Lenovo

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 3/2/14

Still not much news out there. Will be interesting to see how the CNY holiday affects the monthly indicators. Such disruption may eventually help reform these awkward bi-annual calculations.

Economy   Finance   Energy   Property   Tech   Agriculture

Economy

China’s official services PMI falls in January – MarketWatch China official nonmanufacturing Purchasing Managers’ Index fell to 53.4 in January from 54.6 in December, the China Federation of Logistics and Purchasing said on Monday.

The services subindex declined to 51.5 in January from 52.5 in December and construction fell to 61.0 from 62.6, the federation said.

Will China’s Cash Squeeze Pinch the Real Economy? – China Real Time Report – WSJ China’s cash squeeze has pushed up interest rates on the domestic interbank market, raised funding costs for the nation’s banks and left many people wondering if this is putting the real economy into lower gear. So far the evidence is inconclusive.

There is proof of slower economic growth. Gross domestic product growth slipped in the final quarter of last year, dropping to 7.7% from 7.8% in the third quarter, and the trend could be continuing into this year. A gauge of factory-level activity–the HSBC Purchasing Managers’ Index—showed contraction in January from December, falling to its lowest level in six months.

Hong Kong bourse expected to ‘open red’ for Year of the Horse | South China Morning Post It is called “open red” if stocks rise on the first trading day of the Lunar New Year, representing good luck. If shares head the other way, it is known as “open black”. And they are tipping a winning start to build momentum for a positive year when the market ends up “in the black”.

Jeffrey Chan Lap-tak, chairman of the Hong Kong Securities Association, is also among those in the industry who believe the market will open red. “The markets fell quite a bit before the Lunar New Year. After the holiday, buying interest should return,” he said. He expects shares in technology and alternative-energy firms and mainland banks to do well.

Finance

China’s insurers look forward to easing of restrictions on investment of funds | South China Morning Post Despite Beijing’s gradual relaxation of investment caps on various assets for insurance funds, regulatory intervention remains a hindrance to the industry, analysts said.

Nonetheless, they expect regulation to become less heavy-handed and the authorities to grant more liberty for insurers on where to invest the funds they manage.

For instance, Chinese insurers were allowed to invest in real estate but barred from residential projects, because of the government’s concern about speculation in property prices, Man said.

Energy

China’s Got A Big Problem, But It Won’t Stop Demanding Energy Moving forward, even if growth continues to slow, energy demand should stay strong. Indeed, people don’t stop using energy when they get too old to work. And, productivity improvements will keep energy demand from industry high, regardless of the size of the workforce. So, even with a shrinking workforce, energy will remain a growth industry in China.

For example, the Energy Information Administration (EIA) projects oil and natural gas consumption to double by 2040 from 2010 levels. And China is expected to account for 70% of the coal demand growth that the EIA is projecting in Asia.

Chinese oil refiners will have to throttle back expansion as capacity races ahead of demand The decision by state-controlled giant PetroChina to put off two new refineries and delay expansion of another is the latest, most dramatic signal that China’s refined fuels capacity has expanded too fast.

While the country will no doubt continue to build refineries, the pace is likely to slow over the next few years, and new units will have to compete with other projects to secure funding.

Mining’s Dormant $8 Billion of Private Equity Seen Reviving M&A – Bloomberg Davis has so far raised $1 billion from Noble Group, Asia’s largest raw-materials trader, and private-equity fund TPG. X2 is targeting mines already in operation or close to producing, said the people, asking not to be identified because the plans aren’t public. A spokesman for X2 declined to comment.

China buys up Russia’s backyard – BUSINESS NEW EUROPE In what must have come as a shock to the Kremlin, during his last stop in Turkmenistan Xi signed off on a $60bn energy investment deal that includes $10bn to develop the massive Galkynysh gasfield which has gas reserves of some 1.3 trillion cubic metres – enough to meet China’s needs for several years. The Turkmen deal makes Gazprom’s deal largely superfluous.

China is clearly on an aggressive westward expansion and trying to spend their accumulated treasure of dollars before anything untoward happens to the currency. Chinese overseas investment rose to $80.2bn in the first 11 months of 2013, the latest data available – more than the $77.2bn that was invested in all of 2012. And outbound investment calculated on the basis of deals closed was up 28.3% in January-November.

Property

Chinese investor buys assets worth $1.9b from Dubai developer Property developer Dubai Pearl sold property assets valued at US$1.9 billion (S$2.4 billion) to a Hong Kong investor, in a sign of increasing Chinese investments to Dubai’s booming property market.

The transaction, which brings to an end a two-year delay in the development of the Pearl project, includes the sale of high-end residences and serviced apartments and two five-star hotels, the company said in an e-mailed statement.

Tech

Lenovo’s ambitious smartphone, server deals fraught with challenges | South China Morning Post Lenovo, the world’s largest supplier of personal computers, announced last Thursday it had agreed to acquire Motorola Mobility from Google for US$2.91 billion, which followed the company’s deal to buy IBM’s commodity server business for US$2.3 billion on January 23.

Despite the optimism expressed by Lenovo’s senior management about simultaneously absorbing two major operations, analysts see the road to integration being fraught with tough challenges.

WeChat got 10 million texts in 60 seconds on Chinese New Year Noting that activity in mainland China peaked from 10PM to to 12AM, WeChat states that it processed 10 million messages in one minute.

That figure dwarfs the one released by Sina Weibo, which stated that it processed 863,000 tweets within a single minute on the same day.

Why Robots Won’t Save China’s Factories – Silicon Hutong The future of Chinese manufacturing, then, lies not in producing consumer products for the world, but in producing consumer products for itself, and, I expect, building the machines that make local, personal production possible.

This will not happen right away: China’s mass-production manufacturers still have a long runway ahead as the world retools. It is also likely that the economies of mass production will continue to be essential for low-cost products for sale to developing nations.

Agriculture

Will China Continue to Drag Down Yum! Brands’ Earnings? (YUM) With KFC a big part of Yum!’s strategy in China, consumer distrust of poultry has the potential to hit Yum!’s China results hard. This couldn’t have come at a worse time for Yum!, with the Chinese New Year holiday, typically a busy period for KFC, beginning on Jan. 31.

2014 may end up being a repeat of 2013 for KFC China, where the chain saw same-store sales decline in the double digits for much of the year. This would destroy the big recovery that analysts are expecting in 2014, and it puts Yum!’s long-term earnings growth goal in jeopardy. Without a stable, safe poultry supply in China, it’s hard to imagine KFC China being successful in the long run.

 

Posted from Diigo.

China Business Briefs 1/2/14

I am experimenting with dividing the day’s links by business area. Any feedback on this will be gratefully received.

Economy   Finance   Auto   Infrastructure   Energy   Telecoms   Travel   Property   Tech   Food

Economy

China factory output slows in January – FT.com The gauge dropped from 50.5 in December to 49.5 in January, a slight downward revision from the 49.6 reported in the “flash” PMI last week. A figure above 50 indicates expansion. The January figure marks the first contraction in the sector for six months.

China Manufacturing Gauge Falls to Six-Month Low – Bloomberg The Purchasing ManagersIndex (EC11CHPM) was at 50.5, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That matched the 50.5 median estimate of analysts surveyed by Bloomberg News and compared with December’s 51 reading. Numbers above 50 signal expansion.

Many Local Gov’ts Aim for Lower GDP Growth This Year – Most of the local governments that have announced their GDP targets for this year aimed lower than they did in 2013, citing the need to rebalance the economy and improve the quality of growth. Many missed their growth targets last year.

The announcements were made after the governments of 28 provinces, municipalities and autonomous regions held their annual lianghui, or meetings of the provincial legislature and political advisory body, in January. The provinces of Anhui, Hunan and Hainan have not yet held the meetings.

China’s loan sharks circle in murky shadow bank waters – Yahoo Singapore Finance China’s crackdown on risky lending has driven borrowers into an even darker place in their search for capital – underground banking.

The domain of loan sharks, underground lending is the least regulated area of China’s shadow banking, or non-banking, sector and for some it is seen as the biggest risk to China’s financial stability.

Why China’s Factories Will Automate – Silicon Hutong In the coming decades, China will go from being “THE factory floor” to “A factory floor.” Many things will force that change – a shrinking pool of workers, growing local opportunities in services, tightening environmental regulations, and more expensive energy. The economics, in short, will change, and so must industrial China.

Chinese prefer buying German, British companies: study – Xinhua | English.news.cn Germany and Britain are by far the most popular investment destinations of Chinese investors, a study showed on Friday.

According to the study of the economic consultancy Ernst & Young published Friday in Dusseldorf, Chinese investors have made 25 acquisitions in 2013 in Germany and Britain respectively.

Finance

Economic danger lurks in China’s shadow banks – FT.com Hence China’s uncomfortable predicament. Because the government was unwilling to see Credit Equals Gold No. 1 collapse, fears of an imminent economic meltdown are overblown. But for precisely the same reason China’s debt powder keg is only getting more tightly packed.

Distrust of China’s Trusts – WSJ.com It would be a mistake for Beijing to overreact now by simply clamping down on trusts, which perform some useful functions. The best prudential regulation is not about blanket bans on particular products, but rather looking for signs of dysfunction and getting ahead of the problem. The explosion of trust products suggests that the Chinese financial system needs new conduits for capital outside the banks. The challenge is to make sure that they are transparent, well regulated and free of any expectation of government bailouts.

Rating agencies criticise China’s bailout of failed $500m trust – FT.com Global rating agencies – often among the more sanguine voices on China – have warned that this week’s bailout of a soured $500m trust loan was a wasted chance to address rising moral hazard in the country’s shadow banking sector.

“By bailing out investors in this particular instance, the authorities are perpetuating moral hazard within the Chinese financial system – and this risk may in fact have become a whole lot bigger,” wrote Jonathan Cornish, an analyst at Fitch, in a research report. “We think the authorities have missed a chance of putting a clear marker in the sand that non-bank products would certainly not be supported.”

China’s top lender ICBC to add Peru to expanding Latin America operations China’s ICBC, the country’s top lender, will start operating in Peru next week as part of a bid to finance local exporters while expanding its operations in South America, the Lima stock exchange said on Wednesday.

Industrial and Commercial Bank of China, one of the largest banks in the world in terms of assets, secured a license to operate in Peru last year and will start lending to Peruvian companies – particularly exporters – as of Feb. 6, the exchange said in a statement.

Audit in their hands: what China can tell us about rotation – 30 Jan 2014 – Accountancy Age TRADE with China makes headlines. But along with trade has come mounting pressure on audit in the country everyone wants to do business with. Last year saw the results from the first wave of companies forced to rotate their auditors in what is an important step for Chinese corporate integrity.

The move has been closely watched and the first tentative conclusions are already being drawn from what many see an experiment in the management of audit provision. What will it do to the concentration of high-profile audits in the hands of the Big Four? How will it affect the price of audit? And what can the rest of the world learn from the experience?

Standard sells stake in London business to ICBC | Financial Services | BDlive STANDARD Bank has sold its controlling stake in its London-based global markets business to the Industrial and Commercial Bank of China (ICBC) as part of its strategy to focus on its African operations.

Africa’s largest banker announced on Wednesday it had sold 60% of the ordinary share capital of its London-based Standard Bank plc.

China’s banks: fighting back against online upstarts | beyondbrics Whether such yields from the money market funds are sustainable is open to question – and security is still a concern for some. Nonetheless, the traditional national banks have been forced to address the challenge, adding pressure to their share prices despite their still-strong earnings.

Shares of 12 banks out of 16 A-share listed Chinese banks have fallen below their net asset value per share. Jiang Jian Qing, chairman of ICBC argued at Davos that it was caused by China-bashing stories about non-performing loans and shadow banking rather than healthy fundamentals.

ICBC and Standard Bank: Limited partnership | The Economist Yet the match—the biggest foreign investment by a Chinese firm at the time—has not quite lived up to expectations. Revenues that could clearly be credited to it seemed slow in coming; then Standard Bank gave up looking for them. In spite of the growing Chinese presence in Africa, Standard Bank never secured the fees and bragging rights that arranging a Chinese takeover of an African firm or a big infrastructure investment would have brought.

China Money Network − Banyan Capital Completes First China Venture Fund Of $206M China-focused venture firm Banyan Capital has completed final closing of its first venture capital fund, Banyan Partners Fund I, on January 8 raising a total of $206 million, according to a company announcement.

The fund had two months of marketing period, and attracted over 40 investors from the world including entrepreneurs, family offices, fund-of-funds, foundations and other institutional investors from greater China and the U.S.

China Money Network − JD.com Files For $1.5B US IPO Beijing-headquartered Chinese e-commerce operator JD.com, Inc. has filed for a U.S. initial public offering, according to a filing with the U.S. securities regulator.

JD.com plans to raise up to $1.5 billion, and has not decided which stock exchange it will list.

Auto

Ford Recalls Edge SUVs in China – January 31, 2014 – Zacks.com Ford Motor Co. has decided to recall 13,493 Edge SUVs in China to repair faulty fuel systems, according to Reuters. Inferior quality of the fuel pulsation damper used in the vehicles might crack and lead to fuel leakage. This may eventually lead to fire.

Discounts yield rebound for foreign car sales – Business – Chinadaily.com.cn Vehicle imports grew 7.3 percent to 1.17 million last year, with a strong rebound in the fourth quarter helping make up for a decline in the first half, China Automobile Trading Co Ltd said.

That was the first contraction since 2006, when China implemented its World Trade Organization commitment to lower the import tariff for vehicles to 25 percent.

SGMW honor Autoliv China with supplier of the year Award – MarketWatch At SGMW’s 2013 supplier conference and award ceremony held on in Guilin China, Mr. Shen Yang President of SGMW presented Autoliv China with the “Excellent supplier award”. This is Autoliv China’s third consecutive year to be named by SGMW following “the best quality award” in 2011 and “the best platform award” in 2012.

Infrastructure

allAfrica.com: Africa: Tanzania Becoming the New Chinese Province in Africa “Compared to the West, on my opinion, the Chinese are the best investors, we are quite sure the projects will succeed as there will be no politicizing,” he adds.

Energy

BP shelves China refinery plan as fuel demand slows BP is dropping plans to invest in a refinery in China, three sources with direct knowledge said, the fourth refining project in recent months to fall foul of a slowdown in growth in the world’s second-largest economy.

China’s fuel consumption rose at the slowest clip in more than 20 years in 2013, ending a decade of rapid demand growth that drove global oil prices to over $100 a barrel and made gaining access to China’s restricted retail market a mouth-watering prospect for international oil firms.

Sinopec to co-operate in Hong Kong graft probe | South China Morning Post China Petroleum and Chemical Corporation, also known as Sinopec, has said it is co-operating with Hong Kong authorities in an anti-graft probe, media reports said.

The state-owned company would not tolerate any illegal or corrupt conduct, it said in a statement made through a public relations agency to Bloomberg News. It added that operations were not affected and it considered the inquiries to relate to the “individual conduct” of unspecified staff, according to the statement.

China sets new world record for solar installations | Jennifer Duggan | Environment | theguardian.com China installed a record 12GW of solar power in 2013, doubling its rate of solar installations, according to preliminary figures. This is more than has ever been installed by any country in a single year and means that China installed three times more solar energy in 2013 than the total UK solar capacity.

China’s first direct coal liquefaction line produces 866,000 tonnes – Xinhua | English.news.cn China’s first direct coal-to-oil project, operated by the country’s leading coal producer, Shenhua Group, produced 866,000 tonnes of oil products last year.

The direct coal liquefaction line is located in Ejin Horo Banner, Ordos City in northern Inner Mongolia Autonomous Region. It produces 3,000 tonnes of oil products with consumption of nearly 10,000 tonnes of coal per day, said Shenhua Coal Liquefaction and Chemical Co., Ltd.

Chinese firms introducing new forms of energy into Ethiopia – Headlines, features, photo and videos from ecns.cn|china|news|chinanews|ecns|cns HydroChina is representative of the Chinese infrastructure enterprises that are building roads, bridges and housing in Ethiopia, catering to the country’s construction boom.

They didn’t stride into the promising but remote market alone; instead, they tapped into Ethiopia through Chinese government foreign aid projects.

China Resources Seeks Lenders for HK$6.4 Billion Syndicated Loan – Bloomberg China Resources Power Holdings Co. (836) is seeking bank commitments for a HK$6.4 billion ($824 million) syndicated loan after hiring banks to arrange the deal, according to two people familiar with the matter.

The state-owned power generator will use the five-year facility to refinance debt and for general purposes, the people said, asking not to be identified because the details are private. It’s asking lenders to commit by Feb. 21, they said.

Telecoms

There really has been a mass exodus of Sina Weibo users With over 60 million daily active users as of November (though some of those could be ghost accounts), Sina Weibo doesn’t appear to be dead just yet. And when the company reports staggering numbers of tweets during Spring Festival or New Year’s Eve, one is reminded that it’s still a powerful player in Chinese social media. But at the very least, Sina Weibo’s heydey of scandals uncovered and corruption exposed appears to be grinding to a halt.

Travel

Outlook bright for low-cost carriers in China|WantChinaTimes.com Chinese budget carrier Spring Airlines saw stellar annual results in 2013, with regulators approving an application for the company to set up a low cost carrier (LCC), signaling a different stage in China’s aviation sector, the Beijing-based Securities Daily reports.

The future of China’s LCC market seems to be bright after the Civil Aviation Administration of China (CAAC) recently approved two applications to set up new carriers, including an LCC to be based in Guangzhou.

Property

Keeping the lid on housing prices – Business – Chinadaily.com.cn Nobel laureate and Yale University professor Robert Shiller was one of the first global economists to talk about the runaway risks in China’s spiraling property prices, a matter that has been of considerable interest in China recently.Shiller, well known for his insights on global asset prices and extended research work on behavioral finance, macroeconomics and real estate, had during a visit to China mentioned that property prices were moving at a “dangerously high” pace. That comment, highly controversial back then, seems even more controversial now, given that real estate prices across most of China have increased by more than 50 percent, and by more than 100 percent in a few high-profile markets.Travel

Tech

Lenovo CEO Reshapes Chinese PC Maker With Deal Spree – Bloomberg In the span of a week, the chief executive officer of China’s Lenovo Group Ltd. (992) cut the two biggest deals in his company’s history. He’s spending a combined $5 billion to buy Google Inc. (GOOG)’s Motorola mobile-phone business and International Business Machines Corp. (IBM)’s low-end server business.

How Lenovo Built a Chinese Tech Giant – WSJ.com China’s Lenovo Group Ltd., once known as Legend, grew from a tiny government-funded venture in the 1980s to a global powerhouse that last year became the No. 1 personal-computer maker in the world.

With its proposed $2.91 billion purchase of Google Inc.’s unprofitable Motorola Mobility handset business, Lenovo is making a risky bet it can replicate that success in smartphones.

3 Reasons Lenovo’s Purchase of Motorola Will Succeed Where Google Failed (LNVGY) There are doubts regarding Lenovo’s ability to revive the Motorola brand, which at its peak (2006) accounted for 22% of the mobile phone market, but I truly believe that Lenovo will do a much better job than Google at rebuilding the fallen brand’s reputation in the mobile marketplace.

Let’s take a look at the three top reasons:

Lenovo’s Purchase of Motorola an Exercise in Buying Brands | China Briefing News Amongst all the recent hype of Chinese outbound investment going to the United States comes the news that Lenovo have purchased Motorola from Google for US$2.9 billion. I’m not a great believer in the stories of Chinese manufacturers heading in droves to buy up struggling American or European businesses – China has emerging Asia right on its doorstep and is investing heavily in these countries both for sound business and political incentives. I wouldn’t be expecting Motorola’s plants in the States to be undergoing mass transformation and expansion anytime soon.

In fact, what we are really seeing is a well planned out, but longer term strategy, consistent with emerging Asian entrepreneurs as a whole: the buying of brands that the West no longer knows what to do with, and the re-positioning of them for the Asian – not Western – markets.

Food

New Zealand’s exports to China soar 45 per cent on demand for dairy | South China Morning Post Figures released on Friday by Statistics New Zealand show that China surpassed Australia for the first time on an annual basis as New Zealand’s top export market.

In 2013, China imported US$8.1 billion worth of New Zealand goods, up from US$5.6 billion the previous year. About 40 per cent of those imports were of milk powder.

France’s truffle farmers aim to stop inferior Chinese fungi getting a sniff | World news | theguardian.com When is a black truffle not a €1,000-a-kilo rare French fungus? When it fails the smell test.

In their battle to see off competition from pale and cheap Chinese imitations, French trufficulteurs (truffle cultivators, as they like to be known), have enlisted the help of scientists.

China Overtakes France, Italy as World’s Biggest Red Wine Consumer – China Real Time Report – WSJ The country, including the wine hub of Hong Kong, consumed 155 million nine-liter cases (1.87 billion bottles) of red wine in 2013, according to new research released this week. The report was commissioned by Vinexpo, a Bordeaux-based wine industry conference, and conducted by the International Wine & Spirit Research, an independent research firm for the liquor trade.

The total marks a 136% increase from five years ago and surpasses France’s 150 million cases and Italy’s 141 million cases of red wine consumed in the same year. What’s more, red wine consumption in China almost tripled between 2007 and 2013, while it decreased 18% in France and 5.8% in Italy.<

Posted from Diigo.

China Business Briefs 29/1/14

I will be travelling over the next two days and might be unable to blog during that time. My visit to Beijing has generally been very pleasant. Will be back in three months.

ECONOMY

China’s retail investors are leading grassroots financial reform | China Economic Review Grassroots movements bring to mind angry petitioners on the streets or the little man fighting against the big, ugly institution. It doesn’t conjure images of investors handing over their cash to bankers, who then pile that money into real estate or coal projects.

But in China, a grassroots financial movement fomenting off the balance sheet involves just that. And in some ways, it too is the story of a marginalized group of people, depositors, pushing back against an almighty, unmovable force, the People’s Bank of China (PBOC).

Micro-credit firms lent RMB227bn last year: People’s Bank|WantChinaTimes.com China had 7,839 micro-credit firms by the end of last year, which made 227 billion yuan (US$37 billion) in new loans, according to the People’s Bank of China, the country’s central bank.

The total loan balance reached 819.1 billion yuan (US$135.4 billion), according to central bank figures.

China trust deal raises thorny questions – FT.com The last-minute rescue raises a thorny question for the future of the Chinese economy. Has the deal confirmed the widespread belief that the government will do whatever it can to stave off trouble, hence fuelling more risk-taking? Or has the near-default taught investors that high yields come with high risks?

China’s Rescue of Troubled Trust May Stoke Risk-Taking – Bloomberg China’s eleventh-hour rescue of wealthy investors in a high-yield trust threatens to drive more money into the nation’s $6 trillion shadow-banking industry, undermining regulators’ efforts to deter excessive risk-taking.

Industrial & Commercial Bank of China Ltd., the nation’s largest lender, yesterday told customers who had invested in the 3 billion-yuan ($496 million) trust product that they can sell their rights to unidentified buyers to recoup the principal. Some clients plan to visit ICBC branches to demand more interest ahead of tomorrow’s 5 p.m. deadline for accepting the offer, according to Du Ronghai, a Guangzhou-based investor.

China Industrial Profit Growth Further Declines in December: NBS-Caijing Total profits of China’s industrial companies rose 6 percent year-on-year to  CNY942.53 in December, compared with a growth of 9.7 percent a month ago and 17.3 percent a year earlier.

For the full year of 2013, industrial profit rose 12.2 percent year-on-year  to CNY 6.28 trillion, compared with a growth of 5.3 percent in the previous  year.

China’s ‘invisible man’ quits forex role – FT.com Zhu Changhong had been the chief investment officer for the State Administration of Foreign Exchange, the agency that manages China’s $3.8tn mountain of foreign exchange reserves. He left a starring role at Pimco, the world’s largest bond house, to join SAFE in late 2009 and is now expected to return to the private sector, according to two people familiar with his decision.

Trained as a physicist, Mr Zhu earned the “invisible” moniker for his extreme reluctance to make public appearances. He has never given any media interviews, and the only photos of him online are a grainy picture from his student days and an unidentified shot from the time of his return to China.

China yuan weakens to 6.1073 against USD Wednesday – Xinhua | English.news.cn The Chinese currency Renminbi, or the yuan, weakens 20 basis points to 6.1073 against the U.S. dollar on Wednesday, according to the China Foreign Exchange Trading System.

China Further Eases Foreign Exchange Control over Capital Accounts | China Briefing News The State Administration of Foreign Exchange (SAFE) of China promulgated a circular on January 24 to improve and further ease the administrative control over capital account foreign exchange items (Huifa [2014] No.2, hereinafter referred to as “Circular 2”). Circular 2 will enter in to effect on February 10.

The approval procedure for profit repatriation will be simplified and banks will no longer review any transaction documents if the remittance amount is under US$50,000. For remittance of profit over US$50,000, banks in principle do not need to review the audit report and capital verification report; however, they will still check the board resolution on profit distribution and the original tax record-filing documents to verify the authenticity of the transaction.

The Misfortunes of the Big Four in China Overall, the judge’s 112-page ruling on the audit work of the Big Four in China makes for interesting, and at times damning, reading. You can click here to access it.The judge’s decision should probably be required reading for anyone working in Chinese private equity and capital markets transactions with Chinese companies. Investments in Chinese companies worth many tens of billions of dollars rely, at least to some extent, on the accuracy and reliability of Big Four audits. That audit bedrock looks shakier now than it did a week ago.

H7N9 bird flu: Chinese provinces halt live poultry trade | World news | theguardian.com Authorities in eastern China have banned live poultry sales after an increase in the number of people infected with the H7N9 strain of bird flu, state media has reported as the busy Chinese new year travel period gets under way.

So far this year H7N9 has killed 19 people in China and infected 96, according to the official Xinhua news agency, which cited the Chinese Centre for Disease Control and Prevention.

Chinese firms dominate Arab Health Congress 2014|WantChinaTimes.com Chinese companies are the biggest participant in the ongoing Arab Health Congress 2014, the largest health fair in the Middle East and North Africa that started in Dubai on Monday.

Among the 3,900 companies participating in the four-day congress, 510 are from mainland China, 29 are from Hong Kong, while 107 are from Taiwan.

China ends 2013 with a total of 417 million 3G subscribers China’s grand total on 3G at the end of 2013 is a whopping 417.3 million, up from 233.5 million in December 2012; that’s a 78.7 percent rise. Check out the growth from 2010 to the most recent number:

Beijing Urges Steelmakers to Pursue Overseas Iron-Ore Assets – WSJ.com China is urging its steel companies to buy more iron-ore assets abroad amid signs that many have been losing their appetite for such investments.

The National Development and Reform Commission this week said Chinese steelmakers should keep building up stakes in global iron-ore assets in the interests of China’s strategic security and “speaking rights,” or influence, in global trade. China’s ore imports rose 10% last year to a record 819 million metric tons, according to customs data.

Chart Of The Day: How China’s Stunning $15 Trillion In New Liquidity Blew Bernanke’s QE Out Of The Water | Zero Hedge You read that right: in the past five years the total assets on US bank books have risen by a paltry $2.1 trillion while over the same period, Chinese bank assets have exploded by an unprecedented $15.4 trillion hitting a gargantuan CNY147 trillion or an epic $24 trillion – some two and a half times the GDP of China!

UK embraces Chinese investment Chinese interest appears to lie in the future of high speed rail in the UK. China currently has the world’s largest and fastest growing high speed rail network of its own, boasting nearly 6000 miles of track, and may now be turning its attention to the UK’s own aging and oversubscribed railway network. Although Chinese investors will not be placing any direct financing into the construction phase of the new £50bn ‘HS2’ line, Chinese bidding for the concession to operate the new railway or invest in schemes around the route and its stations seems likely. Chinese Premier Li Keqiang noted, following talks with Mr Cameron, that “The two sides have agreed to push for a breakthrough and progress in co-operation in the areas of nuclear power and high speed railway.”

Norway’s sovereign fund halves coal exposure | Reuters Norway’s $817 billion sovereign wealth fund, the world’s largest, has halved its exposure to coal producers, with most of its remaining interest in the sector in Chinese companies, its chief executive said on Tuesday.

COMPANIES

Citic Group Unit May Invest in Trust Product, Morning Post Says – Bloomberg A unit of Citic Group Corp., a Chinese state-backed conglomerate, may take part in bailing out investors in a troubled 3 billion-yuan ($496 million) trust product, Oriental Morning Post reported.

The transaction is under way, the newspaper reported yesterday, citing a person close to Industrial & Commercial Bank of China Ltd. (601398) The person declined to give the name of the unit or the amount it plans to invest, according to the report.

China’s Tencent WeChat App Launches Electronic Hongbao – China Real Time Report – WSJ When China celebrates the Lunar New Year on Friday, millions of red envelopes stuffed with cash are expected to change hands among families, friends and colleagues. But this year, there’s a new spin on this old tradition, with the gift-giving happening right on people’s smartphones.

On Tuesday, Wechat, the social networking and messaging app from Chinese Internet giant Tencent Holdings, launched a new feature that allows users to send these envelopes of money to each other electronically. Givers must first link the app to their bank accounts, then they can send specified amounts of money to their Wechat contacts through a personal message or to put the cash up for grabs in chat rooms full of friends. Receivers can transfer the funds back into their own bank accounts. (This reporter successfully grabbed three this morning.)

Alibaba Posts Profit on Demand Ahead of Potential IPO – Bloomberg Net income attributable to ordinary shareholders was $792 million in the three months ended September, up from a loss of $246 million a year earlier, according to a presentation from Yahoo! Inc. (YHOO), which owns a 24 percent stake in China’s largest e-commerce company. Revenue rose 51 percent to $1.78 billion.

Weibo’s value shrinks by US$500m after market report|WantChinaTimes.com The stock price of Sina Weibo, China’s equivalent of Twitter, fell by 11.32% from US$84.60 on Jan. 15 to US$75.02 on Jan. 17, which was a result of a recent Chinese report, according to Beijing’s Economic Observer.

The China Internet Network Information Center (CNNIC) released a report on Jan. 16 in which it said that the number of Weibo users had dropped by 9.2%, or 27.83 million last year. The market misinterpreted the Weibo or microblog users mentioned in the report as Sina Weibo users, as a result of which Sina Weibo’s market value shrunk by US$500 billion after the report’s release.

PetroChina: Discounted Growth Play With Significant Upside – Seeking Alpha PetroChina (PTR), China’s only super major, has a history of strong financial growth and is well positioned to take advantage of China’s growing demand for diversified energy sources. Currently trading at only 9.3x earnings, the PTR stock looks like the rare gem that offers growth at a value price.

Wal-Mart to upgrade China vendor compliance after state TV criticism | Reuters U.S. retailer Wal-Mart Stores Inc (WMT.N) said on Wednesday it will upgrade its vendor compliance process in China, requiring more documentation and making use of a computer-based system to help suppliers manage associated paperwork.

The announcement came after state-owned China Central Television (CCTV) criticized the world’s No. 1 retailer for circumventing its quality control process and fast-tracking some products with higher profit margins.

Shipping lines shed assets to offset poor performance – Business – Chinadaily.com.cn China Shipping Container Lines Co, a main subsidiary of State-owned China Shipping (Group) Co, has forecast a net loss of 2.63 billion yuan ($435 million) for 2013, as the company underwent a shrinking global shipping market, aggravated by the challenges of overcapacity and international competition.

To avoid financial loss, CSCL began to sell its quality assets in the second half of 2013. However, the company only managed to complete a 49 percent share sales of Lianyungang New Oriental International Container Wharf with Singapore’s port operator PSA International Pte Ltd within the year, gaining 260 million yuan in sales profit.

Huawei, Lenovo poised to close gap with smartphone leaders | South China Morning Post Huawei Technologies and Lenovo are expected to intensify competition in the global smartphone market after both companies recorded strong unit shipment growth last year.

Data released yesterday by technology research firm IDC showed the two Chinese technology giants captured a combined 9.4 per cent market share last year, when total industry shipments topped 1 billion units for the first time.

Why Baidu Acquired Renren’s Group-Buying Site By acquiring the remaining shares in Nuomi, Baidu actually does something rare, as the company is well-known for buying only controlling stakes. At the same time, by selling all of its stake in Nuomi, Renren –which has been largely overtaken by Sina‘s Weibo and Tencent‘s WeChat in the past two years– may be trying to make its portfolio of services more compact. The social network company may focus more on improving user and monetization metrics of its promising game business, rather than releasing new services.

Hong Kong Property Tycoons Settle Family Feud – China Real Time Report – WSJ A yearslong feud involving the family behind one of the world’s biggest property empires appears to have come to a happy ending, with a deal reached to equally divide family-owned shares in Sun Hung Kai Properties Ltd. to the three Kwok brothers and their families.

The agreement in essence restores eldest brother Walter Kwok as a beneficiary of the family trust that controls the property company, commanding a market capitalization of 260 billion Hong Kong dollars (US$33.5 billion).

CICC, Qianhai Financial Plan $3.3B Joint Cross-Border Fund Beijing-based China International Capital Corporation (CICC) has signed a memorandum of understanding with Qianhai Financial Holdings, a wholly-owned subsidiary of the Administrative Bureau of Qianhai Economic Zone in Shenzhen, to establish a joint development fund, according to an announcement.

The CICC Qianhai Development Fund will target to raise a total of RMB20 billion ($3.3 billion). It plans to complete first closing of RMB5 billion ($833 million) before June 30 this year.

Toyota Supplier Sees China Sales Doubling on Orders From VW, GM – Bloomberg Tsubakimoto Chain Co. (6371), a Toyota Motor Corp. (7203) supplier, forecasts China auto parts sales to more than double in four years as carmakers including Volkswagen AG and General Motors Co. raise orders to diversify supply chains.

The maker of transmission chains and gears expects sales to jump to more than 12 billion yen ($117 million) by March 2018, Toru Fujiwara, managing executive officer, said in a Jan. 27 interview. The board has approved plans for a new plant in China as early as this year, he said.

China Money Network − KPCB-Backed Chinese Group-Buying Site ManZuo.com Sold To Suning Nanjing based Chinese home appliance retailer Suning Commerce Group Co. says it has acquired Chinese group-buying site ManZuo.com for around $10 million, according to media reports.

Kingsoft to Take Security Software Business KIS and List it on U.S. Market Kingsoft Corporation (SEHK: 3888), a leading applications and entertainment software developer in China, announced today that it planned to spin off security software business and list the sector on NASDAQ or New York stock exchange. Kingsoft has filed to Hong Kong Stock Exchange for the spin-off.

Kingsoft’s security software business is operated by Kingsoft Internet Software Holdings Limited (KIS), also known as Kingsoft Network in China. The company is principally engaged in development and operation of security software and web browser Liebao, as well as cross-platform value-added services and online advertising.

Noble Group Limited (via noodls) / NOTIFICATION ON SUBSIDIARY Noble Group Limited (the “Company”) wishes to announce that on 23 January 2014, the Company’s wholly-owned subsidiary, Noble Clean Fuels Limited (“NCFL”), has subscribed for a 51% shareholding interest in Watt Power Limited (“WPL”), a company incorporated in the United Kingdom.

Moody’s assigns A1 to China Shipping Overseas Finance 2013 Limited’s bonds Moody’s Investors Service has assigned a definitive A1 rating to the credit enhanced bonds issued by China Shipping Overseas Finance 2013 Limited (unrated).

The bonds are supported by an irrevocable standby letter of credit from  the Bank of China Limited (BOC, A1/P-1/D, stable),  Macau Branch.

RPT-UPDATE 2-Shaanxi Coal debut hit by volatility in China’s reopened IPO market | Reuters Shares of Shaanxi Coal Industry Co Ltd jumped in their Shanghai debut but came off earlier stratospheric highs in a roller coaster day as China’s newly reopened initial public offering market drew out aggressive punters.

Shaanxi Coal, which raised $660 million in the biggest mainland China listing since 2012, had soared by its daily limit of 44 percent in early trade. That triggered a suspension until five minutes before the market’s close and prompted an announcement from the exchange that it had taken measures against two retail investors who had driven the price up aggressively.

KWM advises Agricultural Development Bank of China on RMB bonds issuance | Firm News | The Lawyer King & Wood Mallesons (KWM) has advised the Agricultural Development Bank of China (ADBC) on the successful issuance of RMB bonds worth ¥3bn (£300m) and getting listed on the Hong Kong Stock Exchange.

The bonds are issued to institutional investors with terms of two years and three years respectively at the interest rate of 3.08 per cent and 3.28 per cent per annum.

Posted from Diigo.

China Business Briefs 28/1/14

Sorry about the lack of posts yesterday. Beijing seems to hit my immune system with frequent minor ailments. All a bit wearisome.

ECONOMY

China Credit Trust Says It Reached Pact on Troubled Product – Bloomberg China Credit Trust Co. said it reached an agreement to restructure a high-yield product that sparked concern over the health of the nation’s $1.67 trillion trust industry and contributed to a global selloff in emerging-market assets.

The agreement includes a potential investment in the 3 billion-yuan ($496 million) product, Beijing-based China Credit Trust said on its website today, four days before payment is due. The two-line statement didn’t identify the source of funds, or say whether investors would get their money back.

China shadow bank says reached pact to avoid default – Yahoo Singapore Finance In a notification to investors, obtained by Reuters, the trust firm declared that an accord had been reached and advised investors to contact client managers, but the document, did not say how or when investors would be repaid.

Citing an unnamed investor in the trust product, Caixin, a respected financial magazine, reported on Monday that the agreement allows investors to recover their invested principal, but not the final interest payment originally promised.

China Trust Default Avoided…What Comes Next? – Forbes A default of the “Credit Equals Gold #1” trust product has been avoided. What happens in the coming months will either push China closer towards a financial crisis or help it gradually step back from the edge.

Heard on the Street: China’s Default That Wasn’t – WSJ.com Like clockwork, a mysterious third party has sprung to the rescue, allowing China Credit Trust to repay the principal on high-yield investment products tied to a struggling coal miner. Savers will miss some interest payments and get a lower effective yield, but otherwise escape unharmed. So does the reputation of Industrial and Commercial Bank of China, the country’s largest commercial lender, which sold the trust products to clients.

The hand of the state seems to be at work. Officials in the miner’s home province were actively involved in coming up with a solution, The Wall Street Journal reported. The bailout involves the third-party investor taking an equity stake in the coal company, which came only after the company suddenly gained approval to restart a closed mine.

China’s top diplomat wants free-trade deal with Europe | Reuters Beijing’s top diplomat called on Monday for China and the European Union to consider a multi-billion-dollar free-trade deal, a once unthinkable step that shows a big improvement in relations between two of the world’s largest markets.

“There are bright prospects for China-EU business cooperation,” Chinese State Councillor Yang Jiechi told reporters after meeting EU foreign policy chief Catherine Ashton ahead a visit to Brussels by President Xi Jinping in March.

China Trade Puzzle Revived as Hong Kong Data Diverge – Bloomberg China’s trade numbers, distorted by fake exports (HKETEXPC) last year, are set to come under renewed scrutiny after a discrepancy between Hong Kong and Chinese figures for bilateral trade widened to the largest in eight months.

Hong Kong’s December imports from China fell 1.9 percent from a year earlier to HK$176 billion ($22.7 billion), the city’s statistics department said yesterday. That compares with $38.5 billion in exports to Hong Kong reported earlier this month by China’s customs administration, up 2.3 percent, based on data compiled by Bloomberg.

China Property New Loans Hit $380Bln in 2013, Accounting 1/3 of Total-Caijing China’’s property sector attracted 2.34 trillion yuan (about $384 billion) of new loans in the past year, representing nearly a third of the total from the banking institutions, a central bank report showed.

Outstanding yuan-denominated lending to the property sector from both Chinese and foreign financial institutions to the property sector rose 19.1 percent year-on-year to 14.61 trillion yuan by the end of 2013, the People’s Bank of China said.

Total loans outstanding at commercial banks amounted to 71.9 trillion yuan at the end of December, up 14.1 percent year-on-year and compared with a growth rate of 15.0 percent in the previous year.

Currencies and banks: the two big questions about China | The A-List But in the financial world the Chinese remain a little more hesitant. Two big issues kept recurring, one international, the other domestic:

-will the renminbi soon rival the dollar as a global reserve currency?

-is the rapid growth of shadow banking an accident waiting to happen?

China’s debt-fuelled boom is in danger of turning to bust – FT.com Debate rages over how this tale will end. Most analysts believe that the Chinese economy will once again expand by more than 7 per cent this year, despite ballooning private sector debts. But the pessimistic minority has history on its side. Only five developing countries have had a credit boom nearly as big as China’s. All of them went on to suffer a credit crisis and a major economic slowdown.

Banks see slower growth in assets – Frontpage – BUSINESS – Globaltimes.cn Assets of the banking industry ­totaled 148 trillion yuan ($24 trillion) by the end of 2013, up 12.8 percent from a year earlier, according to data released Sunday by the China Banking Regulatory Commission (CBRC). The growth rate was the lowest since 2003, when the CBRC first started revealing such data.

Banking assets mainly refer to ­financial institutions’ lending assets. Meanwhile, total liabilities reached 137.9 trillion yuan.

Beijing says US should stop new dumping probe on solar cells | South China Morning Post China’s commerce ministry called on the United States on Sunday to stop anti-dumping investigations into imports of solar power products from China, expressing “serious concern” and vowing to defend its producers.

“The Chinese side expresses serious concern,” the commerce ministry said in a statement on its website. “China urges the United States again to carefully handle the current … investigations, be prudent in taking measures and terminate the investigation proceedings.”

Life Insurance in China, Key Trends and Opportunities to 2017 – PR Newswire – The Sacramento Bee The report provides in depth market analysis, information and insights into the Chinese life insurance segment, including: • Benchmarking analysis of the BRICS (Brazil, Russia, India, China and South Africa) countries • The Chinese life insurance segment’s growth prospects by life insurance categories and customer segments • The various distribution channels in the Chinese life insurance segment • The competitive landscape in the Chinese life insurance segment • A description of the life reinsurance segment in China • Detailed analysis of the regulatory framework in China

Oil Companies Using New Logic in Their Overseas Acquisitions – Among mergers and acquisitions of global upstream oil and gas assets over the past few years, one trend has seen European and American companies selling while national oil companies in China and Russia have been buying.

“In 2013, global M&A transactions of upstream oil and gas assets were the lowest since 2008,” said a January report by IHS, an energy consultancy. The report said that from 2010 to 2012, global M&A transactions of upstream assets totaled US$ 600 billion, with 2012 the highest in a decade, at US$ 250 billion. But this fell to US$ 136 billion in 2013.

Capital’s Expensive Plan to Fight Air Pollution Misguided, Expert Says – However, Tao Guangyuan, executive director of the Sino-German Renewable Energy Cooperation Center, said that while the sum shows determination, the government’s approach might be unnecessarily costly. (The center is supported by the governments of China and Germany.)

Much of the 760 billion yuan will go toward converting coal-burning power plants into ones that burn natural gas. Tao says the government will need to invest heavily in equipment and production facilities, but doing this will also create a long-term financial burden because gas is more expensive than coal.

Selling products and Services into China The big issue today is not so much how to make product in China, but how to sell product and services to China, be that within China or from outside China. Needless to say, the “within China” part is where the complicated legal regulations and hence the tensions can arise.

China’s guarantee companies face survival problems amid slowing economy|WantChinaTimes.com Since the second half of 2011, the government’s four trillion stimulus policy began to ebb, followed with a tightening monetary policy and the implementation of macro-economic control. Bad debt from soft government funds exploded from small and medium-sized enterprises, leading to rising pressure on guarantee companies.

Reforms to fuel Shanghai’s growth in 2014 – Xinhua | English.news.cn Economists believe the city’s financial sector is going to grow even more this year, while Shanghai Mayor Yang Xiong estimates the city economy will grow by 7.5 percent. A series of reforms in the landmark Shanghai Free Trade Zone, including changes to capital accounts and interest rates, are expected to add new sources of growth to the financial sector.

Talent returns to China, but progress slow – Business – Chinadaily.com.cn A report on returned overseas talent compiled by Wang found that more than 270,000 people came back in 2012, an increase of 46 percent over 2011, adding that rapid economic development in China is one of the major attractions.

Of those who returned, more than 30 percent took jobs or started a business in areas such as new materials, energy, biotechnology and electronic information.

8.8% salary hikes expected for 2014 – Chinadaily.com.cn Salary increases are expected to hit 8.8 percent in 2014, a slight rise on the 8.6 percent for 2013, according to a survey issued by 51job.com, a human resources service provider.

It found that the highest salary increases occurred in the financial sector, reaching 10.4 percent, followed by real estate (10.1 percent), high tech (9.9 percent) and bio-pharmaceuticals (9.2 percent).

Li reaffirms commitment to social welfare system[1]- Chinadaily.com.cn During his visit, the premier highlighted the importance of social relief work and urged the governments to do a better job in providing basic welfare to disadvantaged people.

“The government has to tighten up the network of social security. A welfare system must be in place for the poor to fall back on if they encounter difficulties,” he said. “Otherwise, these disadvantaged people can easily impact the bottom line of society.”

Hong Kong export growth misses forecast | South China Morning Post The growth, which lagged economists’ forecasts of a rise of 4 to 5 per cent, underscored a weak economic recovery in the United States and disappointing demand in Europe in the wake of the 2008 global financial crisis, they said.

However, some economists expected better prospects this year on the back of recent strength in the US recovery while Europe’s turmoil hit its bottom.

China probes death of official who liquored up at lavish banquet | Reuters **”negative social impact” is my new favourite euphemism** The Central Commission for Discipline Inspection is investigating Chen Ruixi, deputy mayor of the small city of Sanming in coastal Fujian province, who attended the banquet, as well as his colleagues.

One official died suddenly after the feast, held at the canteen of a private company, the agency said, adding that the event had made a “negative social impact”.

COMPANIES

Citic’s bad loan writeoff a sign of strain in China’s mid-sized banks | South China Morning Post China Citic Bank’s shareholders have agreed for the bank to more than double bad-loan writeoffs for last year, the latest sign of how much China’s economic slowdown is costing the country’s mid-sized banks.

At a meeting in Beijing yesterday, shareholders signed off as expected on management’s plan to write off 5.2 billion yuan (HK$6.6 billion) in non-performing assets, Citic said in a Hong Kong stock exchange filing. The bank originally budgeted for two billion yuan in writeoffs.

Lenovo expands into internet service marketWantChinaTimes.com The Lenovo Group, one of the world’s largest PC suppliers, is placing putting more emphasis on catering to internet services in a bid to become more competitive, reports Shanghai-based First Financial Daily.

Instead of focusing on only hardware production, the company is shifting towards an operational style that will also values software capabilities and offering customized internet services.

Mobile Tourism Service Yikuaiqu Nets Millions of Dollars in Series A Financing Yikuaiqu, a tourism app, announced that it has raised millions of dollars in Series A financing led by Shenzhen Hight-tech Investment and followed by Shenzhen Capital Group, etc. The company has secured millions of yuan of angel investment in 2012. The capital will be used in research and development of its travel applications for scenic spots, said Liang Jiankun, CTO of the company.

Suning Commerce Fully Acquires Group-purchasing Site Manzuo with Nearly 10 Million Dollars Suning Commerce (SZ:002024) announced that it fully acquired group-buying site Manzuo for nearly $10 million (source in Chinese), continuing its expansion into Internet industry after becoming the largest shareholder of peer-to-peer video streaming service PPTV last year.

In addition to maintaining independent operation, Manzuo will also take over the group-buying and travelling businesses under Suning. Feng Xiaohai, founder of Manzuo, will be named as the head of Suning’s local life sector. The acquisition procedure will be completed by the end of this March.

Alibaba unveils its three games for Laiwang and Taobao The games are available on two of Alibaba’s mobile apps. Users who update Laiwang, Alibaba’s social messaging app, to the new 4.5 version, will notice a new tab under the “Explore” page with a castle icon. Pressing the tab takes users to the app’s new game center, which currently features two titles.

Not unexpectedly, all three titles fit firmly in the “casual” genre, which have proven to be popular among game developers looking to reach broad audiences, and social networks looking to keep up user retention. Of the games on Laiwang, “Pa Pa Pa” bears a resemblence to Line’s Bubble Pop, while “Po Po Po” recalls Simon. Taobao’s “Crazy Toy,” meanwhile, has many of the trappings of King’s Candy Crush Saga.

China Mobile Ltd. (ADR) (CHL): China Mobile Shakes Up Fixed-Line Broadband – Seeking Alpha A welcome development looks set to shake up China’s fixed-line broadband sector this year, with word that leading wireless carrier China Mobile (HKEx: 941; NYSE: CHL) is offering aggressive pricing after receiving a license to offer fixed-line service late last year.

After-school Tutoring Service TAL Education Injects 150 Million Yuan in Childcare Portal Babytree TAL Education (NYSE:XRS), a K-12 after-school tutoring services provider formerly known as Xueersi, announced today it will inject 150 million yuan ($24.79 million) of strategic investment in childcare portal Babytree. Babytree has secured a combined $20 million of investments in previous rounds.

The acquisition of Babytree will help TAL to include pre-school children into its target customers. TAL has acquired education site Kaoyan.com for 50 million yuan last year.

Flying the flag for Chinese cars – Xinhua | English.news.cn Chinese carmaker Hong Qi, or Red Flag, is pressing to have its brand move into the mainstream here in China after years of supplying vehicles to the Chinese government.

Six months ago, Red Flag opened this showroom in Beijing’s exclusive Jinbaojie Street, which makes them almost neighbours with other top name carmakers such as Ferrari and Maserati. So what makes Red Flag Sales Manager Wang Rui Chao believe customers will come to his showroom and not theirs?

Drilling services provider COSL expects deep-water revenue boost | South China Morning Post China Oilfield Services (COSL), the mainland’s dominant provider of offshore drilling services, expects more work and a greater contribution from more capital-intensive deep-water jobs will lift revenues this year.

However, the company warned that the subdued outlook for oil prices will constrain the upside for drilling rates.

China’s Tencent WeChat App Targets U.S. Users – China Real Time Report – WSJ The fast-growing smartphone messaging application is now trying to expand in the U.S. market with a newly launched promotional campaign.

According to WeChat’s Chinese website, here’s how the new promotion works: Tencent is asking people who hold Google accounts to connect their accounts with WeChat, so they can invite their Google contacts to join WeChat. People can win a $25 Restaurant.com gift card from Tencent by getting five of their Google contacts to join WeChat.

Tencent Fully Acquires Map Service Linktech Navi with 60 Million Yuan Chinese Internet giant Tencent continues its acquisition spree this year by pouring 60 million yuan ($9.92 million) of funding in Beijing-based mapping service Linktech Navi for a 100% stake in the company (source in Chinese).

Founded in 2001, Linktech Navi is accredited with the state Grade-A qualification on surveying and mapping. The company’s main businesses are digital maps, navigation system, GPS vehicle monitoring solution, LBS application solution, etc. Linktech Navi’s customers include automobile manufacturers, like Chery, Shac, and Hawtai Motor, navigation services, telecos, among others.

Closer Look: Developers Build Banking Ties with Stake Purchases – Hong Kong-listed Evergrande Real Estate Group expanded into banking by acquiring a 4.5 percent stake in Beijing-based Huaxia Bank for 3.3 billion yuan last week.

A source close to the property developer said the purchase is a strategic investment. Huaxia has a strong balance sheet that can improve Evergrande’s financials. It may help Evergrande finance at a lower cost, he said.

BRIEF-China Life Insurance expects 2013 net profit up 120 pct on investment gains | Reuters China Life Insurance Co Ltd

* Says expects 2013 net profit up 120 percent y/y versus net profit of 11.1 billion yuan ($1.8 billion) previous year

Source text in Chinese: link.reuters.com/wac46v

BRIEF-Ping An Insurance 2013 premium income totalled 268.7 bln yuan | Reuters Ping An Insurance Group Co of China Ltd

* Says 2013 premium income totalled 268.7 billion yuan ($44.4 billion)

Source text in Chinese: link.reuters.com/seb95v

allAfrica.com: Ethiopia: Halfway Point Reached in Inner-City Rail Project (Page 1 of 2) While China Railway Group Limited (CREG) won the contract for the construction of the lines, it was the Metal & Engineering Corporation (MetEC) that was charged with supplying the tracks and the trains to transport passengers. Once complete, the tracks will be of standard size (1.435m wide) double track for the whole route.

LNG import: SSGC, ECC likely to award $1.4b contract today – The Express Tribune EVTL had submitted the offer for LNG services in partnership with China Harbour Engineering Company, a subsidiary of China Communications Construction Company, which has been blacklisted by the World Bank until January 2017.

However, the government cleared the company, saying that the project was not being funded by the World Bank, therefore, EVTL could not be disqualified. However, “a question arises why such clause was made part of the tender when it could not be implemented,” an official asked.

SKAI Holdings secures AED737.6m (USD201m) of financing from China’s ICBC for its Viceroy Dubai Palm Jumeirah projectReal Estate – Zawya SKAI Holdings, the Dubai-based real estate investment company, today announced it has secured AED737.6m (US$201m) of financing for its AED3.75bn Viceroy Dubai Palm Jumeirah, ensuring the project is fully funded.

The financing agreement, which further reaffirms SKAI Holdings commitment to the UAE’s hospitality sector, was arranged by the Industrial and Commercial Bank of China (ICBC), China’s largest bank, marking its first project financing deal for a hospitality project in the Middle East.

BRIEF-China’s Jiugui Liquor says police investigating theft, financial impact uncertain | Reuters China’s Jiugui Liquor Co Ltd

* Says police investigating 100 million yuan ($16.53 million)stolen from its account with Agricultural Bank of China’s Hangzhou Branch, financial impact of the theft still uncertain

Chinese Pork Supplier WH Group Said to Apply for $6b IPO – Bloomberg WH Group Ltd., the Chinese company that bought the world’s biggest pork supplier last year, applied to the Hong Kong stock exchange for an initial public offering, said two people with knowledge of the matter.

The company plans to seek as much as $6 billion from the offering in the first half, the people said yesterday, asking not to be identified as the information is private. WH Group changed its name from Shuanghui International Holdings Ltd. this month.

The WSJ Weekend Interview with Erik Prince: Out of Blackwater and Into China – WSJ.com Now, sitting in a boardroom above Hong Kong’s Victoria Harbour, he explains his newest title, acquired this month: chairman of Frontier Services Group, an Africa-focused security and logistics company with intimate ties to China’s largest state-owned conglomerate, Citic Group. Beijing has titanic ambitions to tap Africa’s resources—including $1 trillion in planned spending on roads, railways and airports by 2025—and Mr. Prince wants in.

Nicaragua canal fast-tracked with Chinese boost The Chinese company, HK Nicaragua Canal Development Investment Co. Ltd., is working with the Nicaraguan government on a massive canal project experts say could take 11 years to finish, cost $40 billion and require digging about 130 miles (200 kilometers) of waterway.

Just as the Panama Canal was a projection of growing U.S. power at the start of the 20th century, the Nicaragua project already reflects China’s influence and financial clout around the world. Another Hong Kong-based company has been operating port facilities on both ends of the Panama Canal.

ICBC Chief: China’s Shadow Banking Overblown – TheStreet Viewers of China’s state-run television Saturday heard the head of the Industrial and Commercial Bank of China say shadow-banking problems in the country have been overblown and “distorted.”

ICBC Chairman Jiang Jianqing, interviewed by CCTV television at the World Economic Forum in Davos, Switzerland, said “society has over-exaggerated and completely distorted the severity of shadow banking” in China.

I did not disown rail deal – AG | The Star Githu further discounted claims that his office’s endorsement of the commercial agreement signed between Kenya Railways and the China Road Corporation was also an approval of the tendering process. He said the SGR the logic of the financing agreement had “the making of a closed tender”.

Posted from Diigo.

China Business Briefs 25/1/14

ECONOMY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China OKs nitrous dioxide carbon offsets | Business Spectator China will allow big emitters to use offset credits from nitrous dioxide (N2O) destruction to meet domestic climate targets, giving its nod to a type of project that has been banned in other carbon markets.

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

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

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

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

COMPANIES

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted from Diigo.

 

China Business Briefs 23/1/14

ECONOMY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

COMPANIES

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

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

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

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

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

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

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

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

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

An excerpt of the interview follows.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted from Diigo.

China Business Briefs 21/1/14

ECONOMY

PBOC Adds Cash to Banks as Money Rates Jump Most in Seven Months – Bloomberg China’s central bank pumped funds into the financial system and expanded a lending facility to include smaller banks as rising cash demand before the Lunar New Year drove money-market rates up by the most in seven months.

The People’s Bank of China supplied money to the largest commercial banks using its Standing Lending Facility and will auction reverse-repurchase agreements today, it said yesterday on an official microblog without giving details of the amounts involved.

China Money-Market Rates Fall – WSJ.com China’s short-term interest rates fell Tuesday after the central bank pumped in an usually large amount of funds into the money markets to pre-empt a potential liquidity crisis as demand for cash rises ahead of the Lunar New Year holiday.

The move also sent cheers to the country’s battered stock market, with the Shanghai Composite Index rising 0.9% and above a five-month low hit Monday.

Warning sounded on failures linked to cash crunches | South China Morning Post Yu E Bao, managed by Tianhong Asset Management and sold online by Alibaba Group, offers an annualised return of 6.7 per cent, compared with the 3 per cent official one-year savings rate. Some funds are offering higher rates, with news portal Eastmoney.com marketing a product that targets 10 per cent.

“Clearly, yields of 8-10 per cent are not sustainable,” Schneider said.

Despite talk of reform, no sign of rebalancing in China’s data | South China Morning Post Last year, investment was the biggest driver of growth, contributing 4.2 percentage points of the 7.7 per cent rise in gross domestic product.

In contrast, consumption – both by households and the government – made up a relatively meagre 3.9 percentage points (with net exports making a small negative contribution to growth).

That reverses the picture from 2011 and 2012, when the growth contribution of consumption edged ahead of investment for the first time in years.

China urged to increase domestic consumption to rebalance economy | South China Morning Post For years economists have been urging China to rebalance its economy and Chinese officials seemed to have heard the call.

While rebalancing could happen simply through a collapse in the current investment model, less devastating would be incremental reforms that realigned incentives. Cheaper imports from a stronger renminbi, private sector reforms, tax incentives and interest rate liberalisation are touted as possible remedies for the current growth model.

China’s clampdown on shadow banking begins to bite | South China Morning Post Interbank lending rates rose sharply again last week. On Friday, the seven-day repo rate climbed above 7 per cent from 4.35 per cent on Thursday.

Trust companies source their funds through the interbank market. The fact the interbank market is prone to regular credit squeezes suggests a key financing channel underpinning the shadow banking sector is becoming less viable.

But most alarmingly is the possibility of a default of a three billion yuan wealth management product at the end of the month. The firm backing the instrument, Zhenfu Energy, a coal miner, has gone bust.

Annual Forecast 2014 – The View from Stratfor / ISN Severe risks to social and economic stability will persist, mainly from recent credit accumulation, threats to employment from slower growth and rising public anxiety over corruption and environmental degradation. However, despite the risk of systemic financial crisis, the central government has the resources to manage these concerns throughout 2014.

China’s Economy Slows on Investment Spending – China Real Time Report – WSJ China’s economy grew 7.7% on-year in the fourth quarter, down from 7.8% in the third quarter. Annual growth in 2013 came in at 7.7%, unchanged from 2012. Here’s a breakdown of some of what the data tell us:

Slower Growth in China Will Put Pressure on Energy Stocks (^DJI, CVX, XOM) Slower growth in China will have a negative effect on demand for oil, and now that Libya’s exports are picking up, there will be increased pressure on margins for oil explorers. It’s a double-edged sword for ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) , which may make more money on refining, but will make less profit on exploration and production if the price of oil falls.

What China’s Electricity Usage Said About GDP Growth in 2013 – China Real Time Report – WSJ The country’s electricity consumption also corresponded with the increase in production. Electricity usage grew 7.5% last year to 5.3 trillion kilowatt hours, faster than a pace of 5.5% in 2012, according to data released last week by the country’s National Energy Administration, as energy-intensive industries such as steel production boosted power demand.

Pakistan in Talks to Acquire 3 Nuclear Plants From China – WSJ.com Pakistan is in talks with China to acquire three large nuclear power plants for some $13 billion, Pakistani officials said, in a further blow to international efforts to restrict the trade in nuclear technology.

The agreement, if reached, would help plug the crippling gap in Pakistan’s electricity supply and cement its strategic regional alliance with China, which is aimed against mutual rival India. Alarming Washington, the China-Pakistan nuclear trade bypasses international rules against nuclear exports to countries—like Pakistan—that have not signed the Non-Proliferation Treaty.

Ministry of Finance ‘Wants More SOEs to Hand over Profits’ – State-owned enterprises (SOEs) that are linked to what the government calls “the budget system” are required to hand over a certain proportion of their net profits depending on their line of business. The levels range from 5 to 20 percent for SOEs around the country. China National Tobacco Corp. is the only enterprise that is required to hand over 20 percent of its profits.

The comments by the ministry official are in line with the central government’s desire to reform SOEs. Backers of change say the public should get a greater share of profits from SOEs, which, they argue, have not honored their obligations to society. A major Communist Party meeting in November decided to make SOEs hand over at least 30 percent of their profits to the government for social security spending by the end of 2020.

US Steel Market Diverging, Baosteel Raising Prices Last week, Chinese iron ore port stockpiles rose 2.14 million tons week-on-week, while weekly shipments from Australia and Brazil dropped by a huge 9mt to 9.5mt. China imported a total of 820.3mt of iron ore in 2013, up 10% year-on-year, with Chinese steel output likely to have reached 775mt last year, up from 720mt in 2012.

China Workforce Slide Robs Xi of Growth Engine – Bloomberg Xi and Premier Li Keqiang, who in November unveiled the broadest policy shifts since the 1990s, are facing a labor force decline that the United Nations estimates will total almost 30 million in the decade through 2025. China’s working-age population, or people age 16 to 59, fell by 2.44 million in 2013, the National Bureau of Statistics said yesterday.

Major cities losing their allure for new graduates – Chinadaily.com.cn A study released last week by online recruitment company Zhaopin and Peking University’s Institute of Social Sciences found college students are showing less interest in working in China’s mega-cities – Beijing, Shanghai and Guangzhou – after graduation.

Only 38.7 percent of the 10,800 students from 200 universities interviewed said they would choose to work in the three cities after graduating, a downward trend for three consecutive years, from 53.8 percent in 2011 and 42.1 percent in 2012.

Proposal to force video uploaders in China to use real names China’s State Administration of Radio, Film, and Television (SARFT) yesterday issued a notice that proposes, among other things, anyone who uploads a video to the internet must be registered on the hosting website with their real name (hat-tip to Techweb for spotting).

Let’s take a look at China’s $13.5 billion online gaming industry (INFOGRAPHIC) This new infographic from the Go-Globe team shows lots of facts and figures on the Chinese online gaming industry right now. Some of the highlights include:

  • China’s online game operators made RMB 82.1 billion ($13.5 billion) in 2013.
  • That’s estimated to grow to $16.1 billion by the end of 2014.
  •  Tencent (HKG:0700), the same company that makes WeChat, is China’s gaming giant.
  •  Action RPGs are the most favored genre, led by PC-based gamers.

China’s economy: Doing stuff, not making stuff | The Economist Those looking for a “rebalanced” Chinese economy had to look elsewhere: not in China’s pattern of spending, but in its pattern of production and income. For the first time since 1961, China’s production of services (which include transport, wholesaling, retailing, hotels, finance, real estate and scientific research, among other things) exceeded its industrial output (see chart). The new figures meant that China’s economy is now primarily based on doing things for people not making things for them. For a country renowned for its industrial clout, this marked a long-awaited turning point.

Slew of IPOs to Test Whether New China Stocks Have Broken an Old Pattern – WSJ.com China’s securities regulator is about to find out whether changes it implemented to the application system for initial public offerings will cure offerings’ tendency to start strong and then lose steam.

When Neway Valve (Suzhou) Co. made its debut on Friday, marking the first new listing in mainland China in more than a year, it kept to the script of starting convincingly. Shares rose 43% to 25.34 yuan ($4.19), just below the opening-day upper limit of 25.43 yuan. But on the second day of trading, the valve manufacturer’s shares fell by the maximum 10% permitted, in line with a trend that, in part, prompted the China Securities Regulatory Commissionto stop approving IPO applications in November 2012.

Virtual telecom operators business nears reality|Industries|chinadaily.com.cn Sixteen companies are expected to get licenses for virtual telecom operators- business of resale mobile communication services- by the end of the year and open for business in 2014, Economic Information Daily reported.

Virtual operators business is reselling mobile communications services to introduce its own brand of telecommunication services through leased telecommunication operator’s network and facilities or other forms of cooperation.

China sets final duties on U.S. solar materials | Reuters China hit the United States with final anti-dumping and anti-subsidy duties on imports of solar-grade polysilicon on Monday, the latest move in what has been a contentious trade battle in the solar industry.

The anti-dumping duties, announced by China’s Commerce Ministry, were in line with initial levels levied last year of up to 57 percent on imports of the raw material used to make solar panels.

CSRC opens door for HK funds – BUSINESS – Globaltimes.cn Investors in the Chinese mainland will be able to buy Hong Kong fund products in the near future as the regulator has eased access to the mainland’s capital market for Hong Kong financial institutions, the China Securities Regulatory Commission (CSRC) said at a press conference Monday.

The securities regulators on both sides have reached a basic agreement on mutual recognition of funds, which means that Hong Kong incorporated fund companies can sell funds to mainland customers directly, and vice versa, said Tong Daochi, director general for the Department of International Affairs at the CSRC

Uralkali signs potash deal with China for $305/ton – MarketWatch The contract to sell 700,000 tons to the Chinese National Agricultural Means of Production Group Corp. until the end of June indicates a possible end to the uncertainty in the potash market. Prices have fallen more than 25% from $400 a ton last summer, prompted by Uralkali leaving a trading partnership with Belarus and breaking an informal global pricing cartel.

China abandons failed cotton stockpiling programme – FT.com Beijing’s effort to use the state reserves system to maintain cotton plantings and thus a secure supply of raw materials for textile mills has backfired spectacularly. Higher prices meant that cotton flowed to the state reserves – which now by some estimates account for half of world cotton stocks – while denying mills the supply they needed.

COMPANIES

Lenovo Said to Be in Advanced Discussions to Buy IBM Server Unit – Bloomberg Lenovo Group Ltd. (992) is in serious discussions to acquire International Business Machines Corp. (IBM)’s low-end server business, and a deal may be signed within weeks, according to a person with direct knowledge of the matter.

Lenovo, the world’s largest personal-computer maker, has completed due diligence, according to the person, who asked not to be identified because the talks are private. The companies failed to agree last year on a price for the assets, estimated to be worth $2.5 billion to $4.5 billion. The person didn’t have details on the current price or structure of the proposed deal.

CNOOC estimates oil output growth below target for third year | Financial Post Top Chinese offshore oil and gas producer CNOOC Ltd is aiming for an up to 4.3 percent output increase this year, excluding contributions from acquisition Nexen, well below its average annual growth target for 2011-2015 for a third year.

CNOOC has vowed it will still meet the annual growth target of 6-10% for the five years through 2015, increasing its capital spending budget by as much as a third from last year to almost $20 billion and aiming to get 20 projects into construction this year while launching up to 10 more.

(PR) CNOOC Limited Announces its 2014 Business Strategy and Development Plan – WSJ.com The Company’s net production target of 2014 is in the range of 422 to 435 million barrels of oil equivalent (BOE), including approximately 69 million BOE as a result of the acquisition of Nexen Inc. (Nexen). The Company’s net production for 2013 is estimated to be around 412 million BOE, including 61 million BOE of production as a result of the acquisition of Nexen.

Jardine to Buy 20% Stake in China Luxury Auto Dealership – Bloomberg Jardine Strategic, the owner of hotels to convenience stores around Asia, will invest about HK$5.6 billion ($722 million) in Beijing-based Zhongsheng, a distributor of luxury car brands including Mercedes-Benz, Audi and Porsche. The Chinese company will use the funds to expand the number of sales outlets in the country, according to a statement yesterday.

Glorious Property Plunges After Buyout Rejected: Hong Kong Mover – Bloomberg Glorious Property Holdings Ltd. (845) fell by a record in Hong Kong trading after shareholders rejected an offer by Chinese billionaire Zhang Zhirong to take the company private.

Glorious Property dropped as much as 30 percent and closed 27 percent lower at HK$1.25, the biggest decline since Oct. 2, 2009. The Hang Seng Index fell 0.9 percent.

4G push expected to hurt profits at China’s Big Three mobile network operators | South China Morning Post In a report released on Monday, Barclays cut its share price targets for China Mobile, China Unicom and China Telecom to reflect lower revenue forecasts for all three companies this year and next year.

“We see little incentive for China’s telco companies to focus on profit growth – 4G comes with all the excuses to [avoid doing] that,” said Anand Ramachandran, lead author of the Barclays report and the firm’s head of telecommunications, internet and media equity research for Asia, excluding Japan.

Xiaomi teams up with Xunlei to provide multimedia content|Companies|Business|WantChinaTimes.co China’s smartphone maker Xiaomi is likely to team up with Xunlei, a download manager developed by Thunder Networking Technologies, to provide phone users with multimedia content downloading services.

The deal will be inked in the week starting Jan. 20. Although the deal has not yet been confirmed, sources from the industry said that the two companies will work well together, Xiaomi providing the hardware, and Xunlei, the content.

Peugeot Plans $4.1 Billion Capital Increase to Boost Funding (1) – Businessweek Dongfeng Motor Corp. (489) may first contribute funding through a sale reserved for Peugeot’s Chinese partner, with a rights offering to follow that Dongfeng would also participate in, the Paris-based automaker said in a statement. The French state may also buy shares in both sales, the automaker said.

To keep up with China Mobile, China Unicom rolls out 42M 3G From what we can surmise, 42M is the standard of 3G used in some mobile hotspot wi-fi routers. Peak download speeds reach up to 42Mbps, reportedly fast enough to download a high-definition movie in one minute. Unicom says that’s comparable to 4G LTE, but perhaps it’s best to think of it as ’3.5G’.

China’s Qihoo aims at 35% search engine share by end of year Qihoo president Qi Xiangdong said last week, according to the Chengdu Evening News (via Marbridge Daily), that the company is aiming to reach 35 percent market share by the end of 2014.

Qi says that Qihoo now has 24 percent share, though the CNZZ data that we prefer to look at pegs the company’s So.com search engine at precisely 22.5 percent.

ZTE reports likely swing to net profit in 2013 – MarketWatch Chinese telecommunications equipment supplier ZTE Corp. said Monday it likely swung to a net profit in 2013, after suffering a hefty loss in the previous year, thanks to cost cuts and efforts to cut back on low-margin business contracts.

In its preliminary financial results filed with the Hong Kong stock exchange, ZTE said it expects a 2013 net profit in the range between 1.2 billion yuan ($198 million) and CNY1.5 billion, a reversal from a net loss of CNY2.84 billion in 2012.

China Mobile will have to make nice with internet firms | China Economic Review Over-the-top (OTT) applications such as Tencent Holdings’ messenger WeChat and Sina Corp’s micro-blogger Sina Weibo are largely dependent on mobile data networks to reach customers. China Mobile, and the country’s two other operators have spent the better part of a decade and tens of billions of dollars putting those networks in place, only see the internet giants scrape off the top of their profits. When users use apps such as WeChat they don’t send texts or make calls that they have to pay for.

China Auto Industry News | PSA and Dongfeng Close To Inking Deal | China Car Times – China Auto News Dongfeng are looking to take a significant stake of their joint venture partner PSA with a capital injection of 3 billion Euro with the French government expected to take a similar amount which will help PSA stay liquid as the European car market continues to slump. Peugeot posted a 5% sales decline in global sales in 2013, whilst Chinese sales jumped 26% to 550,00 units.

Alipay for Taxi Has Expanded to 40 Chinese Cities The taxi app Kuaidi, which is venture backed by Alibaba, now supports Alibaba’s payment solution Alipay in 40 Chinese cities, covering more than 400,000 taxi drivers, according to Alipay. Alipay was integrated into Kuaidi in May 2013.

Novus Energy Inc. announces completion of acquisition by Yanchang Petroleum International Limited – EIN News Novus Energy Inc. (“Novus” or the “Company“) (TSXV: NVS) is pleased to announce that the previously announced  acquisition of the Company by Yanchang Petroleum International Limited  (“Yanchang Petroleum International“) through its indirect wholly-owned subsidiary, Yanchang International  (Canada) Limited, pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement“) has been completed. Pursuant to the Arrangement, Novus shareholders  will receive C$1.18 in cash per common share of Novus.

Lenovo rewards top new designs[1]- Chinadaily.com.cn The 2014 Lenovo Innovators Competition kicked off in Beijing a few months ago and concluded on Jan 19, 2014. By following the release of the final results, 44 outstanding works from candidates were selected and will remain on display to the public at Beijing’s 798 Art Zone through the Chinese New Year holiday.

ICBC Macau’s Hengqin plan is still in pipeline | Macau Business Daily Industrial and Commercial Bank of China (Macau) Ltd (ICBC Macau) says the mainland authorities are still considering its plan to get a foothold on Hengqin Island.

Last week one of ICBC Macau’s competitors, Luso International Banking Ltd, got permission to open a representative office on Hengqin, which could be a step towards setting up a branch there.

GoXBTC’s closure raises trading concerns|Markets|Business|WantChinaTimes.com China-based bitcoin trading site GoXBTC announced on Jan. 4 that its services will be discontinued from Jan. 18, citing growing costs and the regulatory risks of operating in China as reasons. The announcement resulted in holders of the virtual currency selling their holdings at cut-throat prices, the newspaper explained. “It was really a clearance sale. One bitcoin can be sold for as low as over 3,000 yuan (US$495),” said a trader on an online forum.

Ethiopia: ERA Awarded 6.5B Birr worth Road Projects to Chinese Companies China Communications Construction Company (CCCC) is awarded three projects in Addis Abeba for 4.6 billion birr. The projects include the continuation of the Rapid Adama Expressway and two projects connecting the expressway with the capital.

China Railway No.3 Engineering Group Co Ltd. is awarded a project totaling 161.23kms, in Amhara region for 1.4 billion birr. The project include the 89.23kms long project which starts in Gashena, 620 km north of Addis Abeba in the North Gonder Zone.

Another Chinese company, China Railway Seventh Group Co Ltd., is awarded a 44km road in Zagora (Kechen Meda), which involves five large bridges, each 30m long. The contract has been awarded to  for 485 million birr.

Smart operator reaps rewards[1]- Chinadaily.com.cn Xu, chairman of the Yuemei Group, now does 40 percent of his business in Africa and the remaining 60 percent in China. He predicts that those numbers will be reversed in three to five years. The company’s current annual output in Africa is worth $30 million.

China Construction Bank (Asia) becomes Multifonds’ latest Asian client – bobsguide.com Multifonds, the leader in single-platform, multi-jurisdictional investment fund software, today announces that China Construction Bank (Asia) [CCB (Asia)] has become its latest Asian client.

Posted from Diigo.

China Business Briefs 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.

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