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China Business Briefs 21/1/14

ECONOMY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

COMPANIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted from Diigo.

China Business Briefs 7/1/14

ECONOMY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

COMPANIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted from Diigo.

China Business Briefs 22/12/13

ECONOMY

China’s economy: The PBOC’s rough playground | The Economist As I mentioned in a previous post, China’s central bank has the power to keep interbank rates steady if it puts its mind to it. So, as Ting Lu of Merrill Lynch points out, any analysis of this week’s interbank strife has to answer two questions: First, why is liquidity tight? And second, why hasn’t the PBOC done enough to ease it?

Q&A: Cash crunch in China – FT.com **Good primer** At the end of Friday China’s central bank, the People’s Bank of China, responded to rising money market rates by announcing it had injected more liquidity into the system. But will that injection be enough to calm fears that China is set for a new cash crunch?

Worst Cash Crunch Since June Drives Chinese ADRs Slump – Bloomberg The Bloomberg China-US Index of the most traded Chinese stocks in the U.S. dropped 0.2 percent to 103.75 yesterday for a weekly slide of 1.6 percent. The gauge’s two-week slump was the longest losing stretch in six months. Macau casino operator Melco Crown Entertainment Ltd. (MPEL) fell for a second day, trading at the widest discount to its Hong Kong stock in a month. NQ Mobile Inc. (NQ) dropped for a fourth week while LightInTheBox Holding Co. slid the most in a week.

Smartphone companies place bet on sports marketing |Companies |chinadaily.com.cn **This will also probably mean more hugely-overpriced friendlies in Beijing, Shanghai etc** As Huawei, Lenovo and ZTE Corp managed to become top-5 mobile phone vendors globally and now aspire to climb the pricing ladder and attract high-end users, they’re starting to build up their branding by using the power of sports stars.

Shenzhen-based Huawei, which has been paying more attention to the smartphone business in recent years, recently signed a sponsorship agreement with Italian football club AC Milan. The three-year deal allows Huawei to use AC Milan’s logo and images of its players for phone promotion activities.

Yuan to appreciate moderately in 2014 |Markets |chinadaily.com.cn **You don’t hear US Congress complaining about currency manipulation any more, amiright?** Deutsche Bank strategists forecast that the yuan will appreciate versus the US dollar by roughly 2-3 percent in 2014, and that renminbi cross-border trade settlement will increase by roughly 50 percent to 6 trillion yuan ($983 billion), or approximately 20 percent of China’s global trade volume.

“Looking to 2014, we expect yuan to continue to appreciate moderately, with the yuan/US dollar bilateral rate expected to rise to the level of 6,” said Zhu Haibin, China economist at J.P. Morgan,

Five Predictions: China’s Business Environment in 2014 – Silicon Hutong **Compare with Evan Osnos’ “ten stories to watch”** Futurism is alchemy in the best of circumstances, and nowhere more so than in the case of China. Nonetheless, if we extrapolate from current events, it appears that China has embarked on a course of commercial nationalism, if not outright mercantilism.

In the spirit of the season, then, we offer our five predictions for 2014:

China faces tough task to resolve housing deadlock |Industries |chinadaily.com.cn “The policy message indicated by authorities recently will bring profound changes to the real estate sector. We expect more targeted reform measures to fix the defects of previous policies,” said Chen Guoqiang, deputy head of the China Real Estate Society.

Processes that allow the market to play a major role are expected to be formed to replace administrative measures currently in place.

Hair-raising rabbit clip hits China’s fur trade |Industries |chinadaily.com.cn The bottom has fallen out of the market for Chinese rabbit fur since a video of fur harvesting appeared online, despite claims that the abuse was an extreme case.

The clip of a farmer ripping fur from an live rabbit precipitated a torrent of public outrage. Many fashion brands, including Calvin Klein, Topshop and H&M, have since refused to use rabbit fur from China in their designs, leaving the Chinese rabbit industry with a tremendous reduction in orders.

Cathay puts in US$7.5b order for Boeing jets | South China Morning Post Chief executive John Slosar has been pushing to retire the airline’s older 747-400 fleet and replace it with more fuel-efficient and modern aircraft as it competes with Emirates for the lucrative business traveller market.

China vs. Japan: Will Boeing’s New Submarine-Destroying Jet Get Battle Tested? (BA) **Is this article literally looking forward to miitary conflict just so we can see quality of Boeing’s hardware? Very bad taste** Japan and China are anything but friendly, but tensions escalated further following China’s recent declaration of a maritime air defense zone over the East China Sea. This move also increased tensions between China and the U.S., and Defense Secretary Chuck Hagel said the U.S. military wont adhere to the guidelines of the Chinese-described air-defense zone.

While this situation isn’t the best news, it has provided Boeing (NYSE: BA) with the opportunity to show off its new submarine-hunting P-8A Poseidon aircraft. Here’s what you need to know.

Ex-ICBC Credit Suisse duo readies China hedge fund as reforms lure investors | GlobalPost Two former portfolio managers of ICBC Credit Suisse Asset Management (International) have started their own hedge fund to invest in China in a sign that Beijing’s bold new reform agenda is drawing investors.

Genesis Capital Investment, founded by Kang Hao, the former head of investment for ICBC Credit Suisse Hong Kong and portfolio manager Jimmy Weng, will start trading by end of this month and aims to raise about $100 million next year.

Posted from Diigo.

China Business Briefs 19/12/13

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted from Diigo.

China Business Briefs 25/11/13

(Reuters) – Commerce Minister Gao Hucheng denounced the United States as “irresponsible” on Sunday after Washington accused China of jeopardizing a deal that aims to cut tariffs on technology products, saying Washington had disappointed participants in the talks.

U.S. Trade Representative Michael Froman said on Thursday that China’s demands to exempt more than 100 products from a technology trade deal risked leading to a breakdown in the negotiations.

As I see more and more production lines in China equipped with robots and not workers, as I read about the modularization of housing construction and presumably the reduction in needed workers, and as I write about the impact of e-retail in eliminating many physical retail locations and related jobs, I do increasingly wonder where the next wave of jobs is going to come from, and what skills people will require to fill them.

Residents in Heze, a third-tier city in Shandong province, were angered last week after they discovered they would have to turn over their homes to the local government. Officials in Juancheng county are offering a scandalously low compensation rate for land that they plan to clear, add basic utilities to, then turn around to a property developer at a steep profit. Residents there say they refuse to move.

Incidents such as these are commonplace. They occur as local governments, entrusted as the sole purveyor of rural land, look to finance regional development with the proceeds of land sales. However, reforms underfoot may soon edge local governments out of the rural land market.

China Central Television (CCTV) ­reported Sunday that major real estate companies are behind on payments of land value-added tax (VAT) amounting to more than 3.8 trillion yuan ($623.58 billion) for the period between 2005 and 2012.China’s real estate companies should have paid a total of 4.6 trillion yuan in land value-added taxes between 2005 and 2012 but only paid 0.8 trillion yuan, CCTV reported, citing Li Jinsong, a Beijing lawyer and certified tax agent.

An explosion at a China Petroleum & Chemical Corp. (386) oil pipeline and the nation’s deadliest spillage since at least 2005 may threaten the government’s efforts to lure investment to state-controlled industries as President Xi Jinping called for improved industrial safety.

The Nov. 22 accident at the Huangdao district in the eastern city of Qingdao killed at least 52 people, Xinhua News Agency reported. Sinopec, as China Petroleum is known, said yesterday it was still investigating the cause of the blast, which happened after crude oil leaked from a 27-year-old pipeline into Qingdao’s municipal rainwater pipe network.

When Samsung Electronics Co’s Galaxy Gear launch in early September created a hype around the potential market for smartwatches, it was certain that we would soon see cheaper versions from Chinese competitors.

Now, ZTE Corp., mainly known for its telecom equipment but also a smartphone maker, plans to launch a smartwatch in the second quarter of next year, according to Lu Qianhao, head of the Shenzhen-based company’s handset marketing strategy.

Earlier this month Cisco CEO John Chambers admitted in an earnings call that political dynamics were stymieing his company’s long march into Huawei’s backyard.

Asked whether the recent U.S. spying scandal was affecting overseas business, Chambers said it was having an impact, particularly in China, which is Cisco’s biggest emerging market country but represents less than 5 percent of its total revenue.

BEIJING, Nov. 25 (Xinhua) — Shares of Sinopec, China’s top refiner listed in both Shanghai and Hong Kong, opened to tumble on Monday following Friday’s deadly oil pipeline blasts in east China’s Shandong Province.

A-share of Sinopec in Shanghai opened at 4.85 yuan (79 U.S. cents) per share, down 3.96 percent from Friday’s closing price.

A group led by Aluminum Corp. of China has abandoned its bid for Glencore Xstrata Plc (GLEN)’s Las Bambas copper project in Peru, two people with knowledge of the matter said.

Chinalco, as the state-owned aluminum producer is known, decided to drop out rejecting a proposal by the Chinese government that it be a minority partner in a combined bid led by China Minmetals Corp., said one of the people, who asked not to be identified as the deliberations are private.

Mobile device chipmaker Qualcomm Inc. expects to continue growing in China, but Chief Executive Paul Jacobs acknowledged U.S. restrictions on Chinese companies and revelations about surveillance by the National Security Agency are impacting its business in the fast-growing country.

Evergrande bid for a piece of land with 20.84 ㎡building area in Chaoyang  District, Beijing on Thursday for CNY5.14billion, a premium of 30 percent over  the original auction price.

This is the third plot the group bought in the capital city this year,  raising the aggregate investment to CNY12.7billion in its first year marching  into Beijing’s property market.

One of the key questions is if China Mobile and Apple were to announce their partnership would the 200,000 TD-LTE base stations that it plans to have in place by the end of the year, which could handle 4 million active users, be enough for the initial iPhone demand. At least one analyst believes that 10% of China Mobile’s users, or about 76 million, could be potential customers. Note that as of September 2013 Apple has sold a total of 421 million iPhones worldwide since it was launched over six years ago.

The COMAC America Corporation aims to further COMAC’s relationship with local civil aviation authorities, aerospace companies and academic institutions, mainly in areas such as airworthiness certification, civil aircraft development and educational training, said Jin Zhuanglong, chairman of the COMAC.

“Chinese civil aviation market is the No.1 booming market…The fast-growing Chinese civil aviation industry is now becoming an indispensable force to world aerospace industry,” Jin said, adding that China is embracing an era of mass aviation with its remarkable air transport growth.

Muddy Waters NQ Short Call Fails to Freeze Chinese IPOs

Chinese companies are selling shares in New York at the fastest pace in two years less than a month after short seller Carson Block’s call spurred a 62 percent plunge in Beijing-based NQ Mobile Inc. (NQ)

Three Chinese companies have debuted on U.S. bourses this month, raising $345.4 million, the most since May 2011, when six companies listed $1.3 billion of shares. 500.com Ltd., an online sports lottery service, raised $75.2 million in an initial public offering. Sungy Mobile Ltd., which makes applications for Google Inc. (GOOG)’s Android software, sold 7 million shares at $11.22. 58.Com Inc. (WUBA), an online marketplace similar to Craigslist, and travel agency Qunar Cayman Islands Ltd. (QUNR) have sold shares above their price targets since Oct. 30.

BEIJING, Nov 22 (Reuters) – As China struggles to rid cities of choking smog, one of the early priorities for Beijing’s economic reforms will likely be to force state-run PetroChina to allow private producers fair access to natural gas pipelines.

Without fair access to the distribution network, independent producers have no incentive to develop the country’s vast gas reserves to their full potential. Already the world’s fourth-largest gas user, China’s leaders want to boost domestic output to accelerate the substitution of cleaner-burning gas for coal to fuel power and heating.

Sina will soon launch a service to enable Weibo users to make online payments on credit, Dai Geng, vice GM of Sina Payments, told Nandu reporter (in Chinese).

Zhong An, the online-only insurance company jointly founded by Alibaba, Tenent and Ping An, will provide coverage for defaults on payments.

Posted from Diigo.