Shanghai Mayor Han Zheng, 58, was appointed as the city’s Party Secretary after serving as Mayor since 2003. He replaces Yu Zhengsheng, 67, who has been elected one of the seven members of the Standing Committee of the Political Bureau.

Sun Zhengcai, 49, a former Minister of Agriculture before he was named in late 2009 as Jilin province’s Party Secretary, has been appointed to the post in Chongqing, succeeding Vice Premier Zhang Dejiang, who was also promoted to the Standing Committee.

Sun Chunlan, until recently Party Secretary of Fujian province, has been appointed Party Secretary of Tianjin Municipality after being inducted into the elite 25-member Politburo. She is the second highest raking woman in the Chinese Communist Party, following Liu Yandong, who is expected to become a Vice Premier in March.

China Construction Bank (CCB) President Zhang Jianguo said that besides building on its network in the United States, Europe and the Asia-Pacific region, the bank would consider expanding through mergers and acquisitions (M&As), with the focus on emerging-markets, where many Chinese companies are going to do business. The bank “would also pay attention to investment opportunities in Europe and North America, in particular if some European and American institutions plan to sell their branches and businesses in emerging markets,” Zhang added. In September, Britain’s Financial Times quoted CCB Chairman Wang Hongzhang as saying that the bank could spend as much as USD15 billion to acquire a major stake in a European bank or even buy it out. If successful, a deal of that size would become China’s largest banking acquisition abroad. CCB later denied it was interested in pursuing such a big investment abroad, citing a “misunderstanding” in the Financial Times article. Zhang told the South China Morning Post that the starting point for the bank’s overseas expansion is to follow its clients. “To go with them and provide banking services to them in those new local markets they are expanding into is the key goal for CCB’s overseas expansion strategy,” he said. Analysts said CCB, which is China’s top property lender, has relatively sound capital which gives the bank more room to make significant investments. At the end of September, CCB’s tier one capital adequacy ratio stood at 11.35%, the highest among China’s Big Four banks.

American International Group (AIG) plans to form a joint venture with Chinese insurer PICC Life Insurance Co to sell life insurance in China’s major cities. AIG said it will subscribe to USD500 million worth of H-shares of PICC Group’s initial public offering (IPO) in Hong Kong. It agreed not to sell over 25% of the stake for five years after the IPO, but it may sell the entire stake if the joint venture documents are not signed by the end of May 2013. PICC Group plans to raise USD3.6 billion through the IPO. AIG now owns around 9.9% of PICC Property and Casualty Co, a unit of PICC Group listed in Hong Kong. China had the fifth largest life insurance market in the world last year with USD134.5 billion in total written premium, PICC said in its preliminary IPO prospectus, citing figures from the Sigma Report compiled by Swiss Re. Life insurance penetration in China reached 1.8% at the end of last year, compared with 8.8% in Japan and 3.6% in the United States. PICC Life ranked third among life insurers in China in the six months ended June this year, with CNY57.2 billion in total written premium in the period. It has a life and health insurance distribution network of about 2,200 branches. PICC’s life insurance business accounted for about 29% of its gross written premium of CNY149.2 billion in the six months ended June this year. The company had 51.4 million life insurance customers at the end of June, up 18% from six months earlier.

Rising competition and a squeeze on net interest margins will dampen profit prospects for Chinese banks over the next 12 to 18 months, according to global credit rating agency Moody’s. Moody’s Vice President and Senior Analyst Hu Bin said that Beijing’s plan to liberalize interest rates would continue to put pressure on Chinese banks’ net interest margin. Moody’s forecast the banks’ net interest margin would fall by between 0.06 percentage point and 0.1 percentage point this year from the previous year if 30% of total loans were priced at the floor rate – the lowest lending rate allowed by the People’s Bank of China (PBOC). Hu said Chinese banks could no longer rely on net interest income to sustain their strong profit growth. Haitong Securities forecast that the average profit growth of 16 China-listed banks would slow to 16.4% this year and to 4.9% next year after 37.6% growth in 2011. China’s financial reforms and structural changes in the economy would take a toll on bank profits, the brokerage said. “Besides competition among mainland banks, direct financing tools have also put pressure on the banks’ lending business,” Hu Bin said. Direct financing tools, such as issuance of stocks and bonds, allow companies to raise funds in the capital markets without going through commercial banks.

Direct investment by Japanese companies totaled USD460 million in October, down almost a third from last year’s levels. The sharp fall reduced Japan’s overall direct investment in China to an annual growth rate of 11%, from 17% in the first nine months. Monthly figures are an imprecise indicator, as investments tend to have long lead-times. But analysts say that the recent escalation of a long-simmering dispute over the Diaoyu islands has given executives cause to rethink the risk of investing in China. Companies are in a “wait-and-see mode”, said a senior official at a government-linked institution in Tokyo. “Their basic investment strategies will not change, but they are looking for a political solution. Many are waiting for signs that their investments in China are safe, and welcome.” Some companies say sales have also been badly hit by disruption to Chinese imports from Japan and unofficial Chinese boycotts of Japanese products. Meanwhile, big Japanese companies with investments in China are experiencing hold-ups in gaining regulatory approvals for deals. Steelmaker JFE Holdings and heavy machinery manufacturer IHI Corp have had to delay a merger of shipbuilding units three times, while trading house Marubeni is still awaiting the go-ahead to buy Gavilon of the U.S. – a deal it had said would be cleared by September. Under a Chinese anti-monopoly law in force since 2008, M&A deals must be cleared with authorities if they would lead to combined sales in China of more than CNY2 billion, or over CNY10 billion worldwide. According to one M&A banker in Tokyo, seeking antitrust approval has become a “painful” process since bilateral relations deteriorated, the Financial Times reports.