China Business Briefs 22/12/13

ECONOMY

China’s economy: The PBOC’s rough playground | The Economist As I mentioned in a previous post, China’s central bank has the power to keep interbank rates steady if it puts its mind to it. So, as Ting Lu of Merrill Lynch points out, any analysis of this week’s interbank strife has to answer two questions: First, why is liquidity tight? And second, why hasn’t the PBOC done enough to ease it?

Q&A: Cash crunch in China – FT.com **Good primer** At the end of Friday China’s central bank, the People’s Bank of China, responded to rising money market rates by announcing it had injected more liquidity into the system. But will that injection be enough to calm fears that China is set for a new cash crunch?

Worst Cash Crunch Since June Drives Chinese ADRs Slump – Bloomberg The Bloomberg China-US Index of the most traded Chinese stocks in the U.S. dropped 0.2 percent to 103.75 yesterday for a weekly slide of 1.6 percent. The gauge’s two-week slump was the longest losing stretch in six months. Macau casino operator Melco Crown Entertainment Ltd. (MPEL) fell for a second day, trading at the widest discount to its Hong Kong stock in a month. NQ Mobile Inc. (NQ) dropped for a fourth week while LightInTheBox Holding Co. slid the most in a week.

Smartphone companies place bet on sports marketing |Companies |chinadaily.com.cn **This will also probably mean more hugely-overpriced friendlies in Beijing, Shanghai etc** As Huawei, Lenovo and ZTE Corp managed to become top-5 mobile phone vendors globally and now aspire to climb the pricing ladder and attract high-end users, they’re starting to build up their branding by using the power of sports stars.

Shenzhen-based Huawei, which has been paying more attention to the smartphone business in recent years, recently signed a sponsorship agreement with Italian football club AC Milan. The three-year deal allows Huawei to use AC Milan’s logo and images of its players for phone promotion activities.

Yuan to appreciate moderately in 2014 |Markets |chinadaily.com.cn **You don’t hear US Congress complaining about currency manipulation any more, amiright?** Deutsche Bank strategists forecast that the yuan will appreciate versus the US dollar by roughly 2-3 percent in 2014, and that renminbi cross-border trade settlement will increase by roughly 50 percent to 6 trillion yuan ($983 billion), or approximately 20 percent of China’s global trade volume.

“Looking to 2014, we expect yuan to continue to appreciate moderately, with the yuan/US dollar bilateral rate expected to rise to the level of 6,” said Zhu Haibin, China economist at J.P. Morgan,

Five Predictions: China’s Business Environment in 2014 – Silicon Hutong **Compare with Evan Osnos’ “ten stories to watch”** Futurism is alchemy in the best of circumstances, and nowhere more so than in the case of China. Nonetheless, if we extrapolate from current events, it appears that China has embarked on a course of commercial nationalism, if not outright mercantilism.

In the spirit of the season, then, we offer our five predictions for 2014:

China faces tough task to resolve housing deadlock |Industries |chinadaily.com.cn “The policy message indicated by authorities recently will bring profound changes to the real estate sector. We expect more targeted reform measures to fix the defects of previous policies,” said Chen Guoqiang, deputy head of the China Real Estate Society.

Processes that allow the market to play a major role are expected to be formed to replace administrative measures currently in place.

Hair-raising rabbit clip hits China’s fur trade |Industries |chinadaily.com.cn The bottom has fallen out of the market for Chinese rabbit fur since a video of fur harvesting appeared online, despite claims that the abuse was an extreme case.

The clip of a farmer ripping fur from an live rabbit precipitated a torrent of public outrage. Many fashion brands, including Calvin Klein, Topshop and H&M, have since refused to use rabbit fur from China in their designs, leaving the Chinese rabbit industry with a tremendous reduction in orders.

Cathay puts in US$7.5b order for Boeing jets | South China Morning Post Chief executive John Slosar has been pushing to retire the airline’s older 747-400 fleet and replace it with more fuel-efficient and modern aircraft as it competes with Emirates for the lucrative business traveller market.

China vs. Japan: Will Boeing’s New Submarine-Destroying Jet Get Battle Tested? (BA) **Is this article literally looking forward to miitary conflict just so we can see quality of Boeing’s hardware? Very bad taste** Japan and China are anything but friendly, but tensions escalated further following China’s recent declaration of a maritime air defense zone over the East China Sea. This move also increased tensions between China and the U.S., and Defense Secretary Chuck Hagel said the U.S. military wont adhere to the guidelines of the Chinese-described air-defense zone.

While this situation isn’t the best news, it has provided Boeing (NYSE: BA) with the opportunity to show off its new submarine-hunting P-8A Poseidon aircraft. Here’s what you need to know.

Ex-ICBC Credit Suisse duo readies China hedge fund as reforms lure investors | GlobalPost Two former portfolio managers of ICBC Credit Suisse Asset Management (International) have started their own hedge fund to invest in China in a sign that Beijing’s bold new reform agenda is drawing investors.

Genesis Capital Investment, founded by Kang Hao, the former head of investment for ICBC Credit Suisse Hong Kong and portfolio manager Jimmy Weng, will start trading by end of this month and aims to raise about $100 million next year.

Posted from Diigo.

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