President Xi visits Poland and Kazakhstan
Jun-27-2016 By : fcccadmin
During Chinese President Xi Jinping’s visit to Poland, both countries agreed to upgrade their ties to a comprehensive strategic partnership, an upgrade from the strategic partnership established in 2011. Xi said he was hoping that cooperative projects, including a China-Europe freight train service, could play a leading role in the joint construction of the Belt and Road initiative. Some 40 deals and memorandums of understanding (MOUs) were signed, mostly related to construction, raw materials, energy, new technologies, finance and science. Xi urged Poland to “fully take advantage of its position as a founding member of the Asian Infrastructure Investment Bank” to do business. Following Serbia, Poland was the second leg of Xi’s three-nation Eurasia tour. President Xi Jinping, accompanied by Polish President Andrzej Duda, attended a ceremony to mark the arrival in Poland of the first China-Europe Block Train. China currently has 39 rail services to Europe. They start from 16 cities, including Chongqing, Suzhou, Chengdu and Zhengzhou, and terminate in 12 European cities, including Warsaw, Madrid and Hamburg. On June 8, China Railway Corp brought the 39 rail lines together under the umbrella name China-Europe Block Train, giving the trains the same type of locomotive and uniform decoration. On the same day, eight trains set off from China to Europe.
President Xi Jinping proposed joint efforts with Russia and Mongolia to achieve fruitful results in building an economic corridor linking the three countries. The nations should also enhance cooperation in areas including infrastructure interconnection, investment, production capacity, culture and environmental protection, he said. Xi made the remarks at a trilateral meeting of leaders from China, Russia and Mongolia on the sidelines of the Shanghai Cooperation Organization (SCO) summit.
Short news
By : fcccadmin
Automotive
- The Shanghai Waigaoqiao Automobile Exchange Market Co was given a China Compulsory Certification (3C) for parallel imports of the BMW X5 xDrive35i – the first in Shanghai’s free trade zone (FTZ). 3C is a mandatory safety mark for both domestic and imported products in the Chinese market. Parallel imported cars are usually 10% to 20% cheaper than those from authorized dealers.
- The Saab car brand is to disappear. National Electric Vehicle Sweden (NEVS), which was created to take over the assets of Saab automobiles in 2012 following the automaker’s bankruptcy, said it will base its first electric vehicle, to launch next year, on the Saab 9-3 platform, but will use its own name as the trademark. Since Saab’s 2012 liquidation, NEVS has used its Saab assets and Swedish know-how to develop a range of electric models with the help of Chinese capital. NEVS has a deal to supply 250,000 cars to Chinese rental company Panda New Energy.
- More than 40% of car owners have been charged extra or unnecessary fees by car dealers when they have had repair work done. Beijing Hyundai, Geely Emgrand and Guangqi Honda dealers were given the lowest score among 20 domestic and overseas automobile brands in terms of the quality of their after-sales service, a survey of 2,000 car owners by the Shanghai New Consumption Research Center, showed.
Finance
- Premier Li Keqiang said China will continue its prudent monetary policy and pro-active fiscal policy, maintaining reasonable growth in aggregate credit, to better serve the real economy. Li made the remarks at a seminar after a visit to China Construction Bank (CCB) and the People’s Bank of China (PBOC). Commercial banks must better serve the real economy, small and micro businesses in particular, the Premier said.
- Chinese banks handled USD12.5 billion of net foreign exchange sales in May, down 47% from April. Chinese lenders bought USD127 billion worth of foreign currency last month and sold USD139.5 billion, the State Administration of Foreign Exchange (SAFE) said in a statement. The reduction suggests that the pressure of capital outflow is easing. Capital flows in and out of China will remain steady in the long term, SAFE predicted.
- China’s growing population of wealthy people is set to benefit the country’s nascent private banking sector. The investable assets of high-net worth individuals (HNWI) in China are expected to grow 15% annually between 2015 and 2020 to CNY102 trillion, to make up 51% of total investable assets of Chinese, said a report jointly released by the Industrial Bank and the Boston Consulting Group. Meanwhile the number of high-net worth households is set to rise 13% annually to 3.88 million by the end of 2020, making China the world’s largest market for wealth management.
- The Monetary Authority of Singapore (MAS) said that it will include yuan investments as part of its official foreign reserves from this month. As of May, MAS held USD244.5 billion in foreign exchange reserves, the 11th-largest reserve holdings globally. If it were to raise the yuan’s share to 5%, it would reallocate USD12.2 billion to yuan assets.
- China will allow direct trading between the yuan and the South Korean won on its inter-bank foreign exchange market from June 27. China is South Korea’s largest trading partner. Bilateral trade was USD240 billion in 2014 and is expected to reach USD300 billion this year.
- The Board of the Asian Infrastructure Investment Bank (AIIB) has approved USD509 million for its first four projects. Three of the four projects are co-financed with the World Bank, the Asian Development Bank (ADB), the UK Department for International Development and the European Bank for Reconstruction and Development (EBRD). The projects include power grid upgrades in Bangladesh, slum renovation in Indonesia and highway construction in Pakistan and Tajikistan.
Foreign investment
- French electric equipment and automation company Schneider Electric will invest in more small and medium-sized high-tech companies in China through a specialized investment fund to help the company gain more quality technologies from selected Chinese SMEs. China is now the company’s second-biggest market. It operates 26 plants, eight logistics centers, three research and development (R&D) centers and 40 branches in China.
- Encanwell Environmental Science and Technology Co, an air pollution monitoring and alerting system developer in Hebei province, has set up a joint venture with Ventilairsec, a French ventilation system manufacturer, in a deal brokered by Bank of China (BOC). The JV will produce smart indoor air quality control systems with a total investment of USD210 million. Their target clients include kindergartens, primary and middle schools, hospitals and hotels in China. Since 2014, BOC has held 23 cross-border matchmaking fairs for more than 7,000 SMEs from 52 countries and regions.
- Chinese companies invested nearly USD15 billion in countries taking part in Beijing’s new Silk Road initiative last year, up one-fifth from 2014, President Xi Jinping said in Uzbekistan. Under the “One Belt, One Road” program, China aims to invest in infrastructure projects including railways and power grids in central, west and southern Asia, as well as Africa and Europe. China has also dedicated USD40 billion to a Silk Road Fund. China’s trade with countries participating in the new Silk Road exceeded USD1 trillion in 2015, accounting for a quarter of its total foreign trade.
Foreign trade
- China’s Ministry of Commerce (MOFCOM) criticized a decision by the United States to impose punitive duties on Chinese steel products, saying the U.S. steel industry was overprotected. The U.S. trade authority ruled that the U.S. industry had been “materially injured” by imports of cold-rolled flat steel products from China and Japan. As a result, the U.S. Commerce Department will levy anti-dumping and countervailing duties on imports of these products from China at a rate of 265.79% and 256.44%, respectively.
Health
- Synthetic school running tracks in China are being made from industrial waste, including old rubber tires and discarded cables, Chinese media reported. Toxic substances – including benzene and formaldehyde – were discovered in a school running track in Beijing in May, which caused 70 primary school students to suffer nosebleeds and dizziness.
IPR protection
- Qualcomm is suing Alibaba-invested smartphone maker Meizu in China for non-payment of a patent license fee under a new format following an anti-monopoly probe. Qualcomm has filed the complaint in the Beijing Intellectual Property Court. The related patents include 3G and 4G wireless communications technologies, said Qualcomm.
Macro-economy
- Hong Kong’s richest man, billionaire Li Ka-shing, said China’s economic outlook is bright in the long term. China continues to have a trade surplus, the services industry is generating income and foreign money is flowing in, he said in his first interview with international media since 2012. He also indicated that investors focusing on the country’s rising debt levels are missing out on the larger picture. His Cheung Kong Property Holdings earns about half of its revenue from mainland China.
- China has ordered local authorities nationwide to check on energy use by coal and steel companies to speed up the closure of plants and mines that fail to reach certain efficiency standards. They will be given a maximum of nine months in which to improve or be closed, according to the National Development and Reform Commission (NDRC). China has vowed to slash steel capacity by 100 million to 150 million tons over five years from around 1.1 billion tons, and reduce coal production by 500 million tons in the next three to five years from its annual output of 3.7 billion tons.
- The profit decline posted by China’s state-owned enterprises (SOEs) widened in the first five months of this year. Profits fell 9.6% year-on-year to CNY837.39 billion in the January-May period, data from the Ministry of Finance said. SOEs in the oil, chemicals and building materials sectors posted substantial profit declines, while coal, steel and non-ferrous metal SOEs continued to suffer losses. However, transport and pharmaceutical SOEs posted big profit increases. SOE revenues fell 0.6% to CNY17.2 trillion.
Mergers & acquisitions
- Australia has granted a three-year extension for a Chinese company to reduce its 80% stake in Australian cotton farm Cubbie Station after it indicated it could not meet the October 2015 deadline. Australia approved the sale of Cubbie Station to a consortium of Shandong Ruyi Scientific & Technological Group Co and local company Lempriere on the provision that the textile manufacturer would reduce its holdings to 51% within three years.
- Russia, the world’s top oil producer, is reported by Bloomberg to seek Indian or Chinese buyers for a stake of 19.5% in Rosneft as part of efforts to cover budget deficits and privatize its state-owned sector. China National Petroleum Corp and Indian Oil & Natural Gas Corp have shown interest in the sale, which would fetch at least USD11 billion.
- The value of China-related M&A deals totaled USD146.4 billion in the April-June quarter, a 36.2% tumble from the first three months and down 34.1% year-on-year, according to data released by Thomson Reuters. That offset a blistering first quarter when growth surged over 30%, and brought the total deal value in the first half of the year to USD375.8 billion, up 2.8% from the same period last year. Chinese companies spent USD111.6 billion on outbound acquisitions in total value in the first six months of this year, surpassing the USD111.5 billion for the whole 2015.
- Weichai Power, through its European unit KION Group, has agreed to buy loss-making Luxembourg-based DH Services, a supplier of automation technology, for around USD2.1 billion in a deal that will enable the Shandong province-based automotive and equipment maker to tap growing logistics demand from the e-commerce sector.
Retail
- A new alliance between Walmart Stores and JD.com is expected to give Walmart wider customer access and expand its opportunities in e-commerce. Walmart will receive about 5% stake in JD and the companies will partner in several strategic areas. Sam’s Club China will open a flagship store on JD platform, vastly expanding the availability of Sam’s Club’s imported products across China. It will offer same- and next-day delivery through JD’s nationwide warehousing and delivery network.
- Parkson Retail Group, the retail division of the Malaysian Lion Group, will transform department stores into broader commercial complexes and will expand to lower-tier cities, said William Cheng, Executive Chairman of Lion Group. Cheng was speaking at a meeting on the eve of the Lion Mall’s opening in Qingdao, the group’s first comprehensive shopping destination in China, hosting department stores, shopping malls, restaurants, cinemas and an indoor entertainment park. Parkson has closed more than 10 stores in more than five cities in China in the past five years.
- Dutch dairy firm Royal FrieslandCampina is bullish on the long-term growth of the dairy market in China and plans to expand its business in third- to six-tier cities and rural areas. Together with Suning Commerce Group, it plans to launch online and offline stores to bring high-quality Dutch dairy products to rural areas in China next year.
- McDonald’s Corp has received more than half a dozen bids for its planned sale of Chinese mainland and Hong Kong stores, including offers from Beijing Tourism Group, Sanpower Group and China National Chemical Corp. McDonald’s is offering a 20-year master franchise agreement to buyers, but has put in place restrictions that have discouraged some private equity firms from participating in the process. The deadline is June 27.
- For the first five months this year, China’s jewelry industry has experienced its first distinct decline in a decade, with many leading jewelry retailers suffering falling revenues and profits. The largest Hong Kong-listed jeweler, Chow Tai Fook Jewelry Group, cut 4,600 staff last year. It saw a 46% plunge in its annual profit year-on-year. This year, Chow Tai Fook plans to close seven to eight jewelry stores in Hong Kong. The retailer saw the jewelry sales in the Chinese mainland, where it runs 2,057 stores as of March, decline 21.3% compared with a year earlier.
- China, the European Union and the U.S. have pledged to increase cooperation to ensure the safety of products sold online amid the huge rise globally in internet shopping. Officials from the three sides said in a statement after a product safety summit in Beijing that regulators would closely monitor online sales, especially cross-border e-commerce. The EU has so far filed 11,540 notifications over dangerous products with China through the Rapid Alert System China mechanism that allows both sides to share information about dangerous consumer products. Only 3,748 follow-up actions were taken, however.
- Data from Forrester Research showed that China’s online retail market will reach USD1.1 trillion by 2020. That would be nine times larger than Japan’s USD122 billion market and 17 times greater than South Korea’s USD65 billion market in the same period.
Science & technology
- China on June 25 launched an experimental probe on its new Long March 7 rocket from the new Wenchang Satellite Launch Center in Hainan. On June 26 the probe returned to earth and was recovered in Inner Mongolia.The mission was in preparation for placing China’s second space station into orbit in September. Since launching its first manned mission in 2003, China has sent up an experimental space station, the Tiangong 1, staged a spacewalk and landed its Yutu rover on the moon. China’s space program plans 20 space missions this year.
Stock markets
- The Hong Kong Stock Exchange (HKSE) held a systemwide test run for stock links with Shenzhen, boosting hopes that the Hong Kong-Shenzhen stock connect scheme would be launched soon. Anthony Ho, Deputy CEO at Amundi Asset Management in Hong Kong, said he believed the upcoming connect scheme would pump liquidity into the cross-border equity markets and serve as a stepping stone for the further opening up of the capital markets on the Chinese mainland.
- Shanghai shares fell after the UK voted to leave the European Union, joining global market turmoil. The Shanghai Composite Index lost 1.3% to close at 2,854 points, with financial shares declining. The gauge dived 2.91% after the results of the referendum were known, but rebounded quickly when national funds stepped into the market. Gold mining company shares jumped.
One-line news
By : fcccadmin
- Lu Ziyue, former Mayor of Ningbo in Zhejiang province, has been expelled from the Chinese Communist Party and dismissed from public office following a corruption investigation. Lu was also found to have intervened in the work of judicial departments.
- China and the European Union (EU) have set up a dialogue mechanism for legal matters, according to the State Council’s Legislative Affairs Office. The mechanism is a result of an agreement at the 17th China-EU leaders’ meeting in June last year. More than 60 officials and experts from both sides participated in the first round of dialogue.
- Anhui province has banned alcoholic beverages at official banquets, except those held to attract investment or involving foreign affairs. The new rule is considered the toughest across the country and was made in response to criticism from the Central Commission for Discipline Inspection (CCDI). Xinhua News Agency said recently that drinking at banquets may easily breed corruption.
- Chinese prosecutors have successfully sued a county environmental agency in Shandong province for inadequately punishing sewage firm Qingshun Chemical Technology Co that produced dye without appropriate safeguards. It was the first ever lawsuit against a environmental protection department in China.
- Chinese authorities have rolled out a new policy on purchasing office equipment and furniture in another bid to cut government spending. The policy covers a wide range of office supplies, from computers, scanners and copiers to conference tables, sofas and book shelves.
Slight increase in car sales in May
Jun-20-2016 By : fcccadmin
Deliveries of passenger cars and commercial vehicles rose 9.8% last month, bringing the accumulative increase of this year to 7% from 6% in April, while the combined volume of sales amounted to 10.8 million units, the China Association of Automobile Manufacturers (CAAM) said. The passenger car segment, making up the bulk of the sales, grew 7.8% over the past five months. The sport-utility vehicle (SUV) market in China was one of the few bright spots as sales surged 45% during the January-May period. Another spotlight was sales of green vehicles, which rose 1.3 times on an annual basis to around 126,000 units to rank as the biggest gainer in the auto market, with domestic carmakers poised to become the biggest beneficiaries. The combined sales volume of green vehicles took up under 2% of the total volume of cars sold. But the level of market penetration was already enough to power China to overtake the U.S. to become the largest seller of new-energy cars last year.
China to set up leading group to deal with growing debt
By : fcccadmin
China’s central government will establish a leading group with a clear mandate to deal with growing debt, Li Yang, Chairman of the National Institution for Finance and Development, said. “The group to be established will play a key role in resolving the debt problems that no single major regulator or financial governor could tackle in the public, corporate and banking sectors,” he said. China has relied on debt-fueled stimulus for years, leading to rapid economic growth, and debt problems did not become apparent until economic pressure appeared, Li said. China’s total debt was CNY168.5 trillion at the end of 2015, which is equivalent to 249% of GDP. The debt-to-GDP ratio of the corporate sector was estimated at 131%. “The debt level remains controllable, and the possibility of a debt crisis in China is rather small,” Li said. The debt problem in China is mostly internal and isn’t likely to turn into a crisis, with enough foreign exchange reserves, he added.
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