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News from China
China criticizes exclusionism in free trade deals
12th October 2018

 China's Ministry of Commerce on Thursday said exclusionism should not be pursued in free trade deals.

 
The remarks were made with regards to a provision in a new trade agreement reached by the United States, Mexico and Canada.
 
"The principle of openness and inclusion should be upheld [in establishing free trade areas], while other members' capacity for external relations should not be restricted. There should be no exclusionism," said MOC spokesperson Gao Feng at a press conference.
 
He was commenting on a provision in the new "United States-Mexico-Canada Agreement," which stipulates that if a member country wants to enter a free trade deal with a "non-market" economy, it must notify the others three months before starting negotiations, while the others can quit within six months to form their own bilateral trade pact.
 
"Clauses on the so-called 'non-market' economies do not exist in the World Trade Organization's multilateral trade rules. They are only included in certain members' domestic laws," Gao said. "China opposes the practice of placing domestic laws above international laws and imposing one country's will on others."
 
"A country should attract trade partners with factors such as market potential and policy environment, based on the principle of mutual respect, equal negotiation and mutual benefits.
 
"We believe that every economy enjoys autonomy in developing foreign trade relations and will value their trade ties with China in line with their demand for mutually beneficial cooperation."
 
Gao said the most important thing for China is to follow its own path and do its own job.
 
"The country will continue to press ahead with supply-side structural reform and optimize its regional, industrial and product structures to push for high-quality development," he said.
 
"China will continue to firmly support trade liberalization and facilitation and back the multilateral trading system, and work with trade partners to make the global trade mechanism fairer and more equitable."
Source: Shanghai Daily, October 12, 2018
Pudong project cutting red tape for business
11th October 2018

 Pudong District is looking at expanding a pilot project to cut red tape, strengthen regulations and improve service, a senior official said yesterday.

 
Under the pilot, the plan to separate the processing of operating permits and business licenses is now fully operational, district deputy director Ji Zhaoliang told reporters yesterday.
 
The aim of one-stop government services has also been implemented, allowing approval for 327 enterprise-related procedures to be completed online or with a single visit to a service center.
 
And the actual processing time has been cut to an average 3.3 working days — 85 percent shorter than the legal maximum of 22 days.
 
"The reform of separating operating permits and business licenses not only simplifies  the single issue of examination and approval but, more importantly, it changes the government's approval management mode," Ji said.
 
The strategy unleashes the vitality of the market, improves the business environment, expands opening-up of the economy and promotes the development of industries.
 
"For the next step, the district will further explore new ways to improve the reforms, aiming to offer the most streamlined market access, the most stable risk prevention and the most convenient government services," Ji said.
Source: Shanghai Daily, October 11, 2018
Robots, humans and 'efficient cooperation'
10th October 2018

 Factories completely operated by robots may be the popular vision for the future of manufacturing, but the human factor cannot be ignored, according to Xiao Weirong, head of B&R China, an arm of the Austrian-based company committed to industrial automation.

 
“In plain words, smart manufacturing means the efficient cooperation between humans and machines in the production process, with humans doing things suitable for humans and machines doing things suitable for machines,” said Xiao.
 
“Smart manufacturing” is the big buzz word in global industry nowadays, reflected in development strategies such as Germany’s Industry 4.0 plan and China’s Made in China 2025 initiative.
 
However, many people tend to equate the term with complete automation. Xiao disputes that, arguing that smart manufacturing means efficient cooperation man and machine. Human beings, he said, will always be essential to smart manufacturing, no matter to what extent it develops.
 
Xiao admitted that he, too, once equated smart manufacturing with unmanned automation.
 
“I believed that automation meant machines did everything and humans were not essential when I was an engineer in Germany,” he said. “In working on my first project, I made the software completely unmanned, but later I saw that if the machine go wrong, humans cannot intercede with its unmanned functions. The co-existence of humans and machines is the basis for industrial automation. Smart manufacturing means humans and machines cooperating harmoniously.”
 
How to improve that cooperation has been the focus of B&R. Last April, Switzerland-based ABB, a giant in the robotics field, acquired B&R and incorporated its technology and expertise into its own industrial automation unit.
 
“Many people think that smart manufacturing means adding a lot of algorithms to software, but, in fact, algorithms eat up a good deal of computing resources and slow down machines,” Xiao said. “That means, in the end, that machine efficiency is reduced and costs increased. Time cost is part of total cost.”
 
An emphasis on the value of humans in smart manufacturing has driven B&R to undertake the training of professionals in automation, in tandem with developing automation technologies.
 
Xiao’s years as a student in Germany gave him an opportunity to learn the value of vocational education. He said he wants to apply that experience to training professional technicians, whose numbers in China fall below those of academic experts.
 
B&R’s automation school was established to address that gap. It offers training classes to customers and employees, in cooperation with technical colleges and universities. Among its academic allies are Shandong University, Northwestern Polytechnical University and Donghua University.
 
By building joint labs with B&R, universities and colleges can offer the latest automation technologies to students, shorten the distance between books and technical development, and enhance the practical abilities of students.
Source: Shanghai Daily, October 10, 2018
Strong services sector shores up business growth – Caixin
9th October 2018

 Chinese business activity expanded modestly last month, with sharp differences between a strong expansion in services and the weakest growth in manufacturing in almost a year, the latest Caixin business report released yesterday shows.

 
And the combined data of both sectors showed a contraction in total employment in September to its lowest level in more than two years, which analysts said could test policymakers' commitment to continued reform.
 
 The seasonally adjusted Caixin China General Services Business Activity Index — or services purchasing managers' index — looking at small and medium private companies, rose to 53.1 last month from 51.5 in August — the largest increase in three months — according to the survey conducted by financial information service provider Markit for Caixin Media.
 
In contrast, the rise in manufacturing production was the weakest since October 2017.
 
"The data indicated that an improved services sector performance was broadly offset by softer manufacturing growth," Caixin said.
 
The Composite Output Index was little-changed at 52.1 from August's 52.0, signaling that the rate of activity growth remained lackluster compared with earlier in the year.
 
New business followed a similar trend, with services companies registering a stronger rise in new orders, the Caixin report said.
 
Although modest, the latest increase in services sector sales was the fastest since June, with some firms linking growth to new product offerings and increased client bases.
 
Meanwhile, new business broadly stagnated for manufacturing companies after a marginal rise in August. 
 
As a result, composite new order inflows continued to expand at a relatively subdued pace, with growth picking up only slightly from August’s 26-month low.
 
Staffing levels fell across both the manufacturing and services sectors in September.
 
"Employment in the services sector contracted abruptly and that sub-index fell to its lowest level since March 2016," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group.
 
For manufacturers, workforce numbers fell at a pace that, although modest, was the fastest for 14 months.
 
Companies across both sectors said restructuring and the non-replacement of voluntary departures had contributed to lower employment levels. 
 
At the composite level, headcounts fell at the fastest rate since August 2016.
 
Prices charged by service providers declined for the first time in 13 months, while input costs rose at their quickest pace since January, which could squeeze company profit margins. 
 
"Reflecting that, the sub-index of business expectations, which gauges service companies' confidence toward the prospects of their operations over the next 12 months, edged down in September from the previous month," Zhong said.
 
Outstanding workloads fell at services companies in September, as has been the case in four of the past five months. That said, the rate of backlog depletion was only slight. 
 
Conversely, the level of work-in-hand (but not yet completed) rose further for manufacturers, albeit at the weakest rate in 12 months.
 
 Unfinished business at the composite level therefore rose only slightly at by the end of the third quarter. 
 
Chinese companies are generally optimistic that output will increase over the next year, the report said.
 
But the level of that positive sentiment fell to a nine-month low among manufacturers amid concerns of ongoing global trade tensions and more restrictive environmental policies, while confidence also slipped across the services sector.
 
Measured across both sectors, expectations fell to their second-lowest in 10 months.
 
"What we should be wary of is that overall employment contracted in September, with the sub-index hitting its lowest level since August 2016," Zhong said.
 
"The deterioration in employment will test policymakers' determination in pressing ahead with reforms."
Source: Shanghai Daily, October 9, 2018

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