(Source: Wall Street Journal)

 The biggest hurdle to the historic sale of General Motors Corp.’s Hummer brand to a little-known Chinese manufacturer of dump trucks and industrial machinery may be receiving Beijing’s seal of approval.

The Obama administration has already expressed strong support for the proposed sale to Tengzhong Heavy Industrial Machinery Co. But before it can buy Hummer, Tengzhong, based in Sichuan province, needs support from three different Chinese government agencies governing overseas investment, economic planning and China’s tight controls on foreign exchange.

China’s economic planning agency will have to weigh the Sichuan-based company’s desire to buy the company against its policies to encourage more fuel-efficient vehicles and automobile-industry consolidation.

Meanwhile, a visit to Tengzhong’s facilities, where workers make small batches of machinery parts at a time, highlight questions about the company’s technical readiness to manufacture a complex passenger vehicle — especially if some manufacturing of the vehicles eventually shifts to China, as is “logical” if the bid succeeds, a person familiar with the situation said.

Normally, China’s high-profile outbound investments involve government ministries at every step of the process, because the buyers are owned by the central government. Tengzhong, however, is privately held, with few assets and no experience in commercial automobiles.

“There aren’t many precedents for this transaction,” says Jeanette Chan, a partner at law firm Paul Weiss in Hong Kong.

She notes new rules that came into effect May 1 require a number of approvals before Tengzhong and GM can sign a binding agreement. The rules stipulate that overseas investments of more than $100 million require central government approvals, while provincial governments can sign off on smaller deals.

Central government agencies expected to review the deal include the Ministry of Commerce, the National Development and Reform Commission and the State Administration of Foreign Exchange. Of these, the commerce ministry’s approval is most important; if its approval process runs smoothly, it will take at least 30 working days, Ms. Chan said.

While the company appears to have ties in the local government, that won’t likely translate to any clout on the national level. On Wednesday, Tengzhong’s CEO Yang Yi said the company was “in the middle of the approval process.”

Key criteria include whether the company will be able to fund the purchase and succeed in developing the business. Tengzhong hasn’t released information about its finances, but it appears to be relatively small. Analysts expect Tengzhong to pay $200 million to $300 million for Hummer.

Click here to read the entire article.

(Source:  The Infrastructurist & Asia Times)

The Chinese are at it again.  The Asian juggernaut is rolling ahead with its investment in beefing its modern infrastructure – this time with a massive investment in railways.   With the dedication and determination that has become a hallmark of all things Chinese, be it sports or the development, the country has proved time and again that it is among the best in the world.  Dithering and doing things half-way are not among the national character flaws that might be pinned on the Chinese.  And, perhaps, they’re already at it with this plan to build the world’s largest high-speed rail network. 

China’s rail links totaled 76,600km by end of 2006. But most of them were built at least 30 years ago and some even date back to the early 20th century.   The economic boom of the past two decades has generated soaring demand for rail transportation. In 2006, China’s rail network handled 25% of the world’s cargo and passenger travel, although the country’s railway network only accounts for 6% of the world’s total by mileage. 

In 2006, China’s railway network carried 662.2 billion passenger-kilometers – 2.7 times that of Japan – while it carried 2.87 billion tons of freight, a billion tons more than in the US, and 4.8 times that in India.  To cope with the skyrocketing demand for rail transport, the Chinese government has kept expanding its plans for rail construction. As of March 31, China has committed $259 billion to building its high-speed rail network project, and plans to spend nearly a half trillion dollars more in the next three years, boosting the total investment to $730 billion by 2012.

Of the Chinese investment, at least $1 billion is going to the German conglomerate Seimens for the purchase 100 high speed train sets. They will be, on average, 16 cars–or 1300 feet–in length, capable of carrying 1000 passengers, and capable of traveling 218 mph. Moreover, they will be running on tracks designed to accommodate that speed. Unlike, say, the Acela.  Ultimately, the Chinese government plans to buy 1000 high speed trains to run on a track network of around 25,000 miles. 

A little context here: The US–a country with a per capita GDP about 16 times that of China–has set rail as a national priority and has committed… $13 billion. Or, about 2 percent as much in China. This, of course, is in a place where it costs a hell of a lot more to get anything done.   In the U.S., President Obama’s decision to make high-speed passenger rail service a centerpiece of his transportation agenda is funded in part through the recently passed $787 billion stimulus plan including a total of $8 billion for improvements in the U.S. rail system. The Obama plan also proposes a separate five-year, $5 billion investment in high-speed rail as part of the administration’s suggested fiscal year 2010 budget (FY10 budget outline) to make a down payment on constructing enhanced rail network.

(Source: Times Online, UK)

China demonstrated its growing naval confidence again in the latest standoff between American and Chinese ships.

Photo Courtesy: Frederic J Browne/EPA

The fifth such incident in two months occurred on Friday in the Yellow Sea when a US Navy surveillance ship turned its fire hoses on two Chinese fishing vessels.

A spokesman for the Chinese Foreign Ministry said that the American ship was operating in China’s exclusive economic zone without permission and had violated Chinese and international laws. “We express our concern about this and demand the US side take effective measures to ensure a similar incident does not happen again,” he said.

The USNS Victorious, an ocean surveillance ship designed for anti-submarine warfare and underwater mapping, was conducting what the Pentagon called routine operations in the waters between China and the Korean peninsula. The Chinese vessels came within 100ft (30 metres) of the vessel.

The Pentagon, which accused five Chinese fishing vessels of harassing another US surveillance ship in the South China Sea near Hainan island in March, cited the incident as an example of unsafe Chinese seamanship.

The Chinese vessels did not withdraw until after the Victorious had sounded an alarm and a Chinese military ship, identified by the Pentagon as WAGOR 17, arrived in response to the call for assistance. It shone a light on the fishing vessels until they left.

The Pentagon earlier played down the confrontation, striking a more low-key tone than during the incident two months ago.

A spokesman for the US Defence Department suggested that the United States was looking to avoid the kind of angry exchanges that followed the March incident. He said: “We will be developing a way forward to deal with this diplomatically.”

It was not the first time the Victorious had encountered Chinese boats. On April 7 and April 8, Chinese-flagged fishing vessels approached the ship and the USNS Loyal as they operated within China’s 200-mile economic zone.

(Source: Jalopnik, Wired, Autoblog, Detroit News)

GM chair fears deal can’t be reached: Kent Kresa, interim chairman of General Motors Corp., is not optimistic money-saving concessions can be reached with bondholders and the United Auto Workers to avoid bankruptcy before a June 1 deadline. “I’m hopeful we can get there,” Kresa told The Detroit News today. “Everybody understands we would be in a much better situation if we can resolve this among all the players without going through bankruptcy.” GM is trying to restructure about $28 billion in unsecured debt held by GM’s bondholders and $20 billion in obligations to the United Auto Workers. The federal government also may agree to swap some of its $13.4 billion in General Motors Corp. debt for new equity in the company in a move to help boost GM’s balance sheet.

GM chairman looking to turn over half of board of trustees by June? According to the Detroit Free Press, General Motors interim chairman, Kent Kresa, has been asked by president Obama’s administration to replenish the automaker’s board with fresh blood. Kresa said that while the board did achieve “historic things” recently, like renegotiating the UAW pay scale, he also said that the board didn’t fully comprehend the magnitude of the downturn. 

 GM Says Volt Won’t ‘Pay the Rent’ : General Motors won’t make money on its electric car for quite awhile. That’s to be expected, and it should be supported. The Obama administration doesn’t understand that.

GM, Task Force preparing for “surgical” bankruptcy: According to a lengthy report by the New York Times, the Treasury Department is directing General Motors to begin work on a bankruptcy filing by June 1. Based on sources close to the talks who were unable to officially discuss the process, the report outlines the “fast ‘surgical’ bankruptcy” of the automaker if GM is unable to reach an agreeme…

GM‘s new offer for bondholders may contain no cash, just equity: …GM, Earnings/FinancialsGM’s most recent offer to its bondholders offered a little bit of cash and a little bit of equity. GM CEO Fritz Henderson’s example was that a holder of $1,000 in bonds would end up with $333 and a some equity. After conferring with the Auto Task Force, however, that offer was deemed excessive in light of GM‘s situation so…

Image: Thingermejig@ Flickr

(Source: New York Times)

 BEIJING — Senior Chinese officials on Friday outlined how they aimed to turn their country into the world’s largest producer of electric cars, including a focus on consumer choice rather than corporate subsidies.

Speaking at a conference at the government’s prestigious Diaoyutai guesthouse here, the officials acknowledged that their efforts faced challenges in terms of the cost and safety of electric cars. They promised a nationwide effort by manufacturers, universities, research institutes and government agencies to overcome these obstacles.

(Source: Going Global & BMW Motorrad Blog via AutoblogGreen)

Two enterprising Swiss citizens are riding home along the Silk Route from Beijing to Istanbul, to generate awareness of climate change, promote sustainable motor travel and raise funds to benefit SCCF, a new international foundation focused on finding solutions to combat global warming.

Using BMW F 650 GS bikes, Mark Dembitz and Clarisse Von Wunschheim will journey across eight countries in 80 days, covering almost 17,000 kilometres. Their route will see them leave Beijing on 4 May and journey back to Europe via Kyrgyzstan, Uzbekistan, Turkmenistan, Azerbaijan, Georgia and Armenia, before ending in Istanbul, Turkey on 25 July.

With a career in carbon finance and a keen interest in the environment, Mark is planning to make their ‘Going Global’ journey carbon-neutral, as well as use the opportunity to show others in cities and towns along the route how to help fight climate change.

“We will be keeping an accurate log of daily time and distance travelled as well as fuel usage, and the quantity and quality of petrol,” he said. “Based on this data, we will be able to approximate the quantity of carbon dioxide we emit along the ride. We will then secure credits (one credit is equivalent to one tonne of carbon dioxide) to offset our carbon emissions.

Along the way, the duo will stop at schools and universities to “teach children and students about global warming, motivating them to join us in being aware of their impact on the environment and in making small changes to their lives that will contribute towards a better and cleaner world for everyone.” 

(Source: New York Times)

China wants to raise its annual production capacity to 500,000 hybrid or all-electric cars and buses by the end of 2011, from 2,100 last year, government officials and Chinese auto executives said. By comparison, CSM Worldwide, a consulting firm that does forecasts for automakers, predicts that Japan and South Korea together will be producing 1.1 million hybrid or all-electric light vehicles by then and North America will be making 267,000.

TIANJIN, China — Chinese leaders have adopted a plan aimed at turning the country into one of the leading producers of hybrid and all-electric vehicles within three years, and making it the world leader in electric cars and buses after that.

Premier Wen Jiabao highlighted the importance of electric cars two years ago with his unlikely choice to become minister of science and technology: Wan Gang, a Shanghai-born former Audi auto engineer in Germany who later became the chief scientist for the Chinese government’s research panel on electric vehicles.

Beyond manufacturing, taxi fleets and local government agencies in 13 Chinese cities are being offered subsidies of up to $8,800 for each hybrid or all-electric vehicle they purchase. The state electricity grid has been ordered to set up electric car charging stations in Beijing, Shanghai and Tianjin.

(Source: Earth2Tech & CNET)

According to IBM, which has just unveiled a new “smart rail” project in China, its software can help cut delays, increase uptime, reduce emissions and slash fuel costs, . The company has already rolled out software for high-speed rail projects in the Netherlands and Taiwan. As Big Blue readies for a round of layoffs, those projects could be key to the company’s bid for high-speed rail stimulus funds.  

IBM’s latest smart rail projects add computing intelligence behind the scenes — they’re less about connecting passengers with the web (Cisco’s focus in the San Francisco demo) and more about automating system management to improve efficiency.

In Taiwan, the High Speed Rail Corporation is using IBM’s Maximo software to manage maintenance and logistics (for example, reporting on conditions of signals, tracks and communication devices and automatically filing work orders) for a network of hundreds of trains, each capable of going up to 186 mph, IBM said in an announcement today. A relevant comparison for those of you in Silicon Valley: Caltrain maxes out at 79 mph.  The same software, Maximo, will power the asset management platform IBM is building for the state-owned rail operator in China’s Guangzhou City. IBM says it’s building a classification and coding system for all of GZ Metro’s software, services, tracks, trains, station shops and advertising spots as the railway operator gears up for a $176 billion expansion expected to double passenger capacity to 4 million per day.

CNET reports that Netherlands Railways used software from Ilog, which IBM bought last year, to optimize its schedule to best match its equipment–5,000 trains, 390 stations, and 2,800 kilometers of track–with passenger travel. By fine-tuning this complex system, the rail authority lowered its operating costs between 5 and 10 percent, saving about 20 million euros a year, according to IBM.

The Taiwan High Speed Rail Corporation is using an “asset-management package,” which IBM gained when itacquired MRO Software, to get trains running from the north side of the island to the south with a punctuality rate of 99.15 percent. The 90-minute trip replaces what would be a 4 1/2-hour trip by convention rail.

This CNET article also discussed the efforts undeertaken by the US in speeding up the High-speed rail investment.  IBM considers government funding for high-speed rail is the equivalent of “seed money” for large projects, said Ken Donnelly, transportation strategy manager for IBM’s Maximo asset-management product. As problems over traffic congestion and pollution become more acute, IBM’s Dierkx expects interest in rail to gain steam.

“In an economic downturn, a lot of green initiatives can come under pressure if you don’t have strategic foresight,” he said.

Click here to read the entire article.  Shown below is a video from IBM’s YouTube Channel (IBMSocialMedia), outlining the Transportation needs in China and how IBM is helping the government meet this challenge. 

Source (TreeHugger)

That’s a Lot of Tailpipes
It wasn’t so long ago that we wrote about China’s 168 million motor vehicles (if you count everything), or about how taxes went up on big vehicles (though fuel is heavily subsidized, encouraging waste). Well, China’s not a country to stand still, even in this economy. The latest numbers for “private cars” are out and 2008 saw a 28% increase.

Click here to read more.