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 CNPC｜WantChinaTimes.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.
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