China Construction Bank

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.

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China Business Briefs 4/2/14

Economy   Finance   Auto   Infrastructure   Energy   Telecoms   Property   Travel   Tech   Agriculture

Economy

Chinese factories act to keep staff in saddle in Year of the Horse – FT.com Many factories across the Pearl River Delta, the manufacturing workshop of the world in Guangdong, are trying to find ways to keep workers. This has become more important as demographic changes – particularly the one-child policy and a government push to create jobs inland – have made staffing harder.

But the world’s factories cannot simply rely on outings, returning bonuses and lucky draws. What workers really want is better pay and benefits, says Geoff Crothall of China Labour Bulletin. While wages in Guangdong have posted double-digit rises in recent years, the minimum wage in Shenzhen – the highest in China – is still only about $300.

Why Did One Of The World’s Largest Generic Drug Makers Exit China? – Forbes The broader questions that Actavis’ CEO pointed towards as a rationale for the company’s exit from China are not wrong.  Surveys conducted by various American and European business groups in China all point towards worrying trends which suggest China is becoming fundamentally less hospitable to foreigners than in years past.  Favoritism towards domestic companies by government purchasing is nothing unique to China, unless you consider that China’s 144,500 State Owned Enterprises (SOE) represent 35% of the country’s industrial revenue (a percentage many economists believe greatly under-represents the economic impact of SOEs). Add to the SOE’s position the role of the Chinese government as purchaser of great amounts of pharmaceuticals and medical devices, and you can see what the comments of Actavis’ CEO ring true to many.

Bilateral China / US Investment ‐ Is 2014 the Year? | The National Law Review Times are changing, however. There has been a rapid increase in the amount and rate of investment by Chinese companies in the United States in the last three years. At the end of the second quarter of 2013, the United States with cumulative investment from China of $57.8 billion ranked only behind Australia with $59.2 billion.2 With the September 2013 closing of the Shuanghui International acquisition of pork producer, Smithfield, for $7.1 billion and several large real estate investments, the United States took the lead as the preferred destination for China investment.3 Included within the United States numbers during the first nine months of the year is $12.2 billion invested in 55 Greenfield projects and acquisitions in the United States.4

The Great Debtscape In short, over the past five years China has rectified one of its famous “imbalances” — excessive reliance on external demand — and made a good start on fixing the other (excessive reliance on investment spending). But a growing chorus of observers views China’s economic future with trepidation. In mid-January, Ray Dalio, who runs Bridgewater Associates, the world’s biggest hedge fund, declared that China was a bubble. And earlier that month, Patrick Chovanec, a well-known China bear, warned that “China’s leaders are riding a runaway train that they don’t quite know how to stop.”

China Demand Still Buoys Global Producers – WSJ.com From southern Africa to southern Asia, investors have soured on many commodity-rich emerging markets boosted in the past by China’s ravenous appetite for what is grown from the soil or extracted from the mines. But so far, a slowing China hasn’t hurt its suppliers much.

That is because massive Chinese demand hasn’t significantly weakened and many emerging economies now have their own consumers to help pick up any slack. The global market jitters, economists and executives say, reflect less an actual falloff in China’s appetite and more a bet that China’s growth will continue to taper off.

Finance

Judge’s Ruling On Accounting Firms In China Touches on Hong Kong Units – WSJ.com But in a potential broadening of the issue at hand, the ruling by SEC Administrative Law Judge Cameron Elliot also spotlighted another practice of note in the auditing of Chinese companies that trade on U.S. markets. In some instances, a Hong Kong unit of a Big Four auditor acts as the company’s official auditor, but the bulk of the audit work is outsourced to the same firm’s affiliate in mainland China.

That could raise issues under U.S. auditing rules, which suggest that an audit firm should do a “material” amount of the work to be entitled to serve as a company’s principal auditor and sign the audit opinion.

Guess which bank has the most valuable brand While the value of bank brands in Russia, India and Brazil fell, China continued to perform strongly. The value of the lenders’ brands there rose by $19 billion during the year, and there are now three Chinese banks ranked in the top 10 — Industrial and Commercial Bank of China (ICBC), China Construction Bank and the Agricultural Bank of China.

Asia Markets live blog: Shares falling on U.S. cue – The Tell – MarketWatch China might soon loosen its tight grip on its banking sector. The official Xinhua News Agency reported Monday that it’s an inevitable choice for China’s financial reform to allow banks to fail.

It quoted Yan Qingmin, vice chairman of the China Banking Regulatory Commission, as saying that the government would let market force play a larger role in the banking system and allow commercial banks to “go out of market” if they turn insolvent.

This Chinese online retailer’s IPO documents could be a bit too candid – Quartz The prospectus for Chinese online retailer JD.com’s planned $1.5 billion US public offering, filed recently with the Securities and Exchange Commission, offers up a warts-and-all look at the risks of investing in a Chinese internet company. And there are a lot of warts—over 40 pages worth—listed in the “risk factors” section, including:

We don’t really know what we’re doing in some businesses. The company recently expanded into internet finance, providing supply-chain financing to supplier and loans to customers. “We have limited experience in operating an internet finance business,” the prospectus admits.

SEC Ruling May Be a Death Knell for Chinese Stocks Woes for Chinese tech stocks are significant. The argument goes that as long as Chinese authorities outright ban Chinese companies from submitting required information to the SEC, such audits are not acceptable. So far Chinese companies have circumvented such requirement by submitting audits conducted by the big four auditor firms’ Chinese affiliates. But again, the SEC said those audits done in China, even by the big four auditors’ affiliates, are not good.

And this raises an interesting issue. Major Chinese companies, as well as smaller ones, are in jeopardy meeting the deadline to submit quarterly and annual reports on time.

SEC, Deloitte, Longtop case resolution raises hopes for solving US audit ban – Governance – The Corporate Treasurer The SEC has dropped its case against Deloitte’s China arm and Longtop Financial Technologies, pointing the way through a broader audit ban crisis.

US houses to boost funds on offer in Hong Kong to tap opportunities in China | South China Morning Post Two US fund houses, Principal Global Investors and Franklin Templeton, have unveiled plans to add to their Hong Kong-domiciled offerings in order to tap into mainland China opportunities under a soon-to-be signed mutual recognition scheme.

Bitcoin Exchange BTC China Resumes RMB-Based Deposits | China Briefing News Bobby Lee, CEO of the Bitcoin exchange BTC China, has announced that customers are once again able to purchase Bitcoin by depositing RMB directly into the company’s corporate bank account.

The decision by BTC China comes after the exchange stopped accepting RMB deposits in response to a Dec. 5 memo from the People’s Bank of China warning national financial institutions not to trade in Bitcoin.

Auto

China’s carmakers have yet to make their marque – FT.com Dongfeng, one of China’s “Big Three” car groups alongside Shanghai Auto and First Auto Works, has more joint ventures with international car groups than any of its domestic peers. Including Korean partner Hyundai, it currently operates four joint ventures and signed a fifth partnership agreement in December with Renault. The Wuhan-based company is also poised to take a 14 per cent stake in Peugeot as part of €3bn capital raising.

Dongfeng’s four joint ventures account for more than 90 per cent of the group’s annual passenger car sales, dwarfing those of its own Aeolus brand. It is an imbalance shared by all of China’s state-owned car companies and helps explain why the country that boasts the world’s biggest car market has, unlike Japan and Korea before it, thus far failed to produce a national champion of its own that can compete globally.

Beijing licence plates fetch twice the price of the car on black market | South China Morning Post Beijing’s clampdown on new car registrations is creating a scramble for licence plates and fuelling a boom on the black market, where prices have soared as high as US$33,000, almost double the price of China’s best-selling car, the Ford Focus.

This year, Beijing will cut the allocation of new number plates by 40 per cent to 150,000, meaning only one in 150 will get a plate.

As China’s Auto Sales Surge, Lunar New Year Travelers Opt for Road Trips – WSJ.com A long car ride home can sound appealing to the alternative. China’s top economic planning body estimates that during the 40-day period around the holiday Chinese will take 3.62 billion rides on trains, planes, buses and ships. China’s rails are carrying an average of 6.8 million passengers each day, according to transport ministry officials.

Many hitting the road are carpoolers. According to 58.com Inc., a U.S.-listed Chinese online marketplace, the number of posters looking for or offering Lunar New Year rides is four times the amount a year ago.

Infrastructure

Giant pipeline brings unaffordable water to China’s north|Policy|Business|WantChinaTimes.com The eastern route of China’s South-North Water Diversion project officially began drawing and diverting water last November and December from the Yangtze River to 71 counties, cities and areas in Jiangsu, Shandong and Anhui provinces. The much-needed water comes, however, at a price many local officials find difficult to swallow.

Even though water prices have yet to be finalized, the preliminary estimate for the high fees has drawn negative comments from officials in Jiangsu and Shandong.

Energy

China imports more natural gas in 2013 – BUSINESS – Globaltimes.cn China saw its aggregate volume of natural gas imported from overseas jump 25 percent year on year in 2013, approaching one-third of its apparent consumption, a new report has showed.

The country imported 53 billion cubic meters of natural gas last year, 31.6 percent of its domestic gas output plus imported volume, according to a report released by an economic and technological academy under China National Petroleum Corporation, the country’s state-owned oil giant.

China’s Xinjiang sizzles with green energy – Xinhua | English.news.cn Xinjiang Uygur Autonomous Region, a major power supplier in China, has accelerated the development of green energy as it recorded higher installed capacity in 2013.

Statistics with the Xinjiang branch of the State Grid Corporation of China (SGCC) showed that by 2013, the combined installed capacity of wind power, hydropower and solar power stations exceeded 1,368 million KW, accounting for about one third of all installed capacity in Xinjiang.

Singapore Refining Co to invest over $500 mln in gasoline, power units – Yahoo Finance Singapore Refining Co (SRC) said on Tuesday it will invest more than $500 million to build gasoline and power generation units at its refinery on Jurong Island.

SRC operates a 290,000 barrels per day refinery and it is a 50:50 joint venture between Chevron Corp and Singapore Petroleum Co, a wholly owned subsidiary of PetroChina International Co.

Why Is China Buying So Much Methanol? In March 2013, IHS Chemical found that the demand for methanol was growing faster in China than any other part of the world — the country increased consumption 23% from 2010 to 2012 and is expected to consume half the world’s production of methanol this year, which is about 32 million tons. By contrast, the United States currently consumes about 6.5 million tons. IHS Chemical expects the demand for methanol in China alone to triple by 2022.

So, what’s fueling China’s interest in methanol?

Telecoms

4.8 million WeChat Users Participated in the Lucky Money Game on Chinese New Year Eve 4.82 million WeChat users took part in the Lucky Money game on 2014 Chinese New Year eve, as disclosed by WeChat’s parent company Tencent. Launched several days before, the feature that adds gamification elements to giving and receiving digital Lucky Money became an immediate hit among WeChat users. Kingsoft even developed a plugin that automatically harvests lucky money for WeChat users.

Property

Tight availability of funds drives Chinese developers abroad to raise cash | South China Morning Post Driven by concern about the availability of funds, more than a dozen mainland developers, including China Overseas Land & Investment, Dalian Wanda, Guangzhou R&F and Greenland, raised more than 50 billion yuan (HK$63.5 billion) offshore in the first month of the year.

Home-buy hopefuls run into banks feeling the pinch – The Standard State-owned banks including Industrial and Commercial Bank of China (1398), China Construction Bank (0939), Agricultural Bank of China (1288), and Bank of China (3988) are reluctant to provide discounts to boost mortgage businesses.

China Guangfa Bank, Ping An Bank and China Minsheng Banking (1988) are tightening as well.

Travel

Ireland goes the extra mile for Chinese visitors | South China Morning Post UnionPay card machines aren’t the only reason mainland Chinese tourist flock to Dublin. Firstly, Ireland eased its visa restrictions last year, after the UK tightened theirs, chuckle, chuckle. The RMB has appreciated 40 per cent in recent years over the euro, which means China’s new travelling middle class gets far more bang for their buck in euroland. Ireland’s high sales taxes and VAT can be claimed back at the airport, reducing real prices even further. You also get the latest lines of European branded products, so they can stock up on their favourite Hermes, Chanel, Louis Vuitton, Burberry and Ireland’s own Waterford Crystal, also popular with Chinese customers.

Tech

Lenovo Slumps on Analyst Downgrades After Buying Spree – Bloomberg Lenovo Group Ltd. (992), which announced $5 billion of deals last month to bolster its server and smartphone businesses, plunged the most in five years in Hong Kong after the stock was downgraded by at least five brokerages.

Lenovo fell 16 percent to HK$8.41 at the close of trade, cutting $2.2 billion from its market value in the biggest decline since January 2009. The world’s biggest maker of personal computers was cut at UBS AG (UBSN), Morgan Stanley (MS), Jefferies Group LLC, JI-Asia Research Ltd. and Kim Eng Securities Ltd., according to data compiled by Bloomberg.

Lenovo said to turn to security insiders for deal approval – DailyHerald.com Lenovo Group Ltd. has turned to national security insiders to win U.S. approval to buy Google Inc.’s Motorola Mobility phone unit, which is based in Libertyville, and International Business Machines Corp.’s low-end server business, people familiar with the two deals said.

The world’s largest personal-computer maker hired attorneys at Steptoe & Johnson LLP who held positions at the Central Intelligence Agency and the Homeland Security Department to guide its Motorola review through a key interagency panel, one of the people said. Covington & Burling LLP partners David Fagan and Mark Plotkin are representing Lenovo in the IBM server deal, according to another person familiar with the matter.

VyprVPN enters Great Firewall-evading VPN market Now a new contender has entered the fray, boasting greater security and privacy than all its competitors. VyprVPN uses a new proprietary protocol called Chameleon, developed by Switzerland-based Golden Frog. Chameleon “scrambles OpenVPN packet metadata to ensure it’s not recognizable via deep packet inspection” and is specifically “designed to mask Internet traffic to defeat VPN blocking in restrictive environments like China.”

Agriculture

China cancels deal to buy Thai rice due to graft probe: Thai minister | Reuters China has canceled a deal to buy 1.2 million tonnes of Thai rice after Thailand’s anti-corruption agency launched investigations into a state rice-buying scheme, the Thai commerce minister said on Tuesday.

“China lacks confidence to do business with us after the National Anti-Corruption Commission started investigations into the transparency of rice deals between Thailand and China,” Niwatthamrong Bunsongphaisan told reporters.

Posted from Diigo.

China Business Briefs 21/1/14

ECONOMY

PBOC Adds Cash to Banks as Money Rates Jump Most in Seven Months – Bloomberg China’s central bank pumped funds into the financial system and expanded a lending facility to include smaller banks as rising cash demand before the Lunar New Year drove money-market rates up by the most in seven months.

The People’s Bank of China supplied money to the largest commercial banks using its Standing Lending Facility and will auction reverse-repurchase agreements today, it said yesterday on an official microblog without giving details of the amounts involved.

China Money-Market Rates Fall – WSJ.com China’s short-term interest rates fell Tuesday after the central bank pumped in an usually large amount of funds into the money markets to pre-empt a potential liquidity crisis as demand for cash rises ahead of the Lunar New Year holiday.

The move also sent cheers to the country’s battered stock market, with the Shanghai Composite Index rising 0.9% and above a five-month low hit Monday.

Warning sounded on failures linked to cash crunches | South China Morning Post Yu E Bao, managed by Tianhong Asset Management and sold online by Alibaba Group, offers an annualised return of 6.7 per cent, compared with the 3 per cent official one-year savings rate. Some funds are offering higher rates, with news portal Eastmoney.com marketing a product that targets 10 per cent.

“Clearly, yields of 8-10 per cent are not sustainable,” Schneider said.

Despite talk of reform, no sign of rebalancing in China’s data | South China Morning Post Last year, investment was the biggest driver of growth, contributing 4.2 percentage points of the 7.7 per cent rise in gross domestic product.

In contrast, consumption – both by households and the government – made up a relatively meagre 3.9 percentage points (with net exports making a small negative contribution to growth).

That reverses the picture from 2011 and 2012, when the growth contribution of consumption edged ahead of investment for the first time in years.

China urged to increase domestic consumption to rebalance economy | South China Morning Post For years economists have been urging China to rebalance its economy and Chinese officials seemed to have heard the call.

While rebalancing could happen simply through a collapse in the current investment model, less devastating would be incremental reforms that realigned incentives. Cheaper imports from a stronger renminbi, private sector reforms, tax incentives and interest rate liberalisation are touted as possible remedies for the current growth model.

China’s clampdown on shadow banking begins to bite | South China Morning Post Interbank lending rates rose sharply again last week. On Friday, the seven-day repo rate climbed above 7 per cent from 4.35 per cent on Thursday.

Trust companies source their funds through the interbank market. The fact the interbank market is prone to regular credit squeezes suggests a key financing channel underpinning the shadow banking sector is becoming less viable.

But most alarmingly is the possibility of a default of a three billion yuan wealth management product at the end of the month. The firm backing the instrument, Zhenfu Energy, a coal miner, has gone bust.

Annual Forecast 2014 – The View from Stratfor / ISN Severe risks to social and economic stability will persist, mainly from recent credit accumulation, threats to employment from slower growth and rising public anxiety over corruption and environmental degradation. However, despite the risk of systemic financial crisis, the central government has the resources to manage these concerns throughout 2014.

China’s Economy Slows on Investment Spending – China Real Time Report – WSJ China’s economy grew 7.7% on-year in the fourth quarter, down from 7.8% in the third quarter. Annual growth in 2013 came in at 7.7%, unchanged from 2012. Here’s a breakdown of some of what the data tell us:

Slower Growth in China Will Put Pressure on Energy Stocks (^DJI, CVX, XOM) Slower growth in China will have a negative effect on demand for oil, and now that Libya’s exports are picking up, there will be increased pressure on margins for oil explorers. It’s a double-edged sword for ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) , which may make more money on refining, but will make less profit on exploration and production if the price of oil falls.

What China’s Electricity Usage Said About GDP Growth in 2013 – China Real Time Report – WSJ The country’s electricity consumption also corresponded with the increase in production. Electricity usage grew 7.5% last year to 5.3 trillion kilowatt hours, faster than a pace of 5.5% in 2012, according to data released last week by the country’s National Energy Administration, as energy-intensive industries such as steel production boosted power demand.

Pakistan in Talks to Acquire 3 Nuclear Plants From China – WSJ.com Pakistan is in talks with China to acquire three large nuclear power plants for some $13 billion, Pakistani officials said, in a further blow to international efforts to restrict the trade in nuclear technology.

The agreement, if reached, would help plug the crippling gap in Pakistan’s electricity supply and cement its strategic regional alliance with China, which is aimed against mutual rival India. Alarming Washington, the China-Pakistan nuclear trade bypasses international rules against nuclear exports to countries—like Pakistan—that have not signed the Non-Proliferation Treaty.

Ministry of Finance ‘Wants More SOEs to Hand over Profits’ – State-owned enterprises (SOEs) that are linked to what the government calls “the budget system” are required to hand over a certain proportion of their net profits depending on their line of business. The levels range from 5 to 20 percent for SOEs around the country. China National Tobacco Corp. is the only enterprise that is required to hand over 20 percent of its profits.

The comments by the ministry official are in line with the central government’s desire to reform SOEs. Backers of change say the public should get a greater share of profits from SOEs, which, they argue, have not honored their obligations to society. A major Communist Party meeting in November decided to make SOEs hand over at least 30 percent of their profits to the government for social security spending by the end of 2020.

US Steel Market Diverging, Baosteel Raising Prices Last week, Chinese iron ore port stockpiles rose 2.14 million tons week-on-week, while weekly shipments from Australia and Brazil dropped by a huge 9mt to 9.5mt. China imported a total of 820.3mt of iron ore in 2013, up 10% year-on-year, with Chinese steel output likely to have reached 775mt last year, up from 720mt in 2012.

China Workforce Slide Robs Xi of Growth Engine – Bloomberg Xi and Premier Li Keqiang, who in November unveiled the broadest policy shifts since the 1990s, are facing a labor force decline that the United Nations estimates will total almost 30 million in the decade through 2025. China’s working-age population, or people age 16 to 59, fell by 2.44 million in 2013, the National Bureau of Statistics said yesterday.

Major cities losing their allure for new graduates – Chinadaily.com.cn A study released last week by online recruitment company Zhaopin and Peking University’s Institute of Social Sciences found college students are showing less interest in working in China’s mega-cities – Beijing, Shanghai and Guangzhou – after graduation.

Only 38.7 percent of the 10,800 students from 200 universities interviewed said they would choose to work in the three cities after graduating, a downward trend for three consecutive years, from 53.8 percent in 2011 and 42.1 percent in 2012.

Proposal to force video uploaders in China to use real names China’s State Administration of Radio, Film, and Television (SARFT) yesterday issued a notice that proposes, among other things, anyone who uploads a video to the internet must be registered on the hosting website with their real name (hat-tip to Techweb for spotting).

Let’s take a look at China’s $13.5 billion online gaming industry (INFOGRAPHIC) This new infographic from the Go-Globe team shows lots of facts and figures on the Chinese online gaming industry right now. Some of the highlights include:

  • China’s online game operators made RMB 82.1 billion ($13.5 billion) in 2013.
  • That’s estimated to grow to $16.1 billion by the end of 2014.
  •  Tencent (HKG:0700), the same company that makes WeChat, is China’s gaming giant.
  •  Action RPGs are the most favored genre, led by PC-based gamers.

China’s economy: Doing stuff, not making stuff | The Economist Those looking for a “rebalanced” Chinese economy had to look elsewhere: not in China’s pattern of spending, but in its pattern of production and income. For the first time since 1961, China’s production of services (which include transport, wholesaling, retailing, hotels, finance, real estate and scientific research, among other things) exceeded its industrial output (see chart). The new figures meant that China’s economy is now primarily based on doing things for people not making things for them. For a country renowned for its industrial clout, this marked a long-awaited turning point.

Slew of IPOs to Test Whether New China Stocks Have Broken an Old Pattern – WSJ.com China’s securities regulator is about to find out whether changes it implemented to the application system for initial public offerings will cure offerings’ tendency to start strong and then lose steam.

When Neway Valve (Suzhou) Co. made its debut on Friday, marking the first new listing in mainland China in more than a year, it kept to the script of starting convincingly. Shares rose 43% to 25.34 yuan ($4.19), just below the opening-day upper limit of 25.43 yuan. But on the second day of trading, the valve manufacturer’s shares fell by the maximum 10% permitted, in line with a trend that, in part, prompted the China Securities Regulatory Commissionto stop approving IPO applications in November 2012.

Virtual telecom operators business nears reality|Industries|chinadaily.com.cn Sixteen companies are expected to get licenses for virtual telecom operators- business of resale mobile communication services- by the end of the year and open for business in 2014, Economic Information Daily reported.

Virtual operators business is reselling mobile communications services to introduce its own brand of telecommunication services through leased telecommunication operator’s network and facilities or other forms of cooperation.

China sets final duties on U.S. solar materials | Reuters China hit the United States with final anti-dumping and anti-subsidy duties on imports of solar-grade polysilicon on Monday, the latest move in what has been a contentious trade battle in the solar industry.

The anti-dumping duties, announced by China’s Commerce Ministry, were in line with initial levels levied last year of up to 57 percent on imports of the raw material used to make solar panels.

CSRC opens door for HK funds – BUSINESS – Globaltimes.cn Investors in the Chinese mainland will be able to buy Hong Kong fund products in the near future as the regulator has eased access to the mainland’s capital market for Hong Kong financial institutions, the China Securities Regulatory Commission (CSRC) said at a press conference Monday.

The securities regulators on both sides have reached a basic agreement on mutual recognition of funds, which means that Hong Kong incorporated fund companies can sell funds to mainland customers directly, and vice versa, said Tong Daochi, director general for the Department of International Affairs at the CSRC

Uralkali signs potash deal with China for $305/ton – MarketWatch The contract to sell 700,000 tons to the Chinese National Agricultural Means of Production Group Corp. until the end of June indicates a possible end to the uncertainty in the potash market. Prices have fallen more than 25% from $400 a ton last summer, prompted by Uralkali leaving a trading partnership with Belarus and breaking an informal global pricing cartel.

China abandons failed cotton stockpiling programme – FT.com Beijing’s effort to use the state reserves system to maintain cotton plantings and thus a secure supply of raw materials for textile mills has backfired spectacularly. Higher prices meant that cotton flowed to the state reserves – which now by some estimates account for half of world cotton stocks – while denying mills the supply they needed.

COMPANIES

Lenovo Said to Be in Advanced Discussions to Buy IBM Server Unit – Bloomberg Lenovo Group Ltd. (992) is in serious discussions to acquire International Business Machines Corp. (IBM)’s low-end server business, and a deal may be signed within weeks, according to a person with direct knowledge of the matter.

Lenovo, the world’s largest personal-computer maker, has completed due diligence, according to the person, who asked not to be identified because the talks are private. The companies failed to agree last year on a price for the assets, estimated to be worth $2.5 billion to $4.5 billion. The person didn’t have details on the current price or structure of the proposed deal.

CNOOC estimates oil output growth below target for third year | Financial Post Top Chinese offshore oil and gas producer CNOOC Ltd is aiming for an up to 4.3 percent output increase this year, excluding contributions from acquisition Nexen, well below its average annual growth target for 2011-2015 for a third year.

CNOOC has vowed it will still meet the annual growth target of 6-10% for the five years through 2015, increasing its capital spending budget by as much as a third from last year to almost $20 billion and aiming to get 20 projects into construction this year while launching up to 10 more.

(PR) CNOOC Limited Announces its 2014 Business Strategy and Development Plan – WSJ.com The Company’s net production target of 2014 is in the range of 422 to 435 million barrels of oil equivalent (BOE), including approximately 69 million BOE as a result of the acquisition of Nexen Inc. (Nexen). The Company’s net production for 2013 is estimated to be around 412 million BOE, including 61 million BOE of production as a result of the acquisition of Nexen.

Jardine to Buy 20% Stake in China Luxury Auto Dealership – Bloomberg Jardine Strategic, the owner of hotels to convenience stores around Asia, will invest about HK$5.6 billion ($722 million) in Beijing-based Zhongsheng, a distributor of luxury car brands including Mercedes-Benz, Audi and Porsche. The Chinese company will use the funds to expand the number of sales outlets in the country, according to a statement yesterday.

Glorious Property Plunges After Buyout Rejected: Hong Kong Mover – Bloomberg Glorious Property Holdings Ltd. (845) fell by a record in Hong Kong trading after shareholders rejected an offer by Chinese billionaire Zhang Zhirong to take the company private.

Glorious Property dropped as much as 30 percent and closed 27 percent lower at HK$1.25, the biggest decline since Oct. 2, 2009. The Hang Seng Index fell 0.9 percent.

4G push expected to hurt profits at China’s Big Three mobile network operators | South China Morning Post In a report released on Monday, Barclays cut its share price targets for China Mobile, China Unicom and China Telecom to reflect lower revenue forecasts for all three companies this year and next year.

“We see little incentive for China’s telco companies to focus on profit growth – 4G comes with all the excuses to [avoid doing] that,” said Anand Ramachandran, lead author of the Barclays report and the firm’s head of telecommunications, internet and media equity research for Asia, excluding Japan.

Xiaomi teams up with Xunlei to provide multimedia content|Companies|Business|WantChinaTimes.co China’s smartphone maker Xiaomi is likely to team up with Xunlei, a download manager developed by Thunder Networking Technologies, to provide phone users with multimedia content downloading services.

The deal will be inked in the week starting Jan. 20. Although the deal has not yet been confirmed, sources from the industry said that the two companies will work well together, Xiaomi providing the hardware, and Xunlei, the content.

Peugeot Plans $4.1 Billion Capital Increase to Boost Funding (1) – Businessweek Dongfeng Motor Corp. (489) may first contribute funding through a sale reserved for Peugeot’s Chinese partner, with a rights offering to follow that Dongfeng would also participate in, the Paris-based automaker said in a statement. The French state may also buy shares in both sales, the automaker said.

To keep up with China Mobile, China Unicom rolls out 42M 3G From what we can surmise, 42M is the standard of 3G used in some mobile hotspot wi-fi routers. Peak download speeds reach up to 42Mbps, reportedly fast enough to download a high-definition movie in one minute. Unicom says that’s comparable to 4G LTE, but perhaps it’s best to think of it as ’3.5G’.

China’s Qihoo aims at 35% search engine share by end of year Qihoo president Qi Xiangdong said last week, according to the Chengdu Evening News (via Marbridge Daily), that the company is aiming to reach 35 percent market share by the end of 2014.

Qi says that Qihoo now has 24 percent share, though the CNZZ data that we prefer to look at pegs the company’s So.com search engine at precisely 22.5 percent.

ZTE reports likely swing to net profit in 2013 – MarketWatch Chinese telecommunications equipment supplier ZTE Corp. said Monday it likely swung to a net profit in 2013, after suffering a hefty loss in the previous year, thanks to cost cuts and efforts to cut back on low-margin business contracts.

In its preliminary financial results filed with the Hong Kong stock exchange, ZTE said it expects a 2013 net profit in the range between 1.2 billion yuan ($198 million) and CNY1.5 billion, a reversal from a net loss of CNY2.84 billion in 2012.

China Mobile will have to make nice with internet firms | China Economic Review Over-the-top (OTT) applications such as Tencent Holdings’ messenger WeChat and Sina Corp’s micro-blogger Sina Weibo are largely dependent on mobile data networks to reach customers. China Mobile, and the country’s two other operators have spent the better part of a decade and tens of billions of dollars putting those networks in place, only see the internet giants scrape off the top of their profits. When users use apps such as WeChat they don’t send texts or make calls that they have to pay for.

China Auto Industry News | PSA and Dongfeng Close To Inking Deal | China Car Times – China Auto News Dongfeng are looking to take a significant stake of their joint venture partner PSA with a capital injection of 3 billion Euro with the French government expected to take a similar amount which will help PSA stay liquid as the European car market continues to slump. Peugeot posted a 5% sales decline in global sales in 2013, whilst Chinese sales jumped 26% to 550,00 units.

Alipay for Taxi Has Expanded to 40 Chinese Cities The taxi app Kuaidi, which is venture backed by Alibaba, now supports Alibaba’s payment solution Alipay in 40 Chinese cities, covering more than 400,000 taxi drivers, according to Alipay. Alipay was integrated into Kuaidi in May 2013.

Novus Energy Inc. announces completion of acquisition by Yanchang Petroleum International Limited – EIN News Novus Energy Inc. (“Novus” or the “Company“) (TSXV: NVS) is pleased to announce that the previously announced  acquisition of the Company by Yanchang Petroleum International Limited  (“Yanchang Petroleum International“) through its indirect wholly-owned subsidiary, Yanchang International  (Canada) Limited, pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement“) has been completed. Pursuant to the Arrangement, Novus shareholders  will receive C$1.18 in cash per common share of Novus.

Lenovo rewards top new designs[1]- Chinadaily.com.cn The 2014 Lenovo Innovators Competition kicked off in Beijing a few months ago and concluded on Jan 19, 2014. By following the release of the final results, 44 outstanding works from candidates were selected and will remain on display to the public at Beijing’s 798 Art Zone through the Chinese New Year holiday.

ICBC Macau’s Hengqin plan is still in pipeline | Macau Business Daily Industrial and Commercial Bank of China (Macau) Ltd (ICBC Macau) says the mainland authorities are still considering its plan to get a foothold on Hengqin Island.

Last week one of ICBC Macau’s competitors, Luso International Banking Ltd, got permission to open a representative office on Hengqin, which could be a step towards setting up a branch there.

GoXBTC’s closure raises trading concerns|Markets|Business|WantChinaTimes.com China-based bitcoin trading site GoXBTC announced on Jan. 4 that its services will be discontinued from Jan. 18, citing growing costs and the regulatory risks of operating in China as reasons. The announcement resulted in holders of the virtual currency selling their holdings at cut-throat prices, the newspaper explained. “It was really a clearance sale. One bitcoin can be sold for as low as over 3,000 yuan (US$495),” said a trader on an online forum.

Ethiopia: ERA Awarded 6.5B Birr worth Road Projects to Chinese Companies China Communications Construction Company (CCCC) is awarded three projects in Addis Abeba for 4.6 billion birr. The projects include the continuation of the Rapid Adama Expressway and two projects connecting the expressway with the capital.

China Railway No.3 Engineering Group Co Ltd. is awarded a project totaling 161.23kms, in Amhara region for 1.4 billion birr. The project include the 89.23kms long project which starts in Gashena, 620 km north of Addis Abeba in the North Gonder Zone.

Another Chinese company, China Railway Seventh Group Co Ltd., is awarded a 44km road in Zagora (Kechen Meda), which involves five large bridges, each 30m long. The contract has been awarded to  for 485 million birr.

Smart operator reaps rewards[1]- Chinadaily.com.cn Xu, chairman of the Yuemei Group, now does 40 percent of his business in Africa and the remaining 60 percent in China. He predicts that those numbers will be reversed in three to five years. The company’s current annual output in Africa is worth $30 million.

China Construction Bank (Asia) becomes Multifonds’ latest Asian client – bobsguide.com Multifonds, the leader in single-platform, multi-jurisdictional investment fund software, today announces that China Construction Bank (Asia) [CCB (Asia)] has become its latest Asian client.

Posted from Diigo.

China Stock Watch 15/1/14

There may not be any posts tomorrow, I am flying London to Beijing tonight so chances to write will be minimal.

Today was tepid, with the majority moving by less than one percent, either way; a plurality showed a mild loss, while a moderate proportion showed gains. The biggest movers were Sinopec (gaining 1.31% to RMB4.65) and ICBC (down 1.99% to RMB3.45). ICBC is now close to its 52-week low of RMB3.4. With the Big 4 state-owned banks all trading around a P/E of 4.7, the market evidently has no great expectations of future growth (and large fears of thus-far hidden bad debts). They are, it is interesting to note, expanding into overseas markets, opening branches in cities from London to Calgary. One wonders what UK-born Chinese think of Bank of China‘s lumbering rules and regulations, for example. Probably not a lot.

Elsewhere only China Construction Bank moved by 1% (down to RMB3.96, losing 1% exactly).

Mild gains were seen in the auto manufacturing sector, with SAIC Motor (up 0.10% to RMB13.21) and Dongfeng Motor (up 0.34% to HK$11.64) shading up. Domestic sales are certainly zooming (or whatever onomatopoeic term you want to use) ahead but sales to the US remain minimal. This remains the holy grail for Chinese auto manufacturers, but with recalls too frequent and safety standards lagging, this is far out of their reach at the moment.

The Shanghai Composite closed down a smidgeon, to use the technical phrase, at 2,023.35 (down 3.49 points or -0.17%).

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.65 +0.06 (1.31%) 542,028.72M 7.03 4.05 CN¥0.62 7.56
PetroChina 7.58 -0.04 (-0.52%) 1.39B 9.5 7.08 CN¥0.68 11.22
ICBC 3.45 -0.07 (-1.99%) 1.21B 4.53 3.4 CN¥0.74 4.69
China Construction Bank 3.96 -0.04 (-1.00%) 990,043.48M 5.19 3.8 CN¥0.85 4.68
Agricultural Bank 2.4 -0.01 (-0.41%) 779,505.91M 3.28 2.38 CN¥0.50 4.78
Bank of China 2.52 +0.01 (0.40%) 703,998.67M 3.26 2.48 CN¥0.53 4.75
China Mobile 77.10* -0.45 (-0.58%) 1.55B 90.45 74.9 HK$8.20 9.4
Noble Group 1.03 0.00 (0.49%) 6,859.03M 1.27 0.785 SGD0.04 28.64
China State Construction 2.98 +0.02 (0.68%) 89,400.00M 4.18 2.9 CN¥0.62 4.84
CNOOC 13.78* -0.06 (-0.43%) 615,241.93M 16.52 12.04 HK$1.89 7.28
China Railway Construction 4.16 -0.01 (-0.24%) 51,324.17M 6.46 3.95 CN¥0.84 4.94
China Railway Group 2.4 0.00 (0.00%) 51,119.76M 3.41 2.3 CN¥0.44 5.47
SAIC Motor 13.21 +0.10 (0.76%) 145,647.74M 19 11.83 CN¥2.05 6.44
China Life Insurance 14.25 +0.01 (0.07%) 402,772.05M 22 12.88 CN¥0.97 14.74
Dongfeng Motor 11.64* +0.04 (0.34%) 100,291.64M 13.28 9.48 HK$1.38 8.45
China Shenhua 14.53 -0.10 (-0.68%) 288,996.18M 25.28 14.4 CN¥2.25 6.45
Ping An Insurance 39.7 -0.29 (-0.73%) 314,270.85M 53.27 31.69 CN¥3.45 11.51
China Telecom 3.71* -0.01 (-0.27%) 300,259.09M 4.42 3.48 HK$0.26 14.36
China Communications Construction 3.84 -0.03 (-0.78%) 62,110.98M 5.79 3.8 CN¥0.81 4.74
Bank of Communications 3.76 -0.03 (-0.79%) 279,227.85M 5.68 3.65 CN¥0.84 4.46

China Stock Watch 14/1/14

A day of some gains for the twenty biggest stocks. Ten rose on the day, with Sinopec easily doing best, rising 2.68% to RMB4.6. Investors seem to have shrugged off the ramifications of the Qingdao disaster, and the pipeline problems it revealed, rather easily. The stock is also in “oversold” territory, which may be encouraging bargain hunters. Next best was Ping An Insurance, climbing 1.37% to RMB39.99.

Of the eight stocks which declined on the day, none fell by over 1%. Conglomerate Noble Group came closest, going down 0.96%, while ICBC came next, shading 0.56%. (China Construction Bank, Bank of China and Bank of Communications all also fell by around half a percent, though Agricultural Bank was flat).

The Shanghai Composite lifted its head somewhat, rising 17.28 points (+0.86%) to close at 2,026.84.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.6 +0.12 (2.68%) 536,200.43M 7.03 4.05 CN¥0.62 7.48
PetroChina 7.63 +0.08 (1.06%) 1.40B 9.5 7.08 CN¥0.68 11.29
ICBC 3.52 -0.02 (-0.56%) 1.24B 4.53 3.4 CN¥0.74 4.79
China Construction Bank 3.99 -0.02 (-0.50%) 997,543.80M 5.19 3.8 CN¥0.85 4.72
Agricultural Bank 2.41 0.00 (0.00%) 782,753.85M 3.28 2.38 CN¥0.50 4.8
Bank of China 2.51 -0.01 (-0.40%) 701,205.02M 3.26 2.48 CN¥0.53 4.73
China Mobile 77.60* -0.20 (-0.26%) 1.56B 91.1 74.9 HK$8.20 9.47
Noble Group 1.03 -0.01 (-0.96%) 6,825.89M 1.27 0.785 SGD0.04 28.35
China State Construction 2.96 +0.01 (0.34%) 88,800.00M 4.18 2.9 CN¥0.62 4.81
CNOOC 13.84* -0.06 (-0.43%) 617,920.80M 16.62 12.04 HK$1.89 7.31
China Railway Construction 4.17 +0.02 (0.48%) 51,447.55M 6.46 3.95 CN¥0.84 4.95
China Railway Group 2.4 +0.02 (0.84%) 51,119.76M 3.41 2.3 CN¥0.44 5.47
SAIC Motor 13.11 +0.10 (0.77%) 144,545.17M 19 11.83 CN¥2.05 6.39
China Life Insurance 14.24 +0.07 (0.49%) 402,489.39M 22 12.88 CN¥0.97 14.73
Dongfeng Motor 11.60* -0.04 (-0.34%) 99,947.00M 13.28 9.48 HK$1.38 8.43
China Shenhua 14.63 +0.07 (0.48%) 290,985.15M 25.28 14.4 CN¥2.25 6.5
Ping An Insurance 39.99 +0.54 (1.37%) 316,566.54M 53.27 31.69 CN¥3.45 11.59
China Telecom 3.71* 0.00 (0.00%) 300,259.09M 4.42 3.48 HK$0.26 14.36
China Communications Construction 3.87 +0.02 (0.52%) 62,596.22M 5.79 3.8 CN¥0.81 4.78
Bank of Communications 3.8 -0.02 (-0.52%) 282,198.36M 5.68 3.65 CN¥0.84 4.51

China Business Briefs 14/1/14

ECONOMY

Red Flags in China – Can It Prevent a Major Financial Crisis? | Matthew Kerkhoff | FINANCIAL SENSE China’s policymakers have been working to shift their economic model towards consumption, and away from excess investment spending. An explosion in lending is beginning to saddle China with the same problems that have plagued other debt-ridden nations.

Take a look at the chart below, from The Wall Street Journal, which shows the rise in China’s debt levels compared with other countries before their respective financial crises. Looks strikingly similar if you ask me.

China pouring billions into London real estate – Headlines, features, photo and videos from ecns.cn|china|news|chinanews|ecns|cns Research released last December by Jones Lang LaSalle Inc, a Chicago-based real estate service and investment company, showed Chinese investment in London real estate has risen more than 1,500 percent since 2010, increasing from 54 million pounds to more than 1 billion pounds at the end of the third quarter of 2013.

This increase means that Chinese investment in London real estate now accounts for more than 50 percent of the total figure for Chinese investment in the rest of Europe, which stood at 1.9 billion pounds in 2013.

China Military to Stop Buying Foreign-Branded Cars, Xinhua Says – Bloomberg China’s military will stop buying foreign-branded vehicles as part of a campaign to promote frugality and reduce waste, the Xinhua News Agency reported.

The military will also limit official trips and lavish receptions and ban its members from receiving gifts and souvenirs, Xinhua said. The armed forces will strictly control new construction of official buildings or the renting out of office space, according to the report.

US challenges China over compliance with WTO ruling – FT.com The United States has for the first time challenged China’s compliance with a World Trade Organisation ruling, claiming the country had failed to make changes ordered by a WTO dispute resolution panel.

The dispute alleges China refused to comply with a 2012 ruling that barred the country from imposing duties on a type of heavy steel manufactured in the US. The complaint asserted that the inaction was costing US companies about $250m per year.

New areas underscore China’s westward shift of development|Markets|Business|WantChinaTimes.com China’s State Council, the country’s cabinet, recently approved two national-level new areas in western China, namely the Xixian New Area in Shaanxi province and Gui’an New Area in Guizhou province, increasing the number of new areas in the western region to four — on top of Liangjiang New Area in Chongqing and Lanzhou New Area in Gansu province, reports Shanghai’s China Business News.

Fuzhou’s US$16bn new town to emulate Shanghai FTZ|Policy|Business|WantChinaTimes.com A proposal for the development of a new district in Fuzhou and the city government’s plan to upgrade the Fuzhou development project to the national strategic level has been announced by the city mayor, reports China Business Journal.

HK should grow into a full-fledged financial market: HKEx – Xinhua | English.news.cn Hong Kong should grow into a full- fledged financial market and become the global financial center of Asia, Hong Kong Exchanges and Clearing Limited (HKEx) Chief Executive Charles Li said Tuesday.

Speaking at the Seventh Asian Financial Forum, Li said that in the last 30 years, China’s reform has been made mainly through three events — trade, which brought China the first bucket of gold, foreign direct investment, which has engaged China with the world market, and capital market formation. Hong Kong has becomes the offshore capital center of the Chinese mainland, and essentially has helped it grow into an important destination for world’s largest banks, insurance companies and other financial institutions.

Chief of China’s wealth fund bullish on US private sector | South China Morning Post China’s sovereign wealth investment fund is poised to launch a buying spree in global infrastructure projects and advanced technology companies after deleveraging in the US and European private sectors has run its course, its chief said.

However, Ding Xuedong, chairman and chief executive of the US$575 billion China Investment Corporation, cautioned that the outlook for US investments could be clouded by the tapering activity of the US Federal Reserve.

Guangdong outlines big FTZ plans[1]- Chinadaily.com.cn The Guangdong provincial government has vowed to realize liberalization of trade in services in the South China province and its neighboring Hong Kong and Macao special administrative regions by this year through CEPA (the Closer Economic Partnership Arrangement).

China Provinces Set Lower Growth Goals for 2014 – Bloomberg Some Chinese provinces are setting lower growth targets for this year than in 2013, adding to signs that expansion will slow as the government focuses on policies to sustain the economy in the long term.

Hebei, which borders Beijing in the north, set an 8 percent growth goal amid “unprecedented pressure” from air-pollution controls, according to an annual work report published today in the official Hebei Daily. Last year’s target was 9 percent. Fujian in the southeast and Gansu and Ningxia in the northwest are also targeting slower expansion, state-run websites show.

Hedge Funds’ Bets on China Pay Off – WSJ.com One reason for the strong performance is hedge funds stayed away from stock benchmarks loaded with shares of debt-laden state-owned enterprises, a sector that is struggling as the country enacts reforms aimed at increasing competition, said Richard Johnston, Asia head for alternative investment advisory firm Albourne Partners.

Chinese Search Market Saw 40% Increase in Revenue in 2013 The total revenues made by Chinese search services in 2013 is 39.32 billion yuan (about $6.5 billion), a 40.1% increase, according to the latest report by Chinese online data service iResearch. The increase rate is, however, lower than that for the previous year.

Foreign banks lured to Shanghai free-trade zone are left in limbo over regulation delay | South China Morning Post Foreign banks that were lobbied by the Chinese government to open branches in the mainland’s first free-trade zone in Shanghai have been left with little to do by ambiguous guidance and regulations that have yet to come into force.

However, after three months of preparation, many foreign banks are still left with very little to do in their new offices in the free-trade zone (FTZ), since most regulations are still at an un-actionable stage, said lawyers and accountants.

Detroit’s Plan: Export Cars, Import Chinese Investment – China Real Time Report – WSJ Even as Chinese auto makers shun the Detroit auto show, local officials and automotive industry players are hoping to transform Motor City into a hub for Chinese investment.

The Detroit Chinese Engineer Association has around 1,600 registered members, according to Zifeng Nie, chairman of its technical council. He estimates the total number of Chinese engineers working in the Detroit area to be around five times that figure. There are around 87,000 engineers in total in Michigan.

China’s Stocks Rebound After Reaching Cheapest Levels on Record – Bloomberg The Shanghai index’s 14-day relative strength measure, measuring how rapidly prices have advanced or dropped during a specified time period, was at 26.2 yesterday. Readings below 30 indicate it may be poised to rise. Trading volumes were 21 percent below the 30-day average today, according to data compiled by Bloomberg.

China branded products Succeeding at selling consumer products (really most products) in the United States virtually always requires more than just having the lowest price.  Unless and until Chinese companies truly understand this (rather than paying it mere lip service), the threat of Chinese companies taking over the US consumer market is minimal at best.

Liam Halligan: It pays to keep an eye on events in the East – Telegraph Among the most under-reported major trends in the world, this emerging Sino-Russian economic and diplomatic link-up will do a great deal to shape   the world economy in the years and decades to come.

As recently as 2003, cross-border trade between Russia and China amounted to just $12bn (£7.28bn). Over the last decade, that total has risen seven-fold, reaching $88bn last year.

China’s water shortage is so bad it could turn out the lights China has lost more than an entire Netherlands-worth of wetlands in the last decade—340,000 sq. km, or 9% of China’s total land—to agriculture, development, and climate change, according to new figures from its State Forestry Administration. It’s the latest in a long line of ominous warnings about the water supply in China, which has one-fifth of the world’s population but only 6% of its freshwater.

Chinese investors should avoid Britain’s rotten egg rail project | South China Morning Post **This is typical of British attitudes towards infrastructure or engineering works – investment in property is fine, but anything more ambitious gets sneered at** According to reports last week, Chinese state companies are eager to invest in Britain’s planned HS2 high-speed railway from London to Birmingham, and beyond to Manchester and Leeds.

They would be better advised to find another use for their capital. Although construction work has yet to start, HS2 shows all the signs of a classic British cock-up in the making.

5 Things Needed For an Education Startup in China Below are the 5 things entrepreneurs ‘should get’ for their education startup in China, according to Terry:

COMPANIES

Sinopec Plagued by Pipeline Crisis -Caijing **This is frightening** A schematic diagram of the national oil pipeline network shows that almost every province throughout the country has petrochemical pipelines, and many  cities incorporate multiple types of pipelines. And in each city, there are a  greater number of municipal grids that are even more complex. According to data from PetroChina Pipeline Company, there are more than 8,000 pipelines nationwide  that are in violation of current regulations.

China Railway Group Ltd : ANNOUNCEMENT-PASS AWAY OF PRESIDENT AND EXECUTIVE DIRECTOR | 4-Traders **Only took a week and a 10% share-price fall** The board of directors (the “Board”) of China Railway Group Limited (the “Company”) announces with deepest grief that Mr. Bai Zhongren, the President and an executive director of the Company, passed away on 4 January 2014 due to accident.

China Securities Regulator Investigating Sinovel Wind Group – WSJ.com **Who are the auditors, Deloitte?** Sinovel Wind Group Co., China’s onetime wind-power champion, signaled renewed scrutiny by Chinese regulators into its accounting problems in a filing to the Shanghai Stock Exchange late Sunday.

In the filing, Sinovel said it received a notice of an investigation from the China Securities Regulatory commission, adding to challenges that also include U.S. criminal charges and weak demand for wind turbines.

China Crackdown on IPO Pricing Gains Momentum With Bids Ignored – Bloomberg Chinese companies marketing initial  share sales are settling for lower valuations than most  investors were offering to pay, evidence that a government crackdown on overpriced deals is yielding results.

Beijing Utour International Travel Service Co. (002707), Hebei Huijin Electromechanical Co. (300368) and Yangzhou Yangjie Electronics Technology Co. (300373) priced IPO shares at below-average valuations for their respective industries after rejecting most investor bids for stock as too high, according to statements on the Shenzhen Stock Exchange’s website today.

Delay in SUV Launch Hits Great Wall Motor – WSJ.com Great Wall Motor Co.’s shares fell to a six-month low Tuesday after the Chinese auto maker said it deferred the launch of a sport-utility vehicle.

Analysts said the delay highlights the challenges China’s largest SUV maker by sales faces as it seeks a more upscale image to better complete with foreign car makers.

Huawei Pushes into Living Room With Game Console – China Real Time Report – WSJ Over the past few years, China’s Huawei Technologies has been branching further outside its mainstay telecommunications equipment business to sell more consumer products like smartphones, tablets and set-top boxes for TVs . Now, it’s making a push into the living room with a video game console.

Huawei has been trying to establish itself as a consumer brand as it seeks new engines for revenue growth beyond the market for telecom networking gear. Over the past few years, Huawei has become a major smartphone vendor in China, but it still has a long way to go in terms of consumer recognition, and the new game console could be a step toward building a more familiar brand.

RSI Alert: China Petroleum & Chemical (SNP) Now Oversold – Forbes In trading on Monday, shares of China Petroleum & Chemical Corp. Inc (NYSE: SNP) entered into oversold territory, hitting an RSI reading of 29.5, after changing hands as low as $75.24 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 47.0. A bullish investor could look at SNP’s 29.5 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of SNP shares:

China Petroleum and Chemical Rating Lowered to Underperform at Zacks (SNP) | Zolmax Zacks’ analyst wrote, “We are downgrading our recommendation on Sinopec to Underperform from Neutral, ahead of fourth quarter results. During the first nine months of 2013, the company witnessed a sharp fall in crude oil prices. This during the first nine months of 2013, dragged down Exploration and Production (E&P) segment’s operating profit by 15.5% year over year.

AB InBev to Buy Chinese Brewery Brand in CY3.8Bn Deal: Reports -Caijing Anheuser-Busch InBev, the Belgian-Brazilian multinational beverage and  brewing group, is planning to buy a Chinese brewery brand with 3.85billion yuan, Chinese media reported.

Ginsber, the north China-based brewer, was the eighth  largest beer brand by sales volume in Chinese market in 2011 when AB InBev surpassed Beijing-based Yanjing Brewery to become the market’s third largest brand.

Chat app WeChat launches four games in Southeast Asia It seems like the chat app competition has become a battle after all – according to WeChat, the China-based messenger will be rolling out four games for users residing in Thailand, Singapore, and Malaysia.

We reported earlier that WeChat had brought its game service into Indonesia, with four titles to begin with. But this news proves that it won’t stop there. WeChat will bring four games to the new markets in Southeast Asia, three of which already launched in Indonesia.

Shuanghui to apply next week for US$6 billion Hong Kong IPO, sources say | South China Morning Post Shuanghui International, China’s largest meat processor, plans to apply as early as next week for a listing on the Hong Kong stock exchange to raise up to US$6 billion, making it one of the biggest initial public offerings in Asia in years, people close to the situation say.

Yum Brands China same-store sales rose in December – MarketWatch Yum Brands Inc.’s China same-store sales rose an estimated 2% during December, increasing for a second straight month, but declined an estimated 4% for its fourth quarter.

The restaurant company has been trying to recover from food-safety concerns related to KFC chicken suppliers more than a year ago. Yum in November began an advertising and social-media campaign to assure people that its food is safe.

China Construction Bank VP to Lead China Everbright Bank | 4-Traders China Construction Bank vice president Zhao Huan will be appointed as president of China Everbright Bank amid a reshuffle of several bank executives, China Business News reported on Monday.

The report also said that Zhu Xiaohuang, president of China Citic Bank, would leave his post to become chairman of China Citic Group’s board of supervisors. The bank, China’s seventh-largest lender by assets, has so far declined to comment on the matter.

Chinese Smartphone Startup OnePlus Aims at Developed Markets OnePlus is a newly established Chinese smartphone brand officially announced today in Beijing.

It’s not just another phone brand by low-cost manufacturing China or aimed at less developed markets. OnePlus will be about high specs, comparatively low prices, selling directly online and shipping to the rest of the world, especially developed markets.

Bright Food gets 2nd Aussie firm – Business – Chinadaily.com.cn Bright Food Group Co Ltd, China’s second-largest food producer, acquired a midsized Australian dairy company following the purchase of Manassen Foods in the same country.

Manassen, in which Bright Food has a 75 percent stake, has signed a deal to buy Mundella Foods, a four-decade-old company in Western Australia, according to Bright Food spokesman Pan Jianjun.

China Merchants eyes deals in logistics | South China Morning Post China Merchants Group will take advantage of merger and acquisition opportunities in the mainland’s fragmented logistics and infrastructure sector as local governments deleverage, said the company’s chairman, Fu Yuning.

There are over 100,000 logistics players on the mainland but there are a lack of major players with advantages of scale.

China shoes: feeling the pinch – FT.com Three years ago Chinese shoe sellers were increasing their sales at a 20 per cent clip – and they were adding stores even faster. Stock valuations could be as dazzling as Dorothy’s ruby slippers. Now that sales are flat or falling, shares have followed suit and a rebound looks unlikely.

China’s Bold $10 Billion Investment in Nigerian Hydrocarbons Well, never mind the experiences of Shell, ExxonMobil, Chevron, Total, and Eni, Chinese companies are willing to brave the Nigerian new frontier and invest onshore there. On 10 January, the federal government in Abuja approved a $10 billion in Chinese oil exploration in the Bida Basin.

More Obstacles Ahead for Chalco Despite Year-end Profits – State-owned Aluminum Corp. of China Ltd. (Chalco), the nation’s biggest producer of aluminum, turned a profit before the year’s end by selling 12.9 billion yuan of assets to its parent company. The sale allowed it to stave off a risk warning on mainland exchanges.

The company said on January 10 that it expects to earn about 1 billion yuan in net profits in 2013, which means the company could avoid getting branded as an “ST share.” ST or Special Treatment, is a risk warning issued by the Shanghai and Shenzhen stock exchanges for listed companies that have two consecutive years of negative net profits.

China Telecom Offers South Pole Mobile Service | 4-Traders China Telecom Corporation Ltd. (NYSE: CHA and SEHK: 0728) has offered e-Surfing mobile communication service in South Pole, making first mobile phone call from there, ending the history for China to have no mobile communication service in South Pole. Thus, China Telecom becomes the first Chinese telecom carrier to open mobile communication service in South Pole.

Uganda inches towards oil sales With China National Offshore Oil Corporation (CNOOC), the only holder of an oil production license for the Kingfisher Discovery Area, expectations are that 2014 will likely be the year for the government to issue more production licenses to other firms.

China Seeks to Invest in Dutch Grain Trader – WSJ.com Chinese state-owned food company Cofco Corp. offered to buy a minority stake in Netherlands-based grain trader Nidera BV, the latest move by the world’s most-populous country to secure access to food resources.

Cofco submitted a binding bid for the stake last month, a person familiar with the transaction said. The stake is valued at around US$250 million, but it wasn’t clear how much Cofco offered to pay. The terms of the deal were being discussed, the person said.

ZURICH inks MoU with BANK OF CHINA to explore bancassurance opportunities in MALAYSIA | 4-Traders Zurich Insurance Malaysia Bhd declared that it has entered into a deal with the Bank of China Ltd for the expansion of bancassurance opportunities in Malaysia, by selling insurance products to the bank s clients.

It is stated, Zurich can provide the right guidance and surety which will be significant in Bank of China s business expansion here in Malaysia.

Fed Approves Chinese Bank for Expansion in California – Syndication Content Article – American Banker The Federal Reserve will allow Hong Kong-based Wing Lung Bank to expand in California as Chinese lenders boost their U.S. presence.

Wing Lung plans to establish a San Francisco branch and upgrade its existing office in Alhambra, California, to a full- service operation, the Fed said today in a statement.

Industrial and Commercial Bank of China : 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.

ICBC points out that it will determine how many certificates will be sold and how long the certificates will mature in quotas filed this year and single issuance will be not less than CNY 50 million. Outstanding certificates will be not higher than quotas planned for the entire year at any time this year.

China data center roundup: Dawning, HongDa Telecom and CloudKC | Datacenter Dynamics Phase 1 of the 20m CNY Xinjiang Cloud Computing Data Center has come online.

Phase 1 of the project has seen 48 high-performance servers and storage systems deployed, and offers optical fiber connections by China Telecom, China Mobile and China Unicom.

Posted from Diigo.

China Stock Watch 7/1/14

There’s been more than a few articles about how 2014 will be a good year for stock markets, but there’s been little sign of it so far with Chinese stocks. Major Chinese stocks are in several cases hovering around 10% above their 52-week low, and the Shanghai Composite is also circling that psychologically important 2000 barrier. That reform stuff that the Hu/Wen leadership kept putting off and putting off? They weren’t procrastinating. They knew it was backbreaking, painful stuff. Now Xi/Li have some enormously difficult work to do, in reining in debt, making at least a start on cleaning up the environment, breaking up or reforming the bloated SOEs, improving productivity, improving IP laws to enhance innovation, deflating the real estate bubble without bursting it, reforming pensions, the hukou and healthcare, improving education… and it goes on. It’s a monumental to-do list. Chinese stocks, consequently, face considerable uncertainty, as the macroeconomic environment tightens and reforms look set to burst SOE privileges.

On the day, then, fifteen of the major stocks fell, with China Construction Bank the worst performer, falling 1.96% to RMB4 a share (against a year low of RMB3.8). The P/E ratios of the four major banks (ICBC, Construction Bank, Agricultural Bank and Bank of China) are all around 4.8, which is remarkably low – until one reflects the likelihood of unrevealed bad debts and the problems revealed by the two recent credit crunches.

The only gains were posted by SAIC Motor (+0.84%), China Communications Construction (+0.78%) and Bank of Communications (+0.27%).

The Shanghai Composite Index closed marginally up, by 1.61 points (+0.08%), at 2,047.32.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.41 -0.07 (-1.56%) 514,053.02M 7.03 4.05 CN¥0.62 7.17
PetroChina 7.73 -0.04 (-0.51%) 1.41B 9.5 7.08 CN¥0.68 11.44
ICBC 3.55 0.00 (0.00%) 1.25B 4.53 3.4 CN¥0.74 4.83
China Construction Bank 4 -0.08 (-1.96%) 1.00B 5.19 3.8 CN¥0.85 4.73
Agricultural Bank 2.43 -0.01 (-0.41%) 789,249.73M 3.28 2.38 CN¥0.50 4.84
Bank of China 2.51 -0.02 (-0.79%) 701,205.02M 3.26 2.48 CN¥0.53 4.73
China Mobile 78.10* -0.05 (-0.06%) 1.57B 91.8 74.9 HK$8.20 9.52
Noble Group 1.03 0.00 (-0.48%) 6,825.89M 1.27 0.785 SGD0.04 28.42
China State Construction 3.03 0.00 (0.00%) 90,900.00M 4.18 2.9 CN¥0.62 4.92
CNOOC 13.66* -0.18 (-1.30%) 609,884.24M 17.38 12.04 HK$1.89 7.21
China Railway Construction 4.26 -0.05 (-1.16%) 52,557.93M 6.49 3.95 CN¥0.84 5.06
China Railway Group 2.49 -0.02 (-0.80%) 53,036.75M 3.41 2.3 CN¥0.44 5.68
SAIC Motor 13.15 +0.11 (0.84%) 144,986.20M 19 11.83 CN¥2.05 6.41
China Life Insurance 14.75 -0.03 (-0.20%) 416,904.40M 22.04 12.88 CN¥0.97 15.26
Dongfeng Motor 11.62* -0.16 (-1.36%) 100,119.31M 13.28 9.48 HK$1.38 8.44
China Shenhua 14.82 -0.02 (-0.13%) 294,764.17M 25.47 14.72 CN¥2.25 6.58
Ping An Insurance 40.1 -0.19 (-0.47%) 317,437.29M 53.27 31.69 CN¥3.45 11.63
China Telecom 3.70* -0.04 (-1.07%) 299,449.77M 4.42 3.48 HK$0.26 14.31
China Communications Construction 3.89 +0.03 (0.78%) 62,919.72M 5.79 3.8 CN¥0.81 4.81
Bank of Communications 3.76 +0.01 (0.27%) 279,227.85M 5.68 3.65 CN¥0.84 4.46