China Business Briefs 13/1/14

ECONOMY

Yuan Reaches 1993-High on Record Fixing as Taper Concern Eases – Bloomberg The currency advanced by the most in a month as the People’s Bank of China strengthened the daily fixing by 0.1 percent today to 6.0950 per dollar, the highest since a peg to the greenback was scrapped in July 2005. U.S. employers added 74,000 workers in December, the least since January 2011, the Labor Department said on Jan. 10. China had a trade surplus of $25.6 billion in December, according to official figures released Jan. 10.

China Moving Closer to Bank Failure: Xinhua-Caijing China is moving closer to allowing its banks actually fail, the official Xinhua reported, citing Yan Qingmin, deputy chairman of China Banking Regulatory Commission.

The market will have the final say in future, Yan told the forum, which means banks would have to stay out of the market if they end up insolvent. Such a remark from the regulator has signaled the state’s exit from its support to deposits in commercial banks and the government will for the first time allow its banks to go bankrupt, Xinhua said.

China’s 2013 exports rise 7.9%, imports up 7.3% – Business – Chinadaily.com.cn China’s exports rose 7.9 percent year on year to $2.21 trillion in 2013, while imports increased 7.3 percent to $1.95 trillion, customs data revealed on Friday.

The foreign trade surplus widened to $259.75 billion in 2013, an increase of 12.8 percent from a year earlier, said Zheng Yuesheng, spokesman for the General Administration of Customs.

Nation’s salary growth strong: Report – Business – Chinadaily.com.cn According to the 2014 Hays Asia Salary Guide, which was released on Thursday and polled about 2,600 employers across the region, 67 percent of the surveyed Chinese employers said they will increase employees’ salaries above 6 percent, compared with 66 percent last year.

US scrutinises Chinese investments most over national security: law firm | South China Morning Post The Committee of Foreign Investment in the United States (CFIUS) reviewed 23 transactions proposed by Chinese companies in 2012, followed by 17 for Britain, traditionally top of the list for scrutiny, and 13 for Canada, US law firm Kaye Scholer said in a report.

Investors still not sold on rail sector – BUSINESS – Globaltimes.cn Some see these losses as a sign that China’s rail assets are undervalued, despite a recent industry overhaul. In actuality though, investors have good reason to be bearish on the rail sector.

Chinese Developers Set to Increase Investment In Foreign Real Estate – Forbes Chinese developers have been purchasing big real estate projects in the world’s most important cities in the past year. They will continue the shopping spree this year, with other Chinese groups to follow the trend soon, according to real estate analysts.

New property bureau to be set up – BUSINESS – Globaltimes.cn China will establish a new bureau specifically designed for property registration this year in a push to facilitate property management reform, the Ministry of Land and Resources (MLR), the country’s top land regulator, said over the weekend, according to the Xinhua News Agency.

On top of the establishment of the new bureau, relevant regulations that will lay the ground for a unified regi­stration system will be released this year, Xu Deming, vice minister of land and resources, said Saturday at a two-day annual work conference.

China Believes that it Can Duplicate Our Success Given our recent success in producing oil and natural gas, it shouldn’t shock anyone that other countries believe they can follow suit. China now has hopes of doubling its oil production by 2030. Because it will be relying heavily on unconventional production methods, the help of current experts in these areas will be needed. Equipment & service providers Halliburton (NYSE: HAL) and Schlumberger (NYSE: SLB) have already begun successfully setting up shop in China. They will be helping producers like CNOOC (NYSE: CEO) and Royal Dutch Shell (NYSE: RDS-A  ) tap these vast resources. For more, tune in to the clip below.

Why China Wants to Kill Off Bitcoin The press releases may seem mundane, but the reality is, China has a big incentive to keep Bitcoin out of the hands of its citizens. China maintains very tight capital controls, limiting the amount of cash citizens can move outside the country.

Bitcoin effectively circumvents any and all capital controls. Prior to a widespread ban, Chinese citizens could buy Bitcoin to sell for another currency, or even buy homes in foreign lands. Yes, homes. Several homes have been listed with prices in Bitcoin.

COLUMN-Record China crude oil imports flatter to deceive: Clyde Russell | Reuters Taken together, net crude and fuel imports last year were 5.83 million bpd, up about 160,000 bpd, or 2.8 percent, from 2012’s 5.67 million bpd.

This figure is a truer reflection of the overall state of Chinese import demand.

Closer Look: Same Game, Different Names – The end of a listing freeze on mainland stock exchanges has reinvigorated investor appetites for new shares. This comes along with the intention of many company founders to cash out of newly-listed companies. When such demands intersect, sparks are bound to fly.

RMB appreciation unappreciated as inflation dampens affordability｜WantChinaTimes.com The 35.7% appreciation in the value of the yuan during this eight-year period has been a positive development for Chinese exchange students studying overseas, but locals who have remained in the country are complaining that their money is becoming less valuable given that the consumer price index, the main measure of inflation, has averaged around 3.1% per year.

Milk, Games and Movies: China Stocks to Watch in 2014 – China Real Time Report – WSJ One area to watch: dairy products. The government’s relaxation of its one-child policy and antitrust measures targeting international competitors are both good news for the domestic milk industry, Bank of Communications Schroder Fund Management Co. said in a recent research report. Retail prices of China’s dairy products rose 5.7% in 2013 on-year, up from an increase of 3.2% in 2012, data from the National Bureau of Statistics showed—faster than inflation, which clocked in for the year at 2.6%.

China can avoid Japan-style property bubble: official | Reuters China’s policy fine-tuning and ongoing urbanization can help it to avoid a Japan-style property bubble, a senior housing official said, amid fears a housing market crash could lead to a hard landing for the world’s second-largest economy.

Beijing has allowed local governments to take differentiated property tightening measures, rather than a one-size-fits-all bid to cool the market, Vice Housing Minister Qiu Baoxing said in remarks published in the Southern Metropolis Daily.

Luxury cars drive UK exports to China – Telegraph British exports to China are rising at a blistering pace and are poised to overtake those of France for the first time in the modern era, driven by sales of Range Rovers and other luxury cars to the country’s new rich.

Fresh data released by China’s authorities show that imports from Britain rose 14pc to $19.1bn (£11.6bn) last year, with more than 40pc of total sales coming from vehicles and transport goods.

Closer Look: Why Overpriced IPOs are not a Reason for Intervention – All of them have one thing in common: the price-to-earnings (PE) ratio of their proposed offering price was much higher than the average PE ratio of comparable companies in the secondary market.

Five companies scheduled to start their online road shows for an initial public offering on January 13 postponed their issuance on the previous day, putting the number of companies to halt their stock issuance last minute at six.

China ‘equity return’ is a misnomer – Craig Stephen’s This Week in China – MarketWatch The lack of correlation between China’s growth and stock-market performance has frustrated money managers for years and spawned a variety of theories to try to explain this misnomer. Some look more useful than others, but they are worth reviewing as new explanations arrive.

Little consensus on renminbi appreciation this year | China Economic Review The bank’s Deputy Governor Yi Gang went a bit further last week, saying that China’s currency was close to equilibrium and would not require more intervention.

If that’s true, and China intends to stop buying US treasuries on a regular basis, the value of the yuan should appreciate considerably this year and in the years to come as China’s trade surplus is set to rise too. The IMF says the country’s current accounts surplus will double between 2013 and 2017.

COMPANIES

Death blast hits Sinopec for $963m – The Standard China Petroleum & Chemical Corporation (0386) announced yesterday it had suffered a direct loss of 751.72 million yuan (HK$963.69 million) from a deadly accident in Qingdao last November for which chairman Fu Chengyu has received disciplinary penalties.

Fu was given a demerit on administration, while vice chairman Wang Tianpu, president Li Chunguang, chief safety officer Wang Yongjian and supervisor and director of general production Yu Renming were given “serous demerit on administration,” the firm said.

Chinese app store Wandoujia seals $120 million in funding Wandoujia, one of China’s top Android app stores, has secured a massive $120 million in funding, the Beijing-based startup revealed today.

The investment is led by SoftBank (TYO:9984), the Japanese mobile telco, with some funds also coming from DCM and Kaifu Lee’s Innovation Works Development Fund (IWDF). It’s the second major cash boost for Wandoujia, coming long after its $8 million in series A funding in 2011, which was led by DCM and Innovation Works.

Billionaire Li’s PCCW, Pacific Century Premium Suspend Trading – Bloomberg PCCW Ltd. (8), controlled by billionaire Richard Li, and its property unit Pacific Century Premium Developments Ltd. (432) halted their shares from trading in Hong Kong.

Pacific Century Premium plans to release a statement relating to “inside information and unusual price and trading volume movements,” the company said in a filing today. Shares of the Hong Kong-based property developer surged 15 percent to HK$3.07 before the trading halt.

WeChat brings in over 100,000 taxi rides in 9 days It’s been about a week and a half since WeChat, the messaging app that’s dominating smartphones in China, added taxi booking and payments to its range of services. The maker of WeChat, Chinese web giant Tencent, added support for the Didi Dache service after investing nearly $100 million into it. Today the fine folks at 36kr say that the total number of completed transactions – meaning taxis hailed and paid for inside of WeChat – have surpassed 100,000.

KFC Crisis in China Tests Ingenuity of Brand Builder – WSJ.com More than a year into the crisis, Yum is still struggling. Now Mr. Su and Chief Executive David Novak say the Louisville, Ky., company can turn things around in 2014, vowing that new menu items and digital-media initiatives will revive the brand in China. “I fully expect a strong comeback year,” Mr. Su said in a rare interview last month.

Some investors are getting restless. Yum’s shares—which had been propelled for years by its China growth—are up only 12% since late November 2012, when Chinese state media started reporting on food-safety concerns surrounding KFC suppliers. The Dow Jones Industrial Average rose 26% in that period.

President Death Leaves Heir Overdue Rail Payments: China Credit – Bloomberg Shares in China’s second-biggest builder of railways have fallen 4.9 percent in Hong Kong since the company said Jan. 5 that President Bai Zhongren had died in an accident and that Chairman Li Changjin will take over his job before a successor is chosen. The yield on 2023 dollar-denominated debt of a company unit reached an eight-week high of 5.03 percent on Jan. 9, up from 3.88 percent when they were sold last January.

The Beijing-based company had 531.6 billion yuan ($87.9 billion) of liabilities on Sept. 30, data compiled by Bloomberg show. Its long-term debt to equity ratio of 129 percent would put it in the worst 3 percent on the Hang Seng Index, while its ability to cover interest payments with earnings would be in the worst 1 percent.

Li & Fung to Launch Factory-Safety Business – WSJ.com Li & Fung Ltd. , the buying agent for retailers including Wal-Mart Stores Inc. and Target Corp., said it is setting up the unit to provide factories with consulting services on safety, compliance and efficiency, as well as access to financing and insurance.

Dogfight on the cards | South China Morning Post A dogfight is looming in the horizon as more budget carriers come on stream, bringing them head-to-head with the likes of Cathay Pacific Airways, China Southern Airlines and Air China.

There are about 60 budget airlines operating nearly 1,000 aircraft in the Asia-Pacific but only four in Greater China – encompassing the mainland, Hong Kong, Macau and Taiwan – deploying fewer than 80 aircraft.

OCBC Said in Talks for All-Debt Financing for Wing Hang Deal – Bloomberg Oversea-Chinese Banking Corp. (OCBC) is in talks with lenders including Bank of America Corp. and HSBC Holdings Plc about an all-debt financing for its acquisition of Hong Kong’s Wing Hang Bank Ltd. (302), according to two people with knowledge of the matter.

Singapore-based OCBC plans to sell stock later to help repay the short-term loan, said the people, who asked not to be identified because the discussions are private. Talks between the companies are centering around a valuation of almost 1.9 times Wing Hang’s book value, though no terms have been finalized, one person said.

Service firms pay 67% of tax revenue – Xinhua | English.news.cn The service industry paid nearly two-thirds of Shanghai’s tax revenue last year and financial firms took the lead as they made up 40 percent of the 100 top service taxpayers, underlining the city’s goal to be a global financial center.

The Bank of Communications Ltd was the top service taxpayer with 16.2 billion yuan, followed by Shanghai Pudong Development Bank with 10.4 billion yuan, and Shanghai GM Sales Co Ltd with 8.4 billion yuan.

Onecard, China’s version of Coin, is your digital credit card As well as storing your credit cards and being swipe-able in China’s point-of-sale devices in stores, OneCard will go a couple of steps further than Coin in also storing prepaid cards and membership/loyalty cards. Even better, it promises to support the tap-to-pay function on Beijing’s and Shanghai’s public transport systems. It also incorporates NFC, but that’s of limited usage pretty much anywhere.

Moody’s assigns A1 to BOC Hong Kong Branch’s MTN program drawdown Moody’s Investors Service has assigned an A1 rating to the benchmark-size  senior unsecured notes to be issued by Bank of China Limited (BOC) Hong  Kong Branch.

ASIA CREDIT CLOSE: New issues feel impact of competition | Reuters Bank of China, meanwhile, also announced a two-tranche offering, which took the shine away from BoCom’s 3-year bonds printed last week, which were, therefore, last quoted at 186bp/184bp over the 2-year US Treasury, or 3bp wider.

Sinohydro Group Ltd : 32 Years After, No Power At Mambilla Hydro-Power Project | 4-Traders According to the report, the project was contracted at the sum of $3.2 billion (equivalent N508 billion) to the China Gezhouba Group Company Limited (CGGC) and another Chinese consortium, Sinohydro, with the proposed structure of the contract stipulating that Sinohydro cover 70 per cent of the project while CGGC would execute the remaining 30 percent.

Hong Kong Electric Eyes up to $3.6 Billion From IPO | 4-Traders HK Electric Investments, which owns power plants and electricity-distribution networks in the city, is selling 4.43 billion units in an indicative price range of HK$5.45-HK$6.30 each, it said in a statement late on Sunday. At the US$3.6 billion size, it will be the region’s top deal since Suntory Beverage & Food Ltd raised US$4 billion from an IPO in Japan in June, according to Dealogic.

£24bn rival to Panama Canal to break ground this year – Telegraph Its construction is essential to deal with a surge in global trade and the rise of colossal supertankers, many of which are too large for the ageing   Panama Canal, more than 500 miles to the south.

The project’s funding is being led by the Chinese telecoms billionaire Wang Jing, whose HKND Group won a licence for the development last year.

Chinese Startup Hopes to Capture Apple’s Magic – China Real Time Report – WSJ The Chinese company, which is planning to expand abroad, paid Apple co-founder Steve Wozniak to appear on Sunday in front of reporters at its headquarters in Beijing. Mr. Wozniak showed up at the event–labeled as the “Lei Jun & Woz Tech Talk”–with Xiaomi’s founder and chairman, Lei Jun, and told reporters that Xiaomi’s products were “excellent” and “good enough to crack the American market.”

What U.S. Coffee Chain Could China’s Goubuli Be Looking to Buy? – China Real Time Report – WSJ Zhang Yansen, chairman of closely held Chinese bun maker Goubuli, has been in the Chinese press this week saying he is in the final stages of negotiations to acquire a well-known American coffee chain, without disclosing the name. He gave some hints though: It has hundreds of shops in 40 countries spanning the U.S., Europe and Asia.

China Life Insurance Co. Ltd. (LFC): New Analyst Report from Zacks Equity Research – Zacks Equity Research Report – NASDAQ.com We maintain our Neutral recommendation on China Life as strong market position, growth in premiums and investment income is expected to outweigh the headwinds like higher expenses and declining cash flow.

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 2/1/14

ECONOMY

China gives local governments go-ahead to roll over debt – FT.com **Had to happen** Faced with a mountain of maturing loans this year, China has given local governments the go-ahead to issue bonds as a way of rolling over their debt to avoid defaults.

The announcement by the National Development and Reform Commission, a top central planning authority, is the most explicit official endorsement of a massive debt refinancing operation that has become unavoidable and is already under way, analysts said.

China to modernize agriculture in new reform bid – Xinhua | English.news.cn **Key being method of financing** A central rural work conference in December set out a series of reform measures aimed at protecting farmland and farmers’ rights, and building a safety net for agricultural financing.

China’s huge population means the task of simply feeding the people remains a high priority. China must rely on itself and pursue a national food security strategy of maintaining agricultural productivity, importing moderately, and employing science and technology, a statement after the conference said.

China Manufacturing Index Falls as Xi Grapples With Growth Risks – Bloomberg **No more 10% growth** Swelling local-government debt, surging property prices in some cities and volatility in money-market rates are risks as Xi embarks on reforms intended to lay the foundations for more sustainable long-term growth. The Chinese economy may have expanded 7.6 percent in 2013, the slowest pace in 14 years, according to a State Council report last week.

“The Chinese leadership has made it clear that they want stable growth this year — neither a sharp fall nor a quick rebound,” said Zhu Haibin, Hong Kong-based chief China economist at JPMorgan Chase & Co. “The central bank will remain neutral in its policy operations.”

Economists React: China’s Manufacturing Sector Runs Into Trouble – China Real Time Report – WSJ All isn’t well with China’s manufacturing industry, long the economy’s major engine. The HSBC China manufacturing purchasing managers’ index, published Thursday, fell to 50.5 in December from 50.8 in November—just a whisker above the 50-mark that separates expansion from contraction. That echoes the signal from the government’s own PMI, released a day earlier, which dropped to 51.0 from 51.4.

Here, economists weigh in on the latest numbers (edited slightly for style and clarity):

China tycoon wants New York Times | South China Morning Post **Expect US consternation and hand-wringing** Jiangsu-based Chen said on Tuesday he had been contemplating buying the media company for more than two years and expected to discuss the matter on Sunday with a “leading shareholder” in New York. “There’s nothing that can’t be bought for the right price,” he said.

With its status, The New York Times is an occasional target among the wealthy. Flamboyant property tycoon Donald Trump had tried to figure out a way to buy the Times early last year, New York magazine reported.

Burgeoning Delivery Industry Grapples with Poisoning Death – **”Begun refusing”…!** Also, in an effort to reduce costs, many chemical companies use courier companies to deliver samples, even of dangerous chemicals. The State Post Bureau, which regulates the postal and delivery industry, issued an emergency notice on December 22 requiring stricter examination of parcels. Major industry players including SF Express, ZTO Express, Yunda Express and YTO Express have tightened controls on parcel reception and begun refusing to accept packages containing chemical products.

But human inspection is highly unreliable. To bring the courier industry up to the level of the aviation industry in scrutinizing packages would require couriers to buy huge quantities of screening equipment. That would be a hard pill to swallow for the industry, which sports profit margins of only about 4 percent.

Chinese iron trade fuels port clash with Mexican drug cartel | Reuters **Great story** The Knights Templar cartel, steadily diversifying into other businesses, became so successful at exporting iron ore to China that the Mexican Navy in November had to move in and take over the port in Lazaro Cardenas, a city that has become one of the gang’s main cash generators.

Mexico’s biggest producer of iron ore, Michoacan state is a magnet for Chinese traders feeding demand for steel in their homeland. But the mines also created an opportunity for criminal gangs, such as the Knights Templar, looking to broaden their revenue base into more legitimate businesses.

Beijing’s land transfer fees hit record high – Xinhua | English.news.cn The red-hot property market in 2013 pushed Beijing’s land transfer fees to a record high of 182.18 billion yuan ($30 billion), 2.8 times that for 2012.

Land prices soared as real estate developers flocked into top-tier cities to compete in developing land, as they remained bullish on the prospect of first-tier cities and bearish on the growth potential of third and fourth-tier cities.

Gen Y’s motto: Show me the money[1]- Chinadaily.com.cn **Taking their lead from the top** In a survey by global human resources firm Hays, by far the most important metric of career success for China’s Generation Y (aged 18 to 30) is creating personal wealth, as 64 percent of the 1,000 young people surveyed listed it as their top priority.

In other surveyed countries, job satisfaction and enjoyment of work were the top priorities. But China’s Generation Y workers are less likely than those in other countries to look for work flexibility — and far more likely to be driven by the potential to earn a bonus.

China’s House Prices up for 19th Straight Month in December: CIA-Caijing Newly built houses in 100 monitored cities were up 0.70 percent in December from the previous month, compared with a monthly increase of 0.68 in November, the CIA said. On a yearly basis, the prices rose for the 13th straight month, expanding by 11.51 percent from the same month a year ago.

The Year of the Horse **Michael Pettis** Whether or not the reforms succeed, analysts who predict that China is about to embark on a decade of 7 percent growth or more will almost certainly be proven wrong. Broadly speaking, either Beijing will successfully implement the reforms over the next two to three years, or political opposition will prevent it from doing so. If Beijing does not succeed, and if China’s growth relies on the same mechanisms that have driven it over the past few years, China’s economy will continue to grow at roughly 7-8 percent annually for perhaps two or three more years. During this time, however, debt levels will surge, and the risk of a financial crisis will ultimately cause growth rates to collapse. If China does not control its surge in debt, in other words, it will probably face either a financial crisis or a decade of economic stagnation well before 2020.

CNPC security incidents due to aging pipelines: report｜Companies｜Business｜WantChinaTimes.com China National Petroleum Corporation (CNPC) — China’s largest oil and gas producer and supplier — has seen seven security incidents over the past four years, including an oil tanker and pipeline explosion, with experts naming problems such as the firm’s aging northeastern crude oil pipeline networks, low degree of automation, and backward communication facilities, reports the Beijing-based Securities Daily.

On Nov. 22, CNPC’s Donghuang oil pipeline exploded after catching fire in Qingdao in eastern China’s Shandong province, killing 62 people and injuring 136. The State Council, the country’s cabinet, swiftly issued an emergency notice, requesting security checks of the whole country’s oil and gas pipelines by the end of March 2014.

Did Chinese dama lose big on gold? |Markets |chinadaily.com.cn The bargain-hunting middle-aged Chinese women known as “dama”, have exerted the influence of the rising Chinese middle class in the gold market this year. As 2013 ends as a bleak year for gold, how do their gold investments look now?

Throughout 2013, the global gold market has risen and fallen in line with expectations that the Federal Reserve would withdraw its quantitative easing (QE) stimulus. Gold has fallen 29 percent in 2013, and is heading for the biggest annual loss in 32 years.

Beijing plans crackdown on illegal sales of rural housing｜Policy｜Business｜WantChinaTimes.com The government intends to tear down illegal units, investigate other violations, and punish those found to be in violation of the law in order to stop all ongoing illegal projects that are being built or sold and stem the increase in the number of new illegal units, an official with the Ministry of Land and Resources stated.

However, the newspaper pointed out that neither the central government’s nor Beijing’s announcement mentioned the already existing rural housing units, which account for 40% of the Chinese capital’s residential units in the market, and up to 50%-70% of such units in Shenzhen.

China to open high speed rail link to North Korean border in 2015 | Reuters China will open a high-speed rail line to the North Korean border next year, state media said on Thursday, in a sign that China remains committed to boosting trade and economic ties with the isolated, nuclear-armed state.

The line, under construction since 2010, will run 207 km (127 miles) from Shenyang to the border city of Dandong, which faces North Korea across the Yalu River, and will shorten the train journey from 3 1/2 hours to one hour, the official Xinhua news agency said.

PBOC’s liquidity injections fell in 2013 |Economy |chinadaily.com.cn The central bank adjusted liquidity levels on China’s money market mostly via the issuance of central bank bills as well as repurchase agreements, known as repos, and reverse repos. Analysts said that it’s becoming clearer that the central bank is taking a more prudent position. The PBOC is urging lenders to avoid shadow-banking activities, cooling some overheated sectors such as real estate, and curbing local governments’ infrastructure programs, analysts added.

China’s Hidden Pension Debt Could Exceed CNY20Trl: Expert-Caijing **Yikes** Zheng Bingwen, director of social security center with the Chinese Academy of Social Sciences, drew the conclusion based on his assumption that China’s pension reserves could only fund the system for a year and a half at the end of 2012.

Zheng said inefficient operation had actually devalued the pension funds, which are already in shortage. Unlike most countries, China parks the majority of its pension funds in banks, where annual returns are typically less than 2 percent, compared with an annual inflation of 2.47 percent in the past 11 years.

Macau 2013 gambling revenue hits $45.2 billion – MarketWatch Gambling revenue in Macau rose 19% last year to 360.7 billion patacas ($45.2 billion) — or around seven times that of the Las Vegas Strip.

The Chinese territory finished the year on a high–earning 33.46 billion patacas in December, a 19% on-year rise and Macau’s second-highest monthly total, according to data from the Gaming Inspection and Coordination Bureau released on Thursday.

In high-speed rail, the world’s loss is China’s gain | China Economic Review **Start with infrastructure, move on to high tech and finance** It seems like just yesterday that foreign companies from Japan, Germany and France crammed into Chinese boardrooms to bid on high-speed rail projects. Yet, today, it’s Chinese state firms that are bidding on – and winning – similar projects abroad, such as the ones secured late last year in Central and Eastern Europe.

The development doesn’t just epitomize the Chinese government’s vigorous “going out” policy, which has pushed state-backed companies and private enterprises alike onto the international stage. The quick turnaround time demonstrates China’s vast exploits after more than 10 years of mandatory technology transfers for many foreign companies wishing to manufacture on the mainland.

What a Bitcoin is really worth in India and China – Outside the Box – MarketWatch Last week, Indian regulators joined the fray. Preferring ominous warnings to outright prohibition, the Reserve Bank of India issued a public advisory on the dangers of Bitcoin. The meaning was clear enough. India’s largest exchange was promptly shut down, and its operator raided by local authorities.

Why the crackdown? The People’s Bank of China explained that Bitcoin isn’t a currency “in the real meaning of the word,” and cited the risk of money laundering. India’s central bank objected to Bitcoin’s volatility and its lack of “backing assets.”

China levies consumption tax on biodiesel, kerosene imports China started levying a consumption tax on imported biodiesel and some types of kerosene from the start of the new year, the customs office said, a move aimed at curbing imports of the fuels that have taken market share from state refiners.

The tax could create a supply gap for diesel in the world’s second largest oil consumer that would force state refiners to scale back exports. That would support Asian processing margins, which have been recently boosted by a refinery outage in Taiwan.

In-depth Research and Development Trend of China Film Market, 2013 – PR Newswire – The Sacramento Bee “In-depth Research and Development Trend of China Film Market, 2013” firstly reviewed the development state of global film industry in 2012; secondly, it conducted in-depth analysis on the policy development and investment economic environment of the film industry; thirdly, it summarized and analyzed the development characteristics of China’s film industry in 2012 and H1 of 2013, at the same time, it also conducted in-depth discussion on industrial major problems as well as competitive landscape; finally, this report carried out professional analysis on the financing environment and development trend of China’s film industry, which can provide you with decision-making reference.

COMPANIES

WeChat to face tougher competition in 2014｜Companies｜Business｜WantChinaTimes.com One of the chief rivals is the Alibaba Group. An employee of the e-commerce business leader told the newspaper that the company was planning to target WeChat in four areas — telecom services, its own IM app Laiwang, vendors on its online platforms, and through the celebrities using the Sina Weibo microblogging service.

Sohu probes source of billionaire Chen Guangbiao’s wealth｜WantChinaTimes.com Citing a report published by the China Business Journal in May 2011, Sohu stated that Chen’s company, Jiangsu Huangpu Recycling Resources, posted losses of around 4.3 million yuan (US$710,000) in 2008 and around 17 million yuan (US$2.8 million) in 2009. However, in a report published by Guangzhou’s Southern Metropolitan Daily, Chen was quoted as saying in 2010 that his company recorded sales of 10.3 billion yuan (US$1.7 billion) and net profit of over 400 million yuan (US$66.1 million).

Weibo users tweet a record 800k posts in 1st minute of 2014 **Sina Weibo seems a bit old-hat now…** The first minute of 2014 brought with it a surge of posts on China’s Twitter-like Sina Weibo. A whopping 808,298 posts surpassed last year’s record of 729,521, according to an official Sina account. It also beats out last year’s Chinese New Year record of 731,102.

Tencent tips in $100 million investment for Chinese taxi app Citic PE is leading the series C funding round with a contribution of $60 million, while tech giant Tencent (HKG: 0700) follows with an investment of $30 million. In May 2013, Tencent gave $15 million in funding to the company.

In addition to the usual horse-race suspense, Chinese taxi-hailing apps also have attracted media attention because on-demand taxi-rides could be the perfect gateway to get China’s smartphone users hooked on online-to-offline payments – a competitive space in the country. If Tencent’s investment sees WeChat integration with Didi Dache, the company will gain easy access to the messaging app’s 270 million monthly active users, and WeChat can get its users in the habit of paying for things using a messaging app.

Wal-Mart recalls donkey meat in China – MarketWatch Wal-Mart Stores Inc. is recalling donkey meat sold at some of its China stores after government tests showed the meat contained the DNA of other animals.

The Bentonville, Ark.-based retailer will provide 50 yuan, or roughly $8.25, compensation to customers who bought the “Five Spice” donkey meat, and it is boosting its own DNA testing for meat products sold in its China stores, a company spokeswoman said Thursday. Authorities in China’s eastern Shandong province announced in late December that the retailer’s product contained fox meat.

Daily Sales of Group Buying Site Meituan Surpass 100 Million Yuan The daily sales of group purchasing site Meituan hit more than 100 million yuan ($16.52 million), according to a Weibo post by Wang Xing, CEO of the company as well as a serial entrepreneur who gave birth to Renren.

Wang previously claimed that Meituan has had a 50% market share of Chinese group buying sector. According to statistics released by Meituan, the company’s sales from film ticket group buying businesses account for around 10% of total domestic box office revenue, while its sales for hotel reservation business account for 70% of the group buying industry.

China Construction Bank Corporation : Boy tears up over 3k yuan cash, bank tapes together in 3 hours | 4-Traders Nobody knows turning your back on a small child can cost you better than a mother in Xi’an, Shaanxi Province, whose child happily ripped up a pile of cash worth 3,585 yuan ($591.88) as she cleaned the house.

A woman surnamed Yang brought in the shredded cash into the local branch of China Construction Bank on December 30, 2013, where five employees spent three hours taping together 39 bills after her four-year-old son ripped up the small fortune, portal hsw.cn reported.

Jiangxi opens private rail line |Industries |chinadaily.com.cn The 3.89-kilometer-long line, approved in 2010, cost 130 million yuan ($21 million) and connects Yugan county’s industrial zone with the Beijing-Kowloon line.

Jiangxi Mingri Group were the main investors. Based in Yugan, the group’s business spans silk products, mineral water and petroleum.

Penang saw the good, bad and ugly | theSundaily Everyone agrees traffic congestion in Penang is bad. What is not agreed is how to go about solving the problem. For some, improving public transport is the way forward but for the state government, a RM6.3 billion package of three road projects and an undersea tunnel is seen as the answer.

Consortium Zenith BUCG Sdn Bhd, a joint-venture between Zenith Construction Sdn Bhd and China Railway Construction Co Ltd, together with Beijing Urban Construction Group, Sri Tinggi Sdn Bhd and Juteras Sdn Bhd, was awarded the projects in October.

Resource Generation Limited (via noodls) / Further funding achieved Resource Generation has signed a binding term sheet for a US$65 million loan facility, with Noble Resources International Pte Ltd, a wholly owned subsidiary of the Noble Group (Noble), which together with existing cash resources will be used for construction of the mine buildings and infrastructure at the Boikarabelo mine.

The loan is on normal commercial terms and is able to be drawn down from 1 January 2014 until 31 December 2015.

Posted from Diigo.

China Business Briefs 26/12/13

ECONOMY

China approves pilot to open mobile telecoms market, boost competition – Yahoo! China has approved a pilot scheme allowing private companies to piggy back on the country’s three dominant telecommunications providers to offer own-brand mobile services, opening the world’s largest mobile phone market to increased competition.

Authorities have approved 11 private “virtual carriers” to resell mobile telecommunications services, the Ministry of Industry and Information Technology (MIIT) said in a statement on its website on Thursday.

Tianjin launches China’s latest carbon market | Reuters The Chinese city of Tianjin on Thursday launched the country’s fifth emissions trading scheme as the world’s biggest-emitting nation took another step towards reining in its impact on the environment.

The newest of China’s carbon markets caps CO2 emissions from iron and steel producers, chemical facilities, power and heat generators, and oil and gas exploitation.

Secondhand housing market sees chill in Dec |Industries |chinadaily.com.cn The secondhand housing market cooled in December in Beijing and Shanghai as turnover fell, and an increasing number of sellers dropped prices, leading industry observers to wonder if the move indicates an inflection point in the white-hot property market.

Internet cafés losing out in China’s online battle – FT.com “Several years ago, we were able to get tens of thousands of [renminbi] a day, but now we are only able to earn several thousand,” says Mr Liu, who runs an airy café with around 30 computers in Beijing’s central Chaoyangmen district of offices and shopping malls.

China Seeks Comments on Revisions to Foreign Investment Laws | China Briefing News China’s Ministry of Commerce (MOFCOM) is mulling over revising the country’s foreign investment laws and is currently soliciting comments for the following three laws:

• The Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises (promulgated on April 12, 1986, last amended on October 31, 2000);
• The Law of the People’s Republic of China on Sino-Foreign Equity Joint Ventures (promulgated on July 1, 1979, last amended on March 15, 2001); and
• The Law of the People’s Republic of China on Sino-Foreign Cooperative Joint Ventures (promulgated on April 13, 1988, last amended on October 31, 2000).

Another Sichuan Businessman Caught in Banking Scandal – Wu Zhong, chairman and Communist Party secretary of the Chengdu Investment Holding Group (CDIH), is under investigation for “serious discipline violations,” anti-corruption officials in Chengdu said on December 25. The phrase “serious discipline violations” often means graft.

Xiamen-Shenzhen high-speed skepticism – BUSINESS – Globaltimes.cn The total investment for the construction of the Xiamen-Shenzhen line was around 50 billion yuan, with 70 percent of the money coming from bank loans. It was estimated that it would take 17 years for the railway line to recover its total cost, according to its initial design plan.

Wooing China’s Princelings-Caijing While recent scandals have put China’s princelings under a harsh media spotlight, they have been hot commodities for Western companies seeking to capitalize on their guanxi (connections) in order to secure multi-billion dollar transactions. The list of financial institutions that have engaged in such hiring practices reads like a who’s who of investment banking.

U.S. IPO Window to Reopen for Chinese Companies in 2014: Report -Caijing The window for Chinese companies to get listed on U.S. markets is expected to  reopen next year after U.S. investors’ sentiment for Chinese companies improved  late this year following a series of accounting scandals, said a report released  by ChinaVenture Investment Consulting Group.

Guangzhou Holds back Plans to Lift House Restrictions-Caijing Local authorities in Guangzhou made a retreat yesterday from a statement that it would consider lifting government controls in the real estate sector, after It was found conflicting with a central government order to keep these policies in place.

Wing Thye Woo lays out the conditions that China must meet to internationalize its currency and turn Shanghai into a global financial center. – Project Syndicate China is increasingly debating whether or not the renminbi should be internationalized, possibly joining the US dollar and the euro as an international vehicle currency (IVC) – that is, a currency that other countries use to denominate the prices of their traded goods and international loans. Related to this is a debate about whether Shanghai can become a first-tier international financial center (1-IFC) like London and New York.

Police Find Tunnel Under China-Hong Kong Border – WSJ.com The tunnel, equipped with lights, vents and a rail track with pulleys to ferry contraband, was found by Shenzhen police before it was put to use. The passage was about 40 meters (131 feet) long and led from a garage in Shenzhen to a secluded thicket of reeds in Hong Kong, according to state media reports.

Companies Can Make Money in China but It Comes With its Own Unique Risks Chinese demand is a mixed blessing. As an investor, you need to watch what China is doing because any changes could have an outsized impact on your natural-resource holdings. Copper and timber are two areas to monitor right now.

That said, China is still one of the fastest growing countries in the world — a silver lining for even out-of-favor industries like iron ore and coal. When supply and demand balance out, prices will again start to rise and companies like Peabody, BHP, and Rio will benefit.

DZHNews.com- Breaking China Biz News, Financial Updates, Corporate News Data showed that chemical, construction materials, iron and steel, nonferrous metals, hydropower and coal industries saw production growth in the first 11 months.

95% self-sufficiency urged for grains[1]|chinadaily.com.cn After enjoying a decade of stable growth for grain production, China will take decisive measures to ensure its self-sufficiency rate, with enough arable land and adequate overseas cooperation in 2014.

COMPANIES

Alibaba Unit to Offer Telecom Services in China – WSJ.com China’s telecom regulator said on Thursday that it awarded licenses to 11 private companies to run mobile telecom businesses based on services leased from China’s state-run carriers. Analysts have long said the creation of the new businesses, known in the industry as virtual telecom service providers, could offer a first step to breaking up the monopoly held by China’s three state-run telecom service providers—China Mobile Ltd., China Unicom (Hong Kong) Ltd. and China Telecom Corp.

11 Companies Get Gov’t Approval for Telecom Resale Pilot – The country’s Big Three telecom operators – China Telecom, China Mobile and China Unicom – each selected more than a dozen partners for the program and submitted their names to the ministry for review. Names they were reported earlier, such as Gome Electrical Appliances and Suning Appliance Co., are not on the final list.

The first batch of mobile virtual network operators (MVNOs) includes e-commerce operators Jingdong Mall and Alibaba Group’s Net.cn, mobile phone retailer D.Phone and value-added service provider Bewinner Communications.

Debt of China Railway Corp reaches RMB3tn and counting｜Companies｜Business｜WantChinaTimes.com The company’s debt hit 3.06 billion yuan (US$504billion) as of Sept. 30, compared with its total assets of 4.8 trillion yuan (US$797.3 billion), with net loss reaching 1.7 billion yuan (US$280 million) in the first nine months.

CNTV, Tencent, Skyworth Partner on ‘WeChat TV’ | Marbridge Consulting – China Television News Future TV, the internet TV subsidiary of China Central Television’s (CCTV) national online TV platform operator CNTV, has partnered with consumer electronics manufacturer Skyworth Digital Holdings (0751.HK) and internet firm Tencent (0700.HK) to jointly release an internet TV set, the “WeChat TV” (“Weixin Dianshi”).

Chinese Taxi App Didi Reportedly Raising $100 million Funding, Will Add WeChat Payment Didi has stood out from a crowd of taxi apps in China thanks to the backing from investors especially Tencent. Didi’s major competitor now is Kuaidi who is venture backed by Alibaba. Likewise, Kuaidi users can make payments with Alipay, the digital payment service of Alibaba Group. Kuaidi announced to acquire the fourth largest taxi app Dahuangfeng in China last month, saying Alibaba would inject more funding into it.

Tech in China: Ups and Downs of Taxi Apps in 2013 The leading ones include Beijing-based DidiDache, Hangzhou-based Kuaidi Dache, Beijing-based YaoyaoZhaoche, and Shanghai-based Dahuangfeng. DidiDache received $15 million of funding from Tencent at valuation of $60 million and reportedly to raise $100 million round led by Citic and Tencent. KuaidiDache secured several millions of US dollars from e-commerce giant Alibaba.

Tech in China 2013: Chinese Internet Giants Shopping Crazily The old story: Big Chinese Internet companies would, rather than acquiring or investing in startups, like to hire a bunch of engineers to build products on their own or do pixel-to-pixel knockoffs. Names like Tencent are notorious for killing startups by doing so with better developed products or the ability of converting existing users. Recognized reasons include 1) the costs of hiring several smart-enough Chinese engineers must be much lower than buying a startup, and 2) intellectual property rights haven’t been well protected in China.

Zoomlion Buys Germany’s M-Tec – WSJ.com Chinese construction equipment manufacturer Zoomlion Heavy Industry Science & Technology Co. has acquired a German dry mortar equipment producer M-Tec, in the latest example of Chinese building machinery players expanding overseas amid a downturn at home.

China Auto Industry News | Welcome Another New Brand To the Chinese Automarket: Enranger – From Weichai | China Car Times – China Auto News The Shandong based company has now launched its own automotive passenger car brand named Enranger in English or Ying Zhi in Chinese. At a press conference earlier this week Weichai explained its brand image; the new company will focus entirely on SUV and MPV products with its name a portmanteau of the word Engine and Energy, which of course will come from Weichai’s own green energy and at the same plays on the word ‘Ranger’

Two Rail Giants Both Claim over Half of Urban Transit Market – As the last round of subway procurements ended in December, China South Locomotive & Rolling Stock Corp. Ltd (CSR) told Caixin that it occupied 54.24 percent of the domestic market in 2013. However, China North Locomotive & Rolling Stock Corp. Ltd (CNR) said it has received contracts for 2,000 metro cars this year, totaling more than 50 percent of the market.

Meanwhile, a third player, Beijing Subway Rolling Stock Equipment Co. Ltd., has entered the market in recent years. It claimed 7.7 percent of the metro vehicle market in 2012, but has not released figures for this year.

Volkswagen Poised to Beat General Motors in China Sales – Bloomberg Both companies have surpassed their targets to deliver more than 3 million vehicles in China this year, with Volkswagen crossing the mark on Dec. 5 and GM a week later. The German automaker held a lead of about 70,000 vehicles through the first 11 months, according to data from the automakers.

Posted from Diigo.

China Business Briefs 13/12/13

ECONOMY

Rules on local govt debts to be rewritten |Policy and Regulation |chinadaily.com.cn The Ministry of Finance has begun drafting rules for local governments’ debt regime, a task that is expected to be completed no late than the end of next year.

Having a system to match local government debt – which could increase by 30 trillion yuan ($4.9 trillion) from now to 2020 – with development needs is an indispensable part of the national program to speed urbanization, according to financial specialists close to the ministry.

China’s VAT Reform Creates Unequal Tax Treatment for Domestic and Foreign Shipping Companies | China Briefing News Under the previous BT regime and the regional VAT pilot program, freight forwarders were allowed to deduct international freight from their taxable income. However, under Circular 37, this deduction is no longer permitted. Instead, starting from August 1, 2013, they are required to pay 6 percent VAT and local surcharges (including urban maintenance and construction tax, education levy and local education levy) on gross proceeds collected from clients.

Genetically modified crops: Food fight | The Economist OF THE many thousands of usually small protests that break out in China every year, few relate to national policy. Many consider the risk of challenging the central government too great. But the entrance to the agriculture ministry is a gathering spot for occasional demonstrations. Their complaints are about an issue dear to the ministry: genetically modified (GM) crops. At one protest this year, a group chanted slogans calling for the eradication of “traitors” who support GM food. Debate over the technology is escalating, putting the government in a bind.

China raises retail oil prices – People’s Daily Online The adjustment, following a rise on Nov. 29, will see the benchmark retail price of gasoline increase by 0.04 yuan per liter and that of diesel rise by 0.05 yuan per liter, the National Development and Reform Commission said.

Hot money distorts China’s exports as speculators seek to cash in on yuan, rate reforms | Reuters November exports rose 12.7 percent on-year, blowing past a Reuters poll that predicted 7.1 percent growth, but many analysts suspect the performance was inflated by speculators moving money into the country through fake trade transactions.

Nomura economist Zhang Zhiwei pointed out in an email to clients that China’s export growth far exceeded that of its Asian neighbors in November, which is unusual.

At the same time, imports grew less than expected and factory output slightly underperformed expectations; all three together form a combination analysts find highly suspicious.

Officials face rating on loans |Markets |chinadaily.com.cn In a recent announcement by the Organization Department of the Communist Party of China, the ruling party said it will abandon the “GDP ranking” system among provinces, counties and prefectures, which put considerable pressure on local officials, prompting them to relentlessly pursue large investments at the cost of environmental degradation and debt buildup.

Will some cities simply fade away? | McKinsey China This flow leaves the proportion of the population that is working age (15-64) in the areas of outflow at 70%, ten points lower than areas of inflow. And those that choose to stay have significantly lower educational achievement. Among other things, this makes it harder for companies to justify investing in production under the “Go West” imperative. Yes, Chengdu in particular is a stand out beacon of growth and development, but local markets in many smaller towns and cities are potentially shrinking; certainly not growing at the national average. Qualified talent – even if it is cheaper – is less and less readily available.

What’s the root of Chinese entrepreneurs lack of creativity? **I agree with the entrepreneurs – I see lots of creativity and drive, but there isn’t the financial backing** But local Chinese entrepreneurs that I’ve spoken with often sing quite a different tune. Rarely do they cite their education or societal preference for financial security as the roots of non-creativity. In fact, many of them argue Chinese entrepreneurs are equally as creative as their western counterparts. The difference is that those truly creative people don’t receive investment or support. The real reason we seldom see disruptive startups coming out of China’s woodwork lies with the venture capitalists and angel investors, who favor startups that use tried-and-tested western models adapted for local markets. As a result, outsiders often only see the copies.

KPMG: Turned Over China Documents to U.S. Regulators – WSJ.com **This isn’t just about accounting, but sovereignty and information flows** The handover is part of a U.S.-China deal reached in May that allows the U.S. access to audit firms’ documents about their Chinese clients, conveyed to the U.S. through Chinese regulators. The agreement was a step toward resolving a standoff over how much China will cooperate with U.S. efforts to oversee Chinese companies, though the pact was nonbinding and didn’t give the U.S. broader access to information it wanted.

Lawsuit accuses IBM of hiding China risks amid NSA spy scandal | Reuters IBM Corp has been sued by a shareholder who accused it of concealing how its ties to what became a major U.S. spying scandal reduced business in China and ultimately caused its market value to plunge more than $12 billion.

IBM lobbied Congress hard to pass a law letting it share personal data of customers in China and elsewhere with the U.S. National Security Agency, in a bid to protect its intellectual property rights, according to a complaint filed in the U.S. District Court in Manhattan.

China Takes Aim at Officials’ Housing Perks – China Real Time Report – WSJ For example, it is widely known in party circles that some officials were renting their government-financed residences to private tenants and then pocketing the proceeds. These “remote officials” were not only supplementing their salaries by such practices, but also often residing in housing provided by local businessmen, who then sought political favors in exchange for that high-end lodging.

US trade with China seen rising – BUSINESS – Globaltimes.cn **As EU trade decreases in importance, may see more EU actions on Chinese human rights. Note reference to “frictions”** The US may overtake the European Union (EU) to become China’s largest trade partner this year, Wei Jianguo, former vice minister of commerce, forecast on Wednesday.

The prediction is based on the robust economic recovery in the US and trade frictions between China and the EU, Wei told a forum held by the China Chamber of International Commerce in Beijing.

Shanghai’s FTZ to see further reforms – People’s Daily Online China will improve the negative list for foreign investment and ensure operational financial rules for Shanghai’s pilot free trade zone next year, the city’s Vice Mayor Ai Baojun said yesterday.

“Shanghai is aiming to build an international-level free trade zone after two to three years of experiment, which will facilitate trade and investment and allow free exchange of currency in a well-regulated environment,” Ai, who also heads the zone’s management committee, said in a statement.

Guangdong to prioritize 4G mobile networks |Industries |chinadaily.com.cn Guangdong, which is the largest provincial economy in the country, will promote 4G broadband applications with a view to improving performance and productivity.

The improvements will include upgrading manufacturing, public services and the management of government services, Zou said during a press conference. The electronic information industry of the province will receive a boost, he said.

China Orders Pilots to ‘Land Blind’ as Smog Delays Flights – Bloomberg **Oh god** Pilots flying to Beijing’s international airport from the nation’s 10 busiest airports must be qualified to land when visibility falls below 400 meters, starting from Jan. 1, the official China Daily said, citing unidentified people at the Civil Aviation Administration of China. The new requirement, translated as “level two blind landing,” uses radio beam transmitters to guide planes when pilots have difficulty seeing, according to the Xinhua News Agency.

The Big Churn — How High Partner Turnover Damages China’s Private Equity Industry | China Private Equity, Published by China First Capital What’s the biggest risk in China private equity investing?  Depends who you’re asking. If you ask LPs, the people who provide all the money that PE firms live off, you will often hear a surprising answer: turnover at PE firms. Nowhere else in the PE and VC world do you find so many firms where partners are feuding, quitting or being thrown off the bus.

Banking system able to absorb market shocks – BUSINESS – Globaltimes.cn **Could work out one of two ways? Either govt helps state-owned banks transition, or they are left to market** For traditional players in China’s financial services industry, most of the bumps ahead are likely to come in the shape of expanding market reforms. According to documents published in official media outlets following the recent Third Plenary Session of the 18th Communist Party of China Central Committee, the central government has made it clear that it wants to see the market gain more sway over the allocation of resources, including capital and bank credit.

COMPANIES

China Mobile Gives $919 Discount on Samsung and Sony 4G Handsets – Bloomberg In a marketing blitz on billboards at bus stops and subway stations across Beijing, the Samsung, Sony and HTC devices are all prominently featured. Domestic vendors in China Mobile’s first wave of 4G handsets include ZTE Corp. (763), Huawei Technologies Co., and the Coolpad brand of China Wireless Technologies Ltd.

China Mobile’s iPhone 5S Preorders Surpass 25,000 on First Day Preorders for Apple’s (NASDAQ:AAPL) iPhone 5S through a new China Mobile (NYSE:CHL) iPhone page have already exceeded 25,000 barely 12 hours after the page was first activated. As previously reported by Apple Insider, the page appears to have been launched sometime before 1 p.m. local time in Beijing. Soon afterwards, Apple Insider posted a screenshot of the iPhone 5S preorder page that showed over 3,000 customers had already visited China Mobile’s new iPhone landing page. Now, approximately 14 hours later, the counter is fast approaching 26,000.

Chinese Subscribers Don’t Have Number Portability Which Leads To Pent Up iPhone Demand At China Mobile – Forbes I received a comment on one of my Forbes posts that Chinese subscribers can not transfer their phone number between carriers so the availability of the iPhone is making at least this one subscriber very happy (and I suspect millions of others). There was also an article from the South China Morning Post on August 5, 2013, that talks about the Chinese market not having number portability until 2015 at the earliest. The author of the article says he is a China Mobile customer and has not switched due to the hassles that come with changing to a new phone number.

Shanghai SOEs to merge amid reform drive – BUSINESS – Globaltimes.cn Shanghai Lansheng Corporation said Thursday that it will merge with Shanghai Eastbest International (Group) Co. The Shanghai branch of the State-owned Assets Supervision and Administration Commission (SASAC) will transfer all of its holdings in Lansheng to Eastbest International, which is also controlled by the commission.

ICBC, Ping An Picked for China Option Trading, News Says – Bloomberg China has selected Industrial & Commercial Bank of China Ltd., Ping An Insurance (Group) Co., PetroChina Co. and Kweichow Moutai Co. as the first stocks in mock options trading, the Shanghai Securities News reported.

Investors will also be able to buy and sell options on two exchange-traded funds that track the 50 and 180 biggest yuan-denominated stocks in the Shanghai Stock Exchange, the newspaper reported, citing unidentified brokerages. The Shanghai Securities News is operated by the official Xinhua News Agency.

Peugeot takes writedown, gets GM’s backing for Dongfeng deal | Reuters PSA Peugeot Citroen said on Thursday it took a 1.1 billion euro ($1.52 billion) writedown at its ailing overseas operations and is pursuing a tie-up with China’s Dongfeng Motor Group that would give the French carmaker the time and cash to pull out of its downward spiral.

Separately, U.S. alliance partner General Motors Co announced the sale of its 7-percent Peugeot stake and said it would not stand in the way of a deal with Dongfeng, insisting that industrial cooperation with Peugeot remains strong.

Taxi Apps DidiDache and KuaidiDache Buddy Up with OTA Ctrip for Larger User Base DidiDache and KuaidiDache, two leading domestic taxi apps, join hands with OTA Ctrip to embed their services in the newly launched 5.2 version of Ctrip’s mobile app (report in Chinese).

What Chinese Shopped on Alibaba Marketplaces in 2013 Alibaba released a report on Alibaba Group’s Taobao Marketplace, Tmall and group-buying service Juhuasuan this year. Here are some interesting findings from the Alibaba report,

Boosted by WeChat, China’s mobile gaming market worth $590M in Q3 Why the sudden burst? After all, smartphones are common in China and have been for a few years already in this pretty mature phone market. iResearch believes that the popular messaging app WeChat is to thank for this mobile gaming explosion, due to the social gaming center that Tencent (HKG:0700), WeChat’s makers, integrated into the app this summer.

Yunnan Tin to Buy Chinese Iron-Ore Mines for $155 Million – Bloomberg China Yunnan Tin Minerals Group Co. (263), a Hong Kong-based mining company, said it plans to buy two open-cut iron-ore mines for HK$1.2 billion ($155 million) after one of its facilities was forced to close after an accident.

The company will pay HK$690 million cash, 1.05 billion new shares and HK$300 million of five-year zero-coupon convertible bonds to Mega Marks Ltd., owner of the mines and an ore-processing plant in western China’s Xinjiang region, according to a Hong Kong stock exchange filing yesterday evening.

Online literature site Cloudary CEO resigns – BUSINESS – Globaltimes.cn Hou Xiaoqiang, CEO of Cloudary Corporation, a Chinese online media company that publishes literature works online, resigned from the position, Hou announced Thursday on his Weibo account.

Hou attributed his resignation to health problems but said he will still be a senior consultant for Cloudary.

Posted from Diigo.