Short news
Aug-21-2017 By : fcccadmin
Automotive
- Geely Automobile Holdings’ revenue and profit more than doubled in the first half of this year amid robust sales of its sedan and sport-utility vehicles (SUVs). The company also revised upward its full-year sales volume from 1 million units to 1.1 million units. Geely Auto’s net profit surged 128% to CNY4.34 billion in the first six months, as total revenue jumped 118% to CNY39.42 billion during the first half year. Geely Auto’s sales in the first six months surged 89% from the first half last year to 530,627 vehicles.
- Ford Motor has challenged the trademark application for Geely’s new car brand Lynk & Co. Lynk & Co’s first car, a compact SUV, is set to hit the Chinese market later this year and was scheduled to reach the United States around 2018, where it is was expected to generate some 20% of Lynk’s annual global sales of 500,000 vehicles around 2020. Ford however argued that Lynk & Co sounds too similar to its premium arm Lincoln and may confuse its customers. Ford has till November 15 to formally file its opposition to the Link & Co trademark.
Finance
- Alipay, China’s biggest digital payments platform, has joined forces with San Francisco-based online review provider Yelp to bring its local content to millions of Chinese travelers through Alipay’s mobile lifestyle app. Alipay also has a partnership with U.S. payment processing specialist First Data Corp to cover a network of more than six million retailers and 4,000 financial institutions around the world.
- The world’s largest aluminum smelter, China Hongqiao Group, will get an HKD8 billion financial lifeline from Citic Group to repay bank loans, as it borrowed its way to having the world’s biggest installed aluminum producing capacity. Hongqiao agreed to sell 806.6 million new shares and USD320 million of convertible bonds to Citic and the conglomerate’s unit CNCB (Hong Kong) Investment. The sale could give Citic up to 13.3% of Hongqiao, making the conglomerate the smelter’s second-largest shareholder. Hongqiao has the capacity to produce 6.46 million tons of aluminum a year.
- China’s latest economic figures suggest the central bank is having to walk a fine line between controlling debt and supporting the government’s development plans, analysts said. The broadest measure of money supply M2 rose 9.2% in July, its lowest ever monthly expansion and far below the government’s 12% annual target. Meanwhile, the value of all loans in the economy, or “aggregate social financing”, increased by 13.2% year-on-year in July, against a target of 12%.
- China’s new loans in July fell to their lowest in eight months due to property curbs that have cooled mortgage lending and seasonal effects, reinforcing views economic activity will slow in the second half. Chinese banks extended CNY825.5 billion in net new yuan loans last month – the lowest since November 2016 – down from CNY1.54 trillion in June.
- Household loans, mostly mortgages, fell to CNY561.6 billion in July from CNY738.4 billion in June, according to Reuters calculations based on the PBOC’s data. Household loans accounted for 68% of total new loans last month, up from 48% in June.
- Foreign banks in shanghai posted a 6.4% rise in total assets to CNY1.36 trillion in the first half of the year and made progress in innovation as well as deepening cooperation with Chinese banks for the Belt and Road initiative. Their loan balances and deposit balances rose while the non-performing loan ratio fell to a two-year low of 0.51%.
- China is again the biggest foreign holder of U.S. sovereign debt after boosting its holding for a fifth consecutive month with a strengthened yuan and eased capital outflow pressures. The country purchased USD44.3 billion of U.S. treasury bonds in June, the most in six years, bringing its total holding to USD1.147 trillion, according to the U.S. Treasury Department.
- China’s credit asset quality remains generally stable, with the non-performing loan (NPL) ratio of commercial banks unchanged, quarter-on-quarter, at 1.74% as of June 30. During the same period, commercial banks in China posted a slight increase of 3.56% in the balance of non-performing loans (NPLs) to CNY1.64 trillion, according to the China Banking Regulatory Commission (CBRC).
- China’s official Xinhua News Agency has called for reining in the risks from bitcoin trading even though trading volume of the virtual currency in Chinese yuan has dropped from 95% to 15% this year in the global market, an indication that Chinese authorities’ regulatory efforts are paying off.
- China Merchants Bank, China’s first joint-stock commercial bank, posted profits for the first half of 2017 that were 11.4% higher compared to the same period last year. Pre- tax profits reached CNY39.26 billion, thanks to higher net interest income of CNY70.9 billion, up 5.1% year-on-year, and improved asset quality. China Merchants Bank’s net interest margin (NIM) was 2.5%, 2 basis points higher than at the end of the first quarter.
- China will continue to refine the value-added tax (VAT) reform pilot program to enable further economic transformation and upgrades, according to an executive meeting of the central government chaired by Premier Li Keqiang. The reform was first piloted in Shanghai in 2012, and was expanded nationwide in May 2016. China’s VAT rate structure was further cut from four to three tiers (6%, 11% and 17%) last month. The total amount of tax cuts from the pilot program has reached CNY1.61 trillion as of June.
Foreign investment
- Chinese investors will have to get special approval from Beijing to put their money in overseas property and sports clubs under tough new restrictions. Companies would also need regulatory approval for outbound investments in hotels, the film industry and other forms of entertainment. Similar restrictions apply for companies setting up overseas equity funds or investment vehicles not tied to specific projects. On the other hand, the government supports stronger tie-ups with foreign hi-tech and advanced manufacturing firms, and encourages domestic firms to set up research centers overseas. Chinese companies spent a record USD170 billion on offshore assets last year.
IPR protection
- A patent infringement lawsuit filed by an individual against the bike-sharing company Mobike is being heard at the Shanghai Intellectual Property Court. The plaintiff claimed he had designed a system allowing motorbike owners to unlock their bikes without a key so as to reduce the risk of theft. He said that under his design each user would be given an exclusive QR code that they needed to store on their mobile phone. They are required to have the code scanned by a micro-camera installed on their bike. He added he had sent his QR recognition technology to the State Intellectual Property Office (SIPO) in 2013 and was granted a patent in May last year. He claimed Mobike used the technology without authorization.
- China’s Supreme People’s Court has ruled that the two leading brands of herbal tea may both use the exact same packaging, as long as they do not harm each other’s interests. The makers of Jiaduobao and Wong Lo Kat have been locked in a five-year legal battle over the right to a trademark design: a red can with distinctive yellow lettering.
- Jewelry companies that plagiarize designs will be put on the industry blacklist if they refuse to rectify their actions after two warnings, according to Shi Hongyue, Secretary General of the Gems and Jewelry Trade Association of China. The First Forum on Intellectual Property Rights of Chinese Jewelry was held in Shenzhen, Guangdong province, earlier this month. Shi said, “jewelry designers lack awareness of IP rights protection and the value of their labor is easily stolen.” He said the association is working on solutions to these problems.
- Hangzhou-based e-commerce giant Alibaba and French luxury group Kering reached an agreement to work together against counterfeiting, both online and offline. Alibaba will use its expertise in technology to identify counterfeiters who target brands in the Kering family, such as Gucci, Bottega Veneta and Balenciaga, and cooperate with Chinese law enforcement agencies.
- The Zhejiang police announced that they have solved the nation’s largest online copyright infringement case, as pirated movies were available for online streaming and download at xiamp4.com. The website had released nearly 35,000 video works and made illegal revenue of more than CNY8 million from advertising.
- China’s first court specializing in handling internet-related cases opened in Hangzhou. The Hangzhou Internet Court handles cases such as online trade disputes and copyright lawsuits. Hangzhou is home to many internet companies, including Alibaba.
Macro-economy
- The Chinese economy is expected to remain resilient in the second half, as continued efforts to promote economic transformation will support the economy as it bottoms out, experts said. “We have made continued progress moving away from the old manufacturing model to a services-led model,” said Hu Angang, Director of the Center for China Studies of Tsinghua University.
Mergers & acquisitions
- Mergers and acquisitions (M&As) by Chinese companies in countries that are part of the “Belt and Road Initiative” are soaring, even as Beijing cracks down on China’s acquisitive conglomerates to restrict capital outflows. Chinese acquisitions in the 68 countries involved in the Belt and Road Initiative totaled USD33 billion as of August 15, surpassing the USD31 billion tally for all of 2016, according to Thomson Reuters. The largest deal in a “Belt and Road” country so far this year was a Chinese consortium’s USD11.6 billion buyout of Singapore-based Global Logistics Properties.
- Yunfeng Financial Group, a company backed by Alibaba’s Jack Ma, agreed to buy an Asian unit from Massachusetts Mutual Life Insurance Co. The buyer will pay HKD13 billion, with about 60% of that sum in cash, and the rest in Yunfeng stock. The business being acquired posted premium income of HKD6.88 billion last year. MassMutual said its operation in Japan and a joint venture in China are not part of the transaction.
Retail
- Two Chinese winemakers were among the world’s top 10 best-selling wine brands in 2016. A list compiled by UK trade publication The Drinks Business had China’s Changyu as the fourth best-selling wine brand, by volume. It sold 15 million cases. Beijing-based Great Wall was the 10th best-selling brand with 7 million cases sold in 2016. United States brand Barefoot was the best-selling product last year, selling 22.5 million cases. Chinese wine consumption rose by 7% last year.
- French high-end department store Galeries Lafayette plans to open its second location in China – an outlet in Pudong, Shanghai – next year. The company has operated in China since 2013, when it opened a store in Beijing. Shanghai Lujiazui Finance & Trade Zone Development Co has signed a letter of intent with Galeries Lafayette (China).
- According to Euromonitor International data, the revenue of China’s department stores grew from CNY943.8 billion in 2012 to CNY994 billion last year, but it forecast that the figure will slip to CNY904 billion by 2021.
- Although China’s e-commerce industry is growing at a rapid rate, industry experts point to offline infrastructure as a future bottleneck unless more investment is made in this area. Online retail sales in mainland China amounted to CNY5.156 trillion in 2016 – equal to CNY3,729 per capita – up 26.3% from the previous year. From 2007 to 2016 the sector grew at a compound annual growth rate of 67.2%. “No matter how advanced the online trade is, you always need offline support to fulfill the orders and deliver goods,” said Ted Chan, Partner and Managing Director of Boston Consulting Group (BCG).
Science & technology
- More Chinese mainland universities than ever before have been ranked among the world’s top 500 universities in terms of research capabilities this year. The annual Academic Ranking of World Universities includes 45 mainland universities, up from 18 in 2009. Tsinghua University broke into the top 50 for the first time, ranking 48th, making it the third-highest-ranking Asian university, behind Tokyo and Kyoto universities. Peking University came in 71st. Fudan University; Shanghai Jiao Tong University; the University of Science and Technology of China in Hefei, Anhui province; and Zhejiang University in Hangzhou all placed in the top 150.
- Cambridge University Press (CUP) has blocked online access to more than 300 journal articles in China at the government’s request. The articles and book reviews were published in China Quarterly, one of the leading journals on Chinese studies. CUP removed the articles to avoid blocking of the site in China.
Stock markets
- China’s securities regulator has refused 46 A-share initial public offering (IPO) applications this year, exceeding the total amount for the previous four years. The 46 vetoes represent 13.6% of the 338 Chinese IPO applications reviewed through August 15. The veto rate for each year from 2013 to 2016 was no higher than 7%. “China’s securities regulator is paying more attention to the authenticity and compliance of IPO documents as well as lowering the threshold of IPO applications,” said Dong Dengxin, a Finance Professor at Wuhan University of Science and Technology.
Travel
- Cathay Pacific Airways has suffered a loss of HKD2.05 billion in the first half of this year, putting it on course to post its first back-to-back annual loss in its 70-year history. The airline blamed the loss on punishing competition and insufficient revenue from ticket sales. Earnings were also dented by higher jet fuel costs, including losses from fuel hedging, which hit HKD3.2 billion. Passenger yield, which measures the average fare paid per kilometer per passenger, was down 5.2%.
- Domestic airline passengers in Shanghai who only have carry-on luggage can now check in with a QR code on their mobile phones at both Hongqiao and Pudong airports. It is part of the authority’s efforts to create a “smart airport community,” featuring quicker check-in procedures. Those who need to check in luggage, or are accompanied by infants, have to check in at the airline counters.
- China will operate more than five magnetic levitation rail lines with a maximum speed of 160 kilometers per hour in cities including Chengdu, Wuhan and Guangzhou by 2020, said its manufacturer CRRC Dalian Co. The maglev lines will mainly run between city centers and airports, the city and suburban areas, and the city and surrounding counties, on routes where it is often too expensive to build a metro.
- A record more than 5 million passengers traveled through Pudong International Airport this summer, up 2% compared with the same period a year earlier. August 10 was the peak day for traffic, with 125,000 passengers departing or arriving through Pudong airport. About 4,100 foreign visitors took up the option of the 114-hour, visa-free transit policy offered at the airport.
Short news
Aug-16-2017 By : fcccadmin
Automotive
- As retail giants Suning and Gome foray into car sales, most analysts and auto industry insiders wonder if such alternative channels could succeed. Luo Lei, Deputy Secretary General of the China Automobile Dealers Association, said car supplies could be a problem, as mainstream carmakers would not deliver to Suning, ignoring their traditional sales network. Suning would also face difficulties offering after-sales services like traditional dealers do.
Finance
- From September 1, banks are required to report all cash withdrawals abroad on a daily basis, as well as card transactions worth more than CNY1,000 at overseas brick-and-mortar and online stores, according to the State Administration of Foreign Exchange (SAFE). Bank cards have become the main tool for overseas payment for Chinese, with overseas transactions by domestic individual card holders exceeding USD120 billion in 2016. Individuals in China are allowed to change the equivalent of up to USD50,000 from yuan to foreign currencies every year under the current quota system.
- China’s foreign exchange reserves rose in July for the sixth consecutive month to a nine-month high as cross-border capital flows were more balanced. The reserves rose USD23.9 billion month-on-month to USD3.08 trillion at the end of July. “Since the beginning of the year, China’s economy has extended a steady and improving development trend, and more positive factors are supporting improvement of economic development quality,” the State Administration of Foreign Exchange (SAFE) said in a statement.
- China’s central bank said it will strengthen regulation of companies engaged in financial technologies or fintech in a bid to prevent risks. The People’s Bank of China (PBOC) said some financial products offered through internet channels by fintech companies are “systemically important” and hence will be included in its macro-prudential assessment (MPA). Big players in the third-party payment services market and the peer-to-peer (P2P) lending market are likely to be included first.
- China is likely to slightly loosen its credit policy in the second half of the year. This will help contain risks that could emerge during the process of economic deleveraging and disposing of loss-making “zombie” companies, analysts said. Li Xunlei, Chief Economist at Zhongtai Securities Co, said that the monetary authority will likely guide more on-balance sheet bank loans into the markets to ensure sufficient credit supply after the regulators moved to contain surging risky off-balance sheet financing by banks.
- Chinese banks’ asset quality will likely improve as a profitable first half of the year would encourage corporate borrowers to repay loans, experts said. Industrial companies’ profit increased by 19.1% year-on-year in the January-June period, compared to single-digit growth in 2016 and a decline in 2015. Banks’ asset quality will improve also because of the regulators’ firm efforts to address the problem of overleveraged companies, according to a Moody’s report.
- China Everbright Bank will relocate its European business to Luxembourg after the United Kingdom leaves the European Union. The bank received approval from regulators to set up an office in Luxembourg as it puts together contingency plans in the wake of Brexit. China Everbright Bank is following six other Chinese lenders that have moved to Luxembourg: Agricultural Bank of China (ABC), Bank of China (BOC), Bank of Communications (BoCom), China Construction Bank (CCB), China Merchants Bank (CMB), and Industrial and Commercial Bank of China (ICBC). Shanghai Pudong Development Bank (SPDB) has also made an application to open a subsidiary in Luxembourg.
- The government’s tighter controls on China’s internet finance industry is likely to be good news for the country’s state-owned players, but could be a death knell for smaller private firms, analysts said. In recent years, companies involved in peer-to-peer lending, crowdfunding and online fund platforms have thrived in what effectively was an unregulated space. For a while, the government allowed a grey area to exist as it wanted to encourage innovation and bring about change within the state-dominated financial sector. Burt now, the People’s Bank of China (PBOC) plans to tighten controls and plug regulatory holes in the sector, including building an information disclosure platform.
- The yuan strengthened against the dollar on August 9 to its highest level in 10 months, reversing its depreciation trend. The exchange rate closed at 6.68. On January 2, the first trading day of the year, it was at 6.94. Better-than-expected economic recovery and efforts to open up the domestic capital market to foreign investors will probably push the yuan further up against the dollar in the short term, experts said.
- China’s banking asset management sector will almost double in size by 2021 on rising demand for investment products and banks’ drive to expand fee-based income, despite a recent decline caused by tighter regulatory scrutiny, McKinsey said. The sector is expected to grow by a compound annual growth rate of 15% to reach almost CNY60 trillion by 2021, or nearly double the size in 2016.
- Ping An Bank will allocate more resources to support businesses in five key industries: healthcare, electronic information, high-end equipment manufacturing, tourism and education. “Those sectors are closely linked to people’s lives and are highly related to our business,” said Xie Yonglin, Chairman of the Shenzhen-based bank.
- A national campaign against pyramid schemes has been launched to try to prevent the public from being duped. Pyramid schemes have led to four deaths since the beginning of July. The gangs often lure job seekers under the guise of regular job recruitment and force them to solicit money from friends and family.
Foreign trade
- China’s foreign trade rose more slowly than expected in July partly due to weather conditions, currency appreciation and a higher base. Exports in yuan-denominated terms rose 11.2% year-on-year to CNY1.32 trillion in July, slower than June’s 17.3% increase. Imports rose 14.7% to CNY1 trillion, slower than June’s 23.1% growth. The monthly trade surplus stood at CNY321.2 billion in July, up 1.4% year-on-year. For the first seven months of 2017, exports increased 14.4% year-on-year, while imports rose 24%.
- China Xiongan Construction & Investment Group Co was set up in the Xiongan New Area to invest in and construct local infrastructure and other facilities, marking another major step toward creating the new economic zone in the area. The company was set up on July 18 in Rongcheng county, Hebei province, with a registered capital of CNY10 billion. The Hebei provincial government is the only shareholder of the company. China announced its intention in April to set up the Xiongan New Area, a planned new economic zone of national significance to help phase out some non-capital functions from Beijing.
- The Shanghai free trade zone (FTZ) plans to further introduce offshore tax arrangements, turn two of its existing bonded warehouses into free ports by 2020, and enhance its financing service to help Chinese companies enter other overseas markets, according to the latest reform plan.
- Ports in Tianjin and Hebei province neighboring Beijing will accelerate the pace of their integrated development in maritime transport to support the coordinated development of the Beijing-Tianjin-Hebei region. There are four major ports in the region – Tianjin Port, and Hebei’s ports of Qinhuangdao, Tangshan and Huanghua. The coordinated development will save costs, improve efficiency and ease competition among all the ports.
- Complying with United Nations sanctions, China has prohibited imports of coal, iron, iron ore, lead and seafood from North Korea. China’s total imports from the DPRK have already seen a drastic drop from March to June.
IPR protection
- More efforts are needed to protect online images in China, experts said at a workshop in Beijing hosted by the Copyright Society of China. Online pictures are often “stolen” on popular services such as WeChat and Weibo, and those who post the images usually do not know they are violating copyright rules, experts said. Yang Dejia, Judge from the Beijing Haidian District People’s Court, said the court had tried more than 2,800 cases related to online image copyright infringement so far this year.
Macro-economy
- Chinese household confidence rebounded to a two-year-high on economic recovery and the strong real estate market in smaller cities. The China Wealth Index, compiled every two months by the Bank of Communications (BoCom) and research firm Nielsen, rose to 140 in July from May’s 135, which was the second highest on record. A sub-index measuring people’s willingness to invest in real estate rose for the first time in eight months along with strong home sales in June.
- Growth in China’s industrial output, retail sales and fixed-asset investment (FAI) slowed slightly in July with the economy remaining in good shape while supply-side reform deepened, the National Bureau of Statistics (NBS) said. Value-added industrial output expanded 6.4% year-on-year in July. Retail sales rose 10.4% and fixed-asset investment (FAI) 8.3%. Investment by the private sector, which accounted for more than 60% of total FAI, rose 6.9% year-on-year.
Mergers & acquisitions
- China’s largest coal miner Shenhua Group and energy producer China Guodian Corp, which are mulling a merger, have extended suspension of trading in their shares for the fifth time, now till September 4. The planned merger will likely create an energy giant with combined assets estimated to be in the range of CNY1.73 trillion to more than CNY1.8 trillion. The merged entity, which will be temporarily named National Energy Investment Corp, will likely have a debt ratio of more than 60%.
- A unit of China’s Fosun Group and Shanghai Pharmaceuticals Holding Co are among bidders for a stake in U.S. speciality drugmaker Arbor Pharmaceuticals. Fosun Pharma said its Hong Kong unit will begin conducting due diligence to determine further steps. Arbor has appointed Bank of America Merrill Lynch to manage the sales process, which has attracted around half a dozen preliminary bids.
Science & technology
- Nearly 70% of Chinese overseas returnees are not satisfied with their current salaries, said a report on Chinese returnees’ employment and entrepreneurship in 2017, jointly released by the Beijing-based Center for China and Globalization and zhaopin.com. A total of 432,500 students came back to China after graduating from overseas universities in 2016, the report said, adding that by the end 2016, China had a total of 2.65 million returnees. More than 14% of these returnees are from Beijing, ranking top in terms of the returnees’ birthplace, followed by Shanghai with almost 6%. More than 90% of the returnees found jobs within half a year after they came back to China, but 68.9% said their current monthly salary was lower than expected.
Stock markets
- Wanda Hotel Development requested a suspension of trading in its shares on the Hong Kong stock exchange, pending the release of a possible asset restructuring. The company may be looking to sell some of its overseas assets to repay debt. The conglomerate last month announced the sale of the majority of its domestic hotel and theme park assets for USD9.4 billion in order to raise funds to repay loans. Separately, the group’s Wanda Film Holding Co unit has been suspended from trading since early July, pending a restructuring of the company.
Travel
- China will support the country’s booming car-sharing industry and standardize its development, according to new official guidelines. Companies are also encouraged to use new energy vehicles as shared-cars, with support given for charging facilities of NEVs. The guidelines followed the release of similar rules on bike-sharing services. The country’s sharing economy witnessed a total transaction volume of CNY3.45 trillion last year, more than doubling that of 2015.
- Alibaba Group has set up a joint venture with hotel group Marriott International to tap the booming leisure travel market. The two parties will jointly operate the official webpage and Marriott’s online flagship store on Alibaba’s online travel unit Fliggy. The joint venture seeks to better leverage Alibaba and Marriott’s platform to tap the two parties’ expertise in technology and services.
- By 2020, Pudong’s Metro network will extend a further 100 kilometers, with 11 cross-river lines. Pudong district will also open six tunnels under the Huangpu river. The city government’s plan aims to make public transport account for 55% of the downtown area’s total transport system, and 60% of all public transport traffic will be on the Metro system.
- Passengers with an Android phone in Beijing can now swipe their phones to board the subway. Currently, the function is limited to around 160 Android phone models with the near field communication (NFC) function enabled, which is not available on Apple’s iPhone.
Short news
Aug-07-2017 By : fcccadmin
Automotive
- China’s sport-utility vehicle (SUV) market is expected to post slower growth this year, according to the China Association of Automobile Manufacturers (CAAM). China’s sales of SUVs are set to hit 11 million this year, up 20% annually, a sharp slowdown from the 44% growth of the SUV sector last year. Sales of SUVs surged 16.8% to 4.53 million units in the first half of this year. The market share of domestic vehicle makers took up 59.6% of the total sector in the first six months.
Finance
- UnionPay, China’s largest card-payment network operator, is struggling to stay relevant in an increasingly cashless economy. Its recent tie-up with online retailer JD.com may not meaningfully help UnionPay regain traffic lost to QR-code-based platforms, dominated by WeChat Pay and Alipay, analysts say. In the first quarter, such transactions grew 113% from the same period a year ago to CNY2.27 billion. WeChat Pay and Alipay accounted for a combined market share of 94%, while JD Finance – the payment unit of JD.com – ranked sixth with a tiny market share of 0.8%.
- Yang Jiacai, former Assistant Chairman of the China Banking Regulatory Commission (CBRC), was sacked in June, after having been placed under investigation in May and is now facing corruption charges, the Central Commission for Discipline Inspection (CCDI) said. Yang had abused his position to help others with promotions and to help his son’s business, besides taking bribes.Yang served at the central bank for six years before moving to the banking regulator in 2003.
- China Construction Bank (CCB), the country’s second-largest bank, has nominated Tian Guoli, Chairman of Bank of China (BOC), as its next Chairman. CCB’s current Chairman, Wang Hongzhang, 63, has reached the retirement age. Chen Siqing, BOC’s current President, is expected to succeed Tian as Chairman. Tian’s move from BOC to CCB was considered “surprising” by some observers as previous speculation was that he could be a potential candidate for a higher position at China’s financial regulatory agencies.
- Chinese business owners say their profit margins have been “squeezed to the extreme” by rising rent and labor costs – and 80% want taxes and levies cut to ease their burden, according to a nationwide survey of 14,709 companies by the Chinese Academy of Fiscal Sciences, a think tank affiliated with the Ministry of Finance. As businesses complain about the tax burden in China – including 25% income tax and 17% value-added tax (VAT) – in several countries taxes are being cut. The average tax burden of respondents was 5.14% of total business turnover in 2016.
- China’s Finance Ministry has created a new type of bond for local government fund raising in a bid to reduce borrowing risks. Unlike the current local government bond that will be repaid from general fiscal revenue, the new type of bond will only be covered by returns from the projects being funded. The new special bonds will be limited to two types of government projects: land and toll roads.
- Gross premium income at insurance companies in China rose more slowly in the first half of the year, but investment returns improved and new technologies were widely adopted, the China Insurance Regulatory Commission (CIRC) said. Gross premium income rose 23% annually in the first half to CNY2.31 trillion, slower than the 37% gain in the same period last year. Business structure improved in the non-life sector as less profitable car insurance contributed 68% of total gross premium income, falling below the 70% mark for the first time.
- United Kingdom-registered funds investing in China delivered the best returns to British investors in the first half of 2017, according to investment research company Morningstar. They returned nearly 19% on average to investors over the six months ending on June 30.
- Chinese banks’ assets will likely grow by around 10% and the non-performing loan (NPL) ratio will be below 2% this year, according to the China Banking Association (CBA). It said in a report that Chinese banks had total assets worth CNY181.7 trillion in 2016, up 16.6% year-on-year. Outstanding debts reached CNY168.6 trillion last year, up almost 17% year-on-year. Net profit in 2016 totaled CNY1.65 trillion, up 3.5% year-on-year.
- Yao Zhongmin, former Chairman of the Supervisory Board of the China Development Bank (CDB), was sentenced to 14 years in prison and fined CNY3.5 million, after being convicted on bribery and corruption charges. He was found guilty of taking bribes totaling CNY36 million between 2002 and 2013 in return for providing preferential treatment to his associates on lucrative property development projects and bank loans.
Foreign investment
- Overseas investors are more sanguine about China’s economy and stock market than they have been for two years, their confidence bolstered by recent economic data that has beaten forecasts, analysts at Macquarie Capital say. But long-term concerns linger, among them tighter capital controls, doubts over the sustainability of China’s investment-driven growth model, and what many see as the advance of the state sector at the expense of private firms.
Foreign trade
- China’s Vice Minister of Commerce Qian Keming called on the U.S. to keep China’s trade ties with the U.S. separate from the Korean nuclear crisis. “We believe that the North Korean nuclear issue and China-U.S. trade are two issues that are in two completely different domains,” he told a press briefing, adding that the issues “are not related, and should not be discussed together”.
Macro-economy
- China’s domestic manufacturing activity expanded by the most in four months in July, indicating sustained economic momentum. The Caixin China General Manufacturing Purchasing Managers’ index (PMI) rose to 51.1 from June’s 50.4. It was the second consecutive month for the PMI to stay above the 50-point mark that separates growth from contraction. “Operating conditions in the manufacturing sector improved further in July, suggesting the economy’s growth momentum will be sustained, ”said Zhong Zhengsheng, Director of macro-economic analysis at CEBM Group. The Caixin readings diverged from an official PMI survey which showed that growth in the manufacturing sector cooled slightly last month to 51.4 in July from June’s 51.7.
- The Chinese government has announced more measures to promote and facilitate private investment, which has contributed about 60% of the country’s total investment and created 80% of employment opportunities. It increased by 7.2% during the first half of this year, 4.4 percentage points higher than in the first half of last year. The measures include a mechanism to ensure the returns on public-private partnership (PPP) projects, which are used to connect China’s massive infrastructure building with private investments. By the end of March, the country had announced 700 PPP projects that attracted investment of CNY1.7 trillion.
- China’s services industries expanded in July at the slowest pace in more than a year, indicating possible downward pressure on the economy. The Caixin China General Services Purchasing Managers’ Index (PMI) fell to 51.5 in July from June’s 51.6. The reading was on par with that of April this year, both months the slowest since May 2016.
Mergers & acquisitions
- The sacking of White House Communications Director Anthony Scaramucci will have no impact on the pending sale of SkyBridge Capital, the New York-based hedge fund investment firm he founded, to HNA Group, insiders said. The transaction is expected to close by the end of the summer, said Robert Rendine, Spokesman for HNA Capital U.S., a subsidiary of HNA Group. HNA plans to buy a majority stake together with holding company Ron Transatlantic. Woomi Yun, Spokeswoman for SkyBridge, also said the deal was proceeding as planned. The sale of SkyBridge is under review by the Committee on Foreign Investment in the United States (CFIUS).
- At least two of HNA Group’s overseas deals have hit a hurdle as the Chinese conglomerate struggles to take money out of China: the acquisition of the London-based International Currency Exchange (ICE) for about GBP200 million and a mandatory tender offer to buy a larger stake in a Swedish hotel group.
- China Guodian Corp, one of the nation’s five largest power groups, has submitted its merger plan with China Shenhua Energy Co to the Chinese government. The merger would create China’s largest power company, to be called the State Power Investment Corp. The new group will have a generation capacity of 226 gigawatt (GW), with assets exceeding CNY1.8 trillion. The merger is part of China’s thermal power reform plans. Over the first seven months, 16 of the 17 thermal power companies which have unveiled half-year reports predicted losses.
Real estate
- Tightening measures coupled with scorching heat has dragged Shanghai’s housing sales to a seven-year low in July, while average home prices also fell to this year’s lowest due to a structural shift. The area of new homes sold, excluding government-subsidized affordable housing, fell 2% from June to 672,000 square meter last month, Shanghai Centaline Property Consultants Co said, marking a year-on-year plunge of 45.1% to the lowest July figure since 2011. July is a traditional low season for property sales. The average cost of new homes fell 2.9% month-on-month to CNY45,925 per sq m, the lowest since January.
- Transactions in residential properties continued to decline in July as a result of tightened housing policies and financing for homebuyers, particularly in key cities in China. The combined space of transacted residential properties in Beijing, Shanghai, Guangzhou and Shenzhen was 2.4 million square meters, down 17% month-on-month, or 46% year-on-year, according to the China Real Estate Index System. In 16 second-tier cities the combined space of transacted residential properties in July declined 4% month-on-month and 23% year-on-year to 12.28 million sq m. Policies encouraging the leasing market have also led some potential buyers to become tenants.
- The Chinese government is taking measures to promote the rental market, such as assuring that some social services are available to renters as well as home-owners. China’s rental business makes up only 2% of the property market, compared with 20% to 30% in developed economies. Guangzhou is the first city of 12 cities to issue policy details for the pilot scheme.
- The niece of fugitive Chinese billionaire Guo Wengui and one of his employees at a real estate firm have been convicted and sentenced for fraud to a 1½-year and two year sentence respectively. Guo’s real estate firm Henan Yuda Real Estate was also fined CNY150 million, in a ruling by the Kaifeng Intermediate People’s Court. Guo, who is living in the United States and wanted by Beijing, has made a series of corruption allegations via social media against top Chinese leaders and company executives.
- In a new measure to stabilize the housing market, Beijing is planning to introduce homes with joint property rights shared between the government and buyers, while the buyers will have the full “right of use.” The measure should allow more people to buy their own homes. Buyers and their families cannot already own homes in their name, and single buyers must be at least 30 years old. Five years after purchase, owners can sell their shares based on the market price. At least 30% of the homes would be offered to “new Beijingers”, referring to people without a Beijing household registration (hukou), but with stable jobs in the city.
Stock markets
- Hong Kong stocks closed out July on an upbeat note, extending their winning streak to a seventh straight month – the longest stretch of monthly gains since 2007 – as heavyweights Tencent, HSBC, and AIA Group set new multi-year highs on robust earnings and corporate deals. China’s Shanghai Composite Index also closed higher, logging the best month since February.
- ChIna’s dollar-denominated Qualified Foreign Institutional Investors (QFII) program rose to USD93.27 billion at the end of July. A total of 284 overseas institutions have received quotas under the QFII program to move money into the country’s capital account, the State Administration of Foreign Exchange (SAFE) said.
Travel
- Passengers taking China Eastern and Shanghai Airlines domestic flights out of Hongqiao International airport have to check-in earlier than usual. Check-in desks now close 40 minutes before departure – up from 30 minutes – for domestic flights at both terminals. Check-in deadlines for international flights remain unchanged at 45 minutes before takeoff for Hongqiao, and 50 minutes at Pudong airport.
- China’s tourism trade surplus is expected to increase as the country takes in more cash from inbound visitors than its outbound travelers spend overseas. The inbound tourism market has grown continuously in the past few years, the China National Tourism Administration (CNTA) said, while the outbound tourism industry has entered a stage of slower growth. Inbound tourism revenue rose 5.6% year-on-year to USD120 billion in 2016, exceeding outbound tourism spending by USD10.2 billion, according to administration figures. In the first half of this year, inbound tourists made 69.5 million trips; while 62 million Chinese tourists went abroad. CNTA predicted that direct investment in tourism this year will jump by more than 20% from last year to CNY1.5 trillion.
Short news
Jul-31-2017 By : fcccadmin
Automotive
- Shares of Great Wall Motor, China’s biggest maker of sports utility vehicles (SUVs), suffered their biggest intraday decline in four months of 7.1%, after the company’s first-half net profit fell by 49.4% to CNY2.5 billion. To attract buyers, the Hebei-based carmaker spent CNY1 billion in March offering discounts to promote its Haval brand of SUVs. The carmaker is counting on its new Haval H6, as well as its premium SUV brand WEY to be the growth drivers for the rest of the year.
- The Haval H6 from Baoding-based Great Wall Motors was the best-selling SUV model in the first half of this year, with sales of 226,500 vehicles. Statistics from the China Association of Automobile Manufacturers showed that 4.5 million SUVs were sold in China over the period, 2.7 million of which were Chinese brands. Eight of the 10 best-selling SUV models were Chinese brands. Tiguan from Volkswagen and Envision from Buick were the only two foreign models in the top 10.
Finance
- The New Development Bank (NDB), founded by the BRICS countries, plans to put about two-thirds of its loans into sustainable infrastructure development in the next five years, Sergio Suchodolski, NDB Director General of strategy and partnerships, said during his address to the 2017 BRICS Youth Forum in Beijing. The NDB intends to approve at least USD32 billion in loans, including 15 projects in 2017 and up to 50 in 2021. The ninth BRICS Leaders’ Meeting will be held in Xiamen, Fujian province, in September.
- The Ministry of Public Security launched a campaign against financial schemes that raise money from the public, including pyramid schemes, in a bid to safeguard economic security and social stability. The action comes on the heels of a series of pyramid scams and other financial crimes that resulted in great financial losses and sparked demonstrations. Recently, Chinese police cracked down on Shanxinhui, a fake charity, accusing the company of operating a pyramid scheme and cheating people out of money in the name of raising funds to help the poor.
- China’s debt risks are under control as enhanced supervision has taken effect, but regulatory bodies need to enhance coordination to tackle risk points, Li Yang, Director General of the National Institute for Finance and Development with the Chinese Academy of Social Sciences (CASS) said. Central government debt in 2016 stayed the same compared to the previous year, while local government and household debt went up by 9 percentage points and 5 percentage points respectively, compared to 2015.
- China’s top leaders decided at a key financial work conference earlier this month to create the Financial Stability and Development Committee to coordinate the work of the financial supervisory bodies and address growing financial threats. Analysts are still guessing who will head the new committee, but are betting on the Premier or a Vice Premier. Ma Kai, one of four Vice Premiers, is in charge of the finance sector.
Foreign trade
- Deutsche Post DHL, Europe’s biggest mail and express company, is looking to partner with a Chinese delivery counterpart to help cope with the surging volume of European goods shipped into China due to the growth in online shopping. DHL’s interest in a local tie-up follows the creation of a joint venture in May between United Parcel Services (UPS) and SF Holdings, parent of Shanghai-listed SF Express. According to AliResearch, China’s cross-border e-commerce market is expected to hit CNY12 trillion by 2020.
- Shanghai will deepen reforms in the free trade zone (FTZ) and accelerate construction of a technology and innovation center, Mayor Ying Yong said. The free trade zone will be a trial zone for reforms that combine opening-up and innovation to become a test zone for risks within an open economy, and a pilot zone to enhance government capabilities, Ying said. The free trade zone is also a frontier for companies to expand overseas as part of China’s One Belt One Road initiative.
- The American companies most at risk in a trade war with China are reported to be Hollywood studios, who are lobbying for a higher quota of foreign films to be allowed on the Chinese market; Boeing, which may lose out to Airbus in the biggest single aviation market in the world; Apple, which may be boycotted in favor of Chinese brands Huawei, Oppo, Vivo and Xiaomi; Starbucks, which had hoped to double the number of outlets in China over the next five years, but which could face a consumer backlash; and carmakers General Motors, Ford and Chrysler, which have all heavily invested in China, but are also vulnerable to a boycott. Finally, Walmart operates 20 outlets in the country, and was planning to open 40 new stores over five years in Guangdong province alone.
Health
- Shanghai United Imaging Healthcare Co is investing CNY2.2 billion in three phases to build the world’s largest medical imaging equipment manufacturing plant in the Guian New Area in Guizhou province by 2020. According to Firestone Inventing, 402 Chinese companies produce medical imaging equipment, accounting for only 10% of the Chinese market, which is forecast to grow to CNY600 billion to CNY800 billion by 2020.
- China is on track to lead the world in organ transplants by 2020 following its abandonment of using organs from executed prisoners, Huang Jiefu, Chairman of the China Organ Donation and Transplantation Committee, said. Voluntary civilian organ donations had risen from 30 in 2010, the first year of a pilot program, to more than 5,500 this year. That will allow around 15,000 people to receive transplants this year, Huang said. China is hosting a major conference on transplantation in Kunming in August.
- The number of cigarettes sold in Beijing last year decreased by 8% year-on-year, the biggest decline in recent years. Among people 15 or older in Beijing, the percentage who smoke decreased to 22.3% last year, a drop of 4.7% from 2014. The total number of smokers decreased by about 200,000. The number of cigarettes sold in Beijing last year reached 93.8 billion. Beijing adopted one of the strictest tobacco control regulations in China in June 2015.
IPR protection
- The Administrative Measures for Priority Examination of Patent Applications will come into force on August 1 and are set to reduce patent filers’ burdens and improve the efficiency of related administrative services. Besides invention patent filings, the new regulation will also cover utility models and industrial designs. China has ranked No 1 in invention patent filings worldwide for six consecutive years. The number reached 565,000 in the first half of this year, an increase of 6.1% year-on-year. Some 209,000 invention patents were granted during the same period, including roughly 160,000 to Chinese filers. The average ownership of invention patents in China has increased to 8.9 per 10,000 people.
Macro-economy
- The International Monetary Fund (IMF) has revised up its forecasts for China’s economic growth in 2017 and 2018, the third time it has raised its outlook for the country this year. The IMF said it expected China’s economy to grow by 6.7% this year, up from the previously anticipated 6.6%. It also said growth in 2018 was on track for 6.4%, compared to its previous estimate of 6.2%. The announcement came as China’s leaders pledged to make shutting down “zombie companies” and stabilizing the property market top priorities. The IMF also warned China to rein in excessive credit growth, which “could result in an abrupt growth slowdown”.
- There were 1.11 vacancies per applicant at job centers in 95 cities across China in the last quarter, Ministry of Human Resources and Social Securities data show, down slightly from 1.13 in the prior quarter. Labor demand in the commercial and leasing sector soared while financial sector demand declined. The ratio edged down in the wealthier eastern region, while demand intensified in western regions. Beijing was the most competitive big city for high-end jobs, followed by Shenzhen, Shanghai and Chengdu.
- Zhaopin data show that white-collar salaries in 37 major cities dropped to a monthly average of CNY7,376, the first quarter-over-quarter decline on record. Wages at the smallest companies fell 31%, which means “startups using high salaries to lure talent is a memory”, Zhaopin said in a recent report. Professional services such as finance, accounting, law and consulting were the highest-paying sectors, with an average monthly salary of CNY10,165. Wage growth for migrant workers slowed to 6.3% compared to more than 20% in 2011.
- China will strengthen the coordination of financial regulation, stabilize the property market and prevent systemic financial risks. “Financial disorder will be tackled thoroughly, financial coordination will be strengthened, and the efficiency and level of financial sectors supporting the real economy will be improved,” according to a statement released after a meeting of the Political Bureau of the Communist Party of China, presided over by General Secretary Xi Jinping. “Policymakers will take more coordinated steps to fend off potential financial risks,” said Gao Haihong, Economist of the Chinese Academy of Social Sciences (CASS).
- Chongqing continued to lead China’s economic growth, with a double-digit expansion in the first half of the year. The city recorded growth of 10.5% in the period, the highest figure among the 25 provinces that have released first-half figures. The success was achieved despite the dismissal of two Party Secretaries, Bo Xilai, who is serving a life sentence for corruption, and Sun Zhengcai, who was placed under investigation earlier this month. The rust-belt province of Liaoning continued to see the slowest growth at 2.1%.
- Chinese policymakers would be willing to sacrifice some short-term economic growth in order to deal with systemic risks, according to Yang Weimin, Vice Chairman of the Office of the Central Leading Group on Financial and Economic Affairs. China is trying to contain rising debt and defuse property bubbles amid fears such risks could derail the economy if not handled well.
Mergers & acquisitions
- State-owned China Merchant Port Holdings is investing up to a USD1.12 billion to develop, manage and operate Sri Lanka’s Hambantota Port. China Merchant said it will take a 80% stake in Hambantota International Port Group with the rest held by the Sri Lanka Ports Authority. China Merchant is also the largest foreign investor in the port of Colombo.
- The China Securities Journal reported that 62 state-controlled listed firms had suspended trading as of July 21 because they were in the process of selling a stake in the company to private or foreign firms as part of ownership restructuring. But some analysts said the restructuring would be dictated by the government rather than market-driven reform.
- A USD416 million investment in U.S.-based Global Eagle Entertainment by Beijing Shareco Technologies, a unit of Chinese conglomerate HNA Group, has been canceled, as the deal did not receive regulatory approval from the Committee on Foreign Investment in the United States (CFIUS) by the agreed date. Shareco had planned to acquire up to 34.9% of the U.S. firm for around USD416 million and become its single largest shareholder. Both companies also planned to form a Chinese joint venture focused on in-flight entertainment and connectivity (IFEC).
- Starbucks is buying the rest of its East China joint venture in a USD1.3 billion transaction. The Seattle-based coffee chain will acquire the remaining 50% of the business from partners President Chain Store Corp and Uni-President Enterprises Corp. Starbucks also is divesting its 50% stake in a separate joint venture in Taiwan. Starbucks plans to operate 5,000 cafes in China by 2021, up from 2,800 locations at present. The deal gives Starbucks 100% ownership of about 1,300 cafes in Shanghai and in Jiangsu and Zhejiang provinces.
- Beijing Sanyuan Foods Co and Chinese conglomerate Fosun Group are buying French margarine maker St Hubert for €625 million. They signed an agreement with European private equity firm Montagu to acquire Brassica Top Co and PPN Management, which are controlling shareholders of St Hubert. Montagu acquired St Hubert from Dairy Crest for €430 million in 2012. Set up in 1904, St Hubert reported consolidated net turnover of €129 million in the 2016 financial year and has 213 employees. It has a more than 40% market share in France and almost 70% in Italy.
Real estate
- Dalian Wanda Group has abandoned its bid for the property portion of the Kuala Lumpur-Singapore high-speed rail project, the biggest of its kind in Malaysia, only three months after being considered a front runner. Wanda was not included among the list of nine candidates – seven Chinese and two Japanese firms – that had submitted proposals to Malaysian authorities. Wanda declined to comment on the status of its bid for Bandar Malaysia.
- Overseas real estate investment by large Chinese companies is likely to stay muted this year, amid tightened regulatory scrutiny, although smaller players may still be active, according to Knight Frank Executive Director Paul Hart. Non-financial outbound direct investment by Chinese companies fell 45.8% year-on-year to USD48.19 billion in the first half. In June alone, outbound investment dropped 11.3% from a year earlier to USD13.6 billion. Chinese foreign investment in industries like property, hotels, cinemas and entertainment has dropped 82.5% year-on-year.
- Just 1% of Hongkongers considered it a good time to buy property in the second quarter of this year, according to the latest Citibank survey. Based on opinions collected by The University of Hong Kong, 79% of the 500 respondents thought the second quarter of this year was a bad time to buy – a record high for the quarterly survey since 2010. 13% of respondents now think property prices will drop in the next 12 months, up from 9% in the second quarter last year, ending a four-quarter consecutive slide.
- Small and medium-sized apartments again dominated Shanghai’s pre-owned housing market in the first half of this year while nearly two-thirds of the homes sold during the period cost below CNY3 million. Nearly 73% of pre-owned houses that changed hands in Shanghai between January and June were no larger than 90 square meters and homes priced at below CNY3 million accounted for almost 65% of total transactions, according to Shanghai Homelink Real Estate Co.
Retail
- Sales of fast moving consumer goods (FMCG) in China in the second quarter rebounded from a sluggish performance in previous quarters to 3.2% from a year ago, as retailers sought to diversify shopping channels. Overall spending on household consumer goods added just 3% in 2016, the lowest level in five years, and just 1.7% annually in the first quarter of the year. Sun Art Retail Group, which operates the Auchan and RT brands, remains the leader with an 8.2% market share, followed by Vanguard Group’s 6.3% and Walmart’s 5.1%. E-commerce spending surged 28.2% from a year ago and contributed 6.9% of the overall FMCG market in the second quarter.
- China’s home-grown brands continue to gain ground in China’s smartphone market, pushing aside Apple and Samsung Electronics with their offerings of sophisticated models at reasonable prices. Huawei Technologies shipped 23 million smartphones in China in the three months ended June, becoming the country’s best-selling brand for the second quarter in a row, according to Canalys. Huawei has a 20.2% marketshare, Guangdong Oppo Electronics has 18.8%, and Vivo 17%. Xiaomi came in fourth and Apple fifth, although the company has not released smartphone shipment figures for the quarter.
Science & technology
- Hong Kong start-up Origami Labs has released an innovative new wearable product Orii this month. Orii is a voice-activated ring that uses bone conduction technology to channel smartphone sounds into a user’s ear. It is the world’s first voice-powered smart ring, basically turning your finger into a voice-enabled smartphone. The company says it is part of the screen-free revolution.
- Chinese scientists have created the largest virtual universe on Sunway TaihuLight, the world’s fastest computer. Researchers hope that within three years the country will be leading the way in making new findings about the birth of the cosmos.
Stock markets
- Chinese stocks fell from a three-month high, as Huaxin Cement and China Molybdenum led the decline of raw-material producers, the best-performing industry over the past two months. “The market is selling the outperformers for profit-taking,” said Wang Zheng, Chief Investment Officer at Jingxi Investment Management in Shanghai. The Shanghai Composite Index slid 0.2%, or 6.91 points, to 3,243.69 at the close on July 25. Hong Kong stocks finished the day little changed.
Travel
- Didi Chuxing is teaming up with Japan’s Softbank to invest USD2 billion in a round of financing in Southeast Asia’s ride-hailing firm Grab, as Didi looks toward internationalizing its business outside of China. Other investors are expected to invest about USD500 million. The investment round pushes Grab’s valuation to over USD6 billion. The new funds will be used to strengthen Grab’s leading position in the region as well as invest in GrabPay, the company’s mobile payments platform. The Singapore-headquartered company said it has a Southeast Asia market share of 95% in third-party taxi-hailing and 71% in private vehicle hailing.
- China’s Foreign Minister Wang Yi said in Bangkok that he hoped construction of a new Thai railway could start immediately to give Thailand better access to Chinese markets. The joint Thai-Chinese plan for a new USD5.3 billion railway from Bangkok to the northeast has been repeatedly delayed, largely over differences about financing, but last month Thai Prime Minister Prayuth Chan-ocha issued a special order to expedite construction. The railroad is part of China’s belt and road infrastructure project.
- Passengers using the West Kowloon station of the new high-speed railway linking Hong Kong to the mainland, will have to pass through two port areas on four levels of the building to reach the platform. China’s immigration and customs services will have a 105,000 square meter leased area patrolled by mainland police officers. Passengers will first go through Hong Kong border control before entering the mainland area for passport or ID checks for arrival in mainland China. Passengers on board a moving train on the line will be subject to mainland laws. For arriving passengers, the process will be similar but in the opposite direction.
- Chinese rail car manufacturer CRRC Qingdao Sifang has unveiled the prototype of a mounted monorail train with a maximum operating speed of 70 kilometers per hour. Driven by a high-efficiency magnet motor, the experimental train runs along an overhead monorail. The train has three or five cars, with a passenger capacity of 300 to 510 people. It is suitable for use in mountainous areas. It costs only about one-third of what a subway costs.
- China has surpassed the United States to become the world’s largest market of Airbus Helicopters in terms of annual bookings. The market grows around 20% a year. Airbus Helicopters is the leader in the global civil helicopter market, with 47% of the market. Last year, it delivered 35 civil helicopters to China. In the next 10 years, China is expected to acquire about 100 aircraft for forest firefighting. About half of these will be medium-heavy helicopters that can carry water buckets and operate in highland regions. In May this year, Airbus Helicopters broke ground on its H135 final assembly line in Qingdao.
- China’s railway investment rose in the first half year and is set to hit a new high in 2017. In the first half year, fixed asset investment (FAI) on railways hit CNY312.5 billion, up 1.9% year-on-year, according to the China Railway Corp. Scheduled progress has been made in 27 major projects.
- Ofo, the world’s first and largest “station-free” bike-sharing platform, announced a global partnership with Adyen, the payments platform choice for the world’s leading companies. The collaboration will allow customers around the world to pay using their preferred local currencies and payment methods. Users registered in Singapore, for example, can use ofo’s services while visiting China with no extra effort to pay in the local currency. The company plans to offer its bikes in 200 cities across 20 countries by the end of this year. Currently, ofo processes more than 25 million transactions daily.
- Some bullet trains between Beijing and Shanghai will be even faster in just over a month, but it could mean fewer available seats as some trains will continue to operate at 300 km/h, requiring the reduction of the number of trains on the line. When the new Fuxing trains go into service in September they will be operating at the speed they were designed to travel at: 350 km per hour. Running the trains 50 km/h faster would increase operating costs by one-third, according to an industry estimate. At the new speed, the journey between Beijing and Shanghai will take 4½ hours – nearly an hour faster than it takes now.
- The cities of Beijing and Tianjin, along with Hebei province, will allow 144-hour visa-free entry for nationals from certain countries and regions by the end of 2017, Beijing Vice Mayor Cheng Hong announced. Currently, the maximum stay in Beijing and Tianjin is 72 hours. In 2016, Shanghai, joined by Jiangsu and Zhejiang provinces, took the lead in permitting 144-hour visa-free entry to visitors from 51 countries.
Short news
Jul-24-2017 By : fcccadmin
Finance
- Apple launched a large-scale promotion, offering special discounts for consumers who use its mobile payment solution ApplePay in China, where third-party mobile payments are dominated by Alibaba Group and Tencent Holdings. Between July 18 and 24, consumers using Apple Pay to make payments at 28 offline retail stores, supermarkets and restaurants such as 7-Eleven, Watsons, Starbucks and Burger King, and 16 internet merchants including bike-sharing app Mobike, online travel app Ctrip as well as JD.com, received discounts.
- Swatch Group has launched the second generation of its chip-embedded devices that can be used for mobile payments in China, after teaming with UnionPay to offer “Swatch Pay”. The new watches can be linked with credit cards issued by 11 partner banks, in addition to debit cards. Swatch unveiled its first-generation of watches with payment functions in October 2015. The new generation will be modestly priced at around CNY580 a piece. Chinese have embraced mobile payment methods, completing transactions worth CNY38 trillion via mobile devices in 2016 – nearly triple the amount of a year earlier.
- The European Central Bank (ECB) is considering carrying out a review of Deutsche Bank’s two largest shareholders, Qatar’s royal family and the Chinese conglomerate HNA, which each own just under 10% of the shares. The aim of the assessment is to establish whether an investor is trustworthy and financially sound, where the money used for the investment came from and whether the investor engages in any criminal dealings such as money-laundering or financing of terrorism. A negative outcome of the review could result in the ECB prohibiting the shareholder from exercising its voting rights.
- China’s tax revenue from the service sectors rose rapidly in the first half of the year, reflecting the country’s improving economic structure. The nation collected CNY7.08 trillion in taxes in the first half of the year, up 8.9% year-on-year. The service sector accounted for 57.6% of total tax revenue, up 1.1 percentage points from the level of last year. Retail tax grew by 25% year-on-year in the first half, reflecting the fact that consumption is playing a bigger role in driving economic growth. The total value of tax cuts for small and innovative companies amounted to CNY216.9 billion in the first half of the year, up by 29.6% year-on-year.
- China faces less pressure from capital outflows, according to the State Administration of Foreign Exchange (SAFE) and economists said the situation may continue to improve in the second half of this year. China’s banks sold a net USD93.8 billion of foreign exchange to clients in the first six months of this year, down 46% year-on-year. The foreign exchange savings by individuals dropped by USD1.7 billion in the first half. Foreign exchange reserves had been rising for five consecutive months by June.
- Chinese President Xi Jinping has told officials they must tighten control over borrowing by local officials and hold them permanently accountable for the debt they incur. China’s overall government debt was about CNY27.3 trillion at the end of last year, almost 40% of its gross domestic product (GDP), still lower than many developed economies, but unregulated corporate loans guaranteed by local governments could push the level above 60%.
- The Beijing-based National Institution for Finance and Development (NIFD) claims that the “leverage ratio” of the non-financial sector rose to 237.5% at the end of March from 234.2% at the end of last year. The leverage ratio compares total debt to assets or gross domestic product (GDP). The leverage ratio of Chinese companies and local governments rose 2.7 percentage points in the first quarter, surpassing the full-year increase of 2.1 percentage points last year. The rise was due to thriving shadow banking, the Institute said.
Foreign investment
- President Xi Jinping says the government should create a “stable, fair, transparent and predictable” environment for foreign businesses operating in China, stepping up Beijing’s rhetoric to woo foreign business as the country is gradually losing its attractiveness to overseas investors. In rare praise for the role of overseas businesses, Xi said foreign money has “helped reasonable resource relocation, promoted market-oriented reforms and played an important role for China’s economic development”. As such, China must do more to retain and attract foreign investment, he said.
- China will release the 2017 Catalog for the Guidance of Foreign Industries to offer more favorable policies and further improve the market environment for global companies by the end of this month.
- Shanghai has reported the biggest half-year slump in overseas capital inflows since 2010, in a sign that growing protectionism, rising costs and a tougher business environment are pushing global companies to look elsewhere. Contracted foreign investment slumped 47% to USD18.2 billion in the first six months of the year. Actual foreign direct investment (FDI) in Shanghai fell 7% in the first half to USD8.1 billion, a larger decline than the nationwide figure, which inched down 0.1% to CNY441.5 billion.
Foreign trade
- Top executives of Chinese and American companies have urged their governments to promptly resolve trade disputes through “effective negotiation” amid concerns that the two nations are heading towards a trade war. Twenty business leaders made the appeal during the first U.S.-China Business Leaders Summit held at the U.S. Commerce Department in Washington. The event was co-chaired by Alibaba Chairman Jack Ma and the Chief Executive of Blackstone, Stephen Schwarzman.
- China should perfect its systems for safety risk alerts, quick response, and supervision of imports and exports of commodities, a meeting of the Central Leading Group for Deepening Overall Reform chaired by President Xi Jinping announced. The meeting highlighted the safety of traded commodities at a time China is becoming a major buyer of global foods.
- China’s imports of major agricultural products continued to increase fast in the first five months of the year, driven by price gaps between domestically produced products and imported products, according to the Ministry of Agriculture. Wheat imports reached 2.2 million metric tons, an increase of 67.3% year-on-year, while import of soybeans increased by nearly 20% to 37 million tons, and imports of beef rose by 14% during the period, compared with the same period last year. Imports of some major agricultural products kept increasing quickly between 2011 and 2016, with grain imports increasing at an average annual rate of 32.2%, meat at an average annual rate of 24.9%, and dairy products at 16.6% during the five-year period.
- China is to ban importing 24 kinds of solid waste from overseas because of damage to the environment and people’s health. China previously allowed the imports because the rubbish was recycled, creating extra supplies of metals and materials in short supply for use in the domestic market, but officials say the problems created far outweigh the benefits. China imported more than 46 million tons of waste in 2015.The real amount of imported waste from overseas is probably much higher as some is brought into the country illegally.
- Shanghai’s foreign trade in the first six months jumped 18.7% from a year earlier to CNY1.55 trillion, reversing a 0.4% drop in the same period last year. The growth accounted for 11.7% of China’s total foreign trade in the first half year. Imports surged 23.7% to CNY926.71 billion while exports rose 12% to CNY626.59 billion. Imports and exports through the city’s free trade zone (FTZ) took up over 40% of Shanghai’s total foreign trade. Exports of machinery and electronics accounted for 70.6% of Shanghai’s total exports in the first half, up 1.2 percentage points from the same period last year. Integrated circuits, automobiles and pharmaceuticals are the three largest categories of imported products.
- China’s steel industry association, which represents 80% of the country’s steel production, has called on the government to get tougher with the administration of U.S. President Donald Trump and to threaten retaliation if Washington moves to curb Chinese steel imports. If Washington moves to levy additional tariffs on Chinese steel products or takes restrictive measures against imports from China, China can “hit back on restricting U.S. imports of automobiles and agricultural products”, Li Xinchuang, Vice President of the China Iron and Steel Association (CISA) said. The U.S. imported 30.1 million tons of steel last year, but only 1.13 million tons, or 3.8%, were actually from China.
Macro-economy
- Alibaba Group Holding and Tencent Holdings are expected to be introduced next month as the first major private-sector stakeholders of a state-owned enterprise. The Shanghai-listed parent of China Unicom announced that its plan has been given the go-ahead by the National Development and Reform Commission (NDRC). The first phase of the reform plan will likely be formally unveiled in four weeks. China United Network is one of eight state-owned enterprises participating in the pilot implementation of the government’s mixed-ownership reform program, which aims to introduce private-sector capital and expertise to improve their efficiency and become more market-driven.
- The number of Chinese companies on the Fortune 500 list has reached 115 with the addition of 10 first-timers this year, including Anbang Insurance Group, Alibaba Group and Tencent Holdings. The number has been rising for the last 14 years. Guangdong-based Country Garden is the only Chinese property company on the list. Walmart topped the list with USD485 billion in revenue in 2016, followed by three Chinese companies: State Grid, Sinopec Group and China National Petroleum Corp (CNPC). Apple is the most profitable company among the 500, followed by four major Chinese commercial banks.
- White-collar salaries continued rising in Hangzhou in the second quarter, bucking a declining national trend. The average monthly salary for white collar workers in Hangzhou increased to CNY7,933, up 4.3% on the last quarter, making the city the fourth highest paid in China for office staff, up from eighth a quarter ago. Hangzhou’s most competitive sectors include telecommunications, software, and IT services. The findings were based on online job postings from 37 key Chinese cities, compiled by recruitment website Zhaopin. Nationwide, average monthly salaries for office workers dropped 3.8% from a quarter ago to CNY7,376 in the second quarter.
- China’s installed solar power capacity surged over the first half year, as 23.6 gigawatt (GW) of solar power were installed, 34.2% higher from a year ago, far more than the 20-25 GW analysts had expected for the whole year. Of the installed solar capacity over the first half year, 7 GW was by rooftop panels at consumers’ homes, up from below 2 GW a year ago, according to the China Electricity Council.
- China should pay more attention to maintaining a balance between cutting leverage levels and stabilizing economic growth in the second half of this year after it achieved faster-than-expected GDP growth of 6.9% in the first half, said Yu Yongding, Economist at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences (CASS). “China’s deleveraging move is in the right direction, but it is a long-term process and we should not carry it out too hastily so as to affect the normal financing activities of enterprises, especially small and medium-sized companies,” Yu added.
Mergers & acquisitions
- More Hong Kong family firms will become targets of acquisitive mainland buyers this year, particularly those planning overseas expansions, according to a new study by UBS.“Competition is intensifying, tempting Hong Kong family companies to sell their assets to bigger industry players,” said Managing Director at UBS’ investment bank, Samson Lo, who’s responsible for mergers and acquisitions in Asia. The latest acquisition involved the family of former Hong Kong Chief Executive Tung Chee-hwa, whose shipping company Orient Overseas International was bought by Chinese rival Cosco Shipping Holdings for HKD49.23 billion.
- China’s outbound mergers and acquisitions (M&As) rebounded in the second quarter of this year with deal value surging 148% quarter-on-quarter. China recorded the second most cross-border acquisitions by value with 94 deals totaling USD35.9 billion, according to Baker McKenzie’s Cross-Border M&A Index. The industrial sector continues to outrank other sectors in terms of China’s outbound M&A deal volume while the consumer and technology sectors also saw significant amounts of outbound investment. China’s inbound M&A activities continued to climb, rising 29% in volume to 62 deals and a 69% jump in value to USD13.2 billion from the first quarter of 2017.
Real estate
- Chinese Estates Holdings has accumulated about 5% of China Evergrande Group since April on the open market for a total of HKD8.1 billion. The Hong Kong developer is now the second-biggest shareholder in Evergrande. Earlier this month, the Hong Kong developer said it would record a HKD2.3 billion gain from the sale of Shengjing Bank shares – which it bought from Evergrande last May. Earlier this month, Evergrande announced its first-half contracted sales soared 72% from a year earlier to CNY244 billion, representing 54% of its annual sales target of CNY450 billion.
- Country Garden Holdings sold USD600 million of five-year bonds in Hong Kong, the latest in a recent string of issuances that signal a relaxation of policy curbs to raise funds by Chinese property developers. Country Garden said the bonds would pay a coupon of 4.74% and would have an option for the company to redeem prior to maturity. Goldman Sachs and Deutsche Bank were the joint global coordinators.
- China’s housing authorities said cities with net population inflows need to accelerate the development of rental housing projects. Twelve cities will pilot the rental projects. Banks have been instructed to help real estate companies with developing rental housing, which takes longer to earn a profit compared to house sales.
- The growth of home prices in China’s key cities slowed for nine consecutive months to the end of June, with prices in Beijing actually falling for the first time in more than two years in June. Shanghai prices declined 0.2% month-on-month, while Shenzhen home prices stalled in June, and Guangzhou’s grew 0.5%. “China’s 15 hottest property markets, mostly first and second-tier cities, remained stable in June,” the National Bureau of Statistics (NBS) said. On a year-on-year comparison, in all of the key 15 cities, prices declined in June between 0.8% and 5.5%. Some lower-tier cities however are still experiencing price increase.
- Sino Land has won a residential land plot in Ma On Shan, in Hong Kong’s New Territories, for HKD1.38 billion, setting a new record for the area. Pacific Asia, a subsidiary of Sino Land, outbid 29 other bidders in the government tendering process, including several mainland Chinese developers. The Ma On Shan site has a maximum gross floor area of about 119,000 square feet, with average land prices reaching HKD11,588 per square foot, an 80% jump from the last record set by developer Citic Pacific in 2015 in the same area.
- About CNY4.93 trillion of new homes, excluding government-subsidized affordable housing, were sold in the first half of the year, a year-on-year hike of 17.9%, the National Bureau of Statistics (MBS) said in a statement. The area of new homes sold in the six-month period climbed 13.5% from a year earlier to 647.9 million square meters.
Stock markets
- Zhongyuan Bank, the biggest city lender in central China, made a sluggish debut on the Hong Kong stock exchange, after investors gave the city’s third-biggest initial public offering (IPO) of 2017 the cold shoulder. The bank’s shares ended 1.6% above the IPO price of HKD2.45. The bank, based in the Henan provincial capital of Zhengzhou, had already priced its offer near the bottom of the expected price range. The IPO was only able to generate enough interest from retail investors to bid for 39% of the shares on offer, making it one of the worst new listings this year in the city.
- The pace of initial public offerings (IPOs) is expected to accelerate in the second half of the year. There were 246 IPOs in the Shanghai and Shenzhen bourses in the first half of 2017, increasing 303% year-on-year, according to PricewaterhouseCoopers (PwC).
- Twenty months after he was taken away for investigation after the 2015 Chinese stock market rout eviscerated trillions of yuan in value, Yao Gang, the former No 2 at the China Securities Regulatory Commission (CSRC) has been expelled from the Communist Party. He is accused of disturbing the capital market order, violating the political system at the CSRC, and taking bribes. Yao was in charge of initial public offering (IPO) approvals before moving to oversee fixed income and futures markets in late 2015.
Travel
- 27 major rail stations in 24 big cities, including Xian, Shanghai, Guangzhou, Wuhan, Nanjing, Hangzhou and Chengdu, have launched an on-demand food delivery service for high-speed trains. The choices include local dishes and Western style fast food, including KFC. Passengers can order their meals on China Railway Corp’s ticket-booking website or via its app two hours before the train is scheduled to arrive at the selected station.
- HNA Infrastructure Co, a subsidiary of HNA Group, has signed an agreement to acquire a 60% stake in Rio de Janeiro Aeroportos, the controlling shareholder of Aeroporto International Antonio Carlos Jobim-Galeao (GIG Airport) from Odebrecht. The equity stake is worth USD18 million. The transaction is subject to regulatory approval in China and Brazil and is expected to be completed in the fourth quarter.
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