Dalian Wanda

China Business Briefs 4/2/14

Economy   Finance   Auto   Infrastructure   Energy   Telecoms   Property   Travel   Tech   Agriculture

Economy

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

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

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

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

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

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

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

Finance

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

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

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

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

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

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

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

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

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

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

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

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

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

Auto

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

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

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

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

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

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

Infrastructure

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

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

Energy

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

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

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

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

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

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

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

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

Telecoms

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

Property

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

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

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

Travel

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

Tech

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

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

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

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

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

Agriculture

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

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

Posted from Diigo.

China Business Briefs 20/1/14

Lots of economic data out today, but the main stories are 1. another spike in interbank lending, and 2. the Shanghai Composite has gone under the 2000 barrier.  The systemic reasons for the sharp rise inter-bank lending are interesting, but we seem to be entering very dangerous territory for the Chinese economy, with the banks at particularly risk Their lazy days of soaking up low interest-paying deposits from the public to lend to SOEs are over. With the shadow banking industry also at risk, we are likely to see some severe pain in the financial sector. Accordingly, several state-owned banks are trading below their book value.

These are very delicate times.

ECONOMY

Crunch Escalates as Money Funds Rival Shadow Banks: China Credit – Bloomberg A doubling in China’s money-market funds in the past six months is draining bank deposits and raising the risk of financial failures during cash crunches, according to Fitch Ratings.

China Money Market Rates Soar – WSJ.com China’s financial system is showing fresh signs of stress with short-term borrowing costs for banks soaring on heavy demand for cash ahead of the Lunar New Year holiday and rising worries over the vast shadow-banking sector.

The rising rates in the money markets is also hammering stocks with the benchmark Shanghai Composite falling past the key level of 2000 to 1996.47, its weakest in almost six months and down 5.7% this year, the worst performer in Asia.

China banks in bond market push | News | IFRAsia China’s biggest banks are stepping up their use of the international capital markets in search of cheaper, longer-term funding.

Two Chinese lenders raised US$1.95bn in the US dollar bond market in the first two weeks of this year, more than half the US$2.67bn issued by China’s entire banking sector in 2013.

The deals have pushed credit spreads wider as market participants brace for a record volume of G3 bonds from Chinese banks in 2014.

Pressure Rises on Chinese Shadow Lender – WSJ.com Pressure is building on China’s largest bank and a major shadow lender to bail out investors facing a nearly $500 million hit, potentially the first loss for a key part of China’s vast but loosely regulated shadow-banking sector.

China Credit Trust Co., the shadow lender, told investors on Thursday that it may take legal action to recoup three billion yuan ($496 million) related to a troubled loan, without specifying against whom, according to a document reviewed by The Wall Street Journal.

Major banks in China see share prices fall below NAV|Markets|Business|WantChinaTimes.com Prices of China’s A-share banking stocks have one by one fallen below their net asset value (NAV) per share. The Industrial & Commercial Bank of China (ICBC) saw its prices fall as of Jan. 15, with the country’s other major state-run banks set to quickly follow, according to Shanghai Securities News and our sister paper Want Daily.

Among the 16 listed banks, 12 have seen their share prices fall below their NAV per share. The remaining four banks — Ping An Bank, Bank of Ningbo, China Minsheng Bank, and China Merchants Bank — may soon approach the line however, as there their price-to-book ratio, or P/B ratio, stands at just 1.01, 1.01, 1.09 and 1.04, respectively.

China’s economic growth slows in line with forecasts – Economic Report – MarketWatch Among other data released Monday, industrial production slowed to 9.7% annual growth in December, from November’s 10% gain. The Wall Street Journal and Reuters surveys put the median forecast at 9.8%.

December retail sales increased by 13.6% compared to the year-earlier period, after a 13.7% rise in November, with the result matching the projected increase from the Reuters survey.

China economic growth continues to cool – FT.com Gross domestic product in the world’s second-largest economy expanded 7.7 per cent in the fourth quarter compared with the same period a year earlier – a slowing from 7.8 per cent growth in the third quarter, according to figures released by the government on Monday.

China’s full-year GDP growth in 2014 is expected by economists to come in at about 7.4 per cent, which would be the country’s slowest pace since 1990, when Beijing faced international sanctions as a result of the 1989 Tiananmen Square massacre.

China’s economy grows 7.7 percent in 2013, more cooling seen | Reuters China’s economy grew 7.7 percent in 2013 after easing in the final three months on sagging investment growth, a cooldown that some analysts say is a sign of the more sober times ahead as the government wrestles to implement major reforms.

How Much Did Consumption Contribute to China’s 2013 GDP Growth? – China Real Time Report – WSJ Economists may not know for months how much China’s emerging consumer class contributed to last year’s 7.7% growth. But by one economist’s estimate, last year it continued to slide.

Ma Jiantang, chief of China’s National Bureau of Statistics, said consumption contributed 50% of GDP last year and investment 54.4%. Trade of goods and services was a negative 4.4%, he said.

China central bank guides yuan slightly lower, downside seen limited – The Economic Times China’s yuan edged down against the dollar on Monday after the central bank fixed a slightly weaker midpoint, but traders said any sharp correction would be suppressed by the central bank.

Spot yuan was trading at 6.0522 per dollar at midday, falling 0.03 per cent from 6.0502 at Friday’s close, after the People’s Bank of China (PBOC) set its midpoint at 6.1083, down 0.07 per cent from Friday’s 6.1041. Traders said December and 2013 economic data published by the government on Monday had no impact on trading as the yuan’s exchange rate remained in the tight grip of the central bank.

China 2013 new home sales surge past $1.1tn – FT.com China’s real estate frenzy continued unabated last year, with buyers snapping up more than $1.1trn worth of new homes, roughly the same amount as was spent on all home sales in the US in 2012.

China – which only embraced home ownership less than two decades ago – ramped up sales as the new premier Li Keqiang eased off on the previous administration’s attempt to artificially cap house prices.

Beijing land sales likely to set new monthly record|Markets|Business|WantChinaTimes.com By Jan. 16, the revenues from land sales in Beijing had exceeded 30 billion yuan (US$4.9 billion), but still many plots of lands are to be auctioned in the remainder of the month, said a department from the Beijing Municipal Bureau of Land and Resources.

Exporters in Guangdong’s Pearl River Delta seek relief from surging yuan | South China Morning Post A stronger yuan adds salt to the wounds of factory owners already suffering from rising wages, worsening labour shortages, weak demand and government policies of weeding out labour-intensive, pollution-inducing and energy-consuming industries.

The yuan’s appreciation shows no signs of abating, and it is on track to gain a further 2 to 3 per cent against the US dollar this year, economists say.

Chinese shipbuilding industry rides wave of restructuring – Xinhua | English.news.cn Though Chinese shipbuilding has yet to come in from the cold, recent restructuring, cuts in overcapacity and upgrades have given the troubled industry more hope, a report showed.

The industry received in 2013 new orders with dead weight tons (DWT) of 70 million, up 242 percent year on year, according to a report posted by the Information and Technology Ministry.

Lock-up shares worth 23 bln yuan come online – Xinhua | English.news.cn Lock-up shares worth 22.6 billion yuan (3.7 billion U.S. dollars) will become eligible for trade next week in China.

The volume marks a slight rise from the 20.83 billion yuan from Jan. 13 to Jan. 17, according to information from the Shanghai and Shenzhen stock exchanges.

Under the mainland’s market rules, major shareholders of non-tradable stocks are subject to one or two years of lock-up before they are permitted to trade.

Beijing Lays Siege to China’s Steel Output – China Real Time Report – WSJ The steel slowdown began in September, with the deceleration becoming most marked in November. In December, daily average production of the industrial metal fell to 2.01 million metric tons, China’s lowest level for the year.

The slide stems in part from an all-out campaign that President Xi Jinping’s government is waging to cut the industry’s bloated capacity and environmental pollution. China produces about half the world’s steel, and the amount of redundant capacity in the country is more than the annual steel output of the U.S. The overproduction has already weakened Chinese steel prices, which ended the year 7.2% lower than when 2013 began. Global composite carbon steel prices followed the trend, falling 2% last year, according to data from the consultancy MEPS.

Beijing-owned US debt sustains growth; not political tool: CNSWantChinaTimes.com As of November 2013, China owned US debt amounting to a total of US$1.3 trillion, and remains the country’s largest creditor.

US debts owned by China increased by 11% in 2013 from the previous year, the report said, adding that US debt remains an important market for China.

Minimum wage raised in 26 provinces, cities in China|Policy|Business|WantChinaTimes.com The paper reported that the minimum wage in Beijing, Zhejiang, Henan, Guizhou, Shanxi, Shandong, Jiangxi, Guangxi, Gansu, Ningxia, Tianjin, Shanxi, Shanghai, Guangdong, Yunnan, Xinjiang, Sichuan, Jiangsu, Jilin, Liaoning, Anhui, Fujian, Hunan, Hainan, Shenzhen and Inner Mongolia has been raised as of Dec. 31, 2013. The minimum monthly wage in Shanghai is now US$216, while the minimum hourly wage for a blue-collar worker in Xinjiang is US$2.

For China, north is a new way to go west – The Globe and Mail China is not an Arctic country. Its northernmost point on the Russian border – a settlement called Mohe that is nicknamed “China’s north pole” – is well shy of the Arctic Circle.

Yet in Beijing lately, officials have made a point of calling their country a “near Arctic” state. China is increasingly casting a hungry gaze north: Its companies are exploring for oil and resources that can be mined, its diplomats are making friends with Nordic countries – with the notable exception of Canada – and its yuan are paying for polar research projects in the Antarctic and Norway.

Hard luxury brands set up shop in Macau – FT.com Macau, the special administrative region of China and undisputed champion of the global gambling industry, is going through a period of unprecedented growth.

Given a Chinese population eager to place bets, and a gambling revenue of $45bn in 2013 – an increase of nearly 20 per cent on the previous year – it is easy to see why. And Macau’s gamblers have an appetite for luxury goods.

Citi offers automated RMB cross-border pooling in Shanghai free trade zone | Reuters Citi (C.N) said on Monday it had launched an automated RMB cross-border pooling solution for its clients in the China (Shanghai) Free Trade Zone, a move that could help multinational companies optimize their cash management and enhance capital efficiency.

The solution enables companies to automatically sweep RMB between their onshore and offshore entities freely, without providing supporting documents or applying for approvals on a deal basis.

Shanghai mayor vows progress on free-trade zone this year | South China Morning Post At the annual meeting of the city’s legislature, which opened yesterday, Yang Xiong underscored the significance of making the yuan fully convertible inside the 28.8-square-kilometre testing ground for economic reforms in the country.

The mainland’s first free-trade zone was launched in late September with the aim of allowing the yuan to be convertible on the capital account, meaning for investment and financial transactions. The details of the zone have yet to be announced.

Premier vows to help startups – Chinadaily.com.cn The premier promised better support from the government for student entrepreneurs facing difficult job-hunting prospects, and he said their perseverance will lead to larger possibilities of success when building up businesses.

Growth in China’s outbound investment not dramatic but steady – as it should be | South China Morning Post Official data may show faster growth for last year, but it will be still be nothing like the explosive gains in the middle of last decade.

Why not? Beijing just pegged foreign exchange reserves at US$3.82 trillion. There are hundreds of billions of dollars in foreign currency more at domestic banks. In that light, another US$50 billion last year would have been a drop in the bucket.

A Sino-British pact on cross-border fund sales? Not so fast | South China Morning Post As China opened up its economy to the world, Hong Kong has long enjoyed the exclusive right to develop certain new products and services.

Now there are straws in the wind that the mainland may not only sign a mutual recognition agreement with Hong Kong to allow the selling of fund products in each other’s markets but may soon also sign a similar accord with Britain.

London sees renminbi transactions take off – Business – Chinadaily.com.cn Rapidly rising renminbi transaction volumes are supporting London’s ambition of becoming the Western world’s offshore yuan center, according to figures released on Thursday by the City of London Corp.

Trade finance transactions using the Chinese currency totaled 27.94 billion yuan ($4.61 billion) in the first half of 2013, up from 13.8 billion yuan a year earlier.

China Vehicle Sales Reach 22 million Units in 2013 | China Briefing News China became the first country to sell in excess of 20 million auto units last year, with nearly 22 million passenger and commercial vehicles being sold in the country over that time. This figure represented a 14 percent increase over 2012, and was double the China Association of Automobile Manufacturers estimate. Of these, 59.7 percent of the market was taken by foreign joint ventures. Volkswagen replaced General Motors as the top China seller for the first time since 2003, while Ford sales grew by 49 percent and Japan’s Toyota enjoyed a record year, despite political problems with China.

COMPANIES

Dalian Wanda to List Two Businesses This Year: Wang Jianlin -Caijing Wan Jianlin, the richest Chinese man said he is attempting to list two of  Dalian Wanda Group’s businesses this year as his conglomerate keeps growing fast  in a slow-down of the world’s second largest economy.

The Dalian Wanda chairman didn’t disclose which businesses he is planning to  list but speculations have been focusing on Wanda Cinema Line, the largest  cinema operator in Asia and Wanda Commercial Properties Co. Ltd., which both  which have been waiting for an IPO on mainland markets for three years.

Petrochina Buy at Chinavestor Based on gas pricing reforms and higher oil prices, we expect Petrochina’s business prospects to improve over the forthcoming quarters. Given Petrochina’s share of the natural gas market, they are likely to overturn downstream losses incurred in 2012 and improve their share price significantly in 2013. The revisions in gas prices are predicted to be considerably higher for industrial users than residential users. Petrochina has traded at PER of 12.5x in 2012, reflecting a 56% premium over CNOOC (NYSE:CEO) , who utilizes more aggressive E&P tactics and realised higher EPS values.

China Grand Automotive Readies Hong Kong IPO – WSJ.com China Grand Automotive Services Co., in which U.S.-based private-equity firm TPG Capital has a stake, is planning to raise $500 million to $800 million in a Hong Kong initial public offering in the second quarter at the earliest, people with a direct knowledge of the deal said Monday.

Steel firms in China’s dirty North get the hammer|WantChinaTimes.com New Wuan Iron and Steel Group, the largest private steel firm in China’s largest steel-producing province, is slimming down its annual capacity to 8 million tons by 2017. The slash, more than 50% of its 2013 output, is indicative of major tremors in the nation’s steel industry, reports the Chinese-language Economic Observer.

Game firms in China solicit endorsements from Japanese porn stars|Markets|Business|WantChinaTimes.com Two years ago, when Japanese adult film star Sola Aoi showed up on stage at online clothing retailer VANCL’s end of year party and was hugged by Chinese business tycoons, it was seen by many in the industry as a fun way of boosting morale. Now, more and more internet firms are following suit, Sina’s technology news webportal reports.

Recently, Qihoo 360 Technology, an antivirus software firm, invited another Japanese adult film star, Takizawa Laura, to its annual party, attracting media attention, while one unnamed Shanghai video game firm, in addition to inviting a Japanese porn star to endorse one of its video games, reportedly offered a special prize for its best performing employee at its end of year party of a one-night-stand with the porn star.

China’s re-opened IPO highway proving a bumpy ride – FT.com In China, initial public offerings are a bit like London buses – you wait 14 months, and then 50 come along at once.

On Friday, the first new listed company since November 2012 – Neway Valve – made its trading debut in Shanghai. The stock rose more than 40 per cent, an encouraging sign for the hundreds of other new listings that are expected through the year.

1 Android Player That Wants to Piggyback on Apple Chinese manufacturer Huawei looks to stand out in the Android crowd with reverse charging in its Ascend Mate 2. It’s a solidly built 6-inch device, but do consumers really want to use one phone to charge another?

Opportunity in China’s food crunch – Craig Stephen’s This Week in China – MarketWatch The imminent listing of Shuanghui International Holdings in Hong Kong — which last year gobbled up America’s largest hog producer — is set to put China’s food industry in the spotlight. There is big money to be made feeding China as it faces up to a self-made food crunch.

Baidu continues to enter households with wireless music box Baidu (NASDA: BIDU), the Chinese internet giant best known for its search engine, has recently unveiled its latest hardware product – a wireless music-streaming box that retails for a smooth RMB 99 (about $16).

Chinese firm constructs high-speed railway in Turkey – People’s Daily Online A photo taken on Jan. 4, 2014 shows a trial train take a test run on the Ankara-Istanbul high-speed railway constructed by China Railway Construction Corporation Limited (CRCC) in Turkey. Chinese railway department officals said on Jan. 17 that second phrase of the principal project of Ankara-Istanbul high-speed railway has been completed, marking the first of its kind in overseas market is about to open to traffic in a short term.

Shell, PetroChina Gas Venture in Australia Reviewing Job Numbers – WSJ.com Royal Dutch Shell PLC (RDSB) and PetroChina Co. (PTR) are looking to cut jobs in an effort to contain costs at their venture in eastern Australia, where the energy companies plan to build a multibillion-dollar operation for extracting and exporting natural gas trapped in underground coal seams.

A spokesman for Arrow Energy Pty. Ltd., a 50-50 venture between Shell and its Chinese partner, said the company is focused on reducing overall costs and continues to assess options to develop its gas reserves. Those options include looking at possible collaboration opportunities, he said.

Xiaomi, Gionee grab 10th largest market share from HTC|Technology|Business|WantChinaTimes.com Taiwan’s HTC dropped out of the top ten for global smartphone market share last year as its Chinese rivals Xiaomi and Gionee saw their market shares increase, according to market research institution TrendForce and our Chinese-language sister newspaper Commercial Times.

US mulling partnership with China in Congo Inga 3 dam project | South China Morning Post In an unusual move, the US government is considering partnering with Chinese state firms in financing the US$12 billion Inga 3 dam in the Democratic Republic of Congo, one of the world’s costliest and possibly most controversial dams.

A Chinese consortium comprising Sinohydro and China Three Gorges Corp, both state-owned enterprises (SOEs), are bidding for the project, according to media reports.

Jidong Cement reaps hefty profit in 2013 – Xinhua | English.news.cn Tangshan Jidong Cement Co., Ltd, the largest cement supplier in northern China, estimated net profits in 2013 would rise between 70 percent and 100 percent year on year to reach over 306 million yuan (50 million U.S. dollars).

Earnings per share for Jidong stood at the range of 0.227 yuan and 0.267 yuan, up around 0.1 yuan from a year earlier, the company said in a business report filed on Saturday to the Shenzhen Stock Exchange.

Goubuli to slash bun prices in Tianjin – BUSINESS – Globaltimes.cn The price cut came shortly after Goubuli’s revelation of its plan to buy a famous American coffee chain. Without revealing the name of the coffee chain, Goubuli said on January 8 that the deal is expected to take place in the first half of the year.

Posted from Diigo.

China Business Briefs 15/1/14

ECONOMY

China’s shadow banking loans leap – FT.com Funds from trust companies and other entities in the shadow sector rose to their highest level on record and accounted for more than 30 per cent of aggregate financing, the People’s Bank of China said, up from 23 per cent the previous year.

China’s shadow banking sector has helped fuel an alarming run-up in the debt owed by local governments, which have established off balance sheet vehicles to borrow money for development projects. A recent report by China’s National Audit Office estimated that local government debts had reached almost $3tn by June last year, rising 70 per cent from the previous audit conducted at the end of 2010.

Is China’s Focus on Reform Clouding the Picture on Shadow Banking? – China Real Time Report – WSJ Fealty to the idea of reform made China slow to recognize that shadow lending was turning into what Cornell University economist calls an “untamed beast in China.” With the encouragement of Messrs. Li and Xi, the central bank has been focusing on its top priority: freeing interest rates so they move according to market sentiment, say banking officials, not on curbing shadow banking

So far lending rates have been deregulated. Next up are deposit rates – a much dicier proposition because banks could compete for customers by offering such high interest rates that they can’t cover their costs.

China urges IMF to give more power to emerging markets | Reuters China called on the IMF on Wednesday to stick to a commitment to give emerging markets more power at the world body after U.S. lawmakers set back historic reforms that would give developing countries a greater say.

The remarks by Chinese Foreign Ministry spokesman Hong Lei were an indirect criticism of the United States, the biggest and most powerful IMF member, where lawmakers failed on Monday to agree on key funding measures, though Hong did not mention the United States by name.

China’s overcapacity easing: Deutsche Bank – Business – Chinadaily.com.cn China’s industries beset by overcapacity have entered a more favorable demand-supply balance, Deutsche Bank said on Tuesday.

The bank estimated the cement industry would reduce its added capacity by 35 percent in 2014 while the steel sector could raise its use ratio to 78 percent.

China Credit Growth Slowed in Second Half of 2013 – WSJ.com The People’s Bank of China on Wednesday said new credit issued in the Chinese economy fell by 10.7% to 7.135 trillion yuan (about $1.18 trillion) in the second half of 2013 compared with the year-earlier period. But for all of 2013, overall credit rose 9.7% to 17.29 trillion yuan compared with 2012. The central bank’s data concerns total social financing, a broad measure of credit in the Chinese economy.

BBC Asks The Hard Question: Will Americans Drive Chinese Cars One Day? | China Car Times – China Auto News With the Detroit Auto Show kicking off this week, the UK’s Britain’s BBC has noted that there is no Chinese prsence at the show for the first time since 2006. The BBC delves into the history of Chinese cars, their current status in China, and also the development of Korean auto brands in the US market with their generosity in warranty guarantees and eventual stylish demands, but the question remains: Will American’s one day look to Chinese cars the way they look to Korean cars today?

Microsoft Ventures Accelerator Debuts 4th Batch of 19 Startups in Beijing Microsoft Ventures Accelerator, a program which has accelerated 154 startups in the past two years, just debuted its fourth batch of 19 startups coming from Chinese mainland, Singapore, and Taiwan. These new companies which were handpicked from 420 applicants range from Internet finance, education, smart wearables, etc. This session of the program will last six months from Jan to July this year.

Hong Kong faces threat from Guangzhou port – FT.com Tens of thousands of litres of Admiral Vodka, a Lithuanian brand, lie in large blue vats in a warehouse in the southern Chinese port of Nansha waiting to be bottled for shipment to consumers in southeast Asia.

The 900,000 litres that Nansha – the main port in Guangzhou – handles annually, alongside European wine, Scottish whisky and polyethylene plastic from the United Arab Emirates, are just a few examples of how the lesser known hub has helped Guangzhou gain ground on Hong Kong and become the world’s seventh largest

China’s fuel exports to rise 30% in 2014: CNPC – MarketWatch It is is expected to produce 313 million metric tons of refined-oil products this year which may lead to a surplus of 13.39 million tons, according to CNPC Research Institute of Economics and Technology in an annual report. Exports of refined-oil products grew 17.5% in 2013, according to customs data.

Saudi to keep 2014 China crude contract volumes steady -trade | Reuters China’s top crude supplier Saudi Arabia is set to ship about the same volumes to Chinese buyers in 2014 as it did last year, as the world’s second-largest oil consumer takes more from Iraq and Central Asia, traders said.  Iraq has been offering cheaper prices and better payment terms to Asian buyers this year as it increases its output, while two new refineries in China are designed to run on crude from suppliers in Kazakhstan, Russia and the Middle East.  Since those two refineries will provide the bulk of China’s oil demand growth in 2014, Saudi Arabia has been left with little room to increase its Chinese contract volumes. That means its 20 percent share of the China market will fall.

Shangha Gold Exchange to Launch Yuan-Denominated Gold Contract in New Free-Trade Zone – China Real Time Report – WSJ Gold buyers in the world’s biggest consumer of the precious metal want more of a say in its price, and the government wants to increase the international use of its currency: The Shanghai Gold Exchange is combining these two wants with the upcoming launch of an “international board” for gold trading in Shanghai’s pilot free-trade zone. Now, the question is whether investors demonstrate a need for gold contracts denominated in China’s currency.

China Auto Industry News | Used Car Warranties in China – The Next Big Thing | China Car Times – China Auto News The used car industry has slipped into China – hidden by the desire for new cars being so huge that the glut of near new vehicles must find new homes – and is now presenting itself as a premium choice for many to build upon or integrate their business into.

China Shoe Factory Owners Detained After Deadly Fire – WSJ.com Authorities detained the owners of a shoe factory in the eastern Chinese city of Wenling where a fire on Tuesday killed 16 workers, according to local officials.

COMPANIES

Can Qihoo 360 Close the Revenue Gap With Baidu? Although the company has gained significant traffic share from Baidu, Qihoo still hasn’t ramped up monetization. Analysts at Stifel expect 2014 to be the year Qihoo flips the switch and closes the gap between market share and revenue share, and they upgraded the stock earlier this week.

Apple’s China Mobile deal to extend beyond handsets – The Wall Street Journal – MarketWatch Apple Inc.’s deal with China Mobile Ltd. to sell iPhones won’t be limited to handsets, but will also entail broad cooperation between the two companies, the chairman of the world’s largest carrier said Wednesday.

China Mobile Chairman Xi Guohua said that already multi-millions of Apple’s iPhones have been ordered by its customers, signaling strong demand for the device. Apple’s iPhones will begin selling at China Mobile, the world’s largest carrier by subscribers, starting Friday.

China’s biggest dating site now has 100 million lovelorn users How many of Jiayuan’s 100 million users are active? According to the newest numbers in Jiayuan’s Q3 financial report (the company went public in 2011) that we looked at in November, it has 5.43 million monthly active users. That’s up an almost glacial 3.5 percent from Q3 2012.

Tesla to build a network of car charging stations in China The network will be similar to the one Tesla is building in the US and plans to build in Europe. It will serve car owners traveling between major cities, such as Beijing and Shanghai. Tesla owners will be allowed to use the charging stations free of charge.

Sanyuan set to suffer first annual loss since 2009 – Business – Chinadaily.com.cn Dairy producer Sanyuan Group estimated losses of between 185 million yuan ($30.63 million) to 215 million yuan for 2013, according to a pre-announcement released on Tuesday.

The Beijing-based dairy group attributed the predicted loss to rising material costs, and a fall in investment.

Haier expanding brand presence in US market|Companies|Business|WantChinaTimes.com China’s leading electrical appliance maker Haier Group has been trying to deepen its penetration into the US market because its brand name is not as well-known as its global counterparts in the country, Tencent’s financial news portal finance.qq.com reports.

In its latest move, Haier was one of six global television suppliers to unveil their line of “flexible” televisions at this year’s Consumer Electronics Show (CES) in Las Vegas.

Breaking New Ground – Liu Chuanzhi, co-founded what is now Legend Holdings – owner of Lenovo, the world’s largest PC maker and seller – has dedicated his life to exploring new ground and pushing boundaries.

Caixin editor-in-chief Hu Shuli recently interviewed Liu. Excerpts from their conversation follow.

Insurance Group Bets Big on Banking and Real Estate – and Pushing Regulatory Limits – Eighteen months after it was established, at the end of 2012, AIG already boasted assets of 510 billion yuan. The figure surpassed 600 billion yuan in 2013, a source familiar with the company said.

Much of the growth apparently owes to the company’s 35 percent holding in Chengdu Rural and Commercial Bank (CDRCB), which it acquired for 5.6 billion yuan in mid-2011. In less than three years, the bank’s assets have grown from slightly more than 100 billion yuan to more than 300 billion yuan.

Apple-China Mobile deal a ‘watershed’ moment: Tim Cook A deal to sell iPhones on China Mobile‘s vast network is a “watershed” moment, Apple CEO Tim Cook told CNBC on Wednesday.

“This is a watershed day,” said Cook, who is in Beijing ahead of Friday’s launch. He referred to China Mobile as a great cellphone firm with a “very fast network.”

Dispute over foreign bank assets sent to New York’s highest court – Yahoo Finance In the second case, privately held Tire Engineering and Distribution of Sarasota, Florida, has been trying to get the Bank of China to turn over money the tire maker is owed after winning judgments against China-based competitors.

The bank has refused, saying Chinese banking laws prohibit it from complying with U.S. court orders to freeze customer bank accounts.

Richard Li’s PCCW Said To Sell Beijing Property For $900M – Forbes A real estate firm controlled by Richard Li, the billionaire son of Asia’s richest man, announced this week that it is in advanced talks to sell a Beijing office building for a price that is said to be in the range of $900 million.

BoCom Financial Leasing to Issue CNY200mn Financial Bonds – Financial and Business News – MENAFN Bank of Communications Financial Leasing intended to issue CNY 200 million three-year financial bonds on January 16, the first term in 2014.

The bonds have fixed rate, the interests will be paid based on an annual basis and the coupon rate is determined by the bid-inviting results. Bank of Communications will act as the lead underwriter of this issuance and Agricultural Bank of China, CITIC Securities and UBS Securities will serve as joint lead underwriters.

ZPMC mulling German shipyard deal – Headlines, features, photo and videos from ecns.cn|china|news|chinanews|ecns|cns Shanghai Zhenhua Heavy Industries Co Ltd, the world’s largest maker of cranes and large steel structures and known as ZPMC, is negotiating the acquisition of a German shipyard – part of its drive to diversify and expand its maritime engineering business.

ZPMC aims to buy JJ Sietas Schiffswerft, a Hamburg-based shipyard with a history of more than 300 years, Huang Qingfeng, vice-president of ZPMC, told China Daily. He visited the shipyard and talked with local politicians and business executives in October.

China’s Huawei profit jumps on smartphones, U.S. asks Hua-who? | Reuters China’s Huawei Technologies Co Ltd, known more for its telecom networking prowess than its razor-thin smartphones, is starting to see success in its consumer electronics business, though the key U.S. market remains elusive.

Huawei became the world’s third-biggest smartphone manufacturer last year, mainly due to a fast-growing Chinese market. That is helping to cushion the impact of a global slowdown in network equipment spending, which caused the company to miss its revenue growth target last year.

Investor’s ALert – Baidu Inc (ADR) (NASDAQ:BIDU), China Telecom Corporation (NYSE:CHA), China Mobile (NYSE:CHL), Qihoo 360 Technology (NYSE:QIHU) | Gaining Green Companies looking to do businesses in China often stumble because they don’t understand the local market, said Baidu Inc (ADR) (NASDAQ:BIDU) CEO Robin Li, operator of China’s largest search engine. Baidu Inc (ADR) (NASDAQ:BIDU) stock opened at $178.90 in last session, and closed at $179.66, while the day range of stock is $176.61 – $180.22. The stock showed a positive weekly performance of 2.50%.

Ping An 2013 gross premium totals $44.36 billion | Business Insurance Ping An Insurance (Group) Co. of China Ltd. posted a total gross premium of 268.7 billion Chinese yuan ($44.36 billion) during 2013, an increase of 15.03% year on year, Chinese news website Hexun.com reports.

Premiums posted by the insurer’s property/casualty arm Ping An Property & Casualty Co. Ltd. totaled CNY 115 billion ($19 billion).

Yanzhou Coal Buy at Chinavestor We recommend a BUY for Yanzhou Coal Mining Co. Ltd. (NYSE:YZC). With an average revenue and net income growth rate of 33% and 56%, the company has growth potential very far into the future. It is clear that the company is very generous in using its resources to invest in new and promising coal projects.

A.M. Best Assigns Ratings to China Overseas Insurance Limited – MarketWatch Best Asia-Pacific Limited  has assigned a financial strength   rating of B++ (Good) and an issuer credit rating of “bbb” to China   Overseas Insurance  Limited  (COIL) (Hong Kong). The outlook assigned to both ratings is stable.

The ratings reflect COIL’s improvement in loss experience, low underwriting expenses and the strong support it receives from its parent company, China State Construction International Holdings Limited (CSCI), one of the largest construction companies in Hong Kong and ultimately owned by China State Construction Engineering Corporation  (CSCEC), a Chinese state-owned construction company.

Petrochina Buy at Chinavestor Based on gas pricing reforms and higher oil prices, we expect Petrochina’s business prospects to improve over the forthcoming quarters. Given Petrochina’s share of the natural gas market, they are likely to overturn downstream losses incurred in 2012 and improve their share price significantly in 2013.

NewsWires : euronews : the latest international news as video on demand A former senior executive at China Mobile Ltd’s state-owned parent has been expelled from the Communist Party amid a company-wide probe into suspected corruption.

Xu Long, who was general manager of China Mobile Communications Corp’s Guangdong office, was expelled from the party due to “severe discipline violations,” according to a statement posted on Wednesday on the website of Guangdong province’s disciplinary committee.

China CNR Said to Pick Banks for $1.5 Billion Hong Kong Offering – Bloomberg China CNR Corp. (601299), the nation’s second-biggest trainmaker, picked China International Capital Corp., Macquarie Group Ltd. and UBS AG (UBSN) to work on a first-time share sale in Hong Kong, said three people with knowledge of the matter.

Shanghai-listed China CNR plans to raise as much as $1.5 billion in the offering this year, said the people, who asked not to be identified because the information is private. The company has yet to file an application to the Hong Kong stock exchange, they said.

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

1.4M Apple Inc. (AAPL) iPhone 5S Shipped For China Mobile’s Launch Apple Inc. (NASDAQ:AAPL) is ready to kick off its China Mobile launch with a bang. A new report surfaced that Foxconn shipped about 1.4 million iPhone 5S units for the launch at China Mobile Ltd. (NYSE:CHL) (HKG:0941).

Agricultural Bank of China goes live with Avaloq platform in Hong Kong The Avaloq group, an international leader in integrated and comprehensive banking solutions, has successfully put the Avaloq Banking Suite into operation at Agricultural Bank of China’s Hong Kong branch.

Chinese Real Estate Developer Dalian Wanda Group Still Has Plenty of Cash to Burn – China Real Time Report – WSJ Wanda, which is one of a handful of large but unlisted property developers in China, still has plenty of cash to burn: The company said over the weekend at its annual meeting that its revenue jumped 31% on-year to hit 186.6 billion yuan ($30.9 billion) in 2013. That marked the eighth consecutive year its revenue rose by more than 30%, the company said in a statement on its website that 2013.

To date, Wanda said it has 380 billion yuan worth of assets world-wide and has opened 85 malls and 54 hotels across China.

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 24/12/13

ECONOMY

China’s Total Debt at 215 Percent of GDP in 2012: CASS-Caijing **Which puts it above Greece in % of GDP – see here** China’s total debt topped more than 100trillion yuan in 2012, which  was 215 percent of that year’s GDP, according to the China Balance Sheet  2013 released by the Chinese Academy of Social Sciences (CASS).

China Cash Crunch Pushes Up Short-Term Rates – WSJ.com Rates rose again despite cash injections last week by the People’s Bank of China, which has tried to rein in lending but is facing crosscurrents ranging from government budget tightening to quirks in bank accounting rules to distrust among banks to rising losses on loans that haven’t yet been disclosed.

Chinese Rate Crunch Exposes Cracks – WSJ.com In an echo of last June’s cash crunch, interest rates that Chinese banks charge each other for short-term funds have again shot up to worrying levels. Despite moves by the central bank to calm the interbank market, the benchmark seven-day repo rate averaged 8.94% on Monday and spiked as high as 9.8%. That’s up from an already elevated 8.2% on Friday.

China banks squeezed for cash – Dec. 23, 2013 Some banks in the world’s second largest economy have been struggling to secure funds as the end of the year approaches, a time when they usually need extra cash to meet minimum deposit requirements, and as companies seek more money for operations.

China cash crunch eases as PBoC reassures – FT.com The People’s Bank of China pumped Rmb29bn ($4.8bn) into the financial system via open-market operations on Tuesday morning. Although the injection was tiny relative to the country’s Rmb100tn banking market, it was an important gesture to coax wary lenders back into doing business with each other.

The relief was virtually immediate. The seven-day bond repurchase rate, a key gauge of short-term funding, fell 344 basis points to 5.4 per cent, the steepest decline in more than two years, as liquidity improved.

China cash squeeze persists even after central bank reassures market | Reuters China’s cash market squeeze showed little sign of easing on Monday, reinforcing the view the central bank has shifted to tighter monetary policy.

Closer Look: Repeated Liquidity Crunches Beg a Question: Where’d the Money Go? – Some analysts say capital has left the country in anticipation of the U.S. Federal Reserve ending its policy of so-called quantitative easing, while others say interest rates have risen as reform deepens. Still others say the money that has been released was looped in a cycle formed by the property sector and the financial market instead of flowing into the real economy.

China Banks Stock Falls Due to Portfolio Adjustment | 4-Traders A slump in shares of banks like China Construction Bank Corp. late Friday was a result of changes in the investment portfolios of one or two foreign institutional investors, the Shanghai Stock Exchange said.

Some foreign index service providers adjusted the components and the weight of components of their indexes for stocks trading in the Shanghai and Shenzhen stock exchanges, which led to one or two foreign investors under the so-called Qualified Foreign Institution Investor program to accordingly adjust their positions in those stocks, the bourse said Sunday through its official account on the Weibo, a U.S. Tweeter-like microblogging service in China.

Local Bonds Set for Approval-Caijing **About time. But lessens central government control** China may allow city governments to issue municipal bonds independently as early as March next year to support their financial need for urbanization and relieve the pressure on mounting government debt, experts close to the matter said.

Key to Debt Problem ‘Is Giving Local Gov’ts More Autonomy’ – The key to the solution is matching local governments’ rights to their obligations and establishing a self-restraint mechanism through which local officials are responsible for their own income and spending, Wei Jianing, a research fellow at the State Council’s Development Research Center, said at an academic forum on local government debt last week.

IMF Working Paper 10.2013–Local Government Financing Platforms in China: A Fortune or Misfortune? Yinqiu Lu and Tao Sun China’s rapid credit expansion in 2009–10 brought local government financing platforms (LGFPs) into the spotlight. This paper discusses their function, reasons behind their recent expansion, and risks they are posing to the financial sector, local governments, and sovereign balance sheet. This paper argues that LGFPs were a fortune for China in the past, but would turn out to be a misfortune if the causes of the rapid expansion of LGFPs are not addressed promptly.

Chinese Steel Firms Reported Debt Ratio of 70pct, Margins at 0.43Pct in Jan.-Oct. Period-Caijing **Major restructuring ahead** Total liabilities in the companies – 21 percent of which posted a net loss – hit 1 trillion yuan in the period, and their margins were among the lowest across all sectors in the economy, said Miao Changxing, a senior official at the Ministry of Industry and Information Technology.

Property Investors Still Can’t Get Enough of Shanghai – China Real Time Report – WSJ **Same as London – property is an asset** According to a report published jointly by PricewaterhouseCoopers and U.S. research organization the Urban Land Institute, Shanghai ranked second out of 23 Asian cities in terms of investment prospects. The city held the No. 2 spot for the fourth year running, finishing behind Tokyo, which catapulted to the top with a hand from the economic reforms of Prime Minister Shinzo Abe. Last year’s winner, Jakarta, slipped to third place this year.

Sotheby’s, Liu Yiqian Deny That $8.2 Million Calligraphy Scroll Is Fake – China Real Time Report – WSJ **How corrupt are the experts?** The public spat began Saturday when three art experts from the Shanghai Museum alleged that the calligraphy work, titled “Gong Fu Tie,” was a forgery. Purchased at a Sotheby’s auction in September by collector Liu Yiqian, the piece is attributed to the Song Dynasty poet Su Shi, who lived from 1037 to 1101 and is known by the literary name Su Dongpo.

Chinese Investments In US Commercial Property Soar By 500% | Zero Hedge **Buy low, sell high!** Investors from multi-billion dollar hedge funds to individuals buying as few as 10 properties have acquired more than 1 million homes across the U.S. in the past three years, transforming a mom-and-pop business into one of Wall Street’s hottest investments. As we noted here, Blackstone Group LP alone has acquired more than 40,000 properties in 14 cities to become the largest single-family landlord in the country. As Bloomberg notes, the new landlords are transforming the way Americans live and accumulate wealth. But while Wall Street is becoming America’s largest residential landlord, it appears China wants to get paid for commercial properties… and Detroit.

Learning the Wrong Lessons from the Three Gorges Dam – **Experts don’t face the pressure on infrastructure which Chinese leaders do** The “South-North” project will cost at least 350 billion yuan. Once again, scientists are warning of dire environmental effects. Critics say the money would be better spent on water conservation, better infrastructure and making industry use scarce supplies more efficiently. Chinese leaders prefer grand projects above complex policy adjustments requiring debate and consent. The 3,000 kilometer network of viaducts, pipelines and canals is proceeding.

Q. and A.: U.S. Commerce Secretary Penny Pritzker on China Trade Talks – NYTimes.com Since a key Communist Party conference issued a plan in November to advance market reforms, a series of foreign envoys have rolled through China seeking to capitalize on some of its more business-friendly initiatives. Top American trade officials took the same tack during talks in Beijing last week, but made clear afterward that it would take time for United States businesses to reap dividends from the conference, known as the Third Plenum.

MOFCOM seeks foreign investment – BUSINESS – Globaltimes.cn China will encourage investment by foreign capital in the tourism, elderly care and education sectors next year, a spokesman for the Ministry of Commerce (MOFCOM) said Monday.

New incentives weighed to curtail overcapacity |Economy |chinadaily.com.cn **Very necessary** China will use fiscal and financial incentives to encourage consolidation in a number of industries, Minister of Industry and Information Technology Miao Wei said on Monday.

In a sign of shifting policy focus, Miao said that instead of mandatory, administrative-oriented consolidation, the industry regulator will do more to create a sounder environment for mergers and acquisitions.

8 tech trends to watch in China for 2014 The new year is a time for reflection, but it’s also a time for looking forward. In this regard, we’ve taken a broad look at some of the budding trends we expect to continue in China in 2014. In an ecosystem growing as fast as China’s tech scene, anything is possible within a year, but here’s a few predictions we think will change the country’s landscape.

SOE Reform in China — Big Change is On the Way | China Private Equity, Published by China First Capital The reality, however, is substantially different and substantially more challenging. SOEs live in a different world than they did ten, or even three years ago. They are more and more often under intensifying pressure to achieve two incompatible goals: to continue to expand revenues by 15%-25% a year, but to do so without corresponding large increases in net bank borrowing. The result, over time, will be that SOEs will need to rely increasingly on private sector capital to finance their future growth.

How going global can go well for firms – Headlines, features, photo and videos from ecns.cn|china|news|chinanews|ecns|cns China’s overseas business is still at its beginning stages, and more effort has been urged to strengthen the enterprises’ “soft power” abroad amid the boom of going global.

COMPANIES

China Mobile Faces Hit From Lower Connection Fees – China Real Time Report – WSJ **Competition is a bitch, ain’t it?** China’s telecoms regulator said it will reduce the interconnection fees that smaller carriers pay to dominant player China Mobile Ltd. beginning next year, as part of the government’s effort to promote competition.

The new fee regime will hit China Mobile’s earnings, analysts say, even as the extent of the profit boost from its new 4G services remains unclear.

Alibaba International Platforms to Merge into One Marketplace Alibaba’s AliExpress, Tmall International and the international division of Taobao, reportedly will merge into one marketplace, targeting individual consumers overseas (via Sina Tech).

Chinese users welcome Apple, China Mobile deal – Yahoo Finance UK Chinese users welcomed a long-awaited tie-up between Apple and China Mobile, the world’s biggest wireless operator, but analysts warned Monday that the deal’s impact depends on the quality of the carrier’s 4G network.

How China’s Richest Man Plans to Take on Hollywood (CMCSK, DIS, IMAX) Small, coastal Qingdao, China, may seem like an odd place for the next entertainment production mecca, but that is just where China’s wealthiest man, Wang Jianlin, with his company Dalian Wanda Group, plan to build their entertainment metropolis. Wanda Group is currently the largest land development company in China, developing and running shopping malls, department stores, hotels, and over 500 cinemas.

Pricing will be key to success of China Mobile’s deal with Apple – FT.com **But profit comes from a small percentage of high-end phones** Operators such as China Mobile traditionally agree to subsidise part of the cost of popular handsets, but some are now trying to end that practice. T-Mobile USA recently began replacing smartphones subsidies with mobile device financing plans, while Randall Stephenson, chief executive of AT&T, said that as smartphones become ubiquitous in more mature markets such as the US, “the model has to change. You can’t afford to subsidise devices like that.”

Chinese Energy Giants Refocus on Traditional Assets – WSJ.com The world’s biggest firms, or majors, are putting plenty of oil assets on the sale block, and Chinese companies are snapping them up. So far this year, China’s top three oil companies—China National Petroleum Corp., China Petrochemical Corp., or Sinpoec Group, and Cnooc Ltd. have spent $32 billion on conventional oil and gas asset acquisitions overseas, according to data provider Dealogic.

China is Preparing for the Future by Buying Up Energy Resources of All Kinds Energy is a necessity for growth. That’s why countries like China and India are building so many new power plants—without reliable electricity their growth would eventually strain and falter. China has been particularly aggressive in partnering with and buying foreign oil companies. And it’s doing the same thing with coal.

Xiaomi reports monthly revenues of $4.9 million from MIUI First, in a post on Xiaomi’s excellent official blog (hat-tip Marbridge Daily), the company revealed that its Android-based MIUI software has over 30 million users. This includes Xiaomi phone buyers as well as those who have installed the software on their Android phones as a ROM. The company points out that this means that one in every 48 people in China have MIUI installed on their devices, if you assume that China has a population of 1.4 billion people – a subject that’s best suited for other blogs.

China’s Jingdong set to pull in over $16 billion in sales in 2013 Jingdong – formerly called 360Buy – is the second largest Amazon-like site in China. It’s behind Alibaba’s Tmall in terms of market share, according to data from iResearch. With China’s whole business-to-consumer e-shopping sector worth $71 billion in Q2 this year, Jingdong has 17.1 percent market share to Tmall’s dominant 50.7 percent. Jingdong differs from Tmall in that it buys and ships its own stock, whereas Tmall serves as an online mall for brands and merchants.

Jingdong Posts Small Profit in Q1-Q3 2013 | Marbridge Consulting – China Internet News **Very low margins on high turnover** Beijing-based B2C e-commerce platform Jingdong has released financial performance figures for the first three quarters of 2013, revealing that the company achieved a small profit during the period. Jingdong’s total gross merchandise volume (GMV) (including the Jingdong open platform) exceeded RMB 100 bln in Q1-Q3 2013.

Netease to Sell Wealth Management Product -Caijing **Leading the market. Shows the dynamism of capital – always seeking returns** Following Baidu’s Baifa, NetEase’s first wealth management product, Tianjin, will be sold starting Dec 25 on that platform.

Tianjin will be launched in collaboration with Xianjinbao, a money market fund managed by China Universal Asset Management. Currently, the seven-day annualized yield of Xianjinbao is 5.97 percent.

HSBC may Target Industrial Bank in Next China Sell: Report-Caijing HSBC is in line to sell its 10 percent stake in China’s Industrial Bank after it spun off all stakes in Ping’an Insurance last year and stakes in Shanghai Bank earlier this month, reported the Money Week.

The Apple-China Mobile Deal Doesn’t Solve Anything – Businessweek Coming just a few months after a similar breakthrough with the leading carrier in Japan, NTT Docomo (9437:JP), the China Mobile deal addresses Apple’s traditional weakness in Asia. What it won’t do, however, is propel Apple to the top of the Chinese market. Samsung Electronics (005930:KS) is No. 1 now, followed by Lenovo (992:HK) and other local makers that sell good smartphones for far less than the cost of an iPhone. “Chinese consumers like to buy low-end, so-called white box, low-priced mobile phones,” Barclays analyst Kirk Yang told Bloomberg Television.

Delivery Industry Faces Review after Leaked Chemical Kills Parcel Recipient – The order was issued after media reports about the death of a man in Weifang, in the eastern province of Shandong, in late November. The man died after taking delivery of a parcel – a box of shoes he bought online – from Shanghai YTO Express (Logistics) Co.

China Telecom (CHA) Updates on Interconnection Settlement Standards; Sees Lower Revenue The Board of Directors of China Telecom Corporation Limited (NYSE: CHA) announced that the Company was notified by the Ministry of Industry and Information Technology of the PRC (the “MIIT”) that amongst others, public telecommunications network interconnection settlement standards of basic telecommunications operators will be adjusted with effect from 1 January 2014.

iOS Jailbreaks Bundled with Chinese App Store Is Just A Matter of Time? No matter who is backing TaiG or who are the other Chinese companies that were in talks with SaurikIT, Chinese tech industry are not surprised that Chinese companies tried to reach partnership with jailbreaks.

Mobile Payment and Loyalty Startup Mobexo Expanding to Four Tier 1 Chinese Cities Mobexo offers a customizable system of pre-payment, payment, and post-payment services. The Mobexo mobile payment e-wallet is a free app on iOS, Android and Windows Phone, which allows two parties to transfer funds without the need of additional devices. The app enables users to pay online or at physical shops, restaurants and bars. At the time of payment, users can earn points on their preferred merchants’ loyalty card and redeem promotional deals. Unlike credit cards or cash, Mobexo allows merchants to accept funds from customers without requiring them to give out their personal banking information.

Tsinghua Unigroup Completes Acquisition of Spreadtrum for US$31.00 per ADS Tsinghua Unigroup Ltd. (“Tsinghua Unigroup”), an operating subsidiary of Tsinghua Holdings Co., Ltd., a solely state-owned limited liability corporation funded by Tsinghua University in China, and Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company”), a leading fabless semiconductor provider in China with advanced technology in 2G, 3G and 4G wireless communications standards, today jointly announced the completion of the approximately US$1.7 billion merger of Spreadtrum with an affiliate of Tsinghua Unigroup (the “Merger”) as contemplated by the previously announced agreement and plan of merger, dated as of July 12, 2013 (the “Merger Agreement”), between Tsinghua Unigroup and Spreadtrum.

allAfrica.com: Ethiopia: Chinese Firms to Undertake Two Billion Birr Road Projects in Amhara, South The roads, totaling 121.5km, are found in the Amhara and Southern regional states. The road in Amhara will be undertaken by China First Highway Engineering (CFHE) for 1.55 billion Br. It involves 24kms of badly damaged asphalt road, constructed during the Italian occupation more than 60 years ago, and 43.5kms of gravel road. Called Dessie-Kutaber-Tenta Junction Road, it will be upgraded to asphalt.

CNOOC’s Huizhou refinery plans Q4 overhaul next year – source | Reuters **You wonder what problems they’ve found in their plants around China** China’s 240,000 barrels-per-day Huizhou refinery, owned by China National Offshore Oil Corp (CNOOC), has set a tentative plan to shut down its whole plant for major overhaul for about 45 days in the fourth quarter of 2014, a company source said on Tuesday.

Moody’s affirms CCB Asia’s ratings and assigns (P)A2/(P)P-1 ratings to the bank’s MTN program Moody’s Investors Service has today affirmed China Construction Bank (Asia)  Limited’s (CCB Asia) long-term and short-term deposit ratings  at A2/P-1. The agency has also affirmed the bank’s  bank financial strength rating (BFSR) at C, which translates into  a baseline credit assessment (BCA) of a3. At the same time,  Moody’s has assigned (P)A2/(P)P-1 long-term and short-term  senior unsecured ratings to the bank’s USD 3 billion Medium-Term  Note Program, and affirmed the bank’s long-term and  short-term certificate of deposit program ratings at (P)A2/(P)P-1.

Posted from Diigo.