Quantcast
Channel: Business Spectator - China
Viewing all 2267 articles
Browse latest View live

Chinese consumer sentiment dips in Jan

0
0

Chinese consumer sentiment dropped slightly in January despite a general move away from the pronounced pessimism that dominated 2014, according to a private survey.

The Westpac-MNI China consumer sentiment indicator fell 0.4 points to 112.1 in January, down from 112.5 in December.

According to the bank, the latest figures indicate that Chinese consumers are still relatively anxious, but has generally improved from the pessimism of last year.

Four of the five components that make up the survey declined from the previous month with current family finances, business conditions ‘one year ahead’ and ‘five years ahead’, and ‘time to buy a major household item’ all moving lower.

However, consumer expectation about their family finances ‘one year ahead’ increased strongly, perhaps reflecting the lower inflation and interest rate expectations also reported in the survey.

According to the bank, consumers seem to be awaiting a durable pick-up in demand conditions before they fundamentally reassess the outlook for the labour market.

Consumers view on real-estate was mixed in January following back-to-back improvements in the previous two months. House buying sentiment lagged with a decline in the share of respondents reporting it was a ‘good time to buy a house’. Despite that, 19.3 per cent of consumers now nominate domestic real estate as the ‘wisest place for their savings’ -- the highest since June.

The proportion of consumers nominating a housing purchase as their primary motivation for saving, rose for a second month.

Consumers reported considerably lower levels of confidence in the share market performance of firms with real estate linkages in January. Margin lending curbs also served to lower the proportion of respondents nominating equities as the ‘wisest place for their savings’.

Investors felt the stock market had become better value over the month, with literally zero respondents nominating it was “very expensive”, but 3 month stock price expectations still decreased by 1.8 per cent.

Author

Quick Summary

The Westpac-MNI China consumer sentiment indicator falls 0.4 points to 112.1 in Jan.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel


China UnionPay cardholders spent 41tn yuan in 2014

0
0

UnionPay cardholders spent 41 trillion yuan last year, an increase of 27.3 per cent from the previous year reports The Paper.

According to the report, the amount is equal to the combined GDP of France, Britain and South Korea.

China UnionPay is the third largest card payment system in the world after Visa and Master Card. 

The company has 30 million merchants worldwide and 1.8 million ATM machines. There are 13 million overseas merchants and 1.2 million ATM machines which accept UnionPay cards.

Author

Quick Summary

Spending increases 27.3 per cent from the previous year equaling the combined GDP of France, Britain and South Korea.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

Chinese luxury hotels suffer under austerity measures

0
0

Chinese luxury hotel profits have plunged since the start of Beijing’s harsh anti-corruption campaign reports The Paper

According to the report, luxury hotels earned more than five billion yuan in profits in 2012, but their profits took a nosedive in 2013 when the government started to crack down on public spending.

The country has 13,500 hotels, which include 850 five star hotels. Profits for the sector went into the red with the luxury hotel sector losing 2.1 billion yuan.

The head of China’s Hotel Association said hotels that relied on high-end government business suffered the most and that profits for the whole sector had fallen off a cliff.

Chinese hotels have asked to be downgraded in order to avoid further unwanted media attention.

Author

Quick Summary

Luxury hotel sector loses 2.1 billion yuan since the start of Beijing’s anti-corruption campaign.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

China's yuan joins top 5 global currencies

0
0

An international financial transactions agency says China's currency, the yuan, has become the fifth-most-widely used currency in global payments.

The Society for Worldwide Interbank Financial Telecommunication said on Tuesday the yuan passed the Australian and Canadian dollars in popularity in December.

The agency, known as Swift, said the yuan now trails the US dollar, the euro, the pound and Japan's yen in popularity.

Beijing is gradually easing controls on the yuan and encouraging its use abroad in an effort to reduce costs for its traders and increase Chinese companies' role in the global economy.

Author

Quick Summary

Yuan passes the Australian and Canadian dollars in popularity: agency.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

Former senior China official to be prosecuted for graft

0
0

Chinese authorities have concluded an investigation into the former deputy head of the coal department at China's National Energy Administration, Wei Pengyuan.

According to Chinese media reports, Wei will now be transferred to the prosecutors office of Baoding City in Hebei province to await trial.

Authorities seized more than 200 million yuan in cash from the home of the Beijing official in May last year in what was reportedly the largest cash seizure since the beginning of the anti-corruption campaign.

The cash reportedly weighed more than 2.2 tons and would climb 200 metres in the air if it was stacked. Analysts have speculated that Wei could receive the harshest punishment yet given the large amount of money he had siphoned out of the public purse.

The former head of the National Energy Administration, Liu Tienan admitted to taking millions of dollars worth of bribes to approve projects in his trial in September last year.

During his trial, Mr  Liu made an appeal for freer markets arguing a more market-oriented economy would dilute the power of officials like himself and help stem corruption.

Liu was reportedly found to be in possession of a fake Australian passport and $2.2 million in Australian dollars when he was arrested.

Author

Quick Summary

Chinese authorities have concluded an investigation into former energy official, Wei Pengyuan.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

China raps Alibaba over fake goods

0
0

BEIJING— Alibaba Group Holding Ltd. is embroiled in an escalating public dispute with a Chinese government agency over sales of fake goods on its e-commerce platforms, highlighting one of the risks for a company that last year raised US$25 billion from global investors in the world’s largest IPO.

In a white paper released on Wednesday, China’s State Administration for Industry and Commerce said the Hangzhou-based, New York-traded e-commerce giant was too lax in what it allows merchants to sell on its online platforms. It also said its sales platforms offered inadequate product information and a flawed system for ranking sellers.

“Alibaba Group hasn’t been paying enough attention to the mismanagement of the Alibaba Internet transaction platforms for a long time, and hasn’t implemented effective controls to solve the problems,” it said.

In response, Alibaba’s Taobao e-commerce platform said it is “willing to assume the responsibility of fighting fakes” and that its effort “is far from complete.” But it criticized the inspection methods of a top SAIC official, Liu Hongliang, and said it would file a formal complaint with the SAIC.

“We believe director Liu Hongliang’s procedural misconduct during the supervision process; irrational enforcement of the law; and obtaining a biased conclusion using the wrong methodology has inflicted irreparable and serious damage to Taobao and Chinese online businesses,” it said in a statement.

A SAIC representative said the agency didn’t have an immediate comment.

The paper was based on SAIC discussions with Alibaba executives that took place in July, it said. It said those talks took place behind closed doors so that they wouldn’t impact Alibaba’s pending initial public offering in the U.S. The offering, which took place in September, was the world’s largest IPO and valued the company in excess of US$230 billion.

The paper said SAIC officials in Zhejiang, the province where Hangzhou is based, and elsewhere would work with Alibaba executives on fixing the problems.

The public fight—rare for a Chinese company against a powerful government agency—could pose a risk to shareholders, said Muzhi Li, a Hong Kong-based analyst at Arete Research. “The government is determined to further escalate this case,” he said.

The dispute brings to the fore a perennial problem for Alibaba, one of China’s biggest corporate success stories. The company has grappled with allegations that fakes are common on Taobao, which was long included on the U.S. government’s list of “notorious markets” known for common counterfeit goods.

The U.S. removed Taobao from the list in late 2012, citing the efforts it had made to curb fakes. Still, some companies and others have since criticized Taobao and Alibaba’s other platforms for not doing enough to stamp out counterfeit and gray market products.

In its prospectus filed with U.S. regulators, Alibaba said it could face legal action or reputational damage from the sale of counterfeit goods on its platforms, even as it said it has taken steps to weed out those products.

Alibaba doesn’t sell products on Taobao itself. The marketplace offers a platform for outside sellers—often mom-and-pop outfits—to sell their products to Chinese consumers. It also offers its Tmall platform, which is home to online stores often dedicated to major global brands in cosmetics, electronics and other goods.

The dispute between Alibaba and the SAIC stems from an earlier report on fakes released by the agency. The report, dated last week, said it found a number of fakes on Taobao, particularly among mobile phones and toys.

On Tuesday, Taobao said on its official Weibo social-media account that the SAIC survey was based on a small sample size and contained other flaws. The post, which was unsigned, was later deleted.

On Tuesday, SAIC defended its findings, saying it has an obligation to monitor and protect the marketplace. The agency has a broad role in marketplace regulation, including oversees trademark and corporate records issues, and has a role enforcing China’s antimonopoly law.

Author

Quick Summary

White paper says Alibaba too lax in what it allows merchants to sell.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

Mexico halts Chinese expo centre on environmental concerns

0
0

MEXICO CITY—Mexican authorities have halted construction of a controversial exposition centre for Chinese goods near the Caribbean resort Cancún, saying the planned site isn’t appropriate for the project because it is home to protected mangroves and birds.

The developers of Dragon Mart Cancún, a US$180 million project partially backed by Chinese investment, began clearing vegetation on 1,370 acres just south of Cancún in 2013 after securing some local and federal approvals. However, upon further inspection last year, Mexican environmental protection agency Profepa deemed the land unsuitable for development.

“As far as we’re concerned, there’s no possibility for the project to be undertaken on this site,” Profepa Director Guillermo Haro said Tuesday.

In a statement, Dragon Mart Cancún vowed to fight the suspension in court, saying that “legal uncertainty is a major risk for any national or foreign investment.”

Dragon Mart Cancún is a joint venture between Mexican investors and a unit of Chinamex, an overseas promotion effort of China’s Ministry of Commerce. Modeled after a similar concept in Dubai, the Dragon Mart was to feature 722 homes for Chinese administrators of more than 3,000 storefronts promoting toys, construction materials, electronics and other goods.

Mexican business leaders had expressed concern that Dragon Mart Cancún would promote Chinese industry at the expense of Mexican jobs.

In recent years, Chinese goods have flooded the Mexican market. Chinese exports to Mexico account for more than 90 per cent of the roughly US$70 billion of goods that flow annually between the two countries, according to Mexican government data. Both countries also compete for market share for imports to the U.S.

The suspension of the Cancún project comes after the Mexican government in November abruptly canceled a US$3.7 billion contract to build a high-speed rail line that was awarded to a Chinese-led consortium. Rival bidders said the process had been too hasty, while questions emerged about potential favouritism because the winning consortium included a local company with close ties to Mexican President Enrique Peña Nieto.

Mexico cancelled the train contract just days before Mr. Peña Nieto traveled to China for talks aimed at expanding commerce. Earlier this month, the Mexican government said it would seek new bids for the rail line.

Mr. Haro, head of Mexico’s environmental protection agency, said Mexico remains open to all types of foreign investment, as long as those investments comply with local regulations and lead to sustainable growth.

Dragon Mart’s developers must also pay some US$1.5 million in fines because they cleared land without a thorough environmental impact study or federal rezoning authorization, Profepa said. The developers have appealed the fines in court.

Author

Quick Summary

The developers of the US$180mn project say they will fight the decision.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

How international students could help boost Australia’s trade

0
0

With the announcement of the recently concluded China-Australia Free Trade Agreement (CHAFTA) between Australia and China, followed by the Labor Party's Asian Century White Paper and the Liberal Party's New Colombo Plan, few could fault Canberra for not taking trade with China seriously.

Australia has set the structural framework to open and accelerate trade links, and established a platform to produce a new wave of China-literate and bilingual talent into the local workforce.

But inevitably the future face of business in China will not just be the Australian participants of prestigious student exchange programs. 

Chinese international students studying in Australia could ultimately play a decisive role in fulfilling Australia’s regional trade ambitions under the new FTA agreement. But haigui, or returning sea turtles as they are known in Mandarin, who have studied in Australia are too often overlooked as a short-term commodity rather than as an investment for the future.

Each year Australia effortlessly supplies an enormous cohort of potential trade envoys to the region, including China, and with no cost to the Australian taxpayer. 

Now that trade liberalisation will open new markets in China for Australian goods and services, it is international students returning to China who are best placed to connect Australia with the market for live cattle, milk, and other products over the coming years.

Connecting Australian farmers and other companies to the local market in China is no easy feat. China is ranked 128 in the world by the World Bank Group for starting a business and the Chinese Government has tightened regulations for foreign companies operating in China in recent years.

A white face and broken Mandarin are a meek force to navigate the labyrinth of bureaucratic paperwork and regulatory requirements, not to mention negotiating, and coordinating logistics under a diversely different -- and at times archaic -- model of doing business.

Australian entrepreneurs and companies need local partners in China who they can trust. Returning international students who are bilingual and familiar with the Australian way of life will help to tick that box.

Returning Chinese students also typically possess extensive family business connections, access to capital, and they are already beginning to absorb important posts previously occupied by well-paid expatriate workers. 

But little investment is made into integrating international students into Australia's regional trade strategy and to stay connected. In fact, scores of international students return to China every year sombre about the lack of professional opportunities and experience Australia provided them. 

Australian employment policies and norms discriminate against international students from gaining vital internship experience. Australian universities also provide little support for connecting international students with employment opportunities in Asia. 

Unless returning international students work for an Australian company in their home country, they quickly lose connection with Australia. 

Australian companies with operations in China should be opening their doors to international students for short-term internships in Australia before transferring talent to their offices in Asia. International organisations with a branch in Australia, including KPMG, could introduce a similar program for talent identification and training.

Government funding could be also be allocated for international students to participate in entrepreneurial incubator projects. These projects provide training, mentoring and foster new trade channels between Australia and the region.

Further investment is then necessary to ensure that international students in Australia are better integrated into Australian society. An isolated experience studying abroad in Melbourne or Sydney does not augur well for promoting bilateral understanding or developing future trade and people-to-people connections.

Organisations such as the Australia China Youth Association play an important role in fostering social and cultural integration in universities and there is far more potential to link Chinese students with young Australians learning Mandarin.

Abroad, we must encourage returning international students to stay engaged with networks including the Australia Chamber of Commerce, the Australia China Young Professionals Initiative, alumni associations and Embassy events. 

Trade is unequivocally a two way street, and if Australia is to truly realise its economic potential under the new free trade agreement, we can’t afford to lose these connections and squander the sizeable pool of talent returning to China.  

Oliver Theobald currently works in Beijing and is the Co-founder of Asia Options.

Categories:

Status

Published
Chinese international students studying in Australia are too often overlooked as a short-term commodity rather than as an investment for the future.

Media

Type


China business news digest

0
0

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

Taobao hits back at fake goods claim

E-commerce giant Alibaba’s flagship online platform has hit back at the State Administration of Industry and Commerce over its allegation that only 37.25 per cent of goods sold on Taobao are genuine.

The Chinese regulator has been fighting a public battle with the Chinese e-commerce giant for the last few days over the fake goods claim. Taobao has challenged SAIC’s sampling methodology as well as the official in charge of the on-line commerce quality department.

Taobao says SAIC’s high-handed and old-fashioned tactics risk stifling innovation and has lodged an official complaint against the official who is responsible for the report.

(Caijing)     

Beijing set to unleash 10.5 trillion yuan of credit

China International Capital Corp, one of the country’s leading investment banks, predicts the central bank will increase total credit creation from between 5 and 10 per cent, making 10.5 trillion yuan worth of credit available to the market this year.

CICC estimates the big four commercial banks are likely to be responsible for 30 to 40 per cent of new loans in 2015 and small and medium sized banks will be reponsible for another 20 per cent. Analysts believe the central bank is adopting a more loose monetary policy.

(Sina Finance

Chinese beer industry hit by anti-corruption campaign

Chinese beer production has declined for the first time in the last decade as a result of bad weather, weak consumer demand and the country’s anti-corruption campaign.

Beer production dropped 0.98 per cent in 2014 compared to the year before. Production growth reached its peak in 2006 when it increased 14.79 per cent. A beverage analyst says consumption at entertainment venues and restaurants decreased last year.

Chinese per capita consumption of beer is 34.2 litres per year, slightly above the world average. The industry is highly concentrated with the top five producers accounting for 80 per cent of market share.

(Caijing)

Shaanxi set to levy 6 per cent tax on coal

Shaanxi province is set to levy a 6 per cent resource tax on its coal industry following examples of other major coal producing provinces such as Shanxi (6 per cent), Inner Mongolia (9 per cent) and Ningxia (6.5 per cent).

The China State Administration of Tax announced at the beginning of December last year that it wanted to replace the myriad of fees and levies on the coal industry with a new resource tax from between 2 and 10 per cent. Each province is allowed to set its own tax rate.

The Shaanxi Coal Association says the new resource tax is likely to increase the burden on the industry which is already struggling as a result of low prices. The association estimates 50 to 60 per cent of coal producers are losing money.

China’s Coal Industry Association estimates the total tax burden for the industry is 35.04 per cent of total revenue, which includes 21.03 per cent of fees and levies and 14.01 per cent of administrative charges.

(Caijing)  

Shanghai's first private bank receives approval to start operating

Following the launch of WeBank, China's 'first private bank', earlier this month, Shanghai authorities yesterday gave another private financial institution, the Shanghai Huarui Bank, the green light to begin operations.

The bank, which has registered capital of 3 billion yuan, will focus on providing trade financing to small- and medium-sized companies operating within the Shanghai Free-Trade Zone.

The executive director of the bank will be the former deputy governor of the Shanghai branch of the PBoC and the new bank's head will be the former head of the Suzhou branch of the Bank of China.

The bank still needs to obtain various other regulatory approvals before it can open for business.

(The Paper)

Employees gain greater access to compulsory housing funds 

Chinese employees will have easier access to their housing funds and will be able to able to use this money to contribute to their rent, according to a joint announcement from the Ministry of Housing and Urban-Rural Development, the Ministry of Finance and the Central Bank yesterday.

Most Chinese employees are required to contribute to a housing fund, which, like superannuation in Australia, is matched by an employer contribution and is not taxed.

The rules to date have meant that they can only access these funds in order to purchase a house.

The new rules allow, under certain conditions, employees to access their funds in order to pay their rent.

(Beijing News)

Tax reform reduced tax burden on firms by almost 200 billion yuan in 2014

China is in the process of reforming how it taxes firms operating in some service industries, shifting from the levying of a 'business tax' to a value-added tax.

The pilot reforms have already resulted in reducing the tax burden of firms by 192 billion yuan last year, according to data released by the country's State Administation of Taxation yesterday.

The report in to the progress of the tax reform says that 4.1 million firms were involved in the trial and that 95 per cent of the companies involved in the piloting of the tax reform experienced a decline in their tax burden.

The scope of the value-added tax reforms are expected to expand into other service industries such as construction and finance this year.

The tax bureau also noted that in 2014 it collected a net total of 10.38 trillion yuan in revenue, an 8.8 per cent increase on the previous year.

(Beijing News)

Two-thirds of provinces say they missed GDP growth targets in 2014

At least two-thirds of China’s provinces, regions and municipalities failed to meet GDP targets last year reports Caixin.

According to the magazine, out of the 22 provinces and regions that have released statistics, only Tibet met its target of 11 per cent.

Shanghai has become the first major city to abandon its GDP growth target.

China’s growth numbers for 2014 showed the economy expanding at its slowest pace in 24 years.

(Caixin)

Alibaba's finance arm launches credit scoring service

Alibaba Group’s finance arm has launched a credit rating system that will draw upon the e-commerce giant’s vast data trove in the company’s latest push into consumer finance.

The credit-scoring system, Sesame Credit, will look use online data including from social networks to determine the credit worthiness of consumers, said Ant Financial Services Group in a statement.

Alibaba has been moving further into financial services of late including through a money market for consumers, micro-loans, and a new private bank. 

Consumer credit remains a relatively underdeveloped sector in China where state-owned banks have long dominated. Companies such as Alibaba and Tencent hope to leverage their massive data banks to make inroads into the sector.

Alibaba founder Jack Ma has made building a culture of credit in China a stated ambition of his company.

(Sina Finance)

Categories:

Status

Published
The public stoush between regulators and Alibaba continues and Beijing gears up to unleash 10.5 trillion yuan of credit.

Media

Type

Chinese beer industry hit by anti-corruption campaign

0
0

Chinese beer production has declined for the first time in the last decade as a result of bad weather, weak consumer demand and the country’s anti-corruption campaign reports Caixin.

According to the magazine, beer production dropped 0.98 per cent in 2014 compared to the year before. Production growth reached its peak in 2006 when it increased 14.79 per cent. According to one beverage analyst cited by Caixin, consumption at entertainment venues and restaurants decreased last year.

Chinese per capita consumption of beer is 34.2 litres per year, slightly above the world average. The industry is highly concentrated with the top five producers accounting for 80 per cent of market share.

Author

Quick Summary

Beer production dropped 0.98 per cent in 2014 compared to the year before.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

Alibaba's finance arm launches credit scoring service

0
0

Alibaba Group’s finance arm has launched a credit rating system that will draw upon the e-commerce giant’s vast data trove in the company’s latest push into consumer finance.

The credit-scoring system, Sesame Credit, will look use online data including from social networks to determine the credit worthiness of consumers, said Ant Financial Services Group in a statement.

Alibaba has been moving further into financial services of late including through a money market for consumers, micro-loans, and a new private bank. 

Consumer credit remains a relatively underdeveloped sector in China where state-owned banks have long dominated. Companies such as Alibaba and Tencent hope to leverage their massive data banks to make inroads into the sector.

Alibaba founder Jack Ma has made building a culture of credit in China a stated ambition of his company.

Author

Quick Summary

Service will draw upon the e-commerce giant’s vast data trove.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

Shaanxi set to levy 6 per cent tax on coal

0
0

Shaanxi province is set to levy a 6 per cent resource tax on its coal industry following examples of other major coal producing provinces such as Shanxi (6 per cent), Inner Mongolia (9 per cent) and Ningxia (6.5 per cent).

The China State Administration of Tax announced at the beginning of December last year that it wanted to replace the myriad of fees and levies on the coal industry with a new resource tax from between 2 and 10 per cent. Each province is allowed to set its own tax rate.

The Shaanxi Coal Association says the new resource tax is likely to increase the burden on the industry which is already struggling as a result of low prices. The association estimates 50 to 60 per cent of coal producers are losing money.

China’s Coal Industry Association estimates the total tax burden for the industry is 35.04 per cent of total revenue, which includes 21.03 per cent of fees and levies and 14.01 per cent of administrative charges.

Author

Quick Summary

Industry group says the new resource tax is likely to increase the burden on the industry.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

Chinese investors eye a giant tourism boon

0
0

Chinese tourists spent a record $US164.8 billion ($208bn) overseas last year, according to official figures, but that amount looks set to be dwarfed by a tsunami of money that is following their now well-trodden path.

Some of the country’s biggest investors have been snapping up brands, property and other assets across the globe to serve as a magnet for China’s booming outbound tourist market. 

Last year, Chinese tourists made more than 100 million trips overseas, but CLSA expects that number to double to 200 million by 2020.

Just this week, Wanda pledged to invest $1bn for development in the Sydney CBD. Across the harbour, Fosun partnered with Sydney-based Propertylink to buy an office tower in North Sydney for $116.5 million. 

Both companies have already made a splash in the Australian market with Wanda already acquiring a controlling stake in a $900m-plus Gold Coast property in August that it hopes to turn into a luxury hotel and serviced apartments complex. Late last year, Fosun completed the acquisition of local oil and gas firm Roc Oil for $439m.

Fosun’s chairman Guo Guangchang sees these steps into the Australian market as just the beginning. “After the acquisition of ROC Oil in November 2014, we are happy to see that we can contribute more to the Australian economy,” he said in a statement this week.

“The Australian property market is well known for its stable growth and transparency. It is also the reason why Australia attracts so much attention from Asian investors including from China,” he said.

The company has been on an overseas spending spree of late drawing heavily on funds made available after its strategic acquisition of Portuguese insurance company Caixa Seguros. That purchase has allowed the company to snap up brands and companies without taking on more debt.

The strategy draws directly on that of Warren Buffet. Guo is unabashedly a devotee of the oracle of Omaha, and the philosophy graduate has shown a similarly deft touch for investments.

Among the company’s most recent acquisitions are a $725m purchase of the Chase Manhattan building in New York City, London’s Lloyds Chambers building and, after over a year of battling, French regulators have cleared the way for it to buy the holiday resorts group Club Med. 

Jeffrey Towson, a managing partner of private equity firm Towson Capital and a professor of management at Peking University, says the Club Med deal is a strategic platform for Fosun.

“Fosun likes to compare itself to Warren Buffett,” says Towson, "but the Club Med deal is actually very similar to what my old boss Prince Alwaleed did."

“He made his first fortune in an emerging market. They he used that to buy premier hotel brands in the West like the Fairmont and Four Seasons. He used these strategic platforms to start doing deals all over the world -- especially in emerging markets. "

The slew of overseas purchases may at first glance look like a scatter-gun approach, but the unifying principle to all of them is a strategy to capitalise on China’s growing affluence.

Towson says, Fosun can use Club Med to grow with China’s booming tourism market. Transitioning Chinese consumers is a major focus for Fosun and that ClubMed is a real unique asset in that regard, Towson says.

"And as Fosun is the largest shareholder of Focus Media, which boats over 300 million views, they have an ability to really promote Club Med to Chinese tourists, which are increasing rapidly anyway."

Fosun’s Club Med purchase latches onto a trend that is beginning to transform how Chinese investors behave in foreign markets, and it’s something Australians should pay attention to. As Chinese outbound tourism numbers have grown, so too has the sophistication of these travellers.

"A lot of early tourism was about buying luxury products says Towson. “And then it became about buying homes overseas. This year they are buying apartment buildings. Basically, via growing tourism, Chinese consumers have discovered the world is full of nice assets to own."

Gary Bowerman, author of the new book The New Chinese Traveller, says that Fosun will first use the Club Med purchase to meet the evolving demands of short-stay and weekend Chinese holidaymakers domestically, but that ultimately it has bigger ambitions.

"Fosun will want to graduate domestic Club Med travellers to its resorts in Europe and worldwide, and in that sense purchasing Club Med gives it a ready-made tourism eco-system that it can mould and nurture to meet the changing desires of Chinese travellers, both at home and abroad" he says.

Looking beyond the Fosun deal, Bowerman sees Chinese investment in global tourism assets as starting to underscore the increasing overlap between domestic and outbound tourism. 

Chinese investors see huge opportunities both in buying and adapting existing tourism and hospitality concepts and creating new ones for domestic travellers, and then expanding those portfolios overseas argues Bowerman.

The trend can be seen in Jin Jiang’s recent purchase of the Louvre Hotels portfolio of brands, and Hainan Airlines increased stake and established a joint venture in China with Spain’s NH Hotels.

Dalian Wanda, whose strategy of purchasing real estate in major cities, such as Madrid, London and Beverly Hills, is working towards creating a portfolio of 150 luxury hotels, both in China and around the world.

Like Japanese investors before them, these Chinese developers want the ever-growing legion of Chinese tourists to shop, dine and play at their owned properties around the world, including Australia. 

Categories:

Status

Published
A slew of property purchases made by Chinese investors in Australia and abroad highlights the strength of China's booming outbound tourism market.

Media

Type

PanAust buckles down as suitors step back

0
0

SYDNEY— PanAust Ltd. is no longer in takeover talks with its biggest shareholder, Guangdong Rising Assets Management, or any other potential suitors, and is instead buckling down to bolster output and cash-flow in the face of falling metal prices, the miner’s managing director said in an interview.

“It is back to situation normal and GRAM is another shareholder,” said Fred Hess, who became managing director of the company in November.

PanAust last year allowed the state-owned Chinese investment group to scrutinize its books despite rejecting a beefed up offer of 2.30 Australian dollars (US$1.81) a share from its major shareholder as too low.

It also held talks with other companies about a possible takeover, but Dr. Hess said Thursday the company was no longer pursuing discussions with any of those interested parties either.

He couldn’t rule out another approach from GRAM in future, though, saying: “Whatever their plans are, we are not privy to” them. A spokesperson for the group—whose president, Zezhong Li, sits on the PanAust board—couldn’t immediately be reached.

PanAust, which has a market value of around A$800 million, owns two active mines in Laos and hopes to build a US$1.7 billion mine producing copper and gold at Frieda River in Papua New Guinea—a site in which it last year acquired a majority stake from Glencore PLC.

Investors and analysts have previously raised concerns over the failure of PanAust to secure a bolstered bid from its major shareholder, but the market nevertheless reacted positively Thursday as the miner said 2014 copper and gold output surpassed its earlier projections, and forecast a further rise in metal output for 2015. PanAust shares recently traded up 5.5%.

PanAust also said it would steadily increase copper production at its Phu Kham mine in Laos over the next three-to-four years as it digs up higher-quality ore.

It wants to use the cash from higher production to help fund the development of its Frieda River deposit, which is touted as one of the largest undeveloped copper-and-gold resources in the world.

“It is time to knuckle down and start generating as much cash as we can,” Dr. Hess said.

Earlier this month, the company announced it would cut 182 jobs, or nearly 5% of its workforce, to cut costs and bolster margins in the face of weaker commodity prices. Copper and gold prices have fallen in recent years, and while gold has recently recorded a slight rebound, copper prices are trading at more-than five-year lows.

Dr. Hess said more roles would be cut in the year ahead, without forecasting specific numbers.

The company is also helping cushion the impact of lower commodity prices by hedging some of its production, it said.

Dr. Hess said he didn’t expect the recent downturn in copper prices to push out the miner’s planned development of Frieda River, saying it still has nearly two years to complete funding of the project as it seeks all the necessary regulatory approvals to start construction.

Author

Quick Summary

Mining firm to increase copper production despite falling prices.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

US business groups ask China to postpone new cybersecurity review

0
0

BEIJING—China is calling for U.S. technology companies to turn over sensitive material and submit to intrusive inspections, according to U.S. business groups, which are calling on Beijing to postpone the plan and come to the negotiating table.

In a letter dated Wednesday and addressed to Chinese cybersecurity officials, the U.S. groups said that the new rules involve turning over sensitive intellectual property, such as source codes, to the Chinese government. The products most also undergo “intrusive security testing” and would be required to use Chinese encryption algorithms. The rules would also restrict cross-border flows of commercial data.

Stricter cybersecurity standards could limit the range of U.S. products that would be available to Chinese businesses, it said.

The letter said the rules were recently proposed for the Chinese banking sector, but the groups worry they could be expanded to other sectors.

“An overly broad, opaque, discriminatory approach to cybersecurity policy” would isolate Chinese companies and worsen cybersecurity issues, it said. It called for China to further discuss potential new rules.

The letter was signed by the U.S. Chamber of Commerce, the American Chamber of Commerce in China, the Information Technology Industry Council and the Telecommunications Industry Association, among others.

Officials at the Cyberspace Administration of China didn’t respond to requests for comment.

The letter comes at a time of escalating tension between the U.S. and China over cybersecurity issues, fueled by mutual suspicion on both sides, especially in the wake of disclosures of U.S. cyberspying efforts by former U.S. contractor Edward Snowden. In a conference call this week, Microsoft Corp. Chief Executive Satya Nadella said its operations in China fell short of expectations and cited “geopolitical issues,” without elaborating. Experts have said cybersecurity concerns have hurt results in China for Cisco Systems Inc., International Business Machines Corp. and others.

“The Snowden snowball keeps getting bigger,” said Duncan Clark, chairman of investment advisory firm BDA China.

Shortly after the allegations became public, state media sounded warnings about American “guardian warriors”—U.S. tech companies like Google , Microsoft, chip maker Qualcomm and computer networking giant Cisco Systems—having infiltrated China.

Several of the companies have since run into trouble in the country. Microsoft was subjected to an antitrust investigation, Google has seen virtually all of its products blocked, and Qualcomm has said it faces “significant challenges” in China, including an antitrust investigation of its own. In July, China’s state broadcaster China Central Television called the location-tracking function onApple Inc. ’s iPhone a “national security concern.”

Microsoft and Qualcomm have both said that they are cooperating with the investigations and don’t believe they violated Chinese laws. Google has said problems with accessing its products in China exist on the Chinese side. Apple, which saw its revenue for the greater China area including Hong Kong and Taiwan grow 70% year-over-year in the most recent quarter, has said it doesn’t track iPhone users or share their locations.

Washington has repeatedly accused Chinese hackers of stealing data from U.S. companies and has blocked efforts of Chinese telecom equipment makers Huawei Technologies Co. and ZTE Corp. to expand their business in U.S., citing national security concerns. In May, the Justice Department indicted five Chinese military officers on charges of hacking U.S. companies’ computers to steal trade data—the first time the U.S. government publicly accused employees of a foreign state of cybercrimes against American firms.

Huawei and ZTE have both denied that their equipment poses security risks to the U.S. China’s foreign ministry has dismissed the Justice Department indictments as being based on “fabricated facts.”

Cybersecurity has come up often in meetings between U.S. and Chinese officials, including when Barack Obama met Chinese President Xi Jinping in Beijing in November, but U.S. officials say privately that little progress has been made. A U.S.-China working group on cyber issues that was dissolved following the Snowden disclosures has yet to be restarted.

China’s proposed rules for the banking sector could constrict access to a major market for U.S. makers of IT equipment and custom software. At the same time, it isn’t clear how banks would replace foreign technology if manufacturers refused to submit to the security checks.

The core functions of China’s banking sector largely run on foreign-made servers and other equipment, according to Chinese banking executives. “Even though we have the will to replace the foreign brands with domestic ones, we just can’t find any homemade ones that could be as reliable and secure as the foreign brands,” said one of the executives, who works at a big state-owned bank in Beijing.

Since last year, Chinese banks have been accelerating their plans to upgrade the kind of banking cards used in the country. A key component of the plan involves replacing magnetic stripe cards with smart cards to enhance security. Again, according to the banking executives, chips made by foreign technology companies, like Samsung Electronics Co., are dominating the transition.

Wednesday’s letter was addressed to the Chinese Communist Party’s central leading group for cyberspace affairs, which is led by President Xi Jinping.

The letter was reported earlier Wednesday by the New York Times .

Author

Quick Summary

Business groups say new process is too intrusive.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel


China trumps US for foreign investment

0
0

China became the world's top destination for foreign investment in 2014, edging the US out of the top position for the first time since 2003, according to figures released Thursday by the United Nations Conference on Trade and Development. 

China's elevation is part of a longer-term switch in foreign investment toward developing and away from developed economies. While investment in developing economies rose 4 per cent in 2014, investment in developed economies fell by 14 per cent. 

Overall, that left overseas investments by businesses down 8 per cent from 2013 at $US1.26 trillion ($A1.58tn), the lowest level since 2009, when the global economy was in recession following the onset of the financial crisis. 

The continued weakness of foreign investment is a testament to the long-lasting nature of the economic damage caused by the financial crisis, as well as rising geopolitical tensions. Foreign investment in Russia collapsed in 2014 following the country's March annexation of Ukraine's Crimea region. 

"Companies are still not yet in the mood and mode for expansion," said James Zhan, director for investment and enterprise at Unctad. 

Unctad said it doesn't expect a significant recovery in foreign investment this year. 

"The fragility of the world economy, with growth tempered by hesitant consumer demand, volatility in currency markets and geopolitical instability will act as a deterrent for investors," Unctad said in a report. "The decline in commodity prices will also lower investments in the oil and gas and other commodity industries." 

One lasting consequence of the financial crisis has been the shift in foreign investment away from developed economies. Developing economies attracted 56 per cent of all overseas investments by businesses, up from 52 per cent in 2013 and double their pre-crisis share. 

Indeed, the US was the only developed economy among the top five recipients of foreign investment, with Hong Kong, Singapore and Brazil among that group. 

China has been threatening to overtake the US for a number of years as its economy has grown rapidly to become the world's second largest. 

"China has been steady with modest growth over the past few years, and it is expected to continue," said Mr Zhan. "There have been structural changes in inflows to China, from manufacturing toward services, and from labour-intensive to tech-intensive." 

But it might not have done so in 2014 were it not for Verizon's purchase of $US130bn worth of shares in a joint venture from Vodafone of the UK. The Vodafone sale counted as a reduction in foreign investment in the US. And with the US economy set to grow more rapidly than most other developed economies, it is possible it will once again become the leading destination for foreign investment. 

The US wasn't alone among developed economies in suffering a decline in foreign investment during 2014. With the eurozone economy trapped in a long sump, businesses cut their investments in Germany by $US2.1bn and their investments in France by $US6.9bn. As the UK returned to rapid economic growth, foreign investment rose to $US61bn, making it the largest European destination for foreign investment. 

While developing countries as a whole attracted an increased share of total investment, some regions fared better than others. Asia led the way, with a 15 per cent rise in foreign investment to an all-time high of $US492bn. By contrast, foreign investment in Latin America fell 19 per cent to per cent 153bn after four years of increase, while foreign investment in Africa fell 3 per cent to $US55bn. 

But the region that suffered the largest decline outside the US was Eastern Europe and the former Soviet Union, known by the United Nations as the "transition economies." With concerns about the conflict in eastern Ukraine and western sanctions against Russia contributing to a halving of foreign investment to $US45bn. Foreign investment in Russia alone fell 70 per cent, while foreign businesses cut their investments in Ukraine by $US200 million. 

Author

Quick Summary

UN conference says China now top destination for foreign investment.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

Copper slips to new 5.5-year low

0
0

Copper prices fell to a new five-and-a-half-year low Thursday, brought down by a stronger dollar and investor concerns that China's slowing economy would hamper demand for the industrial metal.

Copper for March delivery, the most actively traded contract, closed down 1.1 per cent at $US2.4515 a pound on the Comex division of the New York Mercantile Exchange, the lowest level since July 21, 2009.

Prices have plumbed five-year lows in recent months amid fears that a slower pace of global growth, combined with ample mine output, would lead to a copper supply surplus.

The metal is widely used in manufacturing and construction, making copper sensitive to economic shifts.

On Wednesday, the Federal Reserve signalled it would keep short-term interest rates near zero at least until midyear, while providing a relatively upbeat assessment of current US growth and labour market conditions.

At the same time, the central bank also hinted at wariness about low inflation, slow global growth, a stronger US dollar and international market turbulence.

Investors, however, construed the comments as mildly hawkish, sending the dollar higher and weighing on copper, which is priced in the US currency and becomes more expensive to foreign buyers when the greenback appreciates.

At the same time, China reported that steel consumption didn't expand in 2014 for the first time in 14 years, a sign that the country's economic slowdown may be hindering demand for raw materials. China is the world's largest consumer of copper, which is used extensively in manufacturing and construction.

"In terms of the metals outlook, it seems that the path of least resistance is lower still, with copper being the weak link in that it is exerting spillover pressure on the others," said Edward Meir, a strategist at INTL FCStone.

Author

Quick Summary

Concerns China's slowing economy could hamper demand weigh on industrial metal.

Associated image

Media

Categories

Primary category

Status

Published

Content Channel

Chinese innovation and the Haier model

0
0

When you walk into a Chinese bookstore, the most visible section is usually one full of books about how to become rich. It’s usually packed with books from management gurus such as Steve Jobs, Peter Drucker and Sony co-founder Akio Morita.

However, things have started to change. Book shelves once reserved for venerated Western gurus are making space for new Chinese business heroes. Jack Ma, the founder of the e-commerce giant Alibaba, is on top of list. There are also less familiar names such as Ma Huateng of Tencent and Zhang Ruimin of Haier, the world’s largest maker of white goods. 

This changing of the guard at Chinese bookstores is a sign of a subtle yet fundamental shift taking place in China -- the rise of indigenous innovation. For years China has been seen as a mere copycat of Western technology and know-how, but some Chinese businesses are shedding this stereotype and taking on their established peers.

American business academics and management consultants have also started to take note of the emerging wave of innovation in China.  The MIT Sloan Management Review devoted an entire issue late last year to examine the trend. Harvard Business Review also carried articles about Chinese innovation.

The chairman of News Corp (the publisher of Business Spectator) Rupert Murdoch was also suitably impressed with pace of innovation in China after a visit to the country earlier this year. He tweeted that China was a "country moving from just copying Western things to much impressive innovation and also business models with vast mass market".

Zhang Ruimin, the chairman of Haier group, is one such groundbreaker. He is a household name in China and turned a state-owned fridge maker on the verge of bankruptcy into the world’s largest and leading producer of white goods. The company has expanded aggressively under his leadership and bought iconic Kiwi brand Fisher & Paykel in 2013.

In a long opinion piece littered with references to celebrated management theorists like Adam Smith, Frederick Taylor and Alfred Chandler, Zhang says he wants to turn Western management theory on its head and transform Haier into a giant platform for innovation.

Zhang wants to destroy the traditional corporate structure, though this means more than simply getting rid of middle management and flattening the chain of command.  He wants to turn Haier into a giant incubator and transform employees from executors of orders into innovators.

“The company is only a platform for innovation and every employee can be their own boss,” according to an op-ed he penned that appeared in the influential Chinese business magazine Caijing.

This may seem like a revolutionary idea but how does he plan to achieve it? As a maker of white goods, the old structure revolves around research and development and sales and marketing. In his brave new world, Haier will dismantle traditional structures in favour of open platforms where people can bring in their own ideas and resources to develop new products and services.

One of the interesting examples is Leishen, or Thor, one of Haier’s newly incubated companies. It was started by four employees from the company’s PC department. They developed a new brand of laptop designed specifically for internet game users in China after painstakingly analysing 30,000 user comments and complaints.

The unit generated 250 million yuan in revenue and has already attracted an initial round of venture capital backing from outside of Haier. The unit is already being valued at between 100 and 150 million yuan and Haier’s initial investment was only 1.9 million yuan.

Thor is an example of Haier employees starting something fresh and completely new. The company has also created platforms to rejuvenate existing product lines and services as well improving Haier’s logistics chains.

For example, Haier relies on an open platform of 90,000 delivery trucks to distribute its products. All these trucks are plugged into the company’s information management system. The system works like taxi-booking app Uber, that is, trucks can respond to call outs and customer feedback will determine whether they get more orders in the future.

Zhang wants Haier employees to become innovators. He is mindful of the Japanese experience and thinks that the Japanese corporate structure is too rigid and too hierarchical. As a result, Japanese companies have lost their mojo. He says in the age of the internet, the company must respect its employees and encourage them to innovate.

His dream is to turn Haier into an open ecosystem. “Forest will live forever, plants will die every day but they will be replaced with new plants everyday as well. Every employee is like a tree and everyone can be a start-up. The boundary of this company will be great and they can suck in seeds, water and fresh air. They will grow strongly,” he wrote.

It’s still too early to say if Haier’s daring attempts to completely overhaul itself will be successful. What is important is to take note of the ground breaking innovation taking place in China. Western companies were caught off guard by Japanese car makers who pioneered many new business models and processes. This should not happen again.

Early results from Haier are very promising, the company’s revenues increased 11 per cent last year to 200 billion yuan and profit was up 39 per cent to 15 billion yuan. Even more astoundingly, its e-commerce sales accounted for more than a quarter of revenue, an increase of 2,391 per cent.  Every CEO should be envious of such a result.

Categories:

Status

Published
The man who helped turn a Chinese state-owned fridge maker into a global white goods giant plans to transform the company into a platform for innovation.

Media

Type

President Xi's Chinese dream means a more multi-polar world

0
0
Graph for President Xi's Chinese dream means a more multi-polar world

The Conversation

China begins 2015 as the world’s largest economy, in terms of purchasing power parity, a key milestone in the country’s rise. And one that likely will herald a change in how China engages with the rest of the world.

For now, President Xi Jinping’s focus is domestic. He says he wants to bring about the rejuvenation of the Chinese nation to allow it to take its rightful place in the world. His aims include the improvement of his people’s livelihood through better education and healthcare services, more stable employment, a cleaner environment, less corruption and a stronger military.

So what does President Xi’s dream mean in terms of China’s global aspirations, beyond carrying through an historic renaissance to see his nation receive the respect he clearly feels it deserves?

China’s uncomfortable perch

Historically, the ascent of a nation and its economy to the top of the heap has led to a major realignment of global power relations, with former dominant powers struggling to accommodate the new entrant.

But it’s China itself that has been perhaps the most uncomfortable ascending to the top spot, disputing the statistics and keeping the information largely hidden from its own population. A strange response from such a proud nation, but an understandable one.

First, acceptance might cause other nations to push China to contribute more to global public goods, such as peacekeeping and disease control. It’s a reasonable concern. The US attitude was summed up by President Barack Obama himself last August.

“They are free riders,” he said, noting that they had been doing so for the past 30 years. "It has worked really well for them.”

It should be kept in mind that China is still a relatively poor country with a per capita income of about $12,000, compared with $53,000 in the US.

Second, domestic nationalist sentiment is strong and might pressure the Chinese leadership to expand global political power to match its economic prowess in ways that may antagonize other nations such as the US.

Third, historically, attempts by the Chinese Communist Party to engage in global governance have not been successful – at least in the past. It was not, for example, able to build a coalition of developing nations to counteract the Soviet Union and the US during the Cold War and its support for guerrilla movements in Southeast Asia set back ties with those countries for many years.

Ascent forcing fundamental changes

The unprecedented level of China’s integration into the global economy, energy markets and foreign reserves accumulation, its role in climate change and other environmental challenges are now forcing fundamental changes in its relatively passive and low-key international position.

Slowly, the contours of a new Chinese policy are becoming apparent. In December, President Xi said that it was important to “inject more Chinese elements into international rules.” This does not mean that China is intending to change dramatically the current global order or confront US supremacy.

Vice Premier Wang Yang made this clear in his own December speech when he stated: “China and the US are global economic partners, but America is the guide of the world… China is willing to join the system and respect those rules and hopes to play a constructive role.”

Of course, China has already joined the system and is a major beneficiary, but playing a “constructive role” may imply that China will pursue its own interests and hope to influence global policy making and institutions more in the future. One suspects that the country still yearns for a multi-polar rather than unilateral world order. The search for a beneficial partnership with the US was clear in Xi’s phrase of seeking a “new type of great power relationship.”

Seeking fruitful collaboration

Indeed there are many areas where collaboration will be fruitful: in terms of security, both countries want a stable Middle East, Iraq and Afghanistan and a non-nuclear Korean Peninsula. There are substantial other areas for cooperation: climate change and environmental protection, drug smuggling, trafficking in women, preventing the spread of infectious diseases to name just a few.

At the same time, China will not just sit on the sidelines and watch the US pursue its own interests where they might conflict.

China clearly sees itself as the dominant power in East Asia, and its trade and investment policies clearly support this. The recent creation of the Asian Infrastructure Bank, which is expected to spend billions investing in the region, promotes this objective.

As does the Shanghai-based New Development Bank, under the auspices of the BRICS – a term referring to the (once) fast-growing economies of Brazil, Russia, India and China. Its formation shows that it is willing to promote development funding outside of the old World Bank framework, to the consternation of the US.

The overriding priority of China’s foreign policy is to maintain a peaceful international environment that will allow it to focus on its domestic agenda. However, this is becoming increasingly difficult. The country is defending its territorial claims more forcefully. It has become a major trade and investment partner of many countries in the region. Finally, China is also a major exporter of pollution and, together with the US, a key contributor to global warming.

One challenge for China as it goes global is that it retains an outdated notion of sovereignty. In short, what China wants is an economic order that is international in terms of the benefits it brings but not necessarily global if that involves compromising national decision-making.

Equal partner or grumpy one?

Ultimately, China needs to be able to feel comfortable with a framework for international governance in which it is an increasingly important player. In turn, other major nations need to incorporate China as a more equal partner and to build its reasonable concerns into the architecture of international governance.

China, for its part, must reduce its suspicion of hostile foreign intent and adjust its outdated notion of sovereignty to accept that some issues need transnational solutions and that international monitoring does not have to erode the Communist Party’s power. Without accommodation on both sides, China will continue to appear as a rather grumpy, unpredictable player on the international scene, rather than achieve the ultimate aims of President Xi’s dream.

The Conversation

This article was originally published on The Conversation. Read the original article.

Categories:

Status

Published
China is likely to pursue its own interests and hope to influence global policy making and institutions more in the future.

Media

Type

China business news digest

0
0

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

China’s outsourcing industry reaches US$100bn

Chinese companies earned $US107bn from outsourcing contracts, up 12.2 per cent from 2013, according to data from the Ministry of Commerce.

The Ministry estimates the outsourcing industry created 4 million new jobs for university graduates. One third of outsourcing contracts involved high end research and development works.

(China News Service)

‘Red princeling’ in charge of Anbang Insurance

Liberal newspaper The Southern Weekend, has published an explosive story revealing that one China’s most prominent princelings, Chen Xiaolu, is the de facto owner of Anbang, one of the largest financial conglomerates in the country with one trillion yuan in assets.  

Chen Xiaolu is the son of Marshal Chen Yi, one of the ten founding marshals of the People’s Republic.

(Sohu)

Chinese railway freight volume declines 3.9 per cent

Chinese railway freight volume, one of the most important economic indicators for the country, declined 3.9 per cent in 2014. Freight volume dropped 7.8 per cent during the final quarter of 2014 as a result of a slowing economy.

Railway freight is one of three components that make up the so-called ‘Li Keqiang Index’, named after the Chinese premier who is reportedly distrustful of the official GDP figure.

(Sohu)

Chinese demand for oil set to moderate

Petro China, one of the country’s three major oil companies, estimates that demand for oil will moderate to 2 to 3 per cent for 2015. China’s dependence on foreign oil will exceed 60 per cent of its total consumption this year.

The company estimates the demand for foreign natural gas will increase 10.2 per cent in 2015, slower than the growth rate in 2014.

(Sohu)

BOC Hong Kong considering sale of $6 billion bank unit

Lender BOC Hong Kong Holdings is weighing up a sale of subsidiary Nanyang Commercial Bank (NCB) for approximately US$6bn, reports Reuters citing sources familiar with the matter.

According to Reuters, one potential buyer interested in NCB is China Cinda Asset Management, China’s second bad debt manager that listed in Hong Kong in December 2013.

The sources told Reuters that purchasing a bank will help China Cinda access cheap sources of funds to buy bad loans -- an ability rivals like Huarong Asset Management already have.

BOC Hong Kong issued a statement to the Hong Kong stock exchange on Thursday saying it was conducting a feasibility study to review its group's business and assets portfolio.

(Reuters)

China expected to set 2015 growth target at 'around 7 percent'

China plans to cut its growth target to around 7 per cent reports Reuters citing sources with knowledge of a recent high-level economic meeting in Beijing.

According to the report, the new growth target, the lowest in 11 years, was endorsed by top party leaders and policymakers at a closed-door Central Economic Conference in December.

"This year's economic growth target will be around 7 per cent, but the 7 per cent should be the bottom line,” said one of the sources, an ‘influential economist’ according to Reuters.

China's economy expanded 7.4 per cent in 2014, its weakest pace in 24 years, and authorities are emphasising a "new normal" as they retool the country's growth model to one they hope will be more sustainable.

(Reuters)

China's reliance on iron ore imports rose to 78.5% in 2014

China now relies on imports to supply 78.5 per cent of its iron ore demand, according to figures released by the China Iron and Steel Association (CISA) on Thursday and reported on by China National Radio

The industry body, which represents the largest players in China's steel industry, said that the decline in import prices last year represents a serious threat to the survival of domestic iron ore producers.

China imported 933 million tonnes of iron ore in 2014, a 13.8 per cent increase on the previous year. 

In 2013, China sourced 68.2 per cent of its iron ore from abroad.

(China News Service)

Iron ore decline lifts profits at Chinese steel firms

The slump in iron ore prices has helped China's largest steel firms post their best annual profits in almost three years.

Medium and large sized steel mills achieved a combined profit of 30.4 billion yuan last year, according to figures released by the China Iron and Steel Association (CISA) yesterday.

This was an 8.75 billion yuan increase on the profits posted in 2013, a more than 40 per cent improvement year on year.

(China Business News)

Ministry of Commerce: Currently no sign of large scale exodus of foreign firms from China

At a press conference held by the Ministry of Commerce yesterday, ministry spokesperson Shen Danyang said that according to the overall data, there has been no widespread removal of capital by foreign-invested companies.

The response followed reports that Microsoft plans to gradually close down two Nokia factories in China. Japan's Panasonic is also said to be planning on closing colour television production lines in China.

Government revenue expands at slowest pace in 23 years

The pace at which overall government revenue expanded in 2014 was the slowest since 1991.

In 2014, China's central and local government collected a total of 14.04 trillion yuan, an increase of 8.6 per cent on the previous year. The central government collected 6.45 trillion yuan in revenue over the year, a 7.1 per cent increase over 2013.

Local governments raked in 7.59 trillion yuan, up 9.9 per cent on the previous year. Tax revenue accounted for 11.92 trillion yuan of receipts, a 7.8 per cent increase on last year's tax take.

China's bull market lifted revenue from stamp duty on stock trades by 42 per cent in 2014, with most of the lift in revenue coming in the final two months of the year.

Aside from tax revenue, profits from various government funds, state-owned enterprises and land sales are also included when calculating total government revenue.

(Ministry of Finance)

Categories:

Status

Published
China expected to set 2015 growth target at 'around 7 percent', and a prominent princeling revealed as the de facto owner of Anbang Insurance.

Media

Type

Viewing all 2267 articles
Browse latest View live




Latest Images