Shenhua Energy

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.

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China factory output slows in January – 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 | 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.


Economic danger lurks in China’s shadow banks – 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 – 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 – 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 − Files For $1.5B US IPO Beijing-headquartered Chinese e-commerce operator, Inc. has filed for a U.S. initial public offering, according to a filing with the U.S. securities regulator. plans to raise up to $1.5 billion, and has not decided which stock exchange it will list.


Ford Recalls Edge SUVs in China – January 31, 2014 – 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 – 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 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.


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 | 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 | 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|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.


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.


Outlook bright for low-cost carriers in China| 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.


Keeping the lid on housing prices – Business – 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


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 – 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.


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 | 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 6/1/14


China draws up new rules to curb shadow banking risks – 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|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 – 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 – 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 | 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| 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| 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 – 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 – 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 – 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.


China Railway Group chairman dies – Headlines, features, photo and videos from|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 – 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 – 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 – 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| 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 – 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., 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 – 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 | “Lenovo’s innovation lies in its technology, products, business model and cultural management. Its name, which was changed from Legend in 2003, is a combination of ‘legend’ and ‘novo’, a Latin word meaning new,” Yang told Xinhua during an interview.

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

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

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

Posted from Diigo.

China Stock Watch 2/1/14

The main news to affect China stocks was the news that local governments will be allowed to roll over debts from infrastructure work not yet producing the necessary revenues to pay off loans. Of course, revenue projections were likely to have been pie-in-the-sky, pluck-a-number-out-the-air – as long as they kept business running. But while this all keeps the show on the road a little longer, refinancing of the LGFVs demonstrates the degree to which access to credit is a political phenomenon. There is also the moral hazard aspect: if politically these projects cannot fail, then what is there to stop reckless borrowing?

A mixed day for the major stocks, then, with nine rising on the day and ten falling. Movement was moderate, with only China State Construction, SAIC Motor, China Shenhua, Ping An Insurance and China Telecom rising or falling by over 1%, and none of them by over 1.5%.

The Shanghai Composite Index closed at 2,109.39, up 11.86 points (+0.57%).

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.47 +0.04 (0.90%) 521,046.78M 7.03 4.05 CN¥0.62 7.27
PetroChina 7.66 -0.04 (-0.52%) 1.40B 9.5 7.08 CN¥0.68 11.34
ICBC 3.57 +0.02 (0.56%) 1.25B 4.53 3.4 CN¥0.74 4.85
China Construction Bank 4.1 +0.01 (0.24%) 1.03B 5.19 3.8 CN¥0.85 4.85
Agricultural Bank 2.47 +0.01 (0.41%) 802,241.48M 3.28 2.38 CN¥0.50 4.92
Bank of China 2.6 -0.01 (-0.38%) 725,786.03M 3.26 2.48 CN¥0.53 4.9
China Mobile 80.20* -0.20 (-0.25%) 1.61B 91.8 74.9 HK$8.19 9.8
Noble Group 1.07 -0.00 (-0.47%) 7,057.84M 1.27 0.785 SGD0.04 29.39
China State Construction 3.14 +0.04 (1.29%) 94,200.00M 4.18 2.9 CN¥0.62 5.1
CNOOC 14.38* -0.04 (-0.28%) 642,030.42M 17.38 12.04 HK$1.89 7.61
China Railway Construction 4.66 +0.04 (0.87%) 57,492.94M 6.49 3.95 CN¥0.84 5.53
China Railway Group 2.67 +0.02 (0.75%) 56,870.73M 3.41 2.3 CN¥0.44 6.09
SAIC Motor 13.85 -0.14 (-1.00%) 152,704.10M 19 11.83 CN¥2.05 6.75
China Life Insurance 14.97 -0.01 (-0.07%) 423,122.64M 22.7 12.88 CN¥0.97 15.49
Dongfeng Motor 12.02* -0.12 (-0.99%) 103,565.77M 13.28 9.48 HK$1.37 8.74
China Shenhua 15.61 -0.18 (-1.14%) 310,476.97M 25.7 15.36 CN¥2.25 6.93
Ping An Insurance 41.29 +0.48 (1.18%) 326,857.51M 53.27 31.69 CN¥3.45 11.97
China Telecom 3.87* -0.05 (-1.28%) 313,208.26M 4.46 3.48 HK$0.26 15
China Communications Construction 4.02 0.00 (0.00%) 65,022.44M 5.79 3.8 CN¥0.81 4.97
Bank of Communications 3.82 +0.02 (0.53%) 283,683.61M 5.68 3.65 CN¥0.84 4.53

China Business Briefs 1/1/14

The Shanghai Stock Exchange is closed today, so no Stock Watch. Happy New Year to all readers – best wishes for 2014.


China trusts bring contrasting fortunes – **Lack of regulation makes it highly risky, whatever the current form of certain banks** The term “shadow banking” in China for many observers conjures up images of underground lenders handing out credit to sketchy borrowers at usurious rates. But that is a simplistic view of many of the financial institutions that have moved into gaps left behind by the country’s heavily regulated banks.

Some shadow banks have indeed courted trouble; others, though, are well-managed companies with strong track records.

China’s manufacturing growth slows as demand for exports weakens – Growth in China’s manufacturing sector slowed for the first time in six months in December, dragged down by weak demand for Chinese exports, according to an official purchasing manager’s index.

The state-sponsored PMI fell to 51 in December, down from 51.4 in November, marking a four-month low and highlighting the challenges facing the ruling Communist party as it tries to transform the growth model in the world’s second-largest economy.

China’s factory growth slower but resilient at year end | Reuters Many economists have said China’s economy was likely to show weaker momentum in the final three months of 2013 after a rebound between July and September, due to slowing credit growth and a fall-off in restocking demand.

China’s farm produce prices stay flat – Xinhua | **Some notable spikes** Farm produce prices in 36 major Chinese cities stayed mostly flat in the week ending Dec. 29 compared with the previous week, according to the latest statistics from the Ministry of Commerce.

Average wholesale prices of 18 kinds of vegetables rose 4.8 percent from a week earlier, while the prices of bitter gourds and tomatoes increased 11.3 percent and 9.9 percent, respectively.

Food accounts for about one-third of China’s consumer price index (CPI), a main gauge of inflation.

Closer Look: Rise in Total Gov’t Debt – to 30.3 Tln Yuan – Means Change Is Needed – This is the third time the National Audit Office has surveyed government liabilities. The survey was the work of some 544,000 auditors across the country. It was performed in August and September, and a report was given to the State Council, the country’s cabinet, in mid-October. Suspicion had mounted about how horrible the figures were considering it took so long for the government to publish them.

Experts, especially those from overseas institutions and academia, tended to be pessimistic in their estimates of total local government debt, guessing the figure would be 18 to 25 trillion yuan. Chinese government officials and affiliated institutions were generally more sanguine, estimating it to be between 15 and 20 trillion yuan.

China’s Tianjin to Begin Restricting Car Population, Xinhua Says – Bloomberg **Tianjin’s subway is still relatively quiet** Only 100,000 new license plates will be issued in Tianjin next year, of which 60,000 will be distributed by lottery and the rest auctioned off for a minimum bid of 10,000 yuan ($1,650) each, according to Xinhua. Government departments will be banned from buying new official cars and all proceeds from the auctions will go to support public transportation, Xinhua reported, citing a plan approved by the Tianjin government.

Property to take less of the GDP load | South China Morning Post **Dangerously high** Property investment accounted for 15.8 per cent of the mainland’s gross domestic product in the first three quarters of last year, a record high and a big jump from the 5 per cent contribution in 2000.

The ratio has stayed above 10 per cent since 2009 and the industry, which affects more than 40 other sectors including metals and home appliances, has stood out and provided a cushion to slowing growth in the world’s second-largest economy.

Xi Says in New Year’s Address China Will Make Progress on Reform – Bloomberg **One leads to the other. Can expect to see more aggressive moves towards of South China Sea neighbours** Xi Jinping, delivering his first New Year’s address as China’s president, said the country must press ahead with reforms in 2014 to improve livelihoods and make the country “rich and strong.”

Analysis: Transparency the crux in China’s struggle to deal with rising debt | Reuters **Money talks louder** By letting local governments sell bonds for cash, China wants to rely on nimble markets rather than inflexible regulations to keep spendthrift units in check.

But analysts say China’s dreams of a municipal bond market are so far just that, as building one has been impeded by a lack of disclosure from local governments on how much money and assets they have, and how much they owe.

China’s Banks Adopt ‘Living Wills’ to Plan for Less Predictable Future – China Real Time Report – WSJ The living will proposals come at an appropriate time for China, as the nation begins to address the prospect of bank failures. Its government-dominated banking sector is seen as having implicit state support. But Beijing wants to bring private capital to the sector and that could mean new risks. While China wants fresh competitors to shake up its banking system, it doesn’t want to be on the hook for management mistakes.

China-Russia trade sees downshift in 2013|Markets|Business| China-Russia trade value in January-November stood at US$81 billion, up 0.5%. The growth rate is more than 10% down on a year ago, according to China’s general customs administration.

During the period, exports to Russia reached US$44.56 billion, up 11.3% while Russian exports to China stood at US$36.5 billion, down 10.1%.

Chinese Banks Eye Global Bond Market – The country’s banks will need to raise up to two trillion yuan ($330 billion) from share and bond sales in the next five years, according to McKinsey & Co. With growing levels of bad debt in a slowing domestic economy, weakness in stock markets and rising capital requirements, Chinese banks can no longer rely on share sales and the country’s four-trillion-yuan bond market for cash.

China’s third economic census enters registration phase – BUSINESS – China’s third national economic census entered its registration phase on New Year’s Day after months of preparation, according to the National Bureau of Statistics (NBS).

The census is designed to paint a wide economic picture of China’s fast-expanding secondary and tertiary industries and complete a database covering all economic sectors, said NBS head Ma Jiantang.

China suspends Pfizer imports – China’s drug watchdog has decided to stop importing an injection from the Pfizer Inc., as the US pharmaceutical maker failed in a supplementary application for drug exports.

China will not import Pfizer’s Fluconazole injection, used to treat monilial infection, until the company makes correction, the State Food and Drug Administration announced Tuesday.

NDRC: Negative list to cut central govt role in investment – People’s Daily Online The National Development and Reform Commission, the country’s economic planner, vowed on Tuesday to stick strictly with the State Council’s directory of investment projects that require government approval.

The directory, known as the negative list, came into effect on Dec 2 and replaces the government’s approval procedures for 19 investment areas.

It devolves the responsibility to approve 30 categories of investment items from central to local authorities, and it transfers approval for 10 kinds of investment projects to industrial administrations.

Timeline: a history of Bitcoin in China in 2013 In the first three months of this year, China’s relationship with bitcoin was virtually nonexistent. A handful of scattered miners and exchanges like BTC China, which launched in 2011, had never really entered the public eye.  As far back as we can tell, Bitcoin’s recorded history in China dates back to April, when a Chinese charity started accepting bitcoins to help earthquake victims in Lushan, Sichuan province. That probably sparked the curiosity of a few speculative investors. The miners sooned caught the favorable eye of state media, which led to China’s explosion of interest.

Walter Lippmann on China – Silicon Hutong **Innovation and agility** “The small American businessman has long complained about how difficult it is for him to survive in the competition with the large American corporation,” [Walter] Lippmann warned. “What will he do when he has to face the competition of totalitarian monopoly organized on a continental scale?”

Lippmann was talking about the Soviet Union at the time, but his words do resonate today.

The year of bitcoin – The Tell – MarketWatch Elsewhere, banking authorities in China, India and Europe issued warnings about the risks associated with bitcoin. Developments in China took a bite out of the bitcoin rally, which was supported in part due to increased Chinese demand, and raised questions about what geographic region could attract the next round of bitcoin mania.

5 Things to Watch: China’s Energy and Environmental Policy – Five Things – WSJ An overhaul of China’s energy and environmental policies will be in focus next year as the country struggles to balance economic growth with protecting the environment. In November, China’s central government said in its landmark reform plan that it would allow markets to take a more “decisive role” in the economy, a signal that the era of cheap, tightly controlled energy prices might be over. Here are some major energy and environmental-policy reforms to look out for in 2014.

China Money Network − The Drivers And Headwinds For China’s Economy In 2014 Now onto the negatives. Drags on growth include tighter monetary policy, a slower real estate market (though location is everything), a cash crunch in the local government infrastructure space and a mild rise in inflationary pressures.

Regional jet service set to start in 2015 – Xinhua | China’s first domestic regional jetliner will go into commercial operation in 2015, with the first two ARJ21-700 aircraft intended for commercial service rolling off the assembly line on Monday.

The dual-turbofan planes will be delivered to Chengdu Airlines Co Ltd by the end of 2014, assuming the airworthiness certification process goes smoothly.


Chinese state firms looking malnourished in 2013: report| **See yesterday’s analysis of the annual performance of the twenty largest stocks** Six state firms sit on the top 10 list with China National Petroleum Corp (CNPC) having seen the highest market value decline among all state firms. CNPC’s market value slipped from 1.46 trillion yuan (US$241 billion) at the beginning of 2013 to 1.24 trillion yuan (US$204 billion) by the end of the year.

In addition to CNPC, state companies that are on the top 10 lists are China Shenhua Energy Company, the Industrial and Commercial Bank of China (ICBC), the China Life Insurance Company, the China Petroleum & Chemical Corp (Sinopec) and the Bank of China (BOC), whose combined market value shrunk by nearly 600 billion yuan (US$99 billion) this year.

How Alibaba and Tencent went head-to-head in 2013 This past year saw some major competition emerge between Tencent, China’s massive gaming and social networking company, and Alibaba, which is best known for its e-commerce offerings. Below we’ve tracked the progression of both firms throughout 2013 and ask: what’s next?, Inc. (ADR) (BIDU): Baidu Cranks Up Anti-Piracy Campaign – Seeking Alpha **Got to act mature if it wants to play with the big boys** Just days after announcing a new acquisition designed partly to rid its various sites of piracy, leading search engine Baidu (Nasdaq: BIDU) has removed all pirated material from one of its popular video sharing sites. The timing of this move looks quite interesting for a number of reasons, including the fact that Chinese media are saying Baidu has just been fined by Beijing for piracy violations. The move also comes just 6 weeks after Baidu was sued for piracy by China’s leading video sites, which took the action in an unusual alliance with Hollywood’s most powerful trade association. But perhaps most interesting is the fact that the U.S. could soon release its latest list of the world’s most “notorious” piracy sites, and Baidu has no desire to see its name appear on the list.

Morgan Stanley Stake Purchase Propels NQ Mobile Rally – Bloomberg Shares of the Beijing-based company soared 17 percent to $13.90 in New York, the biggest gain since Nov. 11. Morgan Stanley, which helped NQ Mobile raise $173 million in convertible bonds in October, said in a filing that it has a 5.2 percent stake. The Bloomberg China-US Index of Chinese companies trading in the U.S. slipped 0.6 percent yesterday, paring its 6 percent advance this year.

805 companies face punishment for pollution **But what punishments?** The names of 33 companies, including Ansteel Group’s chemical branch in Northeast China’s Liaoning province, were publicized by the ministry for serious air or environmental pollution.

Another 890 small workshops were shut down in the inspection, the ministry said.

Why China Ming Yang Wind Power Group Ltd. Soared 113% in 2013 (MY) Shares of wind-turbine maker China Ming Yang Wind Power Group  (NYSE: MY) clearly had the wind buoying them in 2013, having clocked a massive 113% gains. For a company that’s yet to turn in a profit, the rally may seem out of place. Yet, a growing order book, and great-looking prospects in the clean energy space, kept investors hopeful. But will that be enough to propel the stock higher in 2014, or is the rally close to over? Let’s find out.

Shenzhen incubated Wearable Device Startup Vigo Helps you Stay Alert and Fight DrowsinessThe Vigo team moved to Shenzhen, China as part of the hardware accelerator HAXLR8R. HAXLR8R offers seed funding ($25,000), office space as well as mentorship along with the other opportunities for startups to take an idea to a product. The programme is based in Shenzhen in order to leverage the supply chain and factory ecosystem. They use a process they call ‘Interactive Manufacturing Process’ to ensure rapid development of manufacturable products.

The Island Speaking at the occasion Minister Abeywardena said that Sri Lanka will sign US $2 billion worth Foreign Direct Investment (FDI) deals, including the $ 1.3 billion Investment from China Communications Construction Co. Ltd. to build a port city.

Riding the Digitization Trend into a New Industrial Age – PR Newswire – The Sacramento Bee Huawei Unveils its Viewpoints on 2014 Industry Trends

TAZARA, Chinese firm sign pact for four locomotives The Tanzania-Zambia Railway Authority (TAZARA) has sealed a contract with the Chinese Civil Engineering and Construction Company (CCECC), for the manufacture and supply of at least four new mainline locomotives.

According to a statement from the TAZARA head office in Dar es Salaam, the locomotives will be supplied together with consumables and spare parts worth Chinese RMB Yuan 85 million (about USD12.45 million).

Chery plans to build R&D center in Brazil – People’s Daily Online After building an engine factory in November, Chery automobile plans to build a R&D center in Brazil. The CEO of Chery Brazil, Luis Curi, said the investment of this center would be tens of millions, aiming to promote localization. Chery has planned an assembly plant, an engine factory and a R&D center.

Numerous Gurus Hold IDCC, DGX, PTR at 10-Year Low P/B – According to the GuruFocus Value Screen  that shows value strategies of stocks traded at historical low P/B ratios, InterDigital Inc. (IDCC), Quest Diagnostics Inc. (DGX) and PetroChina Co. Ltd. PTR) are held by numerous gurus and are traded at or near their 10-year low. Furthermore, insiders are selling IDCC and DGX.

Revlon to Exit Operations in China, Cut 1,100 Jobs – Bloomberg Revlon Inc. (REV), the maker of cosmetics under its namesake and Almay brands, will cease operations in China and eliminate about 1,100 positions, including 940 beauty advisers, as it restructures its struggling business.

The China business makes up about 2 percent of net sales, and the restructuring will result in about $22 million of pretax charges, the New York-based company said in a filing with the U.S. Securities and Exchange Commission. The changes are expected to reduce costs by about $11 million a year, Revlon said.

Posted from Diigo.

China Business Briefs 25/12/13

Merry Xmas everyone.



China treasury bond futures close higher — Dec. 25 – Xinhua | China’s treasury bond futures closed higher on Wednesday, with the contract for settlement in March 2014, the most actively traded, went up 0.12 yuan to finish at 91.792 yuan (15.01 U.S. dollars).

The contract for settlement in June 2014 closed at 92.238 yuan, up 0.05 yuan.

China Considers Rule Change for Challenging Land Disputes – A subgroup of China’s legislature began considering draft amendments that would strengthen a law governing how ordinary citizens can appeal government decisions by opening new channels for them to sue official bodies, the state-run Xinhua News Agency reported Tuesday. The agency said the amendment, if adopted, would be the first adjustment in the Administrative Procedure Law since its 1990 adoption.

Even A Dog Can Run China’s Banking System, Says Former State Council Spokesman China’s banks are a different breed of financial institution. They enjoy lucrative interest margins during good times, and when things head south, the state is there to clean up things up. In fact, the former chief economist and spokesman of China’s National Bureau of Statistics went so far as likening (in Chinese) the nation’s banking system to an automated system that even a dog could successfully run.

Golden age of SOEs draws to close amid reforms – BUSINESS – Looking ahead, the future holds little more than the promise of new challenges and uncertainties. Based on official statements made since November’s third plenary session, the central government is clearly determined to press ahead with further market reforms designed to turn SOEs into truly competitive commercial entities.

Dependency on natural gas imports rises |Industries | Up to 32 percent of China’s natural gas use this year will depend on imports, Wang Xiaokun, an analyst at domestic commodities consultancy Sublime China Information Group Co Ltd, said on Tuesday.

Last year, 29 percent of China’s natural gas came from foreign sources, according to the consultancy’s estimates based on data from the National Bureau of Statistics and import data from the customs office.

Members Only No More: China’s Graft Crackdown Nixes Private Clubs for Officials | Tony private clubs are the latest target of China’s anti-corruption crusaders, joining extravagant banquets and flashy cars as off limits for officials. Communist cadres must promise that they will refrain from belonging to or even visiting private clubs, said a Dec. 23 circular from the Central Commission for Discipline Inspection, the body charged with cleaning up government ranks amid allegations of widespread abuse of power and graft within the ruling party.

Yuan Trades Near 20-Year High as Yield Gap Seen Luring Capital – Bloomberg The yuan traded near its strongest level in 20 years on speculation the widening yield advantage on Chinese assets will attract capital inflows.

The People’s Bank of China boosted the currency’s reference rate for a second day today, raising it by 0.03 percent to 6.1145 per dollar. The yuan is up 2.6 percent this year, the best performance among 11 most-traded Asian exchange rates tracked by Bloomberg. The yield premium on Chinese one-year government bonds over similar-maturity U.S. notes increased by 1.4 percentage points to 4.1 percentage points in 2013, according to data compiled by Bloomberg.

China names new state assets regulator chief The State-owned Assets Supervision and Administration Commission (SASAC) said late on Tuesday that Zhang Yi had been appointed, replacing Jiang Jiemin.

Zhang was previously SASAC’s deputy head, and prior to that had worked as secretary-general for the ruling Communist Party’s anti-corruption watchdog.

Most employers to raise bonuses – BUSINESS – About 64 percent of employers in China plan to raise annual bonuses for their employees in 2013, while another 23 percent mull cuts, according to a report released by Career International Consulting on Tuesday.

The overall increase will be slight, as 47 percent of respondents said the bonus increase will be less than 10 percent, and only 3 percent plan to offer raises of more than 20 percent, according to the report, based on a survey of 847 companies in China conducted in late November.
The company’s hepatitis B vaccines have come under scrutiny since authorities suspended their use for liver disease after the first deaths of babies were reported.

Alibaba spinoff moves further into the cloud[1]| Aliyun, Alibaba’s spinoff cloud-computing division, is scheduled to set up data centers outside China to provide cloud-computing services to local enterprises and Chinese companies’ overseas operations, the company announced on Tuesday.

By building platforms for companies to manage and store data in the cloud, Aliyun will become the first Chinese company to reach out to the foreign public cloud segment, days after its US counterpart Amazon announced the launch of a similar services in China.

Notable Two Hundred Day Moving Average Cross – SNP – Forbes In trading on Monday, shares of China Petroleum & Chemical Corp. Inc (NYSE: SNP) crossed below their 200 day moving average of $79.88, changing hands as low as $79.64 per share. China Petroleum & Chemical Corp. Inc shares are currently trading down about 0.8% on the day. The chart below shows the one year performance of SNP shares, versus its 200 day moving average:

Bank of China Limited : BOC Releases Mobile Payment APP | 4-Traders The “BOC Mobile Payment” APP integrates multiple mobile payment products including BOC swift payment, payment via mobile banking, and payment by agreement, covering all the day-to-day mobile payment demands in a bid to create a customized mobile cashier desk for customers. Besides the mobile payment function, the “BOC Mobile Payment” APP also features such functions as inquiring about electronic payment transaction records, opening and closing various electronic payment transaction functions, and setting the transaction limit.

Banks announced $57.3 billion in refinancing – Headlines, features, photo and videos from|china|news|chinanews|ecns|cns Ten banks announced a 348.2 billion yuan ($57.3 billion) refinancing plan this year, reflecting the pressure on capital flow in the banking industry, Beijing-based Securities Daily reported.

China Minsheng Banking Co Ltd, Industrial Banking Co Ltd, Bank of Chongqing Co Ltd, Huishang Bank Co Ltd, and China Everbright Bank Co Ltd were some of the banks to complete refinancing.

Coal Giant Looks to Northern Neighbors to Satisfy Investment Hunger – As many in the coal industry have started to cut their assets or searched for new investments amid a market slump, Shenhua Group Co. has adopted another approach, aggressively seeking assets overseas.

China’s largest coal enterprise announced on December 11 it won license to jointly explore for coal and develop the Zashulanskoye deposit in the Transbaikal Territory with Russia’s En+ Group. The deposit is close to the Russia-China border. The deal came just after a late October announcement that Shenhua signed an agreement with the government of Mongolia to develop the Tavan Tolgoi thermal coal deposits in southern Mongolia and to build rail links from that site to China. Earlier, media reports also said that Shenhua was exploring investments in several coal mines in Australia.

The shale gas project, which has 25 gas wells, is located in Pennsylvania and is expected to produce 3.8 billion cubic meters gas in the first 30 years.
The key to the deal is Novus’ 57,000 net hectares of drilling leases in the Saskatchewan Viking play. It produces about 4,000 barrels of oil equivalent per day, more than 80 per cent of which is light crude oil.
China National Petroleum (PTR) and Gazprom agreed in September on the basic terms of an agreement, including volume, the date of the first delivery, payment and a take-or-pay amendment, but both countries failed to secure the most important detail: a price.

The term facility attracted banks from Asia, North America, Europe, Australia and the Middle East and pays a margin of 1.23 percent, the statement from United Overseas Bank Ltd. and the Royal Bank of Scotland Group Plc said. Tiptop Energy Ltd. and Sinopec Century Bright Capital Investment Ltd. are the borrowing entities and the facility is guaranteed by Sinopec Group, as China Petrochemical is more commonly known.

Posted from Diigo.

China Business Briefs 21/12/13


Chinese Interest Rates in Money Markets Jump on Friday – **Amazing to see what tight margins the banks operate under – any increase in lending rates and they scream** The situation worsened Friday as the interest rate banks charge each other for short-term loans jumped to 8.2%, the highest level since a crippling liquidity shortage in the summer. The stress in the banking system is starting to spread: Stocks in Shanghai fell for a ninth consecutive day to the weakest level in four months, while government bonds dropped, pushing the 10-yield near to its highest level in eight years.

The People’s Bank of China issued its second statement about the developments in two days, saying it had injected a total of 300 billion yuan ($49.4 billion) into the financial system over the previous three days.

Video: China’s Banking System in Claymation – China Real Time Report – WSJ **Very cool** China’s leaders are well aware that there’s too much infrastructure spending and too little spending by consumers, and they’re trying to “rebalance” the economy by easing interest rates and adding deposit insurance. Ken Brown explains China’s financial system—with some help from claymation.

@PBOC: Nice work on the social media ploy | China Economic Review Governors at the People’s Bank of China have stepped up their social media game as of late. For days they’ve been posting cute cat photos on Weibo, China’s answer to Twitter (which is blocked in China). That wasn’t gaining much traction, with only the suits at the ministries of finance and commerce re-posting the furry felines.

That’s probably why PBOC late on Thursday announced on its Weibo account that it pumped billions of yuan into China’s monetary system via short-term liquidity operations, or SLOs. You see, central bank rules say that SLOs must be announced a month after they are conducted. But PBOC just couldn’t wait that long to generate a storm in the social media universe.

China’s lenders in push to lure depositors |Markets | Lenders, especially smaller banks, are raising the returns on their wealth management products in a bid to attract depositors.

In the last week of November, a total of 423 wealth management products hit the market with an average promised annualized return of 5.3 percent, the Beijing Evening News reported. That figure was up 0.13 percentage point from the previous week and compares with 4.47 percent for the same period last year.

Tech bans to be relaxed: US – The United States said on Friday it will “actively” carry out a plan to lift bans on high-tech exports to China, a long-term irritant in economic ties between the world’s two largest economies.

The development is a sign that recent military and trade friction will not deter the two nations from steadily advancing their economic relations, experts said.

China Ministry of Finance Official Praises U.S. Federal Reserve Move to Wind Down Bond-Buying – China Real Time Report – WSJ Many emerging markets have worried that the Fed’s efforts could reduce investment flows into their nations as investors looked more favorably at a recovering U.S. economy. But China’s central bank is far less worried and may welcome such an outcome, some Chinese and U.S. economists say.

Chinese tycoons top list of Britain’s richest property investors | South China Morning Post **London property has become a global asset, much to Londoner’s dismay** Tycoons from China have come from nowhere to top the list of the UK’s wealthiest property investors for the first time, ending the Duke of Westminster’s 10-year reign at the No1 spot.

China’s richest man, Wang Jianlin of the Dalian Wanda group, topped the 2013 Estates Gazette Rich List with an estimated fortune of £10.4 billion (HK$131 billion), closely followed in the No2 spot by New World Development chairman Henry Cheng Kar-shun and his family at £10.2 billion.

Video: Christmas 2013: Inside a Chinese toy factory – Telegraph Malcolm Moore visits the Atopp toy factory in Shantou, finding remote control helicopters and harmony.

Chinese Leader Xi Weakens Role of Beijing’s No. 2 – **Cameron’s obsequious behaviour is designed to put UK ahead of EU partners in China trade – China/EU trade is still limited** British officials were finalizing details of Prime Minister David Cameron‘s visit this month to Beijing when they received a last-minute scheduling change: President Xi Jinping would host a banquet in Mr. Cameron’s honor.

The invitation, which delighted the British officials, effectively scrubbed dinner plans with Mr. Cameron’s official host, Premier Li Keqiang. And it illustrates an important shift in the Chinese leadership’s internal dynamics: Mr. Xi is downgrading the premier’s role and assuming the primary duty of overseeing economic reforms as well as briefing foreign leaders on economic affairs, Communist Party insiders say.

China to make new bid to join global procurement pact in 2014 | Reuters **Colour me sceptical** China has agreed to make a revised offer to join a global agreement aimed at creating a level playing field for foreign companies competing for government contracts, senior U.S. and Chinese officials said on Friday.

Lack of access has been a sticking point with trade partners since China joined the World Trade Organisation (WTO) 12 years ago.

If China were to join the Agreement on Government Procurement (GPA), it would potentially open $100 billion of government contracts to foreign competition every year, and offer opportunities ranging from building highways to running data networks.

Elite Talk: A talk with former US Undersecretary of Treasury on China’s currency reform – People’s Daily Online How to see the yuan’s substantial appreciation? Is the Chinese currency really a one-way bet upward?

Joining the Elite Talk program to talk about these sizzling hot topics is former US Undersecretary of Treasury Mr. Timothy Adams. While at the White House, he was the George W. Bush administration’s point person on international financial and economic issues, including exchange rate policy issues. He has regularly interacted with top-ranking officials in key emerging markets including China and traveled extensively throughout the world’s second-largest economy. Here’s our talk.

Organization of Firms in P2P Lending Publishes Standards for Entering Industry – An organization of companies involved in peer-to-peer lending and information providers has published a set of standards that mark an attempt to set requirements for establishing P2P firms.

The requirements cover a range of items, from the credentials of employees and a company’s information disclosure to risk controls and the use and custody of client money.

Chinese factory manager from Hong Kong walks daily tightrope | South China Morning Post **Good insight into the control necessary with staff** “You want to make sure not a single area is dominating,” he said. “It’s not about those much-reported gang fights, but the loss of control if you have too many from one province.”

People from the same area tend to gang up, and not just because of differences in dialect and culture. Real interests can be at stake.

China, US start annual trade talks |Economy | Annual trade talks between China and the United States started on Friday in an effort to address trade frictions and build a foundation for the new model of major-power relations between the world’s two biggest economies.

China promises to promote US beef imports | South China Morning Post A Chinese deputy commerce minister, Wang Chao, said at a news conference the two sides agreed to “promote US beef exports to China” but gave no details. A deputy agriculture ministry, Niu Dun, said the two sides will work on technical issues but gave no timetable for when full-scale imports might be allowed.

Beijing banned US beef in 2003 due to fears of mad cow disease. It has promised in recent years to ease those restrictions but effectively maintained its ban.


Treasure piles up for Alibaba as depositors desert China’s banks – **Savers desperately seeking returns** Li Mingyang only joined Alibaba’s investment platform one month ago but he has already transferred almost all the cash in his bank account – nearly Rmb200,000 ($32,000) – to the online fund.

He is far from alone. More than 30m people in China have signed up to Yu’E Bao, or “Leftover Treasure”, only six months since its launch.

Why Tencent’s Investment In Cyanogen Inc Matters Now, Tencent (HKG:0700) is no stranger to investing in software companies based outside of China. In the past year or two, the company has injected cash into, Snapchat, Kakao Talk, and a handful of small, Silicon Valley startups.

But the CyanogenMod investment stands out because it’s an operating system – specifically, one that appears to aspire to compete with Android (even though it remains a fork for the time being).

Appliance Retailers Run an Online Marathon, Uphill – Indeed, it’s been an uphill race ever since Gome Electrical Appliances Holding Ltd. and Suning Commerce Group Co. Ltd. decided in around 2009 to gradually migrate business from traditional storefronts to online retailing.

Each company has invested heavily in e-commerce, but both have fought for their online stores, which sell consumer electronics, household appliances and related wares. Gome’s online unit lost about 400 million yuan in the first three quarters of 2013, the company said, bleeding slightly less red ink than in the same period 2012. Although Suning didn’t release profit figures of its e-commerce business, the company reported a 73 percent year-on-year decline in total net profit for the first three quarters. The company said with the rising online sales and the company’s effort to unify prices of its online and offline stores, Suning’s gross profit margin declined 3.48 percentage points to 15.2 percent for the first quarters compared to the same period last year.

Chinese firm to acquire Plaza Construction – Business – Plaza Construction, a major New York-based construction management firm that is prominent in South Florida and the mid-Atlantic region, said its stock will be acquired by China Construction America Inc..

CCA is a unit of state-owned China State Construction Engineering Corp., based in Beijing, China.

China to become centre for ‘various disruptive changes’ in business as its digital, mobile and tech sectors grow, claims WPP’s Sir Martin Sorrell | The Drum The research, published by WPP and conducted by research firm Millward Brown, reports on China’s most valuable brands, this year listing the top 100 for the first time, rather than the regular top 50 brands.

Top of the list was China Mobile at $61.4bn, followed by Industrial & Commercial Bank of China at $39.7bn and then Tencent at $33.9bn.

Bank of China Limited : Chinese Liquidity to Remain Tight in 2014 | 4-Traders **Plus how much bad debt?** Next year will see further liberalization in China’s banking system, but financing conditions will likely remain tight, Bank of China said on Friday in a report detailing its outlook for 2014.

Liquidity will remain tight for China’s financial institutions next year thanks to a combination of an increasingly vigilant stance by the central bank and the “tapering” of quantitative easing in the U.S., the bank said.

China Everbright Bank Shares Fall on Debut – Everbright priced its IPO at HK$3.98, near the middle of its indicated price range, but still increased its fundraising to US$3 billion last week by selling additional shares, from an original base deal worth US$2.6 billion.

Yet, as trade opened Friday, China’s 11th largest lender by assets saw its shares fall 0.5% below the IPO price of HK$3.98. Everbright Bank shares fell as much as 5% intraday before closing at HK$3.87, down 2.8% from their Hong Kong IPO price, underperforming the benchmark Hang Seng Index, which ended down 0.3% at 22,812.

Hershey hits sweet spot with deal for Golden Monkey |Companies | The Hershey Co, North America’s largest quality chocolate producer, has announced plans to acquire 80 percent of snack producer Shanghai Golden Monkey Food Joint Stock Co Ltd.

The acquisition will be carried out through Hershey Netherlands BV, a wholly owned subsidiary. It’s expected to be completed in the second quarter of next year, subject to approval from Chinese regulators and shareholders.

Analyst: Here’s Why the Apple-China Mobile Partnership Has Been Delayed Did Apple’s (NASDAQ:AAPL) distribution deal negotiations with China Mobile (NYSE:CHL) hit a snag over declining sales of the iPhone 5C? According to a note to investors obtained by Apple Insider, KGI Securities analyst Ming-Chi Kuo attributed the distribution deal delay to the unexpectedly low sales of Apple’s mid-range smartphone.

Spy Shots | BaoJun’s First Minivan Revealed | China Car Times – China Auto News Baojun is apparently planning to expand its auto range in 2014 with the addition of a new MPV and hatchback to the sole 630 sedan that has kept the GM-Wuling-SAIC made sub brand alive so far. The hatchback has already been sighted testing in China, but the MPV is a new one in such clear conditions.

JinkoSolar Partners with Beijing University to Build the University’s First Experimental PV Plant | 4-Traders JinkoSolar Holding Co., Ltd. (“JinkoSolar” or the “Company”) (NYSE: JKS), a global leader in the solar PV industry, today announced that it will partner with Beijing University’s Solar Power Engineering Center to construct the University’s first experimental PV power plant on campus which will be used for collecting and analyzing data on the power generation capabilities of PV modules when exposed to various conditions.

A place to call its own on the NYSE – BUSINESS – **Um… yeah…** Investors have shown a strong bout of confidence in Autohome, after the Chinese auto information provider went public earlier this month, when the company’s share price soared 76.88 percent the day it was listed on the New York Stock Exchange (NYSE) – in an encouraging sign for the company to work harder to keep their backers happy.

Blacklisted by World Bank!: CHEC refutes PGPL’s claim | Business Recorder China Harbour Engineering Co Ltd (CHEC) has refuted the claim of being blacklisted by the World Bank and has demanded an apology from Pakistan Gasport Limited (PGPL) which had claimed that CHEC is a blacklisted contractor by World Bank and cannot participate in the fast-track LNG tender.

Ministers of Finance &Transport in Beijing  | Sierra Express Media Sierra Leone Ministers of Finance and Economic Development and Transport and Aviation, Dr. Keifala Marah and Leonard Balogun Koroma, respectively on 17th December, arrived in the People’s Republic of China to hold further discussions with EXIM Bank of China and China Railway International on the construction of the Mamamah International Airport Project and the Hunan Rice and rubber agricultural project.

Ineos says most at UK Grangemouth plant agree to terms – Yahoo Singapore Finance **This story has been big in Scotland, but there was no mention of PetroChina’s stake** Ineos is the full owner of the Grangemouth petrochemical plant and a joint owner of the 210,000 barrels-per-day (bpd) refinery along with PetroChina , which holds 49.9 percent.

The company halted operations at Grangemouth in October and demanded changes in terms and conditions before it would permit a restart. It had previously said that losses would force it to shut the petrochemical plant.

Swiss Re buys stake in New China Life – Headlines, features, photo and videos from|china|news|chinanews|ecns|cns Swiss Re is acquiring directly from Zurich Insurance Company 152.9 million New China Life H shares (which are listed on the Stock Exchange of Hong Kong). representing 4.9 percent of the total issued share capital of New China Life (which includes both H shares listed in Hong Kong and A shares listed in Shanghai). The total value of the transaction is HK$3.82 billion ($493 million).

China Life Insurance Company Ltd. (LFC) is Overbought, What’s Next? – Tale of the Tape – Investors have definitely seen some solid trading in China Life Insurance Company Ltd. (LFC) lately, leading to gains for some. However, LFC is now in overbought territory thanks to its latest move, as the firm has an RSI value of 76.1. Additionally, China Life Insurance Company Ltd. currently has a Zacks Rank #4 (Sell), so if the earnings estimate trend is any guide, a fall might be coming for this overbought stock.

Peabody, Shenhua form thermal coal joint venture – Pennenergy Peabody Energy (NYSE: BTU) and China’s Shenhua Group announced they have entered into an agreement to create Sino-Pacific Coal Trading Corporation Pte. Ltd., a Singapore-based joint-venture company that will supply Shenhua’s growing coal import demand with thermal coal from Peabody’s global production and coal trading platform.

Market Research Reports, China State Construction Engineering Corporation Ltd (601668) – Financial and Strategic SWOT Analysis Review China State Construction Engineering Corporation Ltd (601668) – Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compiled by GlobalData to bring to you a clear and an unbiased view of the company’s key strengths and weaknesses and the potential opportunities and threats. The profile helps you formulate strategies that augment your business by enabling you to understand your partners, customers and competitors better.

ICBC has Business Focus For First NZ Branch | The country’s newest bank, China’s state-controlled ICBC, says it will focus largely on business banking as it sets up shop in New Zealand.

But the local arm of the world’s biggest bank also intends to branch into commercial property deals, as well as offering retail banking services.

The Zacks Analyst Blog Highlights: China Petroleum and Chemical, Apache, Chevron, SM… — CHICAGO, Nov. 29, 2013 /PRNewswire/ — Reportedly, China Petroleum and Chemical Corporation (NYSE: SNPFree Report) is discussing the purchase of a minor stake in Kitimat liquefied natural-gas (LNG) project with U.S. energy firm Apache Corp. (NYSE: APAFree Report). China Petroleum and Chemical Corporation, also known as Sinopec, is one of the largest petroleum and petrochemical companies in Asia.

Details relating to the purchase have not been disclosed. Moreover, Sinopec’s management has not sanctioned the investment yet. However, a source revealed that Sinopec’s stake investment will be utilized to fund the LNG project.

Shenhua Unit Wins Russia Coal Resources Use Right – Financial and Business News – MENAFN China Shenhua Energy Company Limited (01088) announces that Razrez Ugol, a unit in which the company indirectly holds 50% of equities, gained the resource use right for coal exploration and exploitation at Zashulanskoye Mining Area in Russia through a bidding at RUB 247 million or CNY 45 million.

OilVoice | Green Dragon Gas announces MOU with PetroChina Green Dragon Gas Ltd. (AIM: GDG), one of the largest independent companies involved in the production and sale of CBM gas in China, is pleased to announce that it has entered into a binding Memorandum of Understanding (MOU) with PetroChina Company Ltd (“PetroChina”), regarding confirming the Company’s participating interests in the Chengzhuang block (“GCZ”), a block included within the Shizhuang South (“GSS”) Production Sharing Contract.

Under the MOU, PetroChina will provide all information necessary for the Company to complete an audit so as to conclude and accept the capital expenditures incurred to develop the block, the gas production, gas sales and related revenues. Commercial gas sales began in March 2010. The parties have agreed to conclude the audits and the related definitive agreements on payments in the first quarter of 2014. Furthermore, the parties agreed that PetroChina will continue to be the operator of the GCZ block, while the Company will continue to operate the GSS block.

Posted from Diigo.

China Business Briefs 19/12/13

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted from Diigo.

China Stock Watch 13/12/13

Today was pretty much more of the same as the past two days, with fifteen of the twenty major stocks closing down on the day. Only Sinopec (down 1.25%) and China Shenhua (down 1.03%) were down by over one percent, however, capping a poor day for energy stocks. Only China Mobile, Noble Group, China Life and Ping An Insurance finished the day up, with Ping An the best of the bunch, gaining 2%. China Mobile’s hookup with Apple has finally showed up in its share price, though, as I’ve said, the initial sign-up rates aren’t that impressive.

Name Price Change Mkt cap
52wk high 52wk low EPS P/E
Sinopec 4.75 -0.06 (-1.25%) 553,685M 7.03 4.05 CN¥0.62 7.72
PetroChina 7.96 -0.05 (-0.62%) 1.46B 9.5 7.08 CN¥0.68 11.78
ICBC 3.73 -0.03 (-0.80%) 1.31B 4.53 3.4 CN¥0.74 5.07
China Construction Bank 4.32 -0.04 (-0.92%) 1.08B 5.19 3.9 CN¥0.85 5.11
Agricultural Bank 2.53 -0.02 (-0.78%) 821,729M 3.28 2.38 CN¥0.50 5.04
Bank of China 2.76 -0.03 (-1.08%) 770,449M 3.26 2.48 CN¥0.53 5.2
China Mobile 81.30* +0.35 (0.43%) 1.63B 91.8 74.9 HK$8.17 9.95
Noble Group 1.02 +0.01 (1.49%) 6,794M 1.27 0.785 SGD0.04 28.7
China State Construction 3.4 0.00 (0.00%) 102,000M 4.18 2.9 CN¥0.62 5.52
CNOOC 15.10* -0.10 (-0.66%) 674,177M 17.38 12.04 HK$1.89 8
China Railway Construction 5.11 -0.05 (-0.97%) 63,045M 6.49 3.95 CN¥0.84 6.07
China Railway Group 2.86 -0.02 (-0.69%) 60,918M 3.41 2.3 CN¥0.44 6.52
SAIC Motor 15.4 -0.08 (-0.52%) 169,794M 19 11.83 CN¥2.05 7.51
China Life Insurance 15.53 +0.11 (0.71%) 438,951M 22.7 12.88 CN¥0.97 16.07
Dongfeng Motor 12.64* -0.06 (-0.47%) 108,908M 13.26 9.48 HK$1.37 9.21
China Shenhua 16.27 -0.17 (-1.03%) 323,604M 25.7 15.51 CN¥2.25 7.23
Ping An Insurance 42.35 +0.83 (2.00%) 335,248.61M 53.27 31.69 CN¥3.45 12.28
China Telecom 3.88* -0.02 (-0.51%) 314,018M 4.46 3.48 HK$0.26 15.06
China Communications Construction 4.28 -0.01 (-0.23%) 69,228M 5.79 3.8 CN¥0.81 5.29
Bank of Communications 4.1 -0.02 (-0.49%) 304,477M 5.68 3.68 CN¥0.84 4.87

Well, it’s a pretty simple task this week. Every single major stock fell over the week. The largest falls were by China Life (5.59%), China Railway Construction (4.84%), and China Mobile (4.13%). The worst performing sectors were energy stocks and telecoms.


China Stock Watch 10/12/13

Though the recent hellish smog over Shanghai may have boosted some environment-related stocks (and this is at least a more subtle spin than the ham-fisted claim that smog makes you “funnier and smarter”), it still shows the struggle China has to be considered an attractive destination, whether for talent or capital. It is difficult to see how Shanghai can present itself as the trading centre of the east when it cannot ensure breathing is a safe exercise. Similarly, news that electronics retailer Suning is making it easier to source items from overseas may be a popular/profitable move, but is a telling indictment of China’s standards compliance.

Twelve of the major stocks declined today, with energy leading the pack. Sinopec was down over 2%, China Shenhua down 0.82% and PetroChina down 0.74%, though the offshore-focused CNOOC finished up 0.64%. Banks and insurance were amongst the day’s leaders, with Ping An Insurance the best performer, up 0.65%.

The Shanghai Composite Index finished just down by 0.71 points, or 0.03%.

Name Price Change Mkt cap
52wk high 52wk low EPS P/E
Sinopec 4.85 -0.10 (-2.02%) 565,341.60M 7.03 4.05 CN¥0.62 7.88
PetroChina 8.1 -0.06 (-0.74%) 1.48B 9.5 7.08 CN¥0.68 11.99
ICBC 3.8 0.00 (0.00%) 1.33B 4.53 3.4 CN¥0.74 5.17
China Construction Bank 4.43 +0.01 (0.23%) 1.11B 5.19 3.9 CN¥0.85 5.24
Agricultural Bank 2.62 +0.01 (0.38%) 850,960.55M 3.28 2.38 CN¥0.50 5.22
Bank of China 2.81 -0.01 (-0.35%) 784,407.22M 3.26 2.48 CN¥0.53 5.29
China Mobile 84.10* -0.80 (-0.94%) 1.69B 91.8 74.9 HK$8.15 10.32
Noble Group 1.04 0.00 (-0.48%) 6,892.16M 1.27 0.785 SGD0.04 29.02
China State Construction 3.47 -0.01 (-0.29%) 104,100.00M 4.18 2.9 CN¥0.62 5.63
CNOOC 15.66* +0.10 (0.64%) 699,179.15M 17.38 12.04 HK$1.88 8.32
China Railway Construction 5.29 -0.07 (-1.31%) 65,265.59M 6.49 3.95 CN¥0.84 6.28
China Railway Group 2.94 -0.02 (-0.68%) 62,621.71M 3.41 2.3 CN¥0.44 6.71
SAIC Motor 15.97 +0.07 (0.44%) 176,078.30M 19 11.83 CN¥2.05 7.78
China Life Insurance 16.3 -0.16 (-0.97%) 460,714.67M 22.7 12.88 CN¥0.97 16.86
Dongfeng Motor 13.00* -0.06 (-0.46%) 112,009.56M 13.26 9.48 HK$1.37 9.5
China Shenhua 16.83 -0.14 (-0.82%) 334,742.31M 25.7 15.51 CN¥2.25 7.48
Ping An Insurance 43.19 +0.28 (0.65%) 341,898.17M 53.27 31.69 CN¥3.45 12.52
China Telecom 4.00* -0.04 (-0.99%) 323,729.47M 4.46 3.48 HK$0.26 15.58
China Communications Construction 4.36 +0.02 (0.46%) 70,521.85M 5.79 3.8 CN¥0.81 5.39
Bank of Communications 4.2 0.00 (0.00%) 311,903.44M 5.68 3.68 CN¥0.84 4.99

China Stock Watch 29/11/13

Today was mixed for the major China stocks. Five finished up, with China Telecom leading the pack, putting on 1.7%. CNOOC did next best, gaining 1.27%. With three stocks static, twelve fell on the day, though only SAIC Motor was down by over by 1% (closing down 1.03%). Banks did poorly, with China Construction Bank, Agricultural Bank and Bank of Communications all down, while Bank of China and ICBC showed no movement.

The Shanghai Composite Index finished up slightly, gaining 1.13 points (0.05%), to close at 2,220.50. Over the week it picked up 24.13 points, or just over 1%.

With Thanksgiving yesterday, the NYSE was closed, hence no earnings reports.

Name Price Change Mkt cap
52wk high 52wk low EPS P/E
Sinopec 4.77 -0.03 (-0.63%) 556,016.39M 7.03 4.05 CN¥0.62 7.75
PetroChina 7.91 -0.03 (-0.38%) 1.45B 9.5 7.08 CN¥0.68 11.71
ICBC 3.8 0.00 (0.00%) 1.33B 4.53 3.4 CN¥0.74 5.17
China Construction Bank 4.39 -0.02 (-0.45%) 1.10B 5.19 3.9 CN¥0.85 5.19
Agricultural Bank 2.61 -0.01 (-0.38%) 847,712.61M 3.28 2.38 CN¥0.50 5.2
Bank of China 2.81 0.00 (0.00%) 784,407.22M 3.26 2.48 CN¥0.53 5.29
China Mobile 83.5 +0.90 (1.09%) 1.68B 91.8 74.9 HK$8.14 10.25
Noble Group 1.11 -0.00 (-0.45%) 7,322.92M 1.27 0.785 SGD0.04 30.87
China State Construction 3.27 -0.02 (-0.61%) 98,100.00M 4.18 2.9 CN¥0.62 5.31
CNOOC 15.9 +0.20 (1.27%) 709,894.53M 17.38 12.04 HK$1.88 8.46
China Railway Construction 5.38 -0.01 (-0.19%) 66,375.97M 6.49 3.95 CN¥0.84 6.39
China Railway Group 2.98 -0.03 (-1.00%) 63,473.70M 3.41 2.3 CN¥0.44 6.8
SAIC Motor 15.38 -0.16 (-1.03%) 169,573.22M 19 11.83 CN¥2.05 7.5
China Life Insurance 15.7 -0.11 (-0.70%) 443,755.86M 22.7 12.88 CN¥0.97 16.24
Dongfeng Motor 12.32 +0.06 (0.49%) 106,150.60M 13.26 9.48 HK$1.37 9.01
China Shenhua 16.9 -0.16 (-0.94%) 336,134.58M 25.7 15.51 CN¥2.25 7.51
Ping An Insurance 41.55 +0.06 (0.14%) 328,915.70M 53.27 31.69 CN¥3.45 12.05
China Telecom 4.19 +0.07 (1.70%) 339,106.63M 4.46 3.48 HK$0.26 16.33
China Communications Construction 4.27 0.00 (0.00%) 69,066.12M 5.79 3.8 CN¥0.81 5.28
Bank of Communications 4.15 -0.01 (-0.24%) 308,190.32M 5.68 3.68 CN¥0.84 4.93

Weeks Movers
Inevitably, given the recent Qingdao disaster, Sinopec was the biggest faller of the week, with PetroChina not far behind. Perhaps as counterpoint, China Shenhua (mostly involved in coal) was one of the biggest risers. China Mobile also rose markedly, on Apple rumours/leaks.