Are you the publisher? Claim or contact us about this channel


Embed this content in your HTML

Search

Report adult content:

click to rate:

Account: (login)

More Channels


Showcase


Channel Catalog


older | 1 | .... | 38 | 39 | (Page 40) | 41 | 42 | .... | 114 | newer

    0 0

    Chinese premier Li Keqiang will this week announce measures that could boost London's bid to be the leading center for offshore renminbi trading, according to people familiar with the matter.

    Mr. Li, who began a three-day visit to Britain Monday, is expected to confirm China Construction Bank as London's first clearing bank for the renminbi, or yuan, and also increase the size of a program that allows U.K.-based asset managers to invest directly in Chinese shares, these people said.

    Several financial centers are vying to be the global hub for China's currency, including Luxembourg, Sydney and Singapore. London, the world's biggest hub for foreign-currency transactions, has made a strong push to corner a significant chunk of the renminbi business, which is expected to grow strongly along with China's economy.

    "On the internationalization of the renmimbi, all eyes are on the U.K.," said Rongrong Huo, head of renminbi business development in Europe at HSBC Holdings PLC. "London will have a clearing bank, a swap line already signed with the Chinese central bank and strong trading infrastructure."

    In April 2012, U.K. Chancellor George Osborne launched a City of London initiative to develop London into a global center for renminbi trading, with the help of 13 banks, the Bank of England and the Prudential Regulation Authority.

    In June last year, the Bank of England signed a three-year agreement with the People's Bank of China to set up a 200-billion-yuan swap arrangement, the first such agreement between China and a Group of Seven country. Such agreements allow each country's central bank to buy currency from the other, channeling it to domestic banks if needed.

    In October, Beijing granted the U.K. a total allocation of 80 billion yuan for U.K-based financial institutions to invest under its Renminbi Qualified Foreign Institutional Investor program. The program allows yuan funds raised offshore to be invested in domestic securities.

    In January, London-based emerging-market investor Ashmore Group PLC became the first Western investor to be granted access to China's markets under the RQFII program.

    Other cities have also made some headway. Luxembourg, home to the European headquarters of three of China's largest banks, is trying to use the fact that it has a well-established asset-management industry to attract renminbi deposits there.

    France recently unveiled plans to set up a currency-swap line with China similar to the one in place in London. The European Central Bank struck a currency-swap deal with China in October that guarantees the ECB access to as much as 350 billion yuan, while the People's Bank will be able to tap €45 billion ($61 billion) from Europe's central bank.

    London currently leads the way in offshore renminbi trading. About 62% of renminbi trading conducted outside China and Hong Kong was through London in October, up from 54% at the beginning of 2013, according to data from the Society for Worldwide Interbank Financial Telecommunication.

    China's currency still accounts for a small proportion of the $5.3-trillion-a-day foreign-exchange market, at only about 2.2%. But the volume of renminbi trading has grown fast, from $34 billion in 2010 to $120 billion in 2013, according to a report by the Bank for International Settlements.

    That year, the renminbi ranked ninth in terms of trading activity, entering the top 10 for the first time, according to the BIS report.

    Author

    Quick Summary

    China Construction Bank set to become London's first yuan clearing bank.

    Associated image

    Media

    Categories

    Primary category

    Status

    Published

    Content Channel


    0 0

    A Chinese court sentenced three people to death Monday for their role in a deadly car crash near Beijing's Tiananmen Square in October that authorities have said is part of a series of terrorist attacks mounted by separatists from China's western Xinjiang region.

    The court sentenced Husanjan Wuxur, Yusup Umarniyaz and Yusup Ahmat after convicting them of leading a terrorist group and endangering public security, state media reported. A fourth person was sentenced to life in prison and four others received sentences ranging from five to 20 years on similar charges.

    The Intermediate People's Court in Urumqi, Xinjiang's capital, didn't respond to requests for comment, and the defendants' attorneys couldn't be reached.

    The convictions were prominently featured on state television and come amid a yearlong antiterrorist clampdown in Xinjiang that has included arrest sweeps and mass, public sentencing rallies in stadiums.

    The October car crash in Tiananmen was the first among the recent violence to generate public alarm. The perpetrators drove their vehicle onto the sidewalk in front of the Forbidden City gate that bears the portrait of Mao Zedong, and after crashing into a pillar they set the vehicle on fire, officials have said. Three pedestrians died in addition to three occupants of the car and 39 others were injured, according to authorities.

    State broadcaster China Central Television aired a new story Monday about the incident, including footage of a sport-utility vehicle plowing through a crowded sidewalk and images of the car in flames. The report showed a collection of knives and swords it said the group collected and what it described as a terrorism video that members of the group watched.

    The report didn't identify the ethnicities of the six men and two women convicted. Their names suggest they are Uighurs, a predominantly Muslim ethnic minority group. Previously authorities have labeled the Tiananmen incident the work of Xinjiang separatists, and some Uighurs have mounted a sporadically violent campaign against Chinese rule.

    The Tiananmen incident marked the first time in recent years that violence from Xinjiang seemingly spilled over to other parts of China. Subsequently, authorities accused Xinjiang separatists for a stabbing spree in the southwestern city of Kunming in March that left 33 people dead.

    In one of the deadliest attacks, assailants hurled explosives into a street market in Urumqi on May 22, killing 39 bystanders plus four suspects. Afterward President Xi Jinping vowed "to resolutely crush the arrogance of violent terrorists," and antiterrorist crackdowns were launched in Xinjiang while security was increased around railway stations and other strategic spots in many cities nationwide.

    The violence has challenged China's strategy for Xinjiang, which has largely relied on a combination of policing and directed investment to boost the economy and soothe tensions between Uighurs and the country's Han Chinese. Some Uighurs believe Han Chinese are reaping most of the benefits of those efforts.

    Chinese officials have blamed separatist sentiment in part on a radical group called the East Turkistan Islamic Movement, which they have said sometimes operate out of camps in neighboring Pakistan. In late October a top Chinese security official blamed the ETIM for the Tiananmen Square attack.

    On Sunday, Pakistan officials said ETIM members and affiliates were killed by a Pakistani military airstrike aimed at militants in the northwestern region of Waziristan.

    Author

    Quick Summary

    Five others get prison sentences for October car attack that officials labeled terrorism.

    Associated image

    Media

    Categories

    Primary category

    Keywords

    Status

    Published

    Content Channel


    0 0

    Ratings agency Moody’s expects China should be able to maintain its high credit rating as the country rebalances its economy.

    Moody’s says that China’s macroeconomic strengths as well as fiscal and external cushions underpinned its stable outlook but that the success of policy measures would determine the country’s future prospects.

    China’s real GDP growth will edge down to the 6.5 per cent to 7.5 per cent range in this year says the rating’s agency.

    The rating firm said that growth dividends from earlier rounds of reform starting in the mid-1990s have dissipated in the wake of the 2008-09 global financial crisis.

    “The longer-term growth outlook hinges on the success of credit tightening policies and the pace of structural reforms."

    Upward rating pressure could arise if recent reforms announced at last November’s Third Plenum meeting result in a growth dividend says Moody’s.

    Author

    Quick Summary

    Ratings agency expects China to maintain credit rating as the country rebalances its economy.

    Associated image

    Media

    Categories

    Primary category

    Status

    Published

    Content Channel


    0 0

    British energy giant BP will sign a long-term deal with Chinese state-owned peer CNOOC in London to supply China with liquefied natural gas, BP chief executive Bob Dudley says.

    The LNG deal, worth around $US20 billion ($21.64bn) over 20 years, will be signed on Tuesday in front of Prime Minister David Cameron and Premier Li Keqiang during the Chinese leader's three-day visit to Britain, Dudley said on the sidelines of an oil conference in Moscow.

    "BP will be signing an agreement today in front of the Chinese premier and David Cameron in agreement with CNOOC," Dudley told reporters at the World Petroleum Congress.

    "The project has a value over the term of the contract of around $US20 billion.

    "It's a 20-year supply agreement of LNG to CNOOC to take it into southeast China. It is a big deal, a fair price for them, a fair price for us ... and a good bridge between the UK and China in terms of trade," he said.

    British media reported that Royal Dutch Shell would also be signing a deal with CNOOC on Tuesday.

    Author

    Quick Summary

    British energy giant to agree to major supply deal with China for next two decades.

    Associated image

    Media

    Categories

    Primary category

    Keywords

    Status

    Published

    Content Channel


    0 0

    The Chinese telecommunication equipment maker Huawei is persona non grata in the US after its Congress labelled it a “national security threat". However, that won't stop the company and its enigmatic founder from admiring the US and the American way of doing business.

    Ren Zhengfei, the founder of the world’s largest telecommunication gears maker, spoke to the Chinese media for the first time since he started the company 27 years ago. It is interesting that he invited Chinese journalists to attend Huawei's "operational excellence" award ceremony in honour of the 10 Whiz Kids of Ford.

    The Whiz Kids were ten talented former young officers from the US Army Air Force who created a management information system that provided data on airplanes, personnel and munitions to help generals to make decisions. They were hired by Henry Ford II to revitalise the car giant and they were widely credited for transforming Ford. The most famous Whiz Kid is Robert McNamara, who became the president of Ford, the World Bank and the secretary of defence under John F Kennedy.  

    Ren spoke highly of these American whiz kids and their contribution to the advancement of modern corporate management using a data-driven decision-making process. He emphasised the necessity to learn from advanced Western management practices, describing it as the synthesis of hundreds of years of corporate experiences of failures and successes and a treasure trove for humanity.  

    "In the last twenty years, we have spent billions on importing Western management systems from the West," he told a gathering of Chinese journalists. "We must humbly and systematically learn it and it is not possible to innovate and to succeed without a modern management system. We can only march forward on the shoulders of giants."

    Chinese journalists bombarded Ren for over an hour on issues ranging from public listing to succession planning at Huawei. China Spectator will examine the key issues raised at the conference below.

    1. What is Huawei’s succession plan?

    Ren, the founder of Huawei, is already 71 years old, and there is a lot of speculation about succession planning at the world’s largest telecommunication gears maker. Ren hinted strongly that he would not be retiring any time soon, citing examples of Hank Greensberg, the founder of American Insurance Group and a personal friend, who was still running the insurance giant when he was 88 years old.

    Ren also made it clear during the interview that his family members, including daughter Cathy Meng, who is the chief financial officer of Huawei, would not succeed him at the company. The company has a so-called rotating emperors system of three chief executives taking terms to run the company. 

    1. Ren’s love-hate relationship with the US

    There is little doubt that Ren is a big fan of the US and even a personal friend of John Chambers, chief executive of Cisco, Huawei’s arch-rival. He says the US is an example for Huawei to emulate.

    "Its advanced institutions, flexible system, clearly defined property rights, basic respect and protection for human rights. Such a good business environment attracts the best talent from around the world and offers hundreds of millions of people the opportunity to innovate and to compete against each other, such power is enormous," he said.

    IBM has played a key role in transforming Huawei’s management structure since 1998.

    However, Ren didn’t mince his words when he was asked whether the US' decision to exclude Huawei from its market was politically motivated. Huawei has been largely excluded from the US market and the Congress has labelled the company a “national security threat.”

    Ren, a former PLA engineer, believes Huawei is a victim of the power struggle between Washington and Beijing. “The US will push back on China as it gets stronger. The push back is not theoretical and it is carefully calibrated. The strike on Huawei is not about the company, it is about China, the Americans must find a point of attack [Huawei].”

    1. Why is Huawei so media shy?

    Ren only offered three interviews recently to New Zealand, French and British media in light of the company’s increasingly global profile and its alleged link to the Chinese military and intelligence.

    The unassuming business tycoon explains that although the company makes about $45 billion a year in revenue, its main customers, who are mostly large telco operators, number only 350. Segmented marketing makes better sense, he says.

    "I have to face foreign media, because operating conditions abroad force me to do that. I don’t have problems at home, so I don’t have to see you [journalists] but I am afraid of offending you," he told an almost adoring group of Chinese reporters.

    Ren believes the best advertising for the company is the fact that Huawei engineers soldier on during the Libyan civil war as well as the devastating earthquake at Fukushima nuclear plant.

    1. Will Huawei float on the stock market in the future?

    One of the main black marks against Huawei is its opaque corporate structure and the company claims Huawei is collectively owned by 150,000 employees. US legislators and other commentators have suggested a public listing of Huawei as a possible way to address the allegation against its non-transparency.

    Ren pretty much ruled that out as a possibility, at least in the foreseeable future.  He says the company has more than enough cash to bank-roll its growing R&D budget which is expected to be around $8 and $10 billion every year.

    He believes the injection of new equity will seriously undermine the company’s management structure, which he thinks is still a work in progress. “If we change too fast, we stand the real possibility to lose everything that we have built so far. Therefore we will not go into the capital markets and diversify our shareholding,” he said.

    China Spectator will bring you part two of Ren Zhengfei’s interview tomorrow.

    Categories:

    Status

    Published
    Huawei founder Ren Zhengfei admires the American way of doing business but believes the company is a victim of the power struggle between Washington and Beijing.

    Media

    Type


    0 0

    Graph for Alibaba’s benevolent dictatorship

    With the filing of its latest draft prospectus with the US Securities and Exchange Commission, Alibaba has opened a little more of the kimono (or should that be "cheongsam"?) to reveal how the world’s most powerful e-commerce conglomerate will be governed.

    The Partnership

    Most importantly, Alibaba has disclosed details of how the infamous "Alibaba partnership" will operate.

    This was the key issue in the dispute between Alibaba and the Hong Kong regulators. Hong Kong was concerned that Alibaba's corporate governance arrangements, including in particular the Alibaba partnership, violated the "one share, one vote" principle of the Hong Kong rules by effectively enabling a small group of senior management with a minority shareholding to control the company’s board of directors.

    Now we have the opportunity to see for ourselves whether the Hong Kong regulators’ concerns were legitimate.

    The filing reveals that the Alibaba partnership currently comprises 27 members of the Alibaba group’s senior management.

    The partnership itself is governed by a five-person partnership committee, led by founder and chairman Jack Ma, vice chair Joe Tsai and CEO Jonathan Lu. New partners may be admitted to the partnership, subject to approval by the partnership committee and a partnership vote. The partnership itself votes on a “one partner, one vote” basis -- ironically something denied to Alibaba shareholders. The partnership committee also allocates the annual cash bonus pool among partners, and has the sole right to nominate their own successors to the partnership committee.

    But it is the partnership’s director nomination rights that are the centerpiece of the whole arrangement, and again the all-powerful partnership committee is in control.

    Alibaba’s articles of association provide that the Alibaba partnership has the exclusive right to nominate a majority of the members of the board of directors of Alibaba. Board nominees are proposed by the partnership committee, and confirmed by a simple majority vote of the Alibaba partnership. After that, the nominees are put to shareholders for approval.

    But it is here the arrangement takes an unusual turn. One would expect that, if shareholders vote down the director nominee proposed by the partnership, the partnership would have to come up with another nominee and put the nominee to shareholders again, until their proposed directors receive the approval of shareholders. Not so. Under Alibaba’s arrangement, if a partnership director nominee is not elected by shareholders, the partnership has the right to go ahead and appoint their nominee anyway, and their appointee then serves as director until the next annual general meeting – effectively short-circuiting the shareholder approval process. It is no doubt this feature which raised the concerns of the Hong Kong regulators, as it effectively disenfranchises shareholders of their right to vote on who will manage their company.

    Not content with relying on the Alibaba partnership, Jack Ma has built in a series of additional corporate governance controls which render Alibaba immune from activist shareholders, corporate raiders and hostile takeovers. Among them:

    ·         A voting agreement, pursuant to which major shareholders SoftBank and Yahoo (holding a combined 56 per cent of the company pre-IPO) will agree to vote their shares in favour of any Alibaba partnership board nominees.

    ·         A “staggered board” arrangement, which prevents the entire board of directors being removed at the same time (something that a corporate acquirer would seek to do upon taking over the company).

    ·         A “poison pill”, which permits the board to make massively dilutive share issuances without shareholder approval in the event an unwelcome suitor emerges. This also would not be permitted in Hong Kong.

    Alibaba seeks to distinguish its partnership arrangement from the dual-class share structures adopted by many internet companies, perhaps seeing themselves as something of an enlightened oligarchy in contrast to the benevolent dictatorships of Google and Facebook:

    “Unlike dual-class ownership structures that employ a high-vote class of shares to concentrate control in a few founders, our approach is designed to embody the vision of a large group of management partners. This structure is our solution for preserving the culture shaped by our founders while at the same time accounting for the fact that founders will inevitably retire from the company.”

    However, seen in totality, Alibaba’s corporate governance arrangements suggest an insecure and paranoid founder, intent on maintaining control of his company at all costs. As many corporate governance experts and shareholder interest groups will tell him, the best way to maintain control of your company is to do a good job managing it, in the best interests of all shareholders. You would think Yahoo might have given Jack the same advice.

    The Board

    In this latest filing Alibaba has also unveiled the full roster of its board of directors. Seen in the context of our previous speculation at China Spectator that Alibaba is setting itself up for an eventual return to list in Hong Kong, these board appointments make rather intriguing reading.

    Alibaba has appointed three independent non-executive directors, or INEDs, composing one-third of their nine member board. By happy coincidence, this meets exactly the Hong Kong requirements on INEDs, pursuant to which listed companies must have -- wait for it -- not less than three INEDs comprising at least one third of the board.

    (Alibaba has also designated Yahoo founder and former CEO Jerry Yang as an INED, but given Yahoo's substantial shareholding in Alibaba, and Yang's long association with Alibaba through the Yahoo relationship, he would not likely be regarded as sufficiently "independent" to qualify as an INED under Hong Kong rules.)

    What is more, all three of the INEDs appointed by Alibaba have strong Hong Kong connections.

    Former Goldman Sachs vice chairman Michael Evans was based in Hong Kong for many years serving as chairman of his former firm's Asian operations.

    Walter Kwauk was a senior partner of accounting firm KPMG in Hong Kong as well as holding leadership positions in their Beijing and Shanghai operations. As a Hong Kong CPA, Mr Kwauk neatly helps fulfil the Hong Kong requirement that at least one INED hold accounting qualifications.

    But it is Alibaba's final INED appointment that is most intriguing: Mr Tung Chee Hwa, the first Chief Executive of Hong Kong after the Handover to China -- the highest position in Hong Kong's post-1997 government and a post broadly equivalent to that of Governor. While Tung’s standing with Beijing was substantially diminished after he was forced to resign prior to the end of his term in the face of huge public protests in Hong Kong, he remains a classic Hong Kong establishment figure, one of the small group of tycoons and their families who have always run Hong Kong, pre- and post- Handover.

    One wonders why Alibaba should need a figure with such strong Hong Kong connections on their board, someone who could effectively lobby the Hong Kong government and regulators to amend listing rules, grant waivers or accommodations – all in the interests of improving and globalizing the Hong Kong market, for the greater good of Hong Kong, of course. Who knows, maybe he'll come in handy?

    Antony Dapiran is a Hong Kong-based international lawyer.

    Categories:

    Status

    Published
    Alibaba’s corporate governance arrangements suggest an insecure and paranoid founder, intent on maintaining control of his company at all costs.

    Keywords

    Media

    Type


    0 0

    Deals worth billions of pounds between Britain and China have been signed as UK Prime Minister David Cameron and Chinese Premier Li Keqiang held talks in Downing Street.

    Cameron hailed the burgeoning trade links between the two countries, which is "central" to the plan to revitalise the UK's economy.

    "Today we have signed deals worth more than STG14 billion ($A25.6 billion), securing jobs and long term economic growth for the British and Chinese people," Mr Cameron said.

    "Ours is truly a partnership for growth, reform and innovation."

    Mr Cameron added: "In the last few years we have made a huge difference and built a much stronger bilateral and trading relationship between our countries.

    "The figures tell the story - bilateral trade at record levels, our exports to China up 15% in 2013, they have more than doubled in the last five years and at a billion a month, they are growing faster than France's or Germany's."

    Activists campaigning for a variety of causes, including Tibetan independence, staged a colourful and noisy protest opposite the gates of Downing Street while the two men met.

    Protest chants could be heard outside No 10 as Cameron and Li shook hands and posed for photographers at the door.

    Author

    Quick Summary

    UK Prime Minister David Cameron says trade between the two countries is "central" to the plan to revitalise the UK's economy.

    Associated image

    Media

    Categories

    Primary category

    Keywords

    Status

    Published

    Content Channel


    0 0

    China has blocked a shipping alliance between Denmark's A.P. Moeller-Maersk, France's CMA CGM and the Swiss MSC Mediterranean Shipping Company, Maersk says.

    The world's three biggest ocean carriers announced plans for their so-called P3 Network in June last year.

    "Today, the Ministry of Commerce of the People's Republic of China announced that they have not approved the P3 Network," Maersk said in a statement on Tuesday.

    "Subsequently, the partners have agreed to stop the preparatory work on the P3 Network and the P3 Network as initially planned will not come into existence," it added.

    The decision was not expected to impact the group's annual results, said Maersk.

    "The decision does come as a surprise to us, of course, as the partners have worked hard to address all the regulators' concerns," chief executive Nils S. Andersen said.

    The alliance had already been greenlighted by regulators in Europe and the US and would have enabled Maersk to reduce costs and carbon emissions. Andersen said he was "quite confident Maersk Line will accomplish those improvements anyway".

    The group's shipping business has outperformed the troubled sector over the past few quarters partly due to cost cuts.

    Shares in Maersk were down by 6.8 per cent in early afternoon trading on the Copenhagen bourse, where the main index was 0.71 per cent lower.

    Author

    Quick Summary

    China blocks shipping alliance between Denmark's A.P. Moeller-Maersk, France's CMA CGM and the Swiss MSC Mediterranean Shipping Company.

    Associated image

    Media

    Categories

    Primary category

    Status

    Published

    Content Channel


    0 0

    Foreign direct investment (FDI) into China fell 6.7 per cent year-on-year to $US8.6 billion ($A9.30 billion) in May, the government says.

    For the first five months of the year FDI - which excludes investment in financial sectors - was up 1.6 per cent at $US48.91 billion, the commerce ministry said in a statement.

    In April, FDI was $US8.7 billion.

    "Investment from major countries and regions into China generally maintained a stable growth momentum," the ministry said.

    China's top investors in the January-May period were Hong Kong, Taiwan, Singapore, South Korea and Japan, the ministry said.

    Investment from South Korea and Britain jumped 87.9 per cent and 62.2 per cent respectively in the five months, while that from Japan and the United States dropped 42.2 per cent and 9.3 per cent respectively, the ministry said, without providing values.

    Investment from the European Union dropped 22.1 per cent to $US2.58 billion, with that from Association of South-East Asian Nations (ASEAN) countries falling 22.3 per cent to $2.54 billion.

    Foreign investment into China rebounded in 2013 to $US117.59 billion, though slowing growth in the world's second-largest economy could suppress inflows this year.

    China's economy expanded 7.7 per cent in 2013, the same as 2012 - the worst pace since 7.6 per cent in 1999. China's official growth target for this year is 7.5 per cent, also the same as last year's.

    It grew 7.4 per cent in the first three months of 2014, the worst pace since a similar 7.4 per cent expansion in the third quarter of 2012.

    The commerce ministry also announced that China's overseas investment in non-financial sectors in the first five months fell 10.2 per cent year-on-year to $US30.81 billion.

    Investment to the United States rose 144 per cent year-on-year to $US2.03 billion, and that to the ASEAN countries increased 4.2 per cent to $US1.9 billion, it said.

    China's investments into Hong Kong, the EU and Australia fell 32.6 per cent, 9.2 per cent and 3.2 per cent respectively, it said.

    But investment into Russia and Japan leaped by 105.7 per cent and 141.9 per cent "due to low comparison bases last year", it said.

    Beijing has encouraged Chinese companies to "go out" to seal supplies of crucial resources as well as make overseas acquisitions to gain market access and international experience.

    China's total outstanding overseas investment in non-financial sectors as of the end of May stood at $US556.5 billion, the ministry said.

    Chinese outbound investment increased last year, hitting $US90.17 billion, and officials said it could overtake FDI this year.

    Author

    Quick Summary

    China May FDI falls by most in 16 months as economy slows.

    Associated image

    Media

    Categories

    Primary category

    Keywords

    Status

    Published

    Content Channel


    0 0

    Hong Kong-listed Citic Pacific Ltd. has secured US$690 million from 10 new investors, including Internet giant Tencent Holdings Ltd., to help finance its $37 billion acquisition of the assets of its Chinese state-owned parent, Citic Group. 

    Shenzhen-listed property firm Oceanwide Holdings Co., Shanghai-listed garments-to-real estate conglomerate Youngor Group Co. and investment firms Trendfield Inc., out of Malaysia, and Kuok Singapore Ltd. are the top four investors, putting up a combined $400 million. Also among the 10 are Chow Tai Fook Nominee Ltd., a private company controlled by Hong Kong tycoon Cheng Yu Tung, hedge fund Och-Ziff Capital Management Group LLC and Sinochem Hong Kong (Group) Co., an overseas investment arm of Sinochem Group. 

    Last month Citic Pacific, which is also Chinese state-owned, secured $5.1 billion from 15 other investors, including Singapore state investment firm Temasek Holdings Pte. Ltd. and Japan's Mizuho Bank Ltd. 

    These 25 investors have committed to buy a total of $5.79 billion of shares in Citic Pacific, an iron-ore miner, steelmaker and real-estate developer that is taking over its parent's portfolio--including financial-services units such as Citic Securites Co. Ltd. and China Citic Bank. Citic Pacific will fund the rest of the deal by selling shares to one more investor and issuing $29 billion in shares to Citic Group. 

    Upon completion of the deal, which will also leave Citic Pacific with a new name--Citic Ltd.--one of China's premier state enterprises will be effectively listed in Hong Kong and so subject to its enhanced regulatory and shareholder scrutiny. 

    While China has listed many state-owned companies in Hong Kong, only in a handful of cases--namely those of the country's four biggest banks--has the listing been of the holding company rather than just an offshore unit. 

    After it acquires its parents' assets, Citic Pacific said, its pro forma profit for calendar year 2013 will be 48 billion Hong Kong dollars (US$6.2 billion). It earlier posted a net profit for the year of HK$7.6 billion. 

    Independent shareholders having approved the deal earlier this month, it is set to be completed by Aug. 29.

    Categories:

    Status

    Published
    Raises $690 million toward $37 billion purchase of parent's assets; investors include Tencent.

    Keywords

    Media

    Type


    0 0

    Average new home prices in 70 Chinese cities declined in May from April, marking the first monthly decline in two years as property developers rolled out further price cuts amid sluggish demand from home buyers and rising inventory of homes. 

    Average new home prices in 70 cities slid 0.15 per cent month-on-month in May, according to calculations by The Wall Street Journal based on data released today by the National Bureau of Statistics. 

    This marks the first month-on-month decline since May 2012. Prices rose 0.06 per cent month-over-month in April.

    On a year-over-year basis, average prices rose 5.35 per cent in May compared with 6.42 per cent in April and 7.32 per cent in March.

    Many home buyers have retreated to the sidelines since the start of the year amid concerns about stagnant or falling housing prices due to the excessive supply of homes, as well as difficulties in getting loans.

    Average home prices in Shanghai also recorded a 0.3 per cent month-on-month fall, indicating that the weakness in the market is spreading to larger cities. In Beijing, home prices rose 0.2 per cent in May from April.

    With public housing stripped out, prices rose 5.63 per cent in May year-over-year compared with 6.76 per cent in April. On a month-on-month basis, prices of private sector homes fell 0.16 per cent in May.

    Sales of residential property in the country fell 10.2 per cent to 1.97 trillion yuan during the January-May period this year from the same period a year earlier, and analysts said they expect developers to roll out more price cuts in the coming months.

    Last month, the People's Bank of China prodded banks to lend more to first-time home buyers, while some local governments in Tier 2 and Tier 3 cities are easing their grip on property controls to stimulate sales. The government has implemented property curbs, such as limits on home purchases and higher down payment and mortgage rates, since 2010 to rein in a housing price bubble.

    But analysts and real-estate developers said that easing such curbs will have a limited impact on boosting sales, given the supply glut of homes and the increase in alternative investment channels for individuals. 

    China's property market and its related sectors, such as cement and steel as well as furniture sales, account for more than 20 per cent of the country's economy, according to estimates from analysts. 

    Author

    Quick Summary

    Average prices post first monthly decline in two years amid sluggish demand.

    Associated image

    Media

    Categories

    Primary category

    Status

    Published

    Content Channel


    0 0

    There will be no hard landing for China's economy and economic growth won't slip below 7.5 per cent, Premier Li Keqiang said in a speech to a British research group during his trip to the UK, according to a statement on the official government website.

    "China's economic growth has slowed in recent years and there have been questions about whether this will continue and whether there will be a hard landing," he said.

    "I can honestly and authoritatively assure everyone here that will not be the case."

    The government "can guarantee economic growth won't slip below 7.5 per cent," he said.

    The government's growth target for the year is about 7.5 per cent though officials have suggested in the past they can tolerate slightly slower growth as they push ahead with reforms to deal with overcapacity in sectors such as steel and cement that may cut growth.

    Growth slowed to 7.4 per cent year over year in the first quarter -- down from 7.7 per cent in the final quarter of 2013.

    Jobs growth and speeding up urbanisation are also guaranteed, Mr Li said.

    Consumer price increases won't exceed 3.5 per cent this year, he said. Inflation was 2.5 per cent year over year in May.

    Author

    Quick Summary

    Chinese Premier guarantees growth in world's second largest economy will stay above 7.5%.

    Associated image

    Media

    Categories

    Primary category

    Status

    Published

    Content Channel


    0 0

    China is to start direct trade between its yuan currency and Britain's pound, the country's foreign exchange trade platform says, in another step on its push to internationalise the unit.

    Sterling and the Chinese renminbi, the yuan's other name, will be directly swapped from Thursday without using the US dollar as an intermediary, the China Foreign Exchange Trade System (CFETS) said in a statement on Wednesday.

    China has long had direct currency trade with the United States, and in recent years has added Japan's yen, the Australian, New Zealand and Canadian dollars, Russia's rouble and the Malaysian ringgit to the options.

    The move will "promote the bilateral trade and investment between China and the United Kingdom" and "facilitate the use of renminbi and pound in the cross-border trade and investment settlement", said the CFETS statement.

    The People's Bank of China (PBoC), the country's central bank, called it "an important move for China and Britain to jointly promote further development in their bilateral economic and trade relationship".

    The announcement came as Chinese Premier Li Keqiang continued an official visit to London, during which he witnessed the signing of trade deals worth more than 14 billion pounds ($A25.55bn).

    Britain has long been looking to make London the European hub for overseas yuan trading -- in competition with Paris -- and separately the PBoC announced Wednesday that a subsidiary of China Construction Bank, the country's second largest lender, had been chosen to undertake yuan clearing business in London under its authorisation.

    China has been actively promoting international use of the yuan and taken measures towards interest rate liberalisation, although full convertibility of the currency remains distant.

    The PBoC last July scrapped limits on lending rates, and in March doubled to two per cent the daily trading band that the yuan can float on either side of a daily midpoint set under the bank's supervision.

    Author

    Quick Summary

    China continues push to internationalise currency unit with new deal announced in London.

    Associated image

    Media

    Categories

    Primary category

    Keywords

    Status

    Published

    Content Channel


    0 0

    A Chinese mining group allegedly used the same commodity stocks as collateral for loans of more than $A2.78 billion from different banks, state-run media reports, with its other lenders also including Standard Chartered, HSBC, and BNP Paribas.

    Dezheng Resources, a mining and trading company, and its affiliates are suspected of borrowing more than 16 billion yuan ($A2.78 billion) from 18 Chinese banks using the same stockpiles of metals stored at Qingdao Port, the 21st Century Business Herald (21st CBH) reported, citing unnamed sources.

    One of Dezheng's subsidiaries also took out 17 loans from six foreign lenders over the last decade, it said.

    It did not give totals but named them as Britain's Standard Chartered and HSBC, BNP Paribas of France, DBS from Singapore, Dutch-Belgian bank Fortis and KBC of Belgium.

    Among the domestic lenders, the state-owned Export-Import Bank of China and Bank of China were the group's biggest providers, loaning it 2.2 billion yuan and two billion yuan respectively, it said.

    "Virtually all the local banks in Qingdao and banks that have branches in Qingdao are involved, because companies like Dezheng had been regarded as quality clients and everybody fought with each other to lend to them," the report quoted a manager with a "big state-owned bank" as saying.

    Foreign banks including Standard Chartered and Citigroup have loaned hundreds of millions of dollars on the basis of collateral held in Qingdao port, in the northern province of Shandong, to various entities, Dow Jones Newswires said Tuesday, citing unnamed Western bankers.

    Some were linked to Decheng Mining, a subsidiary of Dezheng, it added.

    Chen Jihong, head of Dezheng and a Singaporean passport holder, has been detained by Chinese authorities, the 21st CBH said.

    Qingdao Port International, the port operator, said in a filing to the Hong Kong stock exchange earlier this month that Chinese police had asked it to assist a fraud investigation relating to aluminium and copper products stored at the port.

    The Qingdao city government and police authorities were not available for comment when contacted by AFP on Wednesday.

    China is the world's biggest copper buyer and prices for the red metal have fallen on the international market in recent weeks, with traders citing causes including concerns over the Qingdao port probe.

    Using the same assets to secure loans from multiple lenders has been "common" in China, with borrowers taking advantage of banks failing to share information on collaterals, the 21st CBH said, citing the bank manager.

    Author

    Quick Summary

    Major Chinese mining firm allegedly used the same commodity stocks as collateral for loans from different banks.

    Associated image

    Media

    Categories

    Primary category

    Status

    Published

    Content Channel


    0 0

    Graph for The world’s largest payment card company you've probably never heard of

    UnionPay's Shi Wenchao and Australia Post's Ahmed Fahour.

    The next time you walk into an Australia Post office, you may likely see stickers bearing a discreet red, blue, and green-banded symbol with UnionPay in English and Chinese appearing on the tills. In fact, you can see them at a lot of places now, from upmarket retailers like David Jones to thousands of cabs in Australia.

    There is no more potent symbol of the spending power of China’s globetrotting consumers than that of UnionPay, which is in fact the world’s largest payment card company according to the number of cards issued. It has more than 4.2 billion cards in circulation, including non-Chinese users in Southeast Asia, Korea and Japan.   

    Speaking at a signing ceremony with Australia Post in Melbourne this week, Shi Wenchao, the chief executive of the card company, said UnionPay cardholders transacted 32 trillion yuan or $5.5 trillion last year, which is more than Japan’s GDP for the same period.

    In terms of transaction volume, China UnionPay is already the world’s second largest card company, behind industry leader Visa. UnionPay has 31 per cent of global market share compared to Visa’s 40 per cent. Mastercard is the third most accepted card, with 24 per cent of the market.

    UnionPay’s business has expanded rapidly internationally on the back of a massive outpouring of tourists, students and business people. Chinese consumers spent about 500 billion yuan or $86 billion in 2012, according to the chairman of UnionPay, Su Ning, who visited Australia last year.

    Chinese consumers spent roughly $1 billion on their UnionPay cards in Australia last year, including a single transaction of $500,000 at a luxury watch shop in Sydney. Point of Sales revenue increased 48 per cent, ATM transaction increased 98 per cent and UnionPay e-commerce increased 599 per cent over the year, according to the company’s internal data.

    Australian businesses need to understand that UnionPay is a piece of critical financial infrastructure that we need to take full advantage of the booming tourism and education trade. The simple fact is that most Chinese don’t use Visa or Mastercard, preferring instead to use UnionPay, which enjoys a virtual monopoly in the country.

    Businesses, universities, banks and even Australia Post are quickly coming to the realisation that having UnionPay enabled payment system is crucial to their businesses. NAB was the first major bank to seal a deal with UnionPay in 2006 and is using its first mover advantage to lure new business customers. However, all remaining big four banks have signed up UnionPay, making Australia the first western nation to have all its major banks accepting UnionPay.

    Even Australia Post is keen to take advantage of Chinese consumers. Ahmed Fahour, the managing director and chief executive of Australia Post, said China was “crucial” to the company’s international strategy.

    “There are a million Chinese visitors and hundreds of thousands of students here,” he told Business Spectator, “we see it [Unionpay] as really important and right up there with Visa and Mastercard. We are a retailer and have many Chinese people visiting us and doing transactions. We want to offer them easy options and UnionPay is growing very nicely and we want to participate.”

    However, the Chinese card giant’s ambition does not stop at being accepted by banks and merchants; it wants to issue its own branded cards in partnership with Australian institutions such as banks and Australia Post.

    “We want to issue our own cards here including debit card, credit card and prepaid card,” Shi told Business Spectator,” I am agnostic when it comes to who is going to be our local partner, as long as they can provide our cardholders with good experience and we are about to launch a pre-paid card with Australia Post.”

    Issuing UnionPay branded cards is an important part of the company’s internationalisation strategy. Business Spectator understands the company is canvassing the opportunity with major Australian banks as well as retailers like Australia Post.

    When asked about UnionPay’s competitive relationship with American giants such as Visa and Mastercard, Shi, who was a Chinese central banker, said the relationship was about competition as well as cooperation.  “We work together on security issues, international technical standards, and user experience standards” he said.

    However, the most important challenge for UnionPay and its international ambitions is how to promote its brand to non-Chinese customers. Of the 28 million UnionPay cards issued outside of mainland China, most of them are to be found in Hong Kong, Macau, Korea and Japan.

    “I have been thinking about that problem and I don’t think I have a mature solution yet,” he told Business Spectator,” it is one of the most difficult tasks for me.”

    The rise of UnionPay is similar to the story of the rise of China. The company has emerged as a serious challenger to Visa and Mastercard, and it was only founded less than 11 years ago. Australia must learn to accommodate this new force to take advantage of the booming services trade between the two countries.

    Categories:

    Status

    Published
    China's own payment card company has emerged as a serious challenger to Visa and Mastercard. Australian businesses can't afford to be without it.

    Media

    Graph for The world’s largest payment card company you've probably never heard of

    Type


    0 0

    The Philippines wants an international tribunal to issue a decision as quickly as it can the legality of China's massive territorial claims in the South China Sea because the disputes continue to escalate.

    Foreign Secretary Albert del Rosario said late on Tuesday that the Philippines would ask its lawyers to petition the Arbitral Tribunal in The Hague, the Netherlands, to issue an earlier ruling after China said it would not get involved in the case, which should shorten the arbitration proceedings.

    "I am hoping we could get something by next year ... because China is not participating and because the situation is getting worse every day in the South China Sea," del Rosario told reporters.

    After China took effective control of a disputed shoal, the Philippines early last year started the tribunal process that questioned the validity under international law of China's so-called "nine-dash line" claim, a rough demarcation of its territory on its official maps that virtually envelops most of the South China Sea.

    Philippine officials have said it may take three to four years for the tribunal to issue a decision.

    Even with the pending legal challenge, China has continued to expand and fortify its claims, including reclaiming land in disputed reefs that can be turned into offshore military bases, possibly with airstrips, del Rosario said.

    In early May, China deployed an oil rig guarded by dozens of escort ships in waters also claimed by Hanoi, igniting sea confrontations and anti-China protests in Vietnam.

    The tribunal issued a statement early this month giving China until December 15 to submit written arguments and evidence against the Philippine complaint, but Beijing said it would not join the arbitration proceedings.

    Brunei, Malaysia and Taiwan also have had overlapping territorial claims in the South China Sea which have sparked confrontations.

    There have been fears the conflicts, including a dispute between Japan and China in the East China Sea, could spark an armed conflict, although analysts say a major fight is unlikely.

    The Philippines recently sought a moratorium on construction and other expansion activities in the disputed areas by rival claimant countries, but China has dismissed that, insisting it has had sovereign rights over most of the disputed waters since ancient times.

    Author

    Quick Summary

    The Philippines is seeking a quick ruling from the Arbitral Tribunal in The Hague on China's territorial claims on the South China Sea.

    Associated image

    Media

    Categories

    Primary category

    Status

    Published

    Content Channel


    0 0

    China's government announced an unusually wide ban on news-gathering activities by Chinese journalists and proposed rules that would muzzle lawyers online, expanding a campaign to exert more control over the public sphere by tightening restrictions on speech.

    Chinese journalists and news bureaus will no longer be allowed to report outside their designated beats and regions and will be prohibited from publishing critical reports without official approval, the country's media regulator said in a notice posted to its website on Wednesday.

    It is the first time Beijing has publicly issued such a wide ban on reporting activities, according to industry insiders. One former legal affairs director from a Chinese news magazine said it indicated increased confidence on the part of authorities in exerting their will on the Chinese media.

    "Bans on cross-field and cross-region reporting used to be unwritten rules handed out by censors in closed-door meetings. Now they feel comfortable enough to issue that in a public decree," he said.

    China's State Administration of Press, Publication, Radio Film and Television, the regulator that issued the notice, couldn't be reached to comment.

    The reporting ban came a day after the circulation online of new draft rules proposed by the government-run All China Lawyers Association that would punish lawyers who go online to make "aggressive or inappropriate" comments about cases, attempt to use public opinion to influence the outcome of a case or attack the country's legal system.

    The draft rules prompted a backlash from lawyers.

    "As soon as these rules take effect, they will become a black mark on the history of rule of law in China," read one online statement in Chinese signed by several lawyers.

    An official with the All China Lawyers Association's public-relations department wouldn't comment on the proposed rules or the public criticism of them.

    "At present we are only seeking comment from within the lawyers' association. No decision has been made," he said.

    Though it remains unclear how aggressive Chinese authorities will be in implementing them, the new restrictions on the domestic media and the proposed rules on lawyers arrive as the Communist Party pursues a relentless crackdown on dissidents and other critics in which they have jailed or interrogated dozens. Authorities have also maintained a tight grip on the Internet, recently blocking access to a wide range of Google services, including search, and to a number of foreign media organizations, including The Wall Street Journal and Reuters.

    The primary aim of the new reporting bans, according to the regulator, is to stamp out efforts by journalists to use the threat of negative reports to extort money from companies and individuals.

    In its notice, it named eight Chinese journalists and news organizations that were being investigated, including a reporter for a state-run newspaper who allegedly used his position to extract 315,000 yuan ($51,000) from an unnamed company.

    An editor for one national newspaper said such cases were common, but criticized the reporting bans as an ineffective solution. "Journalists who do this sort of thing are good at avoiding detection. This notice is pointless," he said.

    "The only effect is going to be to convince even more people that the regulators are clueless."

    Hu Yong, an Internet and media scholar at Peking University, said some news organizations would likely find ways around the new bans. Still, he said, "they will make things harder."

    Reaction to the proposed restrictions on lawyers was more strident, with some lawyers calling openly for the head of the association to step down.

    The proposed regulations "could ignite a backlash of historical proportions," Beijing-based legal scholar Xu Xin wrote to his more than 10 million followers on the popular Weibo microblogging platform. "Lawyers represent their clients, and they represent society. Pressuring lawyers is pressuring anyone who might one day hire a lawyer."

    Author

    Quick Summary

    Domestic journalists and news bureaus confined to beats and regions, can only criticize with approval.

    Associated image

    Media

    Categories

    Primary category

    Keywords

    Status

    Published

    Content Channel


    0 0

    China's government auditing agency said Wednesday it found financial irregularities at two big state banks and the nation's sovereign wealth fund last year and that all three need to tighten their management.

    The National Audit Office said it had uncovered management failures related to investments at China Investment Corp., the country's big sovereign-wealth fund, as well as irregular lending and credits at Bank of China and Agricultural Development Bank of China.

    China Investment Corp. was found to have management shortcomings that resulted in overseas losses on six projects between 2008 and 2012. The extent of the losses wasn't given.

    The auditor blamed the losses at CIC on dereliction of duty by management, insufficient due diligence and poor post-investment management. It didn't provide further details, though it said that CIC and the state banks had largely addressed the problems as of May.

    The auditor also said there were irregularities at subsidiaries of the fund in connection with an 8.28 billion yuan ($1.33 billion) investment in a property development project and in the extension of 949 million yuan in credit to unqualified property developers.

    CIC had no immediate comment on the auditor's report.

    Agricultural Development Bank of China, one of the country's three policy banks, was also found to have issued 6.80 billion yuan in credits in violation of lending regulations between 2006 and 2012. The policy bank also violated rules in writing off 1.48 billion yuan in bad debt since 2008, according to the auditor.

    In a statement Wednesday on its website, Agricultural Development Bank of China said it had rectified all the problems pointed out by the state auditor, including taking measures to resolve lending risks. It also said it would strengthen its management and boost internal controls and risk management.

    Six branches of Bank of China, the country's fourth-largest lender by assets, were found to have extended 6.43 billion yuan in loans to unqualified borrowers and to have violated mortgage-related rules. The irregularities were said to have occurred between 2004 and 2012.

    The bank also issued 3.25 billion yuan in bankers' acceptances and letters of credit to borrowers without real underlying trade deals during the same period, according to the auditor.

    Bank of China had no immediate comment on the report.

    Author

    Quick Summary

    China's National Audit Office says banks, wealth funds need to tighten their management.

    Associated image

    Media

    Categories

    Primary category

    Keywords

    Status

    Published

    Content Channel


    0 0

    The Reserve Bank of Australia says growth in infrastructure investment in China is likely to remain strong for some time, which will have a positive impact on Australian commodity exporters.

    The central bank released 'Infrastructure investment in China' as part of its quarterly bulletin and noted that while infrastructure investment in the country remains well below developed countries, it will continue to be a significant driver of economic growth and improved standards of living in the country.

    The RBA noted that the expansion and upgrading of China’s infrastructure has had a significant impact on the Australian economy as iron ore and coking coal are key inputs into the production of steel, which is in turn used intensively in infrastructure-related construction.

    "If the Chinese economy continues to converge -- on a range of development indicators -- with advanced economies and the share of the population dwelling in urban areas grows further over time, Chinese investment in infrastructure should continue to support the global demand for raw materials," the report said.

    The RBA noted that investment of this kind in China is not without its risks, but suggested these may be mitigated somewhat by reforms proposed by Chinese authorities, such as increasing the private sector’s participation in the allocation, execution and financing of this investment.

    Author

    Quick Summary

    Central Bank expects sustained growth in infrastructure investment in China over coming years.

    Associated image

    Media

    Categories

    Primary category

    Status

    Published

    Content Channel


    0 0

    Graph for Six unexpected graphs from the RBA’s latest report

    We’ve all heard of Christmas in July. Well, for business reporters around Australia, it’s Christmas in June thanks to the Reserve Bank of Australia’s quarterly bulletin.

    The bulletin is set to generate countless analysis and commentary articles over the next couple of weeks. Our economics writer Callam Pickering already wrote on the foreign investment section of it earlier today.

    To give you a taste of what you can expect from the boffins at our central bank, we pored through the 76-page document and pulled out six unexpected graphs that the RBA has produced for its analysis. 

    1. While Australia is building roads, China is building rail. Lots and lots of rail.

    Graph for Six unexpected graphs from the RBA’s latest report

    2. But perhaps it should consider building more hospital beds for its ageing population.

    Graph for Six unexpected graphs from the RBA’s latest report

    3. In Australia, the older you are, the more likely you are to hold copious amounts of cash in your wallet.

    Graph for Six unexpected graphs from the RBA’s latest report

    4. Talking about cash, despite the rise of card and contact payments it’s still the predominant means of paying for goods Australia.

    Graph for Six unexpected graphs from the RBA’s latest report

    5. And this may be why: merchant fees for credit card charges are skyrocketing.

    Graph for Six unexpected graphs from the RBA’s latest report

    6. But, after decades of growth, household consumption -- which accounts for a bit over half of Australia's GDP -- has remained fairly stagnant after the GFC.

    Graph for Six unexpected graphs from the RBA’s latest report

    Got a question? Let us know in the comments below or contact the reporter @HarrisonPolites on Twitter.

    Categories:

    Status

    Published
    China needs more hospital beds, the elderly are hoarding cash in their wallets and overall households are spending less and saving more.

    Keywords

    Media

    Graph for Six unexpected graphs from the RBA’s latest report

    Type


older | 1 | .... | 38 | 39 | (Page 40) | 41 | 42 | .... | 114 | newer