China Business Briefs 8/1/14

ECONOMY

PBOC Shows Strong Hand on China’s Shadow Banks – WSJ.com China’s move to step up regulation of its shadow-banking system highlights the weakness of its financial regulators, which have failed to slow the country’s lending boom even as top government officials raised concerns.

The lack of strong action by China’s securities and banking watchdogs to limit the growth of lending outside traditional banks contrasts with aggressive moves by the country’s central bank, which has emerged as the main bulwark against shadow banking.


Beijing’s assault on property developers threatens global economy – FT.com
Last week, China Central Television doubled down on its attacks on real estate companies for owing billions in unpaid land taxes, training its guns on no less a target than the country’s biggest listed developer, Vanke. The report marked the second time in little more than a month that the broadcaster had made these accusations. Developers have denied them both times.

What might seem like an obscure tussle between CCTV and the property companies could turn out to be one of the most serious risks facing the global economy this year.

China to try to make local, national GDP stats match amid skepticism | Reuters The difference between gross domestic product reported in aggregate by China’s 31 provinces in 2011 and the national level, for instance, showed a huge discrepancy, roughly equivalent to the GDP of Turkey.

“We will promote statistical reform and innovation this year to actively and steadily push forward unified accounting for regional GDP,” said Ma Jiantang, head of the National Bureau of Statistics.

Convertibles perk up China’s limp markets – FT.com Chinese groups turned to convertible bonds in near record numbers last year as it became the most reliable way to issue a large chunk of equity – and so support growth – for companies that are already listed.

The market is dominated by domestic investors, but foreigners are becoming more active as corporate interest in using this financing tool means companies are prepared to offer convertible bonds at cheap premiums. The bonds allow issuers to offer debt that pays investors a low monthly coupon and gives them the option to convert the security into the issuer’s stock if it climbs to a preset premium over the bond’s tenure.

Hiring demand hits five-year low – Business – Chinadaily.com.cn About 45 percent of 1,000 employers, who were polled said they will increase the head count at their companies in the first quarter of the year, down 9.7 percentage points from the previous quarter. Some 44 percent of surveyed employers are expecting to keep staffing steady in the next three months, up 7.6 percentage points from a quarter earlier, while more than 10 percent of employers intend to cut their workforce in the next quarter, up 2.1 percentage points.

Crisis Risk Flagged by Haitong as Debt Snowballs: China Credit – Bloomberg Liabilities at non-financial companies may rise to more than 150 percent of gross domestic product in 2014, raising default risks, according to Haitong Securities Co. The ratio of 139 percent at the end of 2012 was already the highest among the world’s 10 biggest economies, according to the most recent data. That compares with 108 percent in France, 103 percent in Japan and 78 percent in the U.S., figures from the Bank for International Settlements and the World Bank show.

Regulators Push Banks, Giant SOEs to Buy Back Stocks: Paper-Caijing Chinese authorities have expressed hopes that major companies with shares below their net asset value, or NAV, should buy back stocks on the stock exchange, reported by the Shanghai Securities News.

The “advice”, delivered at a meeting gathering officials largely from banks and large SOEs, came at a time when Chinese stocks extend their dramatic 2013 falls into 2014. A liquidity squeeze in June and again in December had hit China’s stock market, making it one of the world’s worst performing in 2013.

Three Priorities Identified for Marketization of Financial Resources -Caijing Financial resources are an integral part of capital factors, and achieving the market-oriented configuration of financial resources is an important element of perfecting the socialist market economic system. Overall, China’s economic development has an advantage in that the savings rate is relatively high, so if financial resources can be effectively mobilized and efficiently utilized, it can strongly support the sustained, healthy development of the country.

In the process of promoting market-oriented reforms of financial resources, we should pay special attention to the following three areas:

Is China About to Let the Yuan Rise? Don’t Hold Your Breath – China Real Time Report – WSJ China’s central bankers are beginning to think the country’s huge pile of reserves – which is still growing as authorities intervene to keep the yuan from rising too fast– is excessive. Curbing its growth could even help the economy’s transition from an export-led model to one based on domestic consumption.

China’s World: Beijing Should Scrap the GDP Target – WSJ.com An alarming surge in local government debt reflects China’s obsession with gross domestic product growth, which encourages officials at every layer of the bureaucracy to borrow and spend, often recklessly.

Rural houses to be covered by system – Business – Chinadaily.com.cn China will establish a unified real estate information database where urban and rural housing will be registered, the 21st Century Business Herald reported on Wednesday.

Analysts said this means that houses in rural areas, now under collective-ownership, could be granted property right certificates, paving the way for selling.

PBOC Should Be More Flexible in Managing Liquidity – BoCom – WSJ.com China’s central bank should be more flexible in managing liquidity this year as it presses ahead with market-based interest rate reforms, Bank of Communications Co. (3328.HK, 601328.SH) chief economist Lian Ping said Wednesday.

“It’s better to push forward interest rate liberalization when liquidity conditions are relatively loose,” Mr. Lian said at a news briefing to release the bank’s research reports for 2014.

China Adds Nearly CNY400Bn Outstanding Funds for Forex in Nov. -Caijing November’s new outstanding funds for forex were at  CNY399.3billion($66billion), according to the People’s Bank of China (PBoC),  slightly down from the precious month when the figure hit over 441.6billion, the  second highest seen in 2013, but remained at a relatively high level. China  added a staggering CNY 683.7billion last January.

China’s Credit Hole Seen Limiting 2014 Growth Prospects – Bloomberg China’s new credit probably fell by a record in the second half amid a crackdown on speculative lending, limiting prospects for economic expansion this year as policy makers focus on controlling financial risks.

The broadest measure, aggregate financing, was 7.1 trillion yuan ($1.2 trillion) based on published figures plus economists’ median estimate for December data due in coming days. That would be about 931 billion yuan less than in July-to-December 2012, the largest drop in figures going back to 2002.

The Guardian blocked by China’s Great Firewall The move comes as a bit of a surprise since both the Wall Street Journal‘s and Reuters’ Chinese-language sites were just unblocked on Monday. Those sites took a two-month involuntary hiatus from the Chinese internet after they published stories about the shady connection between former premier Wen Jiabao and American bank JP Morgan Chase

CCP Face Boycott Over Threats To Slash Salaries – New Tang Dynasty Television (NTD TV) The Central Committee of the Chinese Communist Party(CCP)have been threatened with boycott if they lower the salaries of the Senior Executives of State-Owned Enterprises. – SOE’s. More than 30 State-Owned Enterprises (SOE) oppose the measure and more than 170 executives threaten to resign. Private entrepreneurs pointed out that SOE Senior Executives are not only Government Officials but also managers with high pay and no risk. It’s a good thing if they are willing to resign. They can go to the open job market to find out what their real value is.

Protecting Your IP from China The bottom line for protecting your IP from China: do what you can on both the legal side and the non-legal side to protect your IP from China.  It’s tough out there and the more “weapons” you employ, the better your chances.

Growing number of machinery firms hire Chinese executives|Markets|Business|WantChinaTimes.co A growing number of multinational machinery companies in China are appointing Chinese executives after losing their market share to Japanese and South Korean rivals, reports the Chinese-language Global Entrepreneur magazine.

What I learned in my first year as an angel investor in Greater China I’m no stranger to tech companies, investing or China, but being in charge of a massive region including China, Taiwan, and Hong Kong and having to dig deep for quality early stage investments. I’ve also done fundraising and participated in and organized numerous community events which were, to say the least, challenging. Here are some of my key learnings:

IamA nanny for a super-rich family in China AMA! : IAmA IamA nanny for a super-rich family in China AMA!

Solar firms face ‘total eclipse’ in the US – Chinadaily.com.cn Chinese solar companies will be “entirely blocked” from the United States market if that nation’s government imposes new duties on solar cell products made in the Chinese mainland and Taiwan, experts have warned.

“It will keep all the Chinese companies out of the US market if new duties are imposed, in addition to the already unfair trade environment,” said Sun Guangbin, secretary-general for solar energy and photovoltaic products at the China Chamber of Commerce of Machinery and Electronic Products.

China 2013: A Year in Review by Stan Abrams | China Briefing News So what was the big IP case of 2013? Arguably it was the alleged infringement of copyrights held by Dutch artist Florentijn Hofman, creator of the giant inflatable yellow duck that graced harbors, lakes and rivers all over China earlier this year. This copyright issue, which never quite escalated to an actual legal dispute, generated a lot of talk but then fizzled out like air escaping a . . . well, a giant inflatable yellow duck.

Trust Companies, Wealth Managers Banned from Investing Pooled Money – Trust companies and wealth management plans cannot pool investor money to make investments, the China Banking Regulatory Commission (CBRC) said on January 6, indicating renewed efforts at reining in the shadow banking system.

Trust companies and wealth managers cannot maintain a “capital pool,” which typically forms when funds collected from investors of different trust products or wealth management plans are kept together to provide capital for investments or covering the repayment of maturing debt, the CBRC said in a meeting that sets priorities for this year’s regulatory work.

China Gold Congress and Expo | China Economic Review Hosted by the China Gold Association and organized by the China International Mining Cooperation Committee and the Capital Exhibition and Conference Corporation, the Congress will be held at the Beijing International Convention Center on September 10-12, 2014.

Global and China Cobalt Industry Report, 2013 – 2016 | Jan 7, 2014 China lacks of cobalt ore resources, with the total proven reserves of cobalt approximating 80,000 tons, accounting for just 1% of global total, and the vast majority of proven resources are associated ore, whereas independent mineralized cobalt ore occupies only 4.7 % of the reserves in China.

COMPANIES

Shaanxi Coal $1.6 Billion China IPO to Be Biggest in 2 Years – Bloomberg Shaanxi Coal Industry Co. plans to raise 9.83 billion yuan ($1.6 billion) in an initial public offering, set to be China’s biggest IPO in more than two years.

The company will sell 1 billion A-shares on the Shanghai Stock Exchange on Jan. 17 and proceeds will be used to fund projects worth 18.3 billion yuan, according to a statement from the Xi’an, Shaanxi province-based company to the exchange today.

Shanxi Coal Industry nearly halves IPO size – MarketWatch The Shanxi province-based coal miner said it plans to sell 1 billion new shares, half of a target previously announced in 2011, when it first revealed plans for an IPO. The current fund-raising target is 57% of the CNY17.3 billion previous target.

Ping An Bank boosts capital with $2.4 billion private share sale – Yahoo Singapore Finance China’s Ping An Bank Co Ltd has raised 14.73 billion yuan ($2.43 billion) by selling stock to its main shareholder, becoming the latest lender to raise funds to meet new banking standards and to absorb an expected rise in bad loans.

Through the sale, Ping An Insurance Group (HKG:2318) raised its stake in the bank to 59 percent from 52 percent, the two firms said in exchange filings late Tuesday.

Rebuffed by New York Times, Chinese Millionaire Chen Guangbiao Remains Undaunted – China Real Time Report – WSJ Chen Guangbiao said Tuesday that a New York Times Co. executive sent him a memo rejecting his request to meet this week to discuss an investment. A recycling magnate known for combining philanthropy and theatrics, Mr. Chen said he would settle for visiting Manhattan newsstands to improve his understanding of the U.S. media landscape.

Great Wall Sells 750,000 Vehicles in 2013, Sales Up But Growth Rate Slowing | China Car Times – China Auto News Great Wall sold an impressive 754,000 vehicles over the course of 2013, an increase of 21% over 2012. SUV sales accounted for 417,400 units, an increase of 48.47%, sedan sales reached 210,000 units showing a minor increase of 2% whilst pick up sales dropped by 8% to 210,000 units.

L’Oréal joins Revlon in pullback from China market – FT.com French cosmetics group L’Oréal has halted sales of Garnier beauty products in China to focus on other brands, a week after US rival Revlon said it would pull out from the slowing China market.

The company will concentrate on its L’Oréal Paris and Maybelline New York product lines, a China-based spokeswoman said in an email to Reuters on Wednesday. Those brands have been performing more strongly in China.

Chinese Gaming Companies Top Forbes China’s Most Promising Small Businesses List for 2014 Forbes China just released the mainland China’s most promising small businesses list for 2014. Boyaa Interactive International and Shanghai Kingnet Technology Co., both being gaming companies, top the most promising listed and privately held small businesses, respectively.

Alibaba reveals plans go into mobile games Chinese e-commerce giant Alibaba spent much of 2013 entering seemingly every sector in the mobile internet space it wasn’t already active in, but one area remained untouched – games. That has historically always been the domain of rival Tencent (HKG: 0700), among other players like Netease.

This morning, however, that’s changed, as Alibaba announced it will begin developing a platform for mobile games.

General Electric Plans Acquisition and Chinese Automakers Eye U.S. Market Despite recent recalls of more than 1.5 million Buick Excelle and Chevrolet Sail units in China, Buick sales in China increased 15.7% in 2013 to finish with nearly 810,000 units sold for an all-time high. In similar fashion, Chevrolet also set a record with an increase of 8.5% in 2013, to slightly more than 650,000 units.

China Telecom Cuts IPhone Price Ahead of China Mobile Release – Bloomberg China Telecom is offering a combination of price reductions and gift packages that together amount to an 800 yuan ($132) off the list price of 5,288 yuan for a 16 gigabyte iPhone 5s, according to promotional material at the carrier’s Beijing retail locations today.

Chow Tai Fook’s Q3 revenue rises by 26% – BUSINESS – Globaltimes.cn Sales in the Chinese mainland rose 34 percent and sales in Hong Kong and Macao rose 18 percent in the three months ended December 31, Chow Tai Fook said in a statement to the Hong Kong Stock Exchange. Gold products remained its top bestsellers, accounting for 57 percent of total revenue.

China Oilfield to Raise $759 Million in Share Placement – Bloomberg The company will sell 276.3 million Hong Kong-listed shares at HK$21.30 each, a 7 percent discount to yesterday’s closing price, according to a Jan. 7 filing with the city’s stock exchange. Units of China International Capital Corp., Credit Suisse Group AG (CSGN), JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. and Morgan Stanley (MS) are the placing agents, China Overseas said.

Sony to Nintendo Mull China’s Console Market as Ban Lifted – Bloomberg “China mainland is an attractive market,” said Satoshi Nakajima, a Tokyo-based spokesman for Sony’s game unit, which sold 2.1 million of its PlayStation 4 units as of early December since it went on sale Nov. 15. “We will seek to expand when there is an opportunity.”

Kyoto, Japan-based Nintendo is studying what it can do in the Shanghai free-trade zone, according to Yasuhiro Minagawa, a company spokesman. He declined to elaborate.

Cloud Service Provider QingCloud Raised $20 million in Series B for Global Expansion Chinese Cloud service provider QingCloud today announced completion of $20 million funding in Series B. The round is led by Lightspeed China Partners and joined by Matrix Partners China and existing investor BlueRun Ventures.

Alibaba’s payment affiliate teams up with Sina – MarketWatch Alibaba Group Holding Ltd.’s online payment affiliate has struck a deal with Sina Corp. to launch an online payment service as competition rises between the e-commerce giant and rival Tencent Holdings Ltd. (0700.HK).

The affiliate, called Alipay, said on its official microblog account that the new service allows users of Sina’s Weibo microblog service to make online and offline payments through their Alipay accounts.

Apple Opens Store on Alibaba’s Tmall – Digits – WSJ Tmall, launched in 2008, is a shopping website that hosts more than 70,000 merchants, including global brands like Nike Inc.NKE +0.63% and Gap Inc.GPS +1.20% Apple’s new Tmall storefront has a design similar to its own Chinese online store.

An Alibaba spokeswoman confirmed that the Tmall page is indeed Apple’s and that it opened recently, but declined to comment further. An Apple spokeswoman wasn’t immediately available for comment.

China Communications Int’l Buys in Zhenhua Heavy Industries | 4-Traders Shanghai Zhenhua Heavy Industries announces that Zhenhua Engineering plans to sell 749,677,500 B-shares held in the company to China mmunications International, which represent 17.08% of capital stock.

Starbucks Introduces Gift Cards in China|PaymentsSource The deployment in China comes as Starbucks broadens its use of gift cards and rewards, in the U.S. and other markets. A significant part of the company’s card volume has migrated to the mobile channel; 11% of the company’s sales in the U.S. and Canada are made through its mobile app.

Yosen Group Honored ‘2013 China Telecom’s Highest Potential Award’ – BWWGeeksWorld China Telecom hosted its 2013 Annual Appreciation Gala last month in Hangzhou, China, where Yosen is headquartered. It was China Telecom’s largest-scaled, most influential annual gathering in recognition of its collaborative partners. Samsung, Huawei, among many other well-known names in the industry, attended the meeting.

Posted from Diigo.

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