Short news
March 13, 2017 Category Short news, Weekly
NPC & CPPCC sessions
- 112 of this year’s NPC Deputies are on Hurun’s list of the richest Chinese, accounting for 3.7% of the total number of deputies, and 97 Members of the CPPCC National Committee are on the list, accounting for 4.3% of the total number of political advisors. Zhang Yong, Vice Chairman of the National Development and Reform Commission (NDRC) said that the private economy accounts for about 60% of China’s economy, 80% of employment and more than 50% of tax revenue.
- China’s fiscal deficit this year is projected to be 3% of GDP, or CNY2.38 trillion. “China’s government debt ratio is relatively low compared with other countries, which leaves enough leeway for further adjustment,” the Minister of Finance said. China will cut taxes and administrative fees by CNY550 billion this year to further reduce the corporate burden and will roll out favorable tax policies to support small innovative and technology companies, Finance Minister Xiao Jie said.
- The economic growth target of around 6.5% set for 2017 is both “necessary and attainable”, He Lifeng, Chairman of the National Development and Reform Commission (NDRC) said. “According to our experience, each 1 percentage point of GDP growth will help create about 1.7 million jobs,” he added. Without quality growth at a reasonable level, China would find it hard to meet the job creation target of over 11 million. He also said that China had invested more than USD50 billion in countries along the Belt and Road since the nation proposed the initiative in 2013.
- China’s mobile phone operators will eliminate charges for domestic roaming and long-distance calls as data services become their major source of revenue. The fees will be canceled as of October 1, said Vice Minister of Industry and Information Technology Chen Zhaoxiong. In 2016, some 9.36 billion gigabytes of data were consumed through mobile internet use, up 123.7% year-on-year.
- President Xi Jinping urged Northeast China to depend on the real economy and push forward supply-side structural reform to revitalize the region’s economic growth, which has slowed in recent years with overcapacity cuts in heavy industries. The northeastern region, consisting of Liaoning, Jilin and Heilongjiang provinces, largely relies on heavy and chemical industries, energy resources, raw materials and a large proportion of state-owned enterprises (SOEs).
- China plans to promote more public-private partnership (PPP) projects, which are still in their infancy in China. A total of 1,351 PPP projects worth CNY2.2 trillion had been signed by the end of last year, with the time frame for implementing such projects growing shorter.
- More young people will go abroad to study in the next five years, according to Yu Minhong, CEO of the New Oriental Education and Technology Group and a Member of the Chinese People’s Political Consultative Conference’s National Committee. He estimates that the number of Chinese studying abroad each year will peak at between 700,000 to 800,000. According to Education Ministry statistics, 544,500 Chinese studied abroad last year, more than triple the 179,800 that sought out education overseas in 2008.
- A proposal was submitted to the CPPCC to translate more of China’s official documents. The number of translation companies in China surged from 18 in 1980 to roughly 73,000 in late 2014. More than 104,000 candidates sat for the China Accreditation Test for Translators and Interpreters (CATTI), rising from about 5,000 in 2004, while the pass rate was less than 20%. Introduced in 2003, the CATTI is the country’s official test for future translators and interpreters of English, French, Japanese, Russian, German, Spanish and Arabic.
- He Yu, Chairman of China General Nuclear Power Corp, has called for the mass production of Hualong One reactors and priority to be given to China’s third-generation nuclear technology in future nuclear power projects. China should build four to six nuclear reactors annually based on the Hualong One design, he said. China added about 8 GW of nuclear power capacity last year,.
- Baidu’s CEO Robin Li has urged the Chinese government to further ease visa restrictions to attract overseas tech workers. He added that U.S. President Donald Trump’s immigration policy offered China “a great opportunity” to attract skilled workers.
- The Chinese government has promised the strictest assessments yet to make sure that its poverty alleviation policies are effective, and warned against irregularities such as the manipulation of figures. Poverty reduction is a key policy aim for the Communist Party and the central government. The official goal is to eliminate poverty, defined as annual income of less than CNY2,300, and build a “moderately affluent society” by 2020.
- China plans to digitalize the registration and licensing of new firms so they could start their businesses quickly. The deregistration process will also be made quicker, simpler and cost-effective, Zhang Mao, Director of the State Administration for Industry and Commerce (SAIC) said.
- China will not suffer labor shortages in the years ahead even though its society is rapidly ageing, Wang Pei’an, Vice Chairman of the National Health and Family Planning Commission, said. He added that the population would peak at 1.45 billion in 2030, 1.4 billion in 2050 and more than 1.1 billion by the end of the century. The labor force, or those aged 15 to 64, accounted for 73% of the population in 2015 and would number 952 million in 2030 and 800 million in 2050.
- China’s court system last year concluded 45,000 graft cases, involving 63,000 people, according to the work report of the Supreme People’s Court. Defendants included 35 former officials at the provincial and ministerial level or above. Courts convicted 2,862 criminals of bribery and concluded 15,000 cases involving corruption in poverty alleviation.
- Google is still in talks with Beijing over its plans to return to the Chinese market, according to Liu Binjie, Standing Committee Member of the National People’s Congress and former Director of the General Administration of Press and Publication (GAPP). Google Scholar is on the priority list for re-entry. “The academic sector will be the first to get through,” Liu said. “China’s focus is on making academic progress, such as academic exchanges as well as exchanges in science and culture, instead of news, information or politics.”
Automotive
- Premium sedans manufactured at the Volvo Cars Daqing plant, in Heilongjiang province, are expected to start selling abroad in May. The plant’s product – Volvo’s new S90 saloon – is selling well in the Chinese market. Staff at the plant increased from 600 to 2,000, with more than 30 foreign nationals. Volvo said it sold 534,332 vehicles globally in 2016, with 99,030 units going to the Chinese market.
- Great Wall Motor, China’s biggest sport-utility vehicle (SUV) maker, is reconsidering its plan to build a plant in Mexico that would have made its bestselling cars for the U.S. market, after tax threats by U.S. President Donald Trump. The company might choose the U.S. instead for its first North American plant, General Manager Wang Fengying said.
Finance
- Citigroup will include China’s bonds in its three government bond indexes – Emerging Markets Government Bond Index, Asian Government Bond Index, and Asia Pacific Government Bond Index – in the wake of the Chinese regulator’s recent signals over a wider opening of the interbank bond market to overseas investors. The U.S. bank said it also plans to add China, South Korea and Israel to a new sub-index of the World Government Bond Index. The sub-index will track 26 global major bond markets, up from 23.
- Dianrong.com, one of China’s largest peer-to-peer (P2P) lending companies, has partnered with Taiwan’s Foxconn Technology Group to expand supply chain finance in China. Their Joint venture Chained Finance plans to create a new online marketplace based on blockchain, the technology behind the digital currency bitcoin. Jacky Lee, Chief Executive of FnConn, a subsidiary of Foxconn, said that Chained Finance would target suppliers of all sizes. Supply chain finance refers to credit given to the small- and medium-sized enterprises that act as suppliers to a large blue-chip buyer.
- Alipay, the mobile payments operator run by Alibaba Group affiliate Ant Financial Services, has further expanded its presence at popular European destinations for Chinese tourists, with the number of stores and restaurants accepting Alipay up tenfold from three months ago. More than 2,000 merchants and restaurants in Europe now accept Alipay payments, compared with just 200 at the end of November. Alipay will also expand the roll out its real-time tax refund services to as many as 12 European airports.
- Banks in China lent more than expected in February as companies started to show signs of a recovery. A total of CNY1.17 trillion in new yuan loans were extended last month, beating market expectations. Although the amount was CNY910 million less than in January, it was CNY439.1 billion more than a year ago.
- M2, a measure of money supply, rose 11.1% year-on-year, slightly slower than January’s 11.3%. “New yuan loans were larger than expected, reflecting strong demand for credit,” Guotai Junan Securities said in a note, adding that there was rapid growth in medium and long-term loans to companies.
- Shanghai is likely to ease limits this year on foreign investment in the banking, securities brokerage, securities fund management, futures trading and insurance sectors, in the China (Shanghai) Pilot Free Trade Zone. The move is in line with the launch of updated guidance on foreign investment in the free trade zone.
Foreign investment
- Foreign-invested companies in Shanghai boosted their profitability last year. Their profits jumped 12.3% year-on-year in 2016 while revenue rose 5.5%, said Shang Yuying, Vice Chairwoman of the Shanghai Commission of Commerce, citing a survey of 15,200 foreign-invested companies in the city. These companies contributed two-thirds of Shanghai’s industrial production as well as two-thirds of foreign trade and a third of tax revenue.
Foreign trade
- Sun Jiwen, Spokesman for the Ministry of Commerce (MOFCOM), urged support for the World Trade Organization (WTO), warning that defiance of WTO rules could lead to a trade war. He added that China firmly supports the WTO and will defend the authority of its rules.
- China’s largest listed telecom equipment maker ZTE has reached a settlement with U.S. authorities over sanctions related to trade with Iran. ZTE agreed to pay a criminal and civil penalty of USD892 million and an additional penalty of USD300 million, which will be suspended for a seven-year probationary period to deter future violations. ZTE Chairman Zhao Xianming said ZTE has established sound relations with its U.S. suppliers and created 130,000 high-tech jobs in the United States. ZTE currently holds about 7% of the U.S. smartphone market.
- China urged the United States to act prudently in the anti-dumping case filed by the Aluminum Association of the U.S. against Chinese aluminum foil product exporters, the first such case this year. The petition concerns the aluminum foil used in a variety of daily and industrial applications, including household foil, flexible and semirigid cookware, product packaging and automotive manufacturing.
IPR protection
- Chinese companies are filing a record number of patents in Europe, in preparation for their international expansion, according to the European Patent Office. The office said Chinese companies filed 7,150 patents with it in 2016, a year-on-year increase of 24.8%. It was the fastest growth rate among the top 10 countries on the office’s patent-filing league table. Huawei Technologies filed 2,390 patents, which was the second-biggest filing by a company globally, after Philips with 2,568 patents.
- Tianjin Seagull Watch Group recently took out insurance for legal fees concerning patent disputes in overseas exhibitions, becoming the first company to file for this type of insurance in China. The insurance was launched by PICC Property and Casualty Co to help Chinese companies to go abroad. It will cover attorney and litigation fees and other legal costs.
Macro-economy
- Sales of excavators in China nearly quadrupled in February from a year ago to the highest monthly growth. A total of 14,530 excavators were sold domestically last month, a surge of 297.65% year-on-year and in line with an annual growth of 17.4% for the government’s infrastructure spending in 2016, GF Securities said in a report. Infrastructure construction “contributes nearly 70% to the heavy machinery demand in many regions in China.” Sany Heavy Industry Co posted a 360% jump in excavator sales from a year earlier in February, its highest monthly growth since it started operation in 1994.
- China’s consumer inflation cooled in February because of lower food prices. The Consumer Price Index (CPI) rose 0.8% year-on-year in February, the lowest since January 2015 and down from January’s 2.5%, the National Bureau of Statistics (NBS) said. The CPI for January and February combined rose 1.7%. The Producer Price Index (PPI) surged 7.8%, the fastest year-on-year increase in more than eight years.
- China’s industrial output for the first two months of the year grew by more than 6%, the National Bureau of Statistics (NBS) said in the latest sign that the economy is stabilizing. Output in the service sector rose more than 8%. Output of most industrial products rose compared with the same period last year. Power generation rose 6.3% year-on-year in the first two months, and freight volume was up 6.9%. Railway cargo volume saw double-digit growth.
Mergers & acquisitions
- China’s technology, media and telecommunications (TMT) overseas merger and acquisitions are expected to increase steadily in 2017, said Deloitte. They grew by a compound annual growth rate of 27% from 2012 to 2016, far exceeding North America, Europe and other regions, according to Deloitte’s “China TMT industry Overseas M&A Report 2017.” “China is showing a growing interest in overseas advanced technology,” said Keat Lee, Deloitte China Consulting Partner.
- HNA Group has acquired an 80% stake in a media company – Beijing Lianban Caixun Cultural Media – that runs the website of Caijing Magazine, one of the most popular and influential Chinese business magazines. HNA’s business now spans aviation, finance, real estate, logistics, hospitality, tourism, ecological technology, and it has now added media.
- Yingde Gases Group’s shareholders voted to end a four-month long boardroom tussle, dismissing Chairman Zhao Xiangti and reappointing to the Board Mark Sun and Trevor Strutt – two co-founders of the company – to pave the way for a sale to Hong Kong buyout fund PAG Asia Capital.
- Eldridge Industries, the U.S. owner of Dick Clark Productions, said that one of its affiliates terminated an agreement to sell off the TV production company to Chinese conglomerate Dalian Wanda Group, after Wanda failed to honor contractual obligations. Dalian Wanda had agreed to a take-over in November of Dick Clark Productions, the company that runs the Golden Globe awards and Miss America pageants.
- Avic International Holdings, an electronics manufacturing unit of state-owned aerospace firm Aviation Industry Corp of China (AVIC), has agreed to buy Xiamen Tianma Microelectronics, the country’s largest flat product display supplier, for CNY10.6 billion. Xiamen Tianma, also the world’s fourth-largest supplier with a 12% share in 2015, supplies displays used in electronic products such as smartphones.
Real estate
- Shanghai posted sales of under 10,000 pre-owned homes for the second straight month in February, and there is no sign of a major recovery soon. Last month, around 9,600 units of pre-occupied houses were transacted, up 2.4% from January but a year-on-year plunge of 64.1%, Shanghai Centaline Property Consultants Co reported.
- China’s land sales in 50 major cities surged 73% in the first two months of 2017 despite measures to cool the red-hot property market. The city governments received a total of CNY452.8 billion from land auctions during the period, up from CNY262.5 billion in the same period of 2016, Centaline Property data shows.“Property developers’ enthusiasm for land-buying is still high,” said Yan Yuejin, Research Director at the Shanghai-based E-house China R&D Institute.
Science & technology
- Chinese scientists have broken two world records in the Mariana Trench in the Pacific Ocean. China became the first country to collect the artificial seismic stratigraphy of the Challenger Deep, the deepest section of the trench measured at more than 10 kilometers. China also set a new world diving record for underwater gliders at 6,329 meters with Hai Yi, a glider designed by the Institute of Automation in Shenyang, Liaoning province.
Travel
- The Mila Mount Tunnel on the Lhasa-Nyingchi Highway is expected to be opened in September, when it will become the world’s highest super-long tunnel. The tunnel is located at the junction of Lhasa and Nyingchi in Tibet at an average altitude of 4,740 meters above sea level. As a key section of the Lhasa-Nyingchi Highway, the two lanes of the tunnel are 5,727 meters and 5,720 meters long respectively.
- China Eastern Airlines has terminated services from Ningbo to Jeju and Cheongju in South Korea from March 15 amid an ongoing boycott of South Korean companies and travel services. Spring Airlines and Okay Airways are also canceling flights. The number of Chinese tourists heading to South Korea is expected to fall by at least half.
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