We have convenience stores without cashiers, and now it seems banks are the latest business to dispense with traditional staff.The concept of a bank without tellers was so intriguing that when Jiang Zhongquan, a postgraduate at the Nanjing Forestry University, came to Shanghai last week to visit his girlfriend, he couldn’t resist the chance to see China’s first-ever unmanned bank. It is the Jiujiang Road sub-branch of China Construction Bank, where customers are served by robots, not humans. A genial robotic woman at the front of the branch is the lobby manager. She welcomes customers, finds out what they want to do and helps them get a queue ticket.Those entering the bank need to scan an identification card or China Construction bankcard to gain admission. On their next-time visit at the bank, they need only show their face to a scanning machine at the entrance. Jiang said the most interesting feature of the bank was the use of virtual reality to find home rentals. He told Shanghai Daily that he usually looks for rentals via agencies, which is rather time-consuming and not always in tune with his expectations. “With the virtual reality equipment in the branch, I know exactly how a flat looks and what kinds of facilities it has,” Jiang said, “I need only check out those that really impress me, instead of wasting my time looking at others.” He said he also found it “practical and convenient” to withdraw or deposit cash using facial recognition technology at the automatic teller machines. It’s a simple matter of linking a banking card with a mobile phone number and recording your face. The machines do the rest. Any problems in the outlet? Just contact one of the patrol robots programmed to deal with any circumstance that may arise. Jiang’s conclusion?“It was really novel and fun,” he said, after talking with the robots. “They tell me almost everything I need to know about the bank’s services.” For Yuan Yunke, Jiang’s girlfriend and a first-year postgraduate at the Economics School of Shanghai University, first impressions were not so favorable.She said she is concerned that graduates like her, majoring in economics or finance, may never find jobs in the future. Jiang tried to jolly her up by noting that bank personnel in the future will be liberated from drudge routine work and can be deployed to more creative jobs.Xie Yong, a local resident in his 40s, said he felt a bit confused after visiting the unmanned branch. “The younger generation prefers to do transactions via mobile banking applications, while many senior citizens may find high-tech banking difficult to master,” he said. “I don’t quite understand why the bank needs such an outlet here. It may not attract much traffic in the long term.” For now, the novelty of the new outlet is attracting customers of all ages. Guo Lanying, a 63-year-old Jilin Province lawyer on a business trip in Shanghai, said she found the facilities at the branch interesting and helpful. She told Shanghai Daily that she hopes to see more such outlets in other cities in China. Unlike online banking, clients at the branch get receipts showing their transactions. She said that was reassuring. “After all, regulations on online banking services aren’t comprehensive yet in China,” she noted. “We consumers want to protect ourselves.”
Robots are still toys for the young and science fiction for many adults. But they are neither for patrons of the China Construction Bank sub-branch on Jiujiang Road.Meet Xiao Fang.She is a robot who greets customers coming into the bank. At 1.5 meters tall, Xiao Fang has a pleasant female face and a soft voice. She looks somewhat like a human.“Hi! Can I help you?” she asks those entering the bank lobby. Although some people are at first hesitant to talk to a machine, those who do find the experience surprising. Xiao Fang is intelligent, with clear answers on hand on how to open an account, check an account or set codes.She might be called the second-generation of robots. Earlier, the Bank of Communications deployed Jiao Jiao, a smaller and more childish-looking robot, in its outlets.The biggest difference between the two is that Xiao Fang works independently. She responds to questions drawing on her own artificial intelligence, while Jiao Jiao was controlled by staff behind the scenes.“Xiao Fang does not need assistance in serving as a lobby manager,” said Li Weijia, deputy sales director of Shanghai-based Ferly Digital Technology Co, which makes Xiao Fang and other artificial intelligence devices like fingerprint recognition.“We have made Xiao Fang smart enough to walk and talk like a real person, and to avoid stumbling over obstacles or talking too much,” Li said.But the questions she can answer are limited to those related to banking. If you ask her about the weather or if she has a boyfriend, Xiao Fang just smiles. And if too many people crowd around her asking questions, she tends to look lost. But whatever the shortcomings, her presence in the bank has created something of a sensation. Customers can often been seen taking selfies with her.“The robot is marvelous,” said a bank clerk surnamed Wei who came from the central province of Hunan just to see this smart bank outlet. “In the future, it may become a standard for every bank to have a robot lobby manager.”All good news for Ferly Digital, which manufactured 50 Xiao Fang-type robots last year and has received a hefty order book so far this year. The company, established in 2002, will get another round of financing valued at 50 million yuan (US$7.96 million) after it becomes a supplier to China Construction Bank.The company is attending the current China (Shanghai) International Technology Fair, where it is exhibiting its robots and other technologies..“We believe the day will come when robots replace human beings in roles like lobby managers, and the concept will be popular,” Li said. “A robot like Xiao Fang, which costs 200,000 yuan, can work around the clock and never get tired or need a break. Isn’t it wonderful?”Yes, so wonderful, in fact, that more companies are piling into the sector, presenting fiercer competition to pioneers like Ferly Digital. Already there are an estimated 1,500 companies in China wrestling to make robots more and more like human beings.
Lanzhou hand-pulled beef noodles may be the next Chinese street food to win the hearts — and stomachs — of foreign foodies.Zhang Renqian, 18, just finished an important exam that will decide whether he can enroll at a school and gain a management position at a Lanzhou beef noodle restaurant after graduation, either in China or overseas.“If I pass all the exams, I can get a job,” said Zhang, who lives in Jingyuan County in northwest China’s Gansu Province.He is part of a group of 60 applicants vying for 20 places at the International Business School for Lanzhou beef noodle, the first of its kind in Lanzhou, birthplace of the popular handmade noodles.Established in late January by the Lanzhou Resources and Environment Voc-Tech College and Gansu Jinwei Food Co Ltd, the school is devoted to training professionals in making authentic Lanzhou beef noodles and bringing them overseas.With a history of about 200 years, Lanzhou beef noodles consist of a flavorful, clear broth, shaved beef, tender radish slices and chewy handmade noodles. While a bowl of Lanzhou beef noodles can be prepared quickly, the skills needed to pull noodles take years to master.“A noodle chef can basically learn to pull noodles in a year, and in three years, he can be regarded as a noodle master,” said Ma Ting, general manager of Mazilu Lanzhou Beef Noodle Co Ltd.There are about 35,000 Lanzhou beef noodle restaurants across China, with total annual revenue hitting 65 billion yuan (US$10 billion), according to Ma Limin, chairman of the Lanzhou Beef Noodle Association. The noodles have received a warm response from customers in the United States, Japan, Canada and Australia.Last August, after a year of study in Lanzhou, Japanese chef Seino Takeru opened a Lanzhou beef noodle restaurant in Tokyo. His diner has been so successful that customers have to wait in line to get a table every day.A bowl of noodles sells for 880 yen (US$8) at Takeru’s restaurant, almost 30 percent more than the price of Japanese ramen, but he can sell more than 300 bowls of noodles within three hours.But bringing Lanzhou noodles to overseas eaters has been difficult for Chinese businesses as many of their chefs fail to meet visa requirements.“Many countries such as the United States, Australia and Canada set requirements for basic educational background for a working visa, but most of our noodle chefs are underqualified, so they have been prevented from going overseas,” said Shi Ningguo, head of the Lanzhou Resources and Environment Voc-Tech College.Shi said students at the school will receive three years of training, ranging from noodle-making to hotel management, and will be awarded associate college degrees and national vocational qualification certificates to help them obtain visas.“The students will learn skills and noodle culture from senior chefs, and those with outstanding performance can spend their second year studying in Australia,” said Zhang Wu of the college.
WPP, the world’s biggest advertising company, will head into uncharted territory when it starts life without its founder Martin Sorrell, whose recent departure has left it rudderless at a time of swirling industry change.The driving force behind 33 years of dealmaking and relentless expansion, Sorrell stepped down last Saturday after the board investigated an allegation of misconduct, saying that the disruption was putting too much strain on the company.While WPP hunts for a new CEO, it has handed the helm to two executives, digital boss Mark Read and Andrew Scott, the chief operating officer of WPP Europe who oversaw acquisitions, making them joint chief operating officers.The sudden departure of Sorrell, the face of the company since he founded it in 1985, has sparked questions as to whether the holding group can remain in its current form of employing 200,000 people in more than 400 companies across 112 countries.“Sorrell’s departure is negative considering ... how instrumental he has been in assembling the assets WPP has today,” said Pivotal Research analyst Brian Wieser.“Any executive filling Sorrell’s shoes needs to orchestrate assets across the holding company and doing so is a challenge in a fragmented federation of businesses such as those which exist within WPP.”The 73-year-old’s departure comes at a difficult time for the British company. In March it published its weakest results since the financial crisis as consumer goods groups such as Unilever and P&G cut spending and other customers jumped ship.The whole industry is also battling the might of Google and Facebook, which dominate the online advertising market, and watching nervously as consultants such as Accenture move more aggressively into the sector.The changing dynamics have meant the previous idea of building marketing groups up to offer advertising, branding, planning and research on a global scale — championed by Sorrell and followed by others — is now under threat as clients want more nimble relationships in a digital age.Many are starting to ask if they can do things differently — creating their own content to place directly on online platforms or working with smaller ad groups.All changeWith so much change in the industry, some analysts have questioned whether the group should seek a new CEO from outside who could look at it dispassionately.Names already in the frame from the industry include Jerry Buhlmann, who runs the Dentsu Aegis network, and Adam Crozier who previously ran broadcaster ITV and Royal Mail.From inside WPP, Read, 51, is seen as the lead candidate.While a common refrain heard about WPP is that no one knows the company like Sorrell, Read is the one man who comes close after he wrote to the WPP boss asking for a job in 1989.From the company’s office in Farm Street, Mayfair, he watched as Sorrell pulled off a string of takeovers before building his own profile by growing its digital operations.He spent nearly 10 years on the WPP board, introducing him to investors, and is regarded by peers as a strategic thinker who can win corporate pitches to bring in work.Scott, 49, is better known in the corporate world than the advertising community, having worked on the company’s acquisition strategy but Sorrell welcomed both appointments.“Mark will be responsible for clients, operating companies and people,” a spokesman said. “Andrew will focus on financial and operational performance and implementing on-going reorganisation of the group’s portfolio.”They will “report to and be supported” by Roberto Quarta, the chairman who becomes executive chairman. Read has already contacted senior executives within WPP to offer to speak to clients and reassure them that work will continue as normal.Whoever replaces Sorrell however will face longer-term questions as to whether a group that was built in his mould should remain intact after his departure. Already executives are predicting that bits will be sold off in a move that could once again become a model for the wider industry.David Jones, the former CEO of WPP peer Havas and the founder of tech marketing group You and Mr Jones, predicted WPP would eventually end up missing Sorrell more than he would WPP.“No one else can keep that company together the way he has been able to because he built it,” he told Reuters. “It’s the fall of an emperor and one that I think will not only take the empire down with him but will also have massive ramifications for that entire industry.”
The ride-hailing market shows no sign of reaching saturation, and the entry of yet more new players may strain prospects for expansion and profits.Didi has dominated the market for some time, securing its grip after merging with smaller rivals Kuaidi and Uber’s China operations. The biggest new challenger is Meituan Dianping, an online-to-offline service platform that links consumers with restaurants, movie theaters and beauty salons. Another new rival is Dida Pinche, a car-pooling service that started in 2015 and began offering an online taxi-booking service last year. Earlier this month, it said it now covers 17 cities, including Shanghai, Guangzhou, Beijing, Zhengzhou, Qingdao and Xi’an. Meanwhile, existing players are caught in an endless cycle of having to offer costly incentives to attract and keep riders and drivers.Yidao, the car-hailing subsidiary of cash-troubled Leshi Holdings, announced a commission-free promotion period for drivers. That compares with the 20 percent commission from Didi. Shanghai-based travel agency Ctrip said it has received a national car-hailing license through a subsidiary in Tianjin. For now, all eyes are on Meituan Dianping in the ride-hailing sweepstakes.Meituan started out as an online food delivery service. At the end of last year, it started its first online car-booking service in Nanjing, expanding to Shanghai last month.The company has been able to take advantage of the burgeoning market in offline services ordered and paid for online. The industry grew 72 percent last year to almost 1 trillion yuan (US$159 billion) and includes film ticketing, leisure activities and food delivery, according to Analysys International. In the first half of this year, the market is forecast to reach 616 billion yuan, a two-fifths increase from a year earlier. Meituan describes its services as an indispensable part of big-picture urban lifestyle. It is promoting its services through discounts and free coupons, and through cash rewards for people who recruit new users to its ride-hailing platform. Anecdotal comment from some users suggests that Meituan services are pretty no-frills.Shanghai office worker Agnes Dong took advantage of a weeklong special discount promotion, receiving 50 percent off when booking a ride through Meituan."I really don’t care about fancy vehicles or services,” she said. “Meituan's discounts work just fine for short rides of 3 kilometers or less."Another user, Jeremy Yang, said he booked three rides from Meituan last month. The mapping service used by the company’s drivers is so poor that they had difficulty finding the designated pick-up point, he said. To counter any foothold Meituan may get on its turf, Didi responded with a price war. It also offered discount coupons. For a short ride within 2 or 2.5 kilometers, passengers need only pay 2 or 3 yuan. Didi also took the battle into Meituan’s backyard, starting its own online food delivery business with a pilot operation in the city of Wuxi. Didi boasts that its new business has captured a one-third market share there. Meituan disputes that claim.Meituan Dianping's recent merger with bike sharing company Mobike opens yet another front in the offline-to-online market. Are bike rentals about to merge with food delivery? There’s little doubt that the business of ordering meals online and having them delivered to the door, which first emerged around 2012, has been growing rapidly. By the end of last year, Meituan and Ele.me dominated the market, with a combined 87 percent share, according to Analysys International. At this stage, food delivery services and ride-hailing apps have one thing in common. Their growth relies on discounts, subsidies and another incentives that detract from the bottom line. The Internet makes it easy for consumers to compare prices. Some say the market is one of reckless competition, fueled by a lack of comprehensive regulations. Yang Xiaoxi, vice director of the Shanghai Traffic Commission, recently told a radio program that a weeklong crackdown on private cars picking up passengers through online apps nailed 668 illegal cars. Of those operating outside regulations, 433 were from Didi, 135 were from Meituan and the rest were from other platforms.Shanghai regulations require that all ride-hailing firms operating in the city must have cars with local plates and drivers with local permanent residency permits.Didi is still in the process of applying for a ride-hailing license from local traffic authorities after receiving national approval at the end of last year. Online ride-hailing apps are subject to fines of only up to 30,000 yuan if they fail to verify the official papers of drivers or allow drivers to register one vehicle with the app but use a separate vehicle to pick up passengers.The ride-hailing businesses are sometimes willing to turn a blind eye to malpractices because they need as many as vehicles as possible on their platforms to attract more riders. Market watchers say they see no order — or profit — coming to the industry anytime soon, as long as Internet giants with deep pockets continue to fight for market share and consumers continue to chase cheaper rides.
CHINA’S Ministry of Commerce said yesterday that the American action against China’s leading telecom equipment maker ZTE Corp will inflict self-damage.
“The action targets China, however, it will ultimately undermine the United States itself,” said ministry spokesman Gao Feng.
The US will lose tens of thousands of job opportunities, while hundreds of related American enterprises will also be affected.
The ministry also said yesterday China is reviewing US smartphone chip supplier Qualcomm’s bid to acquire its Dutch rival chipmaker NXP Semiconductors based on anti-trust laws.
The company has to receive approval from market regulators in nine countries to seal the deal.
CHINA’S Ministry of Commerce said yesterday that there have not been any bilateral talks over trade frictions between China and the United States.
The US submitted a file to the World Trade Organization on Tuesday claiming that it is willing to negotiate over the trade dispute with China.
The US move follows WTO procedures, which order members to respond to a request for settlement from another member within 10 days, said Gao Feng, spokesman for the Chinese ministry.
He reiterated that US Section 232 and Section 301 measures to slap tariffs on Chinese products seriously violate WTO rules.
China yesterday announced that it will impose provisional anti-dumping measures on chlorobutyl rubber imported from the United States, the European Union and Singapore.
A preliminary ruling by the ministry found that firms from these countries had dumped chlorobutyl rubber on the Chinese market, and such imports had caused substantial damage to the domestic industry.
Starting today, importers of the product will have to pay deposits with Chinese customs calculated based on a rate ranging from 26 to 66.5 percent.
The US commerce department launched anti-dumping and anti-subsidy measures against Chinese steel wheels on Wednesday and decided that general-purpose aluminum alloy plates from China received government subsidies.
“Steel products have become a major target of US trade remedy measures, which account for over half the country’s total trade remedy measures,” Gao said. “Overuse of trade remedy measures in certain sectors will not sustain booming industrial growth, and China hopes the US will return to the right track of win-win cooperation to help promote global trade and nurture domestic industries.”
A trade war will not protect American workers and will hurt US consumers and global growth, Gao added yesterday.
China does not want escalating trade frictions with the US, but is well prepared to take countermeasures to any further American moves in the wrong direction.
Meanwhile, China’s foreign trade outlook remains positive despite seasonal fluctuations and uncertainty arising from protectionism, the commerce ministry said yesterday.
Gao said the trade deficit recorded last month was mainly due to the Spring Festival, which had affected production and exports.
China posted a trade deficit of 29.78 billion yuan (US$4.7 billion) in March, the first monthly deficit since February 2017.
Growing global demand amid a recovering world economy, as well as China’s sound economic fundamentals and supply-side structural reforms, will support foreign trade, Gao said.
LESHI may have found white knights in technology giants, including Tencent and JD.com, who are prepared to invest 3 billion yuan (US$478 million) in its smart TV and online video business, the Shenzhen-listed firm said yesterday.
Leshi, or Leshi Internet Information and Technology, is expected to use the investment to “reactivate” its smart TV business. It has been facing “capital shortage and reputation damage” since the end of 2016, as its parent company LeEco became debt-laden because of aggressive business expansion.
Tencent and JD.com will each invest 300 million yuan in New Leshi Zhixin, Leshi’s smart TV and online video business. Their injection gives each of them a 2.55 percent stake in the business. TCL Corp and Suning.com are also expected to invest equal amount in the business.
The investment is based on Leshi Zhixin’s valuation of 9 billion yuan, Leshi said in a statement to the Shenzhen Stock Exchange yesterday.
The 3 billion yuan investment will dilute Leshi’s holding of 40.1 percent in New Leshi Zhixin to 33.46 percent, but it will remain the biggest shareholder.
Shares in Leshi surged 10 percent to close at 5.12 yuan, compared with a 0.11 percent drop in China’s Growth Enterprise Market yesterday.
Tencent’s investment will allow the firm to distribute more video content through Leshi’s TV while Suning can diversify its business from a electronics chain retailer. TCL, which has invested heavily in LCD panel business, can secure Leshi as a potential buyer for the panels, industry insiders said.
Jia Yueting, Leshi’s founder and former chairman, expanded LeEco’s business from online video to smartphones and even electric cars. But LeEco ran into a cash crunch in 2016 and 2017 after expanding too fast. Jia left China to continue developing the electric car business in the United States.
Sun Hongbin, Sunac China’s chairman, took Jia’s position after Sunac invested 17.1 billion yuan in Leshi and LeEco.
Sunac China has since written off 97 percent of its investment in Leshi, amounting to a total loss of 16.6 billion yuan. The write-off was akin to “the pain of chopping off a head,” Sun said last month, before resigning as chairman after only eight months in office.
But Sun still has a “positive view about the development prospects of large-screen operations and content in the long run,” referring to the value of Leshi's smart TV business.
China posted stable growth in its fiscal revenue in the first quarter of 2018, official data showed, adding to evidence of a solid economy.The fiscal revenue rose 13.6 percent year on year to 5.05 trillion yuan (US$805 billion) in the January-March period, the Ministry of Finance said at a press conference on Wednesday.Ministry official Lou Hong attributed the increase mainly to strong tax revenue, as businesses saw better performance amid a solid economy in the first three months. Revenues rose 28 percent in consumption tax, 21.1 percent in commercial value added tax and 14.4 percent in import tax.Business and individual income taxes rose 11.7 percent and 20.7 percent respectively.Lou expects fiscal revenue growth to moderate in the coming months but will remain steady.During the first quarter, fiscal spending rose 10.9 percent year on year to 5.1 trillion yuan.China has pumped more money into reforms, poverty relief, environmental protection and education to address unbalanced development since the start of the year, ministry official Wang Xinxiang said.Government expenditures soared 76.8 percent on forest protection, 58 percent on poverty relief, 47.5 percent on applied research, 38.3 percent on agriculture, and 13.7 percent on basic pension fund. The central government will also boost fiscal support for less-developed areas to improve people’s livelihood, Wang said.With the economy on a firm footing and fiscal revenue increasing, China cut its fiscal deficit target to 2.6 percent of GDP for 2018, down by 0.4 percentage points compared with 2017, the first drop since 2013.
THE diverse strengths and developed economies of Beijing and Shanghai have set them on course to join the elite group of “Big Seven” powerful and globally-connected cities within the next five years, global real estate service provider JLL said in a recent study.
The “Big Seven” refers to London, New York, Paris, Tokyo, Singapore, Seoul and Hong Kong.
JLL’s study examined a dozen Chinese mainland cities and their transformation into major hubs of innovation and global interaction.
“The 12 Chinese cities are at the forefront of the transition to an innovation economy, and are home to a growing breed of energetic, tech-savvy businesses that will spearhead the next wave of China’s globalization,” said KK Fung, managing director of JLL China.
The study used both traditional metrics including size, wealth, growth and connectivity, as well as “future proofing” metrics like talent, innovation, livability and real estate transparency, to evaluate each city.
Beijing and Shanghai stood out as “Global Contenders.” Beijing leads in innovation, education and “next generation” corporations, while Shanghai scores highly in livability, environment and integration within the surrounding region.
Shenzhen and Guangzhou — the “Enterprisers” — scored high in quality of life, connectivity and their talent pools.
Hangzhou, Nanjing, Suzhou, Wuhan, Tianjin, Chengdu, Chongqing and Xi’an are seen as “Powerhouses” due to their strong links to global manufacturing and industry.
FOREIGN direct investments from Chinese companies in Abu Dhabi’s industrial free zone has hit US$1 billion in under a year and is set to rise when the UAE’s new investment law takes effect, officials said yesterday.
Chinese companies are seizing opportunities in the Gulf as the world’s second-biggest economy seeks to expand its influence overseas with its ambition to rebuild Silk Road trade routes.
Last year, five Chinese firms invested US$300 million to set up base in the Khalifa Industrial Zone Abu Dhabi.
Since then, 10 Chinese firms have invested in Kizad, taking the total number of companies to 15 and value of investments to US$1 billion, Mohamed Juma al Shamsi, CEO of Abu Dhabi Ports told a business forum.
Three firms in the chemicals, construction and oil sectors signed deals yesterday to invest in Kizad.
A new investment law allowing 100 percent ownership to foreign companies outside of free zones in the UAE is likely before the end of this year, prompting more Chinese firms to invest, said the Chinese embassy.
SHANGHAI shares rebounded yesterday on a technical rally after giving up gains since last week.
The Shanghai Composite Index rose 0.84 percent to close at 3,117.38 yesterday, led by consumer stocks and cyclical sectors like nonferrous metals.
Shares of Jiangsu Lidao New Material Manufacture Co, a Changzhou-based aluminum coil maker, surge by the 10 percent daily limit to close at 23.65 yuan (US$ 3.77).
Since the latter part of last week, China’s A-share market has continued to decline amid increased uncertainty as a result of trade friction between China and the United States, the emergence of geopolitical risks around the world as well as volatility in overseas stock markets.
DESPITE a surprise cut in the reserve requirement ratio for most commercial and foreign banks, China sees no sign of monetary easing and will maintain its prudent and neutral policy stance to ensure stable and reasonable liquidity.
The People’s Bank of China said late Tuesday that it will cut the RRR for banks except policy lenders by 1 percentage point from Wednesday to help small businesses, and to improve overall stability and liquidity in the economy.
Zeng Gang, a financial researcher with the Chinese Academy of Social Sciences, said the central bank’s move was a neutral operation, as the amount of the net injection is small and will not change the current prudent and neutral trend in monetary policy.
Swiss investment bank UBS agreed that the RRR cut was more of a move to normalize the central bank’s liquidity operations and to lower banks’ funding costs.
Instead of a “strong easing signal,” the RRR cut has been resumed as a more regular liquidity operation tool, UBS said in a research note.
The PBOC has recently managed market liquidity through targeted moves rather than across-the-board adjustments of interest rates or RRR.
The last cut to the benchmark RRR was in March 2016, when the rate was lowered by 0.5 percentage points.
A targeted RRR cut was ordered earlier this year to encourage inclusive financing by commercial banks, such as credit support for small and micro enterprises, startups and agricultural production.
Gao Yuwei, a Bank of China researcher, dismissed concerns that the RRR cut, which came on the heels of the release of China’s first quarter GDP, was aimed at addressing downward pressure on the economy.
The Chinese economy expanded 6.8 percent year on year in the first three months of this year, flat from the previous quarter and above the country’s annual growth target of “around 6.5 percent,” official data showed on Tuesday.
Gao said the move was largely to ease structural problems like financing difficulties for small and micro enterprises, and providing payment for medium-term lending facility will reduce the interest burden on financial banks and allow them to better support the real economy.
Describing China’s 6.8-percent first-quarter GDP as “decent,” UBS also believes that there is no need for China to ease monetary policy materially to secure its annual GDP target for now.
“Recent market turmoil and fragile sentiment amid rising trade frictions may be a minor policy concern,” UBS said.
Investors responded positively to the RRR cut, with the Shanghai Composite Index closing up 0.8 percent at 3,091.4 points on Wednesday.
Looking ahead, economists believe that it is unlikely for the PBOC to notably ease the monetary policy as risk prevention is still a priority for 2018.
The central bank has said that it will keep a stable, reasonable level of liquidity and oversee moderate growth of financial credit and social financing.
Wen Bin with China Minsheng Bank said he expects that China’s monetary policy, while remaining prudent and neutral, will be more flexible in the future, with more diverse and structural policy tools to be employed.
CHINA has been seeing signs of recovery in its business aviation industry with global players gearing up to boost their presence in the market.
“More frequent business activities stimulate the buying of business aircraft or using charter services thanks to the country’s economic growth,” said Jenny Lau, chairperson with the Asian Business Aviation Association.
“A more healthy and rational development in China’s business aviation is on track following multiple years of slowing growth since 2013 after the previous round of market expansion.”
Lau made the remarks at the three-day 2018 Asian Business Aviation Conference and Exhibition, the largest annual business aviation expo in Asia, which ended yesterday in Shanghai.
The event attracted 170 exhibitors, including almost all the world’s major manufacturers of business aircraft with 30 of their flagship models.
Related companies also participated to seek business opportunities from the high-value industrial chain such as systems supply, maintenance, leasing and chartering.
Last year, China was home to 330 jet and 250 turboprop business aircraft. They are supporting business travel, law enforcement, and humanitarian needs, according to AsBAA.
A recent survey showed 61 percent of industry insiders noted aircraft utilization had risen, and a 42-percent jump in the measure since the fourth quarter of 2015.
Global leading manufacturer Gulfstream sees the Asia-Pacific as its largest market, said Scott Neal, the company’s senior vice president for worldwide sales.
In China, Gulfstream’s fleet has grown almost 70 percent since 2013, and 197 Gulfstream aircraft are in service in China.
“While the frenetic pace of activity we’ve seen over the past several years has tempered, we’re seeing initial signs of potential uptick in activity,” said Neal.
Deliveries continued with its fleet in the region growing by almost 6 percent in 2017.
“We see a market evolution in China’s business aviation and forecast a positive outlook for its continuous growth,” said Andy Gill, senior director of business and general aviation in Asia-Pacific for Honeywell Aerospace.
ALIBABA has agreed to step up investments in Thailand as competition between online retailers heats up in fast-growing Southeast Asia.
The founder of the online shopping giant, Jack Ma, met with Thailand’s prime minister, Prayuth Chan-ocha, yesterday and later signed several agreements, including one to help set up a “smart digital hub” in a showcase project called the Eastern Economic Corridor, to facilitate trade between Thailand, China, Laos, Myanmar, Cambodia and Vietnam.
Prayuth said the amount of investment involved would be determined later. Earlier, Thai media reported that Alibaba plans to invest 11 billion Thai baht (US$350 million) in the Eastern Economic Corridor.
Reports said the hub, due to be completed next year, would also serve as a research and development center for Alibaba.
Prayuth, who as army commander led a 2014 coup, said he asked Ma to help Thailand to boost exports of rice, palm oil and rubber and to help the country’s low-income and farm workers.
Ma told Prayuth that Alibaba could help develop logistics systems to speed up delivery of farm products, he said.
The government said Alibaba also plans to help train Thai entrepreneurs and small businesses in e-commerce.
E-COMMERCE giant Alibaba is steering resources toward driverless car technology, its CEO Jack Ma confirmed yesterday, joining a global race to shape the future of driving.
Despite fresh safety fears after a woman was hit and killed by a self-driving Uber vehicle in the US last month, many tech giants like Google as well as automakers are accelerating plans in an industry attracting billions of dollars.
The competition is heating up in China, the world’s largest car market, with Internet firm and Alibaba rival Baidu recently predicting that self-driving vehicles will hit the road in the country within three to five years.
Both Baidu and Tencent are pursuing the technology, stirring speculation about Alibaba’s plans.
“We’ve been doing a lot of research on driverless things,” Ma said yesterday while on a business trip to Bangkok.
“What we want to do is (figure out) how we can make the cars more automatic, more friendly, more like a partner of human beings rather than just a driving tool,” he said.
“I believe our children will only work four hours a day and four days a week or maybe three days a week, but they still will tell us they are very busy. Why are they busy? They are in cars,” he added.
Ma did not elaborate on the company’s plans but said the purpose was not to commercially compete with rivals Tencent and Baidu.
Chinese authorities approved rules this month to allow for local driverless road tests, said state-backed media, which reported on Wednesday that Alibaba was adding staff to work on the technology.
A rotor leaves a factory yesterday in Chengdu in Sichuan Province. It is the last rotor for the No. 5 unit of Fuqing Nuclear Plant built in Fujian Province, the first reactor with the Hualong One design.
SHANGHAI has set up a one-stop trading service platform to support its hosting of the China International Import Expo in November.
The city yesterday launched the one-stop year-round exhibition and transaction platform, and announced the establishment of Shanghai International Import Trading Services Co.
This move puts the action plan of the last 200 days’ preparation for the expo into practice. It is also a measure to help to magnify both the driving and the spillover effect of the import expo.
The city’s commission of commerce built the platform in line with the expo’s implementation plan approved by the central leadership.
Furthermore, the launch of the one-stop platform marks the basic formation of a normal professional service mode for the expo, which has three functions — exhibiting, promoting transactions, and offering professional import services.
The platform will demonstrate not only the exhibits of the six-day expo, which opens on November 5, but import exhibits from all the year-round exhibition platforms.
The first batch of year-round platforms, totaling 30, was launched on April 11.
Leading firms in logistics, exhibition, e-commerce, finance and consulting sectors have been gathered on the platform to offer professional services to participants of the expo.
Shanghai International Import Trading Services is a joint venture co-funded by the Council for the Promotion of International Trade Shanghai and the Donghao Lansheng Group, a major state-owned enterprise in the modern service industry.
The service company is set up mainly to take charge of the design, construction and operation of the one-stop service platform.
The platform will use smart methods to provide professional services, including online demonstration, matchmaking, transactions and payment.
Information sharing will be enhanced to promote the matching of supply and demand, supporting global products, services and technologies to enter the Chinese market.
“The platform will exhibit the world’s latest products, most advanced technology and featured products, make matches for exhibitors and purchasers, enhance their communication, and promote the transaction,” said Wang Qiang, chairman of Donghao Lansheng.
Yang Jianrong, chairman of the Council for the Promotion of International Trade Shanghai, said the service platform is there to promote global trade and gather the world’s top brands, products and services to enable companies from all countries to sell their products throughout the world via the platform.
It will strongly push forward the process of trade globalization, Yang added.
Shanghai’s Party Secretary Li Qiang said at the mobilization meeting on Tuesday that the city will actively offer “multi-mode and multi-channel services” for foreign businesses to enter Chinese markets and develop the city into a hub to distribute imported goods across China and Asia.
THE International Monetary Fund urged central banks yesterday to take a gradual and transparent approach to tightening monetary policy, warning that unexpected moves could shock the global economy.
The IMF cautioned that investors and financial markets expect a steady approach to monetary tightening based on the belief inflation will remain relatively tame.
But the IMF pointed to some fragilities in global finance after a lengthy period of easy money policies and low interest rates, including a flood of high-risk bonds, record-high debt levels and lofty prices for risky assets.
If conditions change abruptly that could even derail the economic recovery, the IMF warned.
“Financial vulnerabilities, which have accumulated during years of extremely low rates and volatility, could make the road ahead bumpy and could put growth at risk,” the IMF said in its Global Financial Stability Report, a twice-annual analysis.
For example, a sudden acceleration of inflation in the United States could lead the Federal Reserve to raise interest rates more quickly than currently expected.
Tobias Adrian, director for the IMF’s Monetary and Capital Markets Department, acknowledged that uncertainty about inflation is currently “very low,” but warned that markets could have an outsized reaction to any spike.
Other factors also could hit markets, including US-China trade tensions, which the IMF flagged as one of the most concerning risks to the global recovery in a separate report released on Tuesday.
Adrian said talk of a US-China trade war had not so far significantly affected financial conditions, even as jitters sent global share prices lower.
“In recent weeks, discussions around trade have increased investor uncertainty and as a result financial conditions have tightened somewhat, but remain easy,” he said.
“What we are flagging is that at some point markets see shocks in inflation that raise inflation uncertainty and when that happens” rates could rise quickly and financial conditions would tighten, he said.
Emerging markets would be especially vulnerable to “spillovers” if that happens, the report cautioned.
“Gradual and well-telegraphed” moves by advanced economy central banks have so far been favorable for emerging economies, but financial flows could fall by “at least one-quarter” if central banks mishandle the transition, the fund said.
The analysis is the latest to tackle the myriad policy-making challenges as the world moves towards ending a long period of low interest rates and monetary stimulus enacted after the 2008 financial crisis.
The US Federal Reserve has undertaken a series of interest rate hikes over the last two and a half years.
AMAZON is expanding its dominance globally by giving overseas customers access to more than 45 million items via its app.
The online powerhouse also said yesterday that it’s teaming with rival Best Buy on new Fire TV Edition smart TVs.
Amazon.com Inc’s “International Shopping” will be available through a mobile browser or app and goods will be shipped globally from the United States. There are five languages to choose from and Amazon is accepting 25 currencies. Customers can also choose from different shipping options and delivery speeds.
Amazon operates largely in North America, Western Europe, parts of Asia, and Australia. The app allows people living outside of regions where Amazon operates to order goods.
Amazon said that its “International Shopping” feature will show prices, shipping costs, and import duty estimates, which can be substantial. Amazon will coordinate with courier services for customs clearance on behalf of the customer.
Amazon’s partnership with Best Buy brings the new Fire TV Edition smart TVs to consumers in the US and Canada. Best Buy will roll out more than 10 4K and HD Fire TV Edition models from Insignia and Toshiba. Customers in the US can buy the device starting this summer.
THE World Bank fund dedicated to helping the world’s poorest countries on Tuesday announced it has raised US$1.5 billion in its first-ever global bond issue, which enjoyed huge demand from investors.
The International Development Association issued a five-year AAA-rated bond which had nearly five times more demand than the amount initially offered for sale, the World Bank said in a statement.
“Today’s bond issue will allow IDA to tap into the power of capital markets to tackle some of the world’s biggest challenges and help millions lift themselves out of poverty,” World Bank President Jim Yong Kim said in a statement.
Over 40 percent of the bonds went to central banks, while a quarter went to banks and another quarter to pension funds. The funds will be used to finance sustainable development projects.
IDA, which provides very low cost funding to the poorest countries, previously relied on regular government contributions for its work. But in 2016 shareholders agreed to turn to investors to raise funds against its huge US$158 billion in capital.
“While it is a new bond issuer, IDA is an established institution, with an almost 60-year track record as the leading source of development finance and expertise for some of the fastest growing economies in the world,” Kim said.
CHINA offered US$1.7 million from the Lancang-Mekong Cooperation Special Fund to Thailand yesterday to boost cross-border economy and trade, business exchange and e-commerce.
Chinese Ambassador to Thailand Lu Jian and Permanent Secretary of the Thai Ministry of Commerce Nuntawan Sakuntanaga signed the cooperation agreement on LMC Special Fund projects yesterday.
China initiated the LMC Special Fund during the first LMC Leaders’ meeting in Sanya in Hainan Province in March 2016 to support small and medium-sized cooperation projects put forward by the six Lancang-Mekong countries.
The six Lancang-Mekong countries are China, Myanmar, Thailand, Laos, Cambodia and Vietnam.
Lu said during the signing ceremony that “our six countries have worked together in the past two years to turn the idea of LMC into reality, bringing benefits to our six countries and the region.”
Visitors take photos of the Queen Elizabeth II luxury cruise liner, also known as the QE2, docked at Port Rashid in Dubai. After sailing the Atlantic for nearly four decades, the 294-meter cruise liner has been turned into a 13-deck luxury hotel moored permanently at Mina Rashid in Dubai. The ship — christened by Queen Elizabeth II in 1967 — partly opened yesterday as a hotel with rates ranging from US$163 to US$6,807 per night, a spokeswoman said. When it officially opens in October, visitors will be able to choose from 13 restaurants and bars planned for the vessel.
HOUSING prices remained largely stable in major Chinese cities in March amid tough government purchase restrictions.
Data released yesterday by the National Bureau of Statistics showed that in the country’s four first-tier cities, Shenzhen recorded a 0.1 percent decline in new home price from a month earlier. Beijing, Shanghai and Guangzhou prices climbed 0.1 percent, 0.2 percent and 0.2 percent respectively.
In February, all four first-tier cities recorded price falls between 0.2 percent and 0.6 percent from January.
On a year-on-year basis, new home prices in the first-tier cities declined 0.6 percent last month, while prices of pre-owned houses in these cities went down 0.1 percent.
“Housing prices were generally stable as market controls have continued to take effect,” said Liu Jianwei, a senior statistician at the bureau, which tracks property prices in 70 Chinese cities.
“Nationwide, differentiated measures to regulate the residential property market continued to be implemented, showing consistency and continuity in government policies.”
Seven of the 15 “hottest” cities with regard to the property market, including both first and second-tier cities, saw declines of 0.1 to 0.4 percent in new home prices from February. Prices in Tianjin and Hefei were flat, and the rest recorded minor increases of 0.1 to 0.2 percent.
On an annual basis, new home prices in nine of the 15 cities shed between 0.3 percent and 2.3 percent, and the remainder recorded rises of 0.1 to 1.2 percent.
Among the 70 cities, new home prices in 10 of them fell month on month, a decrease of six from February. In the pre-occupied housing market, seven cities posted price declines, a drop of eight from February.
“Notably more cities around the country witnessed monthly price growth in both new and existing housing markets in March,” Shanghai Homelink Real Estate Agency wrote in a report.
“That was partially because of some seasonal factors as the domestic housing market finally started to pick up some strength amid improving momentum among buyers following the Spring Festival holiday in February.”
The data came after the statistics bureau released on Tuesday that China’s investment in property development expanded 10.4 percent year on year in the first quarter of 2018, accelerating from an increase of 7 percent registered in 2017. Total investment in the real estate sector stood at 2.13 trillion yuan (US$340 billion) in the first quarter.
“The double-digit growth beat market expectations,” said Xia Dan, senior researcher of the Bank of Communications, noting that the construction of rental housing and affordable housing partly contributed to the growth.
During previous years, rocketing housing prices, especially in major cities, had fueled concerns about asset bubbles. To curb speculation, local governments passed or expanded their restrictions on house purchases and increased minimum down payments required for mortgages.
In addition, China is moving faster to implement a long-term mechanism for property regulation that ensures supply through multiple sources, provides housing support through multiple channels, and encourages both housing purchases and rentals.
This year’s government work report reiterated that “houses are for living in, not speculation.”
The report added: “We will support people in buying homes for personal use, and develop the housing rental market and shared ownership housing.”
So far, 51 state-owned home renting companies have been set up in 12 pilot cities, where government-led rental management and service platforms were established.
For 2018, the government pledged to maintain stability and consistency of property regulatory policies and accelerate establishing the long-term mechanism for real estate regulation.
“China will not waver in its efforts to implement property market regulation, and will maintain continuity and stability of policies in 2018,” said Wang Menghui, minister of housing and urban-rural development.
CHINA will substantially reduce restrictions on foreign investors to further open up the economy.
An official with the nation’s top economic planner said yesterday that a new negative list on foreign investment will impose a much smaller number of restrictions.
At the same time, measures will be unveiled to open up in fields such as finance, automobiles, energy, resources, infrastructure, transport, commercial circulation and professional services.
Yan Pengcheng, spokesman for the National Development and Reform Commission, said the list will also increase the predictability of policies by giving timetables and grace periods for opening-up measures to be taken in the years ahead.
On Tuesday, the NDRC announced that the new negative list will be published as early as possible in the first half of this year. China started to pilot a negative list approach in the Shanghai free trade zone in 2013. All sectors are open to foreign investors except for those outlined in the negative list.
Foreign and domestic companies will be given equal treatment in the implementation of the Made in China 2025 strategy and other areas, including government purchase and technology programs, Yan said.
The Made in China 2025 strategy is a plan to upgrade the country’s manufacturing sector.
Authorities will boost efficiency of services for foreign firms in terms of business establishment, construction permission and cross-border trade, Yan added.
With regard to trade frictions with the United States, there has been a limited but controllable impact on the Chinese economy, he said. “China has prepared multilevel response plans and backup policies for the US-initiated trade frictions.”
Supply-side structural reform and new growth momentum have laid a solid foundation to prepare China for the external impact, Yan said, citing a reassuring performance of China’s economy in the first quarter.
The economy demonstrated its resilience by delivering a solid start to the year with GDP growing 6.8 percent year on year.
“China, with a population of nearly 1.4 billion, has a huge domestic market, and even if the east goes dark, the west still shines,” he said. “We are confident and capable of sustaining the stable development of our economy.”
While certain sectors of Chinese exports will be affected, consumers and related manufacturers in the US will pay the price of American protectionist policies, Yan added.
“We hope to work together with other countries to create a more favorable environment for globalization and cross-border investment.”
The latest J7 series Jiefang truck is seen at Chinese automaker FAW Group in Changchun, capital of northeast China’s Jilin Province, yesterday. The Jiefang J7 truck was rolled off the assembly line in Changchun yesterday, officially going into the mass production phase.
SHANGHAI’S economy got off to a solid start this year when it grew at a steady 6.8 percent in the first quarter of 2018.
The city’s gross domestic product expanded 6.8 percent year on year to 786.34 billion yuan (US$125.06 billion) — flat from the same quarter last year, according to the Shanghai Statistics Bureau.
The services sector took up 70.3 percent of the total GDP, contributing 552.78 billion yuan — up 7 percent year on year.
The value-added industrial output rose 6 percent to 836.09 billion yuan in January to March from a year earlier.
Of the city’s six key industrial sectors, the output of automobile manufacturing rose 11.6 percent and that of biomedical producers gained 16.1 percent. The output of complete equipment manufacturing and electronic information product manufacturing also rose. The production of high-quality steel manufacturing and petrochemical and fine chemicals sectors, however, fell from the same three-month period last year.
The industrial added value of strategic emerging industries in Shanghai grew 8.2 percent to 243.16 billion yuan, up 1.7 percentage points from January-March last year.
Shanghai’s foreign trade from January to March grew 5.9 percent from a year earlier to 793.93 billion yuan, according to data from Shanghai Customs.
Imports were up 8.5 percent to 483.47 billion yuan while exports rose 2 percent from the first quarter of last year to 310.46 billion yuan.
The total contract value of Shanghai’s foreign direct investment amounted to US$10.54 billion in January to March, with the number of contracts up 1.6 times from the same quarter a year ago to 984.
Fixed-asset investment rose 7.7 percent annually, 0.4 percentage points faster than the whole of 2017.
State-owned enterprises’ FAI rose 0.6 percent to 32.12 billion yuan, while non-SOEs’ investment surged 10 percent.
Infrastructure FAI jumped 15.1 percent and that in real estate development grew 4.6 percent to 90.94 billion yuan.
The Consumer Price Index, a main gauge of inflation, rose 1.8 percent in the first quarter year on year. Prices in services gained 0.2 percent from the fourth quarter of 2017 amid a consumption upgrade and rapid expansion in consumer demand for services.
SHANGHAI’S Huangpu District launches preferential policies including generous subsidies to encourage foreign businesses to set up regional headquarters there.
Foreign companies, especially trading firms and research and development centers from abroad, who set up offices in the downtown district can receive subsidies for housing and other expenses, the district government said yesterday.
The district government yesterday chose five foreign firms, which set up regional bases in Huangpu, to be part of the scheme. They include popular clothing brands H&M from Sweden and Puma from Germany as well as French cosmetics giant Sephora.
These companies can receive 300,000 yuan (US$47,758) in subsidies for each franchise they open across China.
To enhance the attractiveness of the district, Huangpu also promised to offer simplified administrative procedures and set up efficient one-stop services to cater to the foreign companies.
Huangpu aims to revive its former glory as the birthplace of China’s early industries and main focal point of foreign investments, said Gao Yun, Party secretary and director of the district. Foreign banks and companies once set up offices on the Bund and in other areas within the district in the early 19th century.
Huangpu has drawn 2,500 foreign companies which invested US$20 billion in the district. Forty-two multinational firms have set up regional headquarters in Huangpu, the district government said.
INDUSTRIAL robot, digital printing, new-technology projector and wearable glasses will become new growth catalysts for Epson in China, the Japan-based firm said yesterday.
The Japanese company showcased wearable glasses with augmented reality technology for industrial users, digital printers and robotic arms for use by watch and electronics manufacture at the Epson Innovation Day yesterday. Epson achieved rapid growth in new business, such as robotics which surged 85 percent year on year and high-end projector which jumped 56 percent, in China.
The surging middle-class, high requirement for green and sustained development and smart manufacturing have all created unique market opportunities for Epson, which debuted in the Chinese market 20 years ago, said Akihiro Fukaishi, president of Epson China.
GLOBAL personal computer giant Lenovo Group eyes selling new-type smart devices worth US$1 billion in the new financial year.
Lenovo will make “intelligence” its new brand label as the company keeps connecting their products with data, services and users, Yang Yuanqing, the company’s chairman and CEO, said at the “Lenovo FY2018 China Kickoff” on Tuesday.
The company expects more progress to be made in PC, mobile services, data centers and artificial intelligence in the new financial year.
Software and other services revenues are expected to reach US$2 billion this year, while the market penetration rate of Lenovo’s PC value-added services could gain 1 percentage point.
Meanwhile, Lenovo hopes that revenue of its super-scale data center business will reach US$1.5 billion and that clients of its vertical industry intelligent solutions will increase by more than three times.
CHINA’S stocks rallied yesterday, with the Nasdaq-style ChiNext index posting the strongest gains, as they were buoyed by the central bank’s latest move to cut reserve requirement ratio for commercial lenders.
The Shanghai Composite Index, the country’s major benchmark, rose 0.8 percent to close at 3,091.40 yesterday.
The Shenzhen Component Index added 0.92 percent to close at 10,491.15 points while the Nasdaq-style ChiNext enterprise board surged 2.16 percent to finish at 18,22.26, lifted by the robust performance of domestic chip companies.
Shares of SGCircuits, a Shenzhen-based technology company, jumped by the 10 percent daily limit to end at 46.48 yuan (US$7.39).
Shenzhen-headquartered Nationz Technologies, a provider of secure integrated circuits and services in Internet identification authentication, closed at 9.46 yuan per share.
The People’s Bank of China announced late Tuesday a 100 basis points cut in the amount of cash that most commercial lenders must hold with the central bank as reserves. Market sentiment rose after the unexpected move which was set to inject 400 billion yuan in new liquidity to the market, according to industry observers.
Gu Yongtao, a strategist at Cinda Securities, said the PBOC’s decision will ease liquidity pressure in the capital markets.
US President Donald Trump has since his election campaign been criticizing China for what he said were Beijing’s “unfair trade practices,” and the recent build-up to what could become a China-US trade war suggests the president is determined to act.
However, a breakdown of facts will show that Washington’s excuses for escalating its trade tensions with China do not hold water.
Before explaining how the algorithms by which the United States has come to the conclusion that its trade deficit with China amounts to over US$375 billion are apparently questionable, let’s see just how casual Trump’s decision, as of now, to impose tariffs on a total of US$150 billion worth of Chinese goods is.
“China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!” Trump wrote in a March 7 tweet.
Reports suggesting the number was severely inflated by the Trump administration itself came shortly after the president fired off the tweet.
The Wall Street Journal reported on March 8 that the administration requested that China shave US$100 billion off the deficit, citing sources familiar with the matter as saying the request was made by US officials to their Chinese interlocutors a week before.
If a lack of intra-administration communication was not the reason for the obvious discrepancy between Trump and administration officials’ assertions, then it seems we can rightly assume that the proposed tally of tariffs was nothing but to add the math up.
Now come the algorithms. The United States calculates trade deficits and surpluses based on where a product is finished instead of on value added, a method that renders its unilaterally-concluded China deficit number unconvincing.
In an opinion piece published on April 2 on the Foreign Affairs magazine’s website, Philip Levy wrote: “Since China is the latest stage in the (global value) chain, a finished product can appear to have come from China, even if Chinese value-added is relatively small.”
Levy, who tried in his article to justify US acceptance of China’s accession into the World Trade Organization in 2001 as one and the only right decision, pinpointed the exact symptom of Washington’s ill-devised calculations.
Indeed, a lot of products with the “made in China” labels oftentimes turn out to be assembled in China using imported parts.
Take Apple’s electronic devices for example. According to statistics dating back as early as 2010, 58.5 percent of iPhone’s profits went to the Apple company, whereas China’s labor cost only constituted 1.8 percent of inputs.
While profits gained by Apple from the iPad slipped to 30 percent in the same year, the percentage of China’s labor cost stood at 2 percent, pretty much the same as that of the iPhone and still in stark contrast with Apple’s gains.
It is crystal clear that it is the American company — and subsequently the US economy — that has harvested most of the profits, not the Chinese assemblers.
Yet, the Apple products, along with many other Chinese-finished commodities, are considered by the Trump administration to be items by which Beijing has taken advantage of Washington.
Cliche of national security
Moreover, the structure of China-US trade matters as well.
China sells mainly daily necessities to the United States that usually have low profit margins, while the United States sells things like aircraft and automobiles to China, ones that undeniably have more added values.
Trump is so vehemently concerned about bilateral trade balance. If he decides to abandon the cliche of national security concerns and sell high-end equipment to China, he would have overturned the deficit “conundrum” with a flip of the hand.
In fact, Beijing, judging from both the complementary nature of the bilateral trade structure and a win-win point of view, has on multiple occasions urged Washington to loosen its grip on exports that the latter worries comprise “sensitive technologies.”
Unfortunately, though, China’s efforts have so far been to no avail.
Last but not least, as far as the decline of the US manufacturing sector is concerned, there is little the United States can righteously complain about China.
During his presidential campaign, Trump spared no effort to blame China for harming the US manufacturing sector.
Although bringing home American manufacturers was a key pledge in Trump’s protectionist “Make America Strong Again” slogan, statistics once again suggests that the loss of US manufacturing jobs is more of a domestic issue than something caused by such external reasons as the China factor.
In the same Foreign Affairs article, Levy said the share of manufacturing employment in total US nonfarm payrolls — the primary indicator used to assess US job creation — fell from 12 percent in December 2001 to 8.5 percent in December 2017.
He called the decline, which came in the wake of China’s accession into the WTO, “a drop of just over 29 percent ... that actually represents a slowing of a preexisting trend.”
Levy said the share of labor in US manufacturing fell by more than 33 percent between 1985 and 2001, the 16 years leading up to China’s WTO membership. That backed up his conclusion that China, if anything, had actually played a much lesser role in the downward trend.
Turning the calendar back by a further 16-year time, the author said “we can see the same trend in the United States: a 31 percent drop from an initial 25.9 percent in 1969.”
“That occurred during a period in which China was largely isolated from the global economy and it therefore cannot be held responsible,” Levy said.
CHINA will phase out shareholding limits for foreign investors in the automobile industry as part of its efforts to further expand opening-up.
The National Development and Reform Commission yesterday announced specific timeline and measures. According to the plan, the sector will ease all restrictions through a five-year transition period starting this year.
In 2018, China will ease restrictions on stakes foreign automakers can own in joint ventures concerning new-energy and special-purpose vehicles.
In 2020, the country will relax foreign ownership limits in joint ventures that produce commercial vehicles.
In 2022, China will relax foreign ownership restrictions in joint car ventures as well as scrapping rules that limit foreign automakers to no more than two joint ventures with Chinese partners. Currently, foreign carmakers can own up to 50 percent in joint ventures with local partners.
“Through the opening-up of the manufacturing industry, we hope Chinese and foreign companies can achieve development in a fair competition environment. We encourage Chinese and foreign firms to carry out more extensive and diverse cooperation in the field of capital, technology, management and talent training,” the commission said.
President Xi Jinping said at the Boao Forum for Asia annual conference this month that China will launch a number of landmark measures this year to significantly broaden its market access and accelerate the opening-up process.
“On manufacturing, China has basically opened up this sector with a small number of exceptions on automobiles, ships and aircraft. Now these industries are also in a position to open up,” Xi said. “We will ease as soon as possible foreign equity restrictions in these industries, automobile in particular.”
The commission said the opening-up of the manufacturing sector “will stimulate market vitality and encourage innovation, as well as gather resources at home and abroad.”
The commission also said yesterday that China will phase out shareholding limits for foreign investors in shipbuilding and aircraft manufacturing from this year.
“The limits will be lifted on shipbuilding processes including design, manufacturing and repair, and on production of airplanes, including trunk and regional airliners, general-purpose airplanes, helicopters, drones and aerostats.”
CHINA’S economy recorded steady growth in the first quarter this year, demonstrating its resilience amid escalating trade tensions with the United States.
First-quarter gross domestic product rose 6.8 percent year on year to 19.87 trillion yuan (US$3.2 trillion), unchanged from the growth in the fourth quarter of 2017, National Bureau of Statistics data showed yesterday.
“The economy is off to a good start,” statistics bureau spokesman Xing Zhihong said, noting that the quarterly performance laid a good foundation for sustained, healthy growth for the whole year.
The GDP growth rate has stayed within the range of 6.7 percent to 6.9 percent for 11 consecutive quarters, with the jobless rate and inflation remaining stable, Xing said.
The solid first-quarter performance extended the economic strength of last year, when China’s GDP logged 6.9 percent growth, picking up the pace for the first time in seven years.
The bureau, meanwhile, released the monthly survey-based urban unemployment rate for the first time. The unemployment rate was 5 percent, 5 percent and 5.1 percent in January, February and March respectively, all in the target range of below 5.5 percent for this year.
Nomura said the “bright spot” was retail sales, whose growth accelerated to 10.1 percent in March from 9.7 percent over January-February. “This is a good sign that growth is rebalancing from investment to consumption,” Nomura said.
“Indeed, underneath the very stable GDP growth over the past five quarters has been a continued rapid rebalancing, from old economy industrial sectors and investment toward new economy sectors like tech and services, as well as consumption.”
The transition was part of China’s bid to steer its economy toward high-quality development rather than growth based on inefficient investment, low-end exports and polluting factories.
Services accounted for 56.6 percent of the economy and 61.6 percent of its growth in the first quarter, the bureau said.
Meanwhile, new businesses and industries continued to grow fast, and the industrial sector steadily upgraded toward medium and high-end production, according to Xing.
The structural shift of China’s economy is also key to its effort to cope with pressure from rising protectionism, a threat highlighted by the spokesman.
The biggest difficulty facing China’s economy “is uncertainty in the international environment,” he said. China is “fully capable” of handling trade tensions with the US, citing the country’s increasingly domestic-led growth, growing innovative edge, and ample room for development and policy control, Xing added.
“The economy has plenty of resilience, potential and leeway. The Sino-US trade frictions cannot stump the Chinese economy, nor can they change its sound momentum of sustained and healthy growth,” he told reporters.
As an upgrading market in China increases demand for high-quality products, domestic sales can partially offset the adverse impact of external factors, said Wang Changlin, an economist at the National Development and Reform Commission.
Domestic demand contributed 105.7 percent of China’s economic growth on average annually from 2008 to 2017, Xing said.
While drawing attention to a narrowing trade surplus, Xing said the country is opening up further.
China earlier this month unveiled a number of landmark measures to be taken this year to significantly broaden market access, from significantly lowering import tariffs for vehicles to opening up the financial sector.
In the first quarter, industrial output rose 6.8 percent year on year, with the growth unchanged from a year earlier and 0.4 percentage points lower than in January-February.
January-March fixed-asset investment growth slowed to 7.5 percent, below 7.9 percent in January-February.
Xing attributed the moderation of some indicators to seasonal factors as the Spring Festival came later this year than previous years and affected production.
“Looking ahead, the favorable conditions and factors to support high-quality development are increasing, and the economy will continue to maintain stable development with a positive outlook,” he said.
Zhang Zhanbin, an economist at the Chinese Academy of Governance said China will fulfill its goal of achieving GDP growth of around 6.5 percent this year.
Australia and New Zealand Banking Group said China’s economic momentum remains solid in the first three months.
“On a year on year basis, China’s GDP increased 6.8 percent, on par with the fourth quarter of 2017. This will provide a cushion to a likely moderation in GDP growth in the second half of this year amid the country’s intensive reform efforts,” said Betty Wang, senior China economist of ANZ.
CHINA’S Ministry of Commerce announced yesterday that it will impose provisional anti-dumping measures on grain sorghum imported from the United States.
A preliminary ruling by the ministry found that US companies had dumped grain sorghum on the Chinese market, and such imports had caused substantial damage to the domestic industry.
Starting today, importers of the product will be required to pay deposits with Chinese customs calculated based on a rate of 178.6 percent.
Data from the ministry showed US sorghum exports to China surged from 317,000 tons in 2013 to 4.76 million tons in 2017, while export prices have slumped 31 percent during the period, which led to a fall in domestic prices that hurt local industries.
Wang Hejun, head of the ministry’s trade remedy and investigation bureau, said the decision is in accordance with Chinese laws and WTO rules, and is aimed at correcting unfair practices to maintain a heathy trade order.
“China has always opposed abuses of trade remedy measures,” Wang said, adding China is willing to expand cooperation with the US to reduce trade disagreements.
Also yesterday, China’s Foreign Ministry said if the US continues to jeopardize multilateralism and free trade, China will take measures to protect them.
During talks with China in the past few days, Japan and India both expressed their support for the multilateral trading system and global free trade regime with the World Trade Organization at the core, the ministry said.
CHINA’S Ministry of Commerce yesterday urged the United States to create a fair, just and stable legal and policy environment for Chinese companies.
This came after the US Department of Commerce announced “activation of denial of export privileges” against leading Chinese telecom equipment maker ZTE Corp for alleged violations of the Export Administration Regulations.
China “will closely track the case and is ready to take necessary measures to protect the legitimate rights and interests of Chinese companies,” said a spokesman for the Ministry of Commerce.
ZTE has extensive trade and investment cooperation with hundreds of American companies, creating tens of thousands of jobs in the US, the spokesman said. “China has consistently asked Chinese companies to comply with the laws and policies of host countries and manage their businesses in line with laws and regulations.”
The US on Monday banned American firms from selling parts and software to ZTE for seven years.
“At present, the company is assessing the full range of potential implications that this event has on the company and is communicating with relevant parties proactively in order to respond accordingly,” ZTE said.
ZTE, whose Hong Kong and Shenzhen shares were suspended from trading yesterday, has set up a crisis management group in response to the ban, according to a ZTE source.
In March last year, ZTE reached settlements with US authorities over American export controls and sanctions charges.
The ZTE agreed to pay a criminal and civil penalty of about US$892 million and an additional penalty of US$300 million that will be suspended during a seven-year probationary period to deter future violations.
At that time, the US Department of Commerce recommended ZTE be removed from the Entity List under the Export Administration Regulations. But it will be subject to ZTE’s compliance with the settlements during the seven-year probation period.
In a statement on Monday, the Department of Commerce claimed that the Shenzhen-based company made false statements regarding supervision of its staff and senior management.
With this claim, the Department of Commerce decided to suspend the export privileges of ZTE for a period of seven years until March 13, 2025. This decision suggests that ZTE could be unable to import high-tech components from the US in these years.
ZTE has 14 offices and six research centers in the United States and supported nearly 130,000 high-tech jobs in the country.
ZTE is China’s No. 2 telecom equipment maker after Huawei Technologies Co, the No. 4 seller of smartphones in the US, and was worth some US$20 billion as of Monday’s close.
In 2017, ZTE derived 59 percent of revenue from its network business and 32 percent from its consumer business.
JP Morgan is banking on experience and diversity of thought as a vital quality in its potential employees as the US bank seeks to tap China’s continuing liberalization of its financial sector.
The investment bank targets a 63 percent rise in the number of students to be recruited for roles located in China this year, compared with that of 2014 when it first launched a China-based analyst program for campus recruits.
The US lender yesterday launched its first careers pop-up campaign called All Minds Wanted to encourage students from all disciplines, not just finance and business, to join the bank at the Shanghai University of Finance and Economics, which attracted over 200 students. The event enables students to interact with the bank’s executives in a less formal environment to encourage a more relaxed interaction between the parties.
The bank draws, on average, around 30,000 applications for its graduate and internship positions in Asia Pacific. It employs 1,000 students as full-time analysts and interns each year.
In the past year the bank saw 39 percent of its campus recruits coming from a background outside of finance, accounting and business in Asia Pacific excluding India. In China, 28 percent of campus recruits in 2017 were from majors such as mathematics, human resources, public affairs, energy management, English literature, and psychology.
CHINA’S central bank said yesterday that it will reduce the amount of cash that most commercial banks must hold as reserves, but will require them to use that freed-up liquidity to pay back loans obtained via its medium-term lending facility.
Whatever funds the banks have left, after paying back their MLF loans, they should use to provide loans to small companies, the People’s Bank of China said in a statement.
The PBOC’s unexpected decision to cut reserve requirement ratios came after official data earlier yesterday showed China’s economy grew a faster-than-expected 6.8 percent in the first quarter.
RRRs — currently at 17 percent for large institutions and 15 percent for smaller banks — will be cut by 100 basis points, the PBOC said.
The cut will be made on April 25 and will apply to most banks, with the exception of policy lenders such as China Development Bank.
On that day, banks with MLF loans that have not reached maturity are to use the liquidity released by the RRR cut to repay borrowed MLF funds to the PBOC.
The amount of cash freed up by the RRR cut will be slightly higher than the amount of MLF loans to be repaid, according to the PBOC.
Based on first-quarter data, the MLF loans due to be repaid on the day will be about 900 billion yuan (US$143 billion). There will be 400 billion yuan in excess of funds released, and most of that cash will go to city-based commercial banks and rural commercial banks, the PBOC said.
The PBOC said it would maintain a prudent and neutral monetary policy.
The PBOC’s last RRR adjustment was on January 25 when most banks saw at least a 50 bps cut to their RRRs as long as the lenders granted more loans to smaller firms and rural communities.
That adjustment was flagged months in advance in late September.
In a Reuters poll this month, the PBOC was forecast to cut RRRs for all banks by only 50 bps in the fourth quarter of 2018. Analysts had expected two extra 25 bps cuts to follow, bringing the rate down to 16 percent.
Despite the economy’s solid first-quarter performance, analysts still expect it to lose momentum in coming quarters as authorities force local governments to scale back infrastructure projects to contain their debt and as property sales cool due to strict controls on purchases to fight speculation.
A full-blown trade war with the United States could also impact billions of dollars in trade.
Net exports overall were already a drag on growth in the first quarter after giving an added boost to the economy last year, highlighting the need for sustained strength in domestic demand if significant new US tariffs are imposed.
“Rising Sino-US trade tensions are clouding the outlook for China’s exports,” said Xu Gao, a Beijing-based economist at Everbright Securities.
“China needs domestic demand to hold up in the face of increasing uncertainties in external demand, so it needs the micro-management of monetary policies to make sure the real economy is stable.”
The PBOC said it required financial institutions to mainly use newly released funds from the reserve cut to provide loans to small and micro companies and to lower funding costs for lenders, and that this would be included as a requirement in its quarterly Macro-Prudential Assessment for banks.
The PBOC said it still needed to maintain relatively high RRRs for banks to fend off financial risks.
But the liquidity freed by the RRR cut is expected to reduce the cost of funds for banks so that they can step up lending to support the economy.
The interest rate that the PBOC pays banks for depositing their reserves at the central bank is 1.62 percent, but the interest rate the lenders pay for MLF loans from the PBOC is 3.3 percent.
“I think it shows a clear trend of policy relaxation because the interest rate of this year’s MLF is 3.3 percent, but the banks are only receiving 1.62 percent for their reserves at the central bank,” said Zhou Hao, senior emerging markets economist at Commerzbank.
“This has greatly reduced the debt costs of banks. So under the context of deleveraging, the policy mix has become low interest rate-plus-strengthened supervision.”
Banks included in the cut include large commercial banks, joint-stock commercial banks, city commercial banks, non-county-level rural commercial banks and foreign banks.
Yang Yewei, analyst at Southwest Securities, said while it was the first time the PBOC was cutting RRRs to get banks to pay back MLF loans, it may not be the last.
“Since increasing funding for small firms has been included in the MPA assessment, and considering that the MPA assessment is quarterly, we suspect such measures may be implemented quarterly,” Yang said.
CHINESE information and communications technology solutions provider Huawei has obtained the world’s first CE type examination certificate for 5G products.
The certification indicates that Huawei’s 5G products have won official approval for commercial use in Europe. It also “represents a significant step towards realizing large-scale commercial 5G deployment,” the company said in a statement.
CE marking is compulsory for products imported to and sold within the European Economic Area. It is regarded as a stamp of approval for entering the European market.
Huawei started research on 5G products in 2009, and has invested at least US$600 million in related research. It has built 11 5G research centers across the world.
Huawei’s net profit surged 28 percent to 47.5 billion yuan (US$7.6 billion) last year. Its sales increased by 16 percent from 2016 to 604 billion yuan.
THE IMF said yesterday it remains upbeat about the economic prospects of emerging Asia, labeling the region “the most important engine of global growth” despite concerns over trade disputes and mounting debt.
The International Monetary Fund’s latest quarterly World Economic Outlook forecasts global growth of 3.9 percent this year as the world economy hums along and nations retain supportive fiscal policies.
The fastest-paced expansion will remain concentrated in Asia, it predicts, where the buoyant economies of China, India and a host of Southeast Asian nations will perform well above the global average.
The IMF left unchanged from January its growth estimate for China of 6.6 percent for 2018 and 6.4 percent in 2019. The country’s own 2018 target is around 6.5 percent.
China reported yesterday that its economy had grown 6.8 percent in the first quarter, maintaining the same pace as the fourth quarter last year.
India is widely expected to be the next global growth juggernaut.
The IMF foresees the nation’s economy surging by 7.4 percent this year and 7.8 percent in 2019, also flat from its previous outlook in January.
The two Asian giants have seen their economic prospects brighten amid strong global demand for their exports and as their massive populations start spending, according to the IMF.
Southeast Asia’s booming economies of Indonesia, Malaysia, the Philippines, Thailand and Vietnam will collectively maintain growth above five percent this year and next, the IMF said.
“Emerging Asia, which is forecast to continue growing at about 6.5 percent during 2018-19, remains the most important engine of global growth,” the IMF wrote.
Global trade jumped 4.9 percent last year, the IMF estimated, with China’s exporters being among the largest beneficiaries.
Their prospects are less certain amid US President Donald Trump’s threats to impose tariffs on up to US$150 billion worth of Chinese goods as part of his “America First” agenda.
“Growing trade tensions and risks of a shift toward protectionist policies, and geopolitical strains” are among the greatest concerns, the IMF said.
“An increase in tariffs and non-tariff trade barriers could harm market sentiment, disrupt global supply chains, and slow the spread of new technologies, reducing global productivity and investment,” the IMF said.
Ballooning debt in both India and China has been a top concern for the IMF in recent years. Last year the IMF said China’s credit growth was on a “dangerous trajectory.”
In India spiralling bad debt forced the government to recapitalize state-owned banks to the tune of US$32 billion in October to help them clean up their books.
Chinese policymakers have delayed cutting debt, instead allowing for “stable and rational debt rises” this year to maintain growth. The IMF said officials were “eroding valuable policy space” but applauded regulators’ efforts to rein in the riskiest portion of its lending known as shadow banking.
“Nevertheless, total credit growth remains high,” the IMF wrote.
In India public banks are saddled with bad loans, making it hard for them to continue to fund the economy.
NEW home sales in China continued to grow by double digits, although at a slower rate, in the first quarter, data released yesterday by the National Bureau of Statistics showed.
About 2.16 trillion yuan (US$343.7 billion) worth of new homes, excluding government-subsidized affordable housing, were sold between January and March, a year-on-year increase of 11.4 percent, the bureau said in a statement posted on its website. The growth was below the 15.7 percent expansion in the first two months.
The area of new homes sold in the three-month period climbed 2.5 percent from the same quarter a year earlier to 261.1 million square meters, up from the 2.3 percent rise for the first two months, according to the bureau’s data.
“As March is the traditional month when property sales start to recover as well as an important time to boost quarterly performance by real estate developers, buying sentiment continued to improve across the country,” said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co.
“In particular, third and fourth-tier cities generally outperformed their larger counterparts which continue implement tightening policies to curb speculation.”
The inventory of new homes for sale as of the end of March fell 25.4 percent from the same month a year ago to 291.67 million square meters, the bureau said.
Investment in housing development, which took up 69.1 percent of total real estate investment in the first quarter, rose 13.5 percent year on year to 1.47 trillion yuan, up 1 percentage point from the first two months.
SHANGHAI Pudong Software Park opened a research lab yesterday, cooperating with information security, FinTech, cloud and storage and artificial intelligence companies, the park said.
The research lab will act as a think tank for firms in the park on policy, talent and brand development, said Zhang Sulong, general manager of the park, adding that it can also offer a technology communications platform.
Top executives from SAP, Huada Semiconductor and Qiniu are invited to become members of the new lab.
Qiniu is focusing on cloud and storage and plans to create an AI industry alliance in partnership with the park, said Lu Guihua, the firms’ co-founder and president. A digital classroom, with virtual reality and AI, will be also built in the park.
Software and information service has become “important catalysts” for Shanghai to transform and innovate its economy.
THE sixth China (Shanghai) International Technology Fair will select 55 latest technological projects for commercialization and gather potential investors to meet developers, the organizer said yesterday.
Some of the projects comprise robots, intelligent and connected cars, artificial intelligence, big data and Internet of Things. They also include flowers that can glow at night developed by Hungary-based Morgan Star Group, and laser radar used in unmanned driving by Shanghai-based Slamtec Co.
“The fair functions not only as an exhibition but aims to attract as many of the latest technologies worldwide,” Sun Yong, project manager for the fair, said.
The selected projects will be targeted for commercialization and the fair, which will be held from tomorrow to Saturday, aims to provide a platform for the developers to meet potential investors, according to Sun.
ALIBABA Group said yesterday it will invest 4.5 billion yuan (US$716 million) in Huitongda Network Co, a rural e-commerce subsidiary of Jiangsu Five Star Appliances Co, to drive sustainable development of rural areas.
The two parties will collaborate on supply chain, logistics and technology to upgrade e-commerce infrastructure in the rural areas.
Huitongda has been serving rural customers in financial services, supply chain management and sales support. The company has about 80,000 franchised stores in rural areas serving 200 million people.
Alibaba now hosts about one million rural e-commerce entrepreneurs and annual sales of agricultural products on its platform exceed 100 billion yuan.
Connecting rural products with Internet shoppers has been one of Alibaba's key strategies and last year, it created a 10 billion yuan poverty relief fund on education, rural health care, empowering women and environmental protection.
UNDER the betel trees of Beireng Village in China’s tropical island of Hainan, Wang Qiuxiang’s coffee stall always does brisk business, even if her menu is more expensive than those of some boutique coffee shops in the city.
Wang, 46, learned to make coffee from her father, who learned the trade from his parents. Wang’s grandparents migrated to Singapore and ran a snack bar. Every morning, the couple made coffee with beans they had grown and roasted themselves for workers at a nearby rubber plantation.
After quitting a job at a four-star hotel in Qionghai City, Hainan Province, where she worked for 17 years, Wang returned to Beireng, her hometown, to start a coffee business in 2014. At the time, the local government was cleaning up the village and planning to develop tourism.
“Piles of garbage and sewage used to be everywhere in the village. Villagers themselves were leaving. Why would any tourist want to come?” Wang said.
Now, with its idyllic setting and well-preserved old buildings, the village of 162 residents receives thousands of tourists each day. It was recognized as one of the most beautiful and livable villages by the housing and urban-rural development ministry in 2016.
“We cherish our clean water and green hills. We clearly know that they can make money and bring us better lives,” said villager Lin Zonghao.
Beireng is a model of Hainan’s increasing environmental awareness in supporting local health and economic development.
The province’s natural environment is already the best in the country. Air quality in the provincial capital of Haikou has ranked first among 74 major cities for five consecutive years and the province’s forest coverage has grown by 65 percent during the past three decades to its current 32.04 million mu (2.14 million hectares), according to statistics from the local environmental protection department and forestry department.
A pilot zone
The Communist Party of China Central Committee has decided to support the province, which was founded 30 years ago, to build a national ecological development pilot zone, with the country’s strictest ecological and environmental protection mechanism and a modern regulation mechanism.
“The good environment is the biggest asset for Hainan. The foundation for green development is preservation of the environment,” said Professor Ge Chengjun with Hainan University.
Since 2013, the provincial environmental protection department has issued dozens of regulations, including a rule establishing a red line for protected coastal areas covering more than 19,800 square kilometers.
To balance environmental protection and development, the local government has stopped assessing the economic performances of 12 cities and counties in terms of GDP and fixed asset investment starting this year.
Across the island, the province is prioritizing the development of 12 environment-friendly industries, such as tourism, internet, agriculture, and health care. A software park in Chengmai County has attracted about 2,500 companies, including heavyweights Tencent, Baidu, and Huawei.
In addition, Hainan plans to have all its vehicles run on new energy by 2030 to cut emissions. With about 1.18 million vehicles, the province plans to introduce 5,600 new energy vehicles into the market and build more than 10,000 recharging posts this year.
Since Sansha City was established in 2012 to administer the Xisha, Zhongsha and Nansha islands and their surrounding waters in the South China Sea, the city government has intensified measures to improve the environment of the islands.
Last year, the city began piloting an “island chief” scheme in Qilianyu Islands to control pollutant discharge, protect sea turtles and restore the environment on the islands.
Thanks to the efforts of the island chiefs and reef protectors, more than 170 sea turtle nests were spotted during breeding season in 2017, compared with some 50 recorded in 2014.
Despite the progress, Hainan still faces challenges, such as water pollution and environmental damage caused by real estate development.
Earlier this month, the provincial government issued a three-year work plan to eliminate filthy bodies of water in cities by 2020. The government also aims to raise the proportion of villages with sewage treatment facilities to 30 percent and will shut down or relocate some large farms by the end of this year.
Hainan is working to reduce its reliance on the lucrative real estate industry, as home buyers across the country have been flooding into the tropical island.
Starting in late September, Qiongzhong, Baisha, Baoting counties and Wuzhishan City in central Hainan stopped approving construction of new property projects to be sold to buyers from outside the province in order to protect the environment. “Hainan cannot be a ‘processing plant’ for real estate. We cannot build as many houses as buyers outside Hainan want,” Liu Cigui, Party chief of Hainan, told reporters during the annual national legislative session in March.
A Bank of America branch in New York seen in this file photo. Bank of America reported a 34 percent rise in first-quarter profit yesterday, topping Wall Street estimates, as the lender gained from higher interest rates and growth in loans and deposits. Revenue rose at three of BofA’s four major businesses. In consumer banking, its biggest business, revenue increased 9 percent as higher interest rates helped BofA charge more for loans while keeping deposit rates low.
US retail sales rebounded in March after three straight monthly declines as households boosted purchases of motor vehicles and other big-ticket items, suggesting consumer spending was heading into the second quarter with momentum.
The Commerce Department said yesterday retail sales added 0.6 percent last month after an unrevised 0.1 percent dip in February. January data was revised to show sales falling 0.2 percent instead of the previously reported 0.1 percent drop.
Economists polled by Reuters had forecast retail sales rising 0.4 percent in March. Retail sales in March increased 4.5 percent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.4 percent last month after being flat in February. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
They were previously reported to have risen 0.1 percent in February. Last month’s pick-up in core retail sales will do little to change hopes of a sharp slowdown in consumer spending in the first quarter.
The dollar was trading weaker against a basket of currencies. Prices for US Treasuries were marginally lower while US stock index futures rose slightly.
Economists largely blame the weakness in retail sales at the start of the year on delays in processing tax refunds. Some also argue that income tax cuts, which came into effect in January, only reflected on most workers’ paychecks in late February.
Consumer spending, which accounts for more than two-thirds of US economic activity, grew at a robust 4 percent annual rate in the fourth quarter. It is expected to have slowed to below a 1.5 percent rate of increase in the first quarter.
Growth estimates for the January-March quarter are running below a 2 percent rate. The economy grew 2.9 percent in the October-December quarter. The government will publish its advance estimate for first-quarter GDP growth later this month.
In March, auto sales jumped 2 percent, the largest increase since last September, after declining 1.3 percent in February. Receipts at service stations fell 0.3 percent, reflecting cheaper gasoline.
Sales at furniture stores added 0.7 percent while those at electronics and appliance stores hiked 0.5 percent. But sales at building material stores fell 0.6 percent last month.
THE value of Australia’s wine exports has hit the highest mark in a decade due to surging demand from China, a report released yesterday found.
Wine Australia’s latest Export Report revealed that the value of wine exports from the country rose 16 percent in the 12 months to March 2018 to A$2.65 billion (US$2.06 billion).
“Regional Australia continues to benefit from higher exports — we’re not going to get rich selling to ourselves,” Anne Ruston, Australia’s assistant minister for agriculture and water resources, said in a media release yesterday.
“It makes sense that we export our wine when the world’s largest market is right on our doorstep.”
“These record wine export numbers also have benefits far beyond the cellar door, with important flow-on effects for the towns around our wine regions.”
Exports to China rose 51 percent to A$1.04 billion, the first time exports to a single market were above A$1 billion.
Ruston credited the signing of the China-Australia Free Trade Agreement for the considerable growth.
“New market opportunities underpinned by free trade deals secured by the ... government are providing producers the ability to increase their sales and reinvest in their business.”
“The government anticipates the value and volume of wine exports to China will only grow as tariffs for Australian wine into China will be entirely removed from January 1 next year.”
The Australian government in August 2017 announced the Export and Regional Wine Support Package, a A$50 million initiative aimed at growing the Australian wine sector by showcasing the nation’s wine tourism and driving demand for wine exports.
CHINESE mergers and acquisitions in ASEAN countries soared in 2017 despite a slump in overall outbound investment, thanks largely to the Belt and Road initiative, a report said.
In 2017, the deal value of Chinese M&As in ASEAN surged 268 percent to US$34.1 billion, representing a quarter of the total value of disclosed Chinese M&As, accounting firm Ernst & Young said in a report.
“Taking advantage of its geographic location as a trade hub under the BRI, ASEAN has achieved steady growth in recent years,” said Andrew Choy, EY’s China International Tax Services Leader.
China and ASEAN are set to further boost their relationship and expand broader cooperation under the BRI, Choy said.
Proposed by China in 2013, the BRI aims to build trade and infrastructure networks connecting Asia with Europe and Africa along ancient Silk Road trade routes.
Singapore has become China’s biggest M&A destination in 2017 as M&A activities by Chinese enterprises surged, mainly in transport, technology, telecommunications and life sciences sectors, according to the report.
Malaysia and Indonesia also offer plenty of investment opportunities, the report said.
CHINA’S non-financial outbound direct investment continued to grow by double digits in the first quarter of the year, official data showed yesterday.
Domestic investors made US$25.5 billion of non-financial ODI in 2,023 overseas enterprises in 140 countries and regions during January-March, the Ministry of Commerce said.
The figure surged 24.1 percent from the same quarter last year, the ministry said.
ODI in countries along the Belt and Road jumped 22.4 percent from one year earlier to US$3.61 billion during the first three months.
The structure of outbound investment has been optimized, with the majority of capital going to leasing, mining, manufacturing and IT services, the ministry said on its website.
China’s ODI has risen rapidly in recent years. Noting an “irrational tendency” in outbound investment, authorities have set stricter rules and advised companies to make investment decisions more carefully.
In a document released in August last year, the State Council said overseas investment in real estate, hotels, cinemas, and entertainment would be limited, while investment in gambling would be banned.
RETAIL conglomerate China Resources Holdings made another step into the online to offline retail sector by joining hands with e-commerce giant JD.com’s grocery delivery platform JD Daojia.
China Resources’ supermarket arm, CR Vanguard, has linked its outlets in Nanjing and Hangzhou with JD Daojia. The tie-up will be gradually extended to as many as 2,000 China Resources’ various retail outlets in over 30 cities nationwide, according to a joint statement issued yesterday.
The tie-up came after China Resources’ strategic tie-up with Tencent, which was announced last week. The two parties said their collaboration covers a wide range of areas including smart cities, commercial property management, cloud computing and retailing.
Tencent holds about 20 percent in JD.com.
JD Daojia works with supermarkets and convenience chain stores such as Walmart, FamilyMart, Yonghui and Lianhua Supermarket, as well as other grocery stores and pharmacies across 370 cities nationwide.
CHINA’S central SOEs will continue opening up to increase imports and expand cooperation with other firms, the SOE regulator said yesterday.
The central SOEs will form a purchasing team to cooperate on imports and in other fields at the first China International Import Expo slated for November in Shanghai, said Peng Huagang, spokesperson for the State-owned Assets Supervision and Administration Commission.
CHINA’S centrally-administered state-owned enterprises posted steady profit growth in the first quarter bolstered by industrial upgrading, the State-owned Assets Supervision and Administration Commission said yesterday.
Profits for the SOEs jumped 20.9 percent from a year ago to 377.06 billion yuan (US$60 billion) in the first three months of the year, SASAC said, adding that March’s profits notched a record monthly high of 169.87 billion yuan.
The SOEs posted the best performance in 2017 over the past five years, with profits over the period rising 15.2 percent annually to 1.42 trillion yuan, according to SASAC.
Peng Huagang, a SASAC spokesman, attributed the profit growth to industrial upgrading and cost management.
The centrally-administered industrial SOEs posted a 26.7 percent annual surge in profits to 212.81 billion yuan in the first quarter — 5.8 percentage points above the average rate of central SOEs, Peng said.
The central SOEs saw a drop in their asset-liability ratio in the first quarter of this year due to deleveraging efforts.
The average asset-liability ratio for central SOEs stood at 65.9 percent by the end of March, down by 0.4 percentage points from the start of this year, according to SASAC.
The SOE sector has become a major target in the ongoing deleveraging drive to rein in mounting debt and guard against financial risks.
The government will continue to cut leverage and liability among central SOEs, said Peng.
More efforts will be made to dispose of non-performing assets and regulate open-book credit and inventory, high-risk businesses, debt investment and risks in other areas like international expansion, Peng pointed out.
Central SOEs are urged to expand equity financing via debt-equity swap and promote mixed-ownership and diversified equities, Peng said, adding this financing will be conducted in a market-oriented manner.
Meanwhile industrial profits contributed nearly 70 percent to the total profit growth — the largest driver of central SOEs’ performance, he added.
Both traditional industrial giants and advanced and emerging manufacturing companies are upgrading. Coal companies added 10 percent in fixed-asset investment compared with the same three-month period last year, while the automobile industry’s FAI surged 46.9 percent annually.
Steel makers gained from the continuing supply-side reform, which has cut domestic steel output capacity by 16 million tons. Central steel SOEs’ profits hiked 129.8 percent year on year to 6.9 billion yuan in the first quarter.
NEW home sales rebounded in Shanghai last week amid an increase in supply, pointing to signs of a market recovery.
The area of new homes sold, excluding government-subsidized affordable housing, jumped 24.2 percent to about 84,000 square meters during the seven-day period ending on Sunday, Shanghai Centaline Property Consultants Co said in a report released yesterday.
But the average price of the new homes fell 6.3 percent week on week to 47,255 yuan (US$7,512) per square meter.
The city’s remote Songjiang District remained the most sought-after area for the second consecutive week after weekly transactions surged 66.7 percent to 20,000 square meters. It was closely followed by outlying Qingpu District where 10,000 square meters of new homes were sold and Jiading District’s 9,438 square meters.
“The local new home market has been gaining strength moderately,” said Lu Wenxi, senior manager of research at Centaline. “A well-established luxury housing project in downtown Xintiandi area launched more than 42,000 square meters into the market in one batch.”
Lakeville, a Shui On Land development, released 118 apartments last week at an average price of between 120,000 yuan and 190,000 yuan per square meter, according to Centaline data. The price range is almost equivalent to that of an earlier batch released in November 2015.
The total new supply released to the market surged 50.7 percent week on week to 98,000 square meters last week.
Eight of the top 10 best-selling projects sold for above 40,000 yuan per square meter with the most expensive development, located in former Zhabei District, costing around 85,000 yuan per square meter, according to Centaline data.
For the second half of April, at least 11 projects with around 4,900 units will be launched for sale citywide, according to a separate report by Shanghai Homelink Real Estate Co.
SHANGHAI will use an international solar power exhibition to help companies commercialize their solar technologies, event organizers said yesterday.
The 12th International Photovoltaic Power Generation and Smart Energy Exhibition, which the city will host from May 27 to 30, will have over 1,800 companies from home and abroad participating, the Asian Photovoltaic Industry Association told a media conference.
The exhibition, to be held at the Shanghai New International Expo Center, is larger than last year’s event in the “record high” number of exhibitors, Mi Yue, executive vice-chairman of Shanghai New Energy Industry Association, said.
Exhibitors will present their latest solar power technologies for storage, “smart” distribution (power distribution under digital control) and mobile solar power.
Around 30 projects, “which should represent the latest solar power technologies and are of great commercial value,” will be selected from the exhibitors and Mi said his association will help raise funds and source customers for these companies to commercialize the technologies.
China has installed 10.87 gigawatts of solar power in the first two months, up 220 percent from a year ago. In 2017, 53 gigawatts of solar power have been installed, or over half of the 102 gigawatts installed globally.
CHINA’S e-sport market revenue is set to expand 21.5 percent annually amid a huge pool of gamers, rising sales of mobile game gadgets and professional tournaments offering big prize money, said China Insights Consultancy yesterday.
The market revenue is expected at 78.6 billion yuan (US$12.5 billion) in 2018, up from 64.7 billion yuan last year, with match advertising and sponsorship, game broadcasting, professional gadgets and e-commerce services being major contributors, said CIC.
However, mobile e-Sport market is predicted to soar 93.4 percent annually on average between 2015 and 2019, one of the rapidly growing sectors in e-sport.
Smartphone has now become an essential part of the game and e-sport ecosystem, said Peter Wu, founder and chief executive of Black Shark, a startup smartphone brand boasting investors including Xiaomi.
Chinese investors react to prices of shares at a brokerage in Nanjing, Jiangsu Province, yesterday. Chinese stocks closed lower yesterday, with the key Shanghai Composite Index falling 1.53 percent to 3,110.65 points. The Shenzhen Component Index closed 0.61 percent lower at 10,621.79 points while China’s Nasdaq-style ChiNext Indexv gained 0.77 percent to close at 1,838.71 points.
STEADY growth in China has promoted global economic recovery and trade growth, and provided unprecedented opportunities for other countries, according to the National Bureau of Statistics.
“In recent years, Chinese economic growth held steady at a medium-high rate to become an indispensable engine and anchor for the world economic recovery and sustainable development,” the bureau said in a statement.
Calculated with exchange rates of respective years, China’s GDP accounted for 14.8 percent of the world economy in 2016, up from 12.5 percent in 2013.
China’s average annual growth was 7.2 percent in 2013-2016 calculated with 2010 US dollar prices, noticeably faster than 2.1 percent for the United States, 1.2 percent for the eurozone, 1.1 percent for Japan and 2.7 percent world growth in the same period.
“China’s growth provided a strong engine for world economic growth and contributed more than 30 percent on average to world growth during the period,” the bureau said.
The country’s economy was also less volatile than its counterparts.
In 2013-2016, the Chinese economy fluctuated within a range of just 1.1 percentage points, much smaller than the ranges for the above-mentioned countries and regions.
“As the world’s second largest economy, China played a crucial role in lowering the risks from world economic volatility with its stable growth,” the bureau said.
If China’s positive influences were excluded, the world’s annual growth would slow by 0.6 percentage points and the fluctuation range might rise by 5.2 percent, the bureau said.
In 2017, China’s economy expanded 6.9 percent, picking up for the first time in seven years and well above the government annual target of around 6.5 percent.
As the World Bank estimated world 2017 growth at about 3 percent, China’s economy represents some 15.3 percent in the global economy and contributes to about 34 percent to world growth, NBS said.
At the same time, China is a “pivotal force behind world consumption growth,” with around one-fifth of the world’s population, it added.
In 2013-2016, China’s final consumption contributed an average of 23.4 percent to world consumption growth, calculated with constant dollar prices, above 23 percent from the US, 7.9 percent from the eurozone and 2.1 percent from Japan.
Chinese consumption expanded by an annual rate of 7.5 percent in the period, faster than 2.4 percent for the world.
In recent years, China’s import demand also rose at a fast pace and contributed significantly to international trade growth and promoted the rebalance of world economy.
The World Bank data showed that the value of goods and services China imported accounted for 9.7 percent of the global total in 2016, up from 8.4 percent in 2011, as the country moved to increase imports from other countries.
MARTIN Sorrell’s dramatic departure as chief executive of WPP, the world’s biggest advertising agency he founded 33 years ago, sent shockwaves through the marketing industry yesterday.
Sorrell, 73, stepped down suddenly, 10 days after the British ad giant launched an independent investigation into allegations of personal misconduct through the misuse of company assets.
WPP said the probe had concluded, adding that “the allegation did not involve amounts that are material.”
He was easily the longest serving chief executive of a company on London’s FTSE 100 share index, having held the position since 1985.
The departure of one of Britain’s best-known businessmen leaves the advertising giant needing fresh leadership at a testing time for the marketing industry, with social media companies offering brands a direct connection with vast audiences.
Sorrell said in a statement late Saturday that he was sad to leave, with WPP having been his passion and focus for more than three decades.
“The current disruption is simply putting too much unnecessary pressure on the business, our over 200,000 people and their 500,000 or so dependents, and the clients we serve in 112 countries,” he said.
“That is why I have decided that in your interest, in the interest of our clients, in the interest of all share owners, both big and small, and in the interest of all our other stakeholders, it is best for me to step aside.”
Sky News television’s City editor Mark Kleinman said his resignation was one of the most significant exits of a FTSE 100 company chief executive for many years.
“His departure will leave the company he built virtually from scratch facing profound questions about its future direction,” he said.
Despite the misconduct investigation, some commentators said it was the fact that the company had lost a third of its value over the past 12 months — in the face of competition from the likes of Google and Facebook — that cost Sorrell his post.
Simon Jack, the BBC’s business editor, said his legacy as an advertising industry titan was secure.
However, “in the end, it was the trends in world business that wrong-footed the sprawling empire he created.
“Shareholders were getting restless,” he wrote, and Sorrell “had lost the unanimous backing of the board.”
WPP said chairman Roberto Quarta is now executive chairman until a new CEO is appointed.
CHINA’S largest trade fair opened its 123rd session yesterday in Guangdong Province, attracting more than 25,000 companies as exhibitors.
The biannual China Import and Export Fair, also known as the Canton Fair, is considered a barometer of China’s foreign trade.
Xu Bing, the fair’s spokesperson, said buyers from more than 210 countries and regions are expected to attend the fair, with the total number of buyers set to remain the same as the previous session.
The first phase of the fair, which runs until Thursday, features products including home appliances, electronics and hardware, with major brands such as Haier and Midea showcasing their latest models.
The fair also features an exhibition area for imports, with more than 600 companies from 34 countries and regions expected to account for around 1,000 booths.
Latest data from the General Administration of Customs showed that China registered sound growth in foreign trade for the first quarter, with its trade surplus shrinking.
China’s exports of goods rose 7.4 percent year on year in the first three months while imports grew 11.7 percent.
The country’s trade surplus stood at 326.18 billion yuan (US$52 billion), a 21.8 percent drop year on year, GAC data showed.
CHINA’S local government debt balance stood at 16.61 trillion yuan (US$2.64 trillion) at the end of March, well within the official limit, according to the Ministry of Finance.
The country’s top legislative body has decided that the upper limit for local government debt this year should be 20.99 trillion yuan.
China issued local government bonds worth 191 billion yuan in March and 219.5 billion yuan in the first three months of this year, all for debt swaps.
China has made bond issuance the sole legal way for local governments to raise debt amid the nation’s efforts to forestall systemic financial crisis, the country’s finance minister said last month.
SHANGHAI will launch a pilot program to offer tax benefits to entice the city’s aging population to buy commercial pension insurance from May 1, said a statement by the Ministry of Finance yesterday.
Under the program, buyers of commercial pensions will enjoy tax exemption of up to 1,000 yuan (US$159) of their monthly income.
The pilot stipulates that the eligible commercial pension must be invested in low-risk or risk-free areas, and needs to be approved by the ministry, according to the statement.
The scheme will also be launched in Fujian Province and Suzhou Industrial Park and will run for one year.
Unlike markets where the burden of social security is shared between the government, employers and individuals in a three-pillar system, China’s pension coverage is heavily reliant on state funding.
To meet the challenges of a rapidly-aging population, China issued a guideline last July to develop by 2020 a well-regulated commercial pension insurance system to provide support for commercial pension plans of individuals and families as well as employees.
The guideline encourages commercial insurers to provide support for the pension system and to take part in investment and management of basic pension funds and the national social security fund.
“Commercial pension insurance, just like social security, is a lifeline for ordinary people,” Premier Li Keqiang said at a State Council executive meeting.
“We must ensure that the funds are managed safely and reliably,” Li said.
SINGAPORE Prime Minister Lee Hsien Loong praised China’s latest effort at opening-up and sees great opportunities for bilateral cooperation at the DBS Asian Insights Conference 2018 held yesterday in Shanghai.
Lee said that the direction and willingness of the Chinese government is crucial but what’s “more important” is carrying out the policies and showing the results to the world.
He said China is very open now and has kept close relations with countries around the world and “the situation is totally different now.”
Referring to the Belt and Road Initiative, Lee said that relevant investment projects should be built on sound commercial basis and also accepted by the local community to ensure long-term success.
“It should benefit both the investors and the local people,” Lee added.
Lawrence Wong, Singapore’s minister for national development, said during a panel discussion that the island republic has signed a Memorandum of Understanding with China’s National Development and Reform Commission to boost third-party cooperation.
Wong pointed out that government funding is insufficient for Belt and Road projects and that more private investment is needed.
Wu Yibing, joint head of portfolio strategy and risk and joint head of China at Singapore government investment fund, Temasek Holdings Private Limited, said that China accounts for a quarter of the investment portfolio. Temasek is working with China’s Silk Road Fund and China Investment Corporation to tap opportunities arising from the Belt and Road countries.
Wong also said that as one of largest offshore yuan centers, Singapore expects more integration with China which is entering a new phase of development.
As the chair for ASEAN this year, Singapore is working on boosting economic resilience and innovation, Lee said, adding that Singapore plans to work with China in building smart cities.
Lee said the China-Singapore (Chongqing) demonstration project will greatly facilitate bilateral trade and connect different parts in west China by building advanced logistics systems.
It’s the third bilateral project after the China-Singapore Suzhou Industrial Park and Sino-Singapore Eco-City in Tianjin.
Grade A office rents remained steady in Shanghai’s core CBD markets in the first quarter of 2018 despite a large supply, latest data released by global property advisors showed.The average rents at Grade A buildings in the CBD managed to hold flat, or were up 0.2 percent quarter on quarter, after six projects with a total gross floor area of 375,140 square meters — including One Museum Place in Puxi and Lujiazui Finance Plaza in Pudong New Area — were completed between January and March, JLL said in a quarterly report released yesterday.“Domestic financial services companies, especially those in the asset management sector, continued to be a major demand driver in the local Grade A office market,” said Danial Yao, head of research for JLL East China. “Notably, robust demand from co-working operators — including both well-known players and newcomers — has been giving an additional boost to landlords.”In Shanghai’s Grade A office market, about 150,000 square meters of net absorption, a measure of change in total demand, were contributed by co-working operators in 2017, taking up 13 percent of the city’s total. They are estimated to grow further to 180,000 square meters this year, according to JLL’s forecast.
WeWork, a leading international co-working space operator, said yesterday it has acquired Naked Hub to further consolidate its presence and accelerate its growth in China.
“One thing we know about China is that we don’t know,” Adam Neumann, co-founder and chief executive officer of US-based WeWork, said in Shanghai yesterday, when asked to comment on the company’s latest acquisition. “Because we don’t know, we need great partners. We need a local team and we need friends and then we have the opportunity to succeed.”
In a statement posted on its official website, Naked Hub said that “we are extremely proud to announce that Naked Hub is joining forces with WeWork, a global leader in redefining the future of work. China-born Naked Hub and WeWork may come from vastly different backgrounds but there is more that binds us than separates us.”
No figure was released for the acquisition but earlier media reports said that total consideration for the deal was about US$400 million, with no confirmation coming from either party.
Naked Hub, the co-working arm of Naked Group and once a major rival of WeWork in China, now provides 24 workspaces globally, most of which are in Shanghai and Beijing.
Founded in 2010, WeWork entered the China market in 2016 and has since expanded to 13 locations in Beijing, Shanghai and Hong Kong.
CHINA’S mid-end medical insurance market value is expected to surge to 20 billion yuan (US$3.2 billion) in 2018 boosted by the rising demand for consumption upgrading among the expanding Chinese middle-class, according to Zhongan Online P&C Insurance Co.
By 2020, the value is projected to top 80 billion yuan, accounting for 6.9 percent of the country’s overall insurance sector, said Tan Yongyue, product head of Zhongan Health, a unit of the online insurer.
From 2015 to 2017 China’s mid-range medical insurance market stood at 500 million yuan, 1.2 billion yuan and 8 billion yuan, respectively, according to Zhongan’s research. During the same period, its proportion in health insurance premiums rose from 0.2 percent to 1.8 percent.
The mid-end medical insurance market mainly targets the growing middle class in the world’s second largest economy. The online insurer sees the segment getting attractive to more people as it is now the most dynamic part of the health insurance market. Health insurance has led the industry in recent years, rising by a compound annual growth rate of 27.6 percent from 2007 to 2017, according to data from regulatory bodies.
CHINA says its continuing opening-up measures have nothing to do with the trade friction with the United States.
The measures are major strategic decisions made based on an accurate estimation of China’s current development level in order to lead opening-up in the new era to a higher level, Ministry of Commerce spokesman Gao Feng said yesterday.
Similarly, Chinese Foreign Ministry spokesman Geng Shuang said unequivocally on Wednesday that the measures China will take have nothing to do with the trade friction.
“Anyone who has some knowledge of how the Chinese government operates will understand that the rollout of such an important decision involving all these major measures will take some time to formulate, deliberate and improve until everything is ready. It is impossible to make such a decision at short notice,” said Geng.
China will continue to adhere to its fundamental national policy of opening-up and will pursue development with its door wide open.
“China’s door of opening-up will not be closed and will only open even wider. This is our consistent position,” Geng said.
Both the report to the 19th National Congress of the Communist Party of China last October and this year’s government work report drew up guidance and plans for future opening-up efforts. Tuesday’s announcement of wider opening-up measures is a solid step to implement the two reports, Geng added.
“It was made in line with our own needs, timetable and roadmap,” he said. “China is determined to open wider to the outside world, no matter what others do.”
As of now, neither government officials from China or the US have engaged in any negotiations concerning the trade friction, Gao said.
“There are principles to follow for negotiations. The US side has not shown any sincerity to negotiate. Concerning the US, we will not only listen to the words but also watch the deeds.”
China will fight till the very end if Washington insists on unilateralism and trade protectionism, Gao said.
While some are implementing protectionism, China’s continued opening-up measures prove clearly to the world that China is embracing openness, said Niu Li, an economist with the State Information Center of the National Development and Reform Commission.
Thanks to the country’s reform and opening-up, overseas investment has become a crucial component of China’s economy.
Foreign-funded companies accounted for nearly half of the country’s total exports and imports as well as nearly a quarter of its industrial output, while contributing 20 percent to taxes and 10 percent of employment.
“Current conditions are already favorable for China to further widen market access, and have led to a critical window for China to continue opening up,” said Niu.
China, the world’s second-largest economy, is now the biggest country in terms of industrialization, goods trade and foreign exchange reserves, said Niu.
China said on Tuesday that it will launch a number of landmark measures this year to significantly broaden market access.
The country will accelerate the opening-up of the insurance industry, ease restrictions on the establishment of foreign financial institutions in China and expand their business scope, and open up more areas of cooperation between Chinese and foreign financial markets.
China also pledged measures, including significantly lowering import tariffs for vehicles, while reducing import tariffs for some other products, and enhancing protection of intellectual property rights.
FOREIGN direct investment in China rose steadily in March and the first three months of this year.
China’s Ministry of Commerce said yesterday that in yuan terms, FDI in the country rose 0.4 percent year on year to 88.14 billion yuan (US$14 billion) last month.
The total FDI inflow in the year’s first quarter increased by 0.5 percent from a year earlier to 227.54 billion yuan, which in US dollar terms represented a growth of 2.1 percent.
The number of new overseas-funded firms in the first three months in China surged 124.7 percent from a year earlier to 14,340, while the number in March was 5,492, up 117.7 percent.
FDI in the high-tech industry jumped 12.8 percent from a year earlier and accounted for 19.3 percent of the total investment, said Gao Feng, the ministry’s spokesman.
In regional terms, the central area of China recorded a FDI rise of 46.7 percent to 17.08 billion yuan; for the western regions, it was 15.18 billion yuan, up 23.4 percent.
In the January-March period, investments from Singapore and South Korea increased 72.5 percent and 65.7 percent respectively, and investments from the Association of Southeast Asian Nations rose 79.1 percent.
Investment from countries along the Belt and Road was up 76 percent in the first quarter from the same period of last year, according to the ministry.
SHANGHAI launched a Big Data center yesterday to improve management of the city and the business environment.
The Shanghai Municipal Big Data Center will bring together all kinds of service data, including those of the government departments and other organizations, for connection, sharing and application, Zhou Bo, Shanghai’s executive vice mayor, said at a press conference.
The center is expected to promote integration of technology, business and data, and help build a data-sharing system of the city. It will formulate technical standards and management methods for the collection, management, sharing, opening, application and security of data resources.
Setting up the center is “an important move aiming to achieve cross-level, cross-department, cross-system and cross-service data sharing and exchange for government, industry and social data,” Zhou said.
The city has entered a stage of comprehensive promotion of the one-stop service platform and is now accelerating the development of smart government.
“Our overall goal is to complete the establishment of the general portal of the one-stop service for Shanghai’s government affairs in 2018,” Zhou said.
By 2020, the city is expected to form a basic framework for a coordinated and efficient smart government with accurate services and scientific management, he added.
According to the city’s plan to build the one-stop service platform and smart government, the one-stop service will allow people to apply for personal affairs at any community service center throughout the city.
Citizens can call the 12345 hotline for further guidance.
The one-stop platform merges the systems of different government authorities and allows online application for and approval of licenses, company seal making, and tax affairs.
Authorities will regulate and integrate their official accounts on WeChat and mobile applications for public services to promote integration and the processing flow of government accounts and services.
“With the integrated service procedures, over 90 percent of the examination and approval for companies can be done at one time,” Zhou said.
Big Data, cloud computing and artificial intelligence will all be used in the development of smart government to build Shanghai into a global city of excellence, Zhou said.
Premier Li Keqiang said during his visit to Shanghai this week that the one-stop service platform “is a big step forward to show the government’s determination in transforming its role.”
Shanghai should live up to the great expectations, Li added, through beefing up efforts to improve its business environment and to reduce operational costs for companies with more investor-friendly policies.
CHINA’S consumer inflation slowed and the factory gate prices cooled to a 17-month low in March.
The Consumer Price Index, a main gauge of inflation, rose 2.1 percent year on year last month, 0.8 percentage points slower than February’s, the National Bureau of Statistics said yesterday.
The Producer Price Index, which measures costs for goods at the factory gate, grew 3.1 percent year on year, 0.6 percentage points slower than that in February.
On a month-on-month basis, the CPI dropped by 1.1 percent in March, with food prices down 4.2 percent and reversing the 4.4 percent rise in February.
Sheng Guoqing, a bureau analyst, said that the slower consumer inflation was mainly due to the influence of a moving Chinese New Year.
“After the 52-month high of year-on-year rise in February caused by the moving lunar new year holiday effect, the CPI inflation fell to a much weaker-than-expected 2.1 percent year on year in March, mainly due to falling food prices,” the Nomura Group said in a note yesterday.
Food prices rose 2.1 percent year on year, 2.3 percentage points below February’s, lifting the CPI reading by 0.41 percentage points, data showed.
Rises in non-food prices slowed to 2.1 percent yearly, with the pace retreating 0.4 percentage points from the previous month.
China’s PPI year-on-year growth was 0.6 percentage points lower than February’s.
Sheng said the PPI slowed in the nonmetallic mineral products, non-ferrous and fuel processing industries while coal mining firms and paper product manufacturers saw a faster gain in prices.
Despite the softening in month-on-month consumer prices, economists still maintain their forecast for annual CPI after taking into consideration supportive service prices and moderation of seasonal factors.
“The service and food price indexes dropped 0.7 percent and 4.2 percent month on month respectively in March, but we attribute this to seasonal factors,” Australia and New Zealand Banking Group said in a note. “Looking forward, the service price index should extend its expansionary trend given booming demand.”
ANZ also highlighted the potential impact if China imposes a 25 percent import tariff on US soybeans, though the market broadly believes this would only cause marginal upward pressure on the headline CPI.
ANZ revised down their PPI forecast for 2018 to 4 percent from the previous 4.8 percent as commodity prices have risen more slowly than expected.
SHANGHAI stocks closed up for the third straight day yesterday, ending above 3,200 points amid strong performance of financial shares and metal producers.
The Shanghai Composite Index added 0.56 percent to 3,208 points.
Metal producers gained, with Shandong Gold Mining Co surging 5.2 percent and Zhongjin Gold Mining Co adding 3.48 percent to 9.8 yuan (US$1.56). China Aluminum Corp gained 2.5 percent.
People’s Bank of China Governor Yi Gang told the Boao Forum that the government will remove foreign ownership caps on Chinese banks and allow foreign securities and life insurance firms to hold majority stakes in their Chinese counterparts.
The Industrial and Commercial Bank of China rose 1.96 percent to 6.24 yuan, Shanghai Pudong Development Bank gained 1.19 percent, while China Citic Bank Corp hiked 3.11 percent.
Real estate developer China Vanke Co rose 1.34 percent and Poly Real Estate Group jumped 1.75 percent to 14.54 yuan.
Investors’ worries about an economic rebound gradually faded away.
Improvement in listed companies’ earnings would continue to push up overall stock performance in the coming months, Haitong Securities wrote in a research note.
Global markets are seeing a warmer sentiment on easing concerns of trade tensions between the US and China, as well as rising crude oil prices.
CHINA’S economic growth is expected to reach 6.6 percent this year, the Asian Development Bank said in a report released yesterday.
In its annual publication Asian Development Outlook 2018, the Manila-based bank said China’s growth accelerated on strong demand from home and abroad.
“Expansion in China should moderate to 6.6 percent in 2018 and 6.4 percent in 2019 as economic policy leans further toward financial stability and a more sustainable growth trajectory,” the ADB said.
According to the Chinese government work report released in March, China has set its GDP growth target at around 6.5 percent for 2018.
The ADB said that the service sector is fueling China’s continued growth, increasing by 8 percent in 2017. Strong demand at home and abroad together with economic reforms lay the foundation for continued growth and macroeconomic stability in China, it added.
“Further progress on reforms such as strengthening financial sector regulation and supervision and addressing debt issues would lay a foundation for solid macroeconomic stability,” the ADB said.
Meanwhile, the ADB said economic growth in East Asia picked up by 0.3 percentage points to 6.3 percent in 2017 “as strong external and internal demand lifted every economy in the sub-region.”
The ADB said other economies in the East Asian sub-region will see lower growth as well, mainly on account of moderating export growth.
“These developments will tamp down East Asian economic expansion to 6 percent in 2018 and 5.8 percent in 2019,” the ADB said.
The ADB said inflation dipped in East Asia last year, reflecting moderation in China, where food prices fell.
The ADB’s economic publication provides a comprehensive analysis of macroeconomic issues in developing Asia, including growth projections for 45 economies, including China, India, and the Philippines.
The report also examines the prospects for developing Asia by Central Asia, East Asia, South Asia, Southeast Asia, and the Pacific.
SHANGHAI said yesterday that it will launch the first batch of 30 year-round exhibition and transaction platforms to support the China International Import Expo to be held in the city in November.
These platforms will provide multi-mode and multi-channel services for overseas companies entering the Chinese market, the municipal government said.
The Shanghai Commission of Commerce took into account that the six-day exhibition to be held in November is too short for exhibitors and buyers from all over the world to learn and take advantage of business opportunities in China and also to be conversant with the approaches and channels for entering the Chinese market.
The commission decided to set up the year-round exhibition and transaction platforms to provide a channel for foreign products, services and technology to enter the Chinese market as well as promote the sustainable development of the CIIE and magnify the spill-over effects of the expo.
The 30 year-round exhibition and transaction platforms are grouped into integrated service platforms, cross-border e-commerce platforms, professional trading platforms and country commodity centers.
These four platforms aim to offer exhibitors more exhibition and trading services for comprehensive products and technology, provide more overseas products for consumers through online channels, bring professional supporting services for specific products, and offer participants convenient and efficient services.
CHINA’S central bank governor yesterday announced specific measures aimed at further opening the country’s financial market will be implemented this year.
Yi Gang’s announcement, made at the Boao Forum for Asia annual conference, follows President Xi Jinping’s declaration to broaden China’s market access and expand reform and opening-up.
According to Yi, six measures will be in place “in the coming months,” such as increasing the threshold of foreign ownership to 51 percent in securities, funds, futures and life insurance joint ventures, and phasing out the cap over three years.
The central bank governor said the country will remove foreign investment cap on banks and asset-management companies,and provide national treatment to foreign financial institutions in the next few months.
Joint-venture brokerages will not be required to have at least one securities firm among its domestic shareholders, Yi added.
To boost the interconnectedness between the Chinese mainland and Hong Kong exchanges, the daily trading quotas on the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connect schemes will be quadrupled from May 1 onward.
Qualified foreign investors will be allowed to conduct insurance brokerage and assessment business in China, and foreign-funded insurance brokers will enjoy the same business scope as their Chinese counterparts, Yi said.
Before the end of 2018, China will encourage overseas investors to enter its trust, financial leasing, auto finance, money brokerage and consumer finance sectors.
As for the newly set financial asset investment and wealth-management companies initiated by commercial banks, there will be no more caps on foreign ownership.
China will also “substantially” expand the business scope of foreign banks and impose no restrictions on the business scope of joint-venture securities companies, Yi said.
Requirements will be removed for foreign-funded insurers to have representative offices for two years in China before they set up businesses.
Yi said that thanks to the joint efforts between China and the United Kingdom, the preparatory work of the Shanghai-London stock connect program is “progressing well” and the scheme will be launched this year.
China is delivering its promises on liberalizing the market access restrictions on banking card settlement agencies and non-bank payment institutions, relaxing its restrictions on credit rating services by foreign players, and providing national treatment to foreign capital when they invest in credit information companies in the country.
Yi noted that all these opening-up measures are “advancing smoothly.”
He said all relevant departments are now working to amend laws, regulations and related procedures to ensure the timely implementation of the new measures. The central bank will strengthen financial supervision and maintain the financial stability while expanding the opening-up of the financial sector.
The research team led by Betty Wang and David Qu at the Australia and New Zealand Bank (China) said Yi’s speech confirms China’s reform commitment, and they view the latest details about the opening-up of the financial market as “a positive move.”
The research team believes the detailed roadmap will help to boost China’s further integration into global financial markets, including the possibility of Chinese bonds being included in global bond indexes.
The Australian lender said that although some of the commitments were made last year following United States President Donald Trump’s visit to China, it marks the first time that China has provided a clear timeline on its financial market opening-up plans since the 19th National Congress of the Communist Party of China last October.
SAN Francisco-based Airbnb is celebrating its 10th anniversary as a global pioneer in the home-sharing concept. Its first decade has seen rapid growth, redefining the hospitality industry by allowing locals to open their homes to visitors via online accommodation listings.
China is a star in the company’s portfolio.
“China is now the fastest-growing domestic market for Airbnb and the second-fastest growing outbound travel market after the US,” Nathan Blecharczyk, chief technology officer of Airbnb and chairman of its China business, told Shanghai Daily in an exclusive interview.
In 2017, Airbnb’s domestic listings in China nearly doubled. There have been more than 3.3 million guest arrivals in Airbnb listings in China by domestic travelers in the past year.
Guest arrivals by Chinese travelers on Airbnb over the past decade have exceeded 10 million, with half occurring within the past year, said Blecharczyk.
Building on that momentum, Airbnb plans to increase its investment in products and services available to domestic travelers.
At a media conference called to mark the 10th anniversary, Blecharczyk unveiled the Airbnb Plus. This is a new category of listings intended for guests who are looking for “beautiful homes, exceptional hosts and added peace of mind.”
“We created the new category to broaden our appeal and to recognize hosts who go above and beyond in providing outstanding hospitality,” said Blecharczyk.
Shanghai is one of the first 13 cities worldwide to launch Airbnb Plus. The service will later be expanded to other cities in China, including Beijing and Chengdu.
Airbnb’s announcement of expanded investment in China comes amid growing competition in the short-term lodging market. Airbnb has to fight for homes and market share against Chinese rivals like Tujia and Xiaozhu.
Despite the fast growth, Airbnb’s number of home offerings in China, estimated at 150,000, is still dwarfed by domestic players.
Xiaozhu said it had 250,000 homes across 384 domestic cities as of last year. New listings average over 1,000 per day, according to a company statement.
Tujia has been even more aggressive. Mergers and acquisitions in the past two years have consolidated its status as the market leader in China.
In January, Tujia’s acquisition of Fishtrip, a Beijing-based online travel agency, gave it an additional 300,000 homes — mostly in Taiwan and other Asian locations. That brought its portfolio of home-shares to over 1 million.
In an earlier interview, Tujia’s Chief Operating Officer Yang Changle said competition with Airbnb is inevitable in overseas markets, but he didn’t rule out possible cooperation in areas such as exchanging information about active listings.
Meanwhile, conglomerates like Ctrip and Meituan have also entered the market, hoping to get a piece of what is viewed as a lucrative business.
Blecharczyk appears unfazed about the competition, saying there is room in the market for multiple players.
“Our respective successes do not seem to come at the cost of the others,” he observed.
Airbnb is perhaps one of the few foreign Internet-related companies to succeed in a marketplace replete with big name failures like Uber and even Google. Blecharczyk attributed the success to advantages the company possesses.
It is the only company with an outbound travel network of 4.5 million homes in 191 countries, allowing it to service the 8 million Chinese tourists going abroad, said Blecharczyk. Outbound travelers who have had positive experiences using Airbnb overseas sometimes decide to become Airbnb hosts when they return home.
For instance, Tony, an Airbnb host in Beijing who has received more than 400 guests in three years said he chose to become an Airbnb host because of the interesting hosts he met using Airbnb on his travels.
“There’s been cross-pollination from the outbound business to the domestic business,” said Blecharczyk.
He said one of Airbnb’s strengths is its “experiences” services, designed to connect travelers to local people, neighborhoods and culture. The company in China is focused on reputation and quality.
For example, to ensure its homes are of premium quality, the company has launched a number of “China-only” initiatives, including the review of every online listing and coaching lessons for hosts on how to be more successful on its platform.
The latter led to the recent creation of an “Airbnb Host Academy,” which helps hosts learn the basics of quality hospitality.
To date, the company has held an unspecified number of offline sessions in Beijing, Shanghai, Chengdu and Guangzhou.
When Blecharczyk co-founded Airbnb with Brian Chesky and Joe Gebbia in 2008, their startup company was laughed off as a “crazy idea.”
“People might still say ‘it’s not for me,’ although they approve of Airbnb’s model,” said Blecharczyk.
A Harvard student entrepreneur before he co-founded Airbnb, Blecharczyk said Airbnb’s core values are built on “earning trust.”
The company has instituted measures to adhere to that principle, including eliciting reviews from travelers and hosts. He said they help allay hosts’ concerns about ill-bred guests.
Concerns about sharing a home with strangers were fanned by media reports about the untoward behavior of some Chinese travelers.
Airbnb offers “host guarantee,” an insurance-like policy that comes free with each reservation. It covers any property damage caused during a stay.
“Local players might outspend us, but we are confident of building our reputation and earning the trust of customers through word of mouth and patience,” Blecharczyk said.
NASDAQ-LISTED Ctrip plans to set up its first overseas call center in Scotland as the company aims to provide quality services to meet demand from the booming outbound tourism market, China’s biggest online tourism website said yesterday.
Plans for the call center in Edinburgh came after Ctrip acquired Scotland-based Skyscanner for 12 billion yuan (US$19 billion).
Ctrip will continue to invest overseas, Chief Executive Jane Sun said during a meeting with Nicola Sturgeon, Scotland’s First Minister.
In 2017, the number of Chinese tourists to Scotland jumped 120 percent and they spent 14,412 yuan on average during the trip, up 50 percent from a year ago, said Ctrip.
Besides expanding overseas, Ctrip also intends to tap new technologies like artificial intelligence, big data and cloud computing to boost its revenue and better serve tourists, Sun added.
Ctrip, with more than 300 million registered users, posted a net profit of 2.1 billion yuan in 2017, reversing a 1.4 billion yuan loss in the previous year.
HAIER Group plans to go public on the China Europe International Exchange’s D share market, the Shanghai-listed home appliance giant said yesterday.
Not more than 400 million D shares will be issued, Haier said in a statement to the Shanghai Stock Exchange. The funds raised will be used in Haier’s global expansion, according to the company.
The China Europe International Exchange, a joint venture company established by Shanghai Stock Exchange (40 percent), Deutsche Boerse Group (40 percent) and China Financial Futures Exchange (20 percent), allows international, especially European, investors to invest in Chinese shares, bonds and related products.
Regulatory approval for the listing is still pending.
SHANGHAI is on track to build itself into a “global exhibition capital” by 2020 as notable improvements have been achieved in various aspects over the past few years, according to government officials.
In 2017, the city held around 1,020 exhibitions and conventions which took up 17.7 million square meters, up 19.9 percent and 17 percent, respectively, from 2015 (the end of the 12th Five-Year period), said Shang Yuying, director of the Shanghai Commerce Commission.
During the whole of last year there were 36 large-scale exhibitions and conventions occupying over 100,000 square meters each, accounting for 32 percent of the country’s total. Six of them were mega-size events taking up 300,000 square meters and above.
“Shanghai has in recent years been accelerating the development of its exhibition industry, one of the key growth engines to boost the city’s economy,” Shang told a press conference yesterday. “By both number and scale of exhibitions and conventions, Shanghai is No. 1 in the country and one of the leading players in the world.”
Direct income from exhibitions and conventions exceeded 120 billion yuan (US$19 billion) in Shanghai last year, government data showed.
Space used by international exhibitions and conventions reached 13.29 million square meters last year, up 12.9 percent from 2016. They accounted for 75.1 percent of the city’s total, up 2.2 percentage points from five years ago.
Under an earlier released master plan, Shanghai aims to hold annual exhibitions and conventions covering 20 million square meters by 2020 (the end of the 13th Five-Year period), and the number of large-scale fairs occupying above 100,000 square meters each should reach 50 by then.
Government officials also released details of two major fairs to be held in the city this year.
The three-day China (Shanghai) International Technology Fair, to run from April 19 at the Shanghai World Expo Exhibition & Convention Center, is set to draw 50,000 visitors. This is the sixth year the fair, covering 35,000 square meters, will be held and exhibitors from 14 countries and regions will display their state-of-the-art technologies.
The 2018 China International Import Expo, the first of its kind held in the country, has more than 1,600 companies from over 120 countries and regions registered. It will held from November 5-10.
CHINA’S wealthy families are optimistic about the Chinese economy in the future amid steady economic growth, Bank of Communications said in a report yesterday.
The bimonthly Climate Index of China’s Wealth was 140 points in March, flat as two months before, according to BoCom.
A reading above 100 indicates growth in wealth, while that below 100 represents deterioration.
Among three main sub-indices, the economic climate index added 3 points to 140, while the index for income growth shed slightly by 1 point to 154. The investment intention index was the same as in January.
The growth of the economic climate index showed that well-off families are optimistic about the future of the Chinese economy, with employment situation and investment climate both showing positive trends, BoCom said.
China’s economy developed steadily in the first two months of this year as value-added industrial output grew by 7.2 percent year on year, 1 percentage point faster than December 2017. Investments in fixed assets rose 7.9 percent yearly at a 0.7-percentage-point faster pace.
The investment intention index was unchanged, with intention to invest in current assets and real estate offsetting each other.
“With the US Federal Reserve’s interest rate hike and the trade friction between China and the US, major benchmarks for the A-share market fell. This brought a negative influence on market sentiment and consumers’ preference for risks,” the report said.
Government’s policies beneficial for the real estate market encouraged well-off families to invest in real estate, offsetting the drop in investment intention on current assets.
The report surveyed 1,843 well-off families with an annual after-tax income above 120,000 yuan (US$19,000) in Beijing, Shanghai, Guangzhou and Shenzhen, those with income over 100,000 yuan in Chengdu, and others in 21 other major cities.
SHANGHAI’S economic growth is set to stabilize at 6.9 percent this year as the city continues to reform and open up, according to an annual report released by the Shanghai Academy of Social Sciences yesterday.
“Shanghai will see steady growth, and with better quality contributed by technology,” said Shen Kaiyan, the author of the report on Shanghai's economic development released by the SASS.
“The city’s science and technology is developing strongly, its innovation is improving and it is cooperating with nearby cities to integrate growth,” Shen said.
Shanghai should continue to open up its industries and drive reform, especially in the China (Shanghai) Pilot Free Trade Zone, that will be the key to power Shanghai’s growth, Shen said.
Shanghai’s economy grew 6.9 percent year on year to 3.01 trillion yuan (US$480 billion) in 2017, better than the 6.5-percent preliminary target set at the beginning of last year.
SHANGHAI consumer confidence dipped in the first quarter of the year from the previous quarter but optimism still prevailed, while investor confidence was unchanged, a survey showed.
The Index of Consumer Confidence in Shanghai, a quarterly gauge compiled by the Shanghai University of Finance and Economics, shed 5.7 points from the fourth quarter of last year to 118.1 points in the January-March quarter, down 0.9 points from the same period last year.
A reading above 100 points indicates optimism.
The international political and economic situations are unpredictabe, said Xu Guoxiang, director of the university’s Applied Statistics Research Center, and deputy directors Cui Chang and Wu Chunjie.
The component index measuring intention by residents to buy homes remained the same as the previous quarter at 58.3 points but dipped 2.8 points from the same period last year. Meanwhile, consumer intention to buy cars fell sharply by 9.6 points from the 2017 October-December period and was down by 9.7 points year on year.
The Index of Investor Confidence was flat in the first three months at 112.46 points from the fourth quarter in 2017, while it grew 2.21 points on a year-on-year basis.
SHANGHAI will invest 69 billion yuan (US$10.9 billion) this year to upgrade industrial technology to transform its economy, the city government said yesterday.
The technology upgrade also embraces software, patent and testing besides manufacturing, said the Shanghai Municipal Commission of Economy and Information Technology, the local industry regulator.
By the end of 2018, Shanghai will have 1,700 technology upgrading projects covering smart manufacturing, new energy cars, intelligent cars, domestically-developed airplanes and next-generation information technology.
New technologies like artificial intelligence, the Internet of Things and cloud computing are to become new catalysts to accelerate Shanghai’s economic transformation and upgrading, said the commission.
More investment will help upgrade technology on new energy car and e-commerce in Songjiang and Jiading districts.
SHANGHAI entrepreneurs often gather in an incubation space in Jing’an District during the weekend for a tech workshop, a broadcast of Apple’s new product release or just an European Cup match. In the P2 (People Squared) space, which is reconstructed from a factory, startups worked in the shared workstations and socialized and entertained in the public spaces.
Now they can expect more as Google has chosen Shanghai to hold Demo Day event, the first time for Google to bring the event to Asia. It will help Chinese startups pitch top investment and venture capital firms.
P2 is one of the 500 innovation spaces in Shanghai, which plans to establish or upgrade its ecosystem on startup and innovation. The city has its unique advantages like many incubation spaces, rich talent pool, huge investment to upgrade technology and advanced information infrastructure covering digitalized daily life and public services.
New technologies like artificial intelligence, the Internet of Things and cloud computing are expected to become new catalysts to accelerate Shanghai’s economic transformation and upgrading, said the Shanghai Commission of Economy and Information Development, the local industry regulator.
Shanghai had over 500 incubation spaces, which offers various services to startups from shared work desks, special policy on rent and tax and related fundraising and legal services. The spaces covered 12,000 startups with 380,000 employees by the first half of 2017, according to latest figures.
As one of them, P2 now has been home to 1,200 startups with 12,000 shared work desks. The firms in P2 have attracted a combined investment of 1 billion yuan (US$158.7 million) by February.
“China is a great location for this event as investment activity and the startup ecosystem are booming,” said Google in a statement explaining the reason to choose the Shanghai for the event.
No. 1 for working expats
In 2017, 81,000 work permits were granted to foreigners in Shanghai, ranking No. 1 nationwide. Over 215,000 foreigners work in Shanghai, accounting for 23.7 percent of the national level.
Shanghai is home to one-third of the AI professionals nationwide, thanks to talent pool and potential AI development, said Wu Qing, the city’s vice mayor.
The traditional industries and latest technologies have been integrated in Shanghai, which creates high-efficient and environment-friendly methods.
China Baowu Steel Group Corporation plans to invest 8 billion yuan in Shanghai to upgrade technology and research. It helps the country’s biggest steel maker adopt more technologies on smart manufacturing and environment protection.
SenseTime, which plans to raise US$600 million in the world’s biggest AI fundraising exercise, will invest 6 billion yuan in Shanghai. It has also signed cooperation deals with Shanghai Lingang Group and Shanghai Inesa to develop AI in harbor management and devices used to track food quality.
Electronic driver’s license and tax certificate, easy checking of personal social security accounts and even nearby sites offering free condoms all help local citizens enjoy their digital life through a mobile application, eshimin (Citizen Cloud).
Through the government-backed app, more than 100 features and public services are offered in the one-stop app, covering health care, transport, social security, community activity and traveling. Up to now, it has over 8.3 million registered users, more than one-third of the city’s population.
Shanghai’s intelligent lifestyle is based on huge volume of data and on how to use it.
More than 500,000 Internet of Things devices, including sensors and monitors, fire alarm security, elevator status tracking, food security and road condition reporting, are being adopted in Jing’an District.
Shanghai Data Exchange Corp or SDE, the IoT project issuer, said the city has “natural advantages” in conducting the data business thanks to its global financial center position, advanced information infrastructure and rich talent pool.
Data mining and analysis technologies have been deeply used in the FinTech sector for risk control, anti-fraud and prevention of information leakage, said Ni Shuyin, CEO of Kuai Niu.
The Shanghai-based online finance firm has set up a special team with “several hundred people” nationwide working on security, Ni said during the LendIT FinTech Summit.
CHINESE technology firms topped the world in the number of initial public offerings in the second half of 2017, according to a private report, as a booming new economy created enormous room for Internet startups to thrive.
Twenty-three businesses operating on the Chinese mainland went public domestically or on overseas markets, raising a total of US$4.65 billion from July to December last year, the PwC China report said yesterday.
Both China’s number and value of IPOs ranked first in the global tech community, followed by the United States with 14 IPOs raising US$2.86 billion.
China Reading, the country’s largest online publisher, raised around US$1.1 billion in Hong Kong last November in the world’s second biggest tech offering in the second half of 2017.
Analysts attributed the IPO surge of Chinese tech firms to vibrant web-based industries. Innovations powered by Internet technology are springing up and the group of tech-savvy young consumers is growing rapidly.
China’s new economy, also known as the digital economy, totaled 26 trillion yuan (US$4.28 trillion) in 2017, accounting for around 32 percent of the national gross domestic product.
From ride-hailing to online financing, innovative startups are sprouting into giants and becoming eager for more investment and financing.
“More Chinese firms in the technology, media, and telecom sectors turned to overseas markets after being blocked by legal and technical barriers in the A-share market, especially those yet to make profits,” said Walter Zhang, PwC China assurance partner.
However, the phenomenon is about to change as regulators started to ease rules to woo more homegrown tech firms to go public on the Chinese mainland.
The China Securities Regulatory Commission has announced a pilot program to help promising startups get listed and allow leading tech firms that have gone public abroad to re-issue shares on the mainland.
“China will become one of the world’s hottest IPO markets,” said Amanda Zhang, PwC China private equity partner.
There were a total of 53 technology offerings worldwide last year which raised around US$13.2 billion, according to the report.
THE 2018 “Startup in Shanghai” International Innovation and Entrepreneurship Competition is being held in the city with 6,520 small and micro businesses taking part, a rise of 4.3 percent, the local scientific and technological commission said.
This year’s competition opened a section for Hong Kong firms for the first time, while its Taiwan section has been running for years.
Last year it set up an international section for foreign companies and individuals to join in.
The competition covers some new areas like science and technology service industry, artificial intelligence, military and civilian integration technology and intelligent automobile. A long-term tracking mechanism will also be set up to discover and foster the development of firms with growth potential.
More than half of the businesses are first-time competitors and over 60 percent of them have been operating for under five years. The winners of the competition will share 600 million yuan (US$95 million) for their innovation.
Chen Hongkai, a commission official, told Shanghai Daily that as an international metropolis and “global dock,” more expats are flocking to Shanghai. “During recent years, a large group of foreign entrepreneurs are gathering in local areas featuring scientific and technological innovation like Zhangjiang,” said Chen. “We noticed this trend and opened the competition’s international section last year, which serves as a nursery for them to seek chances in Chinese market.”
SHANGHAI Zhangjiang Biobank, the largest of its kind in China, plans to add storage for 50 million human biological samples such as cells, blood and organ tissues in the coming years to meet robust domestic demand, it told Shanghai Daily.
The biobank, which stores the samples for research use, is investing between 300 million yuan (US$48 million) and 500 million yuan to construct a building in Shanghai’s Zhangjiang Hi-tech Park to store the 50 million samples, said Ye Yang, its chief operating officer.
The expansion in storage from the current 15 million samples will “help us meet the fast growing demand, especially after we opened the service to the public last year,” Ye said.
The biobank started storage services for the public in October last year to enable residents to “save” their organs and cells for decades, which can be taken out in the future to help cure diseases or to be used for research.
So far it has stored nearly 7,000 samples for the public, “and the number of orders is rising fast, much faster than that from hospitals,” Ye said
The demand from the public has been surging since the service started and there has been rapid growth for blood and tumor cells storage, he said.
“Alongside stem cells to help cure diseases in the future, people also hope their cancer or tumor cells can be saved, which may help scientists find ways to cure (related) diseases,” Ye said.
As well as growing its storage capacity, the biobank plans to build 10 to 15 branches across China to tap the surging demand.
The biobank started in 2016 by collaborating with hospitals and institutes to help them store biological samples or conduct joint research.
It has stored over 400,000 samples for these institutions.
The biobank will participate in the sixth China (Shanghai) International Technology Fair from April 19 to 21 at the Shanghai World Expo Exhibition & Convention Center “to help the public learn our services,” according to Ye.
LOCAL universities are active in educating students on innovation and entrepreneurship.
By the end of last year, 35 universities in Shanghai, or more than half of the total in the city, have set up over 1,000 innovation and entrepreneurship courses, including over 200 delivered online, according to the Shanghai Education Commission.
In about 30 universities, the innovation and entrepreneurship courses are compulsory.
Fudan University plans to integrate the innovation and entrepreneurship courses into its liberal arts education system that covers all undergraduates by 2020, according to a new plan released last year.
Nearly 400 teachers in local universities and 600 from outside are mentoring students who are interested in startups. Among them, 217 have been selected into the national pool of mentors for innovation and entrepreneurship.
Shanghai Jiao Tong University, Fudan University and ShanghaiTech University have been selected as national demonstration bases for innovation and entrepreneurship.
The city has also organized innovation and startup competitions under the theme of “Internet Plus” for three years. Last year, 14,950 students participated in the event, double the number in the previous year. They accounted for 2 percent of all the students in local universities. They presented 3,679 projects, up 260 percent from the previous year.
Universities are also encouraged to explore new ways to commercialize their scientific and technological achievements and reward researchers in a bid to stimulate them to be more active in innovation.
The total value of 4,220 contracts for translating university research achievements to applications exceeded 2 billion yuan (US$320 million) for the first time last year, up 8.8 percent from the previous year.
These include a case in Fudan University which permitted American Huya Co to use its anti-cancer drug patents, worth not more than US$65 million, for clinical development and sales globally except the Chinese mainland, Hong Kong, Macau and Taiwan.
SHANGHAI shares jumped yesterday after President Xi Jinping said that China would continue to open up further and commit to deeper reform, seen as a gesture that might ease trade tension between China and the US.
The Shanghai Composite Index rose 1.66 percent to close at 3,190.3 points.
Xi’s remarks in his speech at the Boao Forum for Asia included a wide range of measures such as lowering import tariffs for autos and other products, as well as enforcing legal intellectual property of foreign firms.
Steel makers led the gains after steel prices rebounded, suggesting a pick-up of demand in near future.
Liuzhou Iron and Steel Co surged by the daily limit of 10 percent and Fangda Special Steel Technology Co gained 5.87 percent to 14.06 yuan.
Transport companies also took off, with Air China rising 6.66 percent while China Eastern Airlines added 3.99 percent.
Stocks also rose on Wall Street yesterday. The Dow Jones Industrial Average climbed as much as 400 points in early trading.
In Asia, Japan’s Nikkei 225 gained 0.5 percent to finish at 21,794.32. Australia’s S&P/ASX 200 edged up 0.8 percent to 5,857.00. South Korea’s Kospi added 0.3 percent to 2,450.74 and Hong Kong’s Hang Seng increased 1.7 percent to 30,728.74.
DEBT issued by Russian company Rusal has been removed from bond trading platform MarketAxess after it was included in a new round of US sanctions against Moscow.
MarketAxess, one of the largest multi-dealer platforms for bonds trading in the world, along with Tradeweb and Bloomberg, confirmed the move through a spokesman yesterday.
Russian stock indexes, the rouble and shares in major Russian companies fell sharply yesterday.
CHINESE retailers saw faster sales increase last month, according to an official survey.
Combined sales of 5,000 retail companies across the country grew 5 percent year on year in March, up from 4.2 percent in the first two months and 4.5 percent in the same month a year ago, the Ministry of Commerce said in a report.
Their sales rose 4.5 percent in the first quarter, also up from 4.1 percent a year earlier.
The data suggested the country’s consumer market remained robust as policymakers have been working to push for a consumption-led economy and to reduce reliance on investment and exports.
“The consumer market has steadily picked up its pace,” the ministry said, citing stronger online shopping and more spending in services such as film and tourism.
E-commerce maintained rapid expansion as online platforms tracked by the ministry reported an average 20-percent rise in turnover from January to March. Brick-and-mortar retailers also recovered, with sales of convenience stores and franchise houses up 7.2 percent and 5.9 percent respectively.
Box office sales exceeded 20 billion yuan (US$3.17 billion) in the first three months, up nearly 40 percent year on year, partly driven by the week-long Spring Festival holiday, which saw a record-setting 5.72 billion yuan in tickets. The ministry has predicted a 10-percent growth in consumer goods sales for the first quarter.
CHINA’S smartphone shipments continued to drop in the first quarter of this year, industrial data showed yesterday.
Domestic smartphone shipments reached 81.87 million in the first three months of 2018, down by 27 percent year on year, said a report by the China Academy of Information and Communications Technology.
Smartphone shipments fell by 28.6 percent year on year last month.
China’s mobile phone shipments started to fall about one year ago, with last December registering the biggest monthly year-on-year drop of 33.2 percent.
Analysts said that the Chinese smartphone market is expected to see restructuring as smartphone consumption slows, with almost all Chinese people owning at least one mobile phone.
Facing fierce market competition, domestic players like Xiaomi and Huawei started to bet on artificial intelligence, dual cameras and other trendy functions to woo customers.
RIDE-HAILING company Uber Technologies Inc said yesterday it has agreed to buy electric bicycle service JUMP Bikes, allowing Uber to offer US passengers an alternative to cars and further consolidating the crowded bike-sharing industry.
JUMP is a dockless electric bike service that has rolled out in San Francisco, where it has 250 bikes, and Washington. About 100 JUMP employees will join Uber, an Uber spokeswoman said. Terms of the deal were not disclosed.
The deal furthers Uber’s goal of offering “the fastest or most affordable way to get where you’re going, whether that’s in an Uber, on a bike, on the subway, or more,” said Uber Chief Executive Dara Khosrowshahi.
JUMP bikes had already integrated its service with Uber’s smartphone app in San Francisco, so that users could find one of JUMP’s bright red bicycles by opening the Uber app. The Uber spokeswoman said the company had no plans to withdraw the standalone JUMP app.
“We’re excited to begin our next chapter and to play a significant part in the transition of Uber to a multi-modal platform” and help “shift millions of trips from cars to bikes,” said JUMP CEO Ryan Rzepecki.
With the addition of bicycles, Uber is taking a page from the playbook of competitors such as China’s Didi Chuxing. Uber has at times lagged rivals in certain markets because it has been limited to private car-hailing.
JUMP started in 2010 as Social Bicycles, evolving over the past eight years from selling bikes to operating its own fleets.
JUMP bikes are unlocked and locked using a smartphone app. Because they are dockless, they can be left at any bike rack and their location is tracked via GPS.
RIO Tinto will be among the biggest winners from the US sanctions imposed on Russian aluminum giant United Company Rusal as the penalties further shake up the global metals trade and boost costs for US consumers, industry sources said yesterday.
The United States imposed the sanctions on Friday.
Rusal, the world’s second-largest aluminum producer, and its former President Oleg Deripaska were included on the list. Rusal said the sanctions “may be materially adverse to the business and prospects of the group.”
Shares plunged 50 percent in Hong Kong yesterday.
Traders and analysts said the sanctions would accelerate a rerouting of global aluminum shipments that began last month after the US imposed a 10 percent duty on aluminum imports under the so-called “Section 232” of US trade laws.
“It probably reroutes a lot of the trade flows,” said analyst Daniel Morgan at UBS in Sydney. “It is beneficial if you are a producer that is (compliant with the section 232 tariffs) because you’ve got an ability to sell into the US and other markets.”
After President Donald Trump announced the tariffs, he later exempted the European Union and other trading partners including Canada and Australia until May.
The new sanctions on Rusal would disrupt unwrought Russian aluminum imports, which in 2017 were 695,778 tons out of a total of about 5 million tons, according to the International Trade Centre.
Rio Tinto would be well placed to replace that metal with any unsold metal if the sanctions stuck, Paul Adkins, managing director of consultancy AZ China said. Rio Tinto declined to comment.
The company produced 3.6 million tons of aluminum last year from its operations including in Canada and Australia, which are exempted from the section 232 tariffs.
“All this does is make things more expensive for Americans,” said one aluminum trader in Singapore. “Everyone who has a duty free exemption is laughing.”
US aluminum premiums traded at 18.4 US cents per pound, or about US$405 per ton on top of futures prices. Those premiums are expected to climb.
“Overall, it should be near-term bullish for the premium and price,” said another physical metal trader in Singapore.
Rising premiums could draw more Chinese aluminum to the US since the additional cost of the section 232 tariff is below the US premium, said Adkins.
A source at a Japanese aluminum fabricator said his company does not plan to change its supply contract with Rusal.
However, if their customers, such as automakers, decide to follow the US sanctions, then the company may have to think twice about buying metal from Rusal, he said.
SENSETIME, one of China’s leading artificial intelligence companies, said it has successfully raised US$600 million in its Series C round of funding led by e-commerce giant Alibaba Group, Suning and Singapore’s Temasek in the largest funding raised by an AI startup so far.
The funds will build SenseTime’s AI platform to advance the company’s technological innovation and also help open up new business opportunities.
“Our latest funding will maximize our advantages, including robust research, deep industry collaboration, and diverse partnerships, while accelerating the development of a global footprint with a larger ecosystem incorporating both domestic and overseas partners,” Xu Li, SenseTime co-founder and chief executive officer, said in a statement. “The funding will also help us widen the scope for more industrial applications of AI, thus increasing the value of SenseTime’s global ecosystem.”
In July, SenseTime set a new record for venture capital funding in the AI sector when it raised US$410 million in funding.
“Alibaba is already seeing tangible benefits from our investments in AI and we are committed to further investment and our strategic partnership with SenseTime will spark more innovation and create value for society,” Joe Tsai, executive vice chairman of Alibaba Group, said.
SenseTime earlier said it would invest 6 billion yuan (US$938 million) in Shanghai. It has also signed cooperation deals with state-owned Shanghai Lingang Group and Shanghai Inesa to develop AI. SenseTime will set up headquarters for global research, intelligent car, smart chip and smart education in Shanghai.
China aims to grow the value of its core AI industries to over 150 billion yuan by 2020 and 400 billion yuan by 2025.
NEW homes in Shanghai sold for an average cost exceeding 50,000 yuan (US$7,917) per square meter for the first time this year despite cooling sentiment among buyers, latest industry data showed.
The area of new homes sold, excluding government-subsidized affordable housing, plunged 60.4 percent last week to around 67,000 square meters, Shanghai Centaline Property Consultants Co said in a report released yesterday.
The city’s outlying districts of Songjiang and Baoshan were the two most sought-after areas after 12,000 square meters and 9,000 square meters of new homes were sold, respectively.
The new homes cost 50,449 yuan per square meter on average, a week-over-week increase of 3.7 percent, according to Centaline data.
“A structural shift led to the price gain as more medium-end homes were sold during the seven-day period ended on Sunday,” said Lu Wenxi, senior manager of research at Centaline. “The beginning of a month usually registers comparatively sluggish sales while the three-day Qingming Festival also affected sentiment among home seekers as well as real estate developers.”
Four of the 10 best-selling developments cost above 50,000 yuan per square meter. A Poly Real Estate project in Baoshan, which sold 7,342 square meters, or 71 apartments, at an average 50,757 yuan per square meter, was the most popular. A project in Jinshan, which sold 41 units at 17,991 yuan per square meter on average, was the cheapest in the top 10 list.
On the supply side, 65,000 square meters of new houses spanning two projects were released to the local market — a sharp contrast to 394,000 square meters of supply launched in the previous seven-day period, Centaline data showed.
Notably, a high-end project in Jing’an released 319 units for sale with most units asking for between 80,000 yuan and 90,000 yuan per square meter, one of the most expensive developments in the local market recently.
JING’AN will go 100 percent digital in September when dealing with applications by people who want to start business in the district.
The move means that entrepreneurs don’t need to pay repeated visits to different government departments. Instead, they can go through all administrative procedures via the Internet, and they just need to wait at home for the business operation license to be sent by express delivery.
Jing’an, home to the Shanghai Data Exchange, is a pioneer in the city in building a “smart guide” system to create a “personalized” application form for entrepreneurs.
People who want to set up restaurant and beverage shop need to offer different documents, but they also all need the food operation permit. The system can tell them what exactly to prepare and they can obtain a tailor-made guide. Previously, they found it cost them time because they had to commute between different departments to ask for information.
Jing’an has also been chosen as a pilot district by the city government to launch “digital business operation license.”
The digital license is designed to break “walls between government departments” by sharing data. A man who wants to sell alcohol has to get a business operation license first before applying for an alcohol retail license. But the digital license will allow different departments to see it on the online platform and saving him visits. Also, his request to apply for an alcohol retail permit can be processed in advance.
However, it hasn’t been decided when to launch the digital license.
CAFéS and dessert and beverage shops in Minhang District can now get their operation permits within the same day after their application and start operation on the second day due to a service the district launched on January 18. Minhang is the first in the city to provide such convenience to eateries.
Previously after they have been issued business certificates, eateries would have to prepare documents and receive inspections on food safety and dining environment which might take weeks, sometimes even months, before they got the permit.
Now all the shops have to do is to provide a written guarantee that they will follow all regulations and instructions on food safety and device placement. The district’s market supervision authority will issue the operation permit afterwards.
The authority will examine their operation within two months to evaluate whether they have kept their promises. “If they failed to do so, we will revoke the permits and ask them to rectify,” said Mao Hui from the market supervision authority.
This service is one of the 12 measures Minhang unveiled in January to provide a better business environment. So far 324 eateries have got their operating permits ahead of inspections.
Luckin Coffee, a chain coffee shop which has been rapidly expanding around the city opened a new branch in Powerlong Square near Qibao in Minhang on March 8. They got their permit one day before.
ROBOTS have been employed at the administrative service center of Xuhui District to guide procedures, further accelerating the paperwork process.
They have been assigned to deliver applicants’ documents to the center’s staff, so staff are now able to focus on the evaluation process, an official with the service center said yesterday.
Each robot, which can take elevators and speak, is able to make 20 round trips a day on average, saving over four hours for the staff and cutting the waiting time of applicants, the center said.
Five face-recognition facilities have also been installed at service windows to check the identity of applicants within a second.
Artificial intelligence robots can answer questions from applicants and guide them to specific window.
STARTING up a new business in Shanghai is getting easier and more time efficient.
A total of 555 businesses have received licenses since the city launched a one-stop service platform on March 31 to cut red tape and improve the business environment, according to the Shanghai Industry and Commerce Administration.
The new reform cuts the time of starting a new business in the city to five days from 22.
The one-stop platform merges the systems of different government authorities and allows online application and approval of licenses, company seal making and tax affairs.
It means businesses no longer have to submit several reports to a range of government agencies, including industry and commerce, tax and police, as well as banks. The number of procedures has also been cut.
The platform includes sections allowing new businesses to set up bank accounts to deal with social security procedures.
Under the new system, government departments can share information and receive information from businesses at the same time, significantly boosting efficiency.
“The practice aims to make it easy, quick and convenient to open a new business in the city,” said Chen Xuejun, director of the administration.
Wu Linxi, legal representative of Shanghai Shengmo Information and Technology Co Ltd, was the first person to receive a business license, in Fengxian District, after the new system was introduced.
He submitted registration information regarding industry and commerce, police, tax and banking through the platform early on April 4, and the information was reviewed and approved quickly — he got his license by noon.
“The efficiency amazes me — it saves precious time for businesses,” said Wu.
Wang Jing, who helps companies in the Linhai Industrial Zone in Fengxian lodge their applications, also gave a thumbs-up for the platform.
“Although it took time to adjust to the new platform, approval speed is surprisingly improved, which is unbelievable,” she said.
“The reforms have brought great convenience for doing business in Shanghai,” said Xue Yincong, leasing manager of Longwin Trade (Shanghai) Ltd.
“For instance, the name check for registering a new business can be done within a much shorter time, and processes have been simplified to a great extent,” Xue said.
Shanghai had 1.91 million registered businesses at the end of February, or equal to 77 businesses per 1,000 people in the city — surpassing the figure in cities such as London and Tokyo, according to the administration.
The number of new businesses registered daily in the city rose to 1,174 last year from 431 in 2013.
The administration plans to trial whole-process electronic registration — with all steps online and paperless — within the year, which will further boost the ease of opening businesses, officials said.
The willingness of Shanghai authorities to encourage business innovation and operation in the city goes beyond streamlined procedures and improved efficiency.
The city’s food authorities have also broadened their services to include several new styles of catering operations.
Fifteen such companies have applied for licenses, and 13 have either passed reviews or been approved so far, the Shanghai Food and Drug Administration said yesterday.
On the list are automatic vending machines selling freshly squeezed orange juice, freshly brewed coffee, pizza, and noodles.
“We want companies to be innovative and are willing to help them if their business operations benefit the public,” said Zhang Zhunmin, deputy director of the administration.
“Automatic vending machines are new business models, and the fact they have been allowed to take root in Shanghai shows flexibility on the part of authorities in charge of supervision and management,” said Zhang.
These business models are not covered in existing food regulations, making it hard to obtain a license.
“We are changing our supervision and management mindset,” Zhang said.
SHANGHAI has taken a number of measures to cut red tape and improve its business environment, particularly by cashing in on the efficiency and convenience brought about by the Internet.
Among these measures is “yiwang tongban” initiative, which means that government departments, in serving market entities and municipal residents, should strive to have their businesses done by one visit to a website or one visit to a government office, with a view of further coordinating different functions of governmental service providers so that in the future all businesses could be handled more efficiently.
These initiatives are taken in view of long-standing popular perception that the administrative procedures were often time-consuming and needlessly cumbersome.
Shanghai has already made some headway in this area. For instance at municipal level, as many as 100 business approvals could be obtained online every step of the way.
Jiefang Daily reported yesterday that a streamlined administrative procedure adopted in Hongkou District on March 9 had enabled 398 businesses to be licensed the same day when the applications were submitted online.
In a similar case, one milk tea franchise in Minhang District was able to obtain its business license and food business permit on February 8, the same day it submitted its application.
“This speed is unprecedented in our prior experience in launching over 70 franchises across the country,” said Liu Kai, a manager for the franchise.
The speed translates into good profits. As the milk tea shop was able to start its business before the Spring Festival, this resulted in an additional 100,000 yuan (US$12,000) in revenue.
This is a marked departure from the old practice where obtaining food business permit might take at least one month, involving such procedures as an on-the-spot inspection of the shop before it went into operation.
This on-the-spot inspection procedure was dispensed with and replaced by the business’ promise that their operation fully complies with the operating conditions as required.
According to the relevant authority in Minhang, since this scheme went into trial operation in the district in February, 304 food businesses have already obtained their food operating permits by this means.
This simplified procedure does not mean businesses could afford to take lightly of their promises. Businesses found guilty of foul play or wrongdoing later will not only have their license revoked, but also be disqualified from using this streamlined procedure in their future application.
These erring businesses would also be listed as high risk and subject to intensified routine supervision.
Shanghai always scores high in term of the quality of its general services. These measures will further consolidate the city’s position as a business center by continually improving its business environment.