BEIJING, May 28 (Reuters) – Nissan Motor Co, Japan’s No.2 automaker, will start making Infiniti cars at a 2-billion-yuan ($315 million) plant in China from 2014 as it moves to challenge the dominance of German rivals in the world’s largest auto market.

Chinese-made Infiniti cars would put Nissan on a more level playing field with Audi AG, Mercedes Benz and BMW AG , which have been making cars in China for years, industry observers say. Imported Infiniti cars have been available in China since 2007.

“It’s a necessary step if Infiniti wants a bigger share of the Chinese market,” said Jenny Gu, a manager with industry consultancy LMC Automotive.

“Local production would provide the volume it needs to catch up with the German brands and help to offset a rising yen” that makes cars imported from Japan more expensive, Gu said.

In a statement, Nissan said two Infiniti models – which have yet to be named – would be produced at a factory jointly operated with Dongfeng Motor Group, that makes Teana and Murano models.

The facility in Xiangyang city in central China would have an initial capacity of 130,000 vehicles, rising to 250,000 eventually, it added.

Nissan sold about 19,000 Infiniti cars in China in the last fiscal year that ended in March, a fraction of the more than 300,000 cars market leader Audi delivered in the whole of 2011.

BEIJING (Reuters) – China will exclude foreign firms from bidding in its second tender for shale gas blocks, despite a need for overseas technology to help exploit massive reserves of gas trapped within shale rock formations in the world’s top energy user.

China launched its shale gas push in late 2009, inspired by a shale boom in the United States

Shale gas development in still at the early stage in China, where technically recoverable reserves of the unconventional fuel are estimated to be even higher than in the United States.

In its first public disclosure of requirements for bidders, the Ministry of Land and Resources said only domestic firms with registered capital of more than 300 million yuan ($47.43 million) could bid.

The firms must also have licenses to explore oil and gas or other gaseous mineral resources, or cooperate with businesses holding such licenses.

Bidders must be independent legal entities and joint bidding would not be accepted, the ministry said in a notice dated May 17 on its website (www.mlr.gov.cn), adding that interested parties should submit their interest before May 25.

It did not say when the tender would be held.

BEIJING, May 11 (Reuters) – China, the world’s top cotton consumer, will soon issue about 1 million tonnes of extra cotton import quotas to help textile mills buy cheaper overseas cotton to cut costs, traders said on Friday.

The extra quotas, which would allow imports at sliding tariffs between 5 and 40 percent, would bring total import quotas issued so far this year to about 2.4 million tonnes, they said.

Traders had expected government authorities to issue the extra quotas and had stockpiled a large volume of cheap cotton at the country’s bonded warehouses.

“Some textile mills made some new purchases last week while others are still waiting as domestic cotton prices are falling,” said one trading manager at an international trading house.

“Demand from textile mills is sluggish, some are running at only 30 to 40 percent of production capacity due to fewer export orders,” said the manager.

Expectation of a large increase in imports has pressured local futures prices, with the most-traded September price trading at its lowest levels since November. Even so, domestic cotton is still more than 10 percent higher than the same quality international cotton supplies.

“There are not many high-quality cotton supplies available from the U.S. market and premiums are high as well. Indian cotton is of low quality, we expect new sales from Brazil will pick up,” said another cotton executive.

BEIJING, May 9 (Reuters) – Car sales in China rose 12.5 percent in April from a year earlier, more than double the modest pace in March as consumers trickled back to the showrooms ahead of the Labour Day holiday.

Demand will likely remain solid in May and June as new models that premiered at the Beijing autoshow start to arrive at the showrooms, industry observers said. After that, a more subdued growth pattern, which began after Beijing’s policy incentives expired, is likely to carry through the rest of the summer, the slowest auto selling season of the year.

Many industry executives expect the once red-hot demand in China to register single-digit growth rates for a second year in a row, the slowest back-to-back years since the market first took off in the late 1990s.

General Motors, whose joint ventures with local Chinese automakers such as SAIC Motor Corp are key players, expects China’s overall vehicle market to grow between 5 percent and 10 percent this year.

Following a “quieter” summer period, Kevin Wale, head of GM’s China operations, said he is “actually bullish about the back half of the year.”

“Some people are holding off buying,” but showroom traffic is “still very strong” in the market, Wale said in a telephone interview with Reuters on Wednesday. “When traffic is strong, that means there’s underlying demand. The economy is still okay, the government is loosening credit, making money available for people,” he said.

Dave Schoch, head of Ford Motor China operations, said the Chinese auto market is headed for a period of slower but sustainable growth after growing leaps and bounds since the late 1990s.

BEIJING, April 26 (Reuters) – Cotton stored at Chinese bonded warehouses has risen to as much as a million tonnes after merchants stocked up with cheaper overseas supplies in anticipation of Beijing raising import quotas, trade sources and analysts said on Thursday.

China, the world’s top cotton buyer, may issue a new batch of quotas for as much as 1.5 million tonnes by May to help textile mills secure cheaper cotton overseas, since Indian supplies are currently about 15 percent cheaper than domestic cotton, they said.

Expectations of higher imports have helped push down China’s cotton futures on the Zhengzhou Commodity Exchange, with the most-active September contract down over one percent so far this week and on track for its worst weekly loss in five weeks.

“There is a large volume of cotton stockpiled at bonded warehouses and textile mills have been pushing the government to issue more import quotas,” said Dong Shuzhi, director of the cotton department at Founder Commodities Group, a Chinese trading house.

“There are now growing expectations from the market that Beijing will agree to issue more quotas.”

Despite lacklustre demand at home, China’s cotton prices are now the most expensive in the world at over 20,000 yuan ($3,200) a tonne, thanks to Beijing’s deliberate stockpiling campaign aimed at shoring up prices.

The buying blitz, which began in September and lasted for six months, saw the government sweeping up 3.13 million tonnes of cotton – nearly half of the country’s 2011 harvest.

BEIJING, April 25 (Reuters) – The State Grid Corp of China (SGCC), the world’s largest state utility, plans to spin off a coal and power generation unit with assets worth about 50 billion yuan ($7.9 billion), or 2.5 percent of its total assets, sources told Reuters on Wednesday.

The sale, to state-run Shenhua Group, would be the second divesture after SGCC stripped 4 percent of assets including mostly power construction services last year in a delayed and scaled-down step in China’s power market reform.

The largest power transmission and distribution firm in China is normally disinclined to spin off its huge and complex businesses, which include power transmission, distribution, construction, equipment manufacturing, finance, trusts, insurance and media.

“The divesture conforms to State Grid’s plan and will strengthen Shenhua’s competitive advantage in thermal power generation,” one source said, however, without elaborating what the plan is.

It was not clear whether the whole of the unit, State Grid Energy Development Co Ltd, or just part of it would be transferred to Shenhua, another source said.

The sale has yet to be approved by the State-owned Assets Supervision and Administration Commission (SASAC), according to the sources who were familiar with deal but were not authorized to publicly announce it.

Shenhua Group is the parent of China Shenhua Energy Corp Co Ltd , which runs a big network of power plants and produces the largest volume of coal among Chinese miners.

BEIJING, April 19 (Reuters) – The tiny electric car that Chen Xianping drives to work over bumpy country roads in Shandong province says much about the hurdles facing China’s efforts to promote electric vehicles and the big car companies’ efforts to sell them.

It’s not a beautiful machine. The Shifeng brand car resembles a plump Fiat Mini with oversized headlights and has a top speed of about 50 kilometres per hour.

But Chen’s little car has a big advantage: it cost only 31,600 yuan (about $5,000), far cheaper than BYD’s larger e6, which costs 369,800 yuan ($58,700). And it helps that it’s not a real car in the eyes of the government.

“I had considered getting a gasoline car, but you need to have a driver’s license and pay insurance for that,” Chen said, beaming as he drove his car home from the village school where he is a teacher.

Beijing has made a dismal start toward its ambitious goal of putting of 500, 000 hybrids and electric vehicles (EVs) on China’s roads by the end of 2015, rising to more than 5 million by 2020. Last year, a mere 8,159 were sold across the entire country, including those for government pilot programs for e-taxis and e-buses.

Although heavily subsidised, the EVs the government promotes remain expensive. Even after generous subsidies of 120,000 yuan, the price of the BYD e6 would be seven times Chen’s salary.

A dearth of charging stations and high battery prices have also contributed to the slow pace of high-performance EV sales.

BEIJING, April 11 (Reuters) – Car sales in China climbed a modest 4.5 percent in March from a year earlier, pulling back sharply from a hefty gain in February, a s a slowing economy and higher fuel prices kept customers away from showrooms.

Sales declined 1.3 percent in the first quarter, in a downtrend that started in January when automakers and dealers cut working hours during China’s lunar new year holiday.

Weak sentiment may continue into the second quarter, but new car launches planned for after the weeklong Beijing autoshow, which kicks off on April 23, will bolster auto sales, industry observers say.

“March was never a very good month for car sales. Now that the government cut the GDP target and raised fuel prices, you can imagine the psychological impact that could have on people who are thinking about buying cars,” said Sheng Ye, associate research director for Greater China at industry consultancy Ipsos.

In mid-March, Chinese Premier Wen Jiabao cut the country’s 2012 GDP growth target to 7.5 percent, the lowest since 1999, to steer the economy to a more balanced growth pattern.

Days later, the government raised retail gasoline prices for the second time in six weeks, making them about 25 percent higher than the average price in the United States.

Higher fuel prices might have little impact on the moneyed class, but the price hikes are giving others pause.

BEIJING, March 29 (Reuters) – Top Chinese automaker SAIC Motor Corp reported a 67 percent surge in quarterly earnings on Thursday, citing solid demand for German and U.S. cars made at its Shanghai ventures as well as a $4.4 billion asset purchase from its state parent.

SAIC and its partners, General Motors Co and Volkswagen AG, will continue to outpace their rivals in China as they roll out more quality new products in the coming months, industry observers say.

“GM and Volkswagen held up quite well last year even though the overall market has slowed. For them, capacity is more an issue than sales,” said John Zeng, Asia Pacific chief at industry consultancy, LMC Automotive.

Car sales in China climbed 5.2 percent in 2011, the slowest pace of growth since the nation’s car culture took off at the turn of the century, after Beijing scrapped tax incentives for small cars.

Sales declined nearly 4.4 percent in the first two months of this year, a trend many blamed on the impact of the Lunar New Year holiday in January when automakers and dealerships reduced working hours.

In a stock exchange filing, SAIC attributed the slowdown in 2011 largely to the end of government incentives, but said it remained sanguine on the mid-to-long term growth potential of the domestic market.

China’s overall vehicle sales are expected to grow about 7 percent to around 20.1 million this year, it said.

BEIJING, March 27 (Reuters) – Dongfeng Motor Group , China’s second-largest automaker, reported a 4.6 percent decline in its annual earnings in 2011 as a slowing market and parts supply disruption from natural disasters dented the sales of its Japanese partner, Honda Motor.

The outlook should improve steadily in 2012, industry observers say, as the No.3 Japanese automaker recovers.

“Honda was a drag for Dongfeng last year. CR-V’s production at Dongfeng-Honda was suspended for quite some time because of supply problems,” said John Zeng, Asia Pacific chief at industry consultancy LMC Automotive. “But the new CR-V that hit the market in February and other new models at Dongfeng’s joint ventures will definitely be a big help.”

Dongfeng’s earned 10.48 billion yuan ($1.66 billion) in 2011 net income, down 4.6 percent from a year earlier and slightly off the consensus forecast of 10.95 billion yuan from 23 analysts polled by Thomson One. Revenue came to 131.44 billion yuan, up 7.4 percent year on year.

SAIC had predicted a more than 40 percent jump in its annual earnings on solid auto sales and an asset purchase deal with its state parent.

In a statement posted on the Hong Kong Stock Exchange website, Dongfeng said it remained upbeat for the outlook and pledged to invest 41.6 billion yuan ($6.59 billion) in 2012 and 2013 in vehicle development and capacity expansion.

“We are confident that there are still a lot of opportunities and bright prospect for Chinese auto industry,” it said, citing China’s low auto penetration rate and strong demand for vehicles in lower tier cities among other factors.