Earnings growth slows at Chinese banks
Mar-25-2013 By : agxadmin
Earnings growth at Chinese banks slowed dramatically to 19% last year from 36% in 2011 and 2010, Fitch Ratings said. The agency cautioned in a report that lower earnings growth at the banks is likely to weaken internal capital generation and put further pressure on capital this year and next. Fitch said that rising funding costs amid weakening liquidity, the rapid growth of lower yielding non-loan credit, and slower growth of fees and commissions will weigh on earnings. “We expect all these trends to intensify from 2013 to 2014, and be exacerbated by further moves toward interest rate liberalization, which will increase already rising funding costs,’’ Fitch added. Net profits at China’s top five banks may rise nearly 12% to above CNY750 billion in 2012, while the bad loan ratio at the top lenders is expected to improve in 2012 to 0.99%. The Big Four banks gave out combined new loans of CNY144 billion in the first 17 days this month, a sharp drop from CNY250 billion in the same period in February.
Lego building its first factory in China
By : agxadmin
Lego is building its first factory in China as part of a plan to move production closer to Asia, its fastest growing market. The Danish maker of colorful plastic building blocks for children said it is investing at least €100 million in the new plant. Building of the factory in Jiaxing will start in 2014 and it will be fully operational by 2017. In recent years Lego’s sales in the Asian region have grown by over 50% annually. CEO Bali Padda said Lego’s strategy is to reduce the time needed for shipping by basing production near its main markets. Lego predicted the factory, which will have moulding, decoration and packaging facilities, will be able to supply 70% to 80% of the toys it sells in Asia in 2017. The plant will employ 2,000 workers by the time it is fully running. Lego also has plants in Denmark, Hungary, the Czech Republic and Mexico.
ODI exceeds FDI in first two months
By : agxadmin
China’s outbound direct investment (ODI) surged 147.3% in the first two months to USD18.4 billion, indicating investors’ enthusiasm to globalize their businesses. It surpassed incoming FDI, which stood at USD17.48 billion over the period, down 1.35% year-on-year. Chinese direct investment overseas surged almost 30% last year from 2011 as firms in the world’s second-largest economy increasingly look to expand abroad. The biggest rise in Chinese investment in a major market in January and February was in Australia, where it surged 282%, followed by Hong Kong, up 156%, and the U.S. with a 146% increase, while in South-east Asia it went up 114% and in the EU 81.9%. In Japan, investment was down 31% and in Russia 46%.
First Hong Kong wholly-owned hospital opens in Shenzhen
By : agxadmin
The first wholly Hong Kong-owned hospital has opened in Shenzhen under the Closer Economic Partnership Arrangement (Cepa) signed a decade ago. Founder and Director Dr Dennis Lam said he had struggled with the application procedures to open his eye hospital for two years. “I had to go through all kinds of procedures with many departments,” he commented. He said he had to own or rent a site before he was granted approval for his business – meaning he could have lost his capital if the application failed. The C-MER (Shenzhen) Dennis Lam Eye Hospital is the first on the mainland to be wholly-owned by Hongkongers as a result of the ninth supplement to Cepa signed last year, which relaxed a requirement that Hong Kong doctors have mainland partners. Speaking at the opening, Chief Executive Leung Chun-ying said there were 72 joint Hong Kong-mainland medical institutions. He said the opening of Lam’s hospital highlighted a new stage of cooperation between the medical professions on opposite sides of the border. But businessman Michael Tien said the hospital might be a one-off project because the risk of investing is too high and the application process too slow. The hospital has an investment of HKD200 million, 30 beds and five operating rooms, and 20 medical staff including five Hong Kong doctors.
China becomes the world’s fifth-largest arms exporter
By : agxadmin
China has defended its rules on overseas weapons sales following a report ranking the country fifth in arms exports. Foreign Ministry Spokesman Hong Lei said that such sales followed domestic laws and United Nations guidelines. He said weapons sales have to be justified by the legitimate needs of the recipient and must not harm peace, security or stability. Sweden’s Stockholm International Peace Research Institute (SIPRI) reported that China had overtaken Britain as the world’s fifth largest arms exporter over the five-year period from 2008 to 2012. It added that the volume of Chinese arms exports rose by 162% between 2008 and 2012, compared with the previous five-year period. China had a 5% share of global arms exports. The largest buyer of Chinese weapons was Pakistan, which accounted for 55% of the country’s exports, followed by Myanmar with 8% and Bangladesh with 7%, SIPRI said. “China’s rise has been driven primarily by large-scale arms acquisitions by Pakistan,” said Paul Holtom, Director of SIPRI’s arms transfers program. “However, a number of recent deals indicate that China is establishing itself as a significant arms supplier to a growing number of important recipient states.” China’s move into the top-five means the United Kingdom (now sixth) drops out of the top five for the first time since at least 1950. The Institute said Asia dominated the global imports of weapons, with the top five importers all located there.
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