Short news
April 10, 2017 Category Short news, Weekly
Finance
- China’s foreign exchange reserves rose for the second consecutive month in March, the first two-month rise since last April. Data released by the People’s Bank of China (PBOC) showed foreign exchange reserves rose by USD3.96 billion in March to USD3.0091 trillion, after rising USD6.9 billion in February. In the first quarter, the reserves fell by USD1.4 billion compared with the end of last year.
- Minsheng Bank has revealed outstanding loans worth CNY1 billion with troubled Huishan Dairy. The bank suspended any new credit to the company last December, after the dairy producer had run into problems, although the bank insisted Huishan and its related companies had not yet defaulted on paying any debt interest payments. Hong Kong listed, Huishan Dairy saw its share price plummet 85% within a few hours on March 24, a day after its top executives held an emergency meeting to discuss capital shortages, and repaying its CNY11 billion worth of debt.
- China is to include “green” financing in the risk monitoring regimes of the country’s banks, to stimulate stronger financing of environmentally-friendly projects. The new measure is likely to be included this year in the macro-prudential assessment (MPA) framework of the People’s Bank of China (PBOC), said Ma Jun, Chief Economist at the PBOC’s Research Bureau. Green credit, such as loans to projects offering energy savings or emission reductions, currently account for nearly 9% of total outstanding loans.
- Bank of East Asia and Credit Suisse Group are among 23 financial services companies that will set up offices in the special economic zone in Qianhai, Shenzhen. Known as the Qianhai SZ-HK Fund Town, the new area is scheduled to finish construction in October, with 29 buildings that can accommodate 100 fund management companies. Shenzhen Metro, the city’s subway operator, is the developer of the zone, while Qianhai Financial Holdings manages the leasing. Already, 124,560 companies have registered in Qianhai, of which 51,188 are financial firms, with 90% of them classified as wealth managers.
- Xiang Junbo, former Chairman of the China Insurance Regulatory Commission (CIRC), has been put under investigation for corruption or other financial malfeasance. A member of the Communist Party’s Central Committee, he is the highest-ranking cadre in the financial industry to be caught up in the government’s crackdown on financial crimes. In the past, Xiang has also been Vice Governor of the People’s Bank of China (PBOC) and President of the Agricultural Bank of China (ABC).
Macro-economy
- Annual spending on robotics in China is forecast to exceed USD59 billion by 2020. That would make up about half of the Asia-Pacific’s USD133 billion in forecast robotic spending in 2020. The country will remain the single largest and fastest-growing robotics market in the world, accounting for more than 30% of global spending during that period, according to technology research firm IDC. Chinese installations of industrial robots reached about 90,000 units last year, up from 68,556 in 2015.
- China Singyes Solar Technologies plans to spend up to CNY700 million to raise its solar farms generation capacity by 37% this year by finishing projects in its home province of Guangdong. The Zhuhai-based firm aims to complete 102 megawatt (MW) of projects in Guangdong, adding to the 271 MW it had at the end of last year. The company posted a 41% jump in net profit to CNY502 million for last year, as revenue grew 25.3% to CNY5.2 billion.
- Four companies signed a framework agreement to establish China’s first steel industry restructuring fund. It is expected to initially have a capitalization of CNY40 billion to CNY80 billion. China Baowu Steel Group’s Hwabao Investment Co and the U.S.-China Green Fund will hold 25% each,WL Ross & Co 26% and China Merchants Finance Holdings Co 24%. The fund will help the Chinese steel industry to eliminate excess capacity, speed up restructuring, raise industry concentration and promote international cooperation.
- China’s service sectors expanded at the slowest pace in six months, reigniting worries that economic growth may be ebbing. The Caixin China General services Purchasing Managers’ index dipped for the third straight month to 52.2 last month from February’s 52.6. Business activity and new orders both expanded at the weakest pace in six months, while employment growth was the slowest this year so far. The Caixin China General Manufacturing PMI fell to 51.2 in March from 51.7 in February. However, China’s official manufacturing PMI rose to 51.8 in March from 51.6 in February.
- Investment by privately owned businesses, after posting a lackluster 3.2% year-on-year growth in 2016, is set to rebound to 6% to 10% this year, according to JP Morgan Chief China Economist Zhu Haibin. Private-sector investment accounts for about 60% of the country’s total fixed-asset investment (FAI).
- The average net profit of 1,598 SMEs listed on the National Equities Exchange and Quotations (NEEQ) hit CNY21.05 million last year, up 26.29% year-on-year. The SMEs posted an average annual business revenue of CNY212 million in 2016, up 25%. Total assets of each company averaged CNY464 million at the end of 2016, up 23.9% year-on-year.
Mergers & acquisitions
- U.S. and European regulators have cleared ChemChina’s proposed USD43 billion acquisition of Swiss agribusiness giant Syngenta on condition it sells some businesses to satisfy anti-monopoly objections. It would be China’s biggest foreign acquisition to date. ChemChina subsidiary Adama Agricultural Solutions agreed to sell businesses in the U.S. that produce the herbicide paraquat, the insecticide abamectin and the fungicide chlorothalonil to American Vanguard Corp and its affiliate Amvac Chemical Corp. ChemChina has also agreed to sell significant parts of its European operations in pesticides and plant growth regulation products.
Real estate
- Shanghai’s housing market will be generally stable in 2017 but sales are likely to be subdued due to strictly-enforced policies to curb speculation. In the first three months of this year, about 1.3 million square meters of new homes were sold across the city, a plunge of 68.7% from the same period a year earlier, Cushman & Wakefield said. These new homes were sold for an average CNY47,335 per square meter, up 6% from the previous quarter and an annual surge of 35.5%. More than 1.03 million square meters of new houses were released locally in the January-March period, little changed from 1.04 million square meters during same period a year ago.
Travel
- China Railway Group, one of the country’s largest rail and infrastructure builders, expects to more than double its overseas business as a proportion of total revenue to 10%, Chairman Li Changjin said. This is despite contribution from the firm’s international revenue dropping to 4.4% of the total last year from 5% in 2015. Li’s projection is backed by a 49.6% surge in new contracts clinched overseas to a record CNY102.5 billion last year, which boosted its overseas order book by 62% to CNY170.8 billion.
- China has risen two positions to 15th in the latest global tourism competitiveness ranking, released by the World Economic Forum (WEF). The forum’s Travel and Tourism Competitiveness Report 2017 ranks 136 countries and regions across 14 dimensions. China received nearly 57 million tourists in 2016, which took up over 20% of global arrivals in Asia, the report said. It attributes the improvement of China’s tourism competitiveness ranking mainly to the country’s increased international openness, improved information and communications technology readiness and further investments in its tourist service infrastructure.
VIP visits
- China and Norway agreed to restart negotiations on a free trade agreement (FTA), after Premier Li Keqiang’s meeting with Norwegian Prime Minister Erna Solberg in Beijing.
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