the central bank increased scrutiny of the country’s bit-coin exchanges earlier this year, a move that prompted the companies to stop margin lend-ing, introduced trading fees and issue rules to rein in users.

Many governments around the world are still mulling how to regulate and classify bitcoin, whose value surged in June to hit a record just shy of US$3,000. China has classifi ed it as a “virtual good.”

Squaring in on bitcoin, Sheng said expectations that bitcoin supply would be capped in the year 2140 would make it diffi -cult for it to become a medium of exchange that could meet modern economic development needs. (SD-Agencies)

Bitcoin can be ‘an asset but not currency’

FORD Motor said its China sales surged 15 percent in June, their strongest pace of the year, and it was optimistic about the outlook for the second half of the year as the industry puts the phasing out of a tax cut behind it.

Peter Fleet, Ford’s Asia-Pacifi c chief, said the fi rst quarter had been diffi cult after a purchase tax on small-engine cars rose to 7.5 percent from 5 percent previously.

Although Ford’s China sales declined 7 percent in the fi rst half from the same period a year ago, they were up 7 percent in the second quarter.

Sales for June alone climbed

to more than 100,000 vehicles with deliveries of sedans includ-ing the Escort and Mondeo, which were hurt by the tax increase, improving.

“I would expect to see for the third quarter strong single digit percentage growth [for] the industry. That’s certainly how it looks to us based on the run rate and how the month of July has opened up,” Fleet said in an interview.

Ford’s level of discounting tracked an overall 4 percent price decline for the industry so far this year.

“I’m not interested in driving our prices down to drive market share,” Fleet said.

Year-on-year comparisons will “get a bit tricky” in the fourth quarter because sales rose so fast at the end of 2016 as consumers rushed to buy cars before the pur-chase tax went up, he added.

The purchase tax on small-engine cars is set for another increase back to its normal 10 percent rate in 2018.

Ford aims to focus its efforts on the sport-utility vehicle market, the fastest growing segment in China, with plans to launch a new version of the EcoSport small SUV later this year.

Outside of China, Ford contin-ues to post positive sales growth in Southeast Asia, India and Australia, he said. (SD-Agencies)

Ford’s sales bounce back as tax impact fades