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China Business Briefs 23/4/14

Economy Finance Auto Infrastructure Energy Telecoms Property Travel Tech Agriculture Healthcare

Economy

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

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

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

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

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

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

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

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

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

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

Finance

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Auto

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

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

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

Infrastructure

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

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

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

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

Energy

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

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

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

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

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

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

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

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

Telecoms

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

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

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

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

Property

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

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

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

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

Travel

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

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

Tech

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

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

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

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

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

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

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

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

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

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

Agriculture

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

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

Healthcare

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

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

Posted from Diigo.

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China Business Briefs 18/4/14

Good to be back in Beijing.

Economy Finance Auto Energy Telecoms Property Tech Agriculture Retail

Economy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Finance

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

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

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

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

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

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

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

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

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

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

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

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

Auto

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

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

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

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

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

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

Energy

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

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

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

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

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

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

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

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

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

Telecoms

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

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

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

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

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

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

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

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

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

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

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

Property

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

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

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

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

Tech

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

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

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

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

Agriculture

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

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

Retail

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

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

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

 

Posted from Diigo.

China Business Briefs 24/1/14

ECONOMY

China races to prevent trust loan default – FT.com Chinese authorities are racing to prevent the default of a soured $500m high-yield investment trust, in a closely watched test case for the country’s shadow banking sector.

Local media reported on Thursday that the Shanxi provincial government is considering helping fund a bailout of the trust loan after ICBC, which distributed the product through its branches, said last week it would not provide a backstop. However, Time-Weekly, a state-owned newspaper, reported that the bank – the world’s biggest by assets – and the product issuer China Credit Trust will also be asked to chip in.

China’s First Default Is Coming: Here’s What To Expect | Zero Hedge So with under 10 days to go, for anyone who is still confused about the role of trusts in China’s financial system, a default’s significance, the underlying causes, the implications for the broad economy, and what the possible outcomes of the CCT product default are, here is Goldman’s Q&A on a potential Chinese trust default.

The People’s Money: The Benefits of Default – WSJ.com So far, Chinese investors who bought fixed-income wealth-management products have enjoyed higher returns than bank deposits offer, without suffering any losses. But that looks to be changing now, as a slowing economy starts to expose the weakness in the system, and the Chinese government may not want to absorb all the losses.

China’s Big Four banks raise their lending: report – MarketWatch China’s top four state-owned banks extended 440 billion yuan ($72.7 billion) of new loans in the first 20 days of January, according to a report by the 21st Century Business Herald on Thursday.

In January 2013, Chinese banks extended a total of 1.07 trillion yuan in new loans. The total amount this January is expected to exceed 1 trillion yuan, according to the report.

The top four banks–Industrial & Commercial Bank of China Ltd. (1398.HK), China Construction Bank Corp. (0939.HK), Agricultural Bank of China Ltd. (1288.HK) and Bank of China Ltd. (3988.HK) — typically account for about 30% of total lending in China.

China PBOC Injects Another CNY120 Bln For New Year Holiday | MNI The People’s Bank of China injected another CNY120 billion into the interbank system on Thursday, bringing the total addition of funds via its open market operations this week to CNY375 billion.

Today’s injection, transacted via 21-day reverse repos, follows the CNY255 billion added on Tuesday and the bank’s notice that it is expanding its Standing Lending Facility to make funds available to smaller lenders when market rates rise above preset thresholds.

China households elude taxman – and official GDP bean-counters | Reuters Data released this week showing China’s economy grew 7.7 percent last year suggested the imbalance is worsening, with consumption unchanged at just under 50 percent of GDP, but investment growing to slightly more than half.

A growing number of economists, however, say official statistics have got it wrong. To avoid taxes, consumers routinely get employers to buy things for them, resulting in a gross underestimation of how much consumers spend and exaggerating just how lopsided China’s $9.4 trillion economy is.

Rhodium Group » China’s Interbank Squeeze: Understanding the 2013 Drama and Anticipating 2014 The year 2014 has started off with additional drama over credit markets in China, and concerns that rising costs could lead to defaults for some risky financial products and end up spilling over to a broader financial crisis in China.  In this note we explore the current situation and the recent changes in money market structure. We also consider the common view that the central bank is not in control, and whether its intervention can steer reform for the coming year. As we held throughout 2013, we believe the Bank knows what it’s doing, is being as rational as it can be in the context of China’s unique political crosswinds, and will play a decisive role in shaping 2014 outcomes.

Salty fish, MNCs and the SEC ban | China Accounting Blog | Paul Gillis As much as the firms are feeling sorry for themselves, it is their clients and their investors who will be hurt if they are banned from practice. A ban could lead to the companies being kicked off of U.S. stock exchanges for failing to produce audited financial statements. IPOs would have to be postponed until the bans were over. Financings would be delayed. Fortunately appeals are likely to delay this for a long time.

McKinsey Greater China – Why should Chinese companies list overseas? 2014 is expected to be a busy year for Chinese companies seeking to list overseas. But the delisting of several Chinese firms from foreign exchanges in recent years has some wondering: why should Chinese companies list overseas? In this podcast, Nick Leung tackles this question with Gordon Orr and David Cogman. Gordon is Asia Chairman of McKinsey. David is a Partner in the Corporate Finance Practice. Nick is Managing Partner of McKinsey’s Greater China Practice.

Beijing considers industry fund to transfer excess capacity abroadWantChinaTimes.com China’s Ministry of Industry and Information Technology is considering setting up an industry investment fund to encourage businesses with a production capacity surplus to transfer capacity to other countries, with its size estimated to reach 100 billion yuan (US$16.53 billion), reports the Shanghai-based National Business Daily.

This time, however, China’s State Council is determined to target five sectors that have shown a production capacity surplus, namely steel, cement, aluminum, plate glass and shipping.

China’s fiscal revenue rises 10.1% in 2013 |China Data |chinadaily.com.cn China’s fiscal revenue climbed 10.1 percent year on year in 2013 to reach 12.91 trillion yuan ($2.11 trillion), the Ministry of Finance said Thursday.

The growth pace, however, slowed from the 12.8 percent reported in 2012 and 24.8 percent registered in 2011.

China’s 2013 M&A Value Hits Record High: PwC-Caijing The total value of mergers and acquisitions (M&A) in China reached a  record high of $260 billion last year, a PricewaterhouseCoopers (PwC) report  showed on Wednesday.

It noted that M&As among China’s state-owned enterprises were mostly  concentrated in energy, resources and industrial areas, while investments by  privately owned enterprises were more diversified.

China’s carbon market may remain a solo one as companies get rights to offset pollution with non-CO2 credits China will allow big emitters to use offset credits from nitrous dioxide (N2O) destruction to meet domestic climate targets, giving its nod to a type of project that has been banned in other carbon markets.

The National Development and Reform Commission (NDRC) published on Wednesday a list of more than 120 new types of projects eligible to earn carbon credits that can be sold to power generators and manufacturers facing emission caps under China’s fledgling carbon markets.

Crowdfunded in China: water cup, smartphone button, sex toy With Kickstarter-like Chinese site Demohour’s recent funding, we’ve taken notice of China’s growing crowdfunding scene. In light of this trend, we’re trying something new starting this week: a regular list of our favorite projects assembled from the top crowdfunding sites in the country. Depending on feedback and how many cool projects we can find, this could be a weekly or bi-weekly post. So to get things started off, here are our inaugural top five picks.

China becomes top gold consumer in 2013 – FT.com China has overtaken India as the world’s largest gold consumer thanks to soaring purchases of jewellery, minted Panda coins and small gold bars.

According to the Thomson Reuters GFMS gold survey, the most widely followed report on the industry, Chinese demand reached 1,189.8 tonnes last year, a 32 per cent year-on-year jump and a fivefold increase since 2003.

China’s rebalancing requires more investment of the right kind – FT.com To work out what the Chinese economy needs to invest in more one only has to spend a few days in Beijing or any other major city and listen to the things that ordinary people complain about.

There is enormous demand for better public transport, cleaner energy, environmental protection, industrial upgrading and other investments that can clean up the air and alleviate terrible gridlock on the roads.

Slowing China Economy Raises Questions About Policy – China Real Time Report – WSJ A sharp downturn in manufacturing activity in China is a warning sign to the government not to move too quickly to tighten monetary conditions, says HSBC’s chief China economist, Qu Hongbin.

Mr. Qu said China needs to get a handle on its huge shadow banking sector to avoid messy defaults. But he pointed out that policy makers need to do this without tightening credit for companies in the manufacturing sector, given that inflation remains low across the economy.

China Money Network − China Added A Record 12 Gigawatts Of Solar Panels In 2013 China installed a record 12 gigawatts of solar panels in 2013, the most solar power added in a single year by any country in history, according to Bloomberg New Energy Finance.

The research and data firm says that the number may be as high as 14 gigawatts if including year-end activities.

Investors Offer Hospitals a Market Injection – Which is one reason why local governments and the nation’s health care industry players have been carefully reviewing guidelines issued in October by the State Council, China’s cabinet, designed to encourage fresh investment in the nation’s more than 10,000 public hospitals.

The guidelines complement previous policy directives introduced by Beijing in recent years that encouraged a more market-oriented approach to managing the big, mainly urban hospital networks at the heart of the nation’s health care system.

Hong Kong Jewelry Sales Hit the Rocks, Says MasterCard Report – China Real Time Report – WSJ Hong Kong’s traditionally hot growth in jewelry sales is sagging, according to a new report analyzing MasterCard spending here, which the authors say is a warning signal for the city’s economy.

Nearly one year ago, year-over-year growth in jewelry sales was as high as 19%, said Sarah Quinlan, senior vice president for MasterCard Advisors, a division of the U.S.-based credit-card company. But according to a MasterCard report analyzing Hong Kong spending, that growth rate dipped below 6.4%, the average overall retail growth rate in the city last month.

COMPANIES

ICBC’s Jiang Won’t Compensate for Trust Product, CNBC Reports – Bloomberg Industrial & Commercial Bank of China Ltd. Chairman Jiang Jianqing said the lender won’t compensate investors for losses tied to a troubled trust product distributed by the bank, CNBC reported on its website.

Investors in the 3-billion-yuan ($496 million) Credit Equals Gold No. 1 high-yield product met with ICBC officials at a Shanghai branch yesterday to demand their money amid concern that the trust wouldn’t repay the funds. A default on the trust product, which raised money for a failed coal mining company, would shake investors’ faith in the implicit guarantees offered by trust companies to draw funds from wealthy investors.

Investors Meet ICBC Officials on Concern of Trust Default – Bloomberg Investors in a troubled trust product distributed by Industrial & Commercial Bank of China Ltd. met with the lender’s officials at a private-banking branch in Shanghai, demanding their money amid concern of a default.

Individuals were asked to sink at least 3 million yuan ($496,000) in the 3 billion-yuan Credit Equals Gold No. 1 product amid guarantees that it was “100 percent safe,” said Fang Ping, one of 20 investors who went into the branch. The product, which comes due on Jan. 31, raised funds for a coal mining company that collapsed after its owner was arrested.

Closer Look: New 4G Offerings Have Put China Unicom on Its Heels – Three years ago a long-time China Mobile customer told me he was lured away by China Unicom’s offer of an iPhone and 3G service.  Now, however, he is returning to China Mobile, which is preparing to offer faster 4G service and the popular Apple Inc. gadget.

Since China Mobile’s iPhone sales started on January 17, many people have told me they are abandoning China Unicom. It remains to be seen exactly how successful China Mobile will be with its new offerings, but alarm bells are ringing for China Unicom and China Telecom.

23rd January downstream news PetroChina has delayed the startup of two new refineries and the expansion of a third in order to counter the threat of overcapacity as oil demand growth slows.

The company will now start up its 200 000 bpd Kunming refinery in the Yunman province in 2016, two years behind the original schedule.

Operation of a 400 000 bpd joint venture refinery in Jieyang of Guangdong will be delayed to 2017, rather than 2013.

Alibaba Stake in Citic 21CN Sends Shares to Highest Since 2000 – Bloomberg Citic 21CN Co. (241)’s shares rose the highest in intraday trading in almost 14 years after Alibaba Group Holding Ltd., the owner of China’s biggest e-commerce business, said it would invest in the company to enter the drug-data industry.

Former Foxconn manager detained in kickbacks probe – Business – Chinadaily.com.cn A former senior manager at Taiwan’s technology giant Foxconn has been detained in an ongoing probe into kickbacks from suppliers, prosecutors said on Thursday after reports he pocketed NT$100 million ($3.33 million) in bribes.

Liao Wan-cheng was taken into custody late on Wednesday, while three other ex-employees were questioned and released on bail, an official at the Taipei District Prosecutor’s Office said.

China CNR Plans to Raise Around $1.5 Billion in HK IPO in 2nd Quarter – WSJ.com China CNR Corp. is planning to raise around US$1.5 billion in a Hong Kong initial public offering in the second quarter, people with direct knowledge of the deal said Tuesday.

CNR, which is already listed in Shanghai, is China’s second-biggest train maker by sales after CSR Corp Ltd., which is listed in Hong Kong and Shanghai. It is planning to submit an application to list to the Hong Kong Stock Exchange in coming weeks, the people said. A listing application is the first step toward an IPO in Hong Kong.

China’s Harbin Bank Said to Apply for $1 Billion Hong Kong IPO – Bloomberg Harbin Bank Co., a Chinese lender based near the Russian border, applied to the Hong Kong stock exchange for a $1 billion initial public offering, said two people with knowledge of the matter.

All three sponsors of the IPO are Chinese investment banks, said the people, who asked not to be identified because the information is private. The lender, based in the capital of northeastern China’s Heilongjiang province, aims to start trading in the first half, they said.

Apple Inc. (AAPL): Why Apple’s China Mobile Launch Was A Flop – Seeking Alpha The answer is partly in Apple’s “Premium” strategy and partly in the unique nature of the complex China smartphone market. In North America customers are pretty well divided between Apple and Samsung with a smattering of Motorola, LG, HTC and BlackBerry users and a group of also ran suppliers including Windows OS phones like the Nokia Lumia. Apple is the number one brand in the United States increasing its market share to 42% in the Christmas quarter.

irasia.com – China Telecom Corporation Limited China Telecom Corporation Limited (“China Telecom” or “the Company”; HKEx: 00728; NYSE: CHA) was voted by leading equity analysts “No.1 Best Managed Company in Asia”, across all industries at the “Best Managed and Governed Companies – Asia Poll 2014” (“the Poll”) by Euromoney, a leading international financial magazine.

Backers say twin $1 billion methanol plants planned by China-backed joint venture would be safe and environmentally sound | OregonLive.com A joint venture backed in part by a Chinese government agency has plans to build two $1 billion plants, one in Clatskanie and the other in Kalama, Wash., which would export methanol to China for making plastics and rubber.

allAfrica.com: Kenya: I Did Not Disown Rail Deal – AG (Page 1 of 2) Nandi Hills MP Alfred Keter yesterday appeared before the committee where he said that the China Road and Bridge Corporation is blacklisted from engaging in projects funded by the World Bank. Keter tabled a press release from the bank indicating the CRBC was blacklisted five years ago.

Museveni assures Chinese Railway Company of Government support President Yoweri Museveni has assured the China Harbour Engineering Company Ltd of Uganda Government support while the company will be undertaking the up-grading of the Northern and Eastern railway-line.

President Museveni said that the China Harbour Engineering Company Ltd will be one of the 2 construction companies the Government of Uganda will work with in improving the railway transport system in Uganda, especially the route from Kampala to Tororo in Eastern Uganda.

How I Lost My Offshore Oil Empire | The Global Mail Sun claims in a lawsuit in US District Court in Los Angeles that the Chinese oil giant Sinopec colluded with Chinese police to illegally detain him for five years and, while he was in prison, connived with his employees to wrest away an offshore firm that controlled much of his oil empire.

Sinopec – the fourth-largest company in the world behind Royal Dutch Shell, Wal-Mart and Exxon Mobil— has filed a motion to dismiss the suit, scheduled to be heard in March. It argues that the proper jurisdiction for the case is China rather than the US and that, even if events had happened as Sun alleged, they would not amount to the extortion, kidnapping and torture that he claims.

The “Self-developed” China Operating System by Chinese Academy of Sciences is A Windows Phone 7 Firmware? One week ago, the Institute of Software under Chinese Academy of Sciences unveiled China Operating System (COS) together with Shanghai Liantong Internet Technologies Ltd, as reported by CCTV, China’s state-owned TV station.

Posted from Diigo.

China Business Briefs 23/1/14

ECONOMY

Markit Economics – Press releases HSBC China Flash Manufacturing PMI (PDF)

China factory data show contraction; stocks fall – MarketWatch China’s manufacturing sector is showing an unexpected contraction in January, albeit a mild one, according to initial results from HSBC’s monthly survey released Thursday. The “flash” version of the HSBC/Markit China manufacturing Purchasing Managers’ Index fell to a six-month low of 49.6, down from a final December reading of 50.5, with the result sending Chinese stocks and the Australian dollar all lower. Economists had expected the flash PMI — which usually includes 85%-90% of total responses used for the final report — to print at 50.3, according to a Bloomberg News forecast. Results below the 50 level indicate contraction, while those above 50 suggest growth.

China PMI Signals First Contraction In 6 Months; Drops Most Since May | Zero Hedge With every component of HSBC’s China Manufacturing PMI either dropping or showong slower growth, it is hardly a surprise that the much-watched survey of economic strength dipped into contractionary territory. At 49.6 this is the lowest since July 2013 and dropped month-over-month by the most since May 2013. HSBC argues this is “domestic demand cooling” but new export orders tumbled at an accelerating pace as did employment. Of course, the silver lining is that because the prices components did not show acceleration then the PBOC has room to ‘stimulate’ to avoid repeating growth deceleration but that appears – despite today’s further CNY 120 billion reverse repo – to not be the plan for the PBOC for now (given the 20-plus percent YoY gains in house prices).

Judge Suspends Chinese Units of Big Four Auditors – WSJ.com The Chinese units of the Big Four accounting firms should be suspended from auditing U.S.-traded companies for six months, a judge ruled, a move that could complicate the audits of dozens of Chinese companies and some U.S.-based multinationals.

The audit firms, plus a fifth China-based accounting firm, broke U.S. law when they refused to turn over documents about some of their clients to the Securities and Exchange Commission to aid the commission in investigating those U.S.-traded Chinese companies for possible fraud, ruled Cameron Elliot, an SEC administrative law judge.

China’s Real-Estate Investment Boom Set to Continue in 2014 – China Real Time Report – WSJ Chinese outbound commercial real-estate investment is estimated to exceed $10 billion this year, after it doubled to $7.6 billion last year from 2012’s $3.3 billion, according to data from Jones Lang LaSalle. Rival brokerage Colliers International is more bullish, saying it expects Chinese investors to spend at least twice as much on overseas property assets this year as last year.

Among some of last year’s higher-profile investments were Shanghai’s Fosun International purchase of the Chase Manhattan Plaza in New York for $725 million in October and state-owned conglomerate Greenland Holding Group’s 70% stake in Brooklyn’s $5 billion Atlantic Yards project. Greeland also paid $1 billion for a piece of land in Los Angeles on which it plans to build a hotel, office units, serviced residences and high-end homes.

President Xi Jinping’s Crackdown on Official Gift-Giving Is Transforming How Business Is Done in China – WSJ.com An unexpected peak-season rut for China’s calendar business illustrates how broadly a corruption crackdown has challenged business as usual. Private clubs are shutting down following official criticism they are extravagant; officials attend meetings without watches and belts to avoid suspicion they have ill-gotten wealth; military officers, once able to ride high in imported SUVs, were recently told to drive only domestically made vehicles.

The campaign may be beginning to drag on China’s economy by reducing demand, economists said after a report this week showed last year’s gross domestic product growth held steady at 7.7%.

China Bailout Costs Jump Seen in Policy Bank Yield Surge – Bloomberg The average yield premium over the sovereign for five-year debt sold by China Development Bank, Export-Import Bank of China and Agricultural Development Bank of China widened 90 basis points from an August low to 142 basis points on Jan. 17, the highest in Chinabond data going back to 2007. The gap was 138 basis points yesterday. Yields have climbed on safer assets, including CDB’s, as delays in restructuring bad loans are stretching the central government’s ability to guarantee debt, Bank of America Merrill Lynch wrote in a report this week.

China creates teams to spearhead economic change, with top leaders in charge | Reuters China has created six teams to supervise its boldest economic and social changes in 30 years, with President Xi Jinping and Premier Li Keqiang personally taking charge, state media said on Wednesday.

Xi has been appointed the head of the central leading group for comprehensive reforms that will oversee the six teams, with Li as his deputy, state radio said after the group held its first-ever meeting.

Gazprom targets May for China gas deal, angles for pre-payments Gazprom on Wednesday proposed signing a major China gas export deal in May, as industry sources indicated that the Russian gas giant may offer a lower price in return for billions of dollars in upfront payments.

Industry sources say that Gazprom is hoping for $10-$11 per mmBtu from China. China is believed to pay $9 per mmBtu to Turkmenistan, the former Soviet state in Central Asia that beat Gazprom to the Chinese market.

China Auto Industry News | China to Account for 30% of Global Auto Sales by 2020 | China Car Times – China Auto News A recent study from KPMG indicates that the Chinese market will continue to expand considerably with it expected to account for 30% of global automotive sales by 2020 alone.

The study, carried out by KPMG as part of its fifteenth annual Global Automotive Executive Survey highlights many key points in the development of the Chinese auto industry which will coincide with the development of other BRIC markets which KMPG believes will benefit the top ten OEM manufacturers in China and to a lesser extent to the following ten.

Let the WMP house of cards fall apart next week | China Economic Review It’s time to let China’s wealth management house of cards fall apart. A potential US$500 million default at China Credit Trust (CCT) next week is the perfect place to start.

The 345 investors that bought CCT trust products through Industrial and Commercial Bank of China (ICBC) in 2011 aren’t sitting on buried treasure. Rather, the underlying assets for those products are a few dilapidated coal mines in Shanxi province. The price of coal has dropped 40% since a group of hungry investors poured their cash into the trusts, a form of wealth management product (WMP). The plant and equipment at the mine have also no doubt fallen in value.

China must spend $330 billion more to do fair share on climate – report | Reuters China must increase spending on emission cuts and clean technologies by 2 trillion yuan ($330 billion) to do its fair share to halt climate change, a report by Beijing’s Central University of Finance and Economics said.

China, the world’s biggest-emitting nation, has already pledged to spend 520 billion yuan to help prevent global temperatures from rising more than 2C, according to Chen Bo, co-author of the report.

Migrants find a home for capital in pursuit of foreign residence[1]- Chinadaily.com.cn Migration for investment in overseas real estate markets has become a top choice for Chinese applicants, according to a report on China’s migration status released on Wednesday.

The Annual Report on Chinese International Migration 2014 shows that a growing number of Chinese investors are rushing to go abroad in order to buy properties and establish permanent residence in places like Europe and North America.

Shadow Banking Again in the Limelight-Caijing The General Office of the State Council recently introduced a new set of  guidelines – known as Document No. 107 – to curb the country’s massive shadow  banking system. The guidelines are widely regarded as China’s highest level  document aimed at regulating risky off-balance-sheet lending.

Document No. 107 officially defines the shadow banking system in China for  the first time. It also clarifies responsibilities of the country’s central bank  and the separate regulatory agencies for the banking, securities and insurance  sectors when it comes to supervising shadow-banking activities, and pledges to  establish a regulatory framework featuring both central- and local-level  regulation.

China abandons its pursuit of growth at all costs – FT.com Implicit in this change of direction is a trade-off between growth and economic efficiency. The government is expecting growth of about 7.5 per cent in 2014. In previous years it has made its forecast deliberately low and then come in triumphantly above expectations. This year, if anything, it could go the other way. By the end of 2014 growth may be slowing towards 6 per cent, even if the result for the year as a whole is still likely to be 7 per cent or above.

China Reforms Hydro-Electricity Prices – WSJ.com China on Wednesday said it would reform the price that power-grid operators pay to hydropower plants for electricity to encourage investment in the industry.

Chinese officials admitted last month that the country is struggling to meet its 2015 targets for clean-energy production. China wants non-fossil fuels to make up 11.4% of its energy mix by 2015, but consumption reached only 9.4% in 2012.

For Liquor Makers, Cheer Dries Up in China – WSJ.com The crackdown on conspicuous consumption—part of an anticorruption drive led by President Xi Jinping—has hit spirits companies harder than most. Profit warnings, executive departures and restructuring drives have all been linked to the ban.

China is the world’s biggest alcohol market, making up 38% of global spirits consumption, according to the International Wine & Spirit Research industry body. The country is especially important for cognac makers: Rémy Cointreau derives about 40% of its total profit from cognac sales in China, while sales of the French liquor account for 15% of  Pernod Ricard S’s earnings.

China listings no lure to investors after closure of 3.6m trading accounts | South China Morning Post The number of mainland stock accounts containing funds shrank to a three-year low of 53.7 million on Friday, a drop of 3.6 million from the June 2011 peak.

The retreat, spurred by slowing economic growth and a shift towards higher-yielding wealth management products, is fuelling losses in the Shanghai Composite Index that erased US$571 billion of market value in the past four years and sent the gauge to a five-month low on Monday.

12 new free-trade zones to follow in Shanghai’s footsteps | South China Morning Post The 12 would include Guangdong, which has been lobbying the central government by highlighting its economic ties with Hong Kong, and Tianjin , Xinhua cited an official source as telling its subsidiary the Economic Information Daily. It did not name the remaining 10.

He said other candidates included Zhejiang’s Zhoushan , which consists of several islands with a focus on the shipping business; Qingdao , an important port city; Chengdu , a southwestern business hub; Wuhan , a central province; and Hangzhou , where e-commerce giant Alibaba is based.

Hi-tech industry helps Shenzhen beat GDP goal | South China Morning Post Mayor Xu Qin will tell delegates that the city’s economy grew by 10.5 per cent last year compared with 2012. Xu early last year set a target of a 9 per cent rise in gross domestic product. Per capita GDP in the city reached US$22,000.

Xu’s work report said Shenzhen’s six strategic industries – biotechnology, information technology, new energy, new materials, telecommunications and the cultural and creative industry – recorded growth of 19.8 per cent last year.

Wealthy Chinese want British education for their children – FT.com The Hurun Report, a closely watched annual survey of China’s entrepreneurs and investors, found that 29 per cent gave Britain as the ideal country for their children’s secondary education, followed by the US with 26 per cent.

The influx of Chinese in Britain’s education system would have spillover effects for the rest of the economy, he added. “These people will have two years in the UK at sixth form, followed by four years at university, followed very likely by a year or two of work experience. So they’re going to have a very personal relationship with Britain for the best part of 8 years.”

Chinese Hotels Drop Stars to Score Political Points – China Real Time Report – WSJ Amid China’s anti-extravagance sweep, hotels are downgrading themselves to score political points – and win back business from politicians. A year ago this week, President and Communist Party Chairman Xi Jinping declared war on “undesirable practices” by officials that he said risked creating an “invisible wall that separates the party from the people.”

COMPANIES

Chinese oil giants make use of offshore shell companies in Caribbean | World news | theguardian.com The country’s biggest oil companies – Sinopec, PetroChina and the China National Offshore Oil Company (CNOOC) – are among the world’s largest businesses, but executives in the industry are embroiled in multiple corruption probes, many tied to networks of shell companies around the world.

Research by the International Consortium of Investigative Journalists (ICIJ) based on leaked financial records from the British Virgin Islands, reveal dozens of companies tied to the three oil giants, many of which are not disclosed on any publicly available filings by the businesses.

China Insurer Ping An Promises to Look Into ‘VIP’ Investment Product Collapse – China Real Time Report – WSJ One of China’s largest insurers said it will look into allegations from investors that some of its salespeople sold them another firm’s product that they now say has collapsed.

In a statement to The Wall Street Journal on Wednesday, Ping An Insurance Group Co. said the company forbids its insurance agents from selling products on behalf of other financial institutions.

ICBC May Pay Part of Funds in Troubled Trust: Time-Weekly – Bloomberg ICBC and China Credit Trust may each take responsibility for 25 percent of payments for the 3 billion-yuan ($496 million) trust, the newspaper reported on its website today, citing a person it didn’t identify. The Credit Equals Gold No. 1 product raised money for a coal mining company that collapsed after its owner was arrested. The government of Shanxi province, where the company was based, may take responsibility for the remaining 50 percent, according to the report on the website of Guangzhou city-based Time-Weekly.

Special Report: How Caterpillar got bulldozed in China | Reuters The night of the awards on November 16 three Caterpillar lawyers were wrapping up an eight-hour grilling of Wang Fu, Siwei’s chairman. Major accounting problems had been unearthed at Siwei headquarters in the gritty Chinese city of Zhengzhou. Two months later, on January 18, 2013, Caterpillar said it had discovered “deliberate, multi-year, coordinated accounting misconduct” at Siwei.

Wang was sacked. Caterpillar took a non-cash goodwill impairment charge of $580 million – 86 percent of the value of the deal. The company says it was caught unaware by the problems at Siwei and only discovered them in November 2012, five months after the deal closed.

Are Lenovo and IBM Finally Close to Another Deal? It has taken a long time, but Lenovo (NASDAQOTH: LNVGY) and IBM (NYSE: IBM) may be about to finally strike a bargain for IBM’s x86 server business. Lenovo has openly acknowledged its interest in this business, but the companies have been at odds on deal terms. With ongoing share loss in the server business and a desire to reallocate capital to higher-returning businesses like software and services, IBM would do well to close this deal.

Yu E Bao Deals with the Pressure of Being No. 1 – As of January 15, Yu E Bao has more than 250 billion yuan in investment from over 49 million users, says Tian Hong Asset Management Co., the company that manages Yu E Bao. That makes it the 14th-largest money market fund in the world, data from Bloomberg shows. Combined with other investment funds, the amount managed by Tian Hong has exceeded 260 billion yuan.

An excerpt of the interview follows.

Text, Chat, Profit: Tencent Launches Investing on WeChat – China Real Time Report – WSJ The new service is no doubt aimed at competing with Alibaba’s service, which was introduced last year. It’s also likely a ploy by Tencent to entice users to link their bank and WeChat accounts. The fund, called Licaitong, offers an impressive 7.3940% seven-day annualized yield, besting Yu’e Bao’s rate by almost 1%.

Magnum Entertainment Soars on First Nightclub IPO in Hong Kong – Bloomberg Magnum Entertainment Group Holdings Ltd. (2080), the first nightclub operator to go public in Hong Kong, more than doubled on its first day of trading.

Magnum raised $16.3 million in an initial public offering, selling shares at the top end of a marketed range, according to data compiled by Bloomberg. The stock jumped as high as HK$3.21 from its offer price of HK$1.50, and traded at HK$3.05 at 9:57 a.m. local time.

China Mobile shakes up fixed-line broadband | South China Morning Post A welcome development looks set to shake up China’s fixed-line broadband sector this year, with word that leading wireless carrier China Mobile (0941.HK; NYSE: CHL) is offering aggressive pricing after receiving a license to offer fixed-line service late last year. Of course I’m speaking from the consumer’s perspective, since China’s 1.3 billion consumers and millions of businesses have had little or no choice for the last decade when choosing a fixed-line broadband supplier.

Qihoo 360 to distribute and facilitate Disney’s mobile gamesWantChinaTimes.co The two companies reached an agreement on Wednesday. Disney Mobile will sign over the intellectual property rights to its mobile games to Qihoo while the Chinese company’s 360 Mobile Assistant will use Qihoo’s resources to distribute and facilitate the games. The two companies will also provide various Disney-related products such as browser skins and computer desktop wallpapers of Disney images, said Jiang Zuwang, director of the Qihoo’s Mobile Gaming group.

Top Chinese App and Mobile Game Trends in 2013: Wandoujia Chinese Android app distributor Wandoujia (or SnapPea) and research institute iResearch jointly released a report on the hottest trends of Chinese mobile apps and games in last year.

Square-like Chinese startup QFPay swipes $16.5M in series B funding QFPay, maker of a Square-like gadget for taking e-payments via a smartphone, has secured series B funding worth $16.5 million, 36Kr reports today.

QFPay’s main product is QPOS, which looks like a mini calculator. It connects wirelessly to Android tablets or phones, or iPhone or iPad; or there’s a wired version that hooks up to a PC. It can be used by retailers of all sizes to take credit card or bank card transactions.

The Himalayan Times : Two banks asked to set aside Rs 1.5bn to pay MWSDB – Detail News : Nepal News Portal Himalayan Bank Ltd (HBL) and Bank of Kathmandu (BoK) will have to deposit Rs 1.51 billion at the central bank for possible payment to Melamchi Water Supply Development Board, according to a court order.

HBL will have to deposit Rs 660 million and BoK has to deposit Rs 850 million as a provision to pay MWSDB the counter guarantee amount. The two Nepali banks stand to lose about Rs 1.5 billion to the project after their client — China Railway 15 Bureau Group Corporation — failed to complete the construction of the tunnel.

LNG Stock Prices: Three Reasons 2014 Will Bring the Biggest Gains Yet China continues to turn more to natural gas as a solution to the country’s air pollution problem. It aims to triple the use of natural gas by 2020 to above 300 billion cubic meters from approximately 100 billion cubic meters now.

China only began importing LNG in 2006, but by the end of 2012 it had six LNG import terminals in operation. The total capacity of these terminals is 18.8 million tons of LNG.

Four of the terminals are run by CNOOC Ltd. (NYSE ADR: CEO) and two by the parent of PetroChina Co. Ltd. (NYSE ADR: PTR).

Addax signs 10-year Gabon petroleum deal – Business – Chinadaily.com.cn Addax Petroleum Corp, the biggest overseas subsidiary of Sinopec Group, has won a 10-year contract to extract oil at three fields in Gabon.

At peak production, the company will account for about 20,000 barrels a day, or nearly one-eighth of the African country’s oil output.

New batch of dairy brands recommended – BUSINESS – Globaltimes.cn The China Dairy Industry Association (CDIA) announced Wednesday the second batch of the association’s recommended baby formula brands. Twelve baby formula products from six domestic dairy companies were promoted in a press conference held in Beijing Wednesday.

The six companies are Zhejiang Beingmate Technology Industry and Trade Co, Beijing Sanyuan Foods Co, and four regional dairy brands.

LifeWatch announces strategic partnership with China Telecom for the sale of medical smartphones LifeWatch AG (SIX Swiss Exchange: LIFE), the leading wireless cardiac monitoring service provider in the U.S., makes a huge step forward in its strategy to complement its offering with products and ser- vices that are independent from third party payees. Today, Yacov Geva, CEO, signed a binding memorandum of understanding with China Telecom with a potential of more than USD 400 million sales of medical smartphones LiveWatch V and subsequent generation and related services in China over five years.

China Mobile Ltd. (ADR) (CHL): China Mobile: A Long-Term Buying Opportunity – Seeking Alpha Although CHL is currently facing some headwinds, the company has an enviable history of growth. From 2003 through 2012, CHL increased both revenue and EPS every year with a 9-year CAGR of 14.7% and 13.7%, respectively. Although rivals China Unicom and China Telecom grew revenues at a faster pace in recent years, their growth came at the expense of profitability as both companies spent heavily on marketing and subsidies to attract CHL customers. For example, although CHL has lagged badly from 2009 through 2012 in terms of revenue, the company has outpaced both CHU and CHA in terms of EPS growth at a 3-year CAGR of 3.9% vs. 0% for CHA and a negative 9.1% for CHU.

WeChat 5.2 Supports Nine Categories of Mobile Payments It now supports making payments for Didi (the taxi app venture backed by Tencent), Licaitong (the mutual fund, released several days ago, similar to Alipay’s Yuebao), purchases on Tencent’s online retailer Yixun, QQ Coins (the virtual currency used in Tencent ecosystem), movie tickets, lottery tickets, making donations, phone bills and splitting bills.

Volvo AB: Chinese Authority Approves Dongfeng Motor JV – WSJ.com Swedish truck maker Volvo AB (VOLV-B.SK) Wednesday said the National Development and Reform Commission in China on Jan. 7 approved the establishment of a previously announced joint venture between the company and China’s Dongfeng Motor Group Company Ltd. (0489.HK).

Volvo in January last year announced an agreement with Dongfeng to acquire 45% of the Chinese vehicle maker’s new subsidiary Dongfeng Commercial Vehicles, which will include a large part of its medium and heavy duty commercial vehicles business.

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 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 Business Briefs 7/1/14

ECONOMY

Rural transformation underpins Chinese economy[1]- Chinadaily.com.cn China has long been a large agricultural nation, therefore the work concerning agriculture, countryside and farmers (the three rural issues) have always been the top priority of the Chinese government. The Central Rural Work Conference provided the first opportunity for the country’s new government to make plans for the three rural issues.

Besides ensuring domestic production of grain, the conference also made decisions about the position of agriculture, safety of farm produce, land rights, development of rural areas and raising farmers’ income.

Analysis: Cash crunch signals policy dilemma for China’s reformist central bank | Reuters China’s central bank looks set to risk another cash crunch at the end of January, barely a month after the last market squeeze, as policymakers press ahead with a crackdown on shadow financing and other risky bank lending.

Periodic cash squeezes as banks scramble for fresh funds highlight the policy dilemma the PBOC faces in 2014, as it pushes financial reforms to help rebalance the world’s second biggest economy away from the investment- and exports-led model that powered its rapid rise.

China’s Cabinet Drafts Shadow-Banking Plan – WSJ.com The plan, which was distributed to regulators by the State Council on Dec. 10 and hasn’t yet been made public, sets out to limit the growth in loans created outside formal channels for bank lending, according to a copy of the document reviewed by The Wall Street Journal. The framework calls for stronger oversight of such informal lending by the central bank and other regulators.

The plan falls short of launching a full-blown crackdown on the sector, suggesting the leadership’s preference for maintaining a key source of credit for the economy but one that has contributed to industrial overcapacity and high debt levels at local governments.

China’s reforms: The pain begins – Craig Stephen’s This Week in China – MarketWatch Despite 2014 beginning with some disappointing data as HSBC’s China services index slumped to 50.9 for December, it looks like authorities will be applying tough-love austerity rather than the usual pump-priming response.

Ashmore becomes first to gain access to invest directly in China – FT.com China has taken a significant step towards opening its multitrillion-dollar capital markets to the outside world by giving a western asset management group freedom to invest in its domestic stocks and bonds.

Ashmore Group has become the first group outside Hong Kong to announce it has been granted a licence to invest directly in China’s $3.4tn domestic equity market, which is quoted in renminbi and known as the A-share market, and its $4.7tn bond market.

Few Specifics Mean China Banks Could Stay in the Shadows – China Real Time Report – WSJ But equally important was what the State Council didn’t say: It made no mention of trying to sharply ratchet down China’s debt which since 2008, has grown to 216% of GDP from 128% and could climb to 271% by 2017 if not corrected, according to Fitch Ratings. Indeed, the framework regulation goes out of its way to call shadow banking is an “inevitable” result of financial innovation and has played an “active” role in serving the economy and broadening the investment channels for Chinese individuals.

Major Corruption Prosecutions up in 2013-Caijing China’s procuratorial authorities investigated 27,236 embezzlement and bribery cases between January and November last year, sentencing 36,907 people, the Supreme People’s Procuratorate said in a statement on Sunday.

Of those cases, 80 percent were considered major or important, which the top procuratorate defines as embezzlement and bribery cases involving more than 50,000 yuan ($8,270) or earmarking public funds over 100,000 yuan.

Sales of luxury goods decline substantially in China|Markets|Business|WantChinaTimes.com Luxury goods sales in China have dropped significantly after rapid growth over the past few years, with some noted fashion brands closing some of their stores in the country, according to Guangzhou’s 21st Century Business Herald.

According to Bain & Company statistics, luxury goods sales in mainland China slowed down in 2013 to a 2% growth rate, compared with the 7% annualized increase in 2012 and 30% in 2011. The consulting firm projected that the downtrend would continue in 2014.

Coking coal prices continue to work in steelmakers’ favour | Business Standard China, which remains relentless in raising steel production even while phasing out high-cost capacity, has to put greater reliance on imports of iron ore, since domestic supply is falling short of requirements of its steel mills. Production cost in many of the mines in China being double that in Australia and Brazil, the country is better off by importing than raising local production.

China destroys ivory stockpile in ‘significant symbolic step towards saving Africa’s elephants’ – Telegraph More than six metric tons of tusks, ivory ornaments and carvings were fed into   crushing machines by forestry and customs officials in southern Guangdong province, where much of China‘s ivory trade is focused.

Much of the ivory on the market in China is legal – bought from African governments selling off their stockpiles of seized tusks in 2008. But the continued demand also drives a trade in illicit ivory “laundered” with fake provenance certificates.

China adjusts measures in Shanghai FTZ – Xinhua | English.news.cn The State Council, or Cabinet, said in a statement that it decided to temporarily adjust measures in an effort to reform the country’s foreign investment management and open the service sector wider to overseas investors.

The government will also relax controls over foreign investment in fields covering international shipping, credit investigation, performance brokerage, entertainment, training and telecommunications within the zone.

Law cuts into guides’ earnings – Business – Chinadaily.com.cn The law took effect on Oct 1 and bans forced shopping during trips. Three months later, many tour guides are looking for new jobs, since much of their income came from the commissions they earned by herding tourists into shops.

Dell looks at China as source of innovation[1]- Chinadaily.com.cn Chinadaily.com.cn interviewed Amit Midha (President, Dell Asia Pacific and Japan Region) on Dec 19, 2013, in Xiamen, Fujian province. Midha talked about Dell’s strategy.

P2P firms in China dropping like flies|Markets|Business|WantChinaTimes.com The total transaction value of major P2P platforms in China reached 49 billion yuan (US$8.1 billion) in 2013, with an average interest rate reaching 23.24%, according to the report. Seventy four platforms had difficulty meeting the demand from cash withdrawals, mostly in the fourth quarter. The situation is gravest in Zhejiang province, where 17 P2P firms bit the dust in 2013, followed by Guangdong with 11 and Jiangsu with nine. December casualties fell to 10, compared with 30 in November and 18 in October.

China suspends ban on foreign video game console sales China’s State Council said it has temporarily lifted a ban on selling foreign video game consoles, paving the way for firms like Sony Corp, Microsoft Corp and Nintendo Co Ltd to enter a nearly $14 billion market.

The suspension of the 14-year-old ban permits “foreign-invested enterprises” to make games consoles within Shanghai’s free trade zone and sell them in China after inspection by cultural departments, the government said in a statement posted on its website on Monday.

China’s online video viewers watch for 5.7 billion hours every month (INFOGRAPHIC) This new infographic, put together by the Go-Globe team, shows just what a massive business it is. China now has 450 million online video viewers who collectively spend 5.7 billion hours per month watching stuff. There will be an estimated 700 million viewers by 2016. 76.3 percent of surveyed users say they prefer online videos over China’s very dour and propaganda-filled state television.

McKinsey Greater China – What might happen in China in 2014? It’s 2014, and Gordon Orr is back with his annual predictions for the coming year in China. In this podcast, he discusses some of his prognostications with Nick Leung and Guangyu Li. Gordon is a Director based in Shanghai. Guangyu is a Partner there. Nick is the Managing Partner of McKinsey’s Greater China Practice.

Cheap cash and speculation has never been tougher | China Economic Review Shadow bankers are no match for the central bank when it comes to throwing China’s financial system into a panic. Back-alley lenders have handed out a mere US$4 trillion in cash at exorbitant interest rates. No surprises here. The People’s Bank of China (PBOC), on the other hand, managed to send shock waves through the banking system and push markets into turmoil twice last year.

China 2013: A Year in Review with Shaun Rein | China Briefing News This week, China Briefing is featuring a series of specially-commissioned articles and interviews from prominent China-based writers regarding their thoughts on the key developments in the country during 2013, and what lies ahead in 2014. Today’s interview features Shaun Rein, author of “The End of Cheap China: Economic and Cultural Trends that Will Disrupt the World” and managing director of the China Market Research Group.

Taiwan Rejects Bitcoin ATMs – China Real Time Report – WSJ The island’s financial regulator said Monday that physical teller machines for the virtual currency “will not appear” here, after Las Vegas-based RoboCoin, which makes bitcoin ATMs, reportedly said it had chosen Taiwan and Hong Kong as its first spots to expand in Asia.

China Auto Industry News | Chinese Manufacturers Rushing to Brazil | China Car Times – China Auto News Rapidly developing markets in South America, led by Brazil, are shaping up to be the new focus of investment in the future.

China Private Equity, M&A & Capital Markets, from China First Capital Think it’s easy to be a private equity boss in China, to keep your job and keep your LPs happy? It’s anything but.

COMPANIES

Report Says Death Of China Railway President May Be Linked To Anti-Corruption Campaign – Forbes The 21st Century Business Herald, citing anonymous sources working in China’s railway sector, said Bai’s death may be related to the ongoing anticorruption campaign that led to the downfall of Liu Zhijun, China’s former railway minister who was given a suspended death sentence in July for abuse of power and taking bribes. Under Liu’s tenure, China’s railway builders were mired in debt, waste and embezzlement. China Railway Construction Corp.Ltd., the country’s second largest infrastructure contractor, spent 837 million RMB ($135 million)on hospitality in 2012. A year earlier, the National Audit Office found officials embezzled 187 million RMB ($28 million) from just the Beijing-to-Shanghai portion of the high-speed railway project.

China Railway reassures after president’s death – BUSINESS – Globaltimes.cn China Railway Group Limited said Monday that the company’s debts and risks are under control, after its president committed suicide over the weekend allegedly because of the firm’s high debts, China News Service reported Monday.

The company had debt of 408 billion yuan ($67.41 billion), and assets worth 503 billion yuan by the end of September 2013, according to the company’s third-quarter earnings report.

China Mobile Probes, Unicom Meddles [China Mobile Ltd. (ADR), China Unicom (Hong Kong) Limited (ADR), China Telecom Corporation Limited (ADR)] – Seeking Alpha We’re just a week into the New Year, and already new signs of political shenanigans at the nation’s 2 leading wireless telcos, China Mobile (HKEx: 941; NYSE: CHL) and China Unicom (HKEx: 762; NYSE: CHU), are hinting at turbulence ahead as Beijing tries to liberalize the state-dominated telecoms services sector. Media are reporting that China Mobile has launched an internal probe into a botched initiative in Hong Kong, which looks to me like an extension of Beijing’s fast-expanding series of anti-corruption probes at major state-owned firms. In the meantime, media are reporting separately that a top Unicom executive has left the company to join one of the nation’s newly licensed virtual network operators (VNO), in a deal that looks aimed at undermining Beijing’s plans to inject new competition into the telecoms services sector.

Alipay apologizes for leak of personal info – Business – Chinadaily.com.cn The leak of information via the country’s largest third-party payment platform has sparked a public outcry over transaction security at a time when the Internet is soaring as a major shopping avenue

“The leaked data revealed only transaction information before 2010. They excluded sensitive information such as usernames or passwords, which were ciphered through a sophisticated method that is not available to anyone,” according to a statement by Alipay on Sunday.

Luring Beyonce Fashion Fans Spurs LightInTheBox Rally – Bloomberg LightInTheBox Holding Co. (LITB), a Chinese online retailer, surged 20 percent New York after saying it bought Seattle-based Ador Inc., a website that sells clothes and accessories similar to those worn by celebrities from Beyonce Knowles to Taylor Swift.

Telecom Deal by China’s ZTE, Huawei in Ethiopia Faces Criticism – WSJ.com The Ethiopian network’s glitches underline the broader troubles that sometimes face poorer nations as they borrow heavily to invest in telecommunications, roads, utilities and other infrastructure to help lift them out of poverty.

China’s financial firepower helps its firms win many of these contracts. But in agreeing to such deals, some governments appear to have flouted rules meant to foster sound public investment. When countries sidestep such rules, say experts at institutions such as the World Bank, big projects often cost more and are more likely to be poorly executed.

Ford Blows Past Toyota and Honda in China (F, TM) Ford China sold 935,813 vehicles last year, the company said in a statement. That was more than Toyota (NYSE: TM) and Honda (NYSE: HMC) , though it’s still a long way from the more than 3 million sold by the twin titans of China’s auto market, General Motors (NYSE: GM) and Volkswagen (NASDAQOTH: VLKAY) .

Was Tencent’s Unverified Non-Competition Agreement Illegal? | Bridge IP Law Commentary Abstract: many of Tencent’s non-competition contracts being reported online are false due to invalidity. If the contracts were true, one might wonder the intelligence and morality of Tencent’s managers and officers. These agreements are arrogant, domineering, selfish and ignorant of relevant laws. It is hard to imagine how these contracts could come from a listed company with billions of dollars. Additionally, Tencent could possibly pay large amounts of compensation to departing employees in order to fully comply with the relevant laws.

Buffett-Backed BYD Says Chinese Cars to Debut in U.S. – Bloomberg BYD plans to introduce about four models for its U.S. debut at the end of 2015, said Stella Li, the senior vice president in charge of the company’s U.S. business, in an interview last week in Shenzhen, China. Though BYD wasn’t ready when it earlier sought to enter the U.S. car market in 2010, the company is more prepared this time, she said.

Ctrip Reportedly Invests Over $100 Million in Overseas Travel Platform ToursForFun Chinese online travel giant Ctrip reportedly invested more than $100 million in overseas tourism service ToursForFun (report in Chinese). According to official website of ToursForFun, the company will become part of Ctrip’s North American branch, which was set up in last November.

Founded in 2006, ToursForFun is a thriving online travel supplier dedicated to providing online purchasing experience for all travel needs. It is focused on overseas tours and vacation packages in North America, Europe, Asia, Australia & New Zealand, and South & Central America.

Former Google China Head John Liu Joins Qihoo 360 John Liu, former vice president at Google Inc. and head of Google China, has joined Qihoo 360 as Chief Business Officer.

Dr. Liu left Google China in July 2013 after six-year stay there. He was the successor to the former Google China chief Kaifu Lee, founder of VC firm Innovation Works.

China Greenland to Invest $2 Billion in London Developments – Bloomberg The state-owned company, which is investing in the U.K. for the first time, will sign an agreement with Minerva Ltd. today to acquire the Ram Brewery site in Wandsworth in southwest London, the two firms said in an e-mailed statement. The completed development will be valued at 600 million pounds, according to the statement. The purchase price wasn’t disclosed.

Schindler Holding Ltd : Press release: Schindler to equip China’s tallest building | 4-Traders Schindler China, the Chinese division of the Schindler Group, has been awarded a major contract for a 115-story megatall skyscraper currently under construction in Shenzhen, Guangdong province.

When complete, Shenzhen’s Ping An Finance Center will include office and retail space and stand 660 meters high, making it the tallest building in China. The structure will feature Schindler’s 7000 high-rise series elevators and Schindler’s cutting-edge PORT transit management technology.

DailyNews Online Edition – Passers-by bother bridge builders CONSTRUCTION of the 680- metre Kigamboni Bridge has been extended to July 2015 following a number of unforeseen challenges that afflict the project.

The project, which is financed by the National Social Security Fund (NSSF), is carried out by the China Major Bridge Engineering Company and China Railway Jiangchang Engineering (Tanzania) Limited as well as Arab Consulting Engineers.

AMEC plc : AMEC to hire 150 for China contract | 4-Traders ENGINEERING company AMEC estimates it will need to hire another 150 workers after being appointed by China’s state-owned CNOOC to provide services for its substantial North Sea oil and gas interests.

The firm has been hired by Nexen Petroleum UK, which has been a subsidiary of CNOOC since the $15 billion (pound(s)9.1bn) acquisition of its Canadian parent in February.

10 Online Tourism Startups You Should Not Miss Chinese startup database ITjuzi recently released the newest round-up of online tourism services. In ITjuzi’s database, there are overall 337 startups fall into this vertical category, while 41 companies or 12.2% of the total have secured capital injections in the past year. Please read the Chinese report here.

Let’s take a look at the 10 must-visit tourism sites recommended by the database:

Chexim plans to issue up to 4 bln yuan dim sum bonds – Yahoo Finance The Export-Import Bank of China (Chexim) plans to issue up to 4 billion yuan ($660.99 million) of dim sum bonds in Hong Kong to institutional investors, kicking off a strong offshore yuan bond pipeline expected this year.

Uganda reviewing nine applications for oil production licences – Yahoo Finance UK In September last year Uganda awarded the first production licence to China’s CNOOC (HKSE: 0883.HKnews) for the Kingfisher (LSE: KGF.Lnews) discovery, which contains an estimated 635 million barrels of crude reserves, of which 196 million are recoverable. CNOOC plans to spend $2 billion to develop the field over a four-year period.

CHINA TELECOM to focus its efforts in five areas this YEAR | 4-Traders The first one would be assuring it to change the way it serves customers and expand fundamental services.

4G commercialisation would be accelerated by the company and it would toughen 4G and 3G and broadband service integration.

Deutsche Bank Initiates Coverage on China Life Insurance (LFC) | WKRB News Analysts at Deutsche Bank assumed coverage on shares of China Life Insurance (NYSE:LFC) in a research report issued to clients and investors on Monday, TheFlyOnTheWall.com reports. The firm set a “hold” rating on the stock.

China Mobile Ltd. : VWO, BZQ: Big ETF Outflows | 4-Traders Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the Vanguard FTSE Emerging Markets ETF (VWO), where 9.2 million units were destroyed, or a 0.8% decrease week over week. Among the largest underlying components of VWO, in morning trading today China Mobile (CHL) is down about 0.3%.

Jeep Cherokee Pricing Revealed For China – $61,000USD to $76,000USD | China Car Times – China Auto News Jeep’s pricing for the New Cherokee was revealed earlier today, the base 2.4L model starts at 375,900RMB and rises to 459,900RMB for the top of the line 2.4L model, the flagship 3.2L pricing hasn’t yet been announced but it is expected to be in the 500,000RMB and rising area.

Posted from Diigo.