China Watch Blog

China Watch Blog has been closely monitoring these traffic jams affecting Northern China since the first monster traffic jam started on August 14, 2010.  Since Friday, about 10,000 trucks were backed up for miles on a northern China highway, the latest in a series of monster jams that have plagued the overloaded road since maintenance work began on a parallel route earlier this summer.

If you are a driver, you would have definitely been stuck in traffic jams before, but that would not warrant the media reporting about it unless it was a real monster.

In this case in Northern China, the traffic jams are real monsters – 10,000 coal trucks stuck in 120 km traffic jam, and that merits a mention in the press.

In about half a month, the expressway has experienced at least three such traffic jams, the People’s Daily has reported.

What causes the traffic jam is the coal from Inner Mongolia that comes load in trucks  inching their way bumper-to-bumper on the Beijing-Tibet highway. Police have been redirecting traffic and reminded drivers to stay alert, an official with Jining traffic police in Inner Mongolia said on Friday.

State television broadcaster China Central Television (CCTV) reported that  the jam for at least 120 kilometers on Friday, turning a stretch of road connecting the coal-rich city of Erdos to Jining in Inner Mongolia into a virtual parking lot. The latest snarl-up has lasted for more than 20 days off and on.

Poor road design and insufficient traffic management were blamed, the Beijing News reported on Friday.

Referring to recent traffic jams on highways, an insider from Beijing Traffic Management Bureau explained that four highways – Beijing-Tibet highway, National Highway 110, Xiguan road and Beijing-Xinjiang highway – all converging into the last one creates huge transportation pressure and causes congestion, the report said.

The booming coal industry in Inner Mongolia also means the more frequent use of highways to send out this “black gold” to fuel the economic development of the rest of China.

Professor Ou Guoli of the School of Economics and Management at Beijing Jiaotong University, said there is no short-term solution for the traffic jam.

To solve the problem permanently, the country’s industrial structure and transportation structure should be adjusted, said Ou.

“Now the country’s economy is heavily dependent on coal, and the supply chain of coal is overloaded. Adjusting the industrial structure will make the consumption of coal more reasonable.”

As for the transportation structure, Ou pointed out that railway is the first choice for transporting raw materials such as coal. Trains have a much larger capacity and can carry the coal more cheaply than trucks on highways.

China Watch Blog likes that headline in a Reuters report today, which stated that a Ryanair plane en route from the UK to Poland was forced to make an emergency landing in Germany after a 56-year-old woman spilt a hot cup of tea on herself, German police said on Wednesday.

We wonder whether airlines will now stop serving hot beverage as it could be “dangerous” and causes losses to them.

China Watch Blog has picked up this story that on the anniversary of direct cross-Taiwan Strait flight, China Airlines and Eva Airways, Taiwan`s two major international airlines, announced  on Aug. 24 that airfare cuts for several major mainland Chinese routes during the promotional period from September through year-end.

The airfare cuts of China Airlines, ranging 10-25%, will apply to the five routes connecting Beijing, Shanghai (Pudong and Hongqiao), Nanjing, and Ningbo, while Eva Airways will also cut airfares at comparable scales for routes connecting Beijing, Nanjing, and Ningbo. Eva Airways even extended the cuts to its global flights, with the airfare for the American route dropping 15%, or NT$5,000, the highest extent.

The two airlines decided to make the cuts, despite the high load factors for direct cross-Strait flights. TransAsia Airways will decide whether to follow suit today (Aug. 25). Along with the advent of off season for other global flights, the move will dampen the passenger-flight revenues of the two airlines by 10% in the fourth quarter, according to institutional investors.

This is the third airfare cut by China Airlines for direct cross-Strait flights, following the previous ones in April and June. As a result, airfare for Shanghai route will decline to near NT$10,000, only half of the peak level.

Transport logistics professionals who wish to take a break will find the fares to Taiwan really dirt cheap.

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China Watch Blog has learnt that orders to US factories for big-ticket manufactured goods dipped in June as demand for commercial aircraft fell. But businesses increased spending on capital goods for a second straight month, a sign that manufacturing continues to help keep the economic recovery afloat.

A report in the SCMP’s Business Post stated that demand for durable goods fell 1% last month to a seasonally adjusted US$190.5 billion, the Commerce Department said.

It was the second straight monthly decline and  the largest drop since August last year. Orders for commercial aircraft fell 25.6%, although seasonal adjustments kept the report from reflecting a strong month for Boeing.

Without the volatile transportation sector, orders fell by 0.6 percentage points.  Still, business spending for machinery and equipment edged up 0.6 percentage points, AP reported.

China Watch Blog has learnt that Guangzhou and Brisbane have agreed to have a direct flight  service in October. This is the first direct flight between Guangdong and Queensland.

Both territories became Friendly Cooperative Provinces in 2004.

Ou Guangyuan, Chairman of the Standing Committee of the People’s Congress of Guangdong Province met with John Mickel, Speaker of Queensland’s parliamentary, in Guangzhou on July 18, 2010, according to NEWSGD.com.

The flight was suggested by Speaker John Mickel of Queensland’s parliamentary after his last mission to Guangdong a year ago. He visited Guangzhou on July 18 and met with Chairman Ou Guangyuan of the Standing Committee of the People’s Congress of Guangdong Province. Chairman Ou pointed out that the flight will enhance cooperation and people-to-people connection between the two provinces.

John Mickel was impressed by the city improvement of Guangzhou brought by the preparatory projects for the 16th Asian Games that will fall on this November, saying “Guangzhou people should be proud of the changes.”

Today, John Mickel will continue his visit in Guangdong to see the province’s latest move in restructuring its economy and intangible cultural heritage protection.

China Watch Blog has picked up this interesting news citing insiders that the Chinese government has deliberately slowed down cross-strait capacity increases, mainly in response to requests from the Hong Kong government, in order to alleviate the impact on Hong Kong`s airport.

Already the number of round-trip flights from Hong Kong to Shanghai has dropped to a dozen a day, compared with over 30 before the inauguration of direct cross-strait flights, according to the report by Taiwan Economic News.

The report says that ever since the launch of direct flights in 2008, airplanes from Taiwan and China have been flying across the Taiwan Strait packed with passengers, and the passengers have been complaining about insufficient capacity (despite increased frequencies) and high ticket prices.

The situation is most serious for such hot routes as those connecting Taiwan with Shanghai, Beijing, and Shenzhen. Passengers have to book at least two weeks in advance for a flight from Taipei to Shanghai, for instance, despite the launching on June 14 of 28 weekly direct flights from Taipei`s Songshan Airport to Hongqiao Airport in Shanghai. This is on top of the original 56 flights per week between Songshan Airport and Shanghai`s Pudong Airport.

The new flight service offers much greater convenience, since Hongqiao is only 13 kilometers from downtown Shanghai; passengers who arrive at Pudong, by contrast, have to travel about an hour to get into the city. Passengers complain that round-trip ticket prices are exorbitant, however, costing NT$17,000 (US$531 at NT$32:US$1), although flying time is only 90 minutes, similar to the flight time from Taipei to Hong Kong, which costs only half the price. The cost of a direct flight is also higher than the NT$15,000 (US$469) price of tickets for indirect Taipei-Shanghai trips that require two flights and transit Hong Kong or Macao.

One major reason for the high ticket prices is a gross insufficiency of flight capacity between the two sides of the Taiwan Strait despite the recent addition of 100 weekly flights, 50 from each side, which has boosted the total number to 370. (Taiwan originally asked to double the number of flights.) The number of weekly flights between China and Korea, by contrast, stands at 800.
Delegates from Taiwan and mainland China are scheduled to meet in October to discuss further increases in flight frequencies.

To meet the huge demand on the bustling Taipei-Shanghai route, Songshan Airport is undergoing major renovation work, scheduled for completion in October, which will enable it to accommodate Airbus A330 jetliners capable of carrying 250-280 passengers. Aircraft that service the route at present, such as the Boeing 737, can hold only about 150 passengers.

A lingering ash cloud spewed from an Iceland volcano continues to wreak havoc on air travel across Europe, cancelling hundreds of flights and stranding travlers around the world. Just as the aviation industry was talking about economic recovery and increase in air cargo business, nature has come to spoil this trend.  Emirates reportedly loses US$1 million in air traffic chaos. Similarly, other airlines are expected to lose hundreds and thousands of dollars. Very bad timing for airlines to absorb such loses as they are just trying to recover from the global recession. Nature’s tricks can very costly. So watch out what happens next, and when airlines will be flying their normal schedules.

15-12-2008

This was the main headline in most of the Taiwan newspapers today. Hooray! Direct cross-Taiwan Strait transportation link formally kicked off today, helping Taiwan to save tens of billions of NT dollars in annual transportation cost and develop into a regional operations center, Taiwan Economic News reports.
Six Taiwanese ships set sail from Keelung, Taichung, and Kaohsiung for 10 Chinese ports, including Tianjin, Shanghai, Guangzhou, and Xiamen, at 10:00 a.m., carrying such goods as chemicals, man-made fiber, machinery equipment, and electronic products, in addition to 1,200 metric tons of orange. Such direct cross-Strait shipping will save 16-27 hours of shipping time per trip, as well as 15-30% of shipping cost. In addition, Taiwanese ships will no longer have to dock at Ishigakijima island of Okinawa, thereby saving NT$300,000 fee of docking certificate, or NT$1.2 billion for 4,000 trips of Taiwanese ships annually.  Meanwhile, direct cross-Strait charter flights will also begin to take off on weekdays today, rather than just on weekends, over five months after the latter service inaugurated on July 4. There will be 54 flights for each of both directions a week. Taipei-Shanghai route, the most popular one, will have flights every day, which will take only 70-85 minutes, faster than the time for traveling between Taipei and Kaohsiung via high-speed rail, thanks to the straight flight route. Cross-Strait one-day life cycle, therefore, will become a reality. Flights bound for Beijing, Nanjing, and Hangzhou will also take straight routes. Direct aviation link will also entail direct postal link, which will cut delivery time for cross-Strait mail by one day on average, and the fee for express-delivery mail and parcels by 10%, as they no longer have to be delivered via the mediation of Hong Kong or Japan. Chunghwa Post has signed contracts with China Airlines and Eva Airways for the transport of cross-Strait postal bags. Presently, cross-Strait mails top 11 million annually, including 5.3 million from Taiwan to China and 6.3 million from China to Taiwan. Plus parcels, the amount hits 13 million. In anticipation of the kickoff of extensive cross-Strait flights, the Tourism Bureau, under the Ministry of Transportation and Communications (MOTC), has relaxed the restrictions on visits of Chinese tourists to Taiwan recently, by halving the minimum number of the members of travel groups to five, raising the ratio of free touring time to one third of the total, up from one fifth originally, and extending their maximum stay to 15 days, up from 10 days. Coupled with expectation relaxation on travels of Chinese tourists to Taiwan by the Chinese authorities, Janice Lai, director general of Tourism Bureau, expected to the see the number of Chinese tourists double to 20,000 a month by year-end. Despite critics saying that it will take at least half a year to a full year before any substantial gains could be had, their comments should be taken with a pinch of salt. They are blind to the fact that the existing businesses between both territories immediately gain because of the shorter travelling time, and the cheaper transportation costs. If the businesses were to plow this savings into their business, within half a year to a full year, these businesses would see substantial gains. So much for prophets of gloom.