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China Business Briefs 24/4/14

Economy Finance Auto Energy Tech Property Agriculture Retail

Economy

Manufacturing remains weak[1]- Chinadaily.com.cn The preliminary reading was 48.3, compared with 48.0 in March. A reading below 50 indicates a contraction.

Domestic demand improved slightly, as suggested by an increase in new orders. The sub-index reading rose to 47.7 in April from 46.5 in March. Output rebounded to 48.0 from 47.2.

Infrastructure projects set to boost growth – Business – Chinadaily.com.cn China announced 80 major public infrastructure projects on Wednesday to arrest the economy’s slowdown while experimenting with wider access for private and overseas investors.

The projects will cover railway and harbor construction, new infrastructure needed by information technology, major clean energy projects such as hydropower, wind power and photovoltaic power, as well as modernization projects in oil and gas and chemical industries.

China Opens 80 Projects in State-Run Sectors to Investors – Bloomberg The projects are in industries including railways, ports and clean energy, according to a statement posted on the central government’s website yesterday that cited a State Council meeting. The projects are also in information technology, oil and gas pipelines, coal-to-chemicals and petrochemicals, it said.

State-controlled companies including PetroChina Co. (857) and China Petroleum & Chemical Corp. (386) have been leading a drive to find private investors amid a push by Premier Li Keqiang to give markets a bigger role in the allocation of resources. The country’s economy grew 7.4 percent in the first three months of the year, the slowest pace in six quarters.

Weakening RMB affecting dim sum bond market|Finance|Business|WantChinaTimes.com Continued depreciation of the renminbi has made investors more cautious in credit checks of offshore RMB bond issuers as the fear of a market reaction has caused some Chinese companies to turn to dollar bonds to raise cash.

Since mid-February, the Chinese currency has depreciated by nearly 3%, meaning investors snapping up “dim sum bonds,” or RMB-denominated bonds issued outside the Chinese mainland, can no longer speculate on a rising yuan.

China Resources ‘mistress’ business link tracked – FT.com China Resources, the state-owned conglomerate whose chairman was detained last week by anti-corruption investigators, has allocated many of its investment banking deals over the past five years to institutions employing the chairman’s alleged mistress.

From 2009 until 2012, Credit Suisse was one of the most prominent advisers on acquisitions and capital market activity carried out by China Resources and its numerous subsidiaries, according to data from Dealogic financial services information. This period coincides with the employment of Yang Lijuan, who also goes by the name Helen Yang and who is alleged to have been the mistress of the disgraced China Resources chairman Song Lin.

Contrarian Fund Will Seek Opportunities in Suffering Chinese Shares – WSJ.com Value Partners Group Ltd., a money manager based in Hong Kong, plans to open a fund in the third quarter to snap up shares in companies such as coal miners and steelmakers. They have been big decliners since China’s government started making noise about pollution and taking aim at energy-intensive heavy industries.

“They are too severely punished, to the point where it’s worth thinking about deep value buying,” said Cheah Cheng Hye, chairman and co-chief investment officer of Value Partners Group Ltd., which will likely look to raise at least US$50 million for its contrarian fund.

Finance

Chinese firms turn to foreign investors to borrow – MarketWatch Businesses based in mainland China–led by banks, property developers and energy companies–at the end of last year had a total of $169.2 billion of bonds outstanding held by investors outside China, up 60% from the previous year and more than double the amount from 2011, according to a new analysis by Nomura Holdings Inc. Many of the bonds are sold in Hong Kong, a Chinese city that operates under its own laws, and in the Caribbean. Of all the estimated $2 trillion of Chinese corporate bonds outstanding, about 8% is held by foreigners, the Nomura study shows.

Chinese brokerages queue up for next round of IPOs | GlobalPost The China Securities Regulatory Commission published the application prospectuses of 19 firms on its website on Tuesday evening, bringing the total to 65 applicants over the last five days.

One firm, Guotai Junan Securities Co Ltd, has applied for an IPO in Shanghai that could raise nearly 22 billion yuan ($3.5 billion), according to Reuters calculations.

Short-Seller Accuses Chinese Rubber Recycler of Doctoring Financials – WSJ.com Short-seller Glaucus Research Group California LLC on Thursday accused a Taipei-listed Chinese foam-rubber recycler of doctoring its financials.

In a 32-page report, Glaucus said it believes Asia Plastic Recycling Holding Ltd , based in China’s Fujian province, has overstated its net income by around 10 times, citing Chinese government tax records. Glacus also said public-land records show the company paid much less than it reported in acquiring two pieces of land and in expanding a factory since 2011.

Auto

Tesla CEO Pledges to Build Up Support Network in China – WSJ.com Tesla Motors Inc. Chief Executive Elon Musk pledged to enhance the auto maker’s support network in China to help broaden use of the company’s niche electric car, and offered new details about a $5 billion battery factory Tesla plans to build in the U.S.

Speaking in Beijing Tuesday at a ceremony marking the first handover of a Tesla vehicle to a customer in China, Mr. Musk said U.S.-based Tesla is building out hundreds of service centers around China but didn’t offer a time frame for their completion.

Energy

China Ends Environmental Ban on CNPC, Sinopec Refining Projects – Bloomberg Overturning an eight month-old ban, China National Petroleum Corp. and China Petrochemical Corp. can resume applying for clearance from the Ministry of Environmental Protection for new refining and petrochemicals projects, the ministry said today on its website.

CNPC, China’s biggest oil and gas company and parent of PetroChina Co. (857), and Sinopec Group, Asia’s biggest refiner and parent of China Petroleum & Chemical Corp. (386) known as Sinopec, were banned from seeking environmental clearances in September 2013 following a review of their emissions in 2012. The ban effectively prevented the companies from building new refineries and petrochemical facilities.

PetroChina Company Limited Given Average Rating of “Buy” by Brokerages (NYSE:PTR) | WKRB News PetroChina Company Limited (NYSE:PTR) has received an average recommendation of “Buy” from the twelve brokerages that are covering the company, ARN reports. One analyst has rated the stock with a sell recommendation, four have given a hold recommendation and seven have given a buy recommendation to the company. The average twelve-month target price among analysts that have issued a report on the stock in the last year is $102.00.

CNOOC Ltd offers $4bn bonds -Upstreamonline.com The overseas arm of state-run China National Offshore Oil Corporation (CNOOC) is offering $4 billion worth of bonds to help repay loans related to its takeover of Canada’s Nexen last year.

CNOOC Ltd revealed it planned to sell $1.25 billion three-year notes, $2.25 billion 10-year notes and $500 million 30-year notes.

CNOOC Ltd names new Nexen boss -Upstreamonline.com Current executive vice president of CNOOC Ltd Fang Zhi will take over for Kevin Reinhart as Nexen’s chief executive, the company said.

Reinhart, who has worked for Nexen for 20 years, was named interim chief executive in early 2012 following the abrupt departure of former boss Marvin Romanow. Reinhart has held the position since then and oversaw the $15.1 billion sale to CNOOC Ltd, which was finalised in February last year.

Tech

Competition, Subsidies Hit China Mobile Earnings – WSJ.com China Mobile, however, has been dependent on homegrown 3G technology, which is compatible with fewer handsets. To maintain its dominant position, the company plans to double its capital spending to $12 billion this year to build a speedier 4G network. Apple and other major smartphone makers including Samsung Electronics Co., Sony Corp. and HTC Corp. already make phones to support this 4G standard.

China Mobile added 1.34 million 4G users in February, of which about one million were new iPhone users, Chief Executive Li Yue told The Wall Street Journal last month. The company said Tuesday it added 1.45 million 4G users in March, but it didn’t give a breakdown of iPhone users.

Tencent $2.5bn bond sale defies tech sector gloom – FT.com The deal, announced to the Hong Kong stock exchange on Wednesday, is part of the company’s medium-term notes programme established earlier this month, and is split into three-year and five-year tranches. The shorter duration debt offers a yield of just over 2 per cent while the notes maturing in 2019 – the bulk of the deal, at $2bn – pay out 3.4 per cent.

The five-year portion was priced at a spread over US Treasuries of 165 basis points, a new low for the company. It paid a spread of 375 bps in its first US dollar deal in 2011, and 275 bps in 2012.

Alibaba Starts to Sells First Ever Private Brand Hardware Tmall Box for 299 Yuan | TechNode Alibaba starts to sell set-top-box Tmall Box today on its B2C e-commerce site Tmall. This is the first time for the Chinese Internet giant to commercialize private brand hardware, although it has released last year another set-top box Wasu Rainbow together with Wasu Media, one of the several state-authorized content providers.

The product is priced at 299 yuan (around $48), while 10,000 Tmall credits will be distributed to each buyer, who can purchase 100 yuan worth of products on Tmall.

Xiaomi announces expansion into 10 more countries this year This afternoon Xiaomi, China’s fast-growing smartphone maker, held a meetup in Beijing to announce it would enter some new markets and also reveal a new product it had been teasing for the past several weeks.

  • Asia: Malaysia, Indonesia, India, the Philippines, Thailand, Vietnam
  • Europe: Russia, Turkey
  • Latin America: Mexico, Brazil

Uber rolls into Beijing, now in 5 cities across China As is Uber’s usual strategy, the Beijing debut is a quiet ‘soft’ launch ahead of a more high-profile entrance at a later date. Uber gave rides to two Beijing luminaries earlier today – local tech blogger Keso, and Beijing newbie Hugo Barra, the Googler who’s now heading the global push at phone-maker Xiaomi.

New competition coming soon in China 4G, broadband | South China Morning Post Just a day after China Mobile (0941.HK; NYSE: CHL) reported some of its worst results in years, new developments in the telecoms space are showing why the nation’s leading telco will face a rough time for the rest of this year and quite possibly well beyond that. According to the latest media reports, China’s telecoms regulator could issue 4G licenses for the main technology being used by China Mobile’s two rivals as soon as next month, injecting a major shot of competition into the market. The second telecoms news bit comes in broadband, with reports that the nation’s newly formed national cable TV company has formally registered and will start business soon.

Huawei to boost its smartphone brand via new retail, online push | South China Morning Post “There are different ways to build a brand,” said Shao Yang, vice-president of marketing for Huawei’s consumer business group. “We will adopt measures not that new to the market but new to Huawei.”

Shao said the China market will be the focus of the company’s efforts in 2014, mainly because of the launch of 4G networks on the mainland. The company trails only Samsung and Apple as a leading producer of smartphones. It plans to manufacture 80 million smartphones this year, having shipped 52 million units in 2013.

China mobile Zong wins Pakistan’s 3G, 4G spectrum – Xinhua | English.news.cn Pakistan raised 1.1 billion U.S. dollars in its first auction for 3G and 4G mobile phone networks on Wednesday and China Mobile Pakistan, or Zong, emerged the sole winner of Pakistan 4G spectrum license and one of four winners of the country’s 3G spectrum licenses.

Property

China Money Network − CITIC Capital, Sonae Sierra Launch Property Management Joint Venture CITIC Capital Holdings Limited and international shopping center operator Sonae Sierra says they have launched a joint venture to provide management and leasing services to shopping centers in China, according to a company announcement.

Headquartered in Shanghai, the joint venture will focus on adding long-term value to shopping centers in China. It will start by providing property management services to retail projects currently invested by CITIC Capital.

Agriculture

Shanghai Dairy planning independent public listing|Companies|Business|WantChinaTimes.com Shanghai Dairy Group, a subsidiary of Bright Dairy and Foods, plans to go public independently, the subsidiary’s chairperson Shen Weiping told Shanghai-based China Business News, denying rumors about Shanghai Dairy’s capital being invested into the listed Bright Foods stock-trading platform.

Shen also said that Shanghai Dairy had reached an agreement with Nestle to build a milk production line in the Heilongjiang region of northeastern China to supply milk to Nestle’s baby formula brands. The planned investment will be worth several billion yuan, Shen stated.

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China Business Briefs 23/4/14

Economy Finance Auto Infrastructure Energy Telecoms Property Travel Tech Agriculture Healthcare

Economy

Reform of China’s state-owned sector gains momentum | South China Morning Post **Cross river by feeling the stones, etc** Far from the spotlight, in secretive high-level meetings and company boardrooms, Beijing is drawing up one of the country’s thorniest reforms: an overhaul of China’s hugely inefficient state-owned enterprises (SOEs).

It shapes up as an eclectic mix of pilot projects and initiatives rather than a single blueprint, which makes it hard to judge their progress.

Yet, taken together, they probably mark the beginning of the biggest revamp of China’s state sector since the late 1990s, when Beijing set out to shore up industry before joining the World Trade Organisation.

South China’s Balancing Act Between Raising Wages & Keeping Investors | China Briefing News In South China for example, minimum wages were last increased in Dongguan, Foshan, Zhuhai and Zhongshan on a mandatory basis on May 1st of last year. This year, no announcement has been made, although rumors are the increase is being deferred a few months to August.

There are signals that local governments are now having to strike a balancing act between making companies happy (with no further labor cost raises) and workers demanding higher salaries – which will attract more workers and increase local consumption. In terms of social insurance, although this is compulsory, some local companies have been late in paying their obligations in full.

Chinese Bad-Loan Ratio Rises ‘Significantly,’ Huarong Says (1) – Businessweek China’s bad-loan ratio rose “significantly” in the first quarter, increasing risks for the nation’s banking industry, according to the nation’s largest manager of soured debt.

The business environment this year has been “grim and complicated” as lenders face pressures on asset quality, liquidity and lending margins, China Huarong Asset Management Co. Chairman Lai Xiaomin said during an internal meeting on April 15, according to a statement today on the website of the Beijing-based company.

Chinese Shoemakers Are on Strike for Benefits — But Who Will Foot the Bill? – China Real Time Report – WSJ The workers said the Hong Kong-listed company has been making social insurance contributions based on basic wages rather than total actual pay as required by law.

According  to an estimate by a not-for-profit labor support organization, Yue Yuen’s back payments could total more than 100 million-200 million yuan ($16 million-$32 million) depending on how many of the workers are owed for long years of service.

Slower growth poses challenges: AmCham[1]- Chinadaily.com.cn “With slower growth, we see more challenges,” AmCham China Chairman Gregory Gilligan told reporters in Beijing. “That is the reason some American companies are scaling back their investment plans.”

Finance

China Warns of Rising Risks From ‘P2P’ Lending – WSJ.com **Again** “Currently, P2P lending has been growing rapidly. The number of new P2P lending websites and the total of loans they have issued have been rising rapidly,” said Liu Zhangjun, director general of the Office of the Interagency Anti-illegal Fundraising Taskforce, a group that includes bank regulators, police and court officials.

Closer Look: Regulator Takes Hard Look at Jack Ma-Hundsun Deal – **Is Ma starting to overreach?** The securities regulator has been consulting large securities firms and fund companies regarding the proposed acquisition of a leading financial software provider by Jack Ma, the founder and chairman of e-commerce giant Alibaba Group, sources with knowledge of the matter said.

Banks to issue preferred shares this year – Headlines, features, photo and videos from ecns.cn The first batch of Chinese commercial banks may issue preferred shares this year, and investors will ask for a higher dividend rate while putting up with more uncertainties, experts said.

Preferred shares pay fixed dividends and enjoy priority over common stock in the event of bankruptcy. They typically do not trade on the open market, carry no voting rights and do not dilute net profits attributable to shareholders.

“The pace of Agricultural Bank of China and Bank of China is faster, and they probably will issue preferred shares this year,” said an insider at one of the four major State-owned commercial banks.

China may let banks default when deposit insurance begins – SFGate Authorities may tolerate failures of smaller banks once depositor safeguards are in place, Kwong Li, Chief Executive Officer of China Lianhe Credit Rating Co. said. Among lender bonds rated at or below AA, the extra yield investors demand to hold the 2022 securities of China Bohai Bank Co. in the northern city of Tianjin surged to an 11-month high of 245 basis points on Thursday. The premium on the notes due 2019 of Harbin Bank Co., a lender near China’s border with Russia, has jumped 51 basis points in the past year to 225.

DZHNews.com- Breaking China Biz News, Financial Updates, Corporate News Wang Yongli, vice president of Bank of China Ltd. (BOC, 601988.SH) quitted his job last week, following reports that he was under investigation by the Communist Party of China’s (CPC) discipline department.

Wang’s resignation came after he had reportedly been investigated by the CPC’s Central Commission for Discipline Inspection (CCDI).

Forex controls and VIEs | China Accounting Blog | Paul Gillis Chukong Holdings Limited filed on last Friday with the SEC for a U.S. IPO. Chukong is an online game company so it uses the variable interest entity (VIE) structure despite a specific MIIT prohibition against using VIEs for game companies. The company also faces a lawsuit alleging they ripped off their game Fishing Joy from an arcade game, report that they have not been paying required employee benefits, never bothered to register their stock option plan, and have an auditor facing suspension by the SEC, but based on past history investors ignore such matters.

Beijing mulls bond sales by local gov’ts|Finance|Business|WantChinaTimes.com Money raised by the bond sales could be used to partly finance construction projects that have been included in the provincial-level governments’ general public budget plans, it said.

No other forms of debt raising by local governments and their subordinate organs would be allowed under the draft revision. Furthermore, local governments and their subordinate departments should not provide debt guarantees for any institutions or individuals, under the proposals.

WH Group Said to Mull Cutting $5.3 Billion IPO in Half on Demand – Bloomberg The company may sell new shares equivalent to 10 percent of its enlarged market capital, about half of what it previously planned, the people said yesterday, asking not to be identified as the information is private. Existing investors including Goldman Sachs Group Inc. (GS) may also refrain from selling stock as part of the IPO, the people said.

At $5.3 billion, the WH Group IPO would have been Hong Kong’s biggest since October 2010, when AIA Group (1299) Ltd. raised $20 billion, according to data compiled by Bloomberg. The company struggled to attract investors even after hiring 28 underwriters, the most ever for an IPO in the city.

Wanda Cinema Line Plans CNY2 Billion IPO in Shenzhen — Update – WSJ.com China’s biggest cinema operator in terms of box office revenue plans to sell up to 60 million yuan-denominated A shares to fund the opening of new cinemas and to supplement working capital, according to a preliminary prospectus posted late Monday by the China Securities Regulatory Commission.

The planned listing comes as China pushes to generate economic growth more through domestic spending and less through state-backed investment. The film industry, part of the so-called “cultural industry” that Beijing wants to build up, has in recent years grown rapidly with box office revenue rising by about 30% a year.

Huarong Q1 profits up by 75% – Business – Chinadaily.com.cn Huarong, one of four asset management companies the government set up in 1999 to absorb toxic assets held by China’s four biggest banks, said total assets and net assets were 432.9 billion yuan and 56.7 billion yuan, respectively, at the end of March.

Profits nose dive for Chinese rare earth miner|Markets|Business|WantChinaTimes.com The company made 1.6 million yuan (US$261,300) in net profits from the start of January to the end of March, diving by 94.1% year on year, according to a financial report released on Monday.

The miner’s business revenue also declined by 98.5% to reach 3.3 million yuan (US$529,100) in the first three months. The financial results came after a 20.5% decline in net profits and a 57.6% drop in business revenue in 2013.

Auto

GM to battle VW in China with $12 billion investment and new plants | Reuters GM expects its China sales to expand 8-10 percent this year, in line with the overall growth of the Chinese market, where foreign firms, such as Volkswagen AG, and domestic players like SAIC Motor Corp vie for more market share.

“We are investing wisely and accelerating our vehicle development and manufacturing to keep pace with market demand. In total we are investing $12 billion between 2014 and 2017,” Matt Tsien, president of GM China, said at the Auto China show in Beijing.

Chinese Nissan Leaf goes on sale in September as Venucia e30 The upcoming Chinese version of the Nissan Leaf, the Venucia e30, was not the highlight of the Dongfeng Nissan stand at this year’s Beijing Motor Show. That honor goes to the R30, a compact car with “segment-competitive fuel economy” and a starting price of under RMB 50,000 ($8,033 US). But that doesn’t mean Dongfeng didn’t make some news about the debut of the world’s most popular electric vehicle in the world’s most populous country.

Infrastructure

China Province to Spend $3.35 Billion on Water Projects – Bloomberg A northeastern Chinese province is planning to invest 20.9 billion yuan ($3.35 billion) this year on water-conservation projects as the world’s most-populous nation tries to ensure residential and industrial supplies.

The works in Heilongjiang province, which borders Russia, will highlight agricultural irrigation and drainage, improved flood protection and preserving water resources, the official Xinhua News Agency reported today, citing a provincial government work meeting.

Sany digs deep to lay foundation in Africa[1]- Chinadaily.com.cn However, Xiao Jiang, general manager of subsidiary Sany Southern Africa (Pty) Ltd, said that while Africa has tantalizing potential as a market, any Chinese company contemplating taking advantage of that potential needs to take a long-term view.

“If all you do is scramble for market share by offering the lowest price and don’t care about related services, it’s only a matter of time before your operations fold,” Xiao said.

Energy

CNOOC Limited Announces Key Operational Statistics of Q1 | The Jakarta Post – PR Newswire In the first quarter, the Company achieved a total net production of 108.1 million barrels of oil equivalent (“BOE”), representing 15.5% increase year over year (YoY).

In the first quarter, the unaudited oil and gas sales revenue of the Company reached approximately RMB59.15 billion, representing an increase of 6.9% YoY, mainly due to the increase of oil and gas production. During the period, the Company’s average realized gas price was US$6.33 per thousand cubic feet, representing an increase of 9.3% YoY while the Company’s average realized oil price was US$104.63 per barrel.

PetroChina hikes 2015 shale gas output target to 2.6 bil cu m: report – Natural Gas | Platts News Article & Story State-owned PetroChina has hiked its shale gas production target significantly and now expects to produce 2.6 billion cubic meters/year next year, a senior executive was reported as saying Monday.

This is an increase from an earlier target of 1.5 billion cu m/year made in August last year.

China Petroleum and Chemical’s Underperform Rating Reaffirmed at Zacks (SNP) – Mideast Time Zacks’ analyst wrote, “We are maintaining our recommendation on Sinopec at Underperform, ahead of first quarter results. During 2013, the company witnessed a sharp drop in crude oil prices, which dragged down the Exploration and Production (E&P) segment’s operating profit by 21.8% year over year. However, increases in the price of international crude oil amid government caps on fuel prices prevented the company from fully passing on the spiraling costs to consumers. We believe that Sinopec’s matured domestic oil fields and associated rising costs will continue to be an overhang on its operations as natural declines become pricier to counterbalance. In view of these factors, we see no positive catalyst in the near term.”

Exclusive – Nigeria favours local firms in $40 billion oil contract awards – Yahoo Singapore Finance A number of other former winners were also absent from the 2014/2015 list, which will take effect from June. China’s Unipec, the trading arm of top Asian refiner Sinopec Corp , as well as Azeri state oil company Socar, were former contract holders and did not feature on the new list.

China Hydroelectric Corporation Announces Results for the Fourth Quarter and Full Year 2013: PR Newswire Business News – MSN Money China Hydroelectric Corporation (NYSE: CHC, CHCWS) (“China Hydroelectric” or “the Company”), an owner, developer, and operator of small hydroelectric power projects in the People’s Republic of China, today announced its unaudited financial results for the fourth quarter and twelve months ended December 31, 2013.

For the fourth quarter of 2013, revenues from continuing operations (net of value-added tax) declined by 18.5% year over year to $10.1 million, due to a 16.6% decline in electricity sold. We recorded a net loss attributable to China Hydroelectric shareholders from continuing operations of $5.1 million for the fourth quarter of 2013, compared to a $9.2 million loss for the same period of 2012. This improvement is partially attributable to a $2.9 million decrease in general and administrative expenses.

Telecoms

China Mobile Profit Declines as Costs Rise With IPhone Release – Bloomberg China Mobile Ltd. (941), the world’s largest phone company by users, posted its third straight drop in quarterly profit as expenses for subsidizing Apple Inc. (AAPL)’s iPhone and building networks increased.

Net income fell 9.4 percent to about 25.24 billion yuan ($4 billion) in the first quarter, the Beijing-based company reported yesterday. Profit was expected to be 27 billion yuan, based on the median of five analysts’ estimates compiled by Bloomberg News.

China Unicom Q1 Earnings Soar on 3G Adoption – April 22, 2014 – Zacks.com China Unicom Hong Kong Limited, China’s second largest mobile operator, announced results for first-quarter 2014 with adjusted net income of RMB 3.302 billion ($539.5 million) that surged 73.8% year over year on strong revenue growth and higher adoption of the 3G plan. Earnings per share soared 75% year over year to RMB 0.14 (2 cents).

Total revenue (excluding deferred fixed-line upfront connection fee) climbed 8.3% year over year to RMB 76.5 billion ($12.5 billion) in the first quarter. Telecommunication service revenues, comprising roughly 81% of total revenue, were RMB 63.80 billion ($10.4 billion), up 11.8% year over year.

Property

Xi’s Squeeze Leaves China’s Heartland Missing Boom – Bloomberg “Cities in China are facing some serious real estate bubbles, and the bubbles in third-, fourth-tier cities have the risks of total collapse,” said Tao Ran, director of the China Center for Public Economics and Governance at Renmin University in Beijing, in a phone interview on March 31. “The central government and banks tightened credit in the property market because they realized the risks.”

Liu said three years ago he could get loans from China Construction Bank Corp. (939) and Agricultural Bank of China Ltd. for half the value of the land at about 6 percent to 7 percent interest. Now he’s forced to rely on “friends with connections” and pay rates of about 20 percent.

Closer Look: Why Gov’t Is Eager to Renovate Shantytowns – Premier Li Keqiang said in a recent work report that the government plans to start building 7 million low-income housing units this year, 340,000 more than the number built last year. But the number to be completed is 4.8 million, 640,000 units less than in 2013.

A rough estimate based on the data from Li’s report shows investment in affordable housing for this year will be around 1.2 trillion yuan, similar to last year’s level. In 2013, 1.12 trillion yuan was spent to build affordable housing, equivalent to 13 percent of the year’s total real estate investment, and 2 percent of GDP.

Travel

Shandong Airlines orders 50 Boeing aircraft for US$4.6 billion | South China Morning Post The company signed a deal to purchase 16 Boeing 737-800s and 34 Boeing 737 MAX planes, a statement said, in a drive to grow its fleet for business expansion in the future.

China’s commercial airline industry is dominated by the “Big Three” – flag carrier Air China, China Eastern Airlines and China Southern Airlines – but a move towards greater competition has seen the growth of smaller players in the market.

Tech

China Money Network − Baidu Likely To Report Better-Than-Expected Earnings Baidu, Inc. will report first quarter results on April 24th after the market close. We believe its results are highly likely to come in better than consensus expectations, mainly driven by its mobile business and other non-traditional search businesses such as online video.

In the mobile area, the number of downloads for both Baidu app stores and Baidu’s apps showed significant growth based on our proprietary data.

Ban on Video Game Consoles Tentatively Lifted in the Shanghai FTZ | China Briefing News **Nuts, when you think about it** On Monday this week, details were announced regarding the lifting of China’s 14-year ban on video game consoles, set to begin as a pilot program in the Shanghai Free Trade Zone (FTZ). The lifting of the ban is poised to fundamentally alter China’s lucrative video gaming market, which is currently dominated by PC and mobile games, as the giants of console gaming compete over the world’s 3rd largest video game market in terms of revenue (valued at 123 billion yuan).

Qingguo Jizhang, WeChat-based Daily Expenses Tracking App | TechNode Qingguo Jizhang is one of those expense tracking apps that hopes to make your life easier through their outstanding value proposition – using audio recording function to track your expenses.

By tapping on the WeChat platform and its audio message capability, Qingguo Jizhang wants to make expense tracking easily accessible, hassle-free and most importantly, cultivate a habit of managing your finances on a daily basis.

Alibaba’s chat app has turned its focus away from messaging **”Me too! Me too!”** How is the new Laiwang different from the old app? For starters, let’s take a look at the design. A screenshot of the original Laiwang ought to show up as a picture under the Chinese-English dictionary entry for the word “uninspired.” Its app icon featured a speech bubble enclosed in a kelly green backdrop. Look familiar? Laiwang’s user interface, meanwhile, closely mimicked that of the original WeChat interface, before Tencent placed public accounts on separate pages from ordinary contacts pages.

Now, the updated Laiwang is drenched in sour-candy yellow as it sports a new lemon theme. It even has a new mascot of sorts – anthropomorphic lemons.

Days after promising to go legit, police in China raid offices of notorious video piracy app Police in the southern Chinese city of Shenzhen performed a raid this morning on the offices of one of China’s most notorious video piracy apps. The raid on Kuaibo, makers of the QVOD app for streaming films and TV shows, comes less than a week after the company promised to remove pirated content – which can be streamed or downloaded – from QVOD.

Late last year, QVOD (pictured below) and a mobile app made by search engine Baidu were the targets of a $50 million legal challenge by legitimate video streaming sites in China.

China Money Network − China Everbright Supports Management Buyout Of iSoftStone Beijing-based Chinese IT services provider iSoftStone Holdings Limited says it has entered into a definitive agreement, in which its chairman and CEO Liu Tianwen, together with China Everbright Investment Management Limited, will take the company private, according to a company announcement.

Agriculture

Millions of China’s Farmers Now Buy Climate-Change Insurance – Scientific American Li is one of hundreds of millions of Chinese farmers who are now using insurance as a tool to hedge against the risks of climate change. China is the world’s second-largest agricultural insurance market after the United States by premium income, and it is scrambling to spread the use of climate-related insurance into other sectors.

Chinese policymakers in recent years have already persuaded hundreds of millions of farmers there to buy agricultural insurance, forming a capability of covering losses worth 1.4 trillion yuan ($225 billion) in 2013. Climate risks are known as the biggest danger for losses in agriculture.

Healthcare

Fosun-TPG Group Agrees to Buy Chindex With Sweetened Bid – Bloomberg **Wonder how this will affect expat media – United Family Hospitals are one of their biggest advertisers** Shanghai Fosun Pharmaceutical Group Co. (2196) and its partners agreed to acquire hospital operator Chindex International Inc. (CHDX) for about $433 million, after raising their offer to counter another bidder.

The group comprising Fosun Pharma, TPG Capital and Roberta Lipson, Chindex’s chief executive officer, boosted its offer for the hospital operator to $24 a share from $19.50, the Chinese drugmaker said yesterday. Chindex, based in Bethesda, Maryland, signed an amended agreement with the group after another bidder, who earlier offered $23 a share, declined to bid further, Chindex said in a separate statement

Posted from Diigo.

China Business Briefs 21/4/14

Economy Finance Auto Infrastructure Energy Telecoms Property Travel Tech Agriculture Retail

Economy

Bank Defaults Seen as Dark Side of Deposit Vows: China Credit – Bloomberg Authorities may tolerate failures of smaller banks once depositor safeguards are in place, Kwong Li, chief executive officer of China Lianhe Credit Rating Co. said. Among lender bonds rated at or below AA, the extra yield investors demand to hold the 2022 securities of China Bohai Bank Co. in the northern city of Tianjin surged to an 11-month high of 245 basis points on April 17. The premium on the notes due 2019 of Harbin Bank Co., a lender near China’s border with Russia, has jumped 41 basis points in the past year to 217.

China allows gold imports via Beijing, sources say, amid reserves buying talk | Reuters China has begun allowing gold imports through its capital Beijing, sources familiar with the matter said, in a move that would help keep purchases by the world’s top bullion buyer discreet at a time when it might be boosting official reserves.

The opening of a third import point after Shenzhen and Shanghai could also threaten Hong Kong’s pole position in China’s gold trade, as the mainland can get more of the metal it wants directly rather than through a route that discloses how much it is buying.

China streamlines tax break procedures for SMEs – Business – Chinadaily.com.cn The State Administration of Taxation (SAT) said in a statement that small firms with annual taxable income under 100,000 yuan (about $16,000) may have their business income tax halved without approvals.

On April 8, Chinese authorities rolled out the taxbreak, which is valid from Jan 1 this year until the end of 2016, shortly after a cabinet executive meeting, at which the government announced an economic package to address downward pressure.

Finance

China Unveils Slate of 28 Companies Planning IPOs – WSJ.com Beijing ended a 14-month-long moratorium on initial public offerings in January, allowing 48 companies to be listed in the first two months of this year. However, the new issues halted abruptly in March, when authorities stopped granting approvals because of loopholes in new IPO rules and lackluster market conditions.

But late Friday night, the China Securities Regulatory Commission announced a list of 28 companies that have disclosed their IPO plans. The “preliminary disclosure” of IPO plans, which includes the size of fundraising and intended use of proceeds, typically suggests the regulator is close to the final stage of issuing approvals.

Commercial banks need to diversify business – BUSINESS – Globaltimes.cn China’s commercial banks should diversify beyond traditional banking, Yi Gang, deputy governor of the People’s Bank of China (PBC), the country’s central bank, said over the weekend.

Instead of competing on better services for local residents and small and medium-sized enterprises, many city commercial banks are vying with each other in expanding their retail footprint, according to Yi, who cautioned the country’s commercial banks have yet to develop specific services targeting the fields of real estate, automobile, bills or credit cards.

First Shanghai Stock Designated for Delisting in 7 Years Plunges – Bloomberg Shares of the oil-shipping company, which has posted four consecutive annual losses, fell 9.8 percent to 1.47 yuan as of 9:40 a.m., compared with a 0.3 percent decline for China’s benchmark Shanghai Composite Index. (SHCOMP) The stock, which had been suspended for a year until today, will move to an over-the-counter board for small- and medium-size enterprises after 30 trading days, according to the company.

China firm plans $1 billion distressed asset fund for foreigners | Reuters A unit of one of China’s biggest bad-debt banks plans to woo foreign investors with a $1 billion fund for soured property loans and distressed real-estate assets, reopening the sector to outsiders after a failed attempt last decade.

That the fund is being launched just as growth in the world’s second-largest economy has slowed to an 18-month low and the housing market is losing strength is no coincidence.

Agricultural Bank of China launches ‘Pretty Mom’ credit card – Economic Times A Chinese bank has launched a new ‘Pretty Mom’ credit card targeting young mothers, a growing group in the world’s most populous country known for their love of shopping and their greater say in the family budget.

The cards – issued by Agricultural Bank of China (ABC) – focus on the needs of new mothers with children up to the age of six by offering discounts on major baby productbrands and early education institutions.

Auto

HEARD ON THE STREET: China’s Geely Shouldn’t Drive Solo – WSJ.com Geely isn’t without foreign expertise: Its parent company bought Volvo in 2010. Yet the benefits of this are out of reach for Geely’s shareholders. Volvo sales are up 25% this year in China, all of which goes to the parent. Geely and Volvo opened a joint research center last year and are working on a new subcompact, but results will take time.

Geely’s shares are down 24% this year. Even so, they are no bargain. Geely earns nearly a quarter of its operating profit from government subsidies and capitalizes a chunk of research-and-development spending. Strip out these elements, and the stock trades at 14.3 times core earnings, according to estimates from Sanford C. Bernstein.

Brilliance China Automotive Holdings, which builds higher-margin premium cars with BMW, fetches only 12.2 times. Investors should be skeptical as long as Geely drives solo.

Chinese Car Makers Struggle to Lure Buyers – WSJ.com Chinese brands are struggling to win Chinese consumers, a trend that appears to have accelerated in the first quarter. Geely’s Hong Kong-listed unit reported sales of 89,607 vehicles, down about 37%. Warren Buffett -backed BYD Co. sold 103,500 cars in China in the first quarter, a drop of about 28% from the same period the previous year. Chery Automobile Co. reported a 25% fall to 109,000 vehicles.

Poor quality, uninspiring marketing and an inefficient industry structure lie at the heart of Chinese auto makers’ woes. Compounding these problems, foreign car makers and their Chinese joint-venture partners are increasingly looking to produce low-cost cars as they anticipate a boom in demand as hundreds of millions of rural Chinese move to cities to seek jobs, housing and cars. Foreign car makers are required to operate in China through joint ventures with Chinese auto makers.

China set to replace U.S. as Volvo’s biggest market this year – Yahoo Singapore Finance China is set to surpass the United States to become Volvo Car Group’s biggest market in 2014 with sales of at least 80,000 cars in the world’s largest auto market.

Its car sales target for 2014 is around a third higher than the 61,146 cars sold in 2013, while sales in the United States in 2014 are expected to increase only in line with the broader market, it said in a statement on Sunday.

Daimler/BYD Joint Venture Unveil Plans for All-Electric Car for China – WSJ.com The new electric car, called the Denza, is entitled to subsidies from both the central and local governments in China, Daimler officials said. The car was developed by Shenzen BYD Daimler New Technology Co. Ltd, the Daimler-BYD joint venture that was formed in 2010. The five-seater Denza is expected to go on sale in China in September, and is priced at 369,000 renminbi, or about $60,000. With government subsidies, Daimler said the price for the consumer could be reduced by 120,000 renminbi.

Infrastructure

Construction at Karuma hydro power project starts THE Karuma hydro-power project, worth about Sh.4.3 trillion ($1.7billion) has commenced with the construction of two big underground access tunnels and access roads at the site.

The eight month old construction of the 600 megawatts dam was commissioned by President Yoweri Museveni in August 2013, who said 85% of the funding will be procured by Sinohydro Corporation Ltd, a Chinese firm with a soft loan from Exim bank and the  Uganda government will cater for the 15%.

Merapoh, China Energy JV to revive Zipy | theSundaily The agreement will see state-owned China Energy emerging as a majority shareholder with a 70% equity interest in Merapoh and an investment of almost RM70 billion by China Energy, which will enable Merapoh to proceed with its projects and plans.

According to a media advisory issued by Merapoh last Friday, the most immediate project that Merapoh intends to proceed with is the creation of Malaysia’s biggest oil refinery complex to be built in Kedah.

Energy

China Is Quietly Profiting From the Russia-Ukraine Standoff: Here’s How Much to the chagrin of the United States, China has the innate ability to negotiate major energy deals in the midst of conflict. PetroChina’s (NYSE: PTR) state-run parent company, China National Petroleum, or CNPC, was the first oil company to secure a contract in the Iraqi oil fields following the fall of Saddam Hussein, and today both it and CNOOC (NYSE: CEO) are two of the most active oil comapnies there. With Russia and the West at a standstill over the recent events in Ukraine, it appears that CNPC is about to seal another energy coup. Let’s look at this deal and what it means for the future of energy around the world.

Nuclear plants to get the nod[1]- Chinadaily.com.cn China is quickening its approvals for nuclear energy and will launch projects in coastal areas to ensure energy security and economic growth, according to the State Energy Commission.

In a statement released on Sunday, the commission said it discussed strategic problems in the development of the energy resources industry as well as some major projects.

The latest approvals of nuclear plants and other energy projects are part of the government’s plan to push economic growth with minimal measures.

Telecoms

Merging cloud, big data and smart cities – Headlines, features, photo and videos from ecns.cnTian, founder and chairman of China Broadband Capital Partners LP, is probably the best-known venture capitalist in the country and one of the first players in China’s big data business.

“Data is the most valuable asset in the 21st century. We can build a long industry chain based on data-related businesses such as analytics, information security and statistics exchange,” Tian said during the opening of the Shenzhen data center on March 30, which was built in less than six months.

Chinese Mobile Gaming Company Chukong Files for US IPO to Raise USD150 million | TechNode The company, according to SEC filing, positions itself as a mobile content platform and development service provider, but it’s more known as a mobile game developer and, more recently, mobile game development service provider. In 2013, 98.5% of its total revenues were from mobile gaming and the rest, 1.5%, was from advertising — it runs a mobile advertising platform PunchBox.

Property

New York Real-Estate Agent Scores $13 Million Deal on WeChat – China Real Time Report – WSJ Last month, Yue (Emma) Hao, a New York-based agent at real-estate brokerage Douglas Elliman, received an unsolicited message on WeChat from a Chinese entrepreneur who wanted to know more about a residential building in Manhattan associated with the crystal brand Baccarat. Ms. Hao, who is from Beijing, realized the person was talking about the Baccarat Residences, a 50-story glass condo tower under construction across from New York’s Museum of Modern Art. The building, which is expected to open later this year, will have 61 units priced from about $3 million to about $60 million.

Ms. Hao left a message with the person on WeChat, telling her she’d inquire. After visiting the Baccarat’s sales center, she sent the Chinese entrepreneur, whom she declined to name, pictures of what the condos would look like and the neighborhood’s amenities. The next day, after speaking with the woman by phone, Ms. Hao hammered out the deal: a $10.25 million three-bedroom apartment on the 39th floor and a one-bedroom unit on the 21st floor for about $3 million.

Travel

Tech

Apple’s App Store China revenue jumps 70% after China Mobile deal – Silicon Valley Business Journal Apple iOS revenue from China increased 70 percent this quarter, according to a report from apps analytics firm App Annie. The index also found that the games, travel and social networking categories led the strong app download numbers.

China Money Network − Why Do We Still Like The Chinese Technology Sector? Governments around the world are slowly shifting away from austerity and, comprising 20% of spend in technology, are expected to be a contributor of overall demand for technology related goods and services.

The sector also has good exposure to the emerging markets where demand growth is structurally strong. In the case of the smart- phone market, penetration rates in Asia are a fraction of that in the U.S. and are likely to increase over time as people become wealthier.

Lastly, the technology sector is not expensive relative to its own history and in certain markets, such as the U.S., is trading at a discount to the local market indices.

China Money Network − Counting Jack Ma’s $5B Shopping Spree In 2014 As you will see from the list below, most deals are led by Alibaba Group. Even though he stepped down as CEO last May, Jack Ma continues to shape the company’s business strategy. Not to mention he still holds 7.4% of the e-commerce giant.

Travel and Expense Management Solution Baoku Announces Nearly $10 Mn of Series A Funding | TechNode Kubao, Chinese business travel & expense management solution provider, recently confirmed on its microblog that the startup raised nearly $10 million of Series A funding from CBC and AsiaInfo Linkage without disclosing the detailed amount of the financing.

Founded in 2007, the Beijing-based SAAS startup builds web-based corporate travel management systems that ensure policy and regulatory compliance, sales platforms for airlines and traveling agencies, as well analytics systems.

Agriculture

China to maintain high grain output in 2014-2023 – Business – Chinadaily.com.cn Xu Shiwei, director of the Agriculture Information Institute under the CAAS, said that the output of China’s three main grain crops — rice, wheat and corn — will achieve a high rate of self-sufficiency during the next decade.

Imports for meat and dairy products will see rising growth, while slower growth will be seen in soybean imports, and cooking oil imports will decline, Xu said.

Retail

Can KFC Win Back China? Any investor savvy to Chinese growth stories knows about Yum! Brands’ (NYSE: YUM) KFC. Since opening its first shop in 1987, KFC has reigned as the chicken king in China. Already operating more than 6,000 Chinese stores, KFC’s future growth will be harder to attain. KFC has also lost favor with Chinese consumers in the face of greater Western competition and health scares.

Let’s look back at how KFC won China the first time, and see whether or not the chain can do so again.

China Focus: Chinese manufacturers not counting on yuan depreciation for profits – Xinhua English.news.cn“Regardless of depreciation or appreciation, the impact on us would be complex,” said Sun Shubao, a senior executive of Haier Group, one of China’s leading home appliance firms with 24 factories worldwide.

“The yuan’s depreciation will not boost our exports as people assume,” Sun said.

Posted from Diigo.

China Business Briefs 19/4/14

Economy Finance Auto Infrastructure Energy Mining Property Travel Tech Healthcare Retail

Economy

Yuan Depreciation Is Deeper Than You Think – China Real Time Report – WSJ But guess what? The yuan depreciation this year is probably steeper than you think.

Since the beginning of the year, the yuan has depreciated 2.8% against the dollar– a number that’s been widely used. But that’s in “nominal” terms, meaning the number doesn’t account for the different levels of inflation in the U.S. and China. When factoring in inflation, calculates Brookings Institution researcher Karim Foda, the yuan has actually fallen 3.2% over the same time period.

Yu’e Bao Finds ‘Leftover Treasure’ in Deposits – China Real Time Report – WSJ Much of Yu’e Bao’s popularity has come from its ability to give customers the convenience of a demand deposit—meaning they can withdraw their funds whenever they like—but with returns well above what a bank could offer. It recently advertised an annualized yield of 5.25%, but that level has on occasion spiked above 7% since the fund was set up June. By contrast, banks offer 3.3% for a one-year fixed deposit and close to nothing on savings deposits.

But those favorable numbers might not last long: On Tuesday Caijing magazine cited a vice president at Yu’e Bao as saying in future he expects the fund’s return to continue to decline, to a point where it’s largely in line with the fixed deposit rate.

China Officials Fibbed To Depositors To Stop Bank Runs In China, “protected by law” has a much different meaning, however.  Ordinary citizens take the phrase to mean that the Chinese government guarantees bank deposits.  That is the sense that Wei Guoqiang, mayor of Yancheng, tried to convey to depositors when speaking at the height of the turmoil last week: “Do you know whom the bank is backed by?  It’s the government.”

That statement is not true.  It is not true not just with respect to tiny rural institutions like Sheyang Rural Commercial Bank, which holds 0.01% of the total assets of the Chinese banking system, but it is also not true with respect to the so-called Big Four banks, the pillars of the national banking system.

China Resources chairman in probe as anti-corruption net widens – FT.com On Wednesday, Mr Song issued a strong rebuttal on China Resources’ website, describing the allegations as “completely false and an ill-intentioned attack that is meant to smear me”.

But on Friday, China Resources said Qiao Shibo, its general manager, had taken over Mr Song’s responsibilities at the company while Mr Song was being investigated for corruption.

China’s plan for iron ore giants hits snag | South China Morning Post Beijing wants Anshan Iron & Steel, a steelmaker with its own iron ore mines, and the Metallurgical Mines’ Association of China to lead the plan. A draft is expected by the end of the year to be submitted to the State Council for approval.

However, combined production would at best amount to only a third of total demand, making a target to cut imports to below half of the country’s requirement within 10 years look impossible and suggesting big global miners may have to ship even more.

Sitting on a lot of copper | China Economic Review Did China really use its political clout to delay a mining megamerger that could fix global commodity prices? Yes, but for its own interests. Beijing’s condition for allowing the merger that formed Glencore Xstrata (GLEN.LON, 0805.HKG) was the sale of Peru’s La Bambas mine to a Chinese consortium made up of state investment and mining companies.

Finance

Land sale revenue rise ‘unsustainable'[1]- Chinadaily.com.cn Land sale revenue rose 40.3 percent year-on-year to 1.08 trillion yuan ($174 billion) during the first quarter, said Finance Minister Luo Jiwei.

By comparison, fiscal revenue only grew 9.3 percent nationwide to 3.5 trillion yuan – and that figure excludes land sales, which are now equivalent to 55.4 percent of the public fiscal revenue of local governments. Land sale revenue for all of 2013 grew 44.6 percent.

China Rate Swap Posts Biggest Weekly Drop Since June on Easing – Bloomberg The one-year rate swap, the fixed payment needed to receive the floating seven-day repurchase rate, dropped 43 basis points this week to 3.77 percent as of 4:52 p.m. in Shanghai, according to data compiled by Bloomberg. It fell six basis points today following a 22 basis point slide yesterday that was the biggest decline since June 21, when the central bank used targeted injections of funds to alleviate a record cash crunch.

P2P Lenders Heading into Dangerous Waters, Critics Say – Most P2P companies also promise to repay lenders their investment when a borrower defaults on a loan, either with money out of their own pocket or through cooperation with a guarantee firm.

Critics have argued that this is why a P2P website should be regulated as strictly as a financial institution rather than as the information providers they started out as. Without proper supervision, they say, P2P companies could use investor money to repay old loans, basically building Ponzi schemes.

Private banking opportunities draw increased foreign interest – Headlines, features, photo and videos from ecns.cn For private banks, China is a market with a vast number of potential clients. As of 2013, there were more than 1 million individuals in the nation with assets available for investment exceeding 10 million yuan ($1.6 million) each, the China Merchants-Bain survey showed. But those individuals have had few private-banking options so far.

For foreign banks, private banking mostly refers to managing personal wealth. But according to Dai Xiaohong, managing director of Standard Chartered Plc’s private banking operations in China, nearly 60 percent of their clients are entrepreneurs, most of whom don’t separate their business and personal wealth.

Third-party payment sector rules issued – Headlines, features, photo and videos from ecns.cn The new regulation features detailed rules on user information protection, user identity verification and the transaction amount during third-party payments, in a bid to reduce security risks.

The regulation made clear that commercial banks should set up transfer amount caps in accordance with the clients’ risk tolerance ability. Some analysts consider the rule as an endorsement of the commercial banks’ earlier decision to set stricter caps on quick transfers via Alipay.

Fed up Chinese retail investors exit losing markets | South China Morning Post **No wonder – see the annual performance of the top 20 stocks** More than 7 million mainland retail investors have exited the stock market since 2010, with many complaining about inefficient regulations and poor earnings by listed firms. Analysts said big funds would take advantage of the crisis of confidence to “buy low” as some shares were undervalued.

A total of 70.9 million retail investors now hold shares in their brokerage accounts, compared to 78.3 million in 2010, Guangzhou Daily reported yesterday, citing figures by data provider iFind. Mainland individual investors have been seen chasing market rallies rather than finding good bargains when the market is languishing.

China’s commodity demand tied to risky credit deals | South China Morning Post While it has been known for some time that copper imports were often used as collateral in order to get financing outside of the traditional banking channels, this year has seen iron ore, soya beans and now gold added to the list.

So far the apparently increasing use of commodities to access lines of credit hasn’t had as much impact on markets as might be expected.

But surely the risks must be mounting as it becomes clearer that significant parts of China’s commodity demand is tied to increasingly risky credit deals, many of them in property, a market that analysts believe is at risk of a sharp correction.

Taiwan Regulator Penalizes Bank Over Derivatives Sales – WSJ.com The Financial Supervisory Commission declined to name the lender, but its chairman, Tseng Ming-Chung, said during a legislative hearing Thursday that the bank was “mercenary” by misleading clients into overinvesting in these products and raking in high commissions.

Over the past two years, sales of such products have surged and brought in additional income for buyers as the yuan rose. Taiwanese companies were big buyers because of their close links with China, but the unexpected slide this year in the Chinese currency has turned many of the contracts into heavy paper losses for holders.

Auto

China Automotive Starter Market 2014-2017 Research Report — DALLAS, April 18, 2014 /PRNewswire/ —  In 2013, China’s auto market achieved more-than-expected growth, of which, the production rose 14.82% YoY to 22.13 million and sales volume climbed 13.94% YoY to 21.99 million. Automotive starter as an integral part of the car witnessed accompanying growth in OEM market size, reaching 22.13 million. On the other hand, after-sales repair & replacement constitutes another big market for automotive starter requirements. With the swelling base of Chinese car ownership, starter replacement market still shows a growing trend. By 2013, aftermarket size has amounted to 1.2604 million sets, presenting a year-on-year increase of 12.0%.

Volkswagen mulls expansion of China plant – The Wall Street Journal – MarketWatch The expansion of the Foshan plant would help Audi add the production capacity it needs to boost sales in China of its upmarket sedans and SUVs over the next few years.

Audi, the leading luxury car brand in China, sold 491,989 cars in China last year, including sales in Hong Kong, up 21% from 2012. In the first three months of this year, Audi sold 124,520 cars in China, up 21%.

Infrastructure

allAfrica.com: Zimbabwe: ZPC Deal Hangs in Balance ZIMBABWE Power Company may re-tender bids for Hwange Thermal Power Station expansion, nearly a year after naming China Machinery Engineering Company as the winning bidder of the multi-million dollar project, sources said.

Alternatively, Sino Hydro, which won the tender to expand Kariba Hydro Power Station, may be considered as it could take time to re-start the whole process.

Energy

Chinese state energy firm ups shale gas spend to £950m | World news | The Guardian Chinese state energy group PetroChina plans to spend more than 10bn yuan (£950m) on shale gas fracking this year as domestic competition heats up after rival Sinopec announced a commercial find.

Faced with high drilling costs and the complexity of tapping shale gas, China has struggled to revolutionise its energy supplies. But now the country wants to unlock what could be the world’s largest shale gas reserves by emulating the success of the US shale boom.

Athabasca triggers oilsands sale to PetroChina Athabasca Oil Corp. says it is selling its 40 per cent stake in the proposed 250,000-barrel-per-day Dover oilsands project to partner PetroChina for $1.32 billion.

The much-anticipated sale, conditional on final regulatory approval of the project, will give the Chinese national oil company its second 100 per cent owned thermal oilsands project in northeastern Alberta.

Candu Energy changes tack in China, seeks construction partnerships – The Globe and Mail When SNC-Lavalin Group Inc. bought Candu Energy Inc. for $15-million, it took private an asset that had, over 60 years, sucked $21-billion from Ottawa.

Just three years later, SNC is pinning hopes for future billions on another government, this time in Beijing. With a long-standing effort to sell new reactors to China yet to produce any fruit, Candu is now seeking to link hands with state-owned Chinese firms to build new reactors abroad, an ambition that has eluded the Canadian nuclear industry for many years.

Mining

China’s Zhongjin Gold profits plunge – BUSINESS – Globaltimes.cn Net profits at Zhongjin Gold Corporation Ltd., China’s leading gold producer, plummeted more than 72.32 percent in 2013 from the previous year, the company announced on Friday.

The company’s net profits tumbled to 431.1 million yuan (70 million US dollars) last year.

Beijing appeals to WTO against rare earth ruling|Policy|Business|WantChinaTimes.com The appeal will be lodged Thursday, Ministry of Commerce spokesman Shen Danyang said.

No matter the result, China will stick to its policy objective to protect resources and the environment, and will continue to boost management of resource industries following the WTO rules, said Shen.

Property

China new-home prices slow gains in March – MarketWatch Average new home prices in 70 cities rose 7.32% year over year in March, according to calculations by The Wall Street Journal based on data released Friday by the National Bureau of Statistics. Prices rose 0.22% month over month compared with 0.27% in February.

The year-over-year rise in February was 8.19% and 8.98% in January. Until then price rises accelerated every month for the past year. In December the average price rise was 9.17% and 9.10% in November.

Chinese Real Estate Service Leju Debuts on NYSE Thursday | TechNode Leju (NYSE:LEJU), once a wholly-owned subsidiary of real estate service E-House (NYSE:EJ) and former property channel of Sina, got listed on the New York Stock Exchange for overall $100 million of funding this Thursday, the same day of Sina Weio’s debut on Nasdaq Capital Market. The company has filed for an US IPO this March.

Leju sought to raise as much as $194 million by selling 17.70 million shares for $10-$12 each, but only saw demand through underwriters for 11.50 million shares at the low end of the offer at $10 apiece.

Travel

Cruise lines push throttle on China expansion plans – Business – Chinadaily.com.cn The 4,180-passenger Quantum of the Seas, Royal Caribbean’s newest ship, will move its home port to Shanghai in May 2015, the Miami, United States-based company said at a news conference in Shanghai. The ship will sail three- to eight-night voyages year-round from Shanghai to Japan and South Korea, following its maiden season, which will launch in November from the US to the Bahamas and the Caribbean.

“People in China have grown to expect the best the world has to offer, and Quantum of the Seas meets that standard like no other ship,” said Adam Goldstein, president and COO of Royal Caribbean Cruises Ltd.

In-Depth Research and Forecast of China Shield Tunnel Boring Machine Market — DUBLIN, April 16, 2014 /PR Newswire UK/ — Research and Markets (http://www.researchandmarkets.com/research/7mbvg9/indepth_research) has announced the addition of the “In-Depth Research and Forecast of China Shield Tunnel Boring Machine Market” report to their offering.

Shield tunnel boring machine is a kind of specialized engineering machinery for tunneling. Currently it is widely used in the construction of subway, railway, road and hydropower projects. With the trend of three-dimensional cities and pipelines buried underground, output of China’s shield tunnel boring machines reached to 141 units in 2012, with sales revenue harvesting CNY 7.045 billion.

Tech

Linked to prostitution, China’s favorite flirty chat app slammed by state media Momo is China’s top chat-and-flirt app, sort of like Skout, for connecting with people in your area. It’s hugely popular, too. Earlier this year Momo reached 100 million registered users.

But China’s state news agency, Xinhua, is not too pleased with some of the shenanigans on Momo. In an editorial yesterday (in Chinese), Xinhua described the “hormone-filled” app as being a hotbed of prostitution. Xinhua’s reporters fired up the app and were shocked – shocked – to find that a number of the nearby women in the app were actually sex workers.

Alibaba’s Alipay payment service inks deal with Rakuten According to an official statement from Rakuten, 250 shops on Rakuten Global Market will open up transactions with Alipay, though the company intends to increase that number gradually. Currently, 10,000 of Rakuten’s 42,000 domestic vendors sell goods internationally on Rakuten Global Market.

Healthcare

China Money Network − Carlyle, Primavera Capital Offer Higher Bid For Chindex Go-Private Deal Washington, D.C.-based global private equity firm The Carlyle Group is the bidder who has offered a higher price to privatize NASDAQ-listed Chinese hospital operator Chindex International, Inc., according to Chinese media reports.

Primavera Capital, a Chinese private equity firm founded by former chairman of Greater China at Goldman Sachs Fred Hu, is also considering making a competing bid, says the report.

Retail

McDonald’s to give China restaurants a makeover – MarketWatch The Oak Brook, Ill., company is overhauling a number of its China-based stores in places like Beijing, Shanghai and Guangzhou using a local designer, according to a company statement. It is also launching a new advertising campaign that focuses on Chinese aspirations and recruiting more locals to run its franchises in China. McDonald’s will also feature basketball star LeBron James in China-focused commercials later this year, the statement said.

Posted from Diigo.

China Business Briefs 18/4/14

Good to be back in Beijing.

Economy Finance Auto Energy Telecoms Property Tech Agriculture Retail

Economy

Closer Look: Signs China’s Economy Transforming Linger behind Latest GDP Figure – What is worth more attention than the growth rate is a change in the economy that other NBS data reflect. In 2013, the tertiary sector’s contribution to total economic output exceeded that of secondary sector for the first time in modern Chinese history.

The latest results showed that services pulled ahead of production and construction even more, with the former accounting for 49 percent of total economic output in the first quarter. Last year tertiary sector’s share of GDP was 46.1 percent.

Many Chinese firms looking overseas: Poll[1]- Chinadaily.com.cn Approximately 60 percent of leading Chinese companies plan to move research and development centers and/or production overseas in the next five years, a study by Strategy& (formerly Booz &Co) and the World Economic Forum said on Wednesday.

That figure roughly doubles the number of Chinese companies that are currently sending these functions abroad, according to the study.

Anti-Dumping The U.S. Trade Representative (“USTR”) announced last week that China, in a follow-up to its December 3, 2013 request for World Trade Organization (“WTO”) consultations, has asked for a dispute settlement panel concerning certain U.S antidumping methodologies. The USTR requests public comments on the issues identified by China in its panel request.

Beijing must stay the course despite the slowdown | China Economic Review If expectations are low, beating them doesn’t mean much. China’s GDP grew by 7.4% year-on-year in the first quarter of 2014, a notch above the market consensus of 7.3%.

But after three months of mainly gloomy economic data, analysts weren’t betting on a powerful punch in overall growth figures. The stats from March alone give reason to believe that China has yet to rebound from a tough start to the year. As for giving the economy a gentle fiscal nudge, Beijing has likely said all it intends to on that matter with some targeted measures in recent weeks. China Economic Review thinks that’s just fine as long as economic reform keeps abreast.

Internationalizing Your China WFOE | China Briefing News In the rush to get into China over the past decade, many foreign investors established WFOEs – either as trading and services companies, or as manufacturing entities in their own right. For many, this is a policy that has worked very well – the legal and regulatory structures are well defined and understood. Today though, as foreign investors start to eye other markets in Asia, the China WFOE is starting to prove awkward as a base from which to launch into Asia. There are a number of reasons for this:

China Resources Chairman Song Lin Faces Probe After Media Charge – Bloomberg Song Lin, whose company is the parent of five Hong Kong-listed units, is being probed for “suspected disciplinary violations,” the Chinese Communist Party’s Central Commission for Discipline Inspection said in a statement yesterday on its website using language that signals a corruption probe.

His company controls China Resources Power Holdings Co., which was accused last year of paying too much for three coal mines in Shanxi province in 2010. The probe is a signal that the Communist Party is intensifying a campaign to root out the corruption that President Xi Jinping has said threatens its six-decade hold on power. Party leaders have promised to target both “tigers and flies,” or cadres up and down the power ladder, over graft.

Bet the Farm, Or Settle for Table Scraps? In this intriguing essay, Shanghai-based consultant Kaiser suggests that for foreign companies, the glory days are over, and the only two strategies left are to either fight for one of the top two positions in your industry (against what might be brutal competition) or accept that your market in China will be modest, picking up what others cannot.

I really enjoyed the essay, because I like contrarian thinking on business in China. But I have a couple of problems right out of the gate.

McKinsey Greater China – Even Chinese SOEs Are Getting Media Savvy **Their websites still suck though** I recall state-owned insurance company announcements as being completely dire in the past. A large semi-lit room, partly filled. Executives sitting at a desk reading a script they didn’t care about to an audience who didn’t really want to be there other than for the drinks available at the end. And always running late.

The new version involved floor to ceiling LCD screens, which projected what was on the screen of the sales agent’s iPad on the stage as she demonstrated an actual sale in real time during the event. The speeches were concise, on time, and delivered with enthusiasm. The back of the room had further iPads so that the journalists could try (and film themselves doing so) the apps.

Disillusioned office workers: China’s losers | The Economist But Mr Zhu considers himself a loser, not a winner. He earns 4,000 yuan ($650) a month after tax and says he feels like a faceless drone at work. He eats at the office canteen and goes home at night to a rented, 20-square-metre (215-square-foot) room in a shared flat, where he plays online games. He does not have a girlfriend or any prospect of finding one. “Lack of confidence”, he explains when asked why not. Like millions of others, he mockingly calls himself, in evocative modern street slang, a diaosi, the term for a loser that literally translates as “male pubic hair”. Figuratively it is a declaration of powerlessness in an economy where it is getting harder for the regular guy to succeed. Calling himself by this derisive nickname is a way of crying out, “like Gandhi”, says Mr Zhu, only partly in jest. “It is a quiet form of protest.”

Finance

How liquidity evaporates from China | South China Morning Post The difficulty of accurately calculating the mainland’s liquidity results from the unknown size of the shadow banking system in which non-banks borrow, lend and invest like a real bank but at market rates and outside the official regulated system. This market is calculated variously as 70 per cent of the mainland’s GDP, or 20 per cent of all credit.

But in reality, no one knows – except that it is significant. This black market has developed to allow market-based funding of smaller enterprises and individuals. It appears strange to have such a tightly regulated banking environment on the mainland when you can game the system so readily.

HEARD ON THE STREET: China’s Citic and the State Share Shuffle – WSJ.com Citic Group, a sprawling state conglomerate, laid out a more ambitious plan last month, with more details unveiled this week. The company will inject its entire $36 billion of assets—including businesses in finance, steel, publishing and more—into Citic Pacific, a Hong Kong-listed unit.

The listed company will pay mainly by issuing shares to the parent, but at a 6.5% premium to where they were trading before the announcement. The new assets will boost return on equity to 13% from 9%, partly because the old listed unit was weighed down by a struggling Australian iron-ore mine.

China eases M&A rules for insurers | Reuters China’s decision to partially relax mergers and acquisition rules in the insurance industry could see global insurance firms expand their footprint in the $288 billion market.

Beijing would allow insurers, including Chinese-based units of foreign insurance firms, to buy stakes in more than one peer that competes in the same market segment, according to a statement on the China Insurance Regulatory Commission’s (CIRC) website and dated last Friday.

RPT-Fitch Affirms Noble Group’s Guaranteed Bonds at ‘AAA(tha)’ | Reuters Fitch Ratings (Thailand) Limited has  affirmed Noble Group Limited’s (Noble; BBB-/Stable) THB2.85bn guaranteed bonds  due 2016 at National Long-Term ‘AAA(tha)’. The bonds, which are guaranteed by  Credit Guarantee and Investment Facility (CGIF), have a Stable Outlook.

Chinese banks are passing the buck | Business Spectator Outstanding non-performing loans soared 19.5 per cent in 2013 from 390 billion yuan ($67 billion) to 467 billion yuan, according to data disclosed by 12 major listed Chinese banks. During the same period, these 12 Chinese banks either transferred or wrote off 102 billion yuan worth of loans, an increase of 206 per cent compared to the same period last year, according to Caixin.

The outstanding non-performing loans of the big five major Chinese banks — the Industrial and Commercial bank of China, Agricultural Bank of China, Bank of China and the Construction Bank of China and Communication Bank of China — increased 16.1 per cent in 2013.

RPT-Fitch Affirms China Life at IFS ‘A+’; Outlook Stable | Reuters Fitch Ratings has affirmed China Life Insurance Company Limited’s (China Life) Insurer Financial Strength (IFS) Rating at ‘A+’.  The Outlook is Stable.

China to Cut Reserve Ratio for Some Rural Banks -Caijing Chinese Premier Li Keqiang Wednesday said reserve requirements would be relaxed for qualifying rural banks in a sign that more loosening policies are likely on the way.

The People’s Bank of China (PBoC) sets different reserve requirements for banks, depending in part on the size of their loan business. The ratio stands at 20 percent for China’s biggest banks, around 16 percent for smaller, rural banks.

Auto

Jaguar Land Rover to recall vehicles in China – Business – Chinadaily.com.cn Jaguar Land Rover Automotive Trading (Shanghai) will recall 1,923 vehicles mainly due to problems with their warning lights, China’s quality watchdog announced on Thursday.

The recall, from April 17, covers 1,909 imported 2014-edition Range Rover vehicles in the Chinese mainland, which were produced from May 7 to Oct. 10, 2013, said the General Administration of Quality Supervision, Inspection and Quarantine.

5.12 Million China Commercial Vehicle Industry Growth in 2017 Forecasts a Research Report | SYS-CON MEDIA According to China Commercial Vehicle Industry Report, 2014-2017 sales volume of China’s commercial vehicles is estimated to register a CAGR of 6% in 2014-2017, and will reach 5.12 million in 2017. The development of the commercial vehicle industry is closely related to the macro economy. In 2013, the growth rate of China’s GDP fell to 7.7%, while commercial vehicle market experienced slow growth at the same time, with output and sales volume increasing by 7.6% and 6.4%, respectively.

Chinese auto brands limp into Beijing show – SFGate **This is not in the Five-Year Plan!** Facing intense competition from General Motors, Volkswagen and other global rivals, local brands such as Chery, Geely and SUV maker Great Wall have suffered shrinking sales and market share this year while China’s overall auto market has grown. That is a blow to Chinese leaders who have made it a national priority to catch up with neighboring Japan and South Korea by creating globally competitive automakers.

Ford to Start Selling Luxury Lincoln Cars in China Lincoln is a late comer to China’s luxury car market, but Robert Parker, president of Lincoln China, said the brand is being introduced here after thorough research.

At Lincoln dealerships, Chinese customers will be greeted with a waterfall, considered auspicious, and their new Lincoln car will have a custom fragrance pleasing to Chinese noses, Parker said.

Energy

China Shenhua Energy Company Limited (HKG:1088) More Than a Coal Company Morningstar analyst Zhao Hu says investors would be wise not to look at China Shenhua Energy Company Limited (HKG:1088) as only a coal story. Even if coal continues to underperform, Hu says China Shenhua’s other businesses will offset the negative impact.

China Shenhua is a little bit different than the other pure-play coal companies we cover primarily because of its vertical integration strategy,” Hu says. “The company recognized the coal sector’s volatility and was able to expand upward and downward into different sectors that include railway transportation, power generation as well as some shipping and port operations.”

CNOOC Limited Filed 2013 Annual Report on Form 20-F – Yahoo Finance CNOOC Limited (the “Company”, NYSE: CEO, SEHK: 00883, TSX: CNU) announced today it has filed with the United States Securities and Exchange Commission (“SEC”) its 2013 annual report on Form 20-F (“annual report”) that included audited financial statements for the year ended December 31, 2013.

The annual report is available on the Company’s website at www.cnoocltd.com as well as SEC′s website at www.sec.gov.

Sinopec Wins Dismissal Of $5B False Imprisonment Suit – Law360 A California federal judge on Tuesday tossed a Chinese foreign national’s $5.17 billion suit alleging China Petroleum & Chemical Corp., known as Sinopec Corp., colluded with the Chinese government to falsely imprison him, ruling the court did not have jurisdiction over the claims.
U.S. District Judge Beverley Reid O’Connell granted Sinopec’s motion to dismiss the July suit, which accused Sinopec officials of interrogating, threatening and ultimately having Tiangang Sun imprisoned for five years after he sued the company in China for breaching a pipeline contract

Your Industry News – Three International wind power exhibitions to take place in Shanghai in July 2014 **Would hope there is a major Scottish presence at these events. Wind power getting important there as oil declines** The Offshore Wind China Conference & Exhibition, the Wind Farm O&M China Conference & Exhibition and Distributed Generation China will take place concurrently at Shanghai Mart in Shanghai on 2-4 July 2014.

China Money Network − Yingli, Shanghai Sailing To Jointly Launch $160M Renewable Energy Fund New York Stock Exchange-listed Chinese solar panel producer Yingli Green Energy Holding Company Ltd. says that it has signed an agreement with Shanghai Sailing Capital Management to jointly form a renewable energy fund in Shanghai to invest in downstream solar energy projects in China, according to a company announcement.

The joint fund will have an initial size of approximately RMB1 billion ($160 million). Yingli China will commit around 51% of the total capital in several installments through its wholly owned affiliate in China.

PetroChina to Expand Installation of Honeywell Technologies to 30 Plants | Control Engineering Asia PetroChina Company Limited will expand its use of Honeywell advanced information management and process modeling software tools to 17 additional refining and petrochemical sites across China, to help meet the country’s growing demand for chemicals and transportation fuels. PetroChina currently uses Honeywell’s information solutions at 13 locations.

Telecoms

Alibaba unit to offer mobile phone service in China from June – Livemint The service will include voice and third-generation data packages on network capacity leased from all three state-owned carriers, according to Alizila, a website run by Alibaba. The packages will be sold through Alibaba’s Taobao and Tmall sites and can be paid for with Alipay, the company’s e-payment affiliate.

Alibaba, Tencent take rivalry to mobile network services | South China Morning Post Alibaba, the mainland’s biggest e-commerce service provider, said yesterday that it would launch 3G data and voice services in June through subsidiary HiChina, one of 19 companies licensed to operate as a mobile virtual network operator in the country.

The announcement, made through the Alizila website of Hangzhou-based Alibaba, followed reports earlier this month that online retail platform operator JD.com in which Tencent is a major shareholder, would launch its own mobile virtual network operator service next month.

ZTE Q1 profit grows – BUSINESS – Globaltimes.cn ZTE Corp, China’s second-biggest telecommunications equipment maker, said first-quarter profit matched its estimate after benefiting from the country’s introduction of 4G networks.

Net profit rose 204 percent to 622.2 million yuan ($100.01 million) from January to March, compared with an estimated range of 425 million yuan to 637 million yuan, the Shenzhen-based company said on Thursday.

China Unicom profits rise – BUSINESS – Globaltimes.cn China Unicom (Hong Kong) Ltd, the country’s second-biggest mobile carrier by subscribers, posted a 74 percent rise in first quarter net profits, beating estimates, as an increase in data usage offset a slowdown in subscriber growth.
China Unicom said on Thursday net profit from January to March was 3.3 billion yuan, higher than the 1.9 billion yuan in the same period one year ago.

Yahoo Still Set to Get Value From Alibaba After IPO – Bloomberg That’s because Yahoo, which owns about 24 percent of Alibaba, will still have a sizable chunk of the Chinese e-commerce company after it goes public as soon as this year. The Web portal is set to sell about 40 percent of its Alibaba stake in the initial public offering, leaving it with the majority of its holding. Yahoo can hang onto that piece indefinitely if it chooses.

Investors who had bought into Yahoo as a proxy for privately held Alibaba thus may not be tempted to dump the Web company’s shares — at least not right away. For Chief Executive Officer Marissa Mayer, who has relied on Yahoo’s Alibaba stake to boost the company’s share price, that may buy just enough time to accelerate a nascent sales rebound.

Xiaomi looks to steal thunder from OnePlus with launch of mysterious new gadget on same day, April 23 The mysterious device is set to launch on the same day as the OnePlus One, the new brand’s first ever phone. We doubt Xiaomi’s timing is unintentional as the OnePlus One phone is designed to compete with Xiaomi’s flagship phone, the Mi3.

Coolpad obtains fresh funds for 4G smartphone expansion | South China Morning Post Coolpad Group, the third-biggest smartphone supplier on the mainland, is poised to boost its 4G mobile phone development plans and global expansion with new financing worth as much as US$175 million.

Shenzhen-based Coolpad, formerly known as China Wireless Technologies, obtained yesterday a US$107 million, three-year loan facility through a syndicate of mostly Taiwanese banks, according to the firm’s filing with the Hong Kong stock exchange.

Property

Towers where no lights burn at heart of China’s puzzle – FT.com The main reason for the slowdown is a slump in fixed asset investment, the biggest driver of the Chinese economy.

The slide was largely owing to declining real estate investment, which also experienced its weakest growth in more than a decade. The situation is certain to get worse in the coming months as new housing floor space under construction contracted 27.2 per cent in the first quarter.

Why China Needs to Let More Companies Go Bankrupt – China Real Time Report – WSJ China needs to let more companies go bust.

That was the message from several executives at a real-estate conference in Shanghai on Thursday, as the latest string of loan defaults among real-estate developers and a small construction firm have some people talking about bankruptcy more freely.

Tech

China Money Network − Sina’s Weibo Downsized IPO By 21% To $286M Chinese social networking platform Weibo Corporation has raised $286 million by offering 16.8 million American Depository Shares (ADR) at $17 per share. The size of its IPO is 21% smaller than its initial target of of $380 million, according to an announcement.

Weibo gains 5% in Nasdaq trading debut – MarketWatch **I wouldn’t put money on Weibo** Shares in Weibo Corp were last up 5% on Thursday in their trading debut on the Nasdaq after initially dropping. Late Wednesday, the Chinese social-media company raised $286 million by offering 16.8 million U.S.-listed shares at $17, according to Renaissance Capital. That $17 price was at the low end of an expected range of $17 to $19.

As Weibo launches IPO, here are all the facts and stats you need to know In less than an hour, China’s top Twitter-esque social network, Sina Weibo (NASDAQ:WB), will launch its long-awaited IPO. As that happens, let’s look at all the facts and stats you need to know about Weibo.

Chinese graduates deepen hi-tech inroads | South China Morning Post The Chinese for more than a decade have been potent rivals to American and European manufacturers. Now, China is giving Westerners something new to worry about: a generation of workers able to compete in higher-technology endeavours. The aim is to develop service industries and shift from producing simple exports – often assembled from parts made elsewhere – to making a larger share of more sophisticated products.

Agriculture

China Says Nearly One-Fifth of Its Arable Land Is Polluted – WSJ.com **But doesn’t say what constitutes “polluted” or “highly polluted”** Nearly one-fifth of China’s arable land is polluted, China’s environmental ministry said. The new report confirms the worst fears of environmentalists and researchers about the effects of decades of rapid industrialization on the country’s soil.

The release of the report Wednesday shed unexpected light on the scale of China’s environmental problem. Environmental authorities had previously declined to disclose national soil pollution data, calling it a “state secret.”

Retail

China backs away from price controls on basic drugs | Reuters **Healthcare in China is FUBAR** China has backtracked on its policy of capping retail prices on medicines and will allow pharmaceutical companies to set prices for some drugs, after criticism that controls had caused a drug drought that derailed treatment for millions of patients.

Beijing has been struggling with rising healthcare costs, violent conflicts between patients and doctors and medicine safety issues, and President Xi Jinping has said providing affordable, accessible healthcare is a government priority.

Gap sees China sales tripling to $1b in three years – Business – Chinadaily.com.cn The push comes as Gap Inc tries to become less reliant on North America, where it generates 84 percent of its sales. North American sales have cooled of late at Gap Inc’s three major brands, which also include Banana Republic.

 

Posted from Diigo.

China Business Briefs 16/4/14

There won’t be a posting of the business briefs tomorrow, as I am flying to Beijing (in about three hours) for a two week visit. I will try to keep on posting once there, but visits and reunions may take precedence.

I am looking forward to seeing Iain Shaw and co, former staff of the Beijinger (and former colleagues of mine) who are starting up The Cleaver Quarterly, a magazine on Chinese food around the world. Check out their kickstarter thing here if you’re interested.

Economy Finance Auto Infrastructure Energy Telecoms Property Travel Tech Agriculture Retail Healthcare

Economy

China’s first quarter GDP grows 7.4% – Business – Chinadaily.com.cn China’s economy grew 7.4 percent year on year in the first quarter of 2014, the National Bureau of Statistics (NBS) revealed on Wednesday.

The NBS said that preliminary data showed the nation’s gross domestic product (GDP) reached 12.8213 trillion yuan ($2.08 trillion) in the first quarter.

The figures suggest growth in the world’s second-largest economy in the beginning of year 2014 was stable and that the economy was generally in good health, as Chinese authorities promoted reforms, innovation, restructuring and improvement of people’s well-being, according to the NBS.

Chinese incomes continue surging in Q1 – BUSINESS – Globaltimes.cn The average per capita disposable income rose 11.1 percent year on year to 5,562 yuan (908.82 US dollars) in the first quarter. Deducting inflation, the actual growth was 8.6 percent, according to the NBS.

The income gap between urban and rural residents narrowed with the actual income growth in rural China 2.9 percentage points higher than that in its urban areas in the first quarter, according to the NBS.

China’s Economic Growth Slows to Six-Quarter Low After Credit Reined In – Businessweek China’s expansion moderated to the weakest pace in six quarters and property construction plunged, testing leaders’ commitment to keep reining in credit as risks mount of a deeper slowdown.

Gross domestic product rose 7.4 percent in the January-to-March period from a year earlier, the statistics bureau said today in Beijing, compared with the 7.3 percent median estimate in a Bloomberg News survey of analysts. Industrial production and fixed-asset investment trailed projections.

China’s expansion slows as property construction falls | Money | The Malay Mail Online Gross domestic product rose 7.4 per cent in the January-to- March period from a year earlier, the statistics bureau said today in Beijing, compared with the 7.3 per cent median estimate in a Bloomberg News survey of analysts. Industrial production and fixed-asset investment trailed projections.

The weakest first-quarter property-investment growth since 2009 signals credit is tight and demand is faltering, adding to economic and default dangers as Premier Li Keqiang grapples with risks from shadow banking and local-government debt. A deeper slowdown would put pressure on leaders to expand stimulus or limit the pace of changes intended to give market forces a bigger role in the world’s second-largest economy.

Chinese Police Confront Trust Investors Demanding Repayment – Bloomberg Chinese investors demanding their money back from a troubled 973 million-yuan ($156 million) high-yield product in Shanxi province were confronted by police in front of a China Construction Bank Corp. (939) branch.

People wearing white masks with the words “despicable bank” and “pay back our money” were among at least 30 investors facing special-forces officers in dark uniforms in Taiyuan city, about 521 kilometers (324 miles) southwest of Beijing. The nation’s second-largest bank is the custodian of the Songhuajiang River No. 77 trust, which missed six payments as of last month, according to the Economic Observer.

Electricity, Steel Hint at Economic Uptick in China – China Real Time Report – WSJ Official data shows China’s economy in the first quarter grew at its slowest pace in 18 months, but two proxies point to some resilience.

Electricity output—an indicator favored by Premier Li Keqiang over gross domestic product—and crude steel production grew faster in March than in the preceding two months. In addition, steel output in March hit a record high, the National Bureau of Statistics said.

China’s slowing growth potential minefield for leaders – The Globe and Mail Slowing growth presents a potential minefield for Chinese leadership, whose chief concern is maintaining a rising standard of living for its own people. To that end, officials have sought to discount the value of GDP as a measure of well-being, instead deliberately underscoring other statistics. “Maybe a more important thing to look at is employment and income,” said Mr. Sheng. And those numbers still look good. The first quarter saw 3.74-million urban jobs created, slightly more than the year before. Rural income is up 10.1 per cent, while urban salaries swelled 7.2 per cent. At the same time, consumer price index growth of 2.3 per cent has allowed many of those gains to flow in to consumer pockets, rather than back into groceries.

Slowdown curbs Q1 lending activity – Headlines, features, photo and videos from ecns.cn Money supply growth decelerated further in March amid a reform-induced economic slowdown, according to figures released on Tuesday by the People’s Bank of China.

The central bank said that the expansion of M2, a broad measure of money supply, slowed to 12.1 percent year-on-year from 13.3 percent in February. The market consensus was for an increase of 13 percent.

Slower deposit growth, which limits banks’ ability to lend, was a factor. Yuan deposit growth fell to 11.4 percent year-on-year in March from 12.5 percent in February.

Higher-value exporters survive turmoil in market[1]- Chinadaily.com.cn Higher-value Chinese exporters are more immune than low-cost manufacturers in the face of market turmoil from such things as weak demand, exchange-rate fluctuations and rising costs, said exhibitors at the Canton Fair that opened on Tuesday.

China not Currency Manipulator: US Treasury-Caijing “China’s currency yuan, or renminbi (RMB) appreciated on a trade-weighted basis in 2013 but not as fast or by as much as is needed,” the US Treasury said  in the latest semi-annual Report to Congress on International Economic and  Exchange Rate Policies.

According to the report, the yuan appreciated by 2.9 percent against the US  dollar in 2013, and China’s current account surplus declined to 2.1 percent of  gross domestic product (GDP) in 2013, down from 2.3 percent of GDP in 2012 and  from a peak of over 10 percent in 2007.

Yangtze River Delta becomes epicentre for China credit risk | South China Morning Post Suzhou, an ancient city in Jiangsu province 100 kilometres west of Shanghai, lives in legend as one of China’s most beautiful, famous for its elegant gardens and charming canals.

More recently, it became an industrial powerhouse, sitting at the heart of the Yangtze River Delta region that, along with the Pearl River Delta in Guangdong, drove the mainland’s economic boom.

Now it is ground zero for a painful corporate deleveraging that has tacit government approval. A third of all loan delinquencies come from the region, and credit is getting harder to come by.

Finance

Citic Pacific to Pay $36B for Parent’s China Assets – Bloomberg The steelmaker and property developer will pay 49.9 billion yuan in cash and issue almost 16.6 billion shares at HK$13.48 each, according to a Hong Kong exchange filing today. Citic Group Corp. will hold 75 percent of Citic Pacific following the transaction and a share sale by the Hong Kong company, it said.

The transaction comes as Chinese President Xi Jinping advocates the most sweeping changes since Deng Xiaoping’s liberalization in 1978, including loosening yuan trading and allowing more private investments in state businesses. The deal gives Citic Pacific a stake in China’s largest brokerage, as well as banking, energy and infrastructure assets.

China Money Network − S&P Downgrades Fosun International’s Credit Rating Shanghai-headquartered Chinese privately owned conglomerate Fosun International Ltd. has been downgraded by Standard & Poor’s Ratings Services because of the company’s increasing leverage level as a result of its acquisitions, according to a notice issued by S&P.

Fosun’s long-term corporate credit rating is downgraded to BB from BB+ with stable outlook.

BRIEF-Ping An Insurance’s Jan-Mar premium income totalled 108 bln yuan | Reuters Ping An Insurance Group Co of China Ltd

* Says January-March premium income totalled 108 billion yuan ($17.37 billion)

Source text in Chinese: link.reuters.com/tan58v

BRIEF-China Life Insurance’s Jan-Mar premium income totalled about 132.2 bln yuan | Reuters China Life Insurance Co Ltd

* Says January-March premium income totalled about 132.2 billion yuan ($21.25 billion)

Source text in Chinese: link.reuters.com/tet58v

Auto

Volvo likely to become China’s next official car brand: report|Companies|Business|WantChinaTimes.com **I wonder what % of Audi’s revenues come from China** China’s president Xi Jinping, who visited the Chinese-owned Volvo car plant in Ghent, Belgium on April 1 during his European trip, seems to have become the best spokesman for the automobile brand after a photo of him and the Volvo XC60 model was published. Volvo could likely become the new choice for official cars in China, according to the Guangzhou-based Time Weekly.

Infrastructure

SOE accounting puzzle blurs frugality drive – Headlines, features, photo and videos from ecns.cn **Article repeated from Xinhua – evidently CRCC’s arse is being kicked** Many Chinese state-owned enterprises(SOEs) that were under fire last year for exorbitant “reception” fees hid the item in their latest financial results, renewing public concerns over their sincerity to cut extravagance.

China Railway Construction Corporation Ltd. (CRCC), one of the country’s largest construction companies, spent 837.5 million yuan (135.1 million U.S. dollars) on receptions in 2012. The company was punished following public outrage over the alleged abuse of state assets.

In its 2013 financial report released in late March, CRCC canceled the item called “receptions” in its accounting statement. Meanwhile, the item named “management fees,” which included the sub-item “receptions” in the 2012 report, surged by nearly 2.2 billion yuan last year.

World’s longest plateau rail tunnel completed – People’s Daily Online The Xinguanjiao Tunnel, the world’s longest plateau rail tunnel on the Qinghai-Tibet Railway, was completed on Tuesday, local authorities said.

Spanning 32.645 km, the tunnel was finished on Tuesday afternoon, making it the longest rail tunnel in China, according to Zhi Changying, an official with the China Railway Tunnel Co. Ltd. (CRTC), a partner in the project.

Sierra Leone Sports: Bo stadium handed over to Salone « Awoko Newspaper Renowned Chinese company, Xinjiang Beixin construction and Engineering Group Company Limited on Friday April 11th handed over the four thousand seater stadium to government through the Ministry of Sports.

Before the handing over ceremony, one of the Engineers Tai Xie who also doubles as interpreter told Newday that they started the construction of the Stadium on the 25th of December 2008 and they finished the project on 25th December 2013 spanning over a five year period.

Energy

China Natural Gas Output Rises in March to Highest in Two Years – BloombergNatural gas output in the world’s largest energy consumer rose 7.6 percent to 11 billion cubic meters last month, data from the National Bureau of Statistics in Beijing show today. That’s the highest since March 2012. NBS didn’t release output figures for January 2013 because the data was distorted by the Lunar New Year holiday.

The Chinese government sees expanding gas supply as a way to curb air pollution that has frequently exceeded limits recommended by the World Health Organization. The National Energy Administration said in its work plan in January that gas output is forecast to rise 12 percent from a year earlier to 131 billion cubic meters this year.

China State Grid Considers Dollar Issue Amid State-Giant Sales – Bloomberg State Grid Corp. of China, the nation’s largest power distributor, is considering a dollar-denominated bond offering following sales from other government-backed giants.

The company will meet investors in the U.S. and Asia from April 21, according to a person familiar with the matter, who asked not to be identified because the details are private. China Petrochemical Corp., known as Sinopec Group and parent of Asia’s largest oil refiner, raised $5 billion selling securities April 2 in Asia’s biggest dollar bond offering in a decade.

China builds up nuclear power grid – Business – Chinadaily.com.cn “China will install another 800 gigawatts of capacity for nuclear power, about 70 percent of which will use our technology for steam turbines and other key components,” Chen Chaoming, vice-president of Nuclear China-Alstom Thermal, told reporters in Beijing during the 13th edition of Nuclear Industry China, organized by the Chinese Nuclear Society.

“Despite the post-Fukushima delays,” he said, referring to the Japanese disaster of three years ago, “China’s nuclear market has a huge potential for growth. Basically, it is because China’s nuclear industry is still at a nascent stage. Power generated by nuclear plants accounts for less than 2 percent,” he said.

PetroChina Company Ltd.: Notice of Annual General Meeting for the year 2013 NOTICE IS HEREBY GIVEN that an annual general meeting of PetroChina Company Limited (the “Company”) for the year 2013 (the “Annual General Meeting”) will be held at 9 a.m. on 22 May 2014 at Beijing Oriental Bay International Hotel, 26 Anwai Xibinhe Road, Dongcheng District, Beijing.

PLN teams up with Chinese firms on marine project | The Jakarta Post State owned electricity company PT PLN has teamed up with three Chinese companies — Technology Intern Shijiazhuang Enric Gas Equipment Co. Ltd, Ocean Engineering Design & Research Institute of CIMC and PT Enviromate Technology International Cui Li — to develop marine transportation of compressed natural gas (CNG) in Indonesia.

The marine CNG transportation project, which will transport CNG from Gresik, East Java to Lombok, West Nusa Tenggara, via a CNG vessel, is the first project of its kind in the world.

Telecoms

Huawei world’s top communications equipment supplier in 2013|Companies|Business|WantChinaTimes.com Drawing from China’s huge mobile communications market, Huawei became the world’s largest communications equipment supplier in 2013, overtaking Ericsson, according to the Chinese-language CBN Weekly.

The company raked in net profits of US$3.47 billion on sales of US$39.5 billion in 2013, compared with US$1.9 billion and US$35.3 billion for Ericsson. Cisco was third.

Property

China First-Quarter Home Sales Post Decline on Tight Credit – Bloomberg The value of homes sold fell 7.7 percent to 1.1 trillion yuan ($177 billion) in the three months to March from the same period a year ago, the National Bureau of Statistics said today. The last time home value sales dropped in the first quarter was in 2012. New property construction declined to 291 million square meters (3.1 billion square feet) in the quarter.

Is glut developing in retail building sector?[1]- Chinadaily.com.cn Despite a rapid growth in retail sales, less-experienced developers could soon be learning a hard lesson from a market with a supply glut, says a retail property trend report released by Cushman & Wakefield, the world’s largest privately held real estate services company.

The report forecast that the new supply of commercial properties in 30 cities that it monitors will total 75 million square meters, and a peak of new supply with more than 20 million sq m will flood the market this year.

Hoping for Price Rises? Here’s the Harsh Reality, CCTV Tells Home Buyers – China Real Time Report – WSJ China’s latest message about the property market is simple and aimed at the man on the street: The home you’ve bought isn’t a one-way bet. Deal with it.

That message has been pumped out through China’s state broadcaster as part of Beijing’s efforts to curb people’s enthusiasm for homes as an investment tool. Such appetite for property has driven economic growth, but also led to imbalances in the country’s economy and social tension.

Hebei Hopes to Turn Cities into Satellites by Pushing Them into Beijing’s Orbit – The housing market in Baoding heated up after media reports that provincial officials in Hebei want to develop some cities into satellites of Beijing, and Baoding might host some central government offices.

A Hebei official has said the idea is still just that, and that the central government has not approved anything.

However, the plan shows the province is enthusiastic about developing its economy, and has identified problems in the capital – overcrowding, heavy traffic and terrible air pollution – as problems it could use to its advantage.

Travel

WeChat Adds Air Ticket Booking Service | TechNode WeChat’s m-commerce offerings has added flight booking service that is provided by LV.com (formerly 17u.cn), a Chinese online travel service Tencent has a stake in. Payments, of course, are supported by WeChat Payment.

Firms decline to comment on merger rumors – BUSINESS – Globaltimes.cn Ctrip.com International and Qunar.com Inc, two Chinese NASDAQ-listed online travel service providers, both declined to comment Tuesday on market rumors that they will merge in a deal that would create an online travel service giant with a market capitalization of over $10 billion.

The rumors, as reported by China Business Journal over the weekend, claimed that search engine giant Baidu Inc, the majority shareholder in Qunar, will swap its shares in Qunar for Ctrip shares, resulting in Baidu taking a controlling stake in Ctrip.

Sikorsky Helicopter Receives Chinese Nod – Analyst Blog – NASDAQ.com **UK political buffs may remember Sikorsky from the Westland affair** Sikorsky Aircraft Corp., a unit of  United Technologies Corp. (UTX), declared that its S-76D aircraft has received China’s  certification, jumpstarting its delivery to Chinese customers.

The Civil Aviation Administration of China (CAAC) issued a validation type certificate for the helicopters, which will  support expansion of Sikorsky’s operations in a potentially  profitable market and strengthen its foothold in the Chinese market.

Tech

Alibaba Plans Hong Kong-Style Fee as Carrot for IPO Banks – Businessweek Alibaba Group Holding Ltd. is planning to award about one-third of the fees for its initial public offering in the form of incentive bonuses to coax better performance from underwriters, people with knowledge of the matter said.

China’s largest e-commerce company plans to pay at least 1.1 percent of the total IPO proceeds in fees, two people said, asking not to be identified discussing private information. Estimates of Alibaba’s valuation suggest the company could raise as much as $18 billion in the sale, making the potential fee pool almost $200 million. While the e-commerce giant is preparing for an IPO in New York, performance incentives are common in Hong Kong and have been used by companies including Agricultural Bank of China Ltd.

China’s Alibaba sees profit double ahead of long-awaited IPO As the tech world awaits Alibaba’s US IPO, here are some new financial figures to chew on. The Chinese ecommerce juggernaut pulled in US$3.06 billion in revenue in Q4 2014, which is up 66 percent on the same period a year before. Alibaba’s Q4 net income hit $1.36 billion in net income in Q4, which has more than doubled (up 110 percent) from the previous year.

Alibaba’s Q4 numbers were boosted by the popularity of China’s equivalent of Cyber Monday, which happens every November 11. On that day, Alibaba’s Tmall and Taobao marketplaces saw $5.7 billion spent by shoppers in just 24 hours.

Baidu enters China’s mobile payments war with Baidu Wallet Baidu (NASDAQ:BIDU), the Chinese tech giant best known for its search engine, announced yesterday it will roll out a new mobile wallet app called Baidu Wallet (baidu qianbao), reports Jinghua.cn (via Techweb).

Like its main rivals from Alibaba (Alipay) and Tencent (Tenpay and WeChat Payments), Baidu Wallet serves as a Swiss army knife for the average Chinese consumer’s finance needs. By binding bank cards to the app, users can transfer money to friends’ accounts, top up their SIM cards, pay for virtual goods in video games, purchase movie tickets, and buy goods from any vendor that accepts Baifubao, Baidu’s third-party payment solution.

Agriculture

Noble Group to sell stake in agriculture unit for US$1.5b – Channel NewsAsia China’s largest grain trader COFCO Corp will buy a 51 per cent stake in Singapore-listed Noble Group Ltd’s agriculture business unit for US$1.5 billion, Noble said on Wednesday.

The two companies plan to form a partnership that will link COFCO’s grain processing and distribution business with Noble Agri’s agricultural unit.

Noble Group Limited – Did it sell the agriculture business at right price – which of the brokers is right? – Yahoo Singapore Finance After failing to spin off its agriculture business in 2011 it has now again plans for an IPO after divesting majority stake to COFCO. The question still remains whether this segment deserves better valuations.

Retail

An Overview of China’s Retail Industry | China Briefing News Underpinned by the steady rise of household income, China’s retail market has become one of the most lucrative and rapidly growing in the world. China is currently the world’s second largest retail market, and Asia’s largest. It is expected to surpass the U.S. to become the world’s largest retail market by 2016. After years of accelerated growth and annual expansion rates of 10 percent or more, China’s growth in 2013 slowed down to 7.7 percent – level with the figure for 2012. This slowdown in growth is consistent with China’s effort to carry out a major overhaul aimed at weaning its economy off its decades-long reliance on heavy industry, export-oriented manufacturing, state-driven investment, as well as investment in infrastructure. Meanwhile, to rebalance the nation’s economy, policymakers are attempting to shift towards a more consumption- and service-driven model, hoping to foster and sustain more productive growth over the next decade and beyond.

Reaching for the red | China Economic Review This is a characteristic trait seen in previous emerging markets like Japan that eventually opened up their palates to other varieties, notes Guilllame Delglise, CEO of Vinexpo, a global wines and spirits exhibition, but it will take time for the same to happen in China.

In an interview during a recent visit to Shanghai, Delglise, who was previously Asia Pacific director for Laurent-Perrier, also told China Economic Review that officials in Beijing are not inclined to serve champagne to their guests, and explained why that might be good for marketers of bubbly as they chase affluent urban youngsters at fancy nightclubs.

Healthcare

China Money Network − TPG, Fosun’s Privatization Target Chindex Receives Higher Takeover Proposal NASDAQ-listed Chindex International, Inc., the operator of high-end United Family hospitals in China, says the company has received a superior take-private proposal from an unspecified financial bidder, according to a company release.

The new bidder is willing to pay $23 per share for all outstanding American Depository Shares (ADS), valuing the company at around $414 million.

Posted from Diigo.

China Business Briefs 5/2/14

Economy   Finance   Auto   Infrastructure   Energy   Telecoms   Property   Travel   Tech   Agriculture

Economy

China’s strong currency problem – Craig Stephen’s This Week in China – MarketWatch There are other vulnerabilities too exposed by China’s renewed popularity as a destination for “hot money” playing the yuan carry trade.

For one, it means its economy and financial system is now reliant on the fickle and potentially destabilizing short-term foreign capital its closed financial system was designed to guard against. This is hard to quantify but claims Hong Kong banks have on mainland counterparts give an approximation of the size of these yield-seeking structured products. As of October, those claims were a record HK$2.3 trillion ($295 billion), up 53% since the end of 2012

China Money Network − Is A Re-Run Of The Asian Financial Crisis Likely In 2014? The emerging market world may not be facing a re-run of the late-1990s, as some have suggested, but the precarious position of some emerging markets makes it likely that several economies will run into trouble over the next couple of years.

Events remain in a state of flux but there are five questions that we have been asked over the past week or so that merit a first stab at answering.

Pimco’s Bill Gross Says He Avoids China ‘Mystery Meat’ – Bloomberg Bill Gross, who oversees the world’s biggest bond fund at Pacific Investment Management Co., said the pace of economic growth in China is among the biggest questions in developing nations and the largest risks for markets.

“I call China the mystery meat of emerging-market countries,” Gross said yesterday during an interview on Bloomberg Television’s “Market Makers” with Erik Schatzker and Stephanie Ruhle. “Nobody knows what’s there and there’s a little bit of bologna, so we’re just going to have to wonder going forward through this year as to the potential problems in China and other emerging markets.”

China Policy Institute Blog » Middle Power Pushback: Explaining Australia’s China Challenge In 2007, China overtook Japan as Australia’s largest trading partner, reflecting unprecedented levels of demand for iron ore and coal resources to power Chinese economic growth. In 2012, Australia and China signed a ‘Strategic Partnership’, which was highly vaunted by the then Gillard Labor Government as marking a new era in the bilateral relationship. While the Sino-Australian ‘Strategic Partnership’ did not constitute a security agreement, much less a formal alliance, for supporters of closer ties between Beijing and Canberra it represented a major step forward.

China Money Network − HK Millionaires Will Possess $1.7T In Combined Wealth In 2017 There will be more than 339,000 millionaires in Hong Kong in 2017, and the amount they possess will increase by 53% to over $1.7 trillion in combined wealth, according to a report release by London-based wealth management research firm WealthInsight.

Austerity drive among factors taking toll on luxury market – Business – Chinadaily.com.cn China’s luxury goods market has slowed from 7 percent growth in 2012 to around 2 percent in 2013, with expectations of similarly slow growth in 2014, according to the China Luxury Goods Market Study by consultancy Bain & Co.

Chinese shoppers now do about two-thirds of their luxury shopping abroad, which has triggered a slowdown in domestic store traffic and store openings, the report said.

Foreign retailers learning how to click with Chinese fashionistas[1]- Chinadaily.com.cn “Cyber Monday” and “Black Friday” are no longer unfamiliar terms to China’s price-savvy middle class. A growing number of English-speaking credit card holders have joined the international fray.

The popular trend of cross-border online shopping is being spearheaded by a number of shopaholics who understand how to buy things overseas. They usually choose items with price differences or things that tend to be unattainable in China.

Finance

The dark economic thoughts of Charlene Chu | South China Morning Post Charlene Chu, a former senior director and head of China financial institutions at the ratings agency Fitch, has been talking to Britain’s Telegraph about why she feels that China is on the verge of a crisis.

Chu left Fitch last year and will join US-based Autonomous Research later this year. She maintains that a banking crisis in China is not just an outside chance but a certainty. “The banking sector has extended US$14 trillion to US$15 trillion in the span of five years. There’s no way that we are not going to have massive problems in China,” she told the newspaper.

China and the U.S. Foreign Account Tax Compliance Act | China Briefing News For several years now, the United States has been preparing legislation under the Foreign Account Tax Compliance Act (FATCA), a complex reporting and withholding regime intended to enable the U.S. to better access offshore accounts, investments and income of U.S. citizens who have failed to rigorously report these holdings. Despite several nations’ embrace of the FATCA, China has continued to delay negotiations with the U.S. Treasury over whether or not to allow Chinese financial institutions to report U.S. taxpayer or U.S. firm information to the United States Government.

Auto

China Has How Many Cars? More Cities To Implement Limiting Car Sales? | China Car Times – China Auto News Chinese media are today reporting that the total number of vehicles on Chinese roads has broken the 250 million barrier for the first time, with 31 cities boasting a vehicle population exceeding one million vehicles.

Out of China’s 1.3 billion people, only 280 million people have a driving license however over 18.44 million people took their driving tests in 2013. Drivers with less than one years driving experience under the belt caused 15% of all accidents in China last year, down slightly from 16.7% a year previously but drivers with more than 3 years of experience caused 51,000 accidents causing 14,000 deaths and 56,000 injuries.

Carmaker Tesla gambles on ‘fair price’ strategy in China despite risk of losing prestige | South China Morning Post In China, where higher prices mean prestige, Tesla, a US maker of luxury electric cars, is taking a bold step to win customers and cachet by restricting its mark-up to half of what some of its rivals can command.

In an unusual blog post last month, the firm announced the lower-than-expected 734,000 yuan (HK$933,000) China price tag for its high-end Model S electric car. The price, still 50 per cent higher than in the United States, includes only “unavoidable” taxes and transport costs, it said.

Infrastructure

Changing the rules of engagement on infrastructure – Business – Chinadaily.com.cn Although there are roads, bridges, railway lines and various other government buildings that stand testimony to the Chinese capabilities, companies are now gearing up to participate in projects such as urban facilities, modern transportation and manufacturing.

Sun Guoqiang, general manager of CGC Overseas Construction Group, a Chinese construction major that has been in Ethiopia for more than 15 years, says that although there are still plenty of construction projects in Africa, his company will move away from the business in five to 10 years.

Sierra Leone News: Grafton road to be handed over as Independence gift -Wang Kai Ge « Awoko Newspaper The General Manager of China Railway Seventh Group Ltd, constructing the Regent  Grafton Road has told this medium that they intend to finish the road and hand it over to Sierra Leone government on the 27th of April as their own gift to the people of Sierra Leone as they celebrate Independence.

Energy

Research and Markets: Concise Analysis of the Asia Pacific Oil and Chemicals Storage Industry – Forecasts to 2017 “Concise Analysis of the Asia Pacific Oil and Chemicals Storage Industry   – Forecasts to 2017”, is the essential source for industry data and information relating to the oil and chemicals storage industry in Asia   Pacific. It provides asset level information relating to active and planned oil and chemicals storage terminals in Asia Pacific. The profiles of major companies operating in the oil and chemicals storage industry in Asia Pacific are included in the report.

Telecoms

China Mobile’s 4G expansion drives smartphone supply buildup in China | South China Morning Post Analysts see the 4G network roll-out being led by China Mobile, the world’s largest wireless network operator, changing the competitive landscape for smartphones in the domestic market, where most of the country’s 1.23 billion subscribers at the end of December were still tied to old 2G cellular infrastructure.

While Apple recently hogged the headlines by having China Mobile as a new carrier-partner for the iPhone, the domestic brands led by Lenovo, Huawei Technologies, ZTE and Coolpad were expected to step up their supply of cheaper smartphones to help the operator sign up more 4G subscribers nationwide, analysts said.

Chinese New Year welcomed in with 13.6 billion messages in 1 day on China’s top social network While everyone’s talking about WeChat, it’s easy to forget that Tencent makes another social network that’s even more popular. It’s called QQ. Today Tencent (HKG:0700) revealed that QQ’s users sent a total of 13.6 billion QQ chats on the instant messaging service during Chinese New Year’s Eve, the busiest and most raucously celebrated day of the year.

Chinese tech giant Huawei enters Nepal’s market – Business – Chinadaily.com.cn Speaking during the launching program held in Kathmandu, Huawei representative Li Ji said that the Chinese tech giant in partnership with Nepal Telecom, the country’s State-owned telecommunication service provider, has the potential to bring a positive change in the lives of Nepalese nationals.

Apple silences FaceTime Audio for iPhone and iPad buyers in China Apple’s (NASDAQ:AAPL) FaceTime was updated with audio support in iOS 7, but a growing number of iPhone and iPad owners in China are realizing that they’ve been left out. Anyone who has bought a made-for-China iPhone 5s, 5c, or newest-gen iPad will find that they only get the option to make FaceTime video calls, with the audio ability nowhere to be seen.

Property

China Savers’ Penchant for Property Magnifies Bust Danger – Bloomberg Some 66.1 percent of family assets were in housing in 2013, a national survey of about 28,000 households shows. Mortgage debt as a share of disposable income rose to 30 percent from 18 percent in 2008, according to estimates by Nicholas Lardy at the Peterson Institute for International Economics in Washington.

The buildup raises the stakes for any slide in property prices amid China’s efforts to head off defaults by local governments and developers that propelled a run-up in borrowing that now amounts to more than double the size of the economy, according to Goldman Sachs Group Inc. A hit to household wealth could impair consumer spending, rebuffing policy maker efforts to rebalance the economy toward domestic demand.

Travel

Countries tap into China’s medical tourism market|WantChinaTimes.com South Korea, Singapore, and Taiwan have been actively developing their medical tourism industry, capitalizing in part on the growing demand for such service among China’s nouveau riche, reports the Guangzhou-based New Express.

The policy is also in line with the expanding global medical tourism market, which has seen an annual growth rate of 20% in recent years, with the market scale topping US$100 billion in 2012 alone, the paper said.

Tech

Alibaba’s Average Valuation Rises to $153 Billion After Earnings – Bloomberg Alibaba is valued at an average of $153 billion, based on the estimates of 10 analysts. That compares with the $120 billion average of six analyst estimates in October. The company last week reported profit of $792 million for the three months ended September, a 12 percent increase from the June quarter, as revenue surged 51 percent to $1.78 billion.

Analysts expect the company, based in Hangzhou, China, to hold the biggest initial public offering since Facebook Inc. (FB) Goldman Sachs Group Inc. valued Alibaba at $150 billion in a Jan. 29 report, saying that may be a “conservative” estimate.

Hon Hai to launch B2B e-trading platform|Companies|Business|WantChinaTimes.com Hon Hai Precision Industry — the world’s largest contract electronics maker, also known by its trading name Foxconn — will launch a business to business (B2B) trading platform in early March, a move perceived as a way for the company to broaden its business model, market sources said on Tuesday.

The sources said Hon Hai chairman Terry Gou made an internal announcement before the Lunar New Year holiday, saying that the Taiwan-based company will gear up to develop its electronics commerce business this year.

Smart Air filters China’s pollution with budget air purifier Despite having no business background, setting an arbitrary price point, and starting off with no name recognition whatsoever, Beijing-based startup Smart Air has sold over 2,500 cheap and frankly ugly do-it-yourself air purifier kits, almost as many replacement filters, and another 600 of the more powerful “Cannon” kits since sales began in mid-September.

The scrappy team of four is making waves across polluted Chinese cities with an incredibly simple fact: by strapping a HEPA1 filter to a household fan, you can clean the air in your home for just RMB 200 ($33).

China’s solar firms consider response to US probeWantChinaTimes.com After the US Department of Commerce recently initiated anti-dumping and anti-subsidy investigations on imports of silicon solar photovoltaic (PV) products from China and Taiwan, Chinese PV makers plan to jointly discuss countermeasures by focusing first on cutting the scope of products covered by the probe, the Shanghai-based China Business News reports.

Agriculture

Bigger farms reap bigger fortunes upon rural land reform – Xinhua | English.news.cn Lured by better employment and salaries, as many as 260 million farm workers have left the countryside for cities. A side effect of the exodus is a vast amount of land being left uncultivated. Farmers have very little wriggle room in land transfers and don’t make much money from land deals anyway, so they often simply abandon their land and start afresh on their urban journey.

With food security and the economic potential of rural and ex-rural residents foremost in their minds, authorities are promising more property rights for farmers. These include transfer and mortgage of land-use rights, and the ability to take shares in large farming entities, according to a document released after the Third Plenary Session of the 18th Communist Party of China Central Committee last November.

Posted from Diigo.