Chinese manufacturers produce more new-energy vehicles
Jun-29-2015 By : fcccadmin
Chinese manufacturers produced three times more new-energy vehicles in May than last year, the Ministry of Industry and Information Technology (MIIT) said. Production of pure electric passenger cars soared 300% to 9,922, with hybrids rising nearly 400% to 4,923. Production of pure electric and hybrid commercial vehicles rose by 700% and 36%, respectively. A total of 19,100 such vehicles rolled off the production line in May. In the first five months, Chinese automakers produced 53,600 new-energy vehicles – again nearly a threefold increase from a year earlier. In March, the Ministry of Transport set a target of 300,000 new energy commercial vehicles on China’s roads by 2020 – 200,000 new-energy buses and 100,000 new-energy taxis and delivery vehicles. The Ministry of Commerce (MOFCOM) also said earlier this year that China will continue to build charging facilities in cities and allow tax exemptions and subsidies on vehicle purchases.
Rule that restricts bank loans to 75% of deposits to end
By : fcccadmin
The Chinese government is to scrap a rule that caps lending by commercial banks at 75% of their deposits, a measure that will increase the supply of cash in the financial system. It will propose amending the nation’s banking law to make the limit a ratio used for reference rather than a regulatory statute. A system will be set up to monitor the liquidity of banks based on the ratio. Changes to the law need to be approved by the Standing Committee of the National People’s Congress (NPC). Premier Li Keqiang is trying to reshape a state-run banking industry that has USD29 trillion of assets, almost twice the amount of its United States counterpart. Deregulating interest rates and easing regulatory controls are part of his efforts to support long-term growth by giving markets a bigger role in the economy. The shake-up is coming five years after the nation completed the stock market listings of the last of its dominant big-four banks. The law limiting lending to 75% of deposits has been in place since 1995. While the loan-to-deposit level for the whole industry was 66% in March, some listed lenders are close to the 75% cap. Bank of Communications’ ratio was about 74% in March, while China Construction Bank’s was 72%. China Securities Co has previously estimated that the removal of the ratio would potentially allow 16 listed banks to release up to CNY6.6 trillion in extra lending. It will allow banks to lend more to the agricultural sector and small businesses. But even with the removal of the lending restriction, bank lending isn’t expected to increase substantially, said Li Qilin, Analyst at Minsheng Securities Co, as banks have become more risk-averse in a slowing economy.
Private companies apply to set up banks
By : fcccadmin
The China Banking Regulatory Commission (CBRC) on June 26 officially started accepting applications from private enterprises to invest in the banking sector, which has long been strictly regulated. “All channels for private capital to enter the banking sector are now open,” CBRC Chairman Shang Fulin told a news conference in Beijing. More than 40 domestic private enterprises have expressed interest in setting up banks. Shang said that the CBRC will decide on those applications within four months after they are made. He also noted that private banks must have arrangements to deal with “residual risks” that are not covered by the deposit insurance system, which provides coverage of up to CNY500,000 for individual bank accounts. The opening to private capital is seen as the government’s strategy to transform the country’s banking structure, which is dominated by large state-owned lenders, and address the issue of financing difficulties of smaller and startup companies in a slowing economy, the China Daily reports. While the guidelines state that foreign and domestic private investors shall be treated equally, Shang said that the 20% shareholding restriction of foreign investors in a Chinese bank remains unchanged. China launched a pilot program in 2014 under which five fully private banks were established, owned by companies such as Alibaba Group Holding and its domestic rival Tencent Holdings. All five private banks are now in operation.
China to allow full-ownership of some e-commerce firms
By : fcccadmin
China will allow full foreign ownership of some e-commerce businesses, aiming to encourage foreign investment, the Ministry of Industry and Information Technology (MIIT) said. The move, effective immediately, will apply to “online data handling and trade handling services”. Allowing full foreign ownership “supports our country’s e-commerce development, encourages and brings in the active participation of foreign investment, and further excites market competition,” the Ministry said. In recent years, the government has lent its support to the industry by keeping taxes low and loosening restrictions on cross-border trade, among other concessions.
China remains top FDI destination
By : fcccadmin
China remains at the top of the world’s 10 most attractive countries for foreign direct investment (FDI), even though last year’s global FDI dropped to the lowest level since the 2008 financial crisis, the United Nations Conference on Trade and Development (UNCTAD) said in a report. According to the organization’s World Investment Report 2015, 28% of the respondents chose China as their first choice for FDI. According to the UNCTAD, last year’s FDI into China was USD129 billion, up by 4% year-on-year. Investment increased in the service sector while falling in manufacturing. It was the first time that China surpassed the United States as the world’s largest FDI recipient. Outbound direct investment (ODI) is also increasing. ODI from the Chinese mainland reached USD116 billion last year, up 15%, to the third-largest amount after the U.S. and Hong Kong. Global FDI as a whole fell by 16% to USD1.23 trillion last year because of the fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks. The UNCTAD predicted this year that total global FDI inflows may grow by 11% to USD1.4 trillion and further rise to USD1.5 trillion in 2016 and USD1.7 trillion in 2017.
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