Tourist market shifting as more Chinese travel abroad
Nov-30-2015 By : fcccadmin
As more Chinese travel overseas, fewer foreigners visited China in the three years to last year. The number of inbound tourists fell 2.2% in 2012 to 132 million; and shrank a further 2.5% and 0.45% in 2013 and last year respectively, according to the National Tourism Administration (NTA). The lackluster performance may reflect various factors, from concerns about worsening pollution to exchange rates to competition from other destinations. Infrastructure in China still has much room for improvement, as well as food and toilet hygiene. Adding to the problem is limited English proficiency. According to the latest travel competitiveness index from the World Economic Forum, China ranked 17th out of 141 economies, trailing Japan, Singapore and Hong Kong. Tourism in China is an important economic pillar, providing some 64.4 million, or 8.4% of jobs. The economic benefit of tourism was expected to top CNY5.817 trillion in 2014, or 9.4% of GDP.
First ARJ21-700 regional aircraft delivered to Chengdu Airlines
By : fcccadmin
Commercial Aircraft Corporation of China (COMAC) delivered its first regional aircraft – the ARJ21-700 – to Chengdu Airlines, after the jet took 5,258 hours of testing flights over the past seven years. The aircraft will be put into commercial operation in three months, said Zhuang Haogang, Chairman of the airline, which is based in Chengdu, Sichuan province. Seven domestic routes are planned, including Chengdu to Shanghai, Beijing, Nanjing, Xian, Kunming, Wuhan and Guiyang. The carrier, which is currently operating 20 aircraft in the Airbus 320 family on over 50 domestic routes, plans to receive another four ARJ21-700s next year, Zhuang said. “Chengdu Airlines expects to fill its total order of 30 aircraft over five years.” It will be the only customer during the coming year, although COMAC has more than 300 orders from 20 clients, including some foreign carriers. The Republic of the Congo, which ordered three ARJ21s last year, may be the first foreign carrier to start operating the aircraft. With 90 seats, the aircraft is considered an advanced regional jet. It is the first product of COMAC, which also is preparing the maiden flight of its large passenger aircraft, the C919.
Fourth Summit of China and Central and Eastern European Countries held in Suzhou
By : fcccadmin
Two documents for a high-speed railway linking Serbia and Hungary were signed amid China’s continuing efforts to boost ties with Central and Eastern European countries. In a ceremony witnessed by Premier Li Keqiang and Hungarian Prime Minister Viktor Orban, China’s National Development and Reform Commission (NDRC) and Hungary’s Foreign Affairs and Trade Ministry signed an agreement to cooperate on the development, construction and financing of the Hungarian section of the Hungary-Serbia railway. Additionally, China Railway International and China Communications Construction Co have signed a contract with the Serbian Ministry of Mining and Energy for the modernization and reconstruction of the Serbian section of the railway. Construction of the Hungary-Serbia railway will begin this year, Li told an economic and trade forum during the Fourth Summit of China and Central and Eastern European Countries (16+1), which was held in Suzhou. The train link, which will cut travel time between Belgrade and Budapest from eight hours to three, will be finished in two years. China also is willing to invest in the construction and upgrading of infrastructure in port areas of the Baltic Sea, the Adriatic Sea and the Black Sea to boost cooperation and connectivity, Premier Li said. Meanwhile, China will support Central and Eastern European countries in their industrial upgrading with its advanced capacity in automobiles, steel, shipbuilding, port equipment and engineering machinery, the Premier added. During the summit, China and the CEE countries outlined a blueprint for the development of the “16+1” mechanism in the next five years, the China Daily reports.
China to cooperate with Poland in finance, new energy, and agriculture
By : fcccadmin
China will explore a new logistics corridor to reach Central and Eastern Europe through Poland, President Xi Jinping said. Xi made the remarks when meeting with Polish President Andrzej Duda at the Great Hall of the People in Beijing. The Polish President attended the Fourth Summit of China and Central and Eastern European Countries in Suzhou, Jiangsu province, and was also making an official visit to China. Xi said the two nations need to accelerate the process of linking China’s Belt and Road Initiative with Poland’s national development strategy. He also said China expects to explore cooperation with Poland in various areas including finance, new energy and agriculture. Poland was one of the first countries to recognize and establish diplomatic ties with the People’s Republic of China (PRC). Poland is China’s largest trading partner in Central and Eastern Europe, while China is Poland’s third-largest source of imports from the region. Trade between the two countries reached USD17.2 billion last year, the China Daily reports.
Short news
By : fcccadmin
Automotive
- The Beijing Environmental Protection Bureau has started soliciting public opinion on its strictest emissions standard, due to be implemented on December 1, 2017. The new standard, which covers light vehicles, heavy vehicles and heavy motors, was drafted according to the strictest possible global emissions standards. Currently, vehicles in Beijing need to meet the fifth phase emissions standard, which went into effect in 2013 and is equivalent to the Euro V emissions cap.
Finance
- At least 52 executives, including those from leading state-owned lenders, have either resigned for personal reasons or moved on to other jobs recently. Stagnating salaries, and highly-paid opportunities in private banking and the nascent online financial sector have helped fuel the cycle of departures. Ten out of the 16 listed banks have reported that executive staff at President or Vice President level have resigned or left. Since the start of the year, pay packages for bank executives have been capped at CNY600,000.
- China’s largest private conglomerate Fosun Group has completed the acquisition of U.S. insurer Ironshore, which marks a milestone for the Shanghai-based company’s investments in specialty insurance. Ironshore is now a wholly-owned subsidiary of Fosun. In February, Fosun paid USD464 million for 20% of Ironshore, which provides broker-sourced specialty commercial property and casualty coverage, and later also bought the remaining 80%.
- Chinese tourists spent HKD13.9 billion in new life insurance policies in Hong Kong in the first half of the year – a 37.6% increase from the HKD10.1 billion in the same period in 2013. Chinese tourists’ share of new life insurance in Hong Kong reached 20.2% in the January-June period, up from 18.4% in the same period in 2013.
- The yuan will be a convertible and freely traded currency by the end of 2020, when more than a third of China’s total payments will be settled in yuan, Zhou Xiaochuan, Governor of the People’s Bank of China (PBOC), said. The currency reforms are among 17 major targets set by the central bank.
- The onshore assets of China’s banking institutions, including commercial banks, policy banks and rural credit cooperatives, rose 15% year-on-year in October to CNY188.6 trillion, the China Banking Regulatory Commission (CBRC) said. The institutions’ total liabilities increased 14.3% in the period to CNY174 trillion.
- The first batch of overseas central banks and similar institutions have been allowed to enter China’s interbank foreign exchange market, the People’s Bank of China (PBOC) said. Seven such institutions have completed registration with the China Foreign Exchange Trading System. The institutions are the Hong Kong Monetary Authority, Reserve Bank of Australia, Hungarian National Bank, International Bank for Reconstruction and Development, International Development Association, World Bank Group Trust Funds, and GIC Private.
- Eight of the country’s largest regional city commercial banks have submitted initial public offering (IPO) applications since June 2014, according to the China Securities Regulatory Commission (CSRC). Wen Bin, Researcher at China Minsheng Banking Corp, said regional city lenders are keen to go public because they are facing greater capital pressures after rapid expansion in recent years.
- Apple Pay is expected to become available in China before the Spring Festival in early February. Analysts don’t expect it to have a big impact on mobile payment leaders Alibaba’s Alipay and Tencent’s Tenpay. China UnionPay, which operates the country’s largest payment and clearing network, will help introduce Apple Pay to the market.
- Internet search firm Baidu, global insurer Allianz and Asian investor Hillhouse Capital Group have formed a digital insurance company in China called Bai An. In November last year, rivals Alibaba and Tencent joined forces with Ping An Insurance in setting up Zhong An Online Property Insurance to tap growing local demand.
- French independent financial services company Oddo & Cie said it was planning to make an offer for asset manager BHFKleinwort Benson, rivaling an existing bid from China’s Fosun. Oddo already holds 21.57% of BHF and said in a statement that it was prepared to acquire more than 50% of the company after reaching an agreement with two other shareholders, the Franklin Templeton and Aqton groups.
Foreign investment
- China is likely to invest more than USD1 trillion overseas in the next five years, Premier Li Keqiang said. He also said the country will probably import commodities worth more than USD10 trillion during this period. Although China’s economic growth has slowed, growth volume is increasing annually, Li said at an economic and trade forum of China and Central and Eastern European countries in Suzhou, Jiangsu province.
Foreign trade
- The General Administration of Customs (GAC) has rolled out 18 measures to boost foreign trade. Customs procedures have been streamlined, raising customs clearance efficiency by about 50%, while foreign trade fees have been lowered or eliminated.
Health
- The first successful womb transplant was performed in China after a mother in Shaanxi province donated her uterus to her 22-year-old daughter. The daughter was born without a vagina and uterus but had functioning ovaries. There have been 11 known womb transplants around the world, most of them in Sweden.
IPR protection
- China’s national intellectual property authority will continue cooperating with its Japanese and South Korean peers to help residents of all three countries benefit from innovation and creation, said Shen Changyu, Director of the State Intellectual Property Office (SIPO). He made the remarks at the 15th trilateral policy dialogue meeting among SIPO, the Japan Patent Office and the Korean Intellectual Property Office on November 17 in Guangzhou. The three IP offices are among the world’s five largest.
- Bank of China (BOC) was held in contempt of court in the U.S. for refusing to hand over account details of Gucci and Yves Saint Laurent counterfeiting suspects. U.S. District Judge Richard Sullivan in Manhattan ordered the bank to pay a fine for withholding its customers’ records. Bank of China itself is not a defendant in the lawsuit and argued that it could not turn over the records without violating Chinese privacy law. The bank also said the New York court had no jurisdiction over it.
- The first unitary patent in Europe, slated to be issued next year by the European Patent Office (EPO), will help Chinese companies save time and money, said EPO President Benoit Battistelli. Rather than dealing with formalities in different countries, a unitary patent applicant can gain approval for participating countries in the European Union. It will be “less costly and more simple” to file a patent, Battistelli said during an intellectual property symposium in Beijing.
- The eighth China Copyright Annual Conference was held in Beijing to tackle online music copyright infringement and promote copyright protection in the internet era. Nearly 500 professionals attended the conference, organized by the Copyright Society of China. The revenue from China’s music copyrights is about 10% of the industry’s profit, compared to about 60% to 70% in developed countries.
Macro-economy
- Chinese Vice President Li Yuanchao encouraged overseas robotics companies to share technologies with China-based vendors, saying that international cooperation will help foreign companies tap into China’s market. China buys one-fourth of all robots globally. At least 800,000 robots will be put into use in Chinese factories by 2020, according to the Ministry of Industry and Information Technology (MIIT), representing a turnover of CNY100 billion.
- China’s cosmetic surgery industry will be valued at CNY400 billion by the end of this year and is expected to double in size to CNY800 billion by 2019. If growth continues as expected, China will be the world’s third largest market after the United States and Brazil by 2019, according to the latest industry trend report issued by the China Association of Plastics and Aesthetics. More than seven million Chinese people, mostly women, had plastic surgery last year.
- PetroChina Co and its state-owned parent China National Petroleum Corp (CNPC) are planning to sell assets before the end of the year that may include stakes in pipelines and refineries. CNPC is seeking to use proceeds from the sale to meet annual income growth targets. The slump in energy prices has pushed energy companies to shed assets and cut staff to survive the downturn. PetroChina’s third-quarter profit fell 81%.
- The increase in social security spending in China has outpaced its revenue growth over the past five years, posing a major challenge to the country’s welfare system, Finance Minister Lou Jiwei said. He called for measures to address the problem, including having 30% of state-owned enterprises’ profits go towards covering the shortfall.
- The Chinese Communist Party has pledged to do everything it could to eradicate poverty in the next five years. The party would take “unconventional measures” and “perfect methods” in its battle to wipe out poverty, the Politburo said after a meeting chaired by President and Party General Secretary Xi Jinping. 70.2 million people in rural areas were living below the poverty line – earning an annual income of less than CNY2,300 – at the end of last year.
- The China Iron and Steel Industry Association (CISA) has rejected international industry claims that a global glut in supplies is the direct result of robust growth in Chinese steel exports. Wang Liqun, CISA Vice Chairman, said it strongly disagreed with a joint statement by nine foreign counterparts that claimed the Chinese steel industry “is the predominant global contributor” to the world’s steel industry suffering “a crisis of overcapacity”.
- China’s industrial profits sharply declined by 4.6% year-on-year in October, widening the 0.1% drop in September. The high-tech manufacturing industry however achieved a 14.2% year-on-year profit growth. Profits in the equipment manufacturing industry increased by 8.6%. In the first 10 months, the country’s industrial profits shrank 2% from a year earlier, reaching a total of CNY4.87 trillion.
- More top talent was sought in China this year by multinationals with a noted shift to high-caliber local prospects. Global executive search and consulting firm Heidrick & Struggles International, said that half of the 119 multinational executives with responsibility over China operations said headcount would likely show an increase by the end of 2015 over the previous year.
Mergers & acquisitions
- A consortium that includes State Grid Corp of China is among the approved final bidders for a USD6 billion electricity network in Australia’s New South Wales. The Chinese company teamed up with Macquarie Group’s Macquarie Infrastructure and Real Assets Fund in July to bid for TransGrid in New South Wales, which plans to raise AUD20 billion from selling a long-term lease to operate the company and stakes in two energy-distribution companies to fund new railways, roads, schools and hospitals.
Real estate
- Cinda Real Estate Co completed the biggest residential land deal of the year in Shanghai, beating more than 10 rival bidders to secure a plot in Yangpu District for close to CNY7.3 billion. With a developable floor area of 148,500 square meters, the winning bid represented an average cost of CNY49,150 per sq m. “This is the most expensive housing plot sold in Shanghai this year,” said Lu Wenxi, Senior Manager at Shanghai Centaline Property Consultants.
Retail
- Chinese consumers and websites embraced Black Friday, the American shopping extravaganza in which retailers offer deep discounts leading up to the fourth Friday of November. More and more foreign websites are accepting China-issued credit cards.
- A strong U.S. dollar – pegged to the Hong Kong dollar – and high rents are killing the retail business in Hong Kong, the latest half-year result reports of two pillar businesses of the Hong Kong retail sector showed. Sincere Co, the operator of Sincere Department Store, reported losses for the six months to the end of September had grown 34% year-on-year, to HKD93 million. Luk Fook Holdings, the operator of Luk Fook Jewellery, saw its profit for the period dive 42.6% year-on-year to HKD463 million, while revenue was down 7.7% to HKD6.96 billion.
Science & technology
- China’s R&D expenditure reached CNY1.3 trillion in 2014, up 9.9% from the previous year, according to a report jointly published by the National Bureau of Statistics, the Ministry of Science and Technology and the Ministry of Finance. Last year’s R&D expenditure equaled 2.05% of the country’s gross domestic product (GDP), the second straight year above 2%. With R&D spending at more than CNY1 trillion, enterprises were the biggest contributor.
- Eight officials of the Communication University of China have been punished for violating austerity rules. The Ministry of Education shamed the top officials for their fancy cars and offices and for trying to cover up the university’s “chaotic” financial management.
- Charles Darwin’s theory of evolution by natural selection does not work at a cellular level, a finding that could profoundly influence the battle to find a cure for cancer, according to joint study by a team of researchers from the University of Chicago and the Chinese Academy of Sciences (CAS). The results were published in a paper in the Proceedings of the National Academy of Sciences. Instead of solving the problem by removing the “fittest” mutant cells, doing so could actually upset the delicate balance of power inside a tumor, the study said.
- Chinese drone maker DJI has launched its first drone designed for agricultural use. The DJI Agras MG-1 has eight rotors and can carry more than 10 kilograms of liquid for crop spraying, with the ability to spray up to four hectares an hour. It also folds to make it convenient and portable. Shenzhen-based DJI is the world’s leader in the civilian drone market boasting a 70% market share for consumer and commercial drones.
Stock markets
- Duzhe Publishing & Media Co, the publisher of China’s most popular magazine The Duzhe (The Readers), is planning to raise CNY500 million in a Shanghai initial public offering (IPO). Subscription will begin on December 1. The capital being raised will be used to develop its magazine titles, digital publishing operations and book publishing projects.
- China will grant a CNY50 billion quota to Malaysia under the Renminbi Qualified Foreign Institutional Investor program (RQFII) to strengthen financial cooperation with Malaysia.
- Nikhil Rathi, Chief Executive of the London Stock Exchange (LSE), said work on creating a trading link between the bourse and Shanghai is making good progress, without disclosing a specific timetable. He said some technical issues are still being sorted out by regulators, adding that London, as a market with deep liquidity and wide global reach, is keen to be complementary to the Chinese market. There are 49 Chinese firms listed in London, and 39 yuan-denominated bonds have been sold on the British bourse, raising GBP2.2 billion.
- CITIC Securities Co, China’s biggest brokerage, overstated some of its financial derivatives by more than CNY1 trillion in monthly reports from April to September, the Securities Association of China said. The Association is investigating the matter, but has not accused CITIC Securities of any wrongdoing, as the wrong figures were not included in CITIC’s quarterly financial filings. CITIC said the error was caused by a system upgrade, and the figures were amended at the beginning of November.
- Credit Suisse Group’s joint venture, Credit Suisse Founder Securities, received approval from the China Securities Regulatory Commission (CSRC) to offer brokerage services in Qianhai, the special economic zone in Shenzhen. The venture is expected to start offering services early next year after it completes the setting up of its trading outlet in Qianhai. Established in 2008, the joint venture is 33.3% owned by Credit Suisse, with the remainder held by its partner Founder Securities.
Travel
- China will expand the scope of its 72-hour visa-free entry policy to boost consumption and provide new impetus to domestic demand. The country will also improve the tax refund policy for foreign visitors and hasten the opening of more duty-free shops in the 18 cities included in the visa program, which applies to travelers from 51 countries and regions. To be eligible, travelers need onward reservations to a third country.
- HNA Group is going to become the largest shareholder in Brazil’s low cost carrier Azul Brazilian Airlines with a USD450 million acquisition of a 23.7% stake. Azul, with a fleet of 145 planes, will be the seventh airline outside China the HNA Group has a stake in, after Hong Kong Airlines and Hong Kong Express in Hong Kong, Aigle Azur in France, Comair in South Africa, Africa World Airlines in Ghana, and myCargo in Turkey. HNA Tourism, a subsidiary of the group, also announced it was making a USD500 million strategic investment to become the largest shareholder in Nasdaq-listed Chinese online travel company Tuniu.
- China now has 202 civilian airports, with 35 new ones being built and more than 60 existing ones undergoing expansion. The government planned to invest CNY500 billion in 193 major domestic aviation projects before the end of this year.
- A HKD133 billion bridge from Hong Kong to Macao and Zhuhai will miss its 2016 construction deadline by a year, the Hong Kong government has confirmed. The statement said the bridge’s completion will be pushed back until the end of 2017 because of unstable material supplies and shortages of labor, as well as dealing with aviation height limits, environmental protection requirements and slower than expected progress in land reclamation. The 50 kilometer link consists of three cable-stayed bridges, two artificial islands, and a 6.7 km-long immersed tube tunnel off Lantau Island. The link would cut travel time from Hong Kong to Zhuhai from more than three hours to 30 minutes.
- China and Russia are setting up a joint venture in Russia for making electromagnetic vehicles for the Moscow-Kazan high-speed rail project. The vehicles will be made by Changchun Railway Vehicles Co, a CRRC subsidiary based in the capital city of Jilin province. The Chinese subsidiary’s experience in making equipment suitable for extreme cold weather conditions will come in handy for the Moscow-Kazan line.
- MTR Corp, the operator of Hong Kong’s metro system, will continue developing new subway lines in Beijing over the next five years. Beijing MTR Corp, a joint venture formed by MTR, Beijing Capital Group and Beijing Infrastructure Investment Co, is looking to participate in the construction of Beijing metro lines 12 and 17, as well as the new airport line. It currently operates the Daxing Line, Beijing Metro Line 4 and Line 14.
- Chinese companies’ business travel budgets have grown by 4.79% year-on-year. China will surpass the United States to become the world’s biggest business travel market in 2016, with expected spending of USD346 billion next year, compared with the U.S. market size of USD319 billion, according to a report by CITS American Express Global Business Travel.
VIP visits
- China and Malaysia reached an agreement to deepen infrastructure cooperation and discuss key projects including a high-speed rail line linking Malaysia and Singapore during Chinese Premier Li Keqiang’s visit. The two countries will also explore the potential for cooperation on building a rail line in southern Malaysia and setting up an alliance covering Chinese and Malaysian ports in order to boost bilateral trade. The high-speed line linking Kuala Lumpur and Singapore is expected to cost more than USD10 billion and cut the traveling time between the cities to just 90 minutes from about eight hours.
- Chinese President Xi Jinping will bring no new concessions to the negotiating table when he attends key UN climate change talks in Paris. World leaders were going to France “to lend political impetus” to the meeting but were “not there for negotiations”, said Vice Foreign Minister Liu Zhenmin. “The Paris conference is not about tabling new proposals – it’s about narrowing differences and reaching agreement on the basis of existing proposals,” he said. U.S. President Barack Obama would meet Xi on the first day of the Paris talks on November 30.
- China boosted its economic ties with Africa by signing 23 business deals totaling USD930 million, ahead of President Xi Jinping’s visit this week. Companies, including Sinosteel Corp, Sinochem Group and China Chengtong, agreed contracts with 50 South Africa firms involved in industries including steel, energy, medicine, fruits, wine and textiles, at a signing ceremony in Johannesburg.
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