China Cinda Asset Management

China Business Briefs 19/1/14

Apologies for the brief hiatus. In the same way that you get your shots before travelling to some countries, you really ought to sort out your internet connections before you travel to China.

ECONOMY

ICBC Won’t Repay Troubled China Trust Product, Official Says – Bloomberg Industrial & Commercial Bank of China Ltd. is rejecting calls to bail out a troubled 3 billion-yuan ($495 million) trust product, a bank official with knowledge of the matter said, stoking concern that the nation’s first default on such high-yield investments may be looming.

ICBC, which distributed the product sold by a trust company to raise funds for Shanxi Zhenfu Energy Group, won’t assume primary responsibility after the coal miner collapsed, according to the executive, who asked not be identified while negotiations continue. China’s largest bank may be forced to repay investors, most of whom were Beijing-based ICBC’s own private banking clients, Guangzhou Daily reported yesterday.

China Shadow Lender Makes Plans to Recoup Loan – WSJ.com A standoff is brewing in China, as an asset management firm that had used the country’s largest bank as its agent seeks avoid setting a loss-making precedent among shadow lenders in connection with a loan-gone-bad made to a coal miner.

China Credit Trust Co., the shadow lender—a term used to describe nonbank lenders in China—raised 3 billion yuan ($495 million) from customers of state-controlled Industrial & Commercial Bank of China Ltd. and lent it to a little-known coal-mine operator in northern China’s Shanxi province, Wang Pingyan. The farmer-turned-entrepreneur, whose financial problems first came to light in 2012, has been detained by authorities and couldn’t be reached for comment.

Troubled shadow bank product tests no-default policy in China | South China Morning Post A high-yielding investment product based on a loan to an indebted coal company is offering the latest test of Beijing’s willingness to permit defaults in the mainland’s shadow banking system.

If the product, which is scheduled to mature on January 31, fails to pay out as promised, it could shatter the widespread assumption that even risky investments carry implicit guarantees from the government and state-owned banks.

UK’s drive to be offshore hub for Chinese currency gains pace – Yahoo Singapore Finance China decided late last year to give UK investors the right to buy up to 80 billion yuan (7.90 billion pounds) of mainland stocks, bonds, funds and money market instruments directly using its currency, making Britain the first country outside Asia with such status.

Last week, the state-controlled Bank of China also sold a 2.5 billion yuan ($413 million) bond in London, the biggest issued in the currency – which is also known as the renminbi (RMB) – so far in the British capital.

Inland provinces in China see boost in foreign trade|Markets|Business|WantChinaTimes.com A total of six inland provinces — Henan, Anhui, Yunan, Shaanxi, Gansu and Guizhou — along with the municipality of Chongqing posted an over 15% growth in foreign trade during 2013. In comparison, the contribution of foreign trade in seven coastal provinces or municipalities dropped 0.9% to 79%, according to China’s General Administration of Customs.

Bank profit growth could miss 10-pct target: analysts – Xinhua | English.news.cn China’s listed banks may see profit growth under 10 percent this year as financial reform and Internet businesses take their toll on the sector.

Chief economist at the Bank of Communications Lian Ping forecast net profit growth for listed banks at around 8.3 percent this year, a notable retreat from the double-digit era, according to China Securities Journal. China Merchants Securities analyst Luo Yi put the figure at 9.4 percent.

China decries U.S. spending bill | Reuters China’s Commerce Ministry has condemned a $1.1-trillion spending bill passed by the U.S. Congress last week over clauses that limit technological purchases from the Asian giant, saying they clash with the principles of fair trade.

In a weekend statement, China’s Commerce Ministry said the move “went against the principles of fair trade” as it sought to curb purchases of Chinese technology and export of satellites and parts to China.

Investment pact ‘means better market access’ – Chinadaily.com.cn China and the European Union will open negotiations next week on a bilateral investment agreement, EU Ambassador Markus Ederer told a news conference on Friday in Beijing.

Even amid weak global economic conditions in recent years, EU-China trade has grown steadily. Bilateral trade expanded 2.1 percent last year to $559.06 billion, according to China’s Ministry of Commerce.

PBOC sets sights on ‘zombie’ financing vehicles[1]- Chinadaily.com.cn The People’s Bank of China has reiterated its resolve to root out “zombie” local government financing vehicles this year and ensure that urbanization funding moves through standard market channels.

The central bank said in an online statement on Thursday that it will “exhaustively clean up” local government financing vehicles that “have poor credit, ambiguous functions and unsustainable financial conditions”.

China Home Prices Advance as Guangzhou, Shenzhen Jump 20% – Bloomberg New-home prices in China’s cities defined by the government as first tier rose more than 15 percent last month, led by Guangzhou and Shenzhen in the south, as local property curbs failed to deter buyers.

Prices climbed 20 percent in Guangzhou and Shenzhen from a year earlier, and jumped 18 percent in Shanghai and 16 percent in Beijing. They increased in 69 of the 70 cities tracked by the government, the National Bureau of Statistics said in a statement today.

Chinese Property Prices Rose in December – WSJ.com New-home prices in major Chinese cities in December were up 9.2% from a year earlier, but month-to-month figures suggest Beijing’s efforts to cool the market are continuing to have an impact.

Prices in December were up from a year earlier in 65 of the 70 cities surveyed by the government, according to data released on Saturday. At 9.2%, the average price increase marked an acceleration from November’s 9.1%, according to Wall Street Journal calculations.

Austerity drive crimps gift-giving by China’s rich – FT.com The Hurun Report, chronicle of all things wealthy in China, said in its 2014 Luxury Consumers Survey that 25 per cent fewer people plan to give a gift over Rmb5,000 ($826) at Chinese New Year – in two weeks’ time – than last year. Overall, their average luxury spending fell by 15 per cent, from Rmb1.77m last year to Rmb1.5m this year, “possibly due to the impact of anti-corruption initiatives and a slowdown in the economy”, Hurun said.

The Rise of China’s Innovation Machine – WSJ.com Chinese companies still face a perception problem among consumers in many parts of the world that their products aren’t as high-quality or reliable as others. Some foreign competitors have alleged that Beijing gives unfair advantages through subsidies, cheap financing and control over the currency market.

But, many executives at Chinese and Western companies contend, China’s technology sector is reaching a critical mass of expertise, talent and financial firepower that could realign the power structure of the global technology industry in the years ahead.

Private Chinese Companies Struggle to Invest in America, Expert Says – In 2012, direct investment made by private Chinese firms for the first time outpaced that by their state-owned counterparts in terms of value. In 2013, total investment by private firms into the U.S. again increased by US$ 5 billion to about US$ 9 billion.

Despite the surge, a large number of private Chinese firms are seeing their attempts to tap the U.S. market fail. Data from the SoZo Group, a Hong Kong company that provided investment expertise to businesses in China, shows that 90 percent of Chinese private enterprises’ attempts at setting up manufacturing in the United States or Europe fail.

Guangdong Tells Certain SOEs to Turn over More of Their Profits – The figure is significantly more than the previous level of 10 percent, but is still lower than the 30 percent target a recent meeting of the Communist Party’s 18th Central Committee called for reaching by 2030.

Wholly state-owned companies in the southern province of Guangdong will turn over 15 percent of their profits to the government this year, a report the provincial finance department submitted to the local people’s congress says.

China Private Equity, M&A & Capital Markets, from China First Capital The long dark eclipse is over. The sun is shining again on China’s capital markets and private equity industry. That’s good news in itself, but is also especially important to the overall Chinese economy. For the last two years, investment flows into private sector companies have dropped precipitously, as IPOs disappeared and private equity firms went into hibernation. Rebalancing China’s economy away from exports and government investment will take cash. Lots of it. Expect significant progress this year as China’s private sector raises record capital and China’s state-owned enterprises (SOEs) gradually transform into more competitive, profit-maximizing businesses.

The Future of the Accounting and Legal Professions in China | China Briefing News The accounting profession in China and, more generally, Asia, will undergo dramatic changes over the next decade as competition intensifies and business complexity increases, according to the Intuit 2013 Future of Accounting Report. More accounting or tax-related products and services will enter the market as banks, financial services companies, software and Internet firms, and even governmental bodies, innovate and develop new offerings.

CSRC Launches Inspections Linked to Pricing of New Shares – The China Securities Regulatory Commission (CSRC) said on January 15 it has sent out teams to inspect underwriters and financial institutions involved in pricing new shares that were about to hit the A-share market.

The inspections target 13 IPO underwriters for 13 issuing companies and 44 financial institutions that took part in the price inquiries. They will be examined for compliance with regulations, the CSRC said, suggesting as usual that it will check whether they inflated the new shares’ offering price.

FDI in China Springs Back by 5.25 Percent in 2013 | China Briefing News Total foreign direct investment (FDI) in China rose by 5.25 percent in 2013 after the decline which was witnessed in 2012. China’s Ministry of Commerce (MOFCOM) recently disclosed this information during a routine press conference on January 16.

COMPANIES

49 million Alipay Users Have Contributed to Mutual Fund Yuebao. WeChat Adds A Me-too One. When WeChat stealthily launched a Yuebao clone, named Licaibao (means a powerful tool for financial management) a couple of days ago, Alipay announced that 49 million Alipay users had contributed 250 billion yuan (roughly $41 bn) to the mutual fund Yuebao as of January 15.

Chinese microblog use fell 9% in 2013, government says – WSJ.com The report doesn’t specify how the data about user numbers were collected or which microblogs the data references. Internet giants Sina Corp. and Tencent Holdings Ltd. operate China’s two largest microblog services. Sina said in November in its most recent earnings report that daily active users grew 11.2% to 60.2 million in the third quarter from the second. Tencent didn’t release third-quarter figures for its weibo users.

Making money from WeChat: Nice little earner | The Economist IT IS hard to make money peddling social media anywhere. During their first few years in business, Facebook and Twitter lost pots of money. Yet somehow Tencent, an innovative Chinese firm that released the WeChat app in 2011, seems to have cracked the code. Alicia Yap of Barclays, an investment bank, forecasts that WeChat will earn some 6.8 billion yuan ($1.1 billion) this year and 9.6 billion yuan next year. The reasons for optimism include clever integration of the app with other money-making services and spectacular growth in users at home and, unusually for a Chinese app, abroad.

Baidu Releases Wireless Music Box Priced at $16 After releasing several smart devices last year, Baidu continues its forays into hardware industry by releasing a wireless music box to enrich its smart gadget lineup. The first batch of 20,000 sets is on sale at online retailer JD with a price tag of 99 yuan ($16.35) .

Tencent’s 10TB of free cloud storage is hands down the best Welcome to Tencent’s Weiyun. In July 2012, the Chinese web giant released its cloud service with a whopping 10TB of free storage, and it now reports 300 million registered users. This week, Tencent released an update that dramatically improved the interface and features. Only a Chinese version is available for now, but Tencent (HKG:0700) plans to launch an English-language version sometime this year.

China’s Tencent latest online platform to launch fund product | Reuters China’s Tencent Holdings Ltd  quietly rolled out its first financial services product for its mobile messaging app WeChat on Thursday to compete against similar offerings from rivals Alibaba Group Holding Ltd and Baidu Inc.

Tencent teamed up with China’s Huaxia Bank Co to offer the product via its three year-old WeChat messaging app, which boasts 272 million global monthly active users. The service was released on a limited basis and is not available to all users.

Peugeot Board to Discuss Possible Investment – WSJ.com The board of loss-making car maker PSA Peugeot Citroën is set to meet Sunday to discuss a possible investment from the French government and China’s Dongfeng Motor Co., as well as from the Peugeot family, people with direct knowledge of the matter said Friday.

Worker error, corrosion caused Nov. pipeline blast, Sinopec says – UPI.com Chinese energy company Sinopec published a statement on a fatal November oil pipeline explosion, blaming worker error and corrosion for the accident.

“After the leakage, rescue workers used hydraulic hammer[s] to break the concrete trench cover slab, and sparks ignited the vapor in the trench and caused an explosion,” Sinopec said in a statement Monday.

Sinopec said it did not take full responsibility for safety at the site while provincial officials didn’t identify the risks properly.

Sina Weibo Loses More Users to Tencent’s WeChat -Caijing Sina Weibo, the once most popular social networking site in China, is losing large number of users last year to WeChat, an instant messaging app where Chinese people are spending more time every day.

The total number of Weibo users dropped 27.83 million from a year ago to 281 million by the end of 2013, a report released by the China Internet Network Information Center (CNNIC) on Thursday showed.

Challenges ahead for Zhou Jiping at the helm of CNPCWantChinaTimes.com Zhou Jiping has assumed the chairmanship of China National Petroleum Corporation (CNPC), taking on the formidable mission of revitalizing the state enterprise’s operations, in the wake of the 180 billion yuan (US$29.8 billion) market value plunge in 2013.

The company’s share price closed at 7.71 yuan (US$1.27) on Dec. 31, 2013, down 11.68% from 9.04 yuan (US$1.49) a year earlier and a far cry from its peak level of 48.62 yuan (US$8.04) in 2007. In addition to the share-price drop, the company was inflicted by a litany of woes in 2013, including the ousting of many executives, heavy fines for violation of environmental regulations, and an outbreak of security incidents.

Apple’s China Data Seems Suspicious (AAPL, GOOG) Apple (NASDAQ: AAPL) CEO Tim Cook, in a recent interview with The Wall Street Journal, claimed that Apple’s iOS devices account for 57% of all mobile Internet browsing in China.

Cook didn’t give a source for his data — it’s likely that he’s relying on internal Apple metrics of some sort. At any rate, I find that figure is a bit hard to believe. Google‘s (NASDAQ: GOOG) Android has taken China by storm in recent quarters, as Samsung, Xiaomi, and other Android handset makers dominate the Chinese market.

Itemized online transactions reveal China spent massively in 2013|Markets|Business|WantChinaTimes.com Alipay released the 2013 National Shopping Records on Monday, saying the annual average per capita expenditure of its users exceeded 10,000 yuan (US$1,653) for the first time, including consumption in online shopping, money transfers, debt repayments and fee payments.

Ping An Launches Trial of App to Provide Wealth Management Services – The service is called Yi Qianbao, meaning One Wallet. It is open to only Ping An employees and a small group of select customers for now, the insurer said on January 16.

Users can now transfer money between bank accounts and chat with each other. The app has other functions, such as one that allows people to split bills conveniently, the company said.

Gov’t-Backed Consolidation of Hebei Steel Industry Melts Away – In 2010, the government of the central province of Hebei, which produces about one-quarter of the country’s steel, arranged a consolidation of Hebei Iron & Steel, the country’s largest steelmaker, and 12 private firms in the hopes of boosting competitiveness and better regulating the industry.

There are two main reasons for the break-up, said an executive at Hebei Iron & Steel who did not want to be named. Hebei Iron & Steel wants to focus on managing its assets and the private companies no longer want to remain part of the group.

A China Hand Loses Touch – In 2006, familiarity with Chinese business culture apparently helped Palmer cut an iron ore mine deal with CITIC Pacific, a Hong Kong-listed subsidiary of one of the country’s biggest state-run investment conglomerates.

Since then, however, Palmer and CITIC Pacific executives have battled bitterly over the contract they signed for the magnetite ore operation in Western Australia’s Pilbara region. Their legal disputes have grown increasingly complicated, to the point where other Chinese executives have apparently discussed pulling their companies out of Australia.

China-focused Boyu Capital raises $1.5 bln for 2nd buyout fund-sources – Yahoo Finance China-focused private equity firm Boyu Capital, whose partners include former TPG Capital executive Mary Ma and the grandson of former Chinese president Jiang Zemin, has raised $1.5 billion for its second buyout fund, according to people with knowledge of the matter.

Boyu, which was established in 2010, is an investor in e-commerce giant Alibaba Group Holding Ltd and debt manager China Cinda Asset Management Co Ltd. Cinda has risen 48.5 percent since listing in December, while China’s biggest e-commerce company Alibaba is widely expected to launch an IPO this year.

Construction of the Yaoundé-Nsimalen highway takes shape – Business in Cameroon The Cameroon government has just hired the Studi International, Cenor and ECTA BTP technical study firms to oversee the construction of the Yaoundé-Nsimalen highway’s “rural” section that runs some 10.6 km for 2 billion FCfa.

The roadwork initially scheduled for early 2013 will now be completed in thirty-six months by the Chinese company, China Communications construction Company Ltd for 36.7 billion FCfa.

Business Newswires : euronews : the latest international news as video on demand Chinese carmaker BAIC Motor, part-owned by Daimler AG , plans to raise up to $2 billion in a Hong Kong initial public offering, hoisting its target as China’s auto industry purrs to solid growth.

Fueling BAIC Motor’s ambitions, the world’s biggest auto market is moving toward a second year of double-digit sales increases. A year ago, in the early planning stages, BAIC Motor’s target was closer to $1 billion.

China’s Jingdong Said to Plan $2 Billion IPO for Second Half (1) – Businessweek Beijing Jingdong Trading Co., the Chinese online retailer backed by Saudi Prince Alwaleed bin Talal, plans to raise about $2 billion in an initial public offering in the second half, three people with knowledge of the matter said.

The Beijing-based company is working with Bank of America Corp. and UBS AG, said the people, who asked not to be identified because the details are private. Jingdong is leaning toward a U.S. listing, although Hong Kong is another potential IPO destination, they said.

30,000 houses from China, and a big earthquake – In Focus – Jamaica Gleaner – Sunday | January 19, 2014 The Chinese company, Gao Zhen Real Estate and Development Company Ltd, is either stupid or knows something which Chairman Douglas and the NHT do not. They are proposing delivering around 6,000 units per year of low-income, high-quality housing solutions while creating sustainable employment for some 1,500 skilled and unskilled Jamaicans.

Your Oil and Gas News – CNOOC Limited – Liuhua 19-5 gas field starts production Liuhua 19-5 is located in the Pearl River Mouth Basin of the South China Sea with an average water depth of about 185 meters. This project was designed to share the existing producing facility of Panyu 30-1 gas field, and two new producing wells were drilled. Liuhua 19-5 is expected to hit its peak production of 29 million cubic feet per day in year 2014.

See how Noble Group earnings could rebound in 2014 | Singapore Business Review The earnings outlook for Noble Group is looking brighter as prices and crush margins may soon see a resurgence, according to Barclays Research.

Noble Group may see its agricultural business margins recover as well as revive its volume growth, which will help the company post better earnings this year.

ICBC to Sell CNY100bn Certificates of Deposit in 2014 | 4-Traders Industrial and Commercial Bank of China announces that it plans to issue CNY 100 billion certificates of deposit in 2014 after ten Chinese banks completed the first round of such issuances at last year end.

China’s CNPC foreign equity oil, gas output up 12.9% in 2013 – MSN Malaysia News China National Petroleum Corporation (CNPC) recorded a 12.9% increase in its overseas equity oil and gas production last year, state media and the company said today, a growth pace rapidly accelerating from the previous year.

CNPC, parent of PetroChina Co Ltd, said its equity share of oil and gas output outside China in 2013 amounted to 59.2 million tonnes of oil equivalent or about 1.18 million barrels per day (bpd).

Sinopec Engineering Entered Into RMB18.67 Billion Contract Providing One-stop EPC Servi… | 4-Traders SINOPEC Engineering (Group) Co., Ltd. (“SEG” or “the Company”, together with its subsidiaries known as the “Group”) (stock code: 2386.HK) announced that the Company and Zhong Tian He Chuang Energy Corporation Limited today entered into an EPC contract for the development of a new coal chemical project (the “Project”) in Uxin Banner, Ordos, Inner Mongolia.

Posted from Diigo.

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China Business Briefs 12/12/13

Qualcomm said that Chinese regulators launched their antitrust probe in late November, adding that it was “not aware of any charge by the NDRC that Qualcomm has violated the anti-monopoly law”.

The competitive playing field will be more even if everyone has to pay the same market price for energy, land, water, capital and labor. Indeed, state-owned enterprises may have to pay more if they are required to make up some of the pension deficits. This will lead to more of a focus on quality of execution, on strength of functional execution, on productivity and efficiency: areas where multinationals are generally stronger.

The National Development and Reform Commission (NDRC) has been working with several other central government agencies to develop a plan to end the two-year-old policy, which obliges the China National Cotton Reserves Corp. (CNCRC ) to buy cotton from farmers whenever price falls under a certain level.

The new urbanization plan is running into problems across the grid, which is already peppered with contradictions.

Central Bank, CBRC Split on Including Rural Lenders in Deposit Plan – **Twenty years…!** The central bank and China Banking Regulatory Commission (CBRC) disagree over whether to include all small rural banks into the planned deposit insurance mechanism, for which a plan has appeared after 20 years of debate.

The top leadership has sided with the central bank in saying that the draft plan should be mandatory for all deposit-taking institutions, including rural banks, rural credit cooperatives, village and township banks and thrift institutions, a source close to the People’s Bank of China said.

Closer Look: Annual Work Conference Picks Up Where Plenum Left Off – Top policymakers usually use the meeting to review the year’s economic conditions and set out a roadmap for next year’s development. Major economic targets – GDP growth, inflation rate, monetary supply, the budget and trade figures – will be set.

Those targets will be announced to the public at a meeting of top legislators the following March. (Recently, many research institutions and think tanks have made predictions for China’s next year’s GDP growth target, debating whether the government will set it at 7 percent or 7.5 percent. However, most researchers agree that next year’s actual figure for GDP expansion is likely to reach 7.5 percent.)

Hong Kong, Shanghai weighed by bank shares – Asia Markets – MarketWatch **Good for the consumer though** The Shanghai Composite and Hong Kong’s Hang Seng Index closed 1.5% and 1.7% lower, respectively, after news that China’s four state-owned banks and a former state policy bank will issue a total of 19 billion yuan ($3.1 billion) of negotiable certificates of deposit, the latest step in China’s move toward less-restricted interest rates. Liberalization has prompted concerns that the banks will face short-term pressure on their profits.

The fines are the first of their kind for the province and also come after China’s central government released a nationwide reform blueprint last month that vowed to impose more fees and taxes on polluters.

Investment-Banking Revenue Falls in China – WSJ.com But overall, a slowdown in share sales including initial public offerings, which tend to pay bankers more than bond sales, hit revenues for investment banks, as did a decline in fees from merger-and-acquisition activity.

“Equity raisings are still well down from peak levels and that has meant that [equity capital market] revenues haven’t grown in the last couple of years,” said  Derek Ovington, CLSA’s head of regional banks in Asia.

China Explores Smoking Ban in Effort to Reduce Tobacco-Related Deaths – China Real Time Report – WSJ **The tobacco monopoly needs to do as Shell did, and present itself as leading the fight against the very problems it creates. Sponsoring a few cancer wards and researchships would go a long way** Within the next year, China’s legislators will accelerate efforts to enact a national regulation banning smoking in public places in China, said Yang Jie, deputy director of Tobacco Control Office for the Chinese Center for Disease Control and Prevention, at a news briefing on tobacco-related health problems in China. Mr. Yang said China’s State Council, the country’s cabinet, is currently planning the regulation and it is expected to be enacted next year.

China’s State Tobacco Monopoly Administration wasn’t immediately available for comment. The tobacco industry pulled in 865 billion yuan ($142.5 billion) from taxes and profit in 2012, up 16% from a year earlier, according to the State Tobacco administration.

That certainly seems to be the case with Autohome Inc., a Chinese automobile information website, which saw its stock price surge 77% on Wednesday on its debut on the New York Stock Exchange. Investor sentiment was probably buoyed by news earlier this week that auto sales in China hit a record high in November.

Under the terms of the proposal, Dongfeng and the French state would each end up holding around 20 percent of Peugeot and the Peugeot family around 15 percent, the source said.

More than 10,000 people have already signed up, according to the company’s online portal.

Brightening up an otherwise dim IPO market for Hong Kong this year, Cinda has raised $2.5 billion – an amount set to grow to nearly $2.9 billion, with sources familiar with the matter saying the stellar demand virtually guaranteed the exercising of an overallotment option.

Anbang raised the stake in the lender as it is optimistic about the Chinese lender’s outlook, the country’s sixth-largest bank by assets said in a filing to the Shanghai Stock Exchange.

Two kinds of websites are available. General sites can be established in a breeze by dragging the modules into the editing interface. Industrial sites, which features custom models catered for needs of different industries, are only opened to members. Website thus created is pending for approval, which will be completed within around ten working days.

ChinaCache is a major supplier for China Mobile, according to analyst Jun Zhang:

ChinaCache has become a top pick of multinational companies such as Apple (AAPL), General Motors (GM), Microsoft (MSFT), etc. for CDN service providers. 70% of China Mobile’s mobile CDN services were provided by ChinaCache.

Currently what ZetYun is developing include an Alpine-like service on predictive analytics for big data. It partners with local business-facing service providers like Ntalker, a CRM solution provider, on predictive modeling. A model then can be adopted by Ntalker’s clients including a Chinese telecom operator. And the performance of the model will be improved based on data from individual clients.

Hong Kong, December 11, 2013 — Moody’s Investors Service has assigned a definitive A2 rating to the credit-enhanced  bonds issued by China Merchants Land Limited (unrated).

The bonds are supported by an irrevocable standby letter of credit from  the Industrial and Commercial Bank of China (Asia) Limited (ICBC Asia,  A2/P-1/C-, stable(multiple)).

The company says it will use the money to expand to Japan and South Korea, the biggest markets in the world by revenue for Google Play developers. It’s already opened up a development studio in Seoul. The focus will remain on Android.

Closer Look: Jingdong Gives Alibaba Some Company in Financial Industry Jingdong may be a latecomer to the competition, but its ambitions are no less  aggressive than Alibaba’s. It has less expertise and experience running an  e-shopping website and third-party payment services than Alibaba, but it has an edge in logistics management.

The difference explains why Jingdong did not start with wealth management  services for individual online shoppers the way Alibaba did when it set out to  explore Internet finance as a new driver for growth. Instead, it targeted the  logistics chain.

Posted from Diigo.

China Business Briefs 10/12/13

ECONOMY

China to judge local governments by their debt: Xinhua | Reuters China will soon rate the performance of local governments partly by how much debt they incur, as Beijing tries to wean the country off heavy government investment, state media said.

The central organization department, which oversees the appointment of senior party, government, military and state firm officials, said debt will be key when evaluating performances, according to the state news agency Xinhua.

China opens key economic meeting – Chinadaily.com.cn China’s Central Economic Work Conference opened on Tuesday to review the country’s economic work in 2013 and map out economic plans for 2014.

This year’s meeting comes about one month after the the Communist Party of China Central Committee unveiled a landmark plan to comprehensively deepen reforms.

TCM Still Struggling to Find Cure for Its FDA Woes – In November, the traditional Chinese medicine (TCM) Fuzheng Huayu Tablets passed the second phase of the U.S. Food and Drug Administration’s (FDA) clinical testing.

Before this, only one TCM drug had cleared the second of the three phases needed for a medicine to hit the U.S. market. That was Compound Salvia Droplet Pills (CDSP), made by the Tasly Group of Tianjin. CDSP has still not passed FDA’s third phase.

Hong Kong listings revival offers sovereign wealth path to China – FT.com Sovereign wealth funds, led by Norway’s $810bn oil fund, are using Hong Kong’s new listings revival to achieve a long-held goal of ramping up exposure to China.

It was one of the main cornerstone investors ahead of the initial public offering of Cinda, the Chinese former bad bank set up to manage distressed debt in the late 1990s.

PBOC Said to Be Talking to Major Banks about Deposit Insurance – The central bank has been consulting executives of major banks  about creating a deposit insurance mechanism and may announce a draft plan early  next year, a source close to the situation said.

Advocates have called for such a system for years, saying it is the  cornerstone of further financial reform. Without it, they argue, the government  will be held as hostage to banks who may act irresponsibly because they know the  government will not let them fail and hurt tens of millions of depositors.

Smog makes you funnier and smarter, Chinese media claims – Telegraph In a controversial and widely mocked comment piece entitled, “Five unexpected gains the haze has brought”, a journalist from state television channel CCTV argued that while Chinese people might “hate” the pollution, it was not a “completely useless” phenomenon.

For while filthy air was a dangerous “enemy”, it was simultaneously bringing “major   benefits” including making people more united, more sober, more equal, more humorous and better informed.

COMPANIES

Why Not To Get Excited About Apple’s China Mobile Deal – Forbes **It’s almost sad to see how necessary this is for Apple** It is easy to see how a superficial analysis can lead one to conclude that it is a big deal.  After all, China Mobile has over 700 million customers and is the last major telecommunications carrier that has held out in not carrying the iPhone. Take a look at the following and make a judgment for yourself.

Suning makes it easier for Chinese parents to get overseas childcare products **Smart move, but what does this say about Chinese standards enforcement?** When it comes to their kids, many Chinese simply don’t trust domestic brands. After Chinese milk and baby formula was found to be contaminated with melamine in 2008 and toys covered in lead-based paint were traced to China in 2007, their fears are not unfounded. Safety concerns over childcare products led to a massive surge in demand for foreign-made baby goods.

In light of this, Suning today launched a special section specifically for overseas childcare products on Redbaby, which it bought in January this year. It sells everything from Huggies diapers to Fisher Price stuffed animals to Nestle baby formula. The suppliers come from the Netherlands, New Zealand, Korea, Hong Kong, and a few other places.

Google Scraps Plan to Build Hong Kong Data Center – China Real Time Report – WSJ While we see tremendous opportunity and potential in Hong Kong…we will not be moving ahead with this project,” Taj Meadows, Asia-Pacific policy communications manager, told The Wall Street Journal on Tuesday, citing cost and the difficulty in acquiring spacious land in Hong Kong to build a facility.

Mr. Meadows declined to comment when asked whether the decision might be because of Hong Kong’s proximity to China, where Google has faced challenges in expanding its business following its run-ins with the Chinese government over censorship in 2010. Tensions between the U.S. and China have heightened in recent months following revelations by National Security Agency contractor Edward Snowden that the U.S. agency collects sensitive data

Interesting Made-in-China Wearables Manufacturers in China offer a huge variety of such devices. Examples of fashion electronics include USB bracelets and pendants, spy hats, and MP3 and camera sunglasses.

Here is a selection of made-in-China smart watches and other wearable tech.

Posted from Diigo.

China Business Briefs 9/12/13

China’s Hot Money Headache – China Real Time Report – WSJ China reported strong export numbers on Sunday, in part due to demand from Western nations ahead of the holiday season.

Some observers think another factor could be at play: Companies overstating the value of exports as a way to circumvent rules that restrict the flow of capital into the country.

China Bank Funding Set to Ease With Certificate of Deposits – Bloomberg Chinese banks’ funding constraints are set to ease after policy makers authorized the sale of certificate of deposits in a move toward loosening control over interest rates in the world’s second-largest economy.

The prices for negotiable certificate of deposits, or NCDs, will be set by trading on the interbank market, with the Shanghai Interbank Offered Rate used as a reference rate, the People’s Bank of China said in a statement yesterday. Deposit-taking firms are permitted to sell NCDs of at least 50 million yuan ($8.2 million) to other financial institutions under rules that go into effect today.

PBOC Said to Be Talking to Major Banks about Deposit Insurance – The central bank has been consulting executives of major banks  about creating a deposit insurance mechanism and may announce a draft plan early  next year, a source close to the situation said.

China says poorly prepared to fight impact of climate change | Reuters China is poorly prepared to tackle the impact of climate change that presents a serious threat to the country, thanks to a lack of planning and public awareness, the government said on Monday.

The world’s most populous country already faces challenges from weather extremes, with 2,000 people dying on average each year since the 1990s in natural disasters that are set to get worse, China’s powerful economic planning agency said.

Enlight shares rise due to ‘The Four 2’ – BUSINESS – Globaltimes.cn Beijing Enlight Media Co, one of China’s biggest private media and entertainment companies, saw its shares surge on Friday, which analysts attributed Sunday to positive market expectation for its Friday-released 3D Chinese hero film The Four 2.

Everbright Bank Said to Seek $2.8 Billion in Hong Kong Offering – Bloomberg The lending unit of state-controlled China Everbright Group is offering 5.06 billion new shares at HK$3.83 to HK$4.27 apiece, said the people, who asked not to be identified because the information is private. Shares of Beijing-based Everbright Bank have traded in Shanghai since 2010.

Tencent to Invest RMB10 billion in Financial Services including WeChat Payments, CEO Says The Chinese Internet giant has registered several companies on e-commerce and finance there with RMB1.6 billion (more than $200 million) in total registered capital, according to Mr. Ma. The businesses those companies will cover include WeChat Payments, online financial services, foreign currency exchange, etc.

Posted from Diigo.

China Business Briefs 8/12//13

The PBOC said Thursday that Bitcoins have no “real meaning”. Market players said the central bank’s warning probably dented investors’ confidence, and some holders of the currency sold their Bitcoins immediately after the PBOC warning.

The State Administration of Foreign Exchange (SAFE) said in a statement that its local branches should urge banks to enhance authenticity and compliance examinations for their trade finances.

The export figures reflect pickups in shipments to the U.S., Europe and South Korea, according to customs data. Stronger demand from abroad may give Premier Li Keqiang more room to implement reforms to increase the role of markets in the economy while helping meet the 7.2 percent annual growth pace he says is needed to ensure stable employment

SAFE cracked down on those, warning trading houses that were cooking their books to get them in order in short order. But it is clear the chicanery, or something like it, is continuing. SAFE lambasted the commercial banks for not being sufficiently vigilant in rooting out the practice among their customers, saying it would now carry out its own assessments. State media says penalties for abuses will be increased — and imposed on both the companies and their bankers.

This was announced by Premier Li Keqiang and visiting French Prime Minister Jean-Marc Ayrault on Friday at a news briefing after they met.

“We agreed to jointly exploit third-party nuclear energy markets. China hopes the two countries can find broader space in the markets,” Li said.

China’s Asian Import-Export Figures Indicative of Growing Ties | China Briefing News Year-on-year import and export figures released by the Chinese government indicate growing ties with ASEAN and increases in bilateral trade with nearly all countries in Asia with the exception of Japan and India. Evidence of increasing consumerism in China came from export figures from Australia, the Philippines and Vietnam, all of whom showed healthy increases of exports to China. Imports from China rose significantly in Malaysia, Thailand and Vietnam, showing that Chinese companies are increasing their spread into Southeast Asia and are taking advantage of the ASEAN-China Free Trade Agreement.

COMPANIES

“I’ve been spending a lot of time with potential partners in other countries, in Southeast Asia primarily,” Barra said. “We just came back from a trip to Singapore a few weeks ago, where we’re trying to get up our operations for Southeast Asia set up as quickly as possible.”

Commentary on the listing, which launched on Thursday, has been scathing since word leaked earlier this year that the company would go public in Hong Kong. Some have called Cinda “China’s insolvent toxic-waste dump.” Others have simply labeled the floatation not only China’s biggest IPO of the year, but also its worst.

Major Chinese lenders including Bank of Communications Co., Bank of Communications Co. Ltd. Agricultural Bank of China Ltd. and China Development Bank are set to be among the first issuers of yuan-denominated bonds, or Formosa bonds, in Taiwan.
Moody’s assigns (P)A1 to CSSC Capital 2013 Limited’s bonds Moody’s Investors Service has assigned a provisional (P)A1 rating to the  credit enhanced bonds to be issued by CSSC Capital 2013 Limited (unrated).
The bonds will be supported by an irrevocable and standby letter of credit  from the China Construction Bank Corporation (CCB, A1/P-1/D+,  stable), Hong Kong Branch.

Posted from Diigo.

China Business Briefs 28/11/13

BEIJING–Chinese people retired from the workforce faster than new workers started paying into the country’s national pension fund last year, according to data from the Ministry of Human Resources and Social Security.

Chinese enterprises explore ways in Central, Eastern Europe – Xinhua | English.news.cn

**Really??**

BEIJING, Nov. 27 (Xinhua) — Chinese enterprises, taking advantage of a favorable situation of closer economic cooperation between China and Central and Eastern European (CEE) economies, are actively exploring ways of business development in the Central and Eastern Europe.

Chinese people have special feelings toward Central and Eastern Europe, from where some classical films like ex-Yugoslavia’s “Valter Brani Sarajevo” and “Bridge” and Romania’s “Zile Fierbinti” once hit almost every screen in China in the early 1970s.

Shanghai free trade zone attracts 1,400 companies – FT.com

Nearly 1,400 companies have registered in Shanghai’s free trade zone within two months of its launch, allowing the official in charge of the new area to claim progress at this crucial testing ground for Chinese economic reforms was on track.

Expectations jumped ahead of the launch of Shanghai’s free trade zone in late September, but companies were initially disappointed when they found that a long list of sectors were still out of bounds for investment.

Firms Take Advantage of China’s Murky Interbank Market – Report – Real Time Economics – WSJ

Until recently, China’s banking system remained stubbornly boring: With the industry a virtual state monopoly and lending quotas and interest rates dictated by the government, there wasn’t much room for financial innovation.

But gradual liberalization has unleashed a tidal wave of inventive accounting in the best tradition of Wall Street, with regulators struggling to keep track of the ways banks move risky deals off their balance sheets.

More Chinese car buyers are willing to hold off on purchasing a car as they wait for auto makers to come up with deal sweeteners.
So says marketing-research and consulting company TNS, which on Wednesday released results of a survey of 1,000 respondents. Around three-quarters of those surveyed said their final purchase decision was prompted by a special deal or promotion, which can include cash discounts, extended warranties or giveaways.

**Adequate access to capital is a major problem**

(Beijing) – Risks associated with peer-to-peer (P2P) lending are increasingly drawing the attention of officials and would seem to be an argument for regulators to act.

The central bank has set out three criteria for deciding whether P2P lending websites are involved in an illegal fundraising. It made the announcement after members of the inter-ministry office in charge of coordinating regulatory efforts against illegal fundraising met on November 25.

The recent announcement by the Chinese government of the relaxation of the one-child policy is casting light on the issue of how China plans to feed its people. The problem is especially acute given the rapid expansion of China’s cities, and the reduction of land available for farming.

In this podcast, Nick Leung, Bruno Roy, and Sheng Hong discuss this issue. Bruno is a Partner who leads McKinsey’s Private Equity Practice in China. Sheng is an Associate Partner in Beijing who leads McKinsey’s work in agriculture. And our host, Nick Leung, is the Managing Partner of McKinsey’s Greater China Practice.

Peng Wensheng, chief economist and managing director of China International Capital Corp, an international investment bank headquartered in Beijing, predicted that the world’s second-largest economy will see a 7.6 percent GDP growth rate in 2014 and that 4.1 percentage points will be contributed by final consumption expenditure.

Guangdong named top export hub – BUSINESS – Globaltimes.cn

**The unfortunate decline of Hong Kong**

Guangdong Province has surpassed neighboring Hong Kong to become China’s top retail export hub in terms of export value, e-commerce platform eBay Inc said in a report published Wednesday.
Although Hong Kong enjoys a duty-free policy, Guangdong has outpaced its neighbor thanks to its advantages in manufacturing, logistics networks and e-commerce labor resources, said the report, which was based on export values in the 12 months to June 30.
Companies

(Reuters) – U.S. oil major Exxon Mobil (XOM.N) will hand over a 25 percent stake in Iraq’s West Qurna-1 oilfield project to China’s biggest energy company PetroChina (0857.HK) (601857.SS) on Thursday, Iraq’s deputy prime minister for energy said.

Iraq said in August that Exxon was selling more than half of its 60 percent holding in the field. Along with the stake going to PetroChina, 10 percent is expected to be sold to Indonesia’s Pertamina PERTM.UL, according to Iraq.

Qualcomm: Cometh the Reaper? – Silicon Hutong

Yesterday I got a note from Edmond Lococo at Bloomberg, who was curious about the degree to which QCOM’s critical China business will take a hit as a result. (Full disclosure: QCOM was a client from 2000 to 2004, but I have had no direct interaction with the company for nine years.)

(Beijing) – By injecting 30.9 billion yuan worth of assets and capital into Shanghai-listed Beijing Zhongchuang Telecom Test Co., telecom equipment and solution provider Beijing Xinwei Telecom Technology Inc. completed a back-door listing at the end of September, the largest in the history of the A-share market.

China Cinda Asset Management’s drive to crank profit out of bad loans has come at a cost – a debt mountain of its own.

As it homes in on Hong Kong’s biggest initial public offering this year, the distressed debt manager’s borrowing has risen twenty-fold in the last three years to more than its maximum market value at listing.

The surge to 104.1 billion yuan ($17 billion) in debt at the end of June came as Cinda went on a spree, scooping up distressed assets from the likes of real estate projects, cement makers, miners and coal companies unable to pay back loans.

Seven employees of China’s second-largest oil company have been detained and the company has been sharply rebuked after a crude oil explosion that killed at least 55 people in the eastern Chinese port city of Qingdao.

A state investigations group has taken over the probe into the spill as well as crisis management from state-owned Sinopec. Simultaneously, the central government ordered a broader safety investigation of the nation’s oil and gas pipelines.

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