Ctrip

China Business Briefs 16/4/14

There won’t be a posting of the business briefs tomorrow, as I am flying to Beijing (in about three hours) for a two week visit. I will try to keep on posting once there, but visits and reunions may take precedence.

I am looking forward to seeing Iain Shaw and co, former staff of the Beijinger (and former colleagues of mine) who are starting up The Cleaver Quarterly, a magazine on Chinese food around the world. Check out their kickstarter thing here if you’re interested.

Economy Finance Auto Infrastructure Energy Telecoms Property Travel Tech Agriculture Retail Healthcare

Economy

China’s first quarter GDP grows 7.4% – Business – Chinadaily.com.cn China’s economy grew 7.4 percent year on year in the first quarter of 2014, the National Bureau of Statistics (NBS) revealed on Wednesday.

The NBS said that preliminary data showed the nation’s gross domestic product (GDP) reached 12.8213 trillion yuan ($2.08 trillion) in the first quarter.

The figures suggest growth in the world’s second-largest economy in the beginning of year 2014 was stable and that the economy was generally in good health, as Chinese authorities promoted reforms, innovation, restructuring and improvement of people’s well-being, according to the NBS.

Chinese incomes continue surging in Q1 – BUSINESS – Globaltimes.cn The average per capita disposable income rose 11.1 percent year on year to 5,562 yuan (908.82 US dollars) in the first quarter. Deducting inflation, the actual growth was 8.6 percent, according to the NBS.

The income gap between urban and rural residents narrowed with the actual income growth in rural China 2.9 percentage points higher than that in its urban areas in the first quarter, according to the NBS.

China’s Economic Growth Slows to Six-Quarter Low After Credit Reined In – Businessweek China’s expansion moderated to the weakest pace in six quarters and property construction plunged, testing leaders’ commitment to keep reining in credit as risks mount of a deeper slowdown.

Gross domestic product rose 7.4 percent in the January-to-March period from a year earlier, the statistics bureau said today in Beijing, compared with the 7.3 percent median estimate in a Bloomberg News survey of analysts. Industrial production and fixed-asset investment trailed projections.

China’s expansion slows as property construction falls | Money | The Malay Mail Online Gross domestic product rose 7.4 per cent in the January-to- March period from a year earlier, the statistics bureau said today in Beijing, compared with the 7.3 per cent median estimate in a Bloomberg News survey of analysts. Industrial production and fixed-asset investment trailed projections.

The weakest first-quarter property-investment growth since 2009 signals credit is tight and demand is faltering, adding to economic and default dangers as Premier Li Keqiang grapples with risks from shadow banking and local-government debt. A deeper slowdown would put pressure on leaders to expand stimulus or limit the pace of changes intended to give market forces a bigger role in the world’s second-largest economy.

Chinese Police Confront Trust Investors Demanding Repayment – Bloomberg Chinese investors demanding their money back from a troubled 973 million-yuan ($156 million) high-yield product in Shanxi province were confronted by police in front of a China Construction Bank Corp. (939) branch.

People wearing white masks with the words “despicable bank” and “pay back our money” were among at least 30 investors facing special-forces officers in dark uniforms in Taiyuan city, about 521 kilometers (324 miles) southwest of Beijing. The nation’s second-largest bank is the custodian of the Songhuajiang River No. 77 trust, which missed six payments as of last month, according to the Economic Observer.

Electricity, Steel Hint at Economic Uptick in China – China Real Time Report – WSJ Official data shows China’s economy in the first quarter grew at its slowest pace in 18 months, but two proxies point to some resilience.

Electricity output—an indicator favored by Premier Li Keqiang over gross domestic product—and crude steel production grew faster in March than in the preceding two months. In addition, steel output in March hit a record high, the National Bureau of Statistics said.

China’s slowing growth potential minefield for leaders – The Globe and Mail Slowing growth presents a potential minefield for Chinese leadership, whose chief concern is maintaining a rising standard of living for its own people. To that end, officials have sought to discount the value of GDP as a measure of well-being, instead deliberately underscoring other statistics. “Maybe a more important thing to look at is employment and income,” said Mr. Sheng. And those numbers still look good. The first quarter saw 3.74-million urban jobs created, slightly more than the year before. Rural income is up 10.1 per cent, while urban salaries swelled 7.2 per cent. At the same time, consumer price index growth of 2.3 per cent has allowed many of those gains to flow in to consumer pockets, rather than back into groceries.

Slowdown curbs Q1 lending activity – Headlines, features, photo and videos from ecns.cn Money supply growth decelerated further in March amid a reform-induced economic slowdown, according to figures released on Tuesday by the People’s Bank of China.

The central bank said that the expansion of M2, a broad measure of money supply, slowed to 12.1 percent year-on-year from 13.3 percent in February. The market consensus was for an increase of 13 percent.

Slower deposit growth, which limits banks’ ability to lend, was a factor. Yuan deposit growth fell to 11.4 percent year-on-year in March from 12.5 percent in February.

Higher-value exporters survive turmoil in market[1]- Chinadaily.com.cn Higher-value Chinese exporters are more immune than low-cost manufacturers in the face of market turmoil from such things as weak demand, exchange-rate fluctuations and rising costs, said exhibitors at the Canton Fair that opened on Tuesday.

China not Currency Manipulator: US Treasury-Caijing “China’s currency yuan, or renminbi (RMB) appreciated on a trade-weighted basis in 2013 but not as fast or by as much as is needed,” the US Treasury said  in the latest semi-annual Report to Congress on International Economic and  Exchange Rate Policies.

According to the report, the yuan appreciated by 2.9 percent against the US  dollar in 2013, and China’s current account surplus declined to 2.1 percent of  gross domestic product (GDP) in 2013, down from 2.3 percent of GDP in 2012 and  from a peak of over 10 percent in 2007.

Yangtze River Delta becomes epicentre for China credit risk | South China Morning Post Suzhou, an ancient city in Jiangsu province 100 kilometres west of Shanghai, lives in legend as one of China’s most beautiful, famous for its elegant gardens and charming canals.

More recently, it became an industrial powerhouse, sitting at the heart of the Yangtze River Delta region that, along with the Pearl River Delta in Guangdong, drove the mainland’s economic boom.

Now it is ground zero for a painful corporate deleveraging that has tacit government approval. A third of all loan delinquencies come from the region, and credit is getting harder to come by.

Finance

Citic Pacific to Pay $36B for Parent’s China Assets – Bloomberg The steelmaker and property developer will pay 49.9 billion yuan in cash and issue almost 16.6 billion shares at HK$13.48 each, according to a Hong Kong exchange filing today. Citic Group Corp. will hold 75 percent of Citic Pacific following the transaction and a share sale by the Hong Kong company, it said.

The transaction comes as Chinese President Xi Jinping advocates the most sweeping changes since Deng Xiaoping’s liberalization in 1978, including loosening yuan trading and allowing more private investments in state businesses. The deal gives Citic Pacific a stake in China’s largest brokerage, as well as banking, energy and infrastructure assets.

China Money Network − S&P Downgrades Fosun International’s Credit Rating Shanghai-headquartered Chinese privately owned conglomerate Fosun International Ltd. has been downgraded by Standard & Poor’s Ratings Services because of the company’s increasing leverage level as a result of its acquisitions, according to a notice issued by S&P.

Fosun’s long-term corporate credit rating is downgraded to BB from BB+ with stable outlook.

BRIEF-Ping An Insurance’s Jan-Mar premium income totalled 108 bln yuan | Reuters Ping An Insurance Group Co of China Ltd

* Says January-March premium income totalled 108 billion yuan ($17.37 billion)

Source text in Chinese: link.reuters.com/tan58v

BRIEF-China Life Insurance’s Jan-Mar premium income totalled about 132.2 bln yuan | Reuters China Life Insurance Co Ltd

* Says January-March premium income totalled about 132.2 billion yuan ($21.25 billion)

Source text in Chinese: link.reuters.com/tet58v

Auto

Volvo likely to become China’s next official car brand: report|Companies|Business|WantChinaTimes.com **I wonder what % of Audi’s revenues come from China** China’s president Xi Jinping, who visited the Chinese-owned Volvo car plant in Ghent, Belgium on April 1 during his European trip, seems to have become the best spokesman for the automobile brand after a photo of him and the Volvo XC60 model was published. Volvo could likely become the new choice for official cars in China, according to the Guangzhou-based Time Weekly.

Infrastructure

SOE accounting puzzle blurs frugality drive – Headlines, features, photo and videos from ecns.cn **Article repeated from Xinhua – evidently CRCC’s arse is being kicked** Many Chinese state-owned enterprises(SOEs) that were under fire last year for exorbitant “reception” fees hid the item in their latest financial results, renewing public concerns over their sincerity to cut extravagance.

China Railway Construction Corporation Ltd. (CRCC), one of the country’s largest construction companies, spent 837.5 million yuan (135.1 million U.S. dollars) on receptions in 2012. The company was punished following public outrage over the alleged abuse of state assets.

In its 2013 financial report released in late March, CRCC canceled the item called “receptions” in its accounting statement. Meanwhile, the item named “management fees,” which included the sub-item “receptions” in the 2012 report, surged by nearly 2.2 billion yuan last year.

World’s longest plateau rail tunnel completed – People’s Daily Online The Xinguanjiao Tunnel, the world’s longest plateau rail tunnel on the Qinghai-Tibet Railway, was completed on Tuesday, local authorities said.

Spanning 32.645 km, the tunnel was finished on Tuesday afternoon, making it the longest rail tunnel in China, according to Zhi Changying, an official with the China Railway Tunnel Co. Ltd. (CRTC), a partner in the project.

Sierra Leone Sports: Bo stadium handed over to Salone « Awoko Newspaper Renowned Chinese company, Xinjiang Beixin construction and Engineering Group Company Limited on Friday April 11th handed over the four thousand seater stadium to government through the Ministry of Sports.

Before the handing over ceremony, one of the Engineers Tai Xie who also doubles as interpreter told Newday that they started the construction of the Stadium on the 25th of December 2008 and they finished the project on 25th December 2013 spanning over a five year period.

Energy

China Natural Gas Output Rises in March to Highest in Two Years – BloombergNatural gas output in the world’s largest energy consumer rose 7.6 percent to 11 billion cubic meters last month, data from the National Bureau of Statistics in Beijing show today. That’s the highest since March 2012. NBS didn’t release output figures for January 2013 because the data was distorted by the Lunar New Year holiday.

The Chinese government sees expanding gas supply as a way to curb air pollution that has frequently exceeded limits recommended by the World Health Organization. The National Energy Administration said in its work plan in January that gas output is forecast to rise 12 percent from a year earlier to 131 billion cubic meters this year.

China State Grid Considers Dollar Issue Amid State-Giant Sales – Bloomberg State Grid Corp. of China, the nation’s largest power distributor, is considering a dollar-denominated bond offering following sales from other government-backed giants.

The company will meet investors in the U.S. and Asia from April 21, according to a person familiar with the matter, who asked not to be identified because the details are private. China Petrochemical Corp., known as Sinopec Group and parent of Asia’s largest oil refiner, raised $5 billion selling securities April 2 in Asia’s biggest dollar bond offering in a decade.

China builds up nuclear power grid – Business – Chinadaily.com.cn “China will install another 800 gigawatts of capacity for nuclear power, about 70 percent of which will use our technology for steam turbines and other key components,” Chen Chaoming, vice-president of Nuclear China-Alstom Thermal, told reporters in Beijing during the 13th edition of Nuclear Industry China, organized by the Chinese Nuclear Society.

“Despite the post-Fukushima delays,” he said, referring to the Japanese disaster of three years ago, “China’s nuclear market has a huge potential for growth. Basically, it is because China’s nuclear industry is still at a nascent stage. Power generated by nuclear plants accounts for less than 2 percent,” he said.

PetroChina Company Ltd.: Notice of Annual General Meeting for the year 2013 NOTICE IS HEREBY GIVEN that an annual general meeting of PetroChina Company Limited (the “Company”) for the year 2013 (the “Annual General Meeting”) will be held at 9 a.m. on 22 May 2014 at Beijing Oriental Bay International Hotel, 26 Anwai Xibinhe Road, Dongcheng District, Beijing.

PLN teams up with Chinese firms on marine project | The Jakarta Post State owned electricity company PT PLN has teamed up with three Chinese companies — Technology Intern Shijiazhuang Enric Gas Equipment Co. Ltd, Ocean Engineering Design & Research Institute of CIMC and PT Enviromate Technology International Cui Li — to develop marine transportation of compressed natural gas (CNG) in Indonesia.

The marine CNG transportation project, which will transport CNG from Gresik, East Java to Lombok, West Nusa Tenggara, via a CNG vessel, is the first project of its kind in the world.

Telecoms

Huawei world’s top communications equipment supplier in 2013|Companies|Business|WantChinaTimes.com Drawing from China’s huge mobile communications market, Huawei became the world’s largest communications equipment supplier in 2013, overtaking Ericsson, according to the Chinese-language CBN Weekly.

The company raked in net profits of US$3.47 billion on sales of US$39.5 billion in 2013, compared with US$1.9 billion and US$35.3 billion for Ericsson. Cisco was third.

Property

China First-Quarter Home Sales Post Decline on Tight Credit – Bloomberg The value of homes sold fell 7.7 percent to 1.1 trillion yuan ($177 billion) in the three months to March from the same period a year ago, the National Bureau of Statistics said today. The last time home value sales dropped in the first quarter was in 2012. New property construction declined to 291 million square meters (3.1 billion square feet) in the quarter.

Is glut developing in retail building sector?[1]- Chinadaily.com.cn Despite a rapid growth in retail sales, less-experienced developers could soon be learning a hard lesson from a market with a supply glut, says a retail property trend report released by Cushman & Wakefield, the world’s largest privately held real estate services company.

The report forecast that the new supply of commercial properties in 30 cities that it monitors will total 75 million square meters, and a peak of new supply with more than 20 million sq m will flood the market this year.

Hoping for Price Rises? Here’s the Harsh Reality, CCTV Tells Home Buyers – China Real Time Report – WSJ China’s latest message about the property market is simple and aimed at the man on the street: The home you’ve bought isn’t a one-way bet. Deal with it.

That message has been pumped out through China’s state broadcaster as part of Beijing’s efforts to curb people’s enthusiasm for homes as an investment tool. Such appetite for property has driven economic growth, but also led to imbalances in the country’s economy and social tension.

Hebei Hopes to Turn Cities into Satellites by Pushing Them into Beijing’s Orbit – The housing market in Baoding heated up after media reports that provincial officials in Hebei want to develop some cities into satellites of Beijing, and Baoding might host some central government offices.

A Hebei official has said the idea is still just that, and that the central government has not approved anything.

However, the plan shows the province is enthusiastic about developing its economy, and has identified problems in the capital – overcrowding, heavy traffic and terrible air pollution – as problems it could use to its advantage.

Travel

WeChat Adds Air Ticket Booking Service | TechNode WeChat’s m-commerce offerings has added flight booking service that is provided by LV.com (formerly 17u.cn), a Chinese online travel service Tencent has a stake in. Payments, of course, are supported by WeChat Payment.

Firms decline to comment on merger rumors – BUSINESS – Globaltimes.cn Ctrip.com International and Qunar.com Inc, two Chinese NASDAQ-listed online travel service providers, both declined to comment Tuesday on market rumors that they will merge in a deal that would create an online travel service giant with a market capitalization of over $10 billion.

The rumors, as reported by China Business Journal over the weekend, claimed that search engine giant Baidu Inc, the majority shareholder in Qunar, will swap its shares in Qunar for Ctrip shares, resulting in Baidu taking a controlling stake in Ctrip.

Sikorsky Helicopter Receives Chinese Nod – Analyst Blog – NASDAQ.com **UK political buffs may remember Sikorsky from the Westland affair** Sikorsky Aircraft Corp., a unit of  United Technologies Corp. (UTX), declared that its S-76D aircraft has received China’s  certification, jumpstarting its delivery to Chinese customers.

The Civil Aviation Administration of China (CAAC) issued a validation type certificate for the helicopters, which will  support expansion of Sikorsky’s operations in a potentially  profitable market and strengthen its foothold in the Chinese market.

Tech

Alibaba Plans Hong Kong-Style Fee as Carrot for IPO Banks – Businessweek Alibaba Group Holding Ltd. is planning to award about one-third of the fees for its initial public offering in the form of incentive bonuses to coax better performance from underwriters, people with knowledge of the matter said.

China’s largest e-commerce company plans to pay at least 1.1 percent of the total IPO proceeds in fees, two people said, asking not to be identified discussing private information. Estimates of Alibaba’s valuation suggest the company could raise as much as $18 billion in the sale, making the potential fee pool almost $200 million. While the e-commerce giant is preparing for an IPO in New York, performance incentives are common in Hong Kong and have been used by companies including Agricultural Bank of China Ltd.

China’s Alibaba sees profit double ahead of long-awaited IPO As the tech world awaits Alibaba’s US IPO, here are some new financial figures to chew on. The Chinese ecommerce juggernaut pulled in US$3.06 billion in revenue in Q4 2014, which is up 66 percent on the same period a year before. Alibaba’s Q4 net income hit $1.36 billion in net income in Q4, which has more than doubled (up 110 percent) from the previous year.

Alibaba’s Q4 numbers were boosted by the popularity of China’s equivalent of Cyber Monday, which happens every November 11. On that day, Alibaba’s Tmall and Taobao marketplaces saw $5.7 billion spent by shoppers in just 24 hours.

Baidu enters China’s mobile payments war with Baidu Wallet Baidu (NASDAQ:BIDU), the Chinese tech giant best known for its search engine, announced yesterday it will roll out a new mobile wallet app called Baidu Wallet (baidu qianbao), reports Jinghua.cn (via Techweb).

Like its main rivals from Alibaba (Alipay) and Tencent (Tenpay and WeChat Payments), Baidu Wallet serves as a Swiss army knife for the average Chinese consumer’s finance needs. By binding bank cards to the app, users can transfer money to friends’ accounts, top up their SIM cards, pay for virtual goods in video games, purchase movie tickets, and buy goods from any vendor that accepts Baifubao, Baidu’s third-party payment solution.

Agriculture

Noble Group to sell stake in agriculture unit for US$1.5b – Channel NewsAsia China’s largest grain trader COFCO Corp will buy a 51 per cent stake in Singapore-listed Noble Group Ltd’s agriculture business unit for US$1.5 billion, Noble said on Wednesday.

The two companies plan to form a partnership that will link COFCO’s grain processing and distribution business with Noble Agri’s agricultural unit.

Noble Group Limited – Did it sell the agriculture business at right price – which of the brokers is right? – Yahoo Singapore Finance After failing to spin off its agriculture business in 2011 it has now again plans for an IPO after divesting majority stake to COFCO. The question still remains whether this segment deserves better valuations.

Retail

An Overview of China’s Retail Industry | China Briefing News Underpinned by the steady rise of household income, China’s retail market has become one of the most lucrative and rapidly growing in the world. China is currently the world’s second largest retail market, and Asia’s largest. It is expected to surpass the U.S. to become the world’s largest retail market by 2016. After years of accelerated growth and annual expansion rates of 10 percent or more, China’s growth in 2013 slowed down to 7.7 percent – level with the figure for 2012. This slowdown in growth is consistent with China’s effort to carry out a major overhaul aimed at weaning its economy off its decades-long reliance on heavy industry, export-oriented manufacturing, state-driven investment, as well as investment in infrastructure. Meanwhile, to rebalance the nation’s economy, policymakers are attempting to shift towards a more consumption- and service-driven model, hoping to foster and sustain more productive growth over the next decade and beyond.

Reaching for the red | China Economic Review This is a characteristic trait seen in previous emerging markets like Japan that eventually opened up their palates to other varieties, notes Guilllame Delglise, CEO of Vinexpo, a global wines and spirits exhibition, but it will take time for the same to happen in China.

In an interview during a recent visit to Shanghai, Delglise, who was previously Asia Pacific director for Laurent-Perrier, also told China Economic Review that officials in Beijing are not inclined to serve champagne to their guests, and explained why that might be good for marketers of bubbly as they chase affluent urban youngsters at fancy nightclubs.

Healthcare

China Money Network − TPG, Fosun’s Privatization Target Chindex Receives Higher Takeover Proposal NASDAQ-listed Chindex International, Inc., the operator of high-end United Family hospitals in China, says the company has received a superior take-private proposal from an unspecified financial bidder, according to a company release.

The new bidder is willing to pay $23 per share for all outstanding American Depository Shares (ADS), valuing the company at around $414 million.

Posted from Diigo.

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China Business Briefs 7/1/14

ECONOMY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

COMPANIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted from Diigo.

China Business Briefs 6/1/14

ECONOMY

China draws up new rules to curb shadow banking risks – FT.com The draft regulations, a copy of which was obtained by the Financial Times, mark an attempt by the government to better co-ordinate regulation of the country’s shadow banks, but also indicate a more permissive official stance than many observers had anticipated.

China approves pilot plan to set up 3-5 private banks | Reuters China has approved a pilot scheme allowing the setting up of three to five private banks, the regulator said on Monday, in a step to boost financial support for cash-starved smaller firm

Chinese leaders have pledged to open up the banking sector, now dominated by big state-owned lenders, to private investors to help boost competition and increase lending to small firms, who are often neglected by the big banks.

Diverse ownership to boost SOE reforms – Headlines, features, photo and videos from ecns.cn|china|news|chinanews|ecns|cns Ding Yifan, deputy director of the Institute of World Development under the State Council’s Development Research Center, said a communique, issued after a key meeting of the Communist Party of China (CPC) Central Committee, set diverse ownership as the future development direction.

The move is a result of complaints about SOEs’ low efficiency and them receiving too many favors from government, said Ding in a program on Chinese reforms aired on Sunday on China Xinhua News Agency Network Co. Ltd. (CNC).

The three big listing themes in 2014 | South China Morning Post While Hong Kong’s equity market may have yet to shake off its holiday lethargy, IPO Watch is casting a glance back into 2013 to explore three important issues that may serve as a guide for stock picking among this year’s listing hopefuls. At least one of the trends is likely to emerge as the defining issue of the city’s listing market in 2014.

China to strengthen delisting rules – Business – Chinadaily.com.cn More issues need to be made clearer concerning the legal basis for delisting in such cases, the definition of a major violation, and the approach for delisting, Monday’s Shanghai Securities News quoted Xiao Gang, chairman of the China Securities Regulatory Commission, as saying.

Half of delistings in recent years in China were voluntary due to companies’ strategic restructuring or privatization, according to Xiao. He added that delisting will become a neutral mechanism, under which rule breaking or legal violations will not be tolerated.

China’s “Big Four” Banks Extend New Loans of CNY180B in December-Caijing China’s biggest four banks extended 180 billion yuan of new loans in December, while new deposits attracted by the state-owned banks surged 1.2 trillion yuan in the same month, reported by the Shanghai Securities News.

With money supply well above target, there is a good chance that banks are cautious in extending loans as planned, said Lu Zhengwei, chief economist with Industrial Bank. Chinese banks all together lent 8.4 trillion yuan in the first 11 months of this year, leaving 600 billion for December if they follow strictly of the full year target of 9 trillion yuan.

China Wages Seen Jumping in 2014 Amid Shift to Services: – Bloomberg Lu Ting, a Hong Kong-based economist for Bank of America, said in an e-mail that he sees wage growth of 11 percent this year after an estimated 10.7 percent gain in 2013. JPMorgan Chase & Co. and Mizuho Securities Asia Ltd. analysts said in interviews that they predict 10 percent to 15 percent increases.

China’s ruling Communist Party is pushing for pay increases to retain public support and to accelerate the nation’s shift away from polluting and capital-intensive manufacturing to a more services-driven economy. In minimum-wage increases so far announced for 2014, workers in Shenzhen in Guangdong province get a 13 percent boost and the gain for those in Yangzhou, Jiangsu province, is 15.6 percent.

Govt campaign to ensure migrant workers’ wages – Business – Chinadaily.com.cn The Ministry of Human Resources and Social Security said in a statement that five working teams will be sent to eight provinces including Zhejiang and Hubei to inspect employers’ salary payments to migrant workers as well as local governments’ related supervisory work.

The statement said that the campaign will urge local authorities to take effective measures to ensure migrant workers get paid in full before the Spring Festival, which falls on Jan 31.

Regional Conflicts in the South China Sea Could Rival the Middle East One Day The South China Sea reportedly holds 11 billion barrels of oil and 190 trillion cubic feet of natural gas. That might actually only tell half of the story as the US Geological Survey estimates that as much as 22 billion barrels of oil could lie underneath the seabed. Unfortunately, there’s no clear way to define who “owns” these resources, as China, Vietnam, Malaysia, Taiwan, the Philippines, Indonesia and Brunei all believe some, or all, of these resources belong to them.

This is in fact one reason why nearly a third of all global crude oil passes through the South China Sea each year. The combination of potentially disputed oil underneath the sea, as well as its importance in the global oil trade makes this region a potential future hotbed for conflict. Clearly, peace in the South China Sea is vital to maintain regional stability.

Futures market records major increase |Markets |chinadaily.com.cn Combined trading volumes in the futures market in 2013 jumped to 2.06 billion contracts, 42.15 percent year-on-year growth, the CFA said.

China’s Financial Futures Exchange’s trading volume jumped to 190 million contracts in 2013, an 84.22 percent increase with trading value of 141 trillion yuan, representing an 85.92 percent year-on-year increase.

Rising home prices send China’s ‘Rat Race’ scurrying underground | Reuters That’s pushing more and more newly arrived urbanites underground. Of the estimated 7.7 million migrants living in Beijing, nearly a fifth live either at their workplace or underground, according to state news agency Xinhua. Beijing’s housing authority refuted this statistic, saying in an email to Reuters that a government survey last year found only about 280,000 migrants living in basements and that only a small percentage of Beijing’s basements were being used as dwellings.

Foreign Banks Are Optimistic on China Reform, Ernst & Young Says – Businessweek “With gradual and successive financial reforms taking place in China, foreign banks are optimistic about their future in China,” Ernst & Young said in a statement in Shanghai today after surveying 38 overseas lenders. Respondents expect a “modest improvement” in their performance over the next three years, the New York-based accounting firm said.

Foreign lenders are struggling to expand their market share of less than 2 percent in the world’s second-largest economy, where banking assets more than doubled since 2008 to 147 trillion yuan ($24 trillion) as of Sept. 30. Global banks face government restrictions on adding branches and offering products as local rivals churn out record profits.

China’s domestic and outbound tourism to keep growing in 2014|Economy|News|WantChinaTimes.com The report made a positive prediction for 2014, forecasting that both the number of tourists and their spending will increase. The number of people traveling abroad may reach as high as 114 million, a 16% hike from 2013, and their spending will increase by at least 18%, according to the report. In terms of country-wide travel, the number of domestic tourists is estimated to reach 3.58 billion, while they are forecast to spend 3.2 trillion (US$528.8 billion).

Luxury cigarette prices fall after Beijing ban|Economy|News|WantChinaTimes.com Prices of luxury cigarettes have been slashed in Beijing following the Chinese government’s ban on extravagant official spending, reports the Beijing Youth Daily, the official newspaper of the Communist Youth League in Beijing.

Taobao lures Russian shoppers – Business – Chinadaily.com.cn Russians, especially young people, have increasingly been buying goods from China. Taobao data showed about $2 million worth of goods were sent to Russia in February. The figure doubled in May.

China’s Leaders Move to Rein In Steel Mecca – WSJ.com In the past two months, the local government in Hebei, a province roughly the size of Oklahoma that produces a quarter of China’s steel, has orchestrated a parade of furnace shutdowns. The head of its top steelmaker has resigned. Mills are scrambling to switch to more fuel-efficient material.

Chinese leaders are telling the province that its measures aren’t enough. Spurred in part by severe pollution that drifts from Hebei to next-door Beijing, the central government has set a goal of lopping off nearly a quarter of the province’s steelmaking capacity.

China to open tech niches to foreign investors – MarketWatch China will open information services and data storage services to foreign investment in the free trade zone, according to a notice posted on the website of the Ministry of Industry and Information Technology. Foreign ownership cannot exceed 50%.

Online data processing will be opened to foreign investment, but foreign ownership cannot exceed 55%. So will virtual private networks, though foreign ownership in these will be limited to 50%.

The 2014 Outlook for the People’s Bank of China – China Real Time Report – WSJ China’s central bank needs to get a mix of offense and defense right in 2014. On the offense, People’s Bank of China Gov. Zhou Xiaochuan was brought back for a third term by China’s top leaders, despite Mr. Zhou having reached the bank’s retirement age of 65. Mr. Zhou’s mission: to put in place a reform agenda that stalled under China’s former leaders.

On defense, the PBOC must decide how to slow China’s escalating debt, which has grown so rapidly over the past five years that it reminds Chinese and foreign economists alike of the credit bubbles that eventually burst in the U.S., Europe and other parts of Asia. First, the PBOC must decide what to do. Boost interest rates? More tightly regulate so-called shadow lenders, such as trust companies and informal lenders, which work out complicated deals with the banks to hide risky loans?

China’s growth is a contradiction, but that’s how we like it | China Economic Review China Economic Review has compiled a list of the best predictions for 2014 while also assuring readers that the world will look at China with awe, antipathy, disgust and envy all at once this year.

Private businessmen crimes rise – BUSINESS – Globaltimes.cn Private entrepreneurs were found guilty of, or had allegedly committed three-quarters of 357 publicly reported entrepreneurial crimes in the country over the past year, the results of an annual Chinese entrepreneur crime report showed over the weekend.

China Evaluating Tax on Foreign Exchange & Capital Flows | China Briefing News China’s State Administration of Foreign Exchange (SAFE) – the regulatory body that oversees all movements of capital out of, and into the country has called for an “in depth study” on the potential imposition of a so-called “Tobin Tax” – a tax on all spot conversions of one currency into another. Named after the Nobel Prize winning economist James Tobin, the tax was originally meant to be used for curbing short term round trip excursions into another currency to prevent deliberate destabilization of national currencies being wrought by market traders.  China however seems to be evaluating its use as a means to control currency flows even as the Chinese RMB is being liberalized.

What’s Trust in China Got To Do With Our Success? Integrity and caring build trust in China. We should be doing that with our workers in China, but we should also insure or direct reports and other important positions have that. Trust in China is worth big money. It makes teams go and must come from top leaders.

China IP infringement As China lawyers, we are all too frequently contacted by our clients who need help dealing with IP infringement in China. As a first step, we analyze the situation and propose a course of action.  The following is an amalgamation of memoranda, done so as to convey both what goes on out there and how to deal with it.  Most importantly, however, it is intended to provide a path towards preventing IP infringement through proactive trademark and copyright registrations.

Video: Ice Festival preparations hot up in Harbin, China – Telegraph According to organisers, the festival is one of the largest in the world stretching to 6,458,400 square feet.

COMPANIES

China Railway Group chairman dies – Headlines, features, photo and videos from ecns.cn|china|news|chinanews|ecns|cns The chairman of China Railway Group Ltd Bai Zhongren died at his home Saturday, Securities Times reported Sunday.

The company’s spokesperson has confirmed the information, but said the company’s operations were normal, the report said. The report also said that Bai had been suffering depression for years, without disclosing the reason why he died.

China Railway Group President Bai Zhongren’s Death From An Unspecified Accident Might Be A Suicide: Local Media However, China Business News, a local newspaper, citing unidentified sources, said that the 53-year-old jumped to his death from a fourth-story window at his home, after suffering from depression in recent months due to his company’s mounting debt.

China Railway Shares Plunge After Company President’s Death – Wall Street Journal – WSJ.com The shares of China’s second-largest construction contractor by revenue after China Railway Construction Corp. fell as much as 7.2% in Hong Kong on Monday, then recouped some of the losses, to end 4.1% lower at 3.75 Hong Kong dollars (US$0.48) per share. It was the lowest close since July 15.

China Harbin Bank Seeks to Raise $1 Billion Via Hong Kong IPO – WSJ.com If it gets listing approval from Hong Kong’s stock exchange, Harbin Bank would be the fourth Chinese bank to go public in Hong Kong since a wave of offerings kicked off in November. Chinese banks have been raising money through Hong Kong IPOs as a way of replenishing their capital amid tighter regulatory requirements, and as bad loans increase while the economy slows.

In December, Hong Kong was home to a $3 billion offering by China Everbright Bank, the country’s 11th largest bank by assets, in what was the city’s biggest IPO of 2013. Everbright Bank’s IPO came just weeks after two smaller Chinese banks, Huishang Bank Corp. and Bank of Chongqing, raised about $2 billion in total in November.

In China you can now hail a cab and pay the driver on WeChat That was fast – just days after Chinese tech giant Tencent (HKG:0700) threw some cash into the massive series C funding round for taxi-hailing app Didi Dache, WeChat, Tencent’s behemoth messaging app, has added a feature that lets users hail a taxi on-demand using Didi’s network.

Alibaba and Sina Weibo partner up to bring Weibo Wallet to mobile The introductory splash-screen for the updated Sina Weibo app – now at v4.2 – tells users they can make payments within Weibo for any product that someone shares or links to within the app. It promises that “paying online is just a tap away.” A “Wallet” section now appears in the “Me” area of the Sina Weibo app. However, it’s poorly implemented right now, and there’s no explanation of how to connect this new Weibo Wallet to any e-payment service or bank card.

Oil Tycoon Denies Hu Yaobang’s Family Is Linked to His Business – Oil tycoon Wang Letian says that the family of former Communist Party general secretary Hu Yaobang was not linked to his deals for oilfields.

Wang bought several fields in 2008 in the northwestern province of Shaanxi from state-owned China National Petroleum Corp. (CNPC) via an intermediary, Zhou Bin, the son of a former top leader. Zhou is currently embroiled in a corruption investigation.

Wang said that he paid for the oil fields and buying them through an intermediary was a choice he made only reluctantly because private oil companies had no access to productive reserves.

China Mobile Probes Loss-Making Exit From Hong Kong TV – Bloomberg China Mobile Communications Corp., the parent of the world’s largest phone company, is probing a decision by its Hong Kong unit to exit the territory’s television market at a loss one year after introducing service.

China Mobile is investigating whether the transaction meets its internal guidelines as well as regulations of China’s State-owned Assets Supervision and Administration Commission, the company said in an e-mail today. The sale involved a unit that owned spectrum to broadcast mobile television service in Hong Kong, the company said, without identifying the buyer.

CNOOC to close new energy unit – BUSINESS – Globaltimes.cn China’s third-largest national oil company decided to end one of its renewable energy subsidiaries, according to media reports, as the country’s lackluster new energy market continues to struggle with limited demand and high production costs, analysts said Sunday.

China National Offshore Oil Corp (CNOOC) plans to dissolve its subsidiary CNOOC New Energy Investment Co, a Beijing-based firm which mainly explores and produces several forms of renewable energy including wind power, coal-based clean energy and biomass energy, the Beijing-based Economic Observer newspaper reported Friday.

Dalian Wanda building theme park to rival Shanghai Disney Resort|WantChinaTimes.com China’s richest man, Wang Jianlin, plans to spend 30 billion yuan (US$5 billion) to build a theme park to rival the Shanghai Disney Resort as he explores possibilities for the future of his property development company, reports the Beijing News.

“I’m targeting Disney. I never have blind faith in foreigners. I will prove that a tourism project built by the Chinese can compete with the so-called famous brands from the United States,” Wang said.

Shenhua Energy Co. Ltd., Energy Corp. of America plan Marcellus wells – Pittsburgh Business Times The biggest coal company in the world, China’s state-owned Shenhua Energy Co. Ltd., is making a big commitment to drilling for natural gas in southwestern Pennsylvania.

Shenhua is making a $90 million investment in a joint venture with Energy Corporation of America to drill for natural gas in Greene County.

SINOPEC Engineering Group Co Ltd : Sinopec plans to build $3.1bn plant | 4-Traders Sinopec Engineering Group said it has entered into a deal to build a $3.1 billion plant in northern China to turn coal into petrochemicals, as China seeks to reduce its reliance on petrochemical imports.

Sinopec Engineering will be responsible for engineering, procurement and construction of the 18.67 billion-yuan project in Inner Mongolia, which it said would be the largest of its kind in the world.

Taking off – BUSINESS – Globaltimes.cn Cathay Pacific Services Ltd, a wholly owned subsidiary of Cathay Pacific Airways, is one of several companies betting on a sharp increase in air freight in coming years.

The company spent HK$5.9 billion ($760 million) in 2013 to build a new cargo terminal at Hong Kong International Airport. It now has the capacity to deal with 2.6 million tons of goods annually, taking the total annual freight capacity at Hong Kong International Airport to 7.4 million tons.

Qunar Jumps on Mobile User Growth as Ctrip Tumbles – Bloomberg Qunar, based in Beijing, rallied 11 percent on Jan. 3 to the highest level since its U.S. debut in November. The Bloomberg China-US Equity Index of the most traded Chinese stocks in New York slid 1.5 percent, capping a 2.5 percent slump last week. Ctrip.com, China’s biggest online travel agency, led declines on the gauge with a 7.9 percent retreat.

In China, Crowd-Funded Concerts Are Catching On With Fans – China Real Time Report – WSJ On a recent weeknight in Beijing, about 800 people gathered at a club in downtown Beijing to watch a performance by pop singer Li Quan and Li Daimo, a singer made popular by the “Voice of China” TV show. At home, several hundred more participants were tuning into the concert live from their computers or smartphones.

The concert was organized by Xiami, a Hangzhou-based online music portal owned by e-commerce giant Alibaba Group, in its first such initiative using crowd-sourced funding via Alibaba’s Taobao online shopping platform.

China,Germany,Japan,United Kingdom : CHINA launches SHANGHAI INSTITUTE OF MARINE INSURANCE | 4-Traders China launches its first marine insurance association called the Shanghai Institute of Marine Insurance.

The association s members include Chinese insurers Ping An Insurance (PAI), People’s Insurance Company of China (PICC) and China Pacific Insurance Company (CPIC).

Foreign companies, including Lloyd’s, Sumitomo Mitsui and Allianz are also members.

Honda says Dec China auto sales up 60 pct y/y | Reuters Honda Motor Co Ltd and its two local joint ventures sold a record 101,465 automobiles in China in December, up 60.4 percent from a year earlier, the Japanese automaker said on Monday.

AMEC plc : Amec Gets 6-Year Nexen Petroleum UK EPC Contract | 4-Traders AMEC PLC, an international engineering and project management company, said Monday it has been appointed by Nexen Petroleum U.K. Ltd., a wholly-owned subsidiary of CNOOC Ltd., to provide engineering, procurement and construction services for their North Sea offshore assets.

Li Ka-shing to spin off Hong Kong electricity distribution unit – FT.com Li Ka-shing’s power generation and supply group will set up the first test of Hong Kong’s equity markets for 2014 when it begins marketing the spin-off of its local electricity distribution business to investors on Monday.

It is the biggest listing in the city since AIA’s $20.5bn sale in 2010 and the largest anywhere in Asia since Japan Airlines’ $8.5bn deal in September 2012, according to Dealogic.

Apple Inc. (NASDAQ:AAPL) Used This Strategy to Win Over China Mobile Ltd. (ADR) (NYSE:CHL) Apple Inc. (NASDAQ:AAPL) employs a tactical marketing strategy that always helps the company to succeed even when it was expected to fail. While entering a new market which presents both challenges and opportunities the company does rush to cut deals with market leaders. Instead, it actually goes for the smaller players.

Minsheng uses aircraft business to expand overseas | South China Morning Post While many of the big names in mainland banking have expanded overseas by opening branches or acquiring foreign assets, China Minsheng Bank has adopted a different approach and is building its brand through aircraft leasing.

Its Minsheng Financial Leasing unit, one of the first five mainland financial leasing companies with a banking background to be approved by the China Banking Regulatory Commission, has recently expanded its private jet leasing to commercial aircraft after setting up Minsheng Commercial Aviation in Hong Kong.

Interview: Innovation key to success of Lenovo – Xinhua | English.news.cn “Lenovo’s innovation lies in its technology, products, business model and cultural management. Its name, which was changed from Legend in 2003, is a combination of ‘legend’ and ‘novo’, a Latin word meaning new,” Yang told Xinhua during an interview.

In 2013, Lenovo ranked first in the PC market taking 17.7 percent of market share worldwide. It is welcoming the post-PC era with 4G technology, Internet development and multiple terminal devices, said Liu.

Firms’ Acquisition Fight Shows How Rules for Overseas Investments Are Changing – A recent acquisition battle between two Chinese companies over a Cayman-registered semiconductor firm has shed light into the China’s changing overseas investment approval system.

Why NEXON’s BNB Failed to Accuse Tencent’s “QQ堂” of Copyright Infringement? | Bridge IP Law Commentary In recent years, there is serious plagiarism in the field of online games. Considering that online game acts as computer software, however, laws protect its “code” other than game mode and method. The case in today’s post will disclose this principle for us.

Posted from Diigo.

China Business Briefs 4/1/14

ECONOMY

China’s credit spiral | FT Alphaville **Good read** Just when you think there’s nothing left to say about China’s debt dilemma up pop some more pieces to greet the new year. Two of the most recent saw Soros on the self-contradiction in Chinese policy boat saying that “restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years” and Patrick Chovanec providing a touch more detail about what all that messy debt actually means:

China is No. 1 risk for world economy: George Soros – The Tell – MarketWatch The People’s Bank of China moved to rein in debt in 2012, but then the world’s No. 2 economy experienced “real distress,” Soros writes. So China’s Communist Party reasserted its supremacy, ordering steelmakers to restart their furnaces and bankers to ease credit.

China’s economy turned around, and party leaders also announced major reforms in November. “These developments are largely responsible for the recent improvement in the global outlook,” Soros says.

China may raise Iran oil imports with new contract: sources – Tehran Times Industry sources say Chinese state-trader Zhuhai Zhenrong Corp, which was sanctioned by Washington in early 2012 for supplying gasoline to Iran, is in talks with the National Iranian Oil Company (NIOC) for a new contract for condensate.

Zhenrong, an affiliate of China’s defense authorities in the 1990s, acts largely as an import agent for China Petroleum and Chemical Corp, or Sinopec, whose refineries process Iranian crude.

Investors clamoring for high-yield funds in China|Finance|Business|WantChinaTimes.com **Ponzi** Financial products touted as highly profitable and risk-free, which were launched by internet giants and fund management firms, have soared in popularity recently.

Five hundred million yuan’s worth (US$83 million) of money management products called “Tianjin” unveiled by Chinese internet company NetEase were sold within an hour on Dec. 25. The product promised yields of 11%.

Policymakers can’t turn blind eye to debt dangers – BUSINESS – Globaltimes.cn **Global Times shifts blame to “alarmist” reports, no doubt from foreign media** Though the results of these two previous audits also suggested that China’s debt risk is manageable, their lack of granularity only created new worries and concerns. Fear of the unknown led many investors and think tanks to adopt increasingly alarmist views concerning the country’s debt risk. By the beginning of 2013, many even believed that a Chinese financial crisis was imminent. At the very least, the local credit situation was acknowledged as untenable and counterproductive to the financial health of China.

China pledges further support for solar industry | Reuters China pledged further support for its ailing solar power industry on Saturday as the government seeks to revive a sector struggling with overcapacity and falling prices.

The State Council, China’s cabinet, said in July that the country aimed to more than quadruple solar power generating capacity to 35 gigawatts by 2015 in an apparent bid to ease a glut in the domestic solar power industry.

China set to overtake US as world’s biggest goods trader |Economy |chinadaily.com.cn The value of trade in China’s goods in 2013 is set to exceed that of the United States, making the world’s second-largest economy the world’s top trader for the first time, certainly in modern times.

“Judging from the current statistics, there is a very high possibility that the value of China’s goods trade will have exceeded the US in 2013,” said Wang Haifeng, a researcher with the Institute for International Economic Research at the National Development and Reform Commission.

IPO rules overhauled for PE and VC firms — China Daily Article | China Private Equity Chinese PE and VC companies used to evaluate the companies by the standards of the China Securities Regulatory Commission for quicker IPOs, but now the market will play a more important role, said Peter Fuhrman, chairman, founder and chief executive officer at China First Capital.

“Under the new IPO system, the share pricing of an IPO company is decided by its strength and competitiveness, so investors will choose companies with real potential to invest in and provide them with the resources of strategy, management and market development to make their own return the best,” said Fuhrman *.

Panel to push financial reform in FTZ |Economy |chinadaily.com.cn Financial reform in the China (Shanghai) Pilot Free Trade Zone will shift into higher gear and detailed policies may be issued by the end of next month, following the establishment of a high-level panel.

The special group has been established to coordinate and advance the affairs of financial reform in the 28 sq km test zone, China Business News reported, citing an unidentified source connected to the financial authorities in Shanghai.

Currency tax under consideration: SAFE |Economy |chinadaily.com.cn Yi Gang, head of the State Administration of Foreign Exchange, made the comments in an article in the Communist Party journal Qiushi.

Yi wrote that a Tobin tax, a tax on all spot foreign currency transactions that’s named after Nobel economist James Tobin, should be “studied in depth”.

China Signs over CNY1 Tln Currency Swap Agreements in 2013-Caijing China’s central bank signed CNY1.16trillion currency swap agreements with eight countries in 2013 to promote bilateral trade and investment in a broader area, according to Great Wisdom, a Shanghai-based financial information provider.

The eight countries or regions include Singapore, Brazil, England, Hungary, Albania, Iceland, Indonesia and Europe.

As a supplement to the country’s RMB going-out policy, the People’s Bank of China (PBoC) has reached currency swap agreements totaling CNY2.5 trillion with 23 foreign central banks since 2008.

China Moves to Tighten Rare-Earths Control, Pave Way for Consolidation – WSJ.com China is moving to tighten control over its far-flung rare-earths industry, paving the way for state-backed mining giants to acquire smaller producers and carry out Beijing’s consolidation mandate.

The central government faces increased urgency to corral an unruly industry. Beijing is under pressure from the World Trade Organization to give up its rare-earths export quota, a key tool for influencing global prices.

A Look Back at China Tech Market in 2013 2013 is quite a year for China tech industry. TechNode reporters produced a series of articles about China tech market in the past year. Here are what we believe you should know about.

Public holidays in China | McKinsey China **Would be** It would be a further sign of a maturing of the Chinese economy and of growth in services industries, which lend themselves to more flexible vacation schedules, if the government shifted its focus from mandating public holidays towards increasing the mandatory minimum vacation dates that employers must provide, and then spend its time ensuring that regulations are adhered to. For manufacturing enterprises, there could be a shift towards the model previously used in Europe of staggering some of the vacation periods, with companies in one region having mandated vacation periods that do not overlap with those in an adjacent region or city.

Hangzhou to invest US$1.7bn in Qiandao lake water diversion project|Markets|Business|WantChinaTimes.com Hangzhou plans to start the construction of a reservoir off Qiandao lake in 2014 and finish 60% of the 10 billion yuan (US$1.7 billion) investment in three years, which will deliver drinking water to residents of Hangzhou after the construction is complete, according to Zhou Dingyan, the head of the city’s Forest and Water Bureau, said.

Local authorities have been unable to discover the reason behind the “strange taste in the tap water,” reported four times since March 2013. A Hangzhou government official pointed out that Hangzhou’s ability to handle polluted drinking water is inadequate because a safe water supply network has yet to be established.

COMPANIES

Alibaba investment fund China’s largest|Finance|Business|WantChinaTimes.com An investment fund backed by China’s e-commerce giant Alibaba has become the country’s largest, with the business model built around its third-party payment service Alipay being seen as an incredible success, the Shanghai-based China Business News reports.

The size of the currency fund Tianhong Zenglibao reached 185.3 billion yuan (US$30.62 billion) at the end of 2013, making it the largest in China and making Tianhong Asset Management the second largest fund company in the country.

Tech in China 2013: High Hopes of Disrupting Domestic Financial Market Yuebao is a mutual fund tailored to Alipay users. Launched in mid-2013, 43.03 million Alipay users adopted it in half a year since its launch. A total of RMB185.3 billion ($30 bn), an average of RMB 4307 ($700)  per user account, were transferred into Yuebao that generated RMB1.70 billion in total return in half a year, disclosed Alipay, the online payments service of Alibaba Group.

Tech in China 2013: The Call from Overseas We discussed on why increasingly more Chinese tech companies test the water of overseas markets. In 2013, they must feel more encouraging as there were several more successful cases. Sungy Mobile, an Android launcher and app developer with 70% users from overseas, went public on the NASDAQ. Another Chinese company that launched IPO in the US in 2013, online retailer LightIntheBox, has a majority of orders from outside China. IGG, an online gaming company that went public in Hong Kong, isn’t known as a Chinese company in many markets. Keyboard app TouchPal announced 100 million users, most being overseas.

Wal-Mart’s Reputation Takes a Hit From China Donkey Meat Scandal (WMT) **WalMart in China is still poor. Logistics problems inhibit quality supermarket sector** For a country in which food quality is already suspect, it’s probably not much of a surprise that China is suffering though yet another bout of tainted goods. The fact that it involves Wal-Mart (NYSE: WMT  ) , however, which takes care to preserve its reputation as a quality retailer, could jeopardize the company’s expansion plans the

Is Apple’s China Mobile Deal a Dud? (AAPL, CHL) There are several reasons low pre-order estimates do not necessarily imply weak sales when the iPhone becomes available at China Mobile later this month. If Apple investors are patient, they are likely to be rewarded with substantial share appreciation this year and beyond as Apple starts to exploit this big opportunity.

Why Ctrip.com International, Ltd., Arch Coal Inc., and Inovio Pharmaceuticals Inc Tumbled Today (ACI, CTRP, INO, PCLN) Ctrip dropped 8% as a Bloomberg report detailed the heightened competition that the online travel company could see in the near future. With companies like newly public Qunar Cayman Islands saying that it saw record levels for bookings of air travel in late 2013, Ctrip is suddenly facing threats not just on the hotel side of its business, but also on airline ticketing. Yet, Ctrip still has its size advantage to use, and U.S. giant Priceline.com (NASDAQ: PCLN  ) has demonstrated the value of using its size to create other competitive advantages it has used to send its shares soaring.

Murdoch’s Fox Sells Star China Stake to Management Group – Bloomberg **China beats Murdoch. Not sure how to feel about that one…** China Media Capital and the management team of Star China, owner of three 24-hour Mandarin-language TV networks, are buying Fox’s 47 percent stake in the venture, the companies said yesterday in a statement. Terms weren’t disclosed.

China Shows Off Its Helicopters – China Real Time Report – WSJ But the biggest recent China helicopter story got less coverage: the maiden flight of a domestically designed medium-lift craft analysts are calling the Z-20, which lifted off from an unidentified snowy military base in the northeast late last month.

James Hardy, Asia-Pacific editor at IHS Jane’s Defence Weekly, said the Z-20 project appears to mark a particularly important advancement, both in terms of its domestic development and the type of lift it will provide.  “It fills a real gap,” said Mr. Hardy.

China Probes Vaccine Makers Amid Heightened Scrutiny – China Real Time Report – WSJ China’s food and drug regulators are coming down on the country’s largest makers of the hepatitis B vaccine, even after clearing the manufacturers as a potential cause of nine infant deaths.

The country’s food and drug watchdog halted vaccine production at Beijing Tiantan Biological Products Corp.600161.SH +6.59% , Shenzhen Kangtai Biological Products Co. and Dalian Hissen Bio-Pharm, citing a failure to meet new production quality, according to the official Xinhua News Agency. It didn’t elaborate on which quality requirements were unmet.

Who are Xiaomi’s 30 million MIUI users? (INFOGRAPHIC) Chinese phone-maker Xiaomi recently released an infographic covering some data points for MIUI, the company’s Android skin and ecosystem that comes pre-installed on all of its handsets.

Apple Inc. (AAPL): Impact On Apple If 2% – 4% Of China Mobile Customers Buy An iPhone – Seeking Alpha Conservative estimates for the amount of China Mobile (CHL) customers to buy an iPhone are approximately 2% for 2014. With the total China Mobile customer count at about 763 million as of the end of November 2013, this equates to approximately 15 million in iPhone sales. With the average price of an iPhone in China, currently at $525, Apple (AAPL) stands to gain about $7.9 billion in additional revenue from China Mobile in 2014.

Moody’s rates ICBC (Argentina)’s senior note issuance Moody’s Latin America assigned today a Ba3 global local currency debt  rating to ICBC (Argentina) S.A.’s (ICBC) expected issuance  of up to ARS 300 million, which will be due in 18 months under the  bank’s $250 million medium-term note program. At  the same time, Moody’s Latin America assigned a Aaa.ar national  scale local currency debt rating to the expected issuance.

Huawei Technology Co Ltd : Joint Project by Huawei and China Mobile Gets DatacenterDynamics Greater China 2013 Green Data Center Award | 4-Traders Huawei, a global information and communications technology (ICT) solutions provider, and China Mobile, a telecommunications service provider, jointly announced that the China Mobile – Huawei Warehouse IDC project, a collaboration between Huawei and a subsidiary of China Mobile, Heilongjiang Mobile, has won the DatacenterDynamics Greater China 2013 Award in the Green Data Center Category.

Singapore’s OCBC in exclusive talks to buy Wing Hang Bank – sources | 4-Traders Singapore’s Oversea-Chinese Banking Corp (OCBC) has begun exclusive talks to buy Hong Kong’s Wing Hang Bank in a deal that would value the family-run lender at about $5.3 billion, two people familiar with the matter told Reuters.

Reuters previously reported that the sale process had attracted interest from suitors including Agricultural Bank of China, Australia and New Zealand Banking Group and Singapore’s United Overseas Bank. But Wing Hang’s high price expectations prompted many to drop out of the auction.

BRIEF-ICBC says 65.69 pct of convertible bonds not converted into A-shares, appoints new senior exec VP | Reuters Industrial and Commercial Bank of China Ltd (ICBC)

* Says 65.69 percent of convertible bonds issued in August 2010 has not been converted into A-shares as of end-2013

* Says received regulatory approval to appoint Wang Jingdong as senior executive vice president

Posted from Diigo.

China Business Briefs 20/12/13

ECONOMY

PBoC acts to ease China cash crunch fears – FT.com The Chinese central bank has made an emergency money injection after a surge in interbank rates, trying to prevent a repeat of the cash crunch that rattled global markets earlier this year.

In a highly unusual move, the People’s Bank of China said it had conducted a “short-term liquidity operation” to provide credit to banks in need of money.

China’s Money Rates Climb, Stocks Slide as Cash Crunch Deepens – Bloomberg The seven-day repurchase rate, a gauge of liquidity in the financial system, increased 100 basis points to a six-month high of 7.60 percent in Shanghai, according to a daily fixing by the National Interbank Funding Center. It jumped 328 basis points this week, the most since January 2011. Transactions were recorded at rates ranging from 3.8 percent to 10 percent as of 4:17 p.m. local time, with a weighted average of 8.22 percent. The Shanghai Composite Index (SHCOMP) of shares slid 2 percent.

Fed taper comes at ‘delicate moment’ for China[1]|chinadaily.com.cn The United States Federal Reserve Board’s announcement that it will scale back its bond-buying program could crimp liquidity in China at a delicate moment, analysts warned.

China’s interbank lending rate is at its highest since June, when the central bank pushed up rates to discourage borrowing, a move engineered partially to prevent further shadow banking activity, said Patrick Chovanec, managing director of Silvercrest Asset Management Group and former economics professor at Tsinghua University.

China says more state companies might be sold off but Beijing will control major industry – Business – Times Colonist Regulators are working on plans to overhaul ownership following last month’s Communist Party pledge to increase competition in state-dominated industries, said Huang Shuhe, deputy chairman of the panel that controls China’s biggest government companies.

Economists say Beijing must curb the dominance of state companies that control swathes of the economy, from banking to oil to steel production, or risk seeing China’s growth rate plunge. The development blueprint issued last month pledges to open more industries to competition, though it said state ownership will remain the core of the economy.

By H1 2013, 465,600 sets of ATMs had been included in China UnionPay, exceeding the United States (445,000 sets) to rank first in the world. However, by quantity of ATMs per million of persons, China (307 sets, 2012-year) still lagged behind western Europe (786 sets, 2012) and the United States (1,376 sets, 2012).

China Prepares to Give State-Owned Enterprises a Professional Look – Wall Street Journal – WSJ.com China wants reformed state-owned enterprises to pay the government more in dividends, the State-Owned Assets Supervision and Administration Commission said on Thursday.

“We need to improve the management of state-owned capital and raise the proportion of profits that are paid out, commission vice chairman Huang Shuhe told a news conference on Thursday. He didn’t give a timetable for these changes or indicate which state-owned enterprises would become joint stock companies where private-sector investment was encouraged.

Chinese unhappy with price levels: central bank – Xinhua | English.news.cn Chinese urbanites are unhappy with the price of goods and services, a central bank survey showed Thursday.

The People’s Bank of China found in its latest quarterly survey of urban bank users that 61.6 percent thought prices in the fourth quarter were “high and unendurable,” up 1.8 percentage points from the third quarter.

China Pushes Ahead on Deposit-Insurance Plan – WSJ.com China is signaling that it is close to insuring a big chunk of its roughly $17 trillion in bank deposits, a key move toward opening up its financial system but one that carries risks for lenders big and small.

The aim is to reassure depositors that their money is safe as the nation moves to allow more competition in the financial system. That could be bad news for China’s big state-run banks, which already enjoy the implicit backing of Beijing but would have to pay for it under a new deposit-insurance program.

PBOC Adds Funds to Banks Amid Worst Cash Crunch Since June (1) – Businessweek The People’s Bank of China conducted short-term liquidity operations recently and will continue to supply funds to qualified financial institutions in this way based on the situation, it said on its microblog. The announcement did not give details of the size or pricing of the cash injections. The monetary authority injected 200 billion yuan ($32.9 billion), online financial news provider Netease reported, citing an unidentified person.

The average price of new Android phones in China? Just $233 Android is huge in China, with an estimated 270 million actively using an Android phone right now. We know which brands Chinese Android users like to buy, but how much are they spending on each phone? App analytics platform Umeng says it has the answer.

Umeng has observed all the Android phones that appear on its ad network and found that China’s average price of newly sold Android phones is just RMB 1,426, which is $233. The figure comes from data for October, and is the newest available right now.

China’s Online Retailers Look Abroad – WSJ.com Chinese Internet retailers serve what has become the world’s biggest e-commerce market. Their next target: the U.S., and the rest of the world.

Jingdong Corp., a leading Chinese Internet retailer by sales, has logged millions of yuan in sales on its English-language site in the past year, despite almost no advertising, according to the firm. AliExpress, which Alibaba Group launched in 2010 as its overseas platform, is growing rapidly in emerging markets, reaching 700,000 registered users in Russia alone.

Caixin Summit: Regulation of P2P Lending ‘Needs to Improve’ – The government needs to release more detailed supervision guidelines for the booming peer-to-peer (P2P) lending business, experts said at the Caixin Summit, which is being held December 18-19 in the capital.

Ren Yong, founder and chairman of the P2P site Yooli.com, said that due to relatively low market entry requirements and attractive business opportunities, new P2P sites are launching every day, but some of them posed risks to investors.

Gripes over JPMorgan’s commodities sale – FT.com Binding bids were due this week, according to people familiar with the sale process. Companies that have considered bids for some or all of the business included BTG Pactual, the Brazilian investment bank; trading house Castleton Commodities International, which is backed by private equity group KKR; Gunvor, the Swiss-based trading house; and Noble Group of Hong Kong.

“They asked for binding bids, but they’ve given people so little information that a binding bid is subject to due diligence. So it’s not really a binding bid,” said a person familiar with the process.

Warning sounded on taper outflows | South China Morning Post “The normalisation of the US monetary conditions will inevitably heighten market volatility,” warned the Hong Kong Monetary Authority in response to the Fed’s policy. “The Fed’s quantitative easing policy over the past few years has led to large capital inflows to emerging markets. As the US economy gradually recovers, fund flows may reverse, exerting downward pressure on asset prices.”

Beijing vows to boost Bolivia infrastructure – Headlines, features, photo and videos from ecns.cn|china|news|chinanews|ecns|cns China and Bolivia’s economic cooperation is growing.

Bilateral trade volume reached $516 million in the first eight months of 2013, an increase of 18 percent compared with the same period last year, according to Chinese customs data.

COMPANIES

William Merritt, the chief executive of InterDigital, said in a statement about the final ruling on Thursday, “Today’s determination by the ITC is extremely disappointing. We believe the commission’s claim constructions are plainly wrong, and we look forward to appealing the determination.”
Established in April, 1963, CFHEC is an affiliate of China Communications Construction Company which has 15 years presence in Ethiopian road construction. CCCC major recent road projects in Ethiopia include the Addis Ababa – Adama Expressway and Africa Avenue (Bole Road) projects.

Chinese man gets 3-year prison sentence for attempt to smuggle satellite parts from Colorado – Denver Business Journal According to the indictment, in late 2011, He bought $549,654 worth of radiation-hardened computer circuitry designed for satellites from Aeroflex Colorado Springs, and tried to ship the circuitry to China from Long Beach, Calif., aboard a Shanghai-bound container ship.

The ship was owned by Zhenhua Port Machinery Company Ltd., a subsidiary of the Chinese state‑owned corporation China Communications Construction.

China’s Huawei expects 4G revenue to double to $4 billion in 2014 | Reuters Chinese telecommunications equipment maker Huawei Technologies Co Ltd expects revenue from its 4G mobile network business to double to $4 billion in 2014 compared with this year, a senior executive said on Friday.

The company also expects revenue from the overall wireless market to total $12.9 billion next year, up from $11.7 billion this year, David Wang, president of Huawei Wireless Network, told reporters in Shanghai.

Li Guoqing, CEO and co-founder of Dangdang, said Wednesday on his Sina Weibo account that the board welcomes strategic investment but has no plan to offer the whole company for sale, refuting recent media reports that domestic search engine firm Baidu is likely to acquire Dangdang.

Ping An Insurance to issue $4.27 billion of convertible bonds | Reuters Ping An said in the exchange filing on Tuesday it has appointed China International Capital Corporation Ltd and Credit Suisse Founder Securities Ltd as joint sponsors and joint lead underwriters. Goldman Sachs Gao Hua Securities, Guotai Junan Securities and JPMorgan First Capital Securities are also joint lead underwriters.

The bonds have a term of six years and pay a coupon of 0.8% in the first year, 1.0% in the second year, 1.2% in the third, 1.8% in the fourth, 2.2% in the fifth and 2.6% in the sixth.

Baidu Wants to Go Viral (BIDU, QIHU) Baidu‘s (NASDAQ: BIDU  ) push into security software — a move that seemed born more out of revenge than strategic opportunity — is starting to pay off. China’s leading online search engine revealed yesterday that Baidu Antivirus was named this year’s “most promising antivirus” in Softonic.com’s Big Antivirus Comparison.

Baidu Antivirus placed third overall in system performance, and that’s a pretty notable achievement for the rookie.

CNOOC Limited : China faced most scrutiny in 2012 over investments in U.S | 4-Traders Chinese corporations filed 23 notices with U.S. regulators in 2012, up from 10 in 2011 and nearly quadruple the number in 2010, according to the Committee on Foreign Investment in the United States, or CFIUS.

This compared with 17 notices from companies from the United Kingdom last year, the report said.

China Construction America Buys New York Builder in First U.S. Deal | ENR: Engineering News Record | McGraw-Hill Construction China Construction America Inc., the U.S. arm of China State Construction Engineering Corp. Ltd., is building on its organic growth in the American market with the acquisition of Plaza Construction Corp., New York City.

While CCA has operated in in its Jersey City, N.J. base for 20 years, this is its first U.S. acquisition.

While a number of billion-dollar plus overseas deals have been completed by Chinese SOEs in the energy and natural resource sectors, and large private companies like Wanda and Shuanghui Group have made billion-dollar plus overseas acquisitions, China’s industrial SOEs have been more cautious. SOEs must get numerous approvals from Chinese regulators to invest outside the country, but despite China’s general encouragement for its companies to “go global,” these approvals have not been easy to come by. The complications of managing overseas businesses, plus sluggish business conditions in Europe and the United States, are two of the main reasons.

Everbright Bank Falls in Gray Market After $3 Billion Share Sale – Businessweek Shares of the Beijing-based lender fell 2.5 percent to HK$3.88 at the 6:30 p.m. close of trading, with 1.68 million shares changing hands, according to records of trading arranged by Phillip Securities Group. Everbright Bank sold 5.84 billion shares at HK$3.98 apiece.

China’s 11th-biggest lender by market value joins other banks bolstering their capital through Hong Kong listings ahead of requirements to hold more reserves. Chinese regulators are pushing banks to strengthen their balance sheets as concern mounts that slowing economic growth may lead to an increase in bad debt.

Posted from Diigo.

China Business Briefs 19/12/13

Profits of Chinese state firms up 8.2% – Xinhua | English.news.cn Total business revenues at SOEs rose 11 percent year on year to 41.93 trillion yuan, the ministry said in a statement on its website.

The ministry did not give any explanation for the lower profit growth rate, but said SOEs in sectors such as power generation, electronics, real estate development and auto production posted relatively fast profit growth, while those in non-ferrous metals, coal mining and chemicals reported declines in profits.

The statement said the monthly report did not include SOEs in the financial sector.

Overseas investing sees large jump |Economy |chinadaily.com.cn **Suspicions that the jump is down to getting money out of China** Outbound investment, calculated on the basis of deals closed, rose to $80.2 billion in the January-November period, exceeding the $77.2 billion for all of last year, the Ministry of Commerce said on Wednesday.

BTC China to stop taking yuan deposits |Companies |chinadaily.com.cn BTC China, the world’s largest Bitcoin operator by trading volume, said it will no longer accept new deposits in yuan, dealing another setback to the virtual currency.

The announcement on the operator’s Sina Weibo account came two weeks after China’s central bank said the country’s banks were barred from handling Bitcoin transactions.

Lack of loans constricts Chinese economy: Beige Book survey | South China Morning Post **Incredible** The number of firms getting new credit shrank for the seventh straight quarter while the proportion of loans going to debt rollovers jumped, meaning that most new bank lending went straight to repaying existing obligations rather than financing new economic activity.

Only 14 per cent of bankers questioned said 30 per cent or more their branch lending went to new customers in Q4, down from 18 per cent in Q3 and 40 per cent in Q2, meanwhile only 33 per cent of firms surveyed said they had applied for loans in the current quarter – down a hefty 13 points from Q3.

China’s private sector still in the shadow of the state | South China Morning Post **See profits statement above** The biggest components of the state sector are the banks, which account for almost half of the domestic stock market valuation, and about half of the total net profit of all the listed companies. Other big components in the stock market, or in the unlisted universe for that matter, are state-controlled big insurance companies, big oil corporations and telecommunications operators.

Chinese banks have an average return on equity (ROE) of about 20 per cent – twice the level of their global peers. Insurance companies do well in general, and telecoms operators enjoy exorbitant privileges. How can the state sector underperform the private sector in financial terms?

State buying may explain China’s gold import surge – FT.com The People’s Bank of China has not provided an update on its bullion reserves since 2009, when it reported a holding of 1,054 tonnes. But the suspicion among some analysts is that China’s central bank has purchased up to 300 tonnes of gold this year.

Global grocers must walk down the aisle with a Chinese mate | China Economic Review France’s Auchan has found a marriage made in heaven with Taiwan-based RT Mart. British retailer Tesco was swept off its feet by a Chinese suitor with government ties. Executives at Carrefour, another huge French grocer, have been rumored for some time to be signing up to every matchmaking service possible.

But as many a foreign businessman in China can attest to, finding a partner to live with happily here ever after is no easy task. Dating is an expensive and complicated game.

China takes lead as New Zealand export destination – Xinhua | English.news.cn **Check this map** China has overtaken Australia to become New Zealand’s top goods export destination on an annual basis for the first time, the New Zealand government statistics agency announced Thursday.

Two more CNPC and PetroChina officials questioned for graft|WantChinaTimes.com Wen Qingshan, chief accountant of China National Petroleum Corporation (CNPC) and Wang Lihua, chief of the company’s oil trading subsidiary Chinaoil, have been held for questioning in an investigation of a corruption scandal which engulfed the state-owned company last week, according to the Chinese-language news portal NetEase and Shanghai’s China Business News.

Whether they are being investigated for graft or simply helping with the investigation remains unclear. Shares of Kunlun Energy, which Wen chairs, have not been traded on the stock exchange since Tuesday morning, with no reason given as to why this is so.

CNOOC Limited : Newly reliable Buzzard calms oil prices | 4-Traders **Suggestions that CNOOC is under-valued** One of the world’s most important oilfields, the North Sea’s Buzzard, long known in the industry for struggling output and continual breakdowns, has gone through a quick and surprising transformation.

Buzzard, which plays a leading part in setting global oil price benchmark Brent, has been pumping almost non-stop since August, less than a year since Chinese state company CNOOC bought its operator, Nexen.

Exclusive: Peugeot board approves outline Dongfeng deal – source | 4-Traders PSA Peugeot Citroen’s board has approved a plan for an alliance with Dongfeng in which the Chinese carmaker and the French state would buy large minority stakes at a 40 percent discount to Peugeot’s current share price, a source familiar with the matter said.

The board agreed to enter final negotiations on a 3.5 billion euro ($4.8 billion) share issue that would see France and Dongfeng Motor Group take matching 20 percent holdings, the source said on Wednesday, speaking on condition of anonymity.

China Auto Industry News | Dongfeng-Honda and Guangzhou-Honda Prepping Low Cost Hybrid For China | China Car Times – China Auto News **How many partners does Dongfeng Motor have?! Shows the desire of manufacturers to get into Chinese market** According to overseas and Chinese press reports Honda are working with their Chinese partner Dongfeng to develop a low cost hybrid model specifically for the Chinese market.

Imported hybrid models have failed to take off in the Chinese market, hence Honda’s decision to design fuel saving cars specifically for the Chinese market. Details on the new model are still exceptionally few but the model should launch in 2016.

APAC Fuels 4G Action | Light Reading **Big infrastructure investment** Nokia Solutions and Networks (NSN) has been detailing its engagement with China Telecom Corp. Ltd., which is rolling out a 4G network that comprises both TDD and FDD LTE access infrastructure. NSN is providing its Flexi Multiradio 10 Base Stations along with associated deployment services and the vendor’s NetAct OSS.

The supplier is one of at least five key infrastructure suppliers to China Telecom, but NSN’s share of the overall initial rollout is believed to be quite small — Huawei Technologies Co. Ltd., ZTE Corp., and Alcatel-Lucent are believed to have snagged the majority of the work. (See AlcaLu Gains LTE Traction in China and Alcatel-Lucent Makes 4G Gains in China.)

China Life Insurance Downgraded by UBS AG to Neutral (LFC) | WKRB News China Life Insurance (NYSE:LFC) was downgraded by investment analysts at UBS AG from a “buy” rating to a “neutral” rating in a note issued to investors on Wednesday, TheFlyOnTheWall.com reports.

Shares of China Life Insurance (NYSE:LFC) opened at 46.60 on Wednesday. China Life Insurance has a 1-year low of $33.88 and a 1-year high of $52.72. The stock’s 50-day moving average is $44. and its 200-day moving average is $39.51. The company has a market cap of $86.193 billion and a price-to-earnings ratio of 20.04.

Saab bets on electric cars and China for revival | Reuters Saab’s new owner, National Electric Vehicle Sweden (NEVS), is targeting its home market of China, where the government is promoting clean automotive technology with up to 100 billion yuan ($16 billion) in vehicle subsidies, R&D and infrastructure spending, according to research firm Frost & Sullivan.

How Do You Say Tesla with Chinese Characters? Nobody Knows – China Real Time Report – WSJ Tesla still hasn’t revealed its Chinese-character name for its car. That could partly be because Chinese businessman Zhan Baosheng already registered the transliteration of Tesla (特斯拉), which doesn’t have any obvious meaning or connotation. Tesla does use the characters on its Weibo account.

Delek, Ratio dispute Noble Energy oil estimates – Globes The Israeli partners of Noble Energy Inc. (NYSE: NBL) in the Leviathan field – Delek Group Ltd. (TASE: DLEKG) and Ratio Oil Exploration (1992) LP (TASE:RATI.L) have distanced themselves from the presentation given by Noble about the oil potential in Leviathan and Cyprus’s Block 12. Noble’s estimates provided to US analysts are not in line with Delek and Ratio’s reports to the Israel Securities Authority regarding oil and gas exploration.

Noble Energy said in its presentation that there is potential for 1.5 billion barrels of oil in Block 12 and a further 1.5 billion barrels of oil in Leviathan.

Posted from Diigo.

China Business Briefs 8/11/13

China is on the cusp of its 4G rollout, but handset maker Huawei doesn’t want smartphone owners getting complacent. The company just announced it will invest $600 million into 5G research and development.

The money will be spread out over four years. The end goal is a 10Gbps broadband connection by 2018. That’s 10 times faster than 4G and a whopping 5,000 times faster than 3G, which most of the Chinese smartphone-owning population is currently connected to. To give you an idea of how fast that is, Huawei CEO Eric Xu says, “5G mobile networks with the peak data rates of over 10Gbps will allow people to download high-definition movies in one second.”

Record-breaking milestones have become routine in the breathtaking development of high-speed railways in China, known as gaotie. In just five years, since the first one connected Beijing with the nearby port of Tianjin in 2008, high-speed track in service has reached 10,000 kilometres (6,200 miles), more than in all of Europe. The network has expanded to link more than 100 cities. In December the last section was opened on the world’s longest gaotie line, stretching 2,400km from Beijing to Shenzhen, on the border with Hong Kong (see map). The network has confounded some sceptics who believed there would not be enough demand. High-speed trains carry almost 2m people daily, which is about one-third of the total number of rail passengers.

China’s exporters had a good month in October, with shipments up 5.6% from a year earlier, far better than the 1.5% growth forecast by economists. That was enough to more than double China’s monthly trade surplus to $31.1 billion, despite strong imports. Matched with decent performance from other East Asian exporters, that suggests that an upturn in demand from the U.S. and Europe is helping support the Chinese economy, which has had a wobbly year. But it may not be out of the woods yet.

The Shanghai Composite Index fell 1.1 percent to 2,106.13 at the close, adding to a 2 percent loss this week. China’s exports rose 5.6 percent in October, compared with a median estimate for 1.7 percent growth in a Bloomberg News survey. The yuan was poised for a weekly advance as the central bank raised the reference rate on anticipation the Communist Party meeting will lead to further economic reforms.

According to Yahoo Finance, over the past 10-odd years since the start of 2003, the Straits Times Index (SGX: ^STI) has gained 8.4% per year

Blue chips like Jardine Matheson Holdings (SGX: J36), Singapore Exchange (SGX: S68), and United Overseas Bank (SGX: U11) have had average annualised returns (including dividends) of 23.5%, 20% and 8.8% respectively in the same period.

Standard Bank said in July it was exploring closer cooperation with its biggest shareholder Industrial & Commercial Bank of China on its global markets and commodities businesses.

Qunar, a travel search and service provider, went listed on the NYSE last week. Its shares soared 89% on the first day of trading. As Qunar became more than a search engine when it built a transaction system in 2012, it is believed it will eventually become direct competitors of existing online travel agencies such as Ctrip and eLong. With that concern, in early this year, a handful of online travel services, including Ctrip and eLong decided to stop working with Qunar. But later they resumed cooperation with Qunar. One the reasons is the traffic on the search service is too high to ignore.

Now Qunar’s market cap is a little less than half of that of Ctrip who is still the largest player in online travel in China. When asked about the potential competition with Qunar on the earnings call for Q3 2013, James Liang, chairman and CEO of Ctrip, said it’s more of competition on air ticket but more of partnership on hotel, for Qunar’s hotel inventory mostly depends on third-party suppliers.

But like what it has done on air ticket, Qunar also possibly can build partnership directly with hotels rather than travel agencies or other third parties. Mr. Liang thinks what can eventually differentiate Ctrip from Qunar is the quality of service — it sounds it doesn’t have any technological advantage.

China looks set to snap up over 350 million new smartphones this year. So what brands are Chinese people buying? How much do they spend on 3G? Who are these people exactly? What OSes do they prefer?

Alibaba’s foray into the world of fund management—through a money-market fund-like investment product called Yu’E Bao, or leftover treasure—has so far been a huge success. The lingering question, however, is how exactly it works.

One of Yu’E Bao’s appeals is that it gives customers the convenience of a demand deposit—they can withdraw their funds whenever they like—with returns similar to wealth-management products or other longer-term deposit options like CDs, which typically lock the funds for three to six months.

Posted from Diigo.