CNOOC

China Business Briefs 24/4/14

Economy Finance Auto Energy Tech Property Agriculture Retail

Economy

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

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

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

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

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

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

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

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

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

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

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

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

Finance

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

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

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

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

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

Auto

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

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

Energy

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

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

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

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

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

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

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

Tech

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

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

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

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

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

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

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

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

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

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

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

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

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

Property

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

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

Agriculture

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

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

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China Business Briefs 23/4/14

Economy Finance Auto Infrastructure Energy Telecoms Property Travel Tech Agriculture Healthcare

Economy

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

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

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

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

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

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

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

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

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

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

Finance

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Auto

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

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

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

Infrastructure

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

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

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

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

Energy

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

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

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

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

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

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

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

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

Telecoms

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

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

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

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

Property

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

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

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

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

Travel

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

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

Tech

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

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

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

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

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

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

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

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

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

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

Agriculture

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

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

Healthcare

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

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

Posted from Diigo.

China Business Briefs 21/4/14

Economy Finance Auto Infrastructure Energy Telecoms Property Travel Tech Agriculture Retail

Economy

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

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

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

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

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

Finance

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

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

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

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

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

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

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

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

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

Auto

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

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

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

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

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

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

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

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

Infrastructure

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

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

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

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

Energy

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

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

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

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

Telecoms

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

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

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

Property

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

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

Travel

Tech

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

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

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

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

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

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

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

Agriculture

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

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

Retail

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

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

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

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

Posted from Diigo.

China Business Briefs 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 6/2/14

Economy   Finance   Auto   Infrastructure   Energy   Telecoms   Property   Tech   Media

Economy

Four reasons the yuan will struggle to gain acceptance | South China Morning Post Yet a look at the economic history books advises caution. Over the past 50 years, other currencies – including the deutschemark, its successor the euro, and the Japanese yen – had been tipped to steal the dollar’s crown.

All failed. And the obstacles the yuan will have to overcome to unseat the dollar are just as formidable as those that defeated the three earlier pretenders.

Intel Economist Sees Pollution Contributing to Slower China Growth – China Real Time Report – WSJ Mr. Thomas predicted slower growth in China, the world’s second-largest economy, in part because of rising concern about air-pollution problems. He said Intel, like many non-Chinese companies, has installed additional air filters in its facilities in China and that many employees use air filters in their homes.

Shenzhen has China’s highest minimum wage|Markets|Business|WantChinaTimes.com The Shenzhen city government announced that the city’s minimum wage has been raised from US$213 to US$241 a month, which has made it the city with the most expensive labor in China. The minimum wage in the city in 1992 was US$39.

In 2013, Shanghai had the largest minimum wage, followed by Shenzhen and Guangdong. In addition to Shenzhen, the growth for the minimum wage in Xinjiang was 31%, 29.8% in Jiangsu, 19.2% in Guangdong, 11.7% in Shanghai and 11.1% in Beijing.

What’s Driving China’s New Economy? Three months after the conclusion of China’s Third Plenum, the state seems to be fulfilling every prophecy set out by economists. These meetings, used by Chinese political leadership to set policy goals and the general direction of the country, seem to show that the state may be giving up its usual stance on intervening in the market for something a little more hands-off. This move is still in its infancy, but in an economy expected to be the world’s strongest by 2020, the move seems to be one a long time in coming.

Although China’s slowing economy has been compared to a near-apocalyptic sign of failing markets, indications show the slow to be a forced suppression of an economy that had been bubbling in the early 2000s. This bubble is now being deflated, says Professor Yiping Huang, by Premier Li Keqiang’s government who seeks less market volatility. In an economic view that has been dubbed “Likonomics,” the Chinese premier calls for the establishment of a market built on no stimulus, deleveraging of current assets, and structural reform.

GlaxoSmithKline hails drug pipeline after 2013’s China scandal The pharmaceutical giant unveiled its drugs pipeline as it revealed that turnover rose 1% to £26.5bn in 2013, while pre-tax profits inched up by 0.7% to £6.6bn. Sales continued to slide in its scandal-hit China division, but the pace of decline slowed down: drug and vaccine sales were down 18% in the final quarter of 2013, compared with a 61% drop in the previous quarter.

Chinese authorities have accused GSK of being a “criminal godfather”, running a £320m slush fund to bribe doctors and hospital officials with cash payments and visits to prostitutes, in order to sell its products.

Finance

Big Four’s Chinese Affiliates May Mull Workarounds – China Real Time Report – WSJ The Big Four’s Hong Kong affiliates aren’t affected by the ruling, and if they were to temporarily take over some of the Chinese affiliates’ work, it might minimize the disruptions the suspension would cause for the Chinese firms’ clients, some observers believe.

But others say a switch would be unfeasible as the Chinese firms’ reason for refusing to give the SEC the documents it wanted – they said Chinese laws on state secrecy prevented them from turning over the documents – could also apply in certain cases to the Hong Kong firms if they took over the work. That could leave the Hong Kong firms similarly unable to comply, and potentially subject to U.S. sanctions.

Singapore Bank Expands China Presence; OCBC Buys Ningbo Bank Shares – WSJ.com A week after announcing that it was in exclusive negotiations to buy Hong Kong’s Wing Hang Bank Ltd., OCBC said Tuesday that it has agreed to buy up to 207.5 million new ordinary shares in Bank of Ningbo, which is undertaking a private placement of shares to current substantial shareholders. The 383 million-Singapore-dollar (US$303 million) investment will raise the Singaporean bank’s stake in the Chinese lender to 20% from 15.35%.

Westpac to launch derivatives business in China – MarketWatch Westpac Banking Corp. (WBC.AU) plans to launch a new derivatives business in China, tapping into increased capital flows after Australia and China agreed to allow each other’s currencies to be directly converted last year.

The Sydney-based bank said Thursday it has been granted a general derivatives license by the China Banking Regulatory Commission. It will offer derivatives trading from its branches in Shanghai and Beijing, where it has already built up its dealing rooms in the past year to support yuan trade.

Bank of China International hires Ex-Goldman metals chief – Yahoo Singapore Finance Bank of China International (BOCI) has recruited former Goldman Sachs (GS.N) metals trading chief as an adviser to help it expand its commodities business.

BOCI’s appointment of Stephen Branton-Speak as an adviser is one of the highest profile metals industry hires by a Chinese bank since Hong Kong Exchanges & Clearing Ltd bought the London Metal Exchange (LME) for $2.2 billion in 2012.

Auto

Aston Martin recalls 75% of the cars it has built since 2008 – FT.com The British supercar manufacturer is recalling almost 18,000 cars – 75 per cent of the cars it built since 2008 – after discovering a Chinese supplier used fake materials in its cars’ accelerator pedals.

Infrastructure

Rail will cost more than Sh1.3trn – PIC | The Star The committee also found out the railway line awarded to China Roads and Bridges Corporation will be constructed in line with the Chinese specifications.

While appearing before the committee on Monday, former Transport Minister Chirau Mwakwere told the committee that CRBC is a credible firm having constructed the 1,390km Shanghai- Beijing railway.

But the committee has information that CRBC was just a sub-contractor in the project and that various audits carried out in China had raised serious audit queries against the firm.

Sierra Leone News: Amb. Zhao visits Hydro & Regent Grafton Rd Construction sites « Awoko Newspaper Chinese Ambassador Zhao Yanbo less than a month after taking office as the new Chinese Ambassador to Sierra Leone has made a visit to the Hydro construction at Charlotte and the Regent  Grafton Road sites.

Energy

Moving Average Crossover: Great News for CNOOC Limited (CEO)? – Tale of the Tape – NASDAQ.com CNOOC Limited (CEO) could be a stock to avoid from a technical perspective, as the  firm is seeing unfavorable trends on the moving average crossover  front. Recently, the 50 Day Moving Average for CEO broke out  below the 200 Day Simple Moving Average, suggesting short-term bearishness.

This has already started to take place, as the stock has moved  lower by 15.8% in the past four weeks. Plus, the company  currently has a Zacks Rank #4 (Sell) meaning that now could  definitely be the time to get out of this potentially in-trouble  stock.

Ethiopia: How Foreign Oil Companies Annihilated the Lives of Ordinary African Population in Ogaden Region February 13, 2013, China’s oil and gas producer of Petro-trans negotiated with Somaliland’s officials for the possibility to extend Berbera  port’s container and mineral export services to help China’s grasping  ways to profit Ogaden gas and oil financially but has scrapped plans to  build a liquefied natural gas facility. Now China’s GCL Poly Petroleum signed  a Memorandum of Understanding (MoU) on Wednesday January 8, 2014, with  the government of Djibouti that will allow the company to construct two  pipe lines stretching from Ethiopia to Djibouti.

Regional commentators believe that China is good for Africa leaders  but it’s bad for Africans as long as human rights concerned. And it uses  the key president’s issue to penetrating, like the European colonial  times, more or less. Sad and angry Somali people in Ogaden say, every  coming year it is Dhina’s day-dreaming to produce oil and gas from Ogaden region and Ethiopia’s nightmare of being an oil-industry nation, dreams likely to be a needle in a haystack.

China’s Oil Pipeline Through Myanmar Brings Energy—and Resentment – Businessweek Until recently, 80 percent of China’s oil and gas imports were transported by ship through a narrow waterway separating Indonesia and Malaysia, known as the Strait of Malacca. The possibility that hostile forces could one day block that crucial passageway and starve the country of energy has long made China’s leaders nervous.

Petrochina’s Neutral Rating Reaffirmed at Zacks (PTR) | Ticker Report Zacks reiterated their neutral rating on shares of Petrochina (NYSE:PTR) in a research report sent to investors on Tuesday morning, AnalystRatings.Net reports. The firm currently has a $102.00 price target on the stock.

Maintenance at UK’s Buzzard oilfield set for Q2 and Q3 -Suncor – Yahoo Finance UK Britain’s biggest oilfield Buzzard will undergo routine, planned maintenance in the second and third quarters of 2014, Suncor, which owns a 29.9 percent stake in the field, said.

Nexen (KSE: 005720.KSnews), Buzzard’s operator and a unit of Chinese state company CNOOC (HKSE: 0883.HKnews) , has said that it aims to improve Buzzard’s reliability in 2014.

Telecoms

WeChat’s money gifting scheme lures 5 million Chinese users Last week WeChat, the popular Chinese messaging app, launched a feature letting users based in China gift money to friends and family.

The feature went viral in China, and yesterday parent company Tencent disclosed to Chinese media that during the first two days of Spring festival, over five million users participated in the scheme, exchanging over 20 million envelopes. At its apex, over 585,000 people sent over 121,000 red envelopes within a five-minute stretch.

Probe against Huawei over hacking of BSNL network – The Hindu The Centre told Parliament on Wednesday that an inter-ministerial team had been formed to investigate the hacking of the Bharat Sanchar Nigam Ltd. network in Andhra Pradesh allegedly by the Chinese telecom equipment-maker Huawei.

In probably the first case of its kind, the Centre is investigating corporate rivalry between Huawei and another Chinese company, ZTE, which has bagged the BSNL’s network-expansion project, including in Rajahmundry, that led to the alleged hacking.

Property

China’s housing market is looking ugly, which is scary for its financial system – Quartz Sales have “showed a sharp decline” (paywall) in January, compared to Dec. 2013, according to China Confidential, a Financial Times research outfit, even when controlling for softness due to the Chinese New Year holiday. Official data show prices still high in December (the last month for which data were available), but those will likely be dragged down in the coming months.

Housing investment is a big engine of China’s economy. And though slower growth could help end China’s dangerous reliance on credit-backed investment, an abrupt slowdown will freak out global markets and throttle commodity prices.

Chinese government foundation teams up with investors in Hong Kong and Dubai to build resorts catering to elderly | South China Morning Post China Ageing Development Foundation, a fund under the Ministry of Civil Affairs, has formed an alliance with investors in Hong Kong and in Dubai for an aggressive plan to build 12 upmarket retirement and health resorts on the mainland and overseas to tap the country’s rapidly greying population.

“Population ageing in China is expected to lead to a burgeoning demand for aged-care services over the next 40 years. It is now recognised that the ageing of China’s population will have far reaching implications for society, for the economy and for the ability of the government to meet the expectations of the community,” the consortium said in a written reply to questions from the South China Morning Post.

Tech

China’s Top Revenue-generating Mobile Apps of 2013 App ranking and analytics service App Annie released top trends of 2013 on iOS and Google Play. For Google Play isn’t widely accessible in mainland China and the majority of Chinese users download Android apps through dozens of other stores, the revenues in China market recorded by App Annie are mainly from iOS platform. What’s interesting is the most revenue-generating non-game categories include dating, messaging, navigation, among others.

Glu Mobile: Better Play Than Zynga [Apple Inc., Zynga Inc] – Seeking Alpha Following the announcement of Apple’s (AAPL) deal with China Mobile (CHL), the mobile gaming stock most likely to benefit, in my opinion, from a double-whammy of an additional 24 million iPhones held in the hands of gamers in China, of which, whose spending on gaming apps soared 247% (y-o-y) in 2013 is: Glu Mobile (GLUU).

I also expect Glu Mobile could reach $9 in 2015, but, first, the lead-up to my analysis.

Media

This Movie Beat Iron Man 3 in Chinese IMAX Corporation Theaters (DIS, IMAX) But that young record fell this week. That’s right — not even Iron Man’s robotic power could hold back the magical armies of the Middle Kingdom this time. Chinese kung fu production The Monkey King just laughed at Iron Man‘s $1.5 million first-day sales, on its way to a $1.8 million opening day in IMAX theaters.

So IMAX is finding new ways to grow in the crucial Chinese market. Furthermore, the company should be able to apply the lessons learned here in other important markets, accelerating revenue growth in places like Latin America and major European markets.

Posted from Diigo.

China Business Briefs 25/1/14

ECONOMY

Big Four firms, China in talks over corporate audit impasse: KPMG | Reuters In the midst of a U.S.-China quarrel over corporate auditing, the global chairman of audit giant KPMG said on Friday that a “constructive dialogue” was under way to defuse the dispute, which led days ago to U.S. sanctions against the Chinese arms of the world’s largest accounting firms

“We are in dialogue with the Ministry of Finance in China on the matter,” KPMG KPMG.UL Chairman Michael Andrew told the Reuters Global Markets Forum, an online community, in Davos, Switzerland, during the World Economic Forum meetings.

What’s Next for Big Four Audit Firms in China? – China Real Time Report – WSJ Still, despite the expected delay, accounting experts said the ruling was another step down the road toward a final reckoning with a broader, fundamental dispute: The U.S. wants to regulate and investigate China-based companies that trade on U.S. markets, but China has put up roadblocks to those efforts, especially with regard to the China-based audit firms that those companies use, including affiliates of the Big Four – PricewaterhouseCoopers, Deloitte Touche Tohmatsu, KPMG and Ernst & Young.

Local govts start releasing audit results[1]- Chinadaily.com.cn China has increased the transparency of its massive local government debt by allowing local governments to release independent reports on their liabilities, a move that analysts said showed Beijing‘s increasing seriousness in dealing with the issue.

As of late Thursday, several provincial-level governments had released audit reports, including Guangdong, Guangxi, Ningxia Hui autonumous region, Beijing, Jilin and Zhejiang.

The mystery of China’s fading inflation, explained – Quartz Where economists disagree is on what a slowing inflation rate does say about China’s money supply. Slate’s Matthew Yglesias argued that something “people are missing about the China slowdown is that monetary policy keeps getting tighter.” Patrick Chovanec, an economist at Silvercrest Asset Management, takes the opposite position. ”Every time the CPI rate looks moderate, people say [China has] more room for monetary easing to boost the economy,” he tells Quartz. “[But] monetary policy is already horrendously loose in China.” Michael Pettis, a finance professor at Peking University, concurs: CPI “is not the appropriate measure by which to gauge domestic monetary conditions.”

China Bank Regulator Said to Issue Alert on Coal Loans – Bloomberg China’s banking regulator ordered its regional offices to increase scrutiny of credit risks in the coal-mining industry, said two people with knowledge of the matter, signaling government concern about possible defaults.

The China Banking Regulatory Commission also told its local branches to closely monitor risks from trust and wealth-management products, said the people, who asked not to be identified as the matter isn’t public. The commission issues such alerts for matters that it judges may pose significant risks to banks, the people said.

China Trust Products Gone Awry Evoke Soros Crisis Echoes – Bloomberg The story of how a 3 billion-yuan ($496 million) Chinese trust investment wound up on the brink of default shows what billionaire investor George Soros has called the “eerie resemblances” between the 2008 global financial crisis and the nation’s debt market.

Banks in Asia need to go digital to keep customers says McKinseyWantChinaTimes.com The number of digital banking consumers in Asia will reach 1.7 billion by 2020, with China, India, and ASEAN seeing the biggest gains, said a new report by global management consultants McKinsey & Company.

The report showed that in China, the number of digital banking consumers will leap from 380 million in 2012 to 900 million in 2020.

China ‘can weather QE challenge’ – Chinadaily.com.cn Although the United States’ tapering of quantitative easing this year will pose a “significant challenge”, China is capable of withstanding the change, according to a Chinese financial official.

Guan Tao, the State Administration of Foreign Exchange official in charge of balance of payments, said the ending of quantitative easing would even be seen as a good thing.

Infographic: China Tech 2013 Year in Review Infographic: China Tech 2013 Year in Review

China to tackle film fraud following hidden box office returns | Film | theguardian.com China‘s media regulator is to bring in a series of measures to tackle fraud in cinemas, as film revenues there could have been hugely underestimated.

Illegal software is used to report cinema takings that are lower than the actual figure, to avoid paying film tax and fees to distributors, Variety reports. Meanwhile tickets are sold for one film and then a ticket for another written out by hand, so that cinemas meet quotas set for certain films – and deprive others of revenue.

China joins Davos drive to cut green trade barriers – FT.com China has joined the US, EU and Japan in a new push to lower tariffs and other trade barriers on the $1tn global annual market in green goods.

The move is intended to end a deadlock within the World Trade Organisation, where efforts to secure a deal on green goods have been caught up in the stalemate around the 12-year-old Doha round of negotiations.

Scottish cloth exports to China set for record high – FT.com Estimates from HM Revenue & Customs indicate that exports of textiles from Scotland to China are about to hit a record high, after sales in the first nine months in 2013 reached nearly £9.7m – outstripping the total for the previous year. Scotland sells more than two and a half times more textiles to China than it did a decade ago.

Another Look at China’s GDP Numbers – China Real Time Report – WSJ Did Thursday’s surprise fall in one of China’s purchasing manager indexes give you pause about the pace of Chinese economic growth? Some indices had already said that China’s economy was doing worse than advertised.

China Money Network − Private Equity Investors Pile Onto China’s Environmental Sector In 2013, private equity firms poured over $1.2 billion in companies related to the environment industry in China, accounting for 8.3% of the year’s total transaction volume, the highest percentage recorded for this sector, according to Asia Private Equity Review.

Building a Chinese floor under the market | China Economic Review Russian firm Uralkali OAO (URALL.LON, URKA.MCX) this week concluded a deal to sell 700,000 tons of potash, a compound most commonly used as a fertilizer, to Chinese National Agricultural Means of Production Group at US$305 a ton, 25% lower that the price it could have got under an existing deal with Belarus. Despite the lower price, the deal is a good one for analysts as it allows Uralkali to strengthen its position in the world’s largest potash market. The China price sets a floor for the global market,” said Elena Sakhnova, an equity analyst for VTB Capital.

China OKs nitrous dioxide carbon offsets | Business Spectator 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.

As Internet TV Grows Popular, Regulator Mulls Show of Force – Internet companies have shown they are ambitious about exploring the growing market, one that also involves appliance manufacturers, telecom operators and broadcasting companies. However, behind the excitement are some uncertainties because regulators are mulling gradually tightening controls.

In mid-December, the State Administration of Press, Publication, Radio, Film and Television, the country’s media watchdog, held a symposium on IPTV oversight with representatives from various industry players.

Record crude oil imports to China from Kazakhstan in 2013WantChinaTimes.com Oil imports hit a record high of 11.9 million tonnes in 2013 through the China-Kazakhstan Pipeline, up 14.1% year-on-year, according to the regional government.

COMPANIES

E-Investing Spurs Banks to Raise Interest Rates for Deposits Many big banks in the country have moved to offer the highest possible interest rates for deposits despite the central bank’s advice they not do this.

The lenders had to act because they were losing customers fast to the emerging league of high-yield money market funds offered by Internet companies such as Alibaba Group and Tencent Holdings, an executive at a large bank said.

China’s Wang Plans Up to $5 Billion Investment in U.K. Projects – Bloomberg Dalian Wanda Group, the property company owned by Chinese billionaire Wang Jianlin, plans to invest as much as 3 billion pounds ($5 billion) in U.K. developments after a meeting with British Prime Minister David Cameron aimed at bolstering trade.

Wang and Cameron announced the investment in Davos, Switzerland, according to a statement today. The main part of the 2 billion-pound to 3 billion-pound venture will be a cultural and travel development. The Chinese company didn’t provide details of the project.

Lenovo Agrees to Buy IBM’s Low-End Server Unit for US$ 2.3 Bln – Lenovo Group Ltd. is counting on a US$2.3 billion deal for International Business Machine Corp.’s (IBM) low-end server unit to generate US$ 5 billion in revenue every year, says Yang Yuanqing, CEO and chairman of the world’s second largest maker of personal computers.

Deutsche bank starts talks to sell gold fixing seat – sources – Yahoo Singapore Finance Deutsche Bank is talking with prospective buyers about selling its place in the global gold and silver price setting process, known as the “fix”, sources familiar with the situation said on Friday.

Bank of China (BoC) and Industrial and Commercial Bank of China (ICBC) have both already become members of the LBMA. ICBC is also about to complete the acquisition of the London commodity arm of Standard Bank (SBKJ.J), another member of the London Bullion Market Association.

KKR, BlackRock, funds in talks to buy stake in China Huarong: sources | Reuters KKR & Co and BlackRock Inc are among leading global investors in talks to buy a stake in China Huarong Asset Management Co Ltd as the bad debt manager seeks to raise more than $2 billion, people familiar with the matter told Reuters.

As China’s economy slows, a wave of loans is expected to turn sour. That will boost prospects for Huarong and the three other asset managers set up by the Chinese government in 1999 to remove an estimated 1.4 trillion yuan ($230 billion) worth of bad loans from the country’s top four state lenders.

Carmaker plans $2b Hong Kong IPO – BUSINESS – Globaltimes.cn Chinese carmaker BAIC Motor, part-owned by Daimler AG, plans to raise up to $2 billion in a Hong Kong initial public offering, hoisting its target as China’s auto industry purrs to solid growth.

Fueling BAIC Motor’s ambitions, the world’s biggest auto market is moving toward a second year of double-digit sales increases.

First Nations, Oil Industry Trade Business Cards Instead of Barbs – Canada Real Time – WSJ One of the issues looming largest is PetroChina Co. affiliate Brion Energy Corp.’s plans to expand production near an area the Fort McKay First Nation considers sacred. The development remains in limbo after a court ruling last fall paved the way for an appeal of the Alberta Energy Regulator’s approval of the controversial project.

Uganda set to sign pact with Tullow to allow for oil production – Yahoo Finance UK In a speech at a private function for Tullow late on Thursday and seen by Reuters on Friday, energy minister Irene Muloni said the government would shortly sign the memorandum of understanding (MoU) with Tullow and its partners, France’s Total and China’s CNOOC.

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.

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