Israeli cybersecurity researchers say that personal information of millions of Alibaba users may have been exposed through flaws on the e-commerce giant's platform.

AppSec Labs on Tuesday said a weakness an employee discovered in the Chinese e-commerce site's code could have allowed hackers to hijack merchant accounts.

"If I want to buy a $US600 phone, I can change the price to a dollar and buy it," said AppSec founder Erez Metula said. "I can see what people have bought, I can change the shipping address so things can be sent to me instead."

Metula said one of the flaws was discovered by a 21-year-old employee, Barak Tawily. He said there was no indication that any user data had been compromised.

Amitay Dan, founder of information security company Cybermoon, said he discovered another flaw that compromised Alibaba users' personal data, and that Alibaba fixed the flaw after he alerted the company.

Alibaba spokeswoman Molly Morgan on Tuesday said that both "potential vulnerabilities" had been fixed.

The flaws were first reported by Israel's Channel 10 TV.

Alibaba raised $US25 billion ($A27.05 billion) in September in the New York Stock Exchange in the largest ever initial public offering.

Alibaba operates such popular e-commerce platforms as Taobao and Tmall in China. Alibaba's platforms account for some 80 per cent of Chinese online commerce.

China is determined to get off coal as quickly as possible to curb the country’s smog problem and protect its water supply, says Barack Obama’s former energy minister Steven Chu.

"if you have a changing climate the water supply in the northern half of China is threatened and that's a big deal,” Dr Chu, a physicist, told the National Press Club in Canberra today.

Air pollution level in parts if China have the potential to cause widespread health problems such as asthma, emphysema and lung cancer, he said.

"This is not good. Because of that, China has become over the last 15 years very concerned about this."

"The reason they're very serious [there] is because a lot of engineers in the government in China, you also don't have to run for re-election and the combination means that you have to look after the long-term interests of the people.”

Dr Chu said that legislative action in the United States was deadlocked and that there will be no comprehensive energy and climate legislation for the next two years.

East Asia Forum

In February 2014, Chinese President Xi Jinping was appointed Chair of the Central Cybersecurity and Informatization Leading Group, an agency which coordinates China’s cybersecurity and ‘informatisation’ policies. The move reflected deep dissatisfaction within the leadership of the pace of innovation in the country. Xi’s appointment reflects China’s willingness to change this — but only to an extent.

‘Informatisation’ is not a common term in English, but as used in China it means the application of advanced information and communications technology to politics, the economy and in the military. Within the economy, it extends well beyond IT products to include the application of information systems in sectors as diverse as health, agriculture, environment and taxation.

China has not lacked leadership in this area of policy. In 1983, Deng Xiaoping set a target for growth of the electronics industry that was double his other wildly ambitious target: quadrupling national GDP by 2000. When Jiang Zemin became General Secretary of the CCP in 1989, he brought with him the experience and passion of his role as the minister of the electronics industry under Deng in 1983. In 1998, as part of a massive reorganisation of government, the incoming premier, Zhu Rongji, set up a new super ministry of Industry and Information Technology. In 2001, Zhu replaced a vice minister as Chair of the Leading Group. Zhu’s successor, Wen Jiabao, in the role as Chair, was an ardent advocate of the informatisation of China, seeing it as a ‘mega-trend for development in world affairs’.

According to the World Economic Forum’s (WEF) 2014 report on the global information technology scene, China is ahead of many advanced economies in terms of its government’s commitment to transformation through informatisation. It ranked 24th in this measure, compared with the United States at 39th, Japan at 28th and South Korea at 26th.

But performance against the ‘transformation intent’ measure is not matched by China’s performance overall in terms of achieving digital competitiveness. In 2014, China was ranked 62nd in the WEF’s Network Readiness Index, having slipped over four years from 36th in the 2011 rankings. China has its own indexes which also give it a relatively low international ranking in the field of informatisation.

It seems there is a conflict between the leaders’ rhetorical commitment and the realities of China’s economy and society. There are many possible explanations for the gulf between ambition and outcomes. In my new book, Cyber Policy in China, I attribute the shortcomings to the divergence between the underlying leadership values and those needed for a country to become an advanced information society.

On the positive side, China’s leaders have made amazing progress, evidenced in their commitment to intellectual property rights reform, promoting the role of venture capital, and recognising the central role of the private sector and university-based research as the main drivers of technological innovation.

But the negatives have been more powerful. As important as universities are to innovation, the CCP has not been prepared to surrender or even lighten the heavy hand of its control over them. This inhibits an environment which would promote a flowering of innovation on the required scale.

One fundamental part of that environment is freedom of information. At its most basic level, an advanced information society depends on the free flow of information and scientific data. This is an inherent characteristic independent of the political system. Yet China’s leaders of the last decade have been unable or unwilling to convert earlier interest in freedom of information into a reality. In 1984, Deng Xiaoping observed that China needed to develop its information resources because its government and scientists did not even have basic statistical data about their own country.

While much has changed in this respect, most government information in China on some of the most important social, economic, environmental and scientific issuesremains a state secret. This is not about the structure of the political system. This is about a defining reality of the digital revolution: it depends inherently on free flow of factual information. China must reach more aggressively for that.

Greg Austin is Professorial Fellow at the EastWest Institute and a Visiting Professor at UNSW (ADFA).

This article originally appeared on the East Asia Forum. Republished with permission.

China will need more than 5300 new aircraft in the coming two decades as demand for domestic air travel mounts, Airbus has forecasted.

The Europe-based aircraft manufacturer said its 2014-2033 Global Market Forecast showed China was expected to take delivery of 5363 new passenger and freight aircraft during the period.

Airbus, manufacturer of the A380, the world's largest passenger jet, competes for orders with Boeing of the United States.

Boeing said in its own forecast released in September that China will need 6020 new aircraft over the same time period as flight demand increases and diversifies.

By aircraft type, Airbus said that its forecast included 3567 single aisle, 1477 twin-aisle and 319 very large aircraft.

The aircraft have a combined market value of $US820 billion ($A887 billion) and account for 17 per cent of total global demand for more than 31,000 new aircraft over the period, it projected.

Airbus also said China will oust the US in 2023 as the world's biggest domestic air traffic market by passenger numbers, as economic development pushes demand for air travel.

"Domestic passenger traffic in mainland China has more than quadrupled over the last 10 years, and it will become the world's number one aviation market within the next 10 years," senior Airbus executive John Leahy said in the release.

"In the next 20 years, the greatest demand for passenger aircraft will come from China," he said.

In his account of his time as foreign minister, Bob Carr recounts how relieved he was to make it through a presser while in China in May 2012.

“A great relief to get through my first China trip without one of those mistakes the media loves trapping foreign ministers in making. Verbal slip-ups. All those potentially neuralgic issues: Tibet, Taiwan, Xinjiang, human rights, the consular cases,” he wrote in his memoir, Diary of a Foreign Minister.

Carr was seemingly chuffed at himself for making it through unscathed.

“Yes, the lines were watertight. I got Graeme Wedderburn and an embassy official to rehearse me. And I stuck to the script. Painstakingly”.

But when Trade Minister Andrew Robb visited Beijing last week, he wasn’t as adroit.

To say Robb was annoyed when I brought up the 'D' word would be an understatement. If you haven’t heard the interview yet, I recommend you have a listen.

I had asked Robb to expand on comments he and the Prime Minister had made about the prospects for democracy in China.

Among his terse responses to me was the legitimate question: “What relationship has that got to do with the free trade agreement that we've just struck?”

But it was the Trade Minister himself who drew the connection in a speech in the days following the signing of the free-trade agreement.

“They need democratic processes, they need very democratic processes, they need strong cultural sectors and of course open markets and rules-based trade and investment, which is pretty much a part of the agreement. The democratic processes, President Xi said on Monday in the Parliament, a very profound comment, that by 2050 you can expect China to be fully democratic,” he said.

Robb was careful to point out that it was still a ‘work in progress’ and if China were to become a democracy by 2050, it may not be the kind of democracy we in the West are used to.

The Trade Minister’s carefully couched statement followed a somewhat more breathless declaration by the Prime Minister two days earlier.

“I have never heard a Chinese leader declare that his country would be fully democratic by 2050. “I thank you, Mr President, for this historic, historic statement which I hope will echo right around the world,” Abbott said.

The comment was met with derision by China-watchers across the globe.

“I’m afraid Abbott has been a bit too optimistic … He seemed a bit overwhelmed having so many heavyweights around him,” Jean-Pierre Cabestan, an expert on Chinese politics at Hong Kong Baptist University, told The Guardian.

If it was the first time the Prime Minister had heard a Chinese leader make a comment like that, he clearly hasn’t been paying attention.

Even chairman Mao himself saw the initial stage of socialism taking 100 years to establish and that by 2049 China would be a democracy.

The only problem is what Chinese leaders regard as democracy doesn’t quite square with what most Westerners think.

Former premier Wen Jiabao used to be able to create a flurry of excitement among many in the Western media by mouthing platitudes about democracy.

But as Richard McGregor points out in The Party: The Secret World of China’s Communist Rulers, when the premier talked about democracy, he was leaving out a crucial caveat included in any official documents about the topic in China, including the Party’s 2005 White Paper on the topic.

‘Democratic government is the Chinese Communist Party governing on behalf of the people,’ the paper said.

A former senior official ousted after the 1989 crackdown reportedly joked to McGregor: “You need a new dictionary to understand what Chinese leaders mean when they talk about democracy”.

The Trade Minister tersely told China Spectator that asking about the 'D' word was merely a ‘gotcha question’.

But understanding whether China is genuinely on a path toward democracy goes to the heart of whether the Australian government really understands who it’s dealing with.

Since taking office in 2012, the Chinese government under Xi Jinping has arrested lawyers, activists, and journalists in a clear attempt to stifle dissent and curtail civil society.

At the same time, Xi has launched an anti-corruption campaign -- that at times has been brutal -- and has selectively targeted factional enemies.

Last week, US President Barack Obama said that Xi had “consolidated power faster and more comprehensively than probably anybody since Deng Xiaoping".

"And everybody's been impressed by his ... clout inside of China after only a year and a half or two years." 

But Obama said there were negative sides to Xi's rise. "There are dangers in that. On issues of human rights, on issues of clamping down on dissent. He taps into a nationalism that worries his neighbours,"

Obama’s candid view reflects a broader shift in policymaking circles in Washington in which the key precept of China policy is that, with further engagement, China will inexorably become more like us.

As Dr Christopher Ford, a former senior US State Department official in the George W. Bush Administration argues, this ‘liberal myth’ is starting to disintegrate due to “a cascade of provocations in the South China Sea and East China Sea, more draconian crackdowns on internal dissent by the CCP regime, and most recently the repudiation of earlier promises of democracy for Hong Kong”.

From Australia’s perspective, two competing themes are animating our attitude towards China on the 'D' word.

The most dominant strain places an emphasis on ‘economic diplomacy’: it’s the idea that increased trade lifts all boats and is preferable to dolling out foreign aid or navel-gazing about fuzzy notions like the ‘Asian Century’.

By increasing trade with our regional neighbours, our countries become more greatly entwined providing stability in the relationships.

Indeed, there are signs from Xi himself that increased trade, and specifically more FTAs in the region, will be used to promote reform at home.

But the other perspective takes what some may argue is a more principled position. Foreign Minister Julie Bishop put that forward when she said Australia would support liberal democratic values and freedom, and put her money where her mouth is when she urged China to ensure Hong Kongers have a genuine say in their elections.

But if the Australian government actually believes encouraging democracy in China is a worthwhile thing, it can’t just rely on trade and the business community. The past year has been replete with examples of foreign businesses showing just how willing they are to kowtow to an increasingly powerful China.

China Spectator has tried to shine a light on instances where the business community has done a disservice to Chinese citizens who are risking their lives for democracy, including in the following instances:

• When LinkedIn came under fire for censoring Tiananmen Square posts (In the shadow of Tiananmen, LinkedIn succumbs to China’s censorship, June 4).
• When the Australian Chamber of Commerce in Hong Kong attempted to please Beijing by remonstrating democracy protestors (Business sides with Beijing in Hong Kong, October 15).
• When just this week Facebook co-founder Mark Zuckerberg ingratiated himself with the very man who blocks his website and many others in China.
• And closer to home, when an influential China lobby did its best to make sure the Australian government would never rock the boat (How the China lobby is building a Great Wall of influence, May 5).

It’s unclear what motivated the Prime Minister to make the comments about Xi’s 'historic statement’. To view it uncharitably, it’s the kind of loose talk that he has demonstrated before – most memorably when he praised Japan's World War II military prowess in his welcome to Japan's Prime Minister Shinzo Abe. (China's fighting words are full of fury, July 15).

More charitably, the Prime Minister was simply throwing Xi’s double-speak back in his face. As Andrew Carr from ANU's School of International Political and Strategic Studies says, “double-speak words have powerful ways of rebounding on leaders. Many democracies began in name only".

At worst, it was jaw-droppingly naïve. At best, it was a way to throw Xi’s weasel words back at him. It’s my understanding that the Prime Minister does not regret the comments.

But now that the government has brought the topic up, we should be able to ask them questions about it. We do live in a democracy after all.

HONG KONG—The protests that have blocked streets in this city for 10 weeks were coming to a close Thursday morning, with protesters’ main demand for free elections still far from reach. But the movement’s legacy may lie not in the reforms it called for, but in the generation it pushed to act.

“The biggest success of the protests is that people are awakened,” said Alex Chow, the 24-year-old head of the university student group that led the protests. “The young generation will be the engine of reform.”

The protests highlighted deep public dissatisfaction with Hong Kong’s government, the city’s yawning wealth gap and with China’s rising influence over the former British colony. If the students continue to harness that anger, they could make life difficult for the city’s government and for Beijing for decades to come.

The new leaders, some still in their teens, exceeded expectations for protests, drawing tens of thousands of people into the streets and paralyzing three busy locations in this densely populated city for 10 weeks. They drew praise for their poise and knowledge during the one negotiating session they had with city officials, who wouldn’t agree to another meeting.

But they lost public support, as the government hoped they would, as the protests dragged on. In the last weeks of the protest, the majority of Hong Kong residents wanted the sites cleared, though many supported the goals of the protest and were critical of the city’s government. Some said the students were disorganized and never articulated a strategy for the occupation, instead sticking to their original demands.

Before the protests began, “I probably couldn’t even tell you who the leader of China was,” said 18-year old Steven Au, who is studying to become an accountant. “I’m no longer apathetic. Now I want to protect my home.”

Young people across Hong Kong shrugged off their political apathy to attend protests after school, carrying their books and wearing their uniforms. University students boycotted classes for weeks, spending days and nights on the streets in tents in defiance of their parents.

The protesters demanded democratic elections for the city’s top official in 2017. Under the current plan laid down by Beijing there will be universal suffrage in the city for the first time, but candidates must be approved by a largely pro-business, pro-Beijing committee. The protesters wanted candidates to be nominated by the public.

By taking a hard line and gaining tens of thousands of supporters, the students effectively seized control of the pro-democracy effort in Hong Kong from an older generation of leaders.

The protests, which were dubbed the Umbrella Movement after demonstrators used umbrellas to block police pepper spray, signaled a transition to a new leadership for the city’s opposition, said Alan Leong Kah-kit, the 56-year old leader of the Civic Party, one of the city’s largest pro-democracy parties. “The umbrella movement is a competition between the past and the future,” Mr. Leong said. “We are the past.”

Much of Mr. Leong’s generation had their political awakening when China cracked down on student protesters in Tiananmen Square in 1989, before any of the current student leaders were born. Activists in Hong Kong ran an underground railroad to sneak fleeing student leaders out of China and to this day, the city still hosts the biggest annual vigil on the anniversary of the crackdown.

The risk, some veteran activists said, is that if student leaders become the establishment opposition they grow more cautious and less effective. Andrew To, 48, led the same university student organization that is driving the current protests during Tiananmen Square, but he said he wouldn’t have stayed on the streets as long as this crop of students have. Now an accountant, Mr. To remains banned from China, which has made it more difficult to serve some of his clients.

“This generation is a bit different than ours,” Mr. To said. “They are more determined.” But, he added, “the advantages of a student leader are different than a politician. They don’t have anything to lose.”

For now, the student leaders say they are focused on the current protests, and aren’t thinking of careers in politics. “No youngster wants to be in the establishment in their 20s,” said Lee Cheuk-yan, 57, chief of Hong Kong’s Labour Party who has been in close contact with the student leaders. “But time will come when they want to play a bigger role to push the government.”

Martin Lee, 76 years old, one of the city’s best-known pro-democracy activists, said the old guard’s tactics of marches and filibusters in the legislature had been failing for years. “But hope came back for us,” he said of the student movement.

After staying on the sidelines for the first two weeks of the protests, the city’s pro-democracy lawmakers came out publicly in support of the students. When the government agreed to a negotiating session, the students turned to the veteran lawmakers and professors to help prepare. One piece of advice: Ask simple questions, one at a time.

At the televised meeting, 21-year-old Lester Shum made a comment that became an oft-repeated line throughout the protests. “We only have a small wish—democracy,” he said. “How can you ask us to leave the streets and accept the current election method?”

The next few months will determine how Hong Kong elects its next leader. Beijing is exploring ways to address the public’s unhappiness with the electoral plan that sparked the protests. But officials there and in Hong Kong didn’t want to be seen as making concessions while protesters occupied streets.

While Beijing isn’t expected to meet the protesters demands, it could modify the nominating committee to give it broader representation. Mr. Chow said if the changes don’t satisfy the students, they would protest again.

Opposition lawmakers said they would veto any unsatisfactory plan in the legislature. If that happens, the city would revert to the old system, and next chief executive would be chosen by the election committee, without a popular vote. If that’s the case, student leaders have vowed to revive protests. At the main protest site the day before the expected clearance, a set of balloon letters formed the words, “We will be back.”

SHANGHAI—China’s new-car sales gains fell to the lowest level in almost two years amid a broad slowdown that has crimped sales and left some auto makers with high inventories of unsold cars on dealers’ lots.

A slowing economy, intensifying competition and curbs on car ownership are slowing sales in the world’s largest auto market even as some manufacturers expand capacity. China’s official auto manufacturers’ association on Wednesday said it would signal to the industry that inventories are too high.

Hardest hit have been domestic brands and Japan’s biggest auto makers, which have suffered from the introduction of few new models and ground lost two years ago when a territorial dispute between Beijing and Tokyo flared up in 2012.

On Wednesday, a salesman at a Nissan Motor Co. dealership in Beijing said many customers were holding off buying as they shopped for bargains. “Some models are doing OK, but others are hard to sell these days,” the salesman who gave his surnamed as Qian said.

The China Association of Automobile Manufacturers on Wednesday said passenger-car sales in November rose 4.7 per cent from a year earlier to about 1.8 million vehicles. It was the weakest gain since February 2013, when the weeklong Spring Festival holiday dented sales.

Slower industry growth figures came after some mass-market brands recorded declining sales last month. Nissan and Honda Motor Co. each said November sales fell 12 per cent from a year ago. Ford Motor Co. ’s passenger-vehicle sales fell 5 per cent.

Lackluster sales are leading to growing inventories for some brands. Data from the China Automobile Dealers Association show that beginning from June dealers have begun to hold inventories of between 10 per cent and 20 per cent higher than the same period a year earlier.

“We feel inventories are too high. We will alert the industry,” Dong Yang, vice president of the auto manufacturers’ association, said Wednesday.

In China, analysts regard one-and-a-half months’ worth of sales on lots as the “alert level” where dealers should begin to be concerned about high inventory. By contrast, dealers in developed markets can hold bigger inventories mainly because they rely less on selling new cars to make money.

In October, the latest month for which CADA data is available, dealers on average held 1.48 months of sales in inventory.

Dealer surveys conducted by automotive research firm Ways Consulting Co. show Chinese brands with inventory levels much higher than the warning line since April, although they have shown some improvement in recent months. Among foreign car makers, Japanese brands had high inventories, its data show.

High inventories can pressure dealers to strike bargains. Xue Xiaolei, a Beijing attorney who is looking to replace his Chinese brand car with a foreign one priced around US$24,500, was shopping outside a Nissan dealership in Beijing but said he was leaning toward a U.S. car. “I might choose Chevrolet. I can get a zero-interest loan and the payment installments are low,” he said. Chevy parent General Motors Co. ’s China joint venture has roughly average inventory levels, according to the data from Ways Consulting.

A Honda spokeswoman said the company was aware that its inventory levels are a bit high at the moment. “We are adjusting our wholesale sales volumes and taking steps to stimulate retail sales including through sales promotion activities,” she said. A Toyota spokesman said inventories depended on the model and location of dealers and that it strives to ensure suitable levels of inventories. Nissan in China didn’t immediately respond to a request for comment.

Car makers also hold more inventory, analysts say. Jochen Siebert, managing director of consulting firm JSC Automotive, estimated inventory held by car makers stands at 1.2 million cars—roughly double the number held last year.

Measures to limit car ownership are making it harder for consumers to buy a vehicle. In the past few years, several cities including Beijing, Shanghai and Guangzhou have introduced measures such as license-plate lotteries. Others cities are considering such rules.

HONG KONG— Alibaba Group Holding Ltd. ’s movie-production unit said an independent analysis of its past financial reports by auditing firm PricewaterhouseCoopers has found that the company misstated taxes and the financial impact of convertible bonds.

The disclosure came nearly four months after Alibaba Pictures Group Ltd. first warned about possible accounting irregularities. In a filing with the Hong Kong Stock Exchange late Tuesday, Alibaba Pictures said the misstatements were due in part to its previous management team’s lack of oversight, while denying that there was fraud.

The misstatements took place in 2012 and 2013, before the Chinese e-commerce giant bought a 60 per cent stake in the film-production company—then-called ChinaVision Media Group Ltd.—in June for more than US$800 million and changed its name to Alibaba Pictures. Since the acquisition, Alibaba has installed a new management teamto replace the unit’s chief executive officer and chief financial officer.

When Alibaba Pictures said in August that it was looking into potential accounting irregularities, some investors raised questions about due diligence in Alibaba’s acquisition of ChinaVision—a reminder of the risk that some potential acquisition targets in China might have poor management and accounting standards.

Now that Alibaba Group is a listed company after its record US$25 billion initial public offering in the U.S. in September, the company’s deals will come under more scrutiny, said Tony Chu, a portfolio manager at U.S. fund management firm RS Investments, which bought Alibaba shares in the IPO.

“There are far more stakeholders now, and the company will be judged by the market,” Mr. Chu said. In the future, any problems resulting from its acquisitions will be reflected on its share price, he said.

In the filing, Alibaba Pictures said it would work with an independent consultant to improve its internal control and financial reporting procedures, without disclosing the name of the consultant. It also vowed to come up with a better internal auditing system based on the consultant’s advice.

Alibaba Pictures is expected to play a major role in Alibaba Group’s expansion into entertainment, one of major battlefields for Chinese Internet companies. Alibaba has announced a series of investments and alliances this year to beef up its entertainment offerings. Last month, Chinese firm and television production firm Huayi Brothers Media Corp. said it would sell new shares to an investment firm owned by Alibaba Executive Chairman Jack Ma and another Alibaba executive, raising the total stake held by Mr. Ma and his investment firm to 8.1 per cent.

As a result of the misstatements, Alibaba Pictures said its earnings for the six months through June, which had been delayed due to the accounting investigation, will likely fall by up to HKUS$390 million (US$50.2 million) due to asset write-downs resulting mainly from the past accounting problems. By comparison, Alibaba Group posted a net profit of US$494 million and revenue of US$2.74 billion in the three months through September. A person familiar with the matter said Alibaba Pictures’ write-downs wouldn’t have any material impact on Alibaba as the company has already set aside provisions.

Alibaba Pictures said it would hold a board meeting Dec. 19 to approve its financial reports for the six months through June. The Hong Kong-listed unit’s shares, suspended since August, are expected to resume trading after its interim financial reports are approved.

Your daily digest of the biggest business news in China, translated and summarized every day.

Chinese regulator approves 12 new IPOs

China Securities Regulatory Commission has just approved 12 new IPOs including one for Spring Airlines. A total of 78 companies have been given the green light to get listed on the country’s stock exchanges since June.

The Chinese government restarted the IPO process this year after suspending it for more than a year to investigate rampant corruption.

(China Securities Journal)

Auto sales hit 20 million in 2014

New car sales in China have reached a new historic high in 2014. 21 million units were sold between January and November, up by 6.1 per cent from the same period last year. China also produced 21.4 million cars during the first 11 months of the year, making it the world’s largest automaker.

Domestically brands account for 40.9 per cent of total sales in China.

(China Radio National)

Corrupt official who embezzled RMB 360 million sentenced to death

A low level official from Guangzhou has been sentenced to death for embezzlement as well as taking bribes. He had reportedly amassed a fortune of RMB 360 million, making him one of the worst offenders in Guangdong province.

(Caixin)

Ma Huateng sells 3 billion Hong Kong dollars worth of shares in Tencent

Founder of Chinese internet giant Ma Huateng has sold 3 billion Hong Kong dollar worth of shares in his company Tencent, reducing his shareholding below 10 per cent for the first time.

The company was listed in Hong Kong in 2004 and the IPO price was 3.7 Hong Kong dollars. Thee price has increased more than 100 times in the last ten years.

(Caixin)

Beijing orders its state-owned champions to pay more

Beijing wants state-owned enterprises to return more profits to the government’s central fund, lifting its contribution to 30 per cent of the total government budget. The money will be used to support the country’s emerging social security network.

(Economic Information)

China is pumping about 400 billion yuan ($78 billion) into the country's banking system, according to people with knowledge of the matter, as it seeks to help its banks lend out money to reinvigorate slowing growth. 

The injection comes as China risks missing its annual economic growth target -- set at about 7.5 per cent for 2014 -- for the first time since the 1998 Asia financial crisis. 

About 500 billion yuan in loans made in September by China's central bank to the country's top five state-owned banks are coming due this month. Uncertainty over whether the central bank would renew those loans has led the banks to grow wary of lending out their funds. Meanwhile, banks in China have been squeezed in recent weeks because many investors shifted their funds out of banks and into the stock market. 

By pumping in the additional 400 billion yuan of short-term credit, the central bank is hoping to signal to the market that it is ready to step in when liquidity is short, according to the people. 

The fund injections so far have been seen as a short-term effort to spur growth without flooding China's financial system with excess credit. The moves fall short of more-dramatic efforts such as cutting the amount of deposits banks have to keep in reserve. Still, by extending more credit as those past loans expire, Beijing is showing it is getting increasingly uncomfortable with the slow growth. 

The People's Bank of China is making the injection via a major policy bank, China Development Bank, the people said. It then lent the funds in the form of seven-day loans to other banks in the interbank market where banks borrow from each other, the people said. 

The PBOC hasn't publicly disclosed the fund injection -- which started on Wednesday -- for fears of sending the market too strong a signal that it is broadly loosening its monetary policy, according to the people. 

"The central bank needs to make sure that there is adequate liquidity in the market, but at the same time, it doesn't want people to think that it is opening the credit spigot," analyst Zhong Zhengsheng at Guosen Securities Co, a Chinese state-owned brokerage firm, said. 

The latest step failed to impress the market. The benchmark seven-day repurchase rate, which measures banks' funding costs, rose 0.17 percentage point to 3.81 per cent, the highest level in four months. 

Chinese banks have been calling for the central bank to free up more funds to bolster their abilities to lend, as their profitability comes under increasing pressure. Specifically, the banks are pressing the PBOC to lower the share of deposits banks must set aside against financial trouble, known as the reserve-requirement ratio. 

Big banks have to hold an amount equivalent to 20 per cent of deposits at the central bank. Reducing that by half a percentage point would free up funds to lend by about 500 billion yuan. 

So far this year, the central bank has beefed up banks' ability to lend in other ways. It pumped nearly 770 billion yuan -- including the 500 billion yuan in September -- into banks in the autumn, but the money was all in the form of short-term loans. The PBOC also has twice lowered reserve requirements for small and regional banks that cater to farmers and small businesses. 

But many Chinese bank executives said such targeted steps are inadequate to address banks’ funding problems. Overall deposits -- traditionally the main source of cheap funding for Chinese banks -- dropped by 950 billion yuan in the third quarter, to 112.7 trillion yuan, the first quarterly decline since the late 1990s. The total fell to 112.5 trillion yuan in October. 

As deposits decline, banks face pressure to either cut lending or find other, more-costly sources of funds. Chinese banks issued 548.3 billion yuan of new loans in October, down from 857.2 billion yuan in September. 

At the same time, China's pending deposit-insurance system could prod banks to offer better terms to keep depositors from jumping ship to smaller lenders offering higher rates, potentially adding to their financing burdens. China doesn't have deposit insurance, and although all state-owned banks are considered to have an implicit guarantee from the government, savers consider bigger banks less risky. Policy makers hope to create competition by making it clear that deposits at all banks are equally safe. 

Chinese banks already face potentially thinner profit margins after the central bank cut interest rates in late November, as the PBOC cut its benchmark lending rate more than it cut the deposit rate. 

The PBOC has maintained that its monetary policy remains "neutral," saying China's economy will keep growing at a fast pace despite the current downward pressure. 

China is adding more cash to its financial system to spur growth, according to people with knowledge of the matter, even as the leadership expressed a willingness to accept a "new normal" of a slower economic pace. 

China's central bank is pumping about 400 billion yuan ($78 billion) into the country's banking system, according to sources, as it seeks to help Chinese banks lend money to reinvigorate weakening growth. The injection comes as senior leaders including Chinese President Xi Jinping and Premier Li Keqiang said the world's second-largest economy faces significant downward pressure and reiterated that it needs to adjust to slower but high-quality growth. 

At the conclusion of a three-day meeting on setting economic priorities for next year, China's top leaders repeated their pledge to press ahead on structural reforms designed to make China's economic growth more sustainable, such as shutting down highly polluting factories, reducing China's industrial overcapacity and taking other difficult economic measures. 

At the same time, the leadership also stressed again the need to maintain a "prudent" monetary policy as well as a "proactive" fiscal policy, according to a statement by the official Xinhua News Agency. Monetary policy shouldn't be "too tight or too loose," according to the statement. 

The remarks illustrate a delicate balance Beijing is trying to strike as it seeks to prop up economic activity without flooding the country's financial system with excessive debt. So far this year, the government has resorted largely to piecemeal easing measures to bolster the economy, which so far have failed to pay off.

Last month, China's central bank caved in to corporate demands for easier access to credit by cutting benchmark interest rates. But many economists and analysts say more needs to be done as Chinese banks remain reluctant to lend amid the slowing economy. 

China didn't disclose its closely watched growth target for next year but reiterated that this year's targets are within reach. Some economists believe Beijing could miss its gross-domestic-product growth target, this year set at about 7.5 per cent, for the first time since the 1998 Asian financial crisis. 

Economists are expecting the Chinese leadership to lower the benchmark closer to 7 per cent at the annual meeting of its national parliament in March. 

"A lower GDP target for 2015 is almost certain," Société Générale Group said in a research note, echoing others. 

The latest, 400 billion yuan capital injection comes as some 500 billion yuan in loans made in September by China's central bank to the country's top five state-owned banks are coming due in a week. Uncertainty over whether the central bank would renew those loans has led the banks to grow wary of lending out funds. Meanwhile, banks in China have been squeezed in recent weeks because many investors shifted funds out of banks and into the stock market. 

By pumping in the additional 400 billion yuan of short-term credit, the People's Bank of China is hoping to signal to the market that it is ready to step in when liquidity is short, according to the people familiar with the matter. 

The central bank is making the injection via a major policy bank, China Development Bank, the people said. It then lent the funds in the form of seven-day loans to other banks in the interbank market, where banks borrow from each other, the people said. By the time the new loans expire, which will be on December 18, the central bank is expected to renew the 500 billion yuan in credit to the big banks, according to the people. 

The PBOC publicly hasn't disclosed the fund injection, which started Wednesday, for fear of sending the market too strong a signal that it is broadly loosening its monetary policy, the people said. 

"The central bank needs to make sure that there is adequate liquidity in the market, but at the same time, it doesn't want people to think that it is opening the credit spigot," analyst Zhong Zhengsheng at Guosen Securities Co, a Chinese state-owned brokerage firm, said. 

The latest step failed to impress the market. The benchmark seven-day repurchase rate, which measures banks' funding costs, rose 0.17 percentage point to 3.81 per cent, the highest level in four months. 

Chinese banks have been calling for the central bank to free up more funds to bolster their ability to lend as their profitability comes under increasing pressure. Specifically, the banks are pressing the PBOC to lower the share of deposits that banks must set aside against financial trouble, known as the reserve-requirement ratio. 

Big banks have to hold an amount equivalent to 20 per cent of deposits at the central bank. Reducing that by half a percentage point would free up funds to lend by about 500 billion yuan. But the PBOC so far has refrained from doing so for fears of the action potentially leading to more credit flowing into sectors that have suffered overcapacity, such as steel and real estate. 

Chinese construction and engineering companies have emerged as major players globally in recent years, overtaking their Western and Japanese rivals.

Indeed, Chinese companies account for five out of ten top construction firms in the world by revenue, according to figures from International Construction Magazine.

China Communications Construction, which this morning paid $1.15 billion for Leighton Holdings’ John Holland unit, is the fifth largest builder in the world behind French engineering giant Vinci. Listed on the Hong Kong and Shanghai stock exchanges it has a market capitalisation of approximately $23.5 billion.

However, the Chinese hold top three spots in the world. China State Construction and Engineering is the world’s largest builder.

Chinese companies have been expanding aggressively internationally in search of new opportunities as competition intensifies at home. 

Though these companies have solid reputation for finishing big projects on time at home, some have experienced difficulties in operating project overseas and especially where they can’t bring in their own workers and engineers.

For example, China Metallurgical Group, the former contractor for CITIC Pacific’s disastrous Sino Iron Project in Western Australia significantly underestimated the cost of construction that played a major role in CITIC’s budget blowout.

The future prospect of Chinese contractors is likely to get a boost from Beijing’s new international economic strategy to spur more infrastructures investment in Southeast Asia and Central Asia.

Beijing has funded three new large multilateral financial institutions under Chinese leadership, with a combined money pool of US$240 billion: the New Development Bank, the Silk Road Infrastructure Fund and the Asia Infrastructure Investment Bank. 

In 2012, Chinese contractors took the largest share of total global revenues, at 23.2 per cent or US$344 billion.

China’s rising smartphone star, Xiaomi Inc., has hit a legal wall in India, in a development that underscores the obstacles Chinese phone makers face as they try to replicate their domestic success abroad.

The High Court of Delhi issued a temporary injunction this week on the sale and import of Xiaomi handsets in India while it waited to hear a patent complaint against Xiaomi by Swedish telecom equipment maker Ericsson. Ericsson alleges that the Chinese firm is using its technology but refusing to pay royalties.

The ban throws a wrench into Xiaomi’s business plans in India, where the Chinese company has already taken a 1.5 per cent market share in the third quarter after it started sales there in July, according to market research firm Counterpoint Research. Xiaomi said it hasn’t yet received the court order and declined to comment on Ericsson’s allegations and the potential financial impact of the ban.

“India is a very important market for Xiaomi and we will respond promptly as needed,” Xiaomi’s head of India operations, Manu Jain, said in a statement Thursday.

The injunction shows why global domination won’t be so easy for Chinese smartphone makers, which have become some of the top vendors in the world on the back of strong domestic sales, and are now looking to topple brands like Samsung and Apple abroad. Led by Xiaomi, half of the world’s top 10 smartphone vendors by shipments are Chinese, versus only two—Huawei Technologies Co. and ZTE Corp. —three years ago, data from Strategy Analytics shows. But to succeed outside of China, the companies must tackle a host of hurdles they didn’t face at home: looming patent expenses, user concerns over cyberspying and poor brand recognition.

“Many Chinese vendors have to think twice before they make the investment to expand” overseas, said Lixin Cheng, head of ZTE’s U.S. operations. “If you are not innovative, you are running a high risk of violating others’ intellectual properties.”

Xiaomi’s success is rooted in selling phones with features rivalling high-end Samsung and Apple models but at around a third of the price, saving costs by marketing through social media and selling handsets online. This year, Xiaomi expanded in Southeast Asia and India and expects to sell 60 million units globally, up from 18.7 million in 2013.

Patent disputes are quite common in the high-tech industry. A single smartphone encompasses about 200,000 patents, intellectual property experts say. To get rights to use those technologies in each country, handset makers typically have to sign cross-licensing agreements, buy patents or pay royalties. Markets with robust intellectual-property protections, such as the U.S., U.K. and Germany, are more challenging for newcomers like Xiaomi than emerging markets where IP protections are weak, executives say.

“Our situation when it comes to patents is the same as everyone else,” said Hugo Barra, Xiaomi’s global vice president, at the WSJD Live Global Technology Conference in October. He noted that his company files for a significant number of patents in China and strikes licensing deals abroad. Litigation risk “is not a determining factor” in deciding the best markets for Xiaomi’s international expansion, he said.

Kwang Jun Kim, chief intellectual property officer at Samsung Display Co., who previously worked on litigation for affiliate Samsung Electronics Co., said as Chinese companies expand abroad they will have to address legal challenges in the global market.

“The U.S. is by far the most intense legal battlefield for global technology firms,” Mr. Kim said.

Access to patents was a key factor behind Lenovo’s recent US$2.91 billion acquisition of Motorola Mobility. By selling Motorola-branded smartphones in the U.S., Lenovo can take advantage of the U.S. firm’s intellectual property as well as its brand recognition, executives said.

ZTE paid about US$17.4 billion to U.S. companies to license and purchase their technologies and products over the past four years, Mr. Cheng said. ZTE last year posted revenue of 75.2 billion yuan (US$12.2 billion).

Chinese firms will also need to distance themselves from concerns about digital surveillance by their government, often accused by the West of cyberespionage. Beijing has said it opposes cyberattacks.

This fall, Taiwan’s regulator began studying data collection by smartphone makers after allegations that Xiaomi collected user information without notifying consumers. The regulator concluded that all 12 smartphone makers it studied were equally culpable.

Authorities in Singapore and India have also been looking into whether data on Xiaomi phones are safe.

In August, F-Secure, a Finnish computer security firm, said it tested a Xiaomi phone and found it was sending unencrypted data back to servers in Beijing. In response, Xiaomi has said the data traffic was part of its cloud messaging service and issued a software update to encrypt the data. It also began in recent months to move servers out of China for data on its international users.

“China still has a very poor image globally,” said co-founder Carl Pei of OnePlus, a Chinese handset startup. It used to be about product quality woes, “now, increasingly, it’s because of cyberwarfare between different countries.”

OnePlus, which ships handsets to the U.S. and Canada, says it stores its global data on Amazon.com ’s U.S. servers. (Read more about OnePlus in a Q&A with Mr. Pei.)

Many Chinese smartphone makers also continue to grapple with being virtually unknown outside China. Interbrand’s Best 100 Global Brands ranking this year included just one Chinese brand: Huawei, at No. 94. Industry executives say brand awareness is crucial even for low-cost players, as cheap handsets proliferate.

When ZTE conducted a consumer survey early last year in Houston, it found almost no one there knew its name. It became the Houston Rockets basketball team’s sponsor in October 2013 and designed its marketing around the team, including making Rockets-edition smartphones. This summer, 16 per cent of those in Houston surveyed said they knew ZTE, a sharp increase from 2013, but still not a household name. ZTE added sponsorships with two other basketball teams—the New York Knicks and Golden State Warriors—this October. It is now the fourth-largest smartphone vendor in the U.S. after Apple Inc., Samsung and LG Electronics Inc. Its U.S. smartphone market share rose to 6.3 per cent in the third quarter from just 0.9 per cent three years ago, according to Strategy Analytics.

Greg Creed had a successful run heading Taco Bell, the U.S.-focused chain famous for fast-food indulgences like Doritos tacos. Now, as the incoming chief executive of parent Yum Brands Inc., he will face bigger challenges, from assuaging Chinese consumers’ food-safety concerns to persuading young people around the world that fast food can be fresh and healthy.

The Australian-born Mr. Creed, a 20-year Yum veteran who is scheduled to take over from long-time CEO David Novak on Jan. 1, said the fast-food industry is undergoing a revolution in which young customers are questioning the integrity of their food and demanding freshly made products.

In his first interview since he was tapped to be CEO in May, Mr. Creed said Thursday that Yum has the potential to double its global restaurant count to 80,000 in the next 20 years. But he added that the company has to overcome the idea of fast food as fuel and “transcend” the industry by showing customers its food is fresh.

“We have to clean up our menu labels. What people want are things on labels that they can pronounce,” Mr. Creed said. “We have to pull preservatives out.” He added that all Yum’s chains, which also include KFC and Pizza Hut, are working on such efforts, though he cautioned that “it’s going to take us a few years.”

Mr. Creed’s comments echo those of McDonald’s Corp. , which said Wednesday that it’s rethinking the use of preservatives and is reviewing its recipes and cooking techniques to better satisfy demands for fresher food. On Wednesday Carl’s Jr. announced the launch of a new grass-fed, free-range beef burger that is free of added hormones, antibiotics and steroids. And Chick-fil-A Inc. says it is phasing out all chicken raised with antibiotics over five years.

Mr. Creed, 57 years old, said that he’d eventually like Pizza Hut and Taco Bell to switch to hormone- and antibiotic-free beef but that it will take other big players in the industry to get on board to increase the supply of those products.

The incoming CEO’s most pressing priority involves food-quality concerns in China, a vital market where Yum has been grappling with a sales slump for two years. In late 2012, Chinese media alleged that a KFC supplier used growth hormones and antibiotics to help chickens grow faster. Yum defended its safety practices, but the chain’s sales were pressured for more than a year as fearful consumers stayed home or switched to competitors.

Yum had said that 2014 would be KFC’s “bounce back” year in China. Sales improved in the first half, following menu adjustments and an advertising campaign emphasizing food safety. But in July, Chinese media reported that a Shanghai supplier had intentionally sold expired meat to Yum and other fast-food chains in China and sales began to slide again.

Yum said Tuesday that it expects same-store sales in China this year to decline by a mid-single-digit percentage, dragging down per-share earnings growth for the company to the mid-single digits. In October, Yum had lowered its forecast for per-share earnings growthto between 6 per cent and 10 per cent from at least 20 per cent. On Thursday, Yum said that November same-store sales in China are expected to be down 15 per cent but sales should improve in December.

The volatility has led some analysts to speculate that Yum could spin off its China business—a notion Mr. Creed didn’t entirely dismiss. “There are no plans today to spin off China or do anything structurally with China,” Mr. Creed said. “Getting China back on its feet is really our focus,” he added, though he also said, “I would never say never.”

KFC plans to give local markets in China more autonomy in offering menu items and setting prices because consumers in large cities have higher incomes and different food preferences than those in smaller cities. KFC is also adding offerings like premium coffee, and it plans to use more Chinese celebrities in its ads, roll out free Wi-Fi at its restaurants and reinvigorate its children’s menu.

Fixing the China business is a tall order for an executive who has spent most of his career in Australia or in Taco Bell’s mostly U.S. business.

Mr. Creed, who was appointed Taco Bell’s CEO in early 2011, is credited with pushing the chain’s successful Doritos Locos Taco product and driving sales during late-night and breakfast periods. In the fiscal third quarter, Taco Bell posted 3 per cent growth in same-store sales, driven by breakfast sales and an operating-profit increase of 14 per cent.

Mr. Creed isn’t a stranger to food-quality issues. Shortly after he became Taco Bell’s CEO, a lawsuit alleging that the chain used more filler than meat in its tacos triggered widespread negative attention. Mr. Creed’s swift defense included full-page newspaper ads and YouTube video appearances defending the products, which he said consisted of 88 per cent beef—along with water, oats, spices and cocoa powder—not the 35 per cent beef content the suit claimed. The suit was ultimately withdrawn.

Mr. Creed said that the demand for fresh, high-quality food from customers—especially those from their midteens to mid-30s—is a global phenomenon. Yum’s Pizza Hut brand just embarked on a major effort to better appeal to this age group with a new menu boasting premium ingredients like Peruvian cherry peppers, new flavors and crusts, lower-calorie pizzas and more customization options.

The Pizza Hut relaunch also extends to the uniforms employees wear in the restaurants, which include T-shirts and jeans, and a more interactive way to order online or on mobile devices in English or Spanish.

Emphasizing food quality can also affect restaurants’ layout. Taco Bell has an open-kitchen restaurant in Bangalore, India, where customers can see their food being prepared through a glass window. Mr. Creed said the company plans to open another open kitchen in Chicago next year.

The chief executive of Momo Inc., which is backed by Alibaba Group Holding Ltd. , said the company expects to turn profitable in the “near future” as the Chinese social-media company raised US$216 million via a U.S. public offering.

Tan Yang, the CEO and co-founder, said Momo will launch a social-media service aimed at U.S. consumers early next year. He also denied allegations of misconduct by his former employer, Netease Inc., that were released on the eve of Momo’s listing on the Nasdaq stock exchange.

By midday in New York, Momo was up nearly 15 per cent, in a sign that investors remain interested in Chinese Internet firms.

The location-based social network has often been called the Chinese version of the dating app Tinder, as many users turn to it to browse through profiles of people available for casual dates nearby. But after encountering criticism from state-run media in China, the company has worked to broaden its focus to general social-media services, and now has more than 180 million registered users.

Momo now plans to expand beyond China and is on the lookout for acquisition targets, Mr. Tang said in a telephone interview Thursday. The company will mainly use its new funds for research and development, he said.

“We will launch an English-language social media service early next year,” Mr. Tang said, adding that it wouldn’t be called Momo. “It will be aimed at U.S. consumers, so it will be a different type of service.”

Mr. Tang also said he expects Momo to turn profitable in the “near future,” although he declined to specify a timeline. But when asked if it would take several years, Mr. Tang said he considered that the “far future.”

The company began to generate revenue last year through subscription packages that offered functions beyond the free app, as well as mobile games, emoticons and mobile marketing.

Momo has yet to post a profit. It reported an accumulated deficit of US$97.3 million through Sept. 30, according to a regulatory filing.

Momo is the latest Chinese company to list in the U.S. Alibaba went public in a record US$25 billion debut on the New York Stock Exchange in September. Alibaba owns a 21 per cent stake in Momo.

Momo’s shares were priced at US$13.50 per American Depositary Share, at the middle of the planned US$12.50-US$14.50 range.

Mr. Tang said he saw strong appetite from investors in Momo and other Chinese Internet firms after the Alibaba IPO. He said the company didn’t want to price the offering too high in order to leave room for the stock to rise.

Chinese Internet portal Netease Inc. issued a statement Wednesday accusing Mr. Tang, an employee at the time of Momo’s launch, of transferring technology from the company to Momo and engaging in other behavior that it described as unethical.

Momo said that its chief executive would “vigorously” defend himself against the allegations.

Netease noted an overlap of dates, with Mr. Tang employed there from September 2003 to September 2011, while Momo was established by Mr. Tang and co-founders in July 2011.Momo said in a filing to the U.S. Securities and Exchange Commission Wednesday that the allegations could affect its image and expenses. Momo said potential legal action by Netease was a business risk and that it couldn’t predict the outcome of such proceedings.

“While Tang Yan was employed, he used his position to his personal advantage, taking a number of information and technology resources from Netease to launch Momo on the side,” Netease said in its statement. Netease also alleged that Mr. Tang used his position as chief editor to direct millions of yuan worth of business to an advertising company launched by his wife.

“Mr. Tang believes the claims lack merit and intends to defend himself against these claims vigorously,” said Momo in the filing.

Momo was hit earlier this year by criticism from Chinese state media that sex workers used the app to find clients. Mr. Tang said Momo has tightened its oversight. Over the past three years, it has deleted more than 8 million accounts that violated guidelines, he said.

“We started off being seen as a dating app, but we’ve expanded far beyond that,” Mr. Tang said.

Copper futures have closed higher on the London Metal Exchange, pushed up by speculation that the Chinese central bank is likely to provide further stimulus.

The LME's three-month copper contract was up 0.7 per cent at $US6,460.00 a metric ton at Thursday's PM kerb close.

A flurry of Chinese data from November is being released overnight, which analysts believe could force the central bank's hand.

"Expectations are for further PBOC (People's Bank of China) action, particularly if the data tonight is disappointing," said analysts at Standard Bank.

China is by far the biggest global consumer of the red metal and the Asian country's economic fortunes tend to dictate the price. Further stimulus is seen as a shot in the arm that may boost the economy.

Aluminium closed down 0.6 per cent at $US1,946.50 a ton, zinc closed 0.7 per cent higher at $US2,195.00 a ton, nickel fell 0.3 per cent to finish at $US16,275.00 a ton, lead closed down 1.4 per cent at $US1,985.00 a ton, while tin closed up 0.7 per cent at $US20,400.00 a ton.

China will accelerate reforms in nine key areas next year as part of a roadmap set out for furthering economic reforms first flagged at last year’s Third Plenum.

According to state media reports, reform will be speeded up in capital market, market access for private banks, administrative approval, investment, pricing, monopolies, franchising, government purchased services, and outbound investment. 

The announcement was made at the conclusion of the Central Economic Work Conference on Thursday. The meeting is meant to set the tone for economic policies in the coming year.

Making state-owned enterprises more efficient and competitive will also be a priority for the government according to a statement released at the conclusion of the conference.

The government also reaffirmed its commitment to pursuing a ‘new normal’ in economic development with an emphasis on more sustainable and less fast-paced growth.

Investment will remain a key driver of growth alongside consumption and exports, Xinhua said.

The statement followed reports that China's central bank has stepped up efforts to pump more cash into its banking system with a $US65-billion fund injection.

According to Dow Jones newswires, the People's Bank of China (PBoC) injected around 400 billion yuan into the interbank market where banks borrow from each other on Wednesday

Your daily digest of the biggest business news in China, translated and summarized every day.

Shanxi government loses 21 per cent of court cases

Shanxi provincial government lost 21.84 per cent of administrative cases against it, according to a report from its high court.

Administrative lawsuits against Chinese governments have been on the increase recently. The number of cases lodged in Beijing was up 20.5 per cent in 2013 and 23.7 per cent in Shanghai.

Though citizens can win up 40 per cent of cases against government in some provinces like Henan, Anhui and Shandong, the national average is only about 8.62 per cent, highlighting the difficulty citizens have suing the government under the country’s administrative law.

(Caixin)

Vale sets up a new iron ore distribution centre in China

Brazilian iron ore giant Vale has set up a new iron ore distribution centre at the Port of Qingdao.

The Chinese port authority says the new centre is likely to reduce Vale’s logistics costs.

Vale is building a fleet of super ore carriers that are capable of shipping 400,000 tonne of commodities.  The move is designed to drive down the transport costs.

(Caixin)

Low iron ore price boosts Chinese steel mills’ bottom line

Chinese steel mills are set to earn 28 billion yuan in profit this year, making 2014 the best performing year in the last three years.

66 out of 88 major steel mills were profitable during the month of October, a significant improvement from April this year when nearly half of all steel mills were in the red.

Analysts say Chinese steel mills are profitable again due to rapidly declining iron ore and coking coal prices.

(Economic Information)

Land sales recover in major cities

Over 190 billion yuan worth of land have been sold so far this year in Beijing, breaking last year’s record. 

Land sales in other three major tier one cities -- Shanghai, Guangzhou, Shenzhen also rebounded significantly. 

Developers spent 470 billion this year buying land in major cities.

(The Economic Observer)

Government spending still 2 trillion yuan short of 2015 target

From January to November all levels of the Chinese government spent 12.63 trillion yuan, 10.1 per cent more than the over the same period last year, according to figures released by the Ministry of Finance yesterday.

These government outlays account for only 82.5 per cent of budgeted outlays for the year, which means that if the government still plans to meet its spending target of over 15 trillion yuan, it will need to spend over 2 trillion yuan in December.

Over the past decade, fiscal spending in China has often peaked at the end of the year. In the past the central government has pledged to rein in these end-of-year 'spending sprees'. 

Over the same 11-month period, government revenue had increased by 8.3 per cent to 12.96 trillion yuan.

Central government revenue grew by 7 per cent when compared to the first 11 months of 2013 to reach 6.1 trillion yuan.

Local government revenue over the January to November period was up 9.5 per cent to 6.85 trillion yuan.

Total tax revenue over the period reached 11.06 trillion yuan, a 7.5 per cent increase over the same period in 2013.

Revenue from state-owned financial institutions had increased in recent months, while the rate of growth in tax revenue related to the real estate sector has slowed, according to the Ministry of Finance.

(Xinhua)

Chinese Internet giant Baidu Inc will invest in ride-hailing app Uber Technologies Inc, in a move that will help the US start-up's business in China, a person familiar with the matter said on Friday. 

Details of the investment amount weren't immediately known. 

Baidu said it is expected to announce an investment in a US start-up on December 17, but didn't provide further details. 

For Baidu, the investment in Uber allows the Chinese Internet firm to better compete against rivals Alibaba Group Holding and Tencent Holdings in China's rapidly growing market for transportation apps. 

News of the investment was first reported by Chinese state media China National Radio. 

Earlier this month, San Francisco-based Uber raised $US1.2 billion in a new round of funding that valued the company at $US41 billion.