Recruiting in China

China aims to increase exports of automobiles and automobile components to 70 billion U.S. dollars by the end of 2010, said an official with the Ministry of Commerce.

In the first half of 2006, China exported 34,500 units of sedans, surpassing the total export volume of 2005, and now exports to 207 countries and regions, China Automotive News reported.

From 2000 to 2005, China averaged 40 percent growth in auto and auto component export volume per year, with exports of complete vehicles growing at a rambunctious 70 percent per year.

Last year, the country's car and auto parts exports hit 10.9 billion dollars, up 34 percent on the previous year.

However, to put this impressive growth into perspective, it needs to be remembered that China's market share in world automobile and automobile component exports is less than 1 percent.

Source: Xinhua

US joined by EU and Canada on WTO dispute settlement action

WASHINGTON, DC – 09./16/06 – The US has joined with Canada and the European Union to request that the World Trade Organization (WTO) establish a dispute settlement panel regarding China’s overall treatment of US-made auto parts.

According to the Office of the US Trade Representative, Beijing is imposing charges that “unfairly discriminate” against imported auto parts and discourage automobile manufacturers in China from using imported auto parts in the assembly of vehicles.

Under China’s current regulations governing the importation of auto parts, all vehicle manufacturers in China that use imported parts must register with China’s Customs Administration and provide specific information about each vehicle it assembles, including a list of the imported and domestic parts to be used, and the value and supplier of each part.

If the number or value of imported parts in the assembled vehicle exceed specified thresholds, the regulations assess each of the imported parts a charge equal to the tariff rate of around 25% on complete automobiles, rather than the 10% tariff applicable to auto parts.

The regulations encourage auto manufacturers in China to use Chinese parts in the assembly process – at the expense of parts from the US and elsewhere.

The regulations also provide an incentive for auto parts producers to relocate manufacturing facilities to China.

China “appears to be acting inconsistently with several WTO provisions including Article III of the General Agreement on Tariffs and Trade 1994 and Article 2 of the Agreement on Trade-Related Investment Measures, as well as specific commitments made by China in its WTO accession agreement,” the statement said.

The US originally initiated the case on March 30, when it requested formal WTO consultations. The US, Canada, and the EU held joint consultations with China on the issue in Geneva in May.

Australia, Japan, and Mexico, which also export auto parts to China, participated in the consultations as third parties.

"While we remain open to settling this dispute, China’s current stance leaves us no choice but to proceed with our WTO case,” the statement said.

The US, it added, “is committed to providing a level playing field for US exporters to China and, as we have made clear, we will not hesitate to pursue dispute settlement if necessary."

The US exported $681 million in auto parts to China in 2005, an increase of 6.5% over exports in 2004.

Over this same period, the market for automotive components in China increased by 16.8%, and the number of passenger vehicles sold in China increased by 27%.

US exports of auto parts to China accounted for 1.4% of total US auto parts exports in 2005, representing approximately 10% of China’s auto parts imports.

TOKYO, SEPT 19: Honda Motor Co, Japan’s third-largest automaker, opened a new factory in China, as it seeks to maintain its lead over Toyota Motor Corp and Nissan Motor Co in the world’s fastest growing major vehicle market.
The new factory, located in the southeastern city of Guangzhou, will have a capacity of 1,20,000 vehicles a year, the company said in a statement. Guangzhou Honda Automobile Co, Honda’s venture with Guangzhou Automobile Group Co, invested 2.2 billion yuan ($277 million) in the factory, which will make Accord models.

Honda, the first Japanese carmaker to set up a venture in China, is opening the plant after capacity shortages stunted its sales growth in the first half. The factory may enable Honda to maintain its lead over Toyota and Nissan, which are also investing in the world’s third-largest vehicle market.

‘‘Demand in China will continue to grow so Honda will likely add more capacity,’’ said Norihito Kanai, a senior research analyst at Meiji Dresdner Asset Management Co which manages $2.5 billion in equities in Tokyo. ‘‘If Honda can’t supply enough cars, customers will go elsewhere.’’

Honda set up its first venture in China in 1998, five years ahead of Toyota and Nissan. The company had about 5.7% of China’s passenger car sales in the first half, compared with Toyota’s 4.5% and Nissan’s 4.1%, according to the China Association of Automobile Manufacturers. Market leader Volkswagen had a share of 17.1%, the carmaker said.

—Bloomberg

(Akron/Tire Review – Asiaport) China's automobile output in 2006 will exceed 7 million cars, making a big leap from 5.7 million cars in 2005, forecasted by Zhang Xiaoyu, the deputy head of China Machinery Industry Federation, and chairman of the Society of Automotive Engineers of China. China’s automobile industry has become an integral part of the national economy after rapidly growing in the first five years of the new century. In 2005, the whole industry generated output value of approximately $151 billion and contributed near $25 billion taxes directly and indirectly, as well as providing 17 million jobs.

China's revenue officers are to strengthen the management of income tax collection from people with annual incomes of more than 120,000 yuan (15,000 U.S. dollars), said a senior official with the State Administration of Taxation (SAT).

SAT deputy director Wang Li told a national conference on income tax collection and management that a system should be established to encourage high-income earners to declare personal income voluntarily.

The SAT would concentrate efforts from October and throughout next year on strengthening management and reform of the income tax system and on building a personal income information system to better monitor the actual status of high-income earners.

"There are loopholes in collecting income taxes from this group of people as their sources of income are diverse," said an official with SAT Information Office, who asked to be anonymous.

Personal income tax files should be established and the management of industries with higher revenues should also be highlighted, Wang said.

Meanwhile, he said China's corporate tax revenues rose to 431.6 billion yuan in the first seven months, 29.7 percent or 98.9 billion yuan more than same period last year.

Personal income tax revenues hit 168.4 billion yuan in the period, up 16.4 percent or 23.69 billion yuan, said Wang.

The growth in personal income taxes, introduced by China in 1980, was achieved after the government lifted the personal income tax threshold from 800 to 1,600 yuan a month from Jan. 1.

Source: Xinhua

ONLINE job ad company Seek has kicked off its global expansion with a $26.6 million investment in Chinese company Zhaopin, which it says is one of the country's three leading recruitment websites.

Seek, which is backed by James Packer, will pick up a 25 per cent stake in the company. Andrew Bassat, joint chief executive of the company with his brother Paul, said he hoped it would be the "first of several" offshore acquisitions.

"We think that the internet employment space is a wonderful space and if you get it right, it is high margin, high profit and high growth," Mr Bassat told the Herald.

"These things take time but we hope over the next year or so we're able to announce a couple more [offshore acquisitions]."

Seek shares rose 11c, or more than 2 per cent, to close at $5.04 yesterday.

The company's move into China comes amid speculation that its 25 per cent shareholder, Publishing and Broadcasting Ltd, is eyeing the online property ad market.

PBL has renamed one of its companies myhome.com.au and is rumoured to be partnering with the Raine family of Raine & Horne real estate.

It has also sounded out shareholders in online car ads business Carsales.com.au with a view to increasing its 41 per cent stake.

Some analysts believe PBL may look to amalgamate its online classifieds businesses at some stage.

But Mr Bassat said yesterday Seek was focused on jobs over the next year or two.

"Our focus is very much on employment and training in the short to medium term," he said. Seek has a 55 per cent share of the Australian online employment ads market in terms of the volume of ads it carries, more than double the number two and three sites run by News Ltd and Fairfax.

Its revenue jumped more than 53 per cent to $109 million in the year to June 30, as it attracted more business in sectors such as government and health care and boosted its education and training division.

Net profit rose 68 per cent to $34 million, exceeding analysts' expectations.

Mr Bassat said the company expected Zhaopin to become profitable in 2008.

He said over the next two years the company would "invest heavily".

"Our model is to find a strong Chinese management team, give them capital and share some of our experience and expertise and support them.

"We are very much there to support them rather than control them."

Zhaopin was founded in 1997. Its headquarters are in Beijing and it has branches in more than 30 cities in China.