News Archive


Asia shares recuperate after rough week, dollar in better health

SYDNEY (Reuters) – Asian shares regained some poise on Friday after a tough week in which the gathering risk of a U.S. rate rise lifted Treasury yields toward nine-year highs and left the dollar on track for its best week so far this year.

European markets have fared much better with Eurostoxx 50 futures at a three-month top in early trade, while the DAX and FTSE both added 0.2 percent.

E-Mini futures for the SP 500 were steady near all-time peaks.

MSCI’s broadest index of Asia-Pacific shares outside Japan bounced 0.4 percent, but was still down 1.7 percent for the week so far. For the quarter, it looked set to gain 4.7 percent.

Japan’s Nikkei was a fraction lower, though South Korea managed to rebound 0.8 percent. Shanghai shares firmed 0.2 percent but were flat on the week.

Many Asian markets have been cold-shouldered this week as investors priced in a greater probability of a rate hike from the Federal Reserve in December.

Fed funds futures 0#FF: now imply around a 73 percent chance of a move at the Dec. 12-13 policy meeting, sharply higher than just a few weeks ago.

As a result, yields on two-year Treasuries reached a near nine-year top before settling at 1.46 percent on Friday. They had been as low as 1.254 percent early in September.

Adding to the upward pressure was President Donald Trump’s proposals for steep tax cuts which, if passed, could benefit U.S. corporations’ profit margins.

The plan, however, lacked any detail on how it might be paid for and faces much opposition in Congress.

“As tax negotiations intensify, significant procedural, fiscal and political constraints are likely to become apparent,” cautioned Richard Franulovich, an analyst at Westpac, while noting the economic benefits of the plan were also in doubt.

“The size of the tax cut is simply too large to be realistic and repealing deductions will prove politically difficult.”

Still, a tax cut that made U.S. equities more attractive while lifting the dollar and Treasury yields would likely prove negative for emerging markets, particularly those that relied heavily on foreign investment. [EMRG/FRX]

The risk alone was enough to rattle share, bond and currency markets in Asia on Thursday, and they will remain vulnerable to headlines on the tax package as it moves through Congress.

DOLLAR REPRIEVE

The jump in Treasury yields proved a much-needed tonic for the U.S. dollar.

Against a basket of currencies the dollar was up 0.18 percent at 93.250, while gains for the week of 1.17 percent were the largest since December.

The euro hovered at $1.1776, having bounced from a six-week trough of $1.1715, but was still down 1.5 percent for the week so far. If it remains there, that would be the largest weekly loss since November 2016. [USD/]

The dollar was also on track for its third week of gains on the Japanese yen at 112.66, just off a peak of 113.26.

On Wall Street, the Dow had ended Thursday with a minor gain of 0.18 percent, while the SP 500 added 0.12 percent and the Nasdaq was flat. [.N]

All three were at or near record highs, stirring concerns about rich valuations.

The forward price-to-earnings ratio (P/E) on the SP stood at 17.9 compared with its long-term average of 15.1, while the forward P/E on the Russell is 26.3 against an average of 21.3.

Important data on inflation from the European Union and the United States are due later in the session, along with economic growth figures in Canada.

Early readings on Chinese manufacturing are out on Saturday ahead of a week-long holiday in the Asian giant.

The EU also faces more political uncertainty on Sunday when Catalan separatists are set to defy Spanish efforts to block an independence referendum.

In commodity markets, oil prices were near to chalking up another weekly gain as investors wagered that efforts to cut a global glut are working and the demand outlook is improving.

Brent was 7 cents higher at $57.48 a barrel, heading for a fifth weekly climb and a 10-percent gain for September. U.S. crude eased 9 cents to $51.48.

Editing by Sam Holmes and Kim Coghill

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/dkeOiRrNOlI/asia-shares-recuperate-after-rough-week-dollar-in-better-health-idUSKCN1C403K

China’s bitcoin market alive and well as traders defy crackdown

SHANGHAI (Reuters) – Weeks after Beijing banned fundraising through token launches and ordered some bitcoin exchanges to shut, casting a chill over the cryptocurrency industry, traders say that the market is far from dead.

While several exchanges have announced that they will close by the end of this month, traders have now moved to buy and sell bitcoin directly with each other on peer-to-peer marketplaces and messenger apps. Industry insiders say some overseas-based initial coin offerings (ICOs) are still being marketed.

Although the crackdown has dissuaded large swathes of less-experienced investors from participating in the trade, market participants point to the limits Chinese regulators ultimately face in controlling the industry, where many users are anonymous and difficult to track.

In the short-run, the crackdown has also created an arbitrage opportunity for investors, with the price of bitcoin in China now trading at a discount to overseas exchanges.

“They can’t set rules to stop me from investing in what I want to invest in. They say you are protecting me, but as long as I think this is good, they have no way to intervene,” said a Chinese bitcoin investor named Victor, who declined to give his full name citing current sensitivities.

“I can do over-the-counter trades or I’ll go offshore…My wallet is my wallet. I’ve never registered my identification card.”

The Chinese government on Sept. 4 ordered ICOs to cease and soon after ordered some cryptocurrency exchanges to shut. Over 15 exchanges, including the three largest players OkCoin, Huobi and BTCChina, have since announced that they will close their mainland businesses by the end of September.

While the clampdown caused the bitcoin price in China to tumble as much as 8 percent on the day of the announcement, it has since recovered to 24,101 yuan ($3,615.67) on Chinese exchange Huobi. On U.S. exchange Bitstamp, it BTC=BTSP currently trades at $4,205.

Trading has spiked generally on peer-to-peer marketplaces, according to data website Coindance. On OTC platform LocalBitcoins, China trading volumes more than doubled in the week starting Sept. 16 from the previous week to 74 million yuan. It hit an all-time-high in the week starting Sept. 23, reaching 115 million yuan in trades.

Volumes on Paxful, another smaller marketplace, also jumped to 1.7 million in the week beginning Sept. 23, up from 351,102 in the previous week, Coindance data showed.

Michael Foster, co-founder of localethereum.com, an over-the-counter marketplace for ethereum trading, said mainland China users accounted for a fifth of its 5,000 signups since it opened for registrations on Tuesday.

“The fact that bitcoin is still being traded is an indication that China isn’t looking to eliminate them, but reposition things in a way to have better control over them,” said Marshall Swatt, the founder of New York-based Coinsetter, a bitcoin exchange acquired by larger peer San Francisco-based Kraken in 2016.

Other Chinese cryptocurrency players said traders were also moving away from using Tencent’s WeChat app, to encrypted messenger app Telegram to avoid regulatory scrutiny.

Some said they were still seeing overseas-based ICOs being marketed in China. The Sept. 4 shutdown of ICOs stipulated that Chinese citizens were not allowed to invest in ICOs. Overseas ICOs have been returning money on a voluntary basis.

“The trend of digital currency transactions moving offshore is inevitable,” Zeng Danhua, the co-author of a bitcoin investment guide, told a television program filmed by Chinese financial news outlet Yicai on Wednesday.

“The regulators may have needed to shut the platforms to guard against financial risks, and there may be a bitcoin bubble, but its investment value persists.”

Additional reporting by Andrew Galbraith, Alexandra Harney and the Shanghai Newsroom; Editing by Sam Holmes

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/3xa2jHpTjtg/chinas-bitcoin-market-alive-and-well-as-traders-defy-crackdown-idUSKCN1C40QD

China’s bitcoin market alive and well as traders defy crackdown

SHANGHAI (Reuters) – Weeks after Beijing banned fundraising through token launches and ordered some bitcoin exchanges to shut, casting a chill over the cryptocurrency industry, traders say that the market is far from dead.

While several exchanges have announced that they will close by the end of this month, traders have now moved to buy and sell bitcoin directly with each other on peer-to-peer marketplaces and messenger apps. Industry insiders say some overseas-based initial coin offerings (ICOs) are still being marketed.

Although the crackdown has dissuaded large swathes of less-experienced investors from participating in the trade, market participants point to the limits Chinese regulators ultimately face in controlling the industry, where many users are anonymous and difficult to track.

In the short-run, the crackdown has also created an arbitrage opportunity for investors, with the price of bitcoin in China now trading at a discount to overseas exchanges.

“They can’t set rules to stop me from investing in what I want to invest in. They say you are protecting me, but as long as I think this is good, they have no way to intervene,” said a Chinese bitcoin investor named Victor, who declined to give his full name citing current sensitivities.

“I can do over-the-counter trades or I’ll go offshore…My wallet is my wallet. I’ve never registered my identification card.”

The Chinese government on Sept. 4 ordered ICOs to cease and soon after ordered some cryptocurrency exchanges to shut. Over 15 exchanges, including the three largest players OkCoin, Huobi and BTCChina, have since announced that they will close their mainland businesses by the end of September.

While the clampdown caused the bitcoin price in China to tumble as much as 8 percent on the day of the announcement, it has since recovered to 24,101 yuan ($3,615.67) on Chinese exchange Huobi. On U.S. exchange Bitstamp, it BTC=BTSP currently trades at $4,205.

Trading has spiked generally on peer-to-peer marketplaces, according to data website Coindance. On OTC platform LocalBitcoins, China trading volumes more than doubled in the week starting Sept. 16 from the previous week to 74 million yuan. It hit an all-time-high in the week starting Sept. 23, reaching 115 million yuan in trades.

Volumes on Paxful, another smaller marketplace, also jumped to 1.7 million in the week beginning Sept. 23, up from 351,102 in the previous week, Coindance data showed.

Michael Foster, co-founder of localethereum.com, an over-the-counter marketplace for ethereum trading, said mainland China users accounted for a fifth of its 5,000 signups since it opened for registrations on Tuesday.

“The fact that bitcoin is still being traded is an indication that China isn’t looking to eliminate them, but reposition things in a way to have better control over them,” said Marshall Swatt, the founder of New York-based Coinsetter, a bitcoin exchange acquired by larger peer San Francisco-based Kraken in 2016.

Other Chinese cryptocurrency players said traders were also moving away from using Tencent’s WeChat app, to encrypted messenger app Telegram to avoid regulatory scrutiny.

Some said they were still seeing overseas-based ICOs being marketed in China. The Sept. 4 shutdown of ICOs stipulated that Chinese citizens were not allowed to invest in ICOs. Overseas ICOs have been returning money on a voluntary basis.

“The trend of digital currency transactions moving offshore is inevitable,” Zeng Danhua, the co-author of a bitcoin investment guide, told a television program filmed by Chinese financial news outlet Yicai on Wednesday.

“The regulators may have needed to shut the platforms to guard against financial risks, and there may be a bitcoin bubble, but its investment value persists.”

Additional reporting by Andrew Galbraith, Alexandra Harney and the Shanghai Newsroom; Editing by Sam Holmes

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/3xa2jHpTjtg/chinas-bitcoin-market-alive-and-well-as-traders-defy-crackdown-idUSKCN1C40QD

China’s bitcoin market alive and well as traders defy crackdown

SHANGHAI (Reuters) – Weeks after Beijing banned fundraising through token launches and ordered some bitcoin exchanges to shut, casting a chill over the cryptocurrency industry, traders say that the market is far from dead.

While several exchanges have announced that they will close by the end of this month, traders have now moved to buy and sell bitcoin directly with each other on peer-to-peer marketplaces and messenger apps. Industry insiders say some overseas-based initial coin offerings (ICOs) are still being marketed.

Although the crackdown has dissuaded large swathes of less-experienced investors from participating in the trade, market participants point to the limits Chinese regulators ultimately face in controlling the industry, where many users are anonymous and difficult to track.

In the short-run, the crackdown has also created an arbitrage opportunity for investors, with the price of bitcoin in China now trading at a discount to overseas exchanges.

“They can’t set rules to stop me from investing in what I want to invest in. They say you are protecting me, but as long as I think this is good, they have no way to intervene,” said a Chinese bitcoin investor named Victor, who declined to give his full name citing current sensitivities.

“I can do over-the-counter trades or I’ll go offshore…My wallet is my wallet. I’ve never registered my identification card.”

The Chinese government on Sept. 4 ordered ICOs to cease and soon after ordered some cryptocurrency exchanges to shut. Over 15 exchanges, including the three largest players OkCoin, Huobi and BTCChina, have since announced that they will close their mainland businesses by the end of September.

While the clampdown caused the bitcoin price in China to tumble as much as 8 percent on the day of the announcement, it has since recovered to 24,101 yuan ($3,615.67) on Chinese exchange Huobi. On U.S. exchange Bitstamp, it BTC=BTSP currently trades at $4,205.

Trading has spiked generally on peer-to-peer marketplaces, according to data website Coindance. On OTC platform LocalBitcoins, China trading volumes more than doubled in the week starting Sept. 16 from the previous week to 74 million yuan. It hit an all-time-high in the week starting Sept. 23, reaching 115 million yuan in trades.

Volumes on Paxful, another smaller marketplace, also jumped to 1.7 million in the week beginning Sept. 23, up from 351,102 in the previous week, Coindance data showed.

Michael Foster, co-founder of localethereum.com, an over-the-counter marketplace for ethereum trading, said mainland China users accounted for a fifth of its 5,000 signups since it opened for registrations on Tuesday.

“The fact that bitcoin is still being traded is an indication that China isn’t looking to eliminate them, but reposition things in a way to have better control over them,” said Marshall Swatt, the founder of New York-based Coinsetter, a bitcoin exchange acquired by larger peer San Francisco-based Kraken in 2016.

Other Chinese cryptocurrency players said traders were also moving away from using Tencent’s WeChat app, to encrypted messenger app Telegram to avoid regulatory scrutiny.

Some said they were still seeing overseas-based ICOs being marketed in China. The Sept. 4 shutdown of ICOs stipulated that Chinese citizens were not allowed to invest in ICOs. Overseas ICOs have been returning money on a voluntary basis.

“The trend of digital currency transactions moving offshore is inevitable,” Zeng Danhua, the co-author of a bitcoin investment guide, told a television program filmed by Chinese financial news outlet Yicai on Wednesday.

“The regulators may have needed to shut the platforms to guard against financial risks, and there may be a bitcoin bubble, but its investment value persists.”

Additional reporting by Andrew Galbraith, Alexandra Harney and the Shanghai Newsroom; Editing by Sam Holmes

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/3xa2jHpTjtg/chinas-bitcoin-market-alive-and-well-as-traders-defy-crackdown-idUSKCN1C40QD

Tesla’s big battery races to keep South Australia’s lights on

ADELAIDE (Reuters) – One year after the state of South Australia suffered a major blackout, construction has started on building the world’s biggest battery to help keep the lights on in Australia’s most wind-dependent state.

Tesla won a bid in July to build a 129 megawatt hour (MWh) battery and the state is counting on it to be ready by the start of the southern summer in December when electricity demand begins to peak.

Tesla chief executive Elon Musk, currently visiting South Australia for a space conference, vowed to install it within 100 days of signing a grid connection agreement or give it to the state for free.

“Construction at the site is already well underway,” South Australia Energy Minister Tom Koutsantonis told Reuters. “The batteries are on track to be operational by December 1.”

Last year’s state-wide blackout was blamed by opponents of renewable energy on the state’s rush to embrace wind and solar, and fueled a backlash that has split Australia’s conservative federal government and led to renewed calls to support coal-fired power.

South Australia hopes the Tesla battery will forestall further blackouts, but Australia’s Treasurer Scott Morrison says it is just a “Hollywood solution” that is not solving the bigger problem of how to supply power when the wind isn’t blowing.

Analysts have estimated the battery, which will be tied to a wind farm run by France’s Neoen, should cost around $750 to $950 per kilowatt, or up to $95 million. Musk said in July the cost to Tesla would be “$50 million or more” if it failed to deliver the project on time.

The Australian Energy Market Operator has warned the country faces a very tight power market this summer, following the closure of one Australia’s biggest coal-fired power stations in the neighboring state of Victoria.

“The battery has a very useful role to play in the South Australian electricity system at the moment,” said Sydney-based energy analyst David Leitch at ITK Services Australia, adding it was valuable insurance against the much heavier costs of another blackout.

The state’s biggest power user, global miner BHP’s Olympic Dam copper mine, alone lost $105 million last year when it was shut for two weeks by the blackout, wiping out the mine’s annual profit.

The battery has been designed to help cover temporary dips in wind power, say for 15 minutes, or help control frequency on the grid at times when gas-fired plants are unable to help balance generation and power demand.

“What they’re trying to do is buy a little bit of time for other systems to respond to fluctuations,” said Bikal Pokharel, an analyst with energy consultants Wood Mackenzie in Singapore.

Transmission company ElectraNet said it was still working to develop the grid connection agreement for the Tesla/Neoen project. Neoen declined to comment on the timeframe.

Reporting by Sonali Paul; Editing by Richard Pullin

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/TByCJjRdxLo/teslas-big-battery-races-to-keep-south-australias-lights-on-idUSKCN1C40DD

Tesla’s big battery races to keep South Australia’s lights on

ADELAIDE (Reuters) – One year after the state of South Australia suffered a major blackout, construction has started on building the world’s biggest battery to help keep the lights on in Australia’s most wind-dependent state.

Tesla won a bid in July to build a 129 megawatt hour (MWh) battery and the state is counting on it to be ready by the start of the southern summer in December when electricity demand begins to peak.

Tesla chief executive Elon Musk, currently visiting South Australia for a space conference, vowed to install it within 100 days of signing a grid connection agreement or give it to the state for free.

“Construction at the site is already well underway,” South Australia Energy Minister Tom Koutsantonis told Reuters. “The batteries are on track to be operational by December 1.”

Last year’s state-wide blackout was blamed by opponents of renewable energy on the state’s rush to embrace wind and solar, and fueled a backlash that has split Australia’s conservative federal government and led to renewed calls to support coal-fired power.

South Australia hopes the Tesla battery will forestall further blackouts, but Australia’s Treasurer Scott Morrison says it is just a “Hollywood solution” that is not solving the bigger problem of how to supply power when the wind isn’t blowing.

Analysts have estimated the battery, which will be tied to a wind farm run by France’s Neoen, should cost around $750 to $950 per kilowatt, or up to $95 million. Musk said in July the cost to Tesla would be “$50 million or more” if it failed to deliver the project on time.

The Australian Energy Market Operator has warned the country faces a very tight power market this summer, following the closure of one Australia’s biggest coal-fired power stations in the neighboring state of Victoria.

“The battery has a very useful role to play in the South Australian electricity system at the moment,” said Sydney-based energy analyst David Leitch at ITK Services Australia, adding it was valuable insurance against the much heavier costs of another blackout.

The state’s biggest power user, global miner BHP’s Olympic Dam copper mine, alone lost $105 million last year when it was shut for two weeks by the blackout, wiping out the mine’s annual profit.

The battery has been designed to help cover temporary dips in wind power, say for 15 minutes, or help control frequency on the grid at times when gas-fired plants are unable to help balance generation and power demand.

“What they’re trying to do is buy a little bit of time for other systems to respond to fluctuations,” said Bikal Pokharel, an analyst with energy consultants Wood Mackenzie in Singapore.

Transmission company ElectraNet said it was still working to develop the grid connection agreement for the Tesla/Neoen project. Neoen declined to comment on the timeframe.

Reporting by Sonali Paul; Editing by Richard Pullin

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/TByCJjRdxLo/teslas-big-battery-races-to-keep-south-australias-lights-on-idUSKCN1C40DD

Tesla’s big battery races to keep South Australia’s lights on

ADELAIDE (Reuters) – One year after the state of South Australia suffered a major blackout, construction has started on building the world’s biggest battery to help keep the lights on in Australia’s most wind-dependent state.

Tesla won a bid in July to build a 129 megawatt hour (MWh) battery and the state is counting on it to be ready by the start of the southern summer in December when electricity demand begins to peak.

Tesla chief executive Elon Musk, currently visiting South Australia for a space conference, vowed to install it within 100 days of signing a grid connection agreement or give it to the state for free.

“Construction at the site is already well underway,” South Australia Energy Minister Tom Koutsantonis told Reuters. “The batteries are on track to be operational by December 1.”

Last year’s state-wide blackout was blamed by opponents of renewable energy on the state’s rush to embrace wind and solar, and fueled a backlash that has split Australia’s conservative federal government and led to renewed calls to support coal-fired power.

South Australia hopes the Tesla battery will forestall further blackouts, but Australia’s Treasurer Scott Morrison says it is just a “Hollywood solution” that is not solving the bigger problem of how to supply power when the wind isn’t blowing.

Analysts have estimated the battery, which will be tied to a wind farm run by France’s Neoen, should cost around $750 to $950 per kilowatt, or up to $95 million. Musk said in July the cost to Tesla would be “$50 million or more” if it failed to deliver the project on time.

The Australian Energy Market Operator has warned the country faces a very tight power market this summer, following the closure of one Australia’s biggest coal-fired power stations in the neighboring state of Victoria.

“The battery has a very useful role to play in the South Australian electricity system at the moment,” said Sydney-based energy analyst David Leitch at ITK Services Australia, adding it was valuable insurance against the much heavier costs of another blackout.

The state’s biggest power user, global miner BHP’s Olympic Dam copper mine, alone lost $105 million last year when it was shut for two weeks by the blackout, wiping out the mine’s annual profit.

The battery has been designed to help cover temporary dips in wind power, say for 15 minutes, or help control frequency on the grid at times when gas-fired plants are unable to help balance generation and power demand.

“What they’re trying to do is buy a little bit of time for other systems to respond to fluctuations,” said Bikal Pokharel, an analyst with energy consultants Wood Mackenzie in Singapore.

Transmission company ElectraNet said it was still working to develop the grid connection agreement for the Tesla/Neoen project. Neoen declined to comment on the timeframe.

Reporting by Sonali Paul; Editing by Richard Pullin

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/TByCJjRdxLo/teslas-big-battery-races-to-keep-south-australias-lights-on-idUSKCN1C40DD

China sets 2019 deadline for automakers to meet green-car sales targets

BEIJING/SHANGHAI (Reuters) – China has set a deadline of 2019 to impose tough new sales targets for electric plug-in and hybrids vehicles, slightly relaxing an earlier plan to launch the rules from next year that had left global automakers worried about being able to comply.

Car makers will need to amass credits for so-called new-energy vehicles (NEVs) equivalent to 10 percent of annual sales by 2019, China’s industry ministry said in a statement on Thursday. That level would rise to 12 percent for 2020.

A single vehicle can generate multiple credits meaning the proportion by NEVs by volume would likely be lower.

The targets, announced by the Ministry of Industry and Information Technology (MIIT), closely mirror previously announced plans, but remove an explicit 8 percent quota for 2018, in effect giving carmakers an extra year grace period.

The quotas are a key part of a drive by China, the world’s largest auto market, to develop its own NEV market, with a long-term aim to ban the production and sale of cars that use traditional fuels announced earlier this month.

Global automotive manufacturers, however, had urged a softening of the proposals for all-electric battery vehicles and electric plug-in hybrids.

Under the rules, car makers will receive credits for new-energy vehicles including plug-in hybrids and fully electric cars that can be transferred or traded. Firms with annual sales volumes above 30,000 units will need to comply with the targets.

These credits – which will vary depending on the range and performance of the vehicle – will be used to calculate if firms have met their quota, a system which would likely mean the actual proportion NEVs made up of total sales was lower.

“The rules could result in the production of more than one million EVs annually in China by 2020, or about 4 percent of sales,” Simon Mui, a transport and energy exert at the U.S.-based Natural Resources Defense Council wrote in note.

GREEN CAR ROLL-OUT

Carmakers were in general positive about the move.

“We welcome the Chinese auto industry’s shift towards greater adoption of NEVs and will comply with relevant regulations presented by authorities,” Ford Motor Co (F.N) said in a statement responding to the announcement.

General Motors Co (GM.N) said it would “strive to comply with the NEV mandatory requirements”, though it added “continued joint efforts by the government and companies are essential to build broad-based consumer acceptance for NEVs”.

“GM has sufficient capacity to manufacture NEVs in China,” it said in a statement.

Japan’s Honda Motor Co Ltd (7267.T) said it planned to launch an electric battery car in China next year and would “try to expand our lineup of new energy vehicles” to meet the quotas.

China is keen to combat air pollution and close a competitive gap between its newer domestic automakers and global rivals. It wants to set goals for electric and plug-in hybrid cars to make up at least a fifth of Chinese auto sales by 2025.

Reuters reported in August that China would delay the implementation of the NEV quotas until 2019, giving global automakers more time to prepare.

Reporting by Adam Jourdan in SHANGHAI, Norihiko Shirouzu in BEIJING; Additional reporting by Joe White in DETROIT, Peter Henderson in SAN FRANSISCO and Beijing Monitoring Desk; Editing by Stephen Coates

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/U61iZYOxAMg/china-sets-2019-deadline-for-automakers-to-meet-green-car-sales-targets-idUSKCN1C30ZL

China sets 2019 deadline for automakers to meet green-car sales targets

BEIJING/SHANGHAI (Reuters) – China has set a deadline of 2019 to impose tough new sales targets for electric plug-in and hybrids vehicles, slightly relaxing an earlier plan to launch the rules from next year that had left global automakers worried about being able to comply.

Car makers will need to amass credits for so-called new-energy vehicles (NEVs) equivalent to 10 percent of annual sales by 2019, China’s industry ministry said in a statement on Thursday. That level would rise to 12 percent for 2020.

A single vehicle can generate multiple credits meaning the proportion by NEVs by volume would likely be lower.

The targets, announced by the Ministry of Industry and Information Technology (MIIT), closely mirror previously announced plans, but remove an explicit 8 percent quota for 2018, in effect giving carmakers an extra year grace period.

The quotas are a key part of a drive by China, the world’s largest auto market, to develop its own NEV market, with a long-term aim to ban the production and sale of cars that use traditional fuels announced earlier this month.

Global automotive manufacturers, however, had urged a softening of the proposals for all-electric battery vehicles and electric plug-in hybrids.

Under the rules, car makers will receive credits for new-energy vehicles including plug-in hybrids and fully electric cars that can be transferred or traded. Firms with annual sales volumes above 30,000 units will need to comply with the targets.

These credits – which will vary depending on the range and performance of the vehicle – will be used to calculate if firms have met their quota, a system which would likely mean the actual proportion NEVs made up of total sales was lower.

“The rules could result in the production of more than one million EVs annually in China by 2020, or about 4 percent of sales,” Simon Mui, a transport and energy exert at the U.S.-based Natural Resources Defense Council wrote in note.

GREEN CAR ROLL-OUT

Carmakers were in general positive about the move.

“We welcome the Chinese auto industry’s shift towards greater adoption of NEVs and will comply with relevant regulations presented by authorities,” Ford Motor Co (F.N) said in a statement responding to the announcement.

General Motors Co (GM.N) said it would “strive to comply with the NEV mandatory requirements”, though it added “continued joint efforts by the government and companies are essential to build broad-based consumer acceptance for NEVs”.

“GM has sufficient capacity to manufacture NEVs in China,” it said in a statement.

Japan’s Honda Motor Co Ltd (7267.T) said it planned to launch an electric battery car in China next year and would “try to expand our lineup of new energy vehicles” to meet the quotas.

China is keen to combat air pollution and close a competitive gap between its newer domestic automakers and global rivals. It wants to set goals for electric and plug-in hybrid cars to make up at least a fifth of Chinese auto sales by 2025.

Reuters reported in August that China would delay the implementation of the NEV quotas until 2019, giving global automakers more time to prepare.

Reporting by Adam Jourdan in SHANGHAI, Norihiko Shirouzu in BEIJING; Additional reporting by Joe White in DETROIT, Peter Henderson in SAN FRANSISCO and Beijing Monitoring Desk; Editing by Stephen Coates

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/U61iZYOxAMg/china-sets-2019-deadline-for-automakers-to-meet-green-car-sales-targets-idUSKCN1C30ZL