Short news
Jul-17-2017 By : fcccadmin
Automotive
- Start-up Faraday Future said it would move production of its planned luxury electric SUV FF 91 to a new site, virtually scrapping a stalled USD1 billion Las Vegas factory amid deepening financial woes of key investor, Chinese entrepreneur Jia Yueting. Faraday is part of a network of young electric vehicle firms in China and the United States backed by Jia, who has said his company LeEco is facing a severe shortage of cash after expanding too fast and in too many sectors. Faraday had initially planned to open the Las Vegas factory late in 2017, with a product portfolio of seven models.
- Audi has traditionally held the premium crown in China, thanks to its early entry into the market. However, BMW and Mercedes-Benz have been rapidly catching up over the past few years. As such, the China-only 1 Series saloon is a key model. BMW is the first of Germany’s Big Three marques to produce a car only for the Chinese market. According to BMW, the car is aimed at fresh college graduates, but at a list price of CNY289,800, they would need to have rich parents to afford such a vehicle as their first car.
Finance
- Yang Xiaochao, Secretary General of the Central Commission for Discipline Inspection (CCDI), is expected to be appointed Chairman of the China Insurance Regulatory Commission (CIRC), a signal that China’s ongoing crackdown on irregular business practices in the financial industry may be set to intensify. The Chairman’s position has been vacant since April, when former Chairman Xiang Junbo was put under investigation for suspected “serious disciplinary violations”. Yang, a native of Nanjing, headed the Beijing Financial Affairs Bureau from 2008 to 2013, and has been the city’s Auditor and Vice Mayor.
- Monetary policies are expected to become relatively tight in the second half of this year, as fending off financial risks has become a greater challenge than stabilizing growth, said economists and analysts. This may mean less monetary liquidity in the market.
- China will maintain a tight grip on capital outflows despite foreign exchange reserves rising for a fifth straight month in June, analysts said. The hawkish stance of the U.S. Federal Reserve (FED) and huge financial risks at home will reinforce the belief that strict controls on capital flows are necessary to ensure economic stability, they said. China’s forex reserves rose to an eight-month high of USD3.06 trillion in June, up USD3 billion from a month earlier, the State Administration of Foreign Exchange said.
- Chinese President Xi Jinping’s administration is still facing “significant obstacles” in reining in credit growth and reducing financial risks, Standard & Poor’s has said, adding that Beijing was trying hard to “deleverage”, but the government’s goal of maintaining relatively fast growth, as well as the large state-owned sector, would continue to lead to credit expansion. Local governments were also demanding more credit, the report said. Standard & Poor’s has not changed its sovereign rating for China, but it kept a “negative” outlook on its credit worthiness.
- Demand for pension insurance in China will help turn the country into the world’s second largest insurance market by 2027, contributing a third of new global premiums generated during the next decade, Allianz said in a report. Gross premium income is expected to rise 14% annually between 2017 and 2027 in China, faster than the global growth of 5.9%. Allianz said China’s consumer demand and policy support on life insurance will drive premium growth in the sector to 16.7% annually in the next decade.
- With the potential USD1.5 billion initial public offer (IPO) by Zhong An Online Property & Casualty Insurance, China’s first online-only insurer, “insurtech” is rapidly becoming the new focus of venture capital funds, according to Qiming Venture Partners. Zhong An plans to leverage artificial intelligence technology and big data to bolster services. Since its inception in October 2013 through the end of 2016, Zhong An sold 7.2 billion insurance products and served more than 492 million customers.
- The People’s Bank of China (PBOC) said that CNY1.54 trillion in new loans was issued last month, up from CNY1.11 trillion in May. Of the June figure, CNY483 billion was for home mortgages, reflecting continuing property sales despite efforts by more than 50 cities to keep a lid on home price growth. China Merchants Bank Analyst Liu Dongliang said credit growth might lose steam over the rest of the year as slow savings growth and strict PBOC bank capital adequacy rules took their toll.
- Combined trust loans, entrusted loans and undiscounted bankers’ acceptances, which are common forms of shadow banking activity, dipped to CNY428.8 billion in the second quarter from CNY2.05 trillion in the first quarter, according to Reuters calculations.
- The M2 money supply grew 9.4% from a year earlier in June – a record low – after a 9.6% growth rate in May, compared with a 12% target for the broad money supply for the whole year. Still, credit grew at a proper level to support economic activities, Ruan Jianhong, Manager of the Survey and Statistics Department of the People’s Bank of China (PBOC) said. He added that the change was a natural result of deleveraging in the financial sector.
- Ping An Insurance (Group) is gearing up to take on China’s internet giants, while pursuing international expansion. “Our Chairman, Peter Ma, wants to transform the entire group into a technology company within 10 years,” Ericson Chan, Chief Executive at subsidiary Ping An Technology, told the South China Morning Post. Ping An Group has 138 million customers and operates 28 subsidiaries, including China Ping An Life Insurance – the country’s second-largest life insurer by premium size. Ping An Technology provides financial technology solutions and cloud computing services to the group, as well as about 150 external customers.
- China’s fiscal revenue recorded faster year-on-year growth in June, adding to signs of structural improvement. Fiscal revenue increased by 8.9% year-on-year to CNY1.7 trillion last month, accelerating from the 3.7% growth in May, according to the Finance Ministry. In the first six months, fiscal revenue increased by 9.8% year-on-year to CNY9.43 trillion.
Foreign investment
- China’s sovereign wealth fund China Investment Corp (CIC) posted a 6.22% return on its overseas investments last year, reversing a 2.96% loss in the previous year. The USD813.5 billion sovereign wealth fund reported a total net profit of USD75.3 billion last year, up from USD73.9 billion in the previous year. CIC is seeking to increase investments in international infrastructure projects, longterm assets such as property and private equity, and to tap into the opportunities generated by the Belt and Road Initiative. The U.S. remained the biggest investment destination for CIC, accounting for about 42% of its total overseas investment last year.
- The Australian local government has bought back 51.4% of a mining license issued for a huge Chinese-run coal mine near prime agricultural land. Chinese company Shenhua was granted the original exploration license for the AUD1.0 billion Watermark mine near Gunnedah in New South Wales state in 2008 by a previous Labor government. But the decision was challenged by local farmers and environmental activists, who said it was harmful to the region. Shenhua Australia Chairman Liu Xiang said his firm would ensure the project “meets the highest environmental standards”.
- China will establish an integrated digital business license registry, enabling one-stop registration for foreign and domestic enterprises within a given time frame. The government will also simplify work and residential permit application procedures for high-level foreign employees.
- ChIna attracted CNY100.45 billion in foreign direct investment (FDI) in June, posting 2.3% annual growth to end a two-month decline. In the first half, FDI inflow stood at CNY441.54 billion, down 0.1% year-on-year. The manufacturing sector attracted CNY128.6 billion of foreign investment in the first half, up 3% year-on-year and accounting for 29.1% of total FDI. Foreign investment in the service sector reached CNY309.99 billion, accounting for 70.2% of the total. A total of 2,894 foreign-funded enterprises opened for business in China last month.
Foreign trade
- U.S. President Donald Trump has nominated Dennis Shea, Vice Chairman of the U.S.-China Economic and Security Review Commission, which has been highly critical of China, as Deputy U.S. Trade Representative. The Commission recommended in November that U.S. lawmakers take action to ban China’s state-owned firms from acquiring U.S. companies.
- Exports in yuan terms rose 17.3% year-on-year to CNY1.35 trillion in June, compared with May’s 15.1% increase. Imports surged 23.1% to CNY1.05 trillion last month. The volume of foreign trade in the first six months grew 19.6% from a year earlier – the quickest growth since the second half of 2011 – to CNY13.14 trillion. Exports rose 15% while imports increased 25.7% with a trade surplus of CNY1.28 trillion in the first half, down 17.7% year-on-year. During the first six months, trade with the European Union jumped 17.4% year-on-year. Trade with the United States and ASEAN went up by 21.3% and 21.9%, respectively.
Health
- China reported 13 fatalities from H7N9 bird flu in June, taking the death toll since October to at least 281. There were 108 deaths in the March to May period, spurring further concern about the virus’s spread. Chinese disease control experts are warning the public to stay alert for H7N9 avian flu and stay away from live poultry. A program to vaccinate poultry against the H7N9 strain will be carried out nationwide from this autumn.
Macro-economy
- China surpassed the United States as the top producer of renewable energy in 2016, according to the latest BP Statistical Review of World Energy, with China contributing about 40% of global growth – more than the entire OECD. China also provided the main source of world growth for both hydro and nuclear power. The BP data showed carbon emissions in the world rose slightly by 0.1% in 2016, while in China, the emissions fell 0.7% from a year ago.
- Salaries in major cities in China have declined quarter-on-quarter for the first time since 2016, recruitment portal Zhaopin.com said in a report. The average salary in China’s 37 top cities was CNY7,376 by the end of the second quarter, a 3.8% drop from the first quarter. Micro and small sized companies led the decline as average salaries in these business dropped 31% quarter-on-quarter. The report attributed the decline to a salary-war among startups.
- China has fulfilled the year’s task of cutting steel capacity over the first six months, boosting the nation’s industrial upgrading, Shen Ying, Chief Accountant of the State-owned Assets Supervision and Administration Commission said. The nation has reduced steel overcapacity by 5.95 million tons during the first half year, “finishing the year’s task ahead of schedule”. China’s efforts to reduce capacity since the end of 2015 have boosted prices of steel and the profits of steel makers. China has also lowered coal capacity by 6.59 million tons.
- The National Development and Reform Commission (NDRC) said that by year’s end it will finish compiling a plan on the development of five interregional city clusters, including the Guangdong-Hong Kong-Macao Greater Bay Area, the Western Taiwan Straits Economic Zone, the Guanzhong Plain Urban Cluster, the Lanzhou-Xining Cluster, and the Hohhot-Baotou-Erdos-Yulin Cluster. The NDRC aims to finish plans for a total of 19 city clusters by 2020.
Mergers & acquisitions
- China hopes Germany and the EU will avoid sending confusing and negative signals when introducing new regulations after Germany tightened foreign takeover rules in key sectors, a Foreign Ministry Spokesman said. The new regulations will allow the German government to block takeovers if there is a risk of critical technology being transferred abroad. “Under the current global situation,” he said, “China is willing to work with Germany and the EU to promote trade liberalization and investment facilitation based on the principle of mutual benefit and common development,” the Spokesman added.
Real estate
- Sunac China Holdings is to pay CNY29.6 billion for a 91% stake in 13 Wanda projects, while CNY33.6 billion will be spent purchasing 76 Wanda hotels, including in Beijing and Wuhan. Wanda Chairman Wang Jianlin said the deal would cause debt at Wanda’s commercial property arm to “drop greatly.” The Sunac deal indicates that “Wanda is running out of options to raise funds through normal financing channels,” said Ivan Han, Shanghai-based Analyst with financial information provider Morning Whistle. The risks of asset management will be shifted to Sunac through this arrangement, while Wanda would earn loan interest income, which is less risky.
- Shanghai’s pre-owned housing index fell for the first time in four months amid continued sluggish sales, the Shanghai Existing House Index Office said. The index, which monitors month-on-month price changes in 130 areas around the city, lost 6 points, or 0.22%, from May to 4,001 points. The average cost of pre-occupied homes climbed in 55 areas, fell in 55 and was flat in the rest. In June, about 12,200 units of existing houses changed hands across the city, a month-on-month decrease of 16.6% and a year-on-year plunge of 49.9%, Shanghai Homelink Real Estate Agency said in an earlier report.
Retail
- Unmanned convenience stores, where customers use their mobile phones to scan barcodes and pay for items themselves, have been suffering from the high summer heat that melted some of the snacks inside. Two of the stores operating in Shanghai were forced to close temporarily as a result of poor air conditioning. Some of the stores are operated by technology start-up BingoBox. Prices are 5% lower than in traditional convenience stores. Wahaha plans to open 100,000 staff-less convenience stores with artificial intelligence within the next three years.
- Consumer confidence dropped in Shanghai in the second quarter amid a weaker real estate market. The Index of Consumer Confidence in Shanghai compiled by the Shanghai University of Finance and Economics, dipped 1.5 points from the first quarter to 117.6 in the April-June period. A reading above 100 points indicates optimism. The survey showed declining willingness to spend money among young and middle aged consumers worried about salary growth and high home prices. People’s intentions to buy homes dropped 4.4 points from the previous quarter to 56.6 and intentions to buy cars fell 2.1 points to 89.7.
- Supermarket chain Vanguard and Tesco’s data analysis firm Dunnhumby announced a 50-50 joint venture on data science. The joint venture, China Wisdom Dunnhumby, will help analyze data on shopping experience, consumer habits, multi-channel distribution networks and supply chains. Initially, it will cater to more than 3,000 Vanguard outlets and later expand into telecommunications, banking and other industries.
- Chinese demand for traditional home appliances such as washing machines, refrigerators and televisions may have peaked, say analysts, pointing to the persistently flat or negative growth of those products in the past two years. After three decades of breakneck economic growth, most of the mainland’s affluent households have already equipped themselves with sufficient home appliances. “The rebound in housing sales over the past 18 months or so has not given much of a boost to appliance demand,” wrote Ernan Cui from Hong Kong-based Gavekal Dragonomics in a recent note. Housing sales volume grew 7% in 2015 and 22% in 2016, while refrigerator sales have declined every year since 2014, and sales of washing machines and televisions only managed 2% growth by volume in 2016.
Science & technology
- Significant progress could be made on artificial sun technology by 2023 – and it could be used to generate clean energy for China in 50 to 60 years, Song Yuntao, lead scientist on the country’s largest fusion energy project, told the Science and Technology Daily. The scientists aim to keep extremely hot plasma for more than 1,000 seconds, at which point they expect the plasma to produce a self-sustainable nuclear chain reaction, an important step for power generation. That milestone would be less than six years away, based on Song’s estimate. China is a key contributor to the International Thermonuclear Experimental Reactor (ITER), the world’s largest fusion reactor, which is being built in southern France.
- A financial reward system for the publication of academic papers has been instrumental in raising China’s profile in the global scientific community. However, a new study has questioned whether it also has resulted in scientists becoming more concerned about earning money than the accuracy of their research. A study by Chen Bikun, Associate Professor at Nanjing University of Science and Technology’s School of Economics and Management, found that between 1999 and 2016, academics were paid between USD30 and USD165,000 for each paper published in an internationally recognized journal. The top figure equals about 20 times a professor’s annual salary.
Stock markets
- China’s stock markets will be more connected to the international market with MSCI’s incorporation of China’s A shares and the launch of the Bond Connect between the mainland and Hong Kong. The proportion of China’s A-shares in Morgan Stanley Capital International Emerging Market Index is expected to rise from 0.73% in August, 2018 to 20% in 2030, Citibank said.
Travel
- Shanghai Communist Party Secretary Han Zheng rode a bike from a bike-sharing company when inspecting walking and cycling paths along the Huangpu riverfront. His use of the bike is seen as a show of governmental support for bike-sharing companies such as Ofo and Mobike, which had worried that opposition from local authorities could obstruct their business.
Short news
Jul-10-2017 By : fcccadmin
Automotive
- China’s FAW Car, the partner of Japan’s Mazda Motor, will recall over 680,000 Mazda cars due to issues with air bags that were supplied by embattled Japanese auto parts supplier Takata Corp. The recall includes Mazda 6 vehicles manufactured in China between September 2008 and March 31, 2016. All faulty parts will be replaced free of charge. It estimated that more than 20 million cars in China from 37 manufacturers were equipped with the faulty airbags, which can explode on impact and spray shrapnel.
Finance
- China’s restrictions on capital repatriation and the large number of stock trading suspensions are foreign investors’ primary concerns, which could impede further global integration of China’s USD7 trillion stock market, according to index compiler MSCI. The two issues may cause illiquidity problems to foreigners who invest in A shares, said Chia Chin Ping, MSCI’s Managing Director.
- Yu’E Bao, one of China’s most popular internet-based funds, had amassed CNY1.43 trillion of assets under management by the end of June, which has already exceeded the size of individual deposits at some of China’s largest banks. The assets under management of Yu’E Bao surged some 80% in the past six months from around CNY800 billion by the end of December 2016. The quarter-on-quarter growth is about 30%.
- In a serious setback for the grand ambitions of Chinese billionaire Jia Yueting, Founder of internet media company LeEco, the CNY16 billion 26% stake Jia owns and controls in LeEco’s Shenzhen-listed arm – Leshi Internet Information & Technology Corp – was frozen by a Shanghai court. The Shanghai branch of China Merchants Bank turned to the courts seeking asset preservation after a LeEco affiliate failed to pay due interest on loans. Other creditors may follow suit with severe consequences for the company.
- SF Lottery, a joint venture by Hong Kong-listed AGTech and Chinese logistics firm SF Express, launched a new instant scratch lottery product in four Chinese provinces in a bid to shake up the country’s lucrative lottery market. The new instant scratch cards will be distributed in Guangdong, Jiangsu, Hunan and Jiangxi provinces initially via the thousands of couriers in SF Express’ network, and in SF Best, the company’s offline retail stores. Instant scratch lottery cards generated CNY28.5 billion in sales last year, according to the Ministry of Finance.
- Holders of mainland-issued China UnionPay bank cards are no longer allowed to withdraw cash from hundreds of ATM machines in Macao. They can only use those fitted with new facial recognition technology. So far, 834 of Macao’s 1,300 ATMs have been fitted with what the Macao Monetary Authority has dubbed “Know Your Customer” technology. Reported casino revenue dropped sharply in the last week of June, a month after the move to facial recognition technology began to be introduced.
- The Chinese government plans to hold a long-delayed key financial work conference in the middle of this month, putting the focus on financial security. The big issues up for debate could include an overhaul of the financial regulatory regime, financial security, and opening up of the financial markets. The first National Financial Work Conference was held in November 1997 during the Asian financial crisis. The conference is held once every five years to determine the direction of financial regulation and reform.
- China is expected to roll out new personal tax relief policies for top executives, in an effort to help its biggest and most successful firms, and start-ups, hold onto their best talent. Business consultancies now expect top corporate officials to be offered tax relief on more non-cash types of remuneration.The top rate of personal tax in China is 45%, compared with 17% in Hong Kong and 20% in Singapore.
- Wang Yincheng, former President of the People’s Insurance Co (Group) of China, will be prosecuted after an investigation found he engaged in corrupt practices, including bribery. The Central Commission for Discipline Inspection (CCDI) said he had been expelled from the Communist Party. Wang interfered with inspections and audits, collaborated with corrupt officials, used public funds to pay for personal holidays and took bribes, the CCDI said.
- The People’s Bank of China (PBOC) said the economy and financial markets are generally stable, though the environment is still “complex”, adding that risk prevention should be given greater emphasis. Reiterating it will stick to a “prudent and neutral” policy, the PBOC said it will “keep liquidity relatively stable and credit growing at a reasonable pace”.
- The Chinese yuan exchange rate has been stable, but it won’t always be and Beijing’s efforts to maintain its stability could hinder China’s global currency ambitions, Kelvin Lau, Senior China Economist at Standard Chartered, said in an interview with the South China Morning Post.
- Foreign firms could “very soon” be allowed to rate onshore bonds, according to PBOC Deputy Governor Pan Gongsheng. Under the new regime, foreign players such as Moody’s, Standard & Poor’s and Fitch Ratings would be able to do business directly rather than as junior partners in joint ventures. But Political Economist Hu Xingdou from the Beijing Institute of Technology said foreign credit rating agencies should be prepared to deal with accusations of China bashing, discrimination or unfairness from senior officials, state media and nationalists.
- China has no intention of devaluing its currency, the yuan, to boost its competitiveness, Pan Gongsheng, Director of the State Administration of Foreign Exchange (SAFE), wrote in the magazine Qiu Shi. The yuan slumped about 6.5% against the U.S. dollar last year in its biggest annual drop since 1994. But since then, it has regained its vigor, rising 2.4% against the dollar in the first half of this year. China’s foreign exchange reserves rose to USD3.06 trillion in June, the first increase for five months in a row since June 2014.
Macro-economy
- Iron ore markets are heading for a very bumpy ride in the next couple of years, marked by significant price swings amid the restructuring of the steel industry in China, according to Andrew Stocks, Managing Director of Iron Road. Iron ore has swung from a bear to bull market within three months, rebounding from a year low of USD53.36 a ton last month on a surge driven by mills in China boosting purchases to replenish inventories, with higher-grade ore in demand. This volatility is the result of the Chinese market transitioning to a cleaner, leaner production phase.
- The Caixin Media and Markit manufacturing purchasing managers’ index (PMI) rose to 50.4 from 49.6 in May, which had been the first time the index had slipped below 50 since June 2016. Output increased to 50.6 from 50.2 in May while new orders also rose. The official government PMI released on June 30 rose to 51.7 in June.
- China is due to bring two nuclear reactors in Zhejiang and Shandong provinces online in the fourth quarter as part its efforts to utilize some of the world’s most advanced nuclear technology. The Sanmen station in Zhejiang and the Gaiyang station in Shandong have a capacity 1,000 megawatt (MW) each and would help China reduce its reliance on coal and gas, Wang Binghua, Chairman of the State Power Investment Corp said at the 25th International Conference on Nuclear Engineering in Shanghai.
- Growth in China’s services industries slowed in June, overshadowing expansion in the manufacturing sector. The Caixin China General Services Purchasing Managers’ Index (PMI) fell to 51.6 in June from May’s four-month high of 52.8. The reading was the second lowest in 13 months. Services companies noted the weakest increase in new orders since May last year, with several firms saying subdued market conditions weighed on client spending.
- China’s wealth gap has widened for the first time in five years. The Gini coefficient increased slightly to 0.465 last year from 0.462 in 2015, according to the National Bureau of Statistics (NBS). A reading of zero would mean everyone’s income was equal, while a reading of one would indicate that all the income was going to one person. The United Nations considers a Gini coefficient higher than 0.4 a sign of severe income inequality. The most recent figure for the U.S. was 0.479. In terms of cities, Hong Kong recorded an all-time high of 0.539 last year, behind only New York at 0.551.
Mergers & acquisitions
- COSCO Shipping Holdings Co has offered to buy Orient Overseas International (OOIL) for HKD49.23 billion in a deal that will see COSCO Shipping become the world’s third largest container line. OOIL’s controlling shareholders agreed to sell their 68.7% stake to COSCO Shipping. Shanghai Port International Group will acquire a 9.9% stake. COSCO shipping will have a fleet of more than 400 vessels and capacity exceeding 2.9 million TEU.
Real estate
- Shanghai-based Greenland Holdings, China’s fourth-largest developer by sales, has agreed to sell its property management unit to its Guangdong rival Agile Property Holdings, raking in a one-time gain of CNY993 million. Greenland Property Service, which currently manages properties covering a total 4.17 million square meters, reported net profits of CNY2.86 million in 2016. Its net assets are valued at CNY6.5 million. Last month, Fitch Ratings downgraded the long-term foreign- and local-currency credit rating of Greenland Holding to BB, from BB+, driven by the developer’s persistent high leverage. In 2016, Greenland reported its profits rose 5% from a year earlier to CNY7.2 billion, as sales climbed 19% to CNY247.2 billion.
- An ageing population, people’s increasing demand for better life, and rising awareness about environment protection have become the key driving forces for China’s property management industry. The China Index Academy predicted that the property management market in China could amount to CNY1.2 trillion a year.
- New home sales more than halved in the first six months of this year in Shanghai as the toughest-ever measures to cool an overheated housing market kicked in. Sales of new residential properties, excluding government-subsidized affordable housing, totaled 3.57 million square meters, or about 29,300 units, between January and June, a plunge of 52.8% in area and 51.8% in units from the same time last year, Shanghai Homelink Real Estate Agency Co said. In June, about 686,100 sq m of new homes were sold across the city, a fall of 3.4% from May and 45.1% from the same period a year earlier. About 620,300 sq m of new houses were released onto the market in June, down 15.2% from May.
- China Evergrande Group’s first-half contracted sales rose 72% in the first half from a year earlier to CNY244 billion, representing 54% of the company’s annual sales target of CNY450 billion. Evergrande achieved sales of CNY61.1 billion in June, up 95% from a year earlier. Growth in terms of floor area was up 44% to 6.05 million square meters. The heavily indebted developer said it had paid back all its perpetual bonds, amounting to CNY112.94 billion. Evergrande will speed up releasing projects in the second half, planning to launch sales of 233 new residential projects, compared to 79 projects in the first six months. The company expects full year contracted sales to reach CNY500 billion.
- According to the China Real Estate Information Corp (CRIC), Country Garden was the best performer among mainland Chinese developers in the first half of 2017. Its contracted sales more than doubled to CNY284 billion by the end of June, followed by China Vanke and Evergrande. Total sales of the top 10 developers amounted to CNY1.5 trillion, rising 58% from a year earlier.
- Both land transaction fees and the average price of land in 300 cities in China rose in the first half of 2017, with lower-tier cities experiencing the fastest growth. According to the China Index Academy, the combined income from leasing land in China was CNY1.5 trillion in the first half year, a 34% year-on-year increase. About 374 million square meters of land were transacted across China. The average price was CNY2,249 per sq m, a year-on-year increase of 40%.
- Two parcels of land in Shanghai are being leased for “rental residential projects”, the first of its kind in the city. Two parcels, 65,000 square meters in Pudong district’s Zhangjiang science park area and 28,500 sq m in Jiading district, would be leased for 70 years. The properties to be built on the land cannot be sold. Shanghai is taking measures to promote the rental market. So far, 10 of the top 30 developers in China have tapped into the rental market across China.
- Sales of pre-occupied homes fell for the third consecutive month in Shanghai in June as sentiment among buyers stayed subdued. Across the city, about 12,200 units of existing houses changed hands last month, a month-on-month fall of 16.6% and a year-on-year plunge of 49.9%, Shanghai Homelink Real Estate Agency said. Last month’s data was the third-lowest June figure since 2011. For the first half, a total of 79,300 second-hand houses were traded in the city, a drop of 55% from same period a year ago.
- Investor interest in the Shanghai office market stayed strong in the second quarter despite high prices and lower transaction volumes, according to JLL. En-bloc real estate investment deals covering all property types in the second quarter totaled CNY19.4 billion, a decrease of 2.8% from the first quarter, but a year-on-year surge of 47.2%.
- Over the next five years until 2020, Shanghai plans to add about 1.7 million new housing units to the market, an increase of 60% from the previous five-year period. To facilitate the growth, a total of 5,500 hectares of residential parcels will be released to the local land market between 2016 and 2020, an increase of 20% from the 12th Five Year Plan (2011-2015) period.
Retail
- The Golden Jaguar buffet restaurant chain has closed its Yan’an Road W. outlet in Shanghai, along with other outlets, leaving diners who bought prepaid cards in the dark. Employees have not been paid for more than three months. All four Beijing outlets are also shut. The chain once had 26 restaurants in China.
Science & technology
- More high schools in China are offering Russian courses as student interest in the language grows in secondary schools. “One of the key reasons is that implementation of the Belt and Road Initiative has facilitated close exchanges and cooperation between China and Russia, as well as with other countries like Kazakhstan and Ukraine, where the language is also used,” said Huang Mei, Director of the School of Russian Language and Culture at the Beijing Foreign Studies University.
- The Chinese communications satellite ChinaSat 9A, which ended up in the wrong orbit after the unsuccessful launch of the Long March 3B on June 19, has now been placed in the correct orbit by activating thrusters on the satellite. But the launch of an experimental satellite – the Shijian-18 – atop a Long March 5 Y2 rocket failed. The two failures have raised concerns about possible delays to China’s ambitious space missions, which include lunar exploration.
- Four students from the Beijing University of Aeronautics and Astronautics entered the Lunar Palace-1 with the aim of living self-sufficiently for 200 days and find out how it feels to live in a space station on another planet, recycling everything from plant cuttings to urine. The experiment will also test how the participants react to living for a period of time without sunlight.
- China’s first city-wide commercial communications system using “unhackable” quantum technology is expected to be up and running next month. Tests on the system in Jinan in Shandong province had been completed. The network will provide extremely secure communication for nearly 200 users in the government, military, finance and electricity sectors.
Stock markets
- In the latest exchange rules to crack down on trading halts, stock trading suspensions cannot exceed three months in principle. As of July 3, 248 out of the 3,235 China-listed companies were suspended from trading.
- Chinese and Hong Kong investors dumped tech shares on July 4, after the People’s Daily labelled Tencent’s popular online game Honor of King’s a “poison” and called for tighter industry regulation. In Hong Kong, the Hang Seng Index declined 395.16 points, or 1.5%, to end at 25,389.01, marking the steepest percentage decline since mid-December. Tencent finished down 4.1%, its biggest fall in nearly 17 months, wiping out more than HKD100 billion of market capitalization.
- China will nearly double its quota for overseas investors to buy securities on the mainland through Hong Kong to forge closer financial links between the two, the People’s Bank of China said (PBOC). The government has approved an increase in the quota under the Renminbi Qualified Foreign Institutional Investor (RQFII) program for Hong Kong to CNY500 billion from CNY270 billion. The RQFII program now covers 18 areas, with Hong Kong allocated the largest of the total CNY1.74 trillion quota. The U.S. allocation is CNY250 billion, followed by South Korea with CNY120 billion.
- China’s finance regulators have uncovered CNY80 billion worth of “rat trading” since 2014. Rat trading in China essentially refers to a form of misconduct in which traders at a financial institution build a position with their own money, and then use investors’ funds to elevate the share price. It is more commonly referred to in western markets as front-running.
Travel
- The first bullet train linking Beijing and the Xiong’an New Area has been put into service. The journey takes 1 hour and 50 minutes. The train’s terminal is Baoding Railway Station in Hebei province. The ticket fare for an economy seat on the bullet train from Baiyangdian to Beijing is CNY45. The establishment of the new area was announced in April.
Short news
Jul-03-2017 By : fcccadmin
Automotive
- China is extending its lead in the development of new-energy vehicles (NEVs) this year, mainly driven by rapid market growth and increasing battery production, a report by German consulting firm Roland Berger said. The country is expected to see annual NEV production and sales quadruple to pass 2 million units by 2020, according to an industry development plan by the Ministry of Industry and Information Technology (MIIT). China has set a target of electric vehicles accounting for 15-20% of total car sales in 2025 and 40-50% in 2030, Roland Berger said in its report.
- Chinese automaker Geely has signed an agreement with Sweden to set up an innovation center. Based in Gothenborg, the 70,000-square-meter center will be Geely’s largest investment in a research facility in Europe. Geely has four design centers in Sweden, Shanghai, Barcelona and California.
Finance
- A Shanghai court has sentenced three Australian and 13 Chinese employees of Australia’s Crown Resorts to nine to 10 months in prison after they pleaded guilty to gambling-related charges. Jason O’Connor, Manager of Crown Resorts’ international VIP programs, was sentenced to 10 months and fined CNY2 million. Their time spent in detention since October 14, 2016 will count toward their sentences. O’Connor, who is based in Melbourne, Australia, was ordered to be deported. The 16 were also fined a total of CNY8.62 million.
- Yishidun, an international trading company that illegally profited more than CNY389 million from futures market manipulation, faces seizure of its ill-gotten gains and a CNY300 million fine, according to the Shanghai No.1 intermediate People’s Court. Two former executives, Gao Yan and Liang Zezhong, were granted three-year reprieves from jail sentences of three years and two and half years respectively. Gao was fined CNY1 million and Liang CNY800,000.
- China Bohai Bank, one of China’s 12 national joint-stock banks, is preparing for an initial public offering (IPO), Chairman Li Fu’an said. Standard Chartered Bank (Hong Kong) is its second-biggest shareholder, with a 19.99% stake. Bohai Bank, based in Tianjin, was the first Chinese-funded commercial bank to introduce overseas strategic investors.
- The yuan will not suffer a sharp depreciation in the coming one or two years and its internationalization remains an “irreversible trend”, said Li Daokui, former PBOC Advisor and Dean of Schwarzman College at Tsinghua University. Eswar Prasad, Professor of Trade Policy at Cornell University in the U.S. concurred, saying “I don’t see much space for a fluctuation of the yuan”.
- The Chinese mainland-Hong Kong bond connect program was launched on July 3. It allows for qualified overseas investors to invest in the Chinese interbank bond market. Overseas investors should register the bonds they purchase under qualified overseas trusteeship bodies.
Foreign investment
- China’s direct investment in the United States will fall this year under tightening scrutiny and regulation, but U.S. investment in China will remain robust led by technology and consumer goods, according to a new study by the Rhodium Group and the National Committee of U.S.-China Relations. Last year, China poured USD46 billion into the U.S., three times that of 2015. Information communications technology was the largest sector for U.S. investment last year, while real estate and hospitality were the favorites for Chinese investments in the U.S.
- Finnish company Nokia, once a dominant global player in mobile phones, is planning a strong comeback in China’s consumer electronics market as it seeks investment opportunities in digital health and virtual reality (VR). Last week, Nokia Technologies launched a portfolio of digital health products on the Chinese market, including wi-fi connected scales, a blood pressure monitor and the Nokia Health Mate app.
Macro-economy
- President Xi Jinping called for more coordinated efforts to implement the reform agenda in key areas such as the restructuring of state-owned enterprises (SOEs) and improving the supervision of outbound investment. Mixed-ownership reform should be accomplished by the end of this year, according to a statement released after the 36th meeting of the Central Leading Group for Deepening Overall Reform, presided over by Xi. Key areas that need attention include improving the corporate governance structure, strengthening supervision of corporate restructuring, and also protecting the interests of employees, the statement said.
- China’s major industrial companies – with an annual revenue of more than CNY20 million – posted faster profit growth in May, supported by larger sales and better investment returns. They reported profits totaling CNY626 billion in May, up 16.7% year-on-year – a growth 2.7 percentage points faster than in April. The NBS data showed 38 of the 41 surveyed industries reported growth in profits, led by the coal and metal industries. January-May total profits rose 22.7% to CNY2.9 trillion. Profits at China’s state-owned enterprises (SOEs) were up 53.3% to CNY652 billion in the January-May period. Private companies’ reported profits grew 14% to CNY963.1 billion in the first five months.
- The Chinese economy is expected to enjoy stable growth and is capable of reaching the growth target of around 6.5% for the whole year, according to the research institute of the Bank of China (BOC). It predicted that China’s economy would expand by around 6.8% year-on-year in the second quarter and by 6.7% in the third quarter. The economy will grow this year at an annual rate of 6.8%, the report added.
- The official manufacturing purchasing managers index (PMI) came in at 51.7 in June, which was better than expected. It was also at its highest mark in three months and signaled that growth in the economy is picking up, despite financial tightening. New orders in June increased to 53.1 from May’s 52.3, while export orders jumped to 52, 1.3 points higher than in May. “Exports have recovered at a pace that beats market expectations,” said Ren Zeping, Chief Economist of Founder Securities. The service sector saw robust growth last month, with the sub index coming in at 53.8, up from 53.5 in May.
Mergers & acquisitions
- Yanzhou Coal Mining has won a take-over battle after sweetening its offer at the eleventh hour for coal assets in Australia sold by Rio Tinto. Rio Tinto confirmed Yancoal Australia to be the preferred buyer of its power-station coal mining unit Coal & Allied Industries, citing a “high level of completion certainty, a further improved offer of USD2.69 billion, with all regulatory approvals received or waived”. The Coal and Allied acquisition will add 556 million tons of “marketable” coal reserves on top of Yancoal’s current reserve of 274 million tons, and more than double its output.
Real estate
- SOHO China has sold a mixed-use office and retail complex, Hongkou SOHO in Shanghai’s Hongkou district, to Keppel Land China, a wholly-owned subsidiary of Singapore-based Keppel Land and Alpha Investment Partners, a wholly-owned subsidiary of Keppel Capital Holdings, for CNY3.6 billion. The average selling price of the building, designed by Japanese architect Kengo Kuma, was around CNY51,000 a square meter based on leasable gross floor area – 53% higher than the cost, SOHO China said in a statement.
- Home buying sentiment rose for the first time in four weeks in Shanghai amid a strong recovery in home sales in outlying areas. The area of new residential properties sold, excluding government-subsidized affordable housing, jumped 33.5% to 159,000 square meters in Shanghai in the week of June 19, Shanghai Centaline Property Consultants Co said. “The latest rebound was mainly fueled by largely improved transactions in remote districts such as Jiading and Qingpu. However, the recovery might be just a temporary one as the traditional low season of July and August is approaching.
Retail
- A survey by Channel News Asia showed that 60% of Chinese consumers prefer foreign brands over local brands. Liu Shijin, Vice Chairman of the China Development Research Foundation told a panel at Summer Davos in Dalian that Chinese consumers will probably warm more to domestic brands in three to five years. “Chinese consumers have three advantages in a global context: first, their scale, the largest in the world; second, they are increasingly picky and quality conscious; and third, they actively embrace innovation,” Liu said.
- Shanghai tops other cities in the dining consumption index of Alibaba’s lifestyle service unit, Koubei. Diners in Xiamen, Guangzhou and Tianjin prefer Western food more than consumers in other regions, while Shanghai residents favor Cantonese and Sichuan cuisine. Last year, China’s dining and catering industry was worth CNY3.5 trillion, according to the National Bureau of Statistics (NBS).
Science & technology
- Shenzhen-based drone maker DJI Innovation Technology signed a memorandum of understanding with Dow AgroSciences to work on the research and application of crop protection drones and technology. DJI is the world’s largest drone maker, accounting for 70% of the global consumer drone market. Its MG series crop protection drones will be used in cooperation with Dow. China has the largest number of agricultural drones worldwide.
- China was the world’s second biggest investor in artificial intelligence (AI) enterprises last year, injecting USD2.6 billion into the sector, according to Chinese think tank the Wuzhen Institute. The U.S. topped the list with USD17.9 billion.
- ZTE, China’s largest listed telecommunications equipment maker, will earmark at least CNY2 billion every year through 2020 for 5G research and development, revving up to commercialize the next generation mobile technology that could be 20 times faster than current standards.
Stock markets
- Initial public offerings (IPOs) will slow down in China in the second half with tighter criteria to help stabilize the market amid slower growth and tightening liquidity, Ernst & Young said. The number of A-share IPOs quadrupled in the first half from the same period of last year to 246, raising a combined CNY125.6 billion. But a slowdown of iPOs already started in the second quarter when major economic indicators began to moderate and financial regulators tightened policies to accelerate deleveraging. The China Securities Regulatory Commission (CSRC) rejected 14% of iPO applications in the first half, twice the number of last year.
- There is likely to be a rash of new technology sector initial public offerings (IPOs) over the next 12 to 18 months, especially by companies already backed by China’s technology giants. Research firm CB Insights says that out of the 46 “unicorns” in China, 21 are backed by China’s Big Four internet giants, Alibaba, Baidu, JD.com, and Tencent or their affiliates, such as Ant Financial. Likely IPO candidates include: logistics company Best; Zhong An Online Property and Casualty Insurance, the first online-only insurer in China; China Reading, the country’s largest online publishing and e-book company; Sogou, China’s third-biggest search engine; and Ant Financial, the online finance arm of Alibaba.
- Zhong An Online Property and Casualty Insurance, China’s first online-only insurer, is seeking to raise USD1.5 billion by listing in Hong Kong. Founded in 2013, Zhong An’s largest shareholder is Alibaba’s financial-services affiliate Ant Financial, which has a 16% stake. Tencent, and Ping An Insurance, China’s second largest insurer, are the joint-second largest shareholders, each with 12.08%. If the deal goes through, Zhong An will be the first financial technology company to be listed in Hong Kong.
- HSBC and Bank of East Asia (BEA) have both received approval to establish their securities joint ventures in the Qianhai economic zone. Both lenders will partner with Qianhai Financial Holdings, a wholly-owned subsidiary of the economic zone. It has taken over a year and a half for the two banks to get the go-ahead from the China Securities Regulatory Commission (CSRC). BEA will own 49% of its venture, East Asia Qianhai Securities, but will be the largest shareholder. Qianhai Financial Holdings will own 4.9%, while Shenzhen Infogem Technologies and Chenguang Holding Group have 26.1% and 20% respectively. HSBC will own 51% of its joint venture, HSBC Qianhai Securities. The bank said that would make it the first foreign lender to hold a majority stake in a securities joint venture in China.
Travel
- Guangshen Railway Co, which operates a high-speed line between Guangdong and Shenzhen, is part of a consortium that has been shortlisted to run the United Kingdom’s planned HS2 high-speed line between London and Birmingham, the British government announced. It is the first Chinese company to be part of a shortlist for a British rail project. Hong Kong metro operator MTR, accountancy firm Deloitte, and WSP Parsons Brinckerhof are also part of the consortium. The HS2 line is due to start operating by 2026.
- Mobike, one of China’s largest bike-sharing operators, has launched an initial 1,000 bikes in Manchester and Salford in the United Kingdom. Chinese bike-sharing companies have also entered the United States, Singapore and Kazakhstan.
- Hong Kong-based airline Cathay Dragon said it will grow its network in mainland China through the expansion of its code share arrangement with Shenzhen Airlines. The subsidiary of Cathay Pacific Airways will add three mainland cities to its list of destinations, including the eastern cities of Yantai and Jinan in Shandong province, and Harbin in northeast China.
- China Southern Airlines has become China’s first carrier to use facial recognition software in the boarding process, launching the system at Jiangying airport in Nanyang, Henan province. Passengers have their faces scanned in lieu of using boarding passes. The scanning process lasts just one second. The airline developed its new facial recognition software with Baidu and GRG Banking, a Guangzhou-based ATM supplier.
VIP visits
- Chinese President Xi Jinping is setting out on a trip to Russia and Germany on July 3. In Hamburg, he will attend the 12th G20 Summit and is expected to have a side meeting with U.S. President Donald Trump. China’s Ministry of Commerce announced that China and Russia would study the feasibility of linking China’s “Belt and Road Initiative” to the Russia-backed Eurasian Economic Union. As President Xi Jinping visits Russia, the link will be on the agenda during his talks with his counterpart, Vladimir Putin. The Eurasian Economic Union was proposed by Russia, Belarus and Kazakhstan in 2014, aiming to create a single market with a free flow of labor, capital and goods by 2025.
- Chinese President Xi Jinping attended the ceremonies for the 20th anniversary of the handover of Hong Kong to Chinese sovereignty and the swearing-in of incoming Hong Kong Chief Executive Carrie Lam.
Short news
Jun-26-2017 By : fcccadmin
Automotive
- U.S. electric car manufacturer Tesla plans to produce vehicles in China soon at production facilities to be set up in Shanghai’s Lingang Economic Development Zone. According to LMC Automotive Consulting Shanghai, Tesla sold 10,399 cars in China last year, up by 181.7% year-on-year. Assembling vehicles in China would allow the company to avoid a 25% customs tax. Tesla would need to set up a joint venture with at least one local partner. Shanghai-headquartered SAIC Motor would be a natural choice. China sold 507,000 new energy vehicles (NEV) last year, ranking first worldwide. NEV sales in the first five months of this year totaled 136,000, up 7.8% year-on-year. LMC statistics show that 95% of new energy cars sold in China are priced under CNY100,000, while a Tesla S sedan is priced at more than CNY700,000.
- SF Motors, a U.S. subsidiary of Chongqing-based Sokon, has signed an agreement with U.S. heavy vehicle and contract automotive manufacturer AM General (AMG) to buy the latter’s commercial assembly plant in South Bend, Indiana, for USD110 million. AMG is best known for the Hummer, its civilian vehicle, and the Humvee, the military heavyweight. The deal does not impact AMG’s military vehicle assembly plant or its core military vehicle business.
Finance
- Chinese investors are expected to remain conservative as more than 68% of their investments are in defensive assets, according to Legg Mason, a U.S.-based asset management firm. Chinese invested in cash (23.8%), fixed income (27.5%), investment real estate (10.7%) and gold or precious metals (6.4%). “A significant portion of Chinese investors are bullish on domestic assets. Besides local business investment, Chinese investors also believe domestic stocks offer the best opportunities over the next 12 months,” said Freeman Tsang, Director of Business Development at Legg Mason Global Asset Management.
- A gold futures contract based on China’s yuan-backed gold benchmark price is expected to be listed on the Budapest Stock Exchange in Hungary as soon as the second half of this year, according to Jiao Jinpu, Chairman of the Shanghai Gold Exchange (SGE). SGE is considered the world’s largest physical bullion exchange. The yuan-backed benchmark fix, launched by the SGE in April 2016, reflects Beijing’s hopes of reducing its reliance on U.S.-dollar based prices of the metal.
- Credit tightening in China will continue as authorities step up efforts to rein in the shadow banking sector, according to the Bank of America Merrill Lynch (BAML). Shadow banking assets in China grew by 21% in 2016, reaching CNY64.5 trillion, equivalent to 87% of GDP, according to ratings agency Moody’s.
- Renminbi yuan internationalization seemed to have slowed in the past year, but behind the scenes China continues to enhance its financial infrastructure so as to increase global usage of the renminbi. The cross-border use of the Chinese currency decreased significantly in 2016. According to SWIFT, the value of international yuan payments fell by nearly 30%, and the yuan is now the seventh-most active payments currency after it began 2016 in fifth place. The stock of renminbi deposits outside mainland China has been shrinking since the beginning of 2015.
- The Bond Connect trading link is expected to be launched in the near future. China’s rapidly expanding bond market is the world’s third-largest, but foreign participation has been limited: international investors own less than 2% of China’s government bond market, compared to 10% in Japan, over 25% in the UK, and nearly 50% in the U.S. The gradual opening up of China’s bond market will offer abundant opportunities to issuers, investors, and all the intermediaries in between.
- Beijing’s push for structural reforms in the economy appears to have sparked a backlash in the form of companies inflating their profitability. An official audit report said that 18 of the 20 state-owned firms that were audited have in recent years inflated their revenues by more than CNY200 billion and boosted their profits by CNY20 billion with faked business and manipulated books. The companies audited include China National Petroleum Corp (CNPC), China State Shipbuilding Corp (CSSC) and Sinochem Group. Lu Zhengwei, Chief Economist from Industrial Bank, said that the fake profits only accounted for a small proportion of the total at the country’s state-owned entities – less than 2% – but nevertheless showed the problems they had deleveraging.
- People with a poor credit rating will be banned from certain markets or industries, serving in certain positions, or carrying out financial business from October 1. They are also banned from “enjoying certain public policies” or gaining honorary titles. Shanghai is the first city where the credit legislation will be implemented.
Foreign investment
- More sectors are now open for foreign investment in China’s 11 pilot free trade zones (FTZs), ranging from helicopter manufacturing to financial services, the Ministry of Commerce (MOFCOM) announced. All activities conducted by foreign firms in businesses not on the negative list only need to be filed at the relevant Commerce Bureau, rather than being reviewed by the government. The Chinese government on June 16 issued the 2017 negative list for its FTZs, which removes 27 items which were in the 2015 edition, leaving 95 areas off-limits to foreign investors.
Foreign trade
- China has proposed three marine passages connecting Asia with Africa, Oceania, Europe, and beyond in a bid to advance maritime cooperation under the Belt and Road Initiative. They are the China-Indian Ocean-Africa-Mediterranean Sea Blue Economic Passage; the China-Oceania-South Pacific Blue Economic Passage; and one that will lead to Europe via the Arctic Ocean.
- Chinese authorities announced that the nation has lifted a 13-year import ban on some U.S. boneless beef and beef on the bone. It is an achievement of the Sino-U.S. 100-day action plan, which aims to boost bilateral economic ties. The removal of the ban applies to cattle under 30 months old. Beef importers should be registered at the Certification and Accreditation Administration of China, and imported cattle must be traceable to their birth farm. China has banned imports of most U.S. beef since 2003.
Health
- Tsinghua Tongfang Co is planning to acquire a stake in a maker of medical therapies, a deal that has the potential to become the largest-ever investment in a Chinese healthcare company. Tongfang is planning to buy up to 29.9% of Shanghai RAAS Blood Products Co, the two companies said in stock-exchange statements. The stake could be worth more than USD4.4 billion. Shanghai RAAS is specialized in therapies derived from human blood plasma. The Chinese market for blood therapies is expected to grow from USD2.5 billion in 2014 to USD6.2 billion in 2019.
IPR protection
- The Shanghai People’s Procuratorate won the National Public Body Award of the 2017 Global Anti-Counterfeiting Awards from the Global Anti-Counterfeiting Group. The awards ceremony was held in Paris on June 7 – World Anti-Counterfeiting Day.
Macro-economy
- Commercial real estate investment in China will jump 45% to CNY260 billion by 2020 from 2016, property service provider CBRE said. The gateway cities of Beijing and Shanghai, among others, will see a combined 60% of the country’s commercial real estate transaction volume in 2020. Six high-potential cities – Guangzhou, Shenzhen, Chengdu, Chongqing, Tianjin and Wuhan – are forecast to account for 36% of the additional transaction volume, according to the report “Towards 2020: China Investment Strategy.”
Real estate
- Wang Shi, 66, who founded Vanke, the world’s biggest builder of residential homes, said he will step down by the end of June as Chairman of the company, handing the baton to China Vanke’s Chief Executive Yu Liang. The Shenzhen-based developer will hold its annual shareholders meeting on June 30, when 11 candidates will stand for election to Vanke’s Board of Directors. Wang will not be among the candidates.
Retail
- E-commerce firm JD.com reported its sales during the mid-year online shopping festival “6.18” between June 1-18 reached CNY119.9 billion and more than 700 million items have been sold. The transaction volume increased more than 50% compared to the same period last year. The top five items on the shopping list of JD consumers were smartphones, air conditioners, flat-panel televisions, refrigerators and washing machines. Sales of products on Tmall’s supermarket increased 13 times compared with the previous year, while Suning saw its orders more than quadruple from a year ago.
- A house at 110 Repulse Bay Road in Hong Kong, measuring 4,120 square feet, with a price tag of USD87.3 million, is the most expensive in the world per square foot. The luxurious waterfront house has four bedrooms and four bathrooms. It has large windows overlooking the South China Sea, an internal staircase, a master room with a walk-in closet, and extra bedrooms to accommodate two domestic helpers.
Stock markets
- Hong Kong has lost its position as the world’s No 1 destination for companies to raise funds, slipping to the No 3 spot behind New York and Shanghai, amid a dearth of blockbuster listings in the first half, according to Thomson Reuters. The city’s stock market raised USD5.8 billion worth of IPOs from the start of the year to June 23, a drop of 19.5% from USD7.3 billion in the same period in 2016. The New York Stock Exchange (NYSE) leapt into the top spot, raising USD18.2 billion, partly due to Snap’s IPO in March, which raised USD3.9 billion. The Shanghai Stock Exchange (SSE) ranked No 2 globally, having raised USD9.6 billion.
Travel
- China Railway Group plans to build a high-speed railway in Russia connecting the country’s third-largest city Yekaterinburg with Chelyabinsk. The project will involve a total investment of USD2.5 billion, according to a memorandum of understanding (MoU) signed between the Chinese company and Ural Highway during the Fourth China-Russia Exposition held recently in Harbin. Trains are expected to run at a speed of up to 250 kilometers per hour, cutting travel time between the two cities to one hour and 10 minutes from five hours. China’s first overseas high-speed rail project was launched in Indonesia in April. In 2016, the company signed overseas contracts worth a record CNY102.5 billion, up 49.6% year-on-year.
- More than 50,000 foreign visitors to Shanghai have used the option of the 144-hour, visa-free transit policy offered at Pudong International Airport, a 70% rise over the same period last year, when visitors were only granted 72 hours and restricted to flying from Shanghai’s two airports. The visa-free transit policy was introduced on January 30 last year, allowing citizens from 53 countries to stay in Shanghai, Jiangsu and Zhejiang without a visa.
- Chongqing-based Wukong Bicycle is thought to be the first cycle-sharing scheme to shut down amid the boom in the services in China, after about 90% of its cycles went missing, presumed stolen, because the firm had failed to install GPS devices in the bicycles.There are now about two dozen similar firms operating bike-sharing schemes around the country.
- China’s controversial “straddling bus” – the elevated vehicle under which cars can pass – has abruptly come to the end of the road. Workers have begun dismantling the test site for the Transit Elevated Bus (TEB). The widely-hyped vehicle in the city of Qinhuangdao in Hebei province went through trial runs on its 300-meter test track last year from August to October. But less than a year after its debut, the giant vehicle will be moved to a nearby parking lot.
- China put two new bullet train models into operation on June 26 on the Beijing-Shanghai high-speed railway. They will travel at a speed of about 350 kilometers per hour, though their maximum speed is 400 km/h. Compared with bullet trains already in service, the new models feature a longer service life. They can operate 30 years, while the existing ones can be used for 20 years. They also have streamlined designs that allow lower power consumption and more space for each passenger. They are designed to Chinese standards. China now operates 124,000 km of rail lines, including more than 22,000 km of high-speed lines, 60% of the world’s total.
Short news
Jun-19-2017 By : fcccadmin
Automotive
- China is planning to draw up standards on smart, internet-connected vehicles as well as autonomous driving. By 2020, the country is expected to formulate at least 30 sets of standards which will basically be capable of supporting driving assistance and low-level autonomous driving, said the Ministry of Industry and Information Technology (MIIT). China is working to build a globally competitive automotive industry, with smart cars as one of its priorities. Last week, the China Industry Innovation Alliance for the Intelligent and Connected Vehicles was established in Beijing.
- Car-sharing platform Ponycar said it plans to launch up to 10,000 electric vehicles in China’s first-tier cities within a year. The Shenzhen-based company has already been offering services in Shenzhen and Guangzhou, with a total of over 2,000 EVs, mostly supplied by Zhidou Electric Vehicle Sales Co and BAIC Motor. Ponycar has so far established a partnership with more than 200 sites in Shenzhen for users to pick up and return the cars.
Finance
- The Ministry of Finance has announced that in the months to come, it will sell its first U.S. dollar denominated sovereign bonds since 2004, along with yuan bonds. The move would mark China’s first overseas issuance of national debt since Moody’s downgrade of the country’s sovereign credit rating in May. The bonds will be sold in Hong Kong to test international investors’ appetite for Chinese government debt.
- The International Monetary Fund (IMF) urged Beijing to resume progress towards a flexible exchange rate, in a subtle criticism of China’s recent interventions in support of the yuan currency. The IMF also said China should speed up reforms to ward off financial risks, after two weeks of discussions with Chinese officials during its annual review of the Chinese economy. David Lipton, First Deputy Managing Director, said that China should gradually strengthen its monetary policy framework, allowing the yuan to move more freely and improving the communication with markets.
- Banks in China lent surprisingly more in May while growth in the money supply slowed to a record low amid deleveraging taking place in the financial sector. New yuan loans totaled CNY1.1 trillion in May, CNY126.4 billion more than the same month last year, the People’s Bank of China (PBOC) said. M2 rose 9.6% year-on-year, the first single-digit gain on record. M2 growth slowed amid tighter regulation to prevent risks, the PBOC said in a statement.
- The Hong Kong Monetary Authority (HKMA) raised its base rate by 0.25 percentage points to 1.5% on June 15 following the U.S. Federal Reserve’s overnight move. Meanwhile, HKMA Chief Executive Norman Chan reiterated his warning to Hong Kong home buyers that mortgage rates will rise in the near future. The HKMA is obliged to follow U.S. interest rates as Hong Kong’s currency is pegged to the U.S. dollar. A number of Hong Kong banks had already raised their mortgage rates in advance of the Federal Reserve’s decision. But China does not need to follow suit by raising its interest rate, said Yu Yongding, former Member of the Monetary Policy Committee of the People’s Bank of China (PBOC).
- Led by China, the Asia-Pacific region (excluding Japan) will surpass Western Europe this year as the world’s second-largest wealth market behind North America, with wealth assets of about USD42.3 trillion by the end of 2017, according to the Boston Consulting Group. The United States and China have the most millionaire households in the world, nearly 7.1 million and 2.1 million respectively. Investors in China and the Asia-Pacific region put about 65% of their assets in cash and deposits with 12% in bonds and 23% in stocks.
- The European Central Bank (ECB) announced that it will diversify some of its foreign exchange reserves into the Chinese yuan. The ECB invested €500 million of its foreign reserves in renminbi assets during the first half of 2017. The ECB sold a small portion of its U.S. dollar holdings, which remain its largest portfolio, leaving the overall size of the ECB’s foreign reserves unchanged. The new investment only accounted for 1% of the ECB’s total €68 billion in foreign exchange reserves, but it is significant for the yuan’s internationalization. The National Bank of Belgium also announced it completed foreign reserve investments in yuan during the first half of 2017 as part of its diversification strategy, buying €200 million worth of yuan.
- Hong Kong, which just joined the Beijing-led Asian Infrastructure Investment Bank (AIIB), is now lobbying the bank to set up a regional office in the city, and is also seeking to have an alternate Governor on the bank’s board. Hong Kong agreed to pay USD155 million for a stake of less than 1% in the AIIB.
Foreign investment
- Shenzhen China Star Optoelectronics Technology Co, a major Chinese display panel manufacturer, started construction on a sixth-generation LTPS AMOLED display panel production line in Wuhan, Hubei province. The move aims to break the monopoly of South Korean companies in the area of flexible display panels for smartphones. At full production, the company will satisfy about 5% of the total global demand of the AMOLED smartphone panel industry. Samsung Electronics currently has a marketshare of around 90%.
- Foreign direct investment (FDI) in China dropped 3.7% year-on-year in May to CNY54.67 billion, extending a downward trend. In the first five months, FDI inflow shed 0.7% from the same period in 2016 to CNY341.08 billion, while 12,159 new foreign-funded enterprises were set up, up 11.9%. Despite a drop in the overall FDI, foreign investment in the service sector, especially in the high-tech and modern service industries, continued to grow steadily. In the first five months, the high-tech service sector attracted CNY48.64 billion of foreign capital, up 20.5% year-on-year. Investment from the European Union grew 6.2% in the January-May period.
Foreign trade
- The United States moved one step closer toward resuming its beef export to China after the U.S. Department of Agriculture said trade rules have been finalized, adding that it has reached agreements with China on final details of a protocol to allow it to export beef to China. China imposed a ban on U.S. beef in December 2003 after mad cow disease was found in U.S. cattle. Before the ban, the United States was China’s largest supplier of imported beef.
- China and Singapore will do their best to expedite talks on the Regional Comprehensive Economic Partnership (RCEP) agreement, Singapore Foreign Minister Vivian Balakrishnan said, calling the potential pact a statement on the importance of free trade, after U.S. President Donald Trump’s withdrawal of the U.S. from the rival Trans-Pacific Partnership (TPP) trade agreement, to which China is not party. RCEP is less comprehensive than TPP and the main focus is on reducing tariffs. Coverage of services is more modest than in the TPP.
- China plans to import two new varieties of genetically-modified crops from the United States, as it accelerates a review of biotech products. China’s Ministry of Agriculture gave permits to two U.S.-based agriculture companies, Monsanto and Dow AgroSciences, to ship their soybeans and corn to China from June 12. The Ministry said it also renewed import approvals for 14 other GMO crops.
Health
- In Shanghai the average number of hospital visits last year dropped by 30% among local residents who signed an agreement for general physician (GP) service, officials from the Shanghai Health and Family Planning Commission said. Shanghai started in 2015 to introduce its health reform system aimed at encouraging people to make more use of their local GPs. The system also allows patients to get medicines – normally only available at leading hospitals – at their neighborhood health centers.
IPR protection
- The Ivanka Trump brand has won approval for four more trademarks since April 20 despite repeated questions from lawmakers about whether she is using her position as a White House Adviser to help her company. Ivanka Trump Marks has at least 24 trademarks that were granted provisional or full approval in China, plus 43 pending marks and three invalid marks, according to the Trademark Office. The trademarks cover wedding dresses, jewelry, bags, spa services, real estate, financial services, construction, furniture, carpets and alcohol.
- Yiwu leads Chinese counties in trademark registrations for the 4th year. Companies in Yiwu have registered 91,919 trademarks, topping all county-level areas in China.
Macro-economy
- Two more provinces – Inner Mongolia and Jilin – have been found falsifying economic data, dealing a fresh blow to central government attempts to improve the credibility of China’s statistics. Inner Mongolia reported a 7.2% rise in its gross domestic product (GDP) last year, while Jilin said it grew 6.9%. Both beat the national average of 6.7% last year. Local government officials have been known to over-report economic growth and industrial output while under-reporting unemployment and accidents.
- Seven Chinese provinces and cities have increased their minimum wages this year, with wages in Shanghai, Shenzhen and Tianjin now exceeding CNY2,000 per month. Tianjin’s monthly minimum wage will be raised from CNY1,950 to CNY2,050 starting from July 1, and that of Shenzhen has gone up to CNY2,130 from June 1. In April, Shanghai increased its minimum wage from CNY2,190 to CNY2,300, the highest among the seven cities and provinces.
- China’s entertainment industry will be worth CNY1 trillion by 2020, almost triple last year’s valuation. Booming web dramas, online paid subscriptions, and new capital and companies entering the sector are behind the rapid financial growth, industry officials said during the Shanghai TV Festival.
- China’s value-added industrial output rose by 6.5% year-on-year in May, flat with April’s figure. Industrial output of state-owned enterprises (SOEs) rose 6.2% in May, that of joint stock enterprises grew 6.8%, while foreign and off-shore-investment enterprises posted a 5.9% increase. Retail sales rose 10.7% in May, flat with April’s. Fixed-asset investment (FAI) rose 8.6% year-on-year in the first five months. Investment by the private sector, which accounted for more than 60% of the total FAI, rose 6.8% annually.
- The International Monetary Fund (IMF) raised its forecast for China’s 2017 economic growth to 6.7%, its third increase this year, citing “policy support, especially expansionary credit and public investment”. China’s economy grew a faster-than-expected 6.9% in the first quarter of this year, well above the government’s target of around 6.5% for the full year.
- Sales of excavators in China surged 106% in May from a year ago and their annual sales continued to grow over the past nine months amid demand from the infrastructure and property sectors. More than 11,280 excavators were sold in China in May and 21 of the 26 main brands posted sales growth. China enjoyed annual sales growth of above 50% over the past nine months. Only 6.9% of the excavators sold were being exported last month. Investment in China’s infrastructure totaled CNY3 trillion over the first four months, up 23.3% from the same period a year ago.
- Alibaba Group Holding and Huawei Technologies have topped this year’s rankings of the most coveted employers for China’s university students. About 80,000 students from 110 universities participated in the annual online poll, which Sweden-based employer-branding company Universum has conducted in the country since 2006 to track the career aspirations of the domestic market’s future talent pool. The percentage of Chinese students who want to work for a start-up or build their own business after graduation has reached a historic high of 20% this year.
- Of the 70 or so economic indicators produced by various Chinese government agencies, three are particularly untrustworthy – the figures for the jobless rate, fixed asset investment (FAI) and personal income, according to a research note published by China International Capital Corporation (CICC).
Mergers & acquisitions
- Honghua Group, China’s largest onshore oil rigs exporter, is on its way back to profit after being integrated into the China Aerospace Science and Industry Corp (CASIC) – one of China’s two main state-owned aerospace and defense equipment makers. The previously privately-held company would now be able to secure orders from state oil and gas producers, which had shunned private sector suppliers in the last few years amid Beijing’s anti-corruption drive. Strategic cooperation agreements signed early this year by CASIC with China National Petroleum Corp and China Petrochemical Corp will help re-open doors for business in the domestic market, said Honghua Chairman Chen Yajun.
Real estate
- Soho China has launched its newest commercial complex in Shanghai’s Changning district. With a total gross floor area of around 170,000 square meters, Soho Tianshan Plaza comprises 74,000 square meters of Grade A offices and 17,000 sq m of high-end retail and hotel space.
Retail
- Chinese consumers’ spending on luxury goods is set to double to CNY1 trillion by 2025, or 37% of the overall global luxury market, McKinsey said in a report. Chinese consumers will account for most of this CNY2.7 trillion growth in value of the global luxury goods market. Around 7.6 million Chinese households spent an average of CNY71,000 on luxury goods per year, according to McKinsey.
Science & technology
- China launched its first X-ray space telescope on a Long March-4B rocket from the Jiuquan Satellite Launch Center in the Gobi desert. The 2.5-ton Hard X-ray Modulation Telescope (HXMT) was sent into an orbit of 550 kilometers above the earth to help scientists better understand the evolution of black holes, and the strong magnetic fields and the interiors of pulsars. It acts as a small observatory in space, carrying three detectors. Compared to other astronomical satellites, the HXMT has a larger detection area, energy range, and wider field of view.
Stock markets
- The Shanghai SE 50 Index, dubbed China’s “nifty 50” index, slumped 1.5% on May 14 in its worst day since mid-December, as investors took profits in blue-chips which had far outperformed the broader market in the past months, and dumped stocks partly owned by Anbang Insurance Group, after Chairman Wu Xiaohui was placed under investigation.
- Zhong An Online Property and Casualty Insurance, the first online-only insurer in China, could list its shares in Hong Kong as early as July or August, raising up to USD2 billion. If successful, Zhong An would be the first online insurance stock in Hong Kong. Major shareholders include Alibaba’s financial-services affiliate Ant Financial, which has a 16% stake, as well as Tencent, Ping An Insurance, China International Capital Corp (Hong Kong), Morgan Stanley and other private equity funds.
- The China Securities Regulatory Commission (CSRC) has imposed CNY6.14 billion of fines on rule violators in the first five months – a daily average of CNY40 million. The total is set to “again hit an all-time high” in 2017, said CSRC Deputy Chairman Jiang Yang. Total fines in the first five months were already 43% higher than those for all of 2016. In 2016, the CSRC issued 183 penalties for illegal market activities and fines totaling CNY4.28 billion.
Travel
- The local government of Tianjin has asked all employees in public sectors, including government departments, state-owned enterprises (SOEs), and affiliated organizations, to report any overseas trips, a sign of tightening regulations on government workers amid the ongoing anti-graft drive. It also stipulates that employees can only go abroad once a year. Other cities have also issued strict regulations on overseas travel for public servants.
- Beijing’s first mid-to low-speed magnetic levitation (maglev) railway line is preparing for its debut later this year. Services on Line S1 will run from Shimenying station in western Mentougou district to Pingguoyuan station in Shijingshan district, a transfer station for Line 1. The maglev line will have eight stations over 10.2 kilometers and will run at a maximum speed of 100 kilometers per hour.
- The C919, China’s first homegrown large passenger plane, received another 30 orders from Everbright Financial Leasing Co, a subsidiary of China Everbright Bank Co, lifting its total orders to 600 from 24 Chinese and overseas clients. China Eastern Airlines will be the first to take delivery of the plane, which made its maiden flight on May 5.
- A new high-speed railway will be built soon between Shanghai and Nanjing, Jiangsu province, linking up more cities in the Yangtze River Delta and shortening travel time in the area. The new 274- km line will link Nanjing and Taicang, where the new line will join another railway under construction to reach Shanghai. The new line could further shorten travel time between Shanghai and Nanjing to less than one hour.
- Hong Kong International Airport may be surpassed by Guangzhou’s airport in a few years in terms of passenger volume, according to Hang Seng Management College. Guangzhou’s Baiyun International Airport handled 60 million passengers last year, trailing Hong Kong’s 70 million passengers. But the passenger growth rates suggest it is only a matter of time before Guangzhou, which ranks 15th globally, overtakes Hong Kong in the No 8 spot.
- HNA Group said its shareholders will donate their stakes to the Hainan Province Cihang Foundation, a charity which currently already controls 22.75% of the company, and is already the largest shareholder. The statement came in response to a report published by the Financial Times on June 2, saying that HNA’s largest single shareholder is a “mysterious” businessman named Guan Jun, who was said to control 29% of the company. HNA responded by claiming that Guan is a “private investor” who does not work for the company. HNA said its largest shareholder is the Cihang Foundation, not Guan Jun, and no government officials or their relatives hold shares of the company.
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