China’s credit spiral | FT Alphaville **Good read** Just when you think there’s nothing left to say about China’s debt dilemma up pop some more pieces to greet the new year. Two of the most recent saw Soros on the self-contradiction in Chinese policy boat saying that “restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years” and Patrick Chovanec providing a touch more detail about what all that messy debt actually means:
China is No. 1 risk for world economy: George Soros – The Tell – MarketWatch The People’s Bank of China moved to rein in debt in 2012, but then the world’s No. 2 economy experienced “real distress,” Soros writes. So China’s Communist Party reasserted its supremacy, ordering steelmakers to restart their furnaces and bankers to ease credit.
China’s economy turned around, and party leaders also announced major reforms in November. “These developments are largely responsible for the recent improvement in the global outlook,” Soros says.
China may raise Iran oil imports with new contract: sources – Tehran Times Industry sources say Chinese state-trader Zhuhai Zhenrong Corp, which was sanctioned by Washington in early 2012 for supplying gasoline to Iran, is in talks with the National Iranian Oil Company (NIOC) for a new contract for condensate.
Zhenrong, an affiliate of China’s defense authorities in the 1990s, acts largely as an import agent for China Petroleum and Chemical Corp, or Sinopec, whose refineries process Iranian crude.
Investors clamoring for high-yield funds in China｜Finance｜Business｜WantChinaTimes.com **Ponzi** Financial products touted as highly profitable and risk-free, which were launched by internet giants and fund management firms, have soared in popularity recently.
Five hundred million yuan’s worth (US$83 million) of money management products called “Tianjin” unveiled by Chinese internet company NetEase were sold within an hour on Dec. 25. The product promised yields of 11%.
Policymakers can’t turn blind eye to debt dangers – BUSINESS – Globaltimes.cn **Global Times shifts blame to “alarmist” reports, no doubt from foreign media** Though the results of these two previous audits also suggested that China’s debt risk is manageable, their lack of granularity only created new worries and concerns. Fear of the unknown led many investors and think tanks to adopt increasingly alarmist views concerning the country’s debt risk. By the beginning of 2013, many even believed that a Chinese financial crisis was imminent. At the very least, the local credit situation was acknowledged as untenable and counterproductive to the financial health of China.
China pledges further support for solar industry | Reuters China pledged further support for its ailing solar power industry on Saturday as the government seeks to revive a sector struggling with overcapacity and falling prices.
The State Council, China’s cabinet, said in July that the country aimed to more than quadruple solar power generating capacity to 35 gigawatts by 2015 in an apparent bid to ease a glut in the domestic solar power industry.
China set to overtake US as world’s biggest goods trader |Economy |chinadaily.com.cn The value of trade in China’s goods in 2013 is set to exceed that of the United States, making the world’s second-largest economy the world’s top trader for the first time, certainly in modern times.
“Judging from the current statistics, there is a very high possibility that the value of China’s goods trade will have exceeded the US in 2013,” said Wang Haifeng, a researcher with the Institute for International Economic Research at the National Development and Reform Commission.
IPO rules overhauled for PE and VC firms — China Daily Article | China Private Equity Chinese PE and VC companies used to evaluate the companies by the standards of the China Securities Regulatory Commission for quicker IPOs, but now the market will play a more important role, said Peter Fuhrman, chairman, founder and chief executive officer at China First Capital.
“Under the new IPO system, the share pricing of an IPO company is decided by its strength and competitiveness, so investors will choose companies with real potential to invest in and provide them with the resources of strategy, management and market development to make their own return the best,” said Fuhrman *.
Panel to push financial reform in FTZ |Economy |chinadaily.com.cn Financial reform in the China (Shanghai) Pilot Free Trade Zone will shift into higher gear and detailed policies may be issued by the end of next month, following the establishment of a high-level panel.
The special group has been established to coordinate and advance the affairs of financial reform in the 28 sq km test zone, China Business News reported, citing an unidentified source connected to the financial authorities in Shanghai.
Currency tax under consideration: SAFE |Economy |chinadaily.com.cn Yi Gang, head of the State Administration of Foreign Exchange, made the comments in an article in the Communist Party journal Qiushi.
Yi wrote that a Tobin tax, a tax on all spot foreign currency transactions that’s named after Nobel economist James Tobin, should be “studied in depth”.
China Signs over CNY1 Tln Currency Swap Agreements in 2013-Caijing China’s central bank signed CNY1.16trillion currency swap agreements with eight countries in 2013 to promote bilateral trade and investment in a broader area, according to Great Wisdom, a Shanghai-based financial information provider.
The eight countries or regions include Singapore, Brazil, England, Hungary, Albania, Iceland, Indonesia and Europe.
As a supplement to the country’s RMB going-out policy, the People’s Bank of China (PBoC) has reached currency swap agreements totaling CNY2.5 trillion with 23 foreign central banks since 2008.
China Moves to Tighten Rare-Earths Control, Pave Way for Consolidation – WSJ.com China is moving to tighten control over its far-flung rare-earths industry, paving the way for state-backed mining giants to acquire smaller producers and carry out Beijing’s consolidation mandate.
The central government faces increased urgency to corral an unruly industry. Beijing is under pressure from the World Trade Organization to give up its rare-earths export quota, a key tool for influencing global prices.
A Look Back at China Tech Market in 2013 2013 is quite a year for China tech industry. TechNode reporters produced a series of articles about China tech market in the past year. Here are what we believe you should know about.
Public holidays in China | McKinsey China **Would be** It would be a further sign of a maturing of the Chinese economy and of growth in services industries, which lend themselves to more flexible vacation schedules, if the government shifted its focus from mandating public holidays towards increasing the mandatory minimum vacation dates that employers must provide, and then spend its time ensuring that regulations are adhered to. For manufacturing enterprises, there could be a shift towards the model previously used in Europe of staggering some of the vacation periods, with companies in one region having mandated vacation periods that do not overlap with those in an adjacent region or city.
Hangzhou to invest US$1.7bn in Qiandao lake water diversion project｜Markets｜Business｜WantChinaTimes.com Hangzhou plans to start the construction of a reservoir off Qiandao lake in 2014 and finish 60% of the 10 billion yuan (US$1.7 billion) investment in three years, which will deliver drinking water to residents of Hangzhou after the construction is complete, according to Zhou Dingyan, the head of the city’s Forest and Water Bureau, said.
Local authorities have been unable to discover the reason behind the “strange taste in the tap water,” reported four times since March 2013. A Hangzhou government official pointed out that Hangzhou’s ability to handle polluted drinking water is inadequate because a safe water supply network has yet to be established.
Alibaba investment fund China’s largest｜Finance｜Business｜WantChinaTimes.com An investment fund backed by China’s e-commerce giant Alibaba has become the country’s largest, with the business model built around its third-party payment service Alipay being seen as an incredible success, the Shanghai-based China Business News reports.
The size of the currency fund Tianhong Zenglibao reached 185.3 billion yuan (US$30.62 billion) at the end of 2013, making it the largest in China and making Tianhong Asset Management the second largest fund company in the country.
Tech in China 2013: High Hopes of Disrupting Domestic Financial Market Yuebao is a mutual fund tailored to Alipay users. Launched in mid-2013, 43.03 million Alipay users adopted it in half a year since its launch. A total of RMB185.3 billion ($30 bn), an average of RMB 4307 ($700) per user account, were transferred into Yuebao that generated RMB1.70 billion in total return in half a year, disclosed Alipay, the online payments service of Alibaba Group.
Tech in China 2013: The Call from Overseas We discussed on why increasingly more Chinese tech companies test the water of overseas markets. In 2013, they must feel more encouraging as there were several more successful cases. Sungy Mobile, an Android launcher and app developer with 70% users from overseas, went public on the NASDAQ. Another Chinese company that launched IPO in the US in 2013, online retailer LightIntheBox, has a majority of orders from outside China. IGG, an online gaming company that went public in Hong Kong, isn’t known as a Chinese company in many markets. Keyboard app TouchPal announced 100 million users, most being overseas.
Wal-Mart’s Reputation Takes a Hit From China Donkey Meat Scandal (WMT) **WalMart in China is still poor. Logistics problems inhibit quality supermarket sector** For a country in which food quality is already suspect, it’s probably not much of a surprise that China is suffering though yet another bout of tainted goods. The fact that it involves Wal-Mart (NYSE: WMT ) , however, which takes care to preserve its reputation as a quality retailer, could jeopardize the company’s expansion plans the
Is Apple’s China Mobile Deal a Dud? (AAPL, CHL) There are several reasons low pre-order estimates do not necessarily imply weak sales when the iPhone becomes available at China Mobile later this month. If Apple investors are patient, they are likely to be rewarded with substantial share appreciation this year and beyond as Apple starts to exploit this big opportunity.
Why Ctrip.com International, Ltd., Arch Coal Inc., and Inovio Pharmaceuticals Inc Tumbled Today (ACI, CTRP, INO, PCLN) Ctrip dropped 8% as a Bloomberg report detailed the heightened competition that the online travel company could see in the near future. With companies like newly public Qunar Cayman Islands saying that it saw record levels for bookings of air travel in late 2013, Ctrip is suddenly facing threats not just on the hotel side of its business, but also on airline ticketing. Yet, Ctrip still has its size advantage to use, and U.S. giant Priceline.com (NASDAQ: PCLN ) has demonstrated the value of using its size to create other competitive advantages it has used to send its shares soaring.
Murdoch’s Fox Sells Star China Stake to Management Group – Bloomberg **China beats Murdoch. Not sure how to feel about that one…** China Media Capital and the management team of Star China, owner of three 24-hour Mandarin-language TV networks, are buying Fox’s 47 percent stake in the venture, the companies said yesterday in a statement. Terms weren’t disclosed.
China Shows Off Its Helicopters – China Real Time Report – WSJ But the biggest recent China helicopter story got less coverage: the maiden flight of a domestically designed medium-lift craft analysts are calling the Z-20, which lifted off from an unidentified snowy military base in the northeast late last month.
James Hardy, Asia-Pacific editor at IHS Jane’s Defence Weekly, said the Z-20 project appears to mark a particularly important advancement, both in terms of its domestic development and the type of lift it will provide. “It fills a real gap,” said Mr. Hardy.
China Probes Vaccine Makers Amid Heightened Scrutiny – China Real Time Report – WSJ China’s food and drug regulators are coming down on the country’s largest makers of the hepatitis B vaccine, even after clearing the manufacturers as a potential cause of nine infant deaths.
The country’s food and drug watchdog halted vaccine production at Beijing Tiantan Biological Products Corp.600161.SH +6.59% , Shenzhen Kangtai Biological Products Co. and Dalian Hissen Bio-Pharm, citing a failure to meet new production quality, according to the official Xinhua News Agency. It didn’t elaborate on which quality requirements were unmet.
Who are Xiaomi’s 30 million MIUI users? (INFOGRAPHIC) Chinese phone-maker Xiaomi recently released an infographic covering some data points for MIUI, the company’s Android skin and ecosystem that comes pre-installed on all of its handsets.
Apple Inc. (AAPL): Impact On Apple If 2% – 4% Of China Mobile Customers Buy An iPhone – Seeking Alpha Conservative estimates for the amount of China Mobile (CHL) customers to buy an iPhone are approximately 2% for 2014. With the total China Mobile customer count at about 763 million as of the end of November 2013, this equates to approximately 15 million in iPhone sales. With the average price of an iPhone in China, currently at $525, Apple (AAPL) stands to gain about $7.9 billion in additional revenue from China Mobile in 2014.
Moody’s rates ICBC (Argentina)’s senior note issuance Moody’s Latin America assigned today a Ba3 global local currency debt rating to ICBC (Argentina) S.A.’s (ICBC) expected issuance of up to ARS 300 million, which will be due in 18 months under the bank’s $250 million medium-term note program. At the same time, Moody’s Latin America assigned a Aaa.ar national scale local currency debt rating to the expected issuance.
Huawei Technology Co Ltd : Joint Project by Huawei and China Mobile Gets DatacenterDynamics Greater China 2013 Green Data Center Award | 4-Traders Huawei, a global information and communications technology (ICT) solutions provider, and China Mobile, a telecommunications service provider, jointly announced that the China Mobile – Huawei Warehouse IDC project, a collaboration between Huawei and a subsidiary of China Mobile, Heilongjiang Mobile, has won the DatacenterDynamics Greater China 2013 Award in the Green Data Center Category.
Singapore’s OCBC in exclusive talks to buy Wing Hang Bank – sources | 4-Traders Singapore’s Oversea-Chinese Banking Corp (OCBC) has begun exclusive talks to buy Hong Kong’s Wing Hang Bank in a deal that would value the family-run lender at about $5.3 billion, two people familiar with the matter told Reuters.
Reuters previously reported that the sale process had attracted interest from suitors including Agricultural Bank of China, Australia and New Zealand Banking Group and Singapore’s United Overseas Bank. But Wing Hang’s high price expectations prompted many to drop out of the auction.
BRIEF-ICBC says 65.69 pct of convertible bonds not converted into A-shares, appoints new senior exec VP | Reuters Industrial and Commercial Bank of China Ltd (ICBC)
* Says 65.69 percent of convertible bonds issued in August 2010 has not been converted into A-shares as of end-2013
* Says received regulatory approval to appoint Wang Jingdong as senior executive vice president
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