What is a “Zombie Company” ?

A Zombie company (僵尸企业) is one which is technically bankrupt, but continues to operate through bank loans, government support, or even cancellation of debts. The key aspect of these organisation is the long-term dependence on this support. Companies that faced a crisis and needed a one-off loan, or government support to bring them back to

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China to accelerate restructuring of zombie companies

China’s government plans to transfer up to 6m employees out of zombie companies before 2019. The aim is to reduce over-capacity across a range of industries. On Feb 29, Minister of Human Resources and Social Security Yin Weimin (尹蔚民) said central government plans to award up to RMB 100,000m in ‘prize money’ to help resettle

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United States TBR dumping tariffs may trigger ‘chain reaction’

A report in Tire Review says the biggest concern in the China tire industry is that the imposition of anti-dumping (AD) and countervailing (CVD) duties on Chinese-made truck tires might trigger a wave of similar duties by countries around the world. A meeting hosted by Minmetals, CRIA and others in Beijing on 19 Feb discussed

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Tire makers think exporting to US is unprofitable

Tire World carried out a survey of tire makers asking about their current sentiment. US export activities: Still exporting to US 22% Looking for other regions 61% Given up on US Market 17%   Export profitability: Still making decent profit 12% Just about breakeven 30% Low Profit 58%   Other export markets Africa 38% Southeast

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MIIT announces first list of tire makers allowed to continue

In September China’s Ministry of Industry and Information Technology (MIIT) began inspecting tire makers to see if they are compliant with the Access conditions (轮胎行业准入条件) and Tire Manufacturer Announcement Interim Measures (轮胎生产企业公告管理暂行办法). MIIT has now published the first list of compliant factories. In the table below, capacities are given as multiples of 10,000 units/year, so

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Jiangsu General Science and Technology goes for IPO

Wuxi-based General Science & Technology Co., China’s Securities Committee has approved Ltd.’s application for an IPO. General Science & Technology (GS) makes tires under the brands Maxima (千里马), Red Horse (赤兔马), Qi Ma (骐马), Starwood Pass (喜达通), Tongyun (通运) names. It has annual capacity for 3m truck tires 1.7m bias-ply car tires; 6m motorcycle tires

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Jiangsu General Science and Tech sets out plans for 2016

General Science & Technology held its annual dealer meeting at the end of January. The company attracted hundreds of dealers to the event in Shanghai. Company chairman, Gu Cui (顾萃) told delegates that the Internet and e-commerce would transform the industry. GS is actively exploring this area. Source: Company announcement

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Is Shandong Fenglun the first ‘zombie’ closure

Further to our report in the 12 Feb issue, it is now being suggested that Shandong Fenglun Tyre Co., Ltd (山东风轮轮胎) has become an early casualty of the Shandong government’s drive to close ‘zombie’ tire makers. On 12 Feb we reported that the company was involved in a dispute with a supplier of carbon black

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Wanli forges deal with Shanghai Lu Sheng Investment

On 26 Feb, Wanli Tires (South China Tire Co) signed a cooperation deal with Shanghai Lu Sheng Investment Co., Ltd. (上海陆晟投资股份有限公司), a tire and auto-parts dealer network. Lu Sheng reportedly has 110 fully-owned stores and a further 12,000 associated retail outlets and reports annual turnover of RMB10,000m The deal covers three aspects: Develop a new

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