China Manufacturing N Quality Control Blog

Over the past year since the “General Plan for the Construction of Hainan Free Trade Port” was published, the “zero-tariff” list of raw materials, transportation vehicles, yachts and self-use production equipment has been implemented. According to haikou Customs statistics, by the end of July, the value of imported goods under the “zero tariff” policy reached 2.69 billion yuan, and the tax exemption for enterprises reached 462 million yuan. The products enjoyed include ships, yachts, automobiles, airplanes, production materials and production equipment.

 

In order to promote the free trade and investment facilitation of Hainan free trade port, Hainan implements the tax system of “zero tariff” as the basic feature of goods trade, and exempts import duties, import value-added tax and consumption tax for goods and articles under the list management. Enterprises in line with the preferential treatment conditions through China (Hainan) international trade “single window” Hainan feature application “zero tariff” special area for the qualification audit of the preferential treatment subjects, and then through the information system to complete the multi-department joint audit. The goods that pass the scope of enterprise import list can enjoy “zero tariff” goods import.

As of August 25, a total of 3,037 trains and 291,186 teUs (teUs) of goods have passed through Manzhouli and Suifenhe ports, the eastern passage of China-Europe freight trains, up 35.5% and 44.6% year on year respectively, China Railway Harbin Bureau Group Co., LTD announced Monday.

Since 2013, the first China-Europe freight train service through Manzhouli port has shown a trend of sustained and rapid growth, and has now exceeded the 10,000-train mark. Since the beginning of this year, Manzhouli Station has operated more than 300 China-Europe freight trains every month for five consecutive months, breaking the 2,000 train mark 45 days earlier than the same period last year.

Suifenhe port, the largest port to Russia in Heilongjiang Province, set a record of 61 china-Europe freight trains in a single month in July this year, achieving double-digit year-on-year growth for 15 consecutive months and exceeding 300 trains for the first time this year.

It is worth noting that since the beginning of this year, 58 China-Europe freight trains have started from Heilongjiang Province, up 61% year on year. Goods exported to Russia, Poland, Germany, Czech Republic, Belgium and other countries accounted for 50.5% of local goods, with a value of 188 million US dollars, up 66.2% year on year.

Since the beginning of this year, 100 percent of china-Europe freight trains have returned via the Manzhouli and Suifenhe railway ports, and 52 inbound and outbound china-Europe freight trains have reached 13 European countries, mainly in the southeastern coastal areas of China, and covering 60 cities including Tianjin, Changsha, Guangzhou and Suzhou.

Sheet metal, kraft paper and candy from Russia and hardware and auto parts from Poland have been operated in a row, driving the rapid development of the return train. In addition to traditional goods such as raw materials and agricultural products, more and more food, consumer goods and cross-border e-commerce goods are transported by return train.

Data showed that the China-Europe freight trains entering and leaving China through Manzhouli Station ran 2,714 trains and sent 262,010 teUs of goods, up 27% and 36.3% year-on-year respectively. The China-Europe freight trains entering and leaving Suifenhe Station ran 323 trains and delivered 29,176 teUs of goods, up 207.6% and 218.7% year on year respectively.

The number of freight trains in operation has reached a new record high, showing a trend of sustained and rapid growth, and actively serving as a bridge for mutual benefit of countries along the belt and Road.

We used to joke that our country was an infrastructure freak, building railroads, Bridges, buildings, etc., all of which were built on steel, and high demand for steel meant high demand for iron ore. However, it is regrettable that China is not a country rich in iron ore reserves, although China’s iron ore reserves ranked fourth in the world, but because China has a large population, so the average number of iron ore per person is not much. In addition, China’s iron ore quality is relatively poor, and most of the 300, 400 meters deep underground, so that the mining cost is high. Because of this, China is heavily dependent on imported iron ore, which accounts for about 90% of its output, 69% of which is from Australia and 19.7% from Brazil. Due to rely heavily on iron ore, and rely heavily on Australian iron ore, lead to the way foreign break through for iron ore chock the lifeblood of our country iron and steel industry (of course, the abroad is also a kind of loss, after all, they couldn’t find another like internationally in countries with high demand for iron ore in China). In this case, why don’t we vigorously develop waste steel recycling, but to import iron ore from abroad?

Why not recycle old steel?

In fact, our country has always been recycling old steel, but our country began to vigorously develop infrastructure at the end of last century, so far only 20-30 years of history. Because of its short history, much of the steel is still in use and cannot be recycled. Secondly, China’s development speed is very fast, the demand for steel is also very large, and the waste steel is far from meeting our demand for steel, so we still need to make steel from iron ore. In addition, the supply of scrap steel is unstable, and the price fluctuates greatly in the short term, so that enterprises can not control the cost, so they prefer to import iron ore from abroad. More importantly, the quality of waste steel in the market is different. After recycling waste steel from the hands of residents, manual sorting and transportation are needed, which increases the operating cost, so that the selling price of waste steel has no advantage compared with iron ore.

Moreover, in order to ensure the efficiency of large steel plants, their machinery and equipment are made to adapt to the calcination process of iron ore. And the recycling of waste steel needs matching equipment, which increases the cost input of enterprises. From the above factors, enterprises are more inclined to use iron ore, rather than the use of scrap steel. But in order to protect the environment, there are also some enterprises will use recycled old steel, but the output of recycled old steel is not high.

Why import iron ore?

As we know, our country has vast territory and abundant resources, and many important mineral resources can be found in our country, so why do we need to import iron ore from abroad?

This is actually because of the high cost of iron ore in China. First of all, because most of the iron ore in China is lean ore, that is to say, the iron content in iron ore is not high, so it is difficult to extract iron. In addition, most of the iron ore in China is a composite ore with multiple elements, so that the quality of iron ore is not the same. However, Australia is not only rich in mining, but also mostly open-pit mining, with lower mining costs. Even if sold at a lower price, it can still earn profits, so it is more competitive in the international market. Moreover, it is difficult to form scale effect because of the small reserves of iron ore in China. However, the ore in Australia is not only of high quality, but also of large reserves, which is easy to form scale effect and further reduce the mining cost. In addition, China’s iron ore is mainly transported by railway and land, and the transportation cost is high. And in Australia, it’s mostly by sea, so shipping costs are low, so even importing iron ore is still much cheaper than mining it ourselves. However, it is precisely because China is heavily dependent on iron ore, which leads to a disadvantageous position in the negotiations with Australian iron ore. It is difficult to control the pricing power, so that China can only import at a high price.

The solutions are as follows: developing alternatives to iron ore; Improve the utilization efficiency of waste steel; Importing iron ore from more countries to spread the risk; Investment in foreign iron ore enterprises, but these methods can not be implemented for the time being, can only hope that we can find a better solution later.

Conclusion

The reason why it is difficult to use waste steel in China is that:

Scrap steel production is small, difficult to meet the needs of enterprises.

Waste steel transportation, sorting and other links are too many, the cost is high, when the cost is not low.

Modern enterprise equipment is mostly built to adapt to iron ore, it is difficult to digest waste steel.

The reason why we need to import iron ore from abroad at a high price is really out of necessity. After all, China’s iron ore reserves are not high, and the quality is not high, so the cost of using domestic iron ore is high, so we can only import iron ore from abroad.

With much of Southeast Asia locked down and air and sea transport restricted, cross-border road freight demand in Southeast Asia is surging, while e-commerce sales are booming.

According to DHL Global Forwarding, road logistics is fast becoming a reliable alternative to air and sea freight affected by the outbreak.

“Road freight is now playing a more important role in Asia’s international long distance transportation solutions as it provides an economically efficient and sustainable option,” said Thomas Tieber, CEO of DHL Southeast Asia.

Indeed, the company has been a strong supporter of the region’s road freight potential. In December, the company noted that trucking companies had begun to shift more to overland intermodal transportation, including long-haul trucking to Europe, rather than just intra-Asian transportation.

Ceva and DSV Panalpina are also quick to recommend Silk Road freight to supplement the rapidly growing china-Europe rail traffic, and even a local company in Malaysia has deployed trucks along the route as they grow tired of the delays and capacity shortages plaguing container shipping.

DHL believes that the economic recovery in ASEAN countries will lead to a surge in demand for road logistics services, with an annual growth rate of 8 per cent until 2025.

“The growth of e-commerce consumer spending and B2B e-commerce, which is expected to grow 70 percent by 2027, is also driving demand for door-to-door logistics solutions,” it added.

DHL also believes that the ASEAN Customs Transit System (ACTS) will enhance cross-border road freight. Launched last year, ACTS allows trucks to cross multiple ASEAN borders and offers a single guarantee of tariffs and taxes throughout. So far, 500 cars have been licensed to operate.

Kelvin Leung, CEO of DHL Asia Pacific, added: “This bodes well for ASEAN countries as they prepare to rebound strongly from the outbreak.”

However, The lockdown in Southeast Asia due to the outbreak poses additional challenges, Says Kelvin Leung. “We are following the containment measures that each country has put in place, and sometimes those containment measures can affect daily operations,” he said in an interview.

At the same time, DHL says a growing number of customers are also turning to road freight for short – and long-haul hauls to reduce carbon emissions.

Air transport from Jakarta to Bangkok via Singapore would not only cut carbon emissions in half, it said, but also save 35 per cent on costs compared with direct flights. Similarly, trucking from Singapore to China can reduce the carbon footprint by 83% compared with air freight.

According to Business Insider, ports in southeastern New England were closed by the US Coast Guard on August 22 as tropical Storm Henry brought strong winds and heavy rain to the region.

The Coast Guard said in a statement late Saturday that several ports, including Narragansett Bay and Mount Hope Bay, were under Hurricane Zulu alert, meaning they were closed to ships due to strong winds.

Previously, the port had been under “Yankee” status, meaning tropical or hurricane-force storms were expected to make landfall at the port within 24 hours.

Tropical storm Henri and the resulting port closures come amid a recent surge in shipping costs that has slowed and caused massive shortages of goods across the global supply chain, which was severely disrupted by last year’s COVID-19 pandemic and made worse by the blockade of the Suez Canal earlier this year, the report noted.

Business Insider reports that major global shipping alliances have cut traffic between Asia and Europe by 22 percent over the spring of 2020, while operators have cut capacity between Asia and North America by about 20 percent.

In 2012, after Hurricane Sandy hit the East Coast, the U.S. Coast Guard reported $70 billion in damage to more than 180 ports in the region that would take months to recover.

Wildfires in the Western United States, flooding in China and Europe and drought in South America have disrupted supply chains for everything from wood to chocolate to rice for sushi, CNBC reported.

Christy Slay, senior director of science and research applications at the Sustainability Alliance, said: “Whether you’re in the agriculture sector, the forestry sector or the technology sector, virtually no industry is immune to the effects of climate change”.

CNBC notes that about a quarter of the wood consumed in the United States comes from Canada, which is experiencing severe droughts and wildfires. Brazil is suffering its worst drought in more than a century, partly as a result of a surge in coffee futures prices in July, which almost doubled from a year earlier. While the increase has not yet been passed on to consumers, experts say price increases will come soon. Even pearl rice, used in sushi, has been hit. Two-thirds of the crop consumed in the United States is grown in California, which faces water shortages due to drought and wildfires, and rice crop production requires a lot of water.

Extreme weather events can also disrupt supply chains because workers cannot find jobs. According to a recent report by the United Nations Development Programme, workplace disruptions caused by climate change could result in more than $2 trillion in lost productivity by 2030.

China hits human rights milestone in achieving moderate prosperity
China has hit another milestone in human rights as all-round moderate prosperity is achieved in the country with a population about one-fifth of the world’s total, a white paper said Thursday.

BEIJING, Aug. 13 — The central parity rate of the Chinese currency renminbi, or the yuan, weakened 45 pips to 6.4799 against the U.S. dollar Friday, according to the China Foreign Exchange Trade System.

In China’s spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

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July 29 — The Syrian Health Ministry on Thursday received a batch of Chinese COVID-19 vaccines provided by the Red Cross Society of China.

Health Minister Hasan al-Ghabash attended the reception ceremony at the Damascus International Airport alongside Chinese Ambassador to Syria Feng Biao, as the Chinese embassy has supervised the delivery of the vaccines to the Syrian government.

During the ceremony, al-Ghabash expressed the Syrian government’s gratitude to China for sending the vaccines, which he hailed as effective and successful.

“We thank the government of the People’s Republic of China and the Chinese people for their important contributions in light of the spread of the COVID-19 virus in the world,” he said.

“This vaccine is one of the recognized and registered vaccines by the World Health Organization and it has proven its effectiveness and success in China and in other areas which have received this vaccine,” he said.

Feng said the new delivery reflects the friendship between the Chinese and Syrian people.

“Nowadays, the COVID-19 pandemic continues to spread around the world in tandem with the appearance of new variants of the virus, which makes it the most important duty for the world to exert efforts to counter the pandemic,” the Chinese ambassador said.

Feng called on all parties to abide by scientific principles in tracing the source of the virus and oppose politicizing this issue.

In April, Syria received a batch of Chinese vaccines as part of many medical donations offered by the Chinese government to Syria to deal with the pandemic.

As the rate of new cases fell by less than two percent over the past week, driven by a sharp drop in South Africa, 21 countries are experiencing a resurgence, three more than last week, warned Matshidiso Moeti, WHO regional director for Africa.

“Let’s be under no illusions, Africa’s third wave is absolutely not over. The small step forward offers hope and inspiration but must not mask the big picture for Africa,” she noted.

Africa continues to lag behind in terms of the COVID-19 vaccination, Moeti said, explaining that only about 1.5 percent of the continent’s population are fully vaccinated so far.

“African countries must go all out and speed up their vaccine rollouts by 5 to 6 times if they are to get all these doses into arms and fully vaccinate the most vulnerable 10 percent of their people by the end of September,” she said.

“Vaccines are key to saving lives and blunting the pandemic, but we must remain focused on controlling the disease until vaccination coverage is increased,” Moeti said.