CHINA’S first domestically developed regional jet, ARJ21, launched a 10-day “demonstrative operations” yesterday in Inner Mongolia to prepare for its commercial highland flights.
The jet, flown by Chengdu Airlines, the aircraft’s first commercial operator, is operating daily return flights with onboard passengers between Hohhot and Ulanhot through March 30, said developer Commercial Aircraft Corporation of China.
It is the first time that the ARJ21 has returned to Inner Mongolia after it started flying commercially in 2016. The jet made test flights in low temperature and highland conditions in Hulun Buir in Inner Mongolia for its airworthiness certification between 2010 and 2014.
The 90-seat ARJ21 was designed to fly in conditions prevalent in China’s central and western regions. It can take off and land at nearly all the highland airports in the country. It can also fly in temperature of minus 30 degrees Celsius, said COMAC which has won 453 orders for the jet from 21 customers at home and abroad.
The airline’s four ARJ21s have flown 50,000 passengers since it started commercial flights in June 2016.
Housing markets in China’s 15 major cities stayed generally stable in February as tightening policies to curb speculation have been consistently implemented, data released yesterday by the National Bureau of Statistics showed.Twelve of the 15 cities, including first-tier ones and key second-tier cities, saw declines of 0.1 percent to 0.6 percent in new home prices from January. Prices in two cities were flat from a month earlier, and Tianjin was the only city where prices rose month on month, according to the bureau, which monitors property prices in 70 Chinese cities.“Stability extended in the country's 15 hottest housing markets as differentiated policies to curb speculation continued to take effect,” said Liu Jianwei, a senior statistician at the bureau.In the four first-tier cities, new home prices in Shanghai lost 0.2 percent from January while Beijing’s shed 0.3 percent, Guangzhou’s fell 0.4 percent and Shenzhen’s dipped 0.6 percent.On an annual basis, prices in nine cities shed by between 0.3 percent and 2.5 percent, five cities saw rises of between 0.6 percent and 3.1 percent while one was flat from a year earlier, according to the bureau.Nationwide on a month-over-month basis, new and pre-owned home prices in the four first-tier cities both fell at a faster rate compared to January. In second-tier cities, new home prices grew slower while those of pre-occupied houses climbed moderately faster, according to the bureau’s data.In third-tier cities prices of both new and pre-owned homes rose at the same rate compared to January.Among the 70 cities, new home prices in 16 cities declined month on month, a rise of three from January. In the pre-owned home market, 15 cities saw price decreases, down two from a month earlier.
SEVERAL large retail companies, including Wal-Mart, Target, Best Buy and Macy’s, are making a direct appeal to President Donald Trump not to impose massive tariffs on goods imported from China, in a letter sent to the White House yesterday.
The Trump administration is said to be preparing tariffs against Chinese information technology, telecoms and consumer products in an attempt to force changes in Beijing’s intellectual property and investment practices. Washington could impose more than US$60 billion in tariffs on goods ranging from electronics to apparel, footwear and toys.
“At the same time, we are concerned about the negative impact as you consider remedial actions under Section 301 of the Trade Act could have on America’s working families,” the letter states. “Applying any additional broad-based tariff as part of a Section 301 action would worsen this inequity and punish American working families with higher prices on household basics like clothing, shoes, electronics, and home goods.”
The letter is the latest example of the growing division between the Trump administration and the business community over trade policy.
On Sunday, a group of trade associations that represent most of the United States’ large businesses penned a letter echoing concerns about the economic ramifications of tariffs. Trade associations publicly pushing back include the US Chamber of Commerce, the National Retail Federation and the Information Technology Industry Council.
Sandy Hill, president of the Retail Industry Leaders Association, which organized the letter, argued that tariffs would eliminate any benefit the tax bill provided the economy.
“This is not American industries crying wolf,” she said in a statement.
NEW home transactions fell in Shanghai for the first time in four weeks along with sentiment cooling among real estate developers, latest market data showed.
The area of new homes sold, excluding government-subsidized affordable housing, fell 11 percent to about 83,000 square meters during the seven-day period through Sunday, snapping a three-week rally after the Spring Festival holiday, Shanghai Centaline Property Consultants Co said in a report released yesterday.
Around the city, projects in outlying areas targeting budget-tight home seekers continued to dominate last week’s new home sales. Jiading, which saw a week-over-week rise of 15 percent, became the most sought-after area after unloading some 23,000 square meters of new houses. Qingpu followed with some 15,000 square meters of new home sales, up 87.5 percent from the previous week.
These new homes cost an average 44,533 yuan (US$7,023) per square meter, a weekly rise of 4.7 percent, according to Centaline data.
“Projects asking for between 30,000 yuan and 40,000 yuan per square meter remained the most popular among buyers with six out of the 10 best-selling developments falling into that range,” said Lu Wenxi, senior manager of research at Centaline.
ALIBABA Group said yesterday that it will invest an additional US$2 billion in the Southeast Asian online shopping platform Lazada Group to drive its integration into the Alibaba ecosystem as the e-commerce giant seeks to accelerate its growth plan in the Southeast Asia market.
Alibaba took a majority stake in Lazada in 2016 by investing US$1 billion and further raised its stake to 83 percent with another US$1 billion investment last year.
The investment is set to enable Lazada to tap into Alibaba’s resources, which can help it better serve consumers and empower merchants in Southeast Asia.
The investment underlines Alibaba’s commitment to provide a broad platform for local talent in Southeast Asia to contribute to the development of the digital economy in their home markets, according to the statement by Alibaba.
Lazada’s board of directors also approved a management transition where Lucy Peng, a co-founder of Alibaba Group and chairwoman of Alibaba’s financial affiliate Ant Financial will assume the additional role of chief executive officer of Lazada to drive further growth strategies.
“Lazada is well-positioned for the next phase of development of Internet-enabled commerce in this region, and we are excited about the incredible opportunities for supercharged growth,” Peng said in a statement.
Chinese Internet firms are expanding globally, hoping overseas nations, especially Southeast Asian countries where online shopping penetration is relatively low, would offer new growth potential in the coming years.
SHANGHAI stocks gained yesterday, buoyed by financial-linked shares and medical companies.
The Shanghai Composite Index rose 0.29 percent to close at 3,279.25 points.
Financial-related shares led the gain, with Kunwu Jiuding Investment Holdings Co Ltd jumping 7.27 percent and Ping An Insurance rising by 4.68 percent.
Stocks related to industrial Internet were also among the biggest gainers yesterday.
Baosight Software advanced 3.63 percent and CIG ShangHai Co Ltd added 2.41 percent.
Medical shares such as Wuhan Thalys Medical Technology Inc and Dali Pharmaceutical Co Ltd both increased by over 6 percent, and Joinn Laboratories China Co Ltd hit the maximum daily limit of 10 percent.
A customer at the Agricultural Bank of China’s first branch in Xiongan New Area. The lender became the first among the country’s “big four” state-owned banks to set up a branch in Xiongan New Area. Li Jun, head of the Xiongan branch, said the branch has set up sub-branches in the counties of Rongcheng, Anxin and Xiongxian. China announced plans in April 2017 to set up Xiongan New Area about 100 kilometers southwest of Beijing. It is the third new area of national significance after the Shenzhen Special Economic Zone and the Shanghai Pudong New Area.
CHINESE video streaming service provider iQiyi Inc, a unit of search engine giant Baidu Inc, has launched an initial public offering in New York worth up to US$2.4 billion, seeking to expand its range of content.
The listing is expected to give the firm extra financial muscle as it squares off against rivals in the Chinese market, including Alibaba Group Holding Ltd’s Youku Tudou Inc.
It plans to offer 125 million American depositary shares priced at US$17 to US$19 each, the company said in a filing to the US Securities and Exchange Commission.
Underwriters have an option to sell an additional 18.75 million shares, which if exercised in full could bring the value of the deal to about US$2.7 billion.
IQiyi, which will list on the Nasdaq, said it expects to use about half of the proceeds to broaden and enhance its content offering while 10 percent would be earmarked to strengthen technology. The rest would go toward general corporate purposes.
Baidu owns 80.5 percent of the Netflix-like video platform and will continue to be its controlling shareholder upon completion of the offering. At the end of February, iQiyi had 60.1 million subscribers, over 98 percent of whom were paying members, it said.
IQiyi saw its 2017 revenue jump to 17.38 billion yuan (US$2.7 billion), up 55 percent over the previous year. It made a net loss of 3.74 billion yuan.
Bilibili, another Chinese video streaming company, also set tentative pricing for its New York listing, seeking to raise as up to US$525 million.
Its depository shares will be offered between US$10.50 and US$12.50 each. The deal has an option for an extra 6.3 million shares to be sold.
China will hold the first international low carbon technology exhibition in Shanghai next month, which seeks to commercialize low-carbon technologies to boost sustainable development, authorities said on Saturday.China had pledged that by 2030 carbon emissions per unit of gross domestic product will drop 60-65 percent from the level in 2005, “which requires efforts from the whole society rather than merely the government, including collaboration among companies and universities,” Li Peng, executive chairman at the Low-carbon Economics Committee of China Electronic Energy-saving Technology Association, said.“The exhibition will be held every year in Shanghai, (which) acts as a bridge to link professionals and companies worldwide to help commercialize low-carbon technologies,” he added.The 2018 (First) China International Low Carbon Technology Expo will feature seven themes of climate change, green building technology, low-carbon cities, low-carbon equipment, low-carbon Internet of Things technologies, new energy and green manufacturing.Seven conferences will also be held on “green” manufacturing and “green” cities development, with experts from the National Development and Reform Commission, Chinese Academy of Sciences and Shanghai authorities, Li said.The expo will be held at the Shanghai World Expo Exhibition and Convention Center (at Exhibition Hall 4) from April 22 to 26, Li said.
A unit of Chinese ride-hailing firm Didi Chuxing has submitted an application to raise 10 billion yuan (US$1.6 billion) through an issuance of asset-backed securities.
Didi, which said in December it had raised US$4 billion to support its overseas expansion, did not respond to a Reuters’ request for comment on how the funds would be used.
The funds will be raised by Dirun (Tianjin) Technology Co Ltd, according to a filing published on the Shanghai Stock Exchange’s bond market website. Dirun’s sole shareholder is Didi Chuxing.
The Beijing News newspaper, which reported the proposed fundraising on Saturday, cited sources as saying Didi was also preparing to launch a meal delivery business in Wuxi on April 1.
Didi, which holds over 87 percent of the Chinese private ride-share market, is facing new challengers with several firms including Tencent-backed meal delivery company Meituan-Dianping announcing plans to launch ride-hailing services.
HONG Kong’s richest man, Li Ka-shing, announced his retirement as chairman of CK Hutchison Holdings Ltd on Friday, bringing to a close a rags-to-riches story that made him a hero in the freewheeling capitalist hub.
Li, 89, will retire after the annual general meeting on May 10, the ports-to-telecoms conglomerate said in a filing to the Hong Kong bourse, passing the mantle to his eldest son Victor Li, who was named successor several years ago.
While Hong Kong’s adoration of Li Ka-shing and his story has waned somewhat in recent years, he is still stepping aside from one of Asia’s most outward-looking empires, spanning more than 50 countries and 323,000 employees at last count.
A factory apprentice when he was 13, Li has been called “Superman” for his business acumen and success.
“I’ve been working for a long time, too long,” a relaxed Li, dressed in a dark suit and striped tie, said.
He said the secret to his success included factors like continual self-improvement and unstinting hard work.
“I have always taken the straight path,” he said. “I’m very happy and very honored I have had this opportunity.”
Li will, as expected, stay on as senior adviser. Victor, who has been a group co-managing director for several years, is seen as a steady hand unlikely to change course.
At the news conference, however, when several questions were addressed directly to Victor, Li ended up interrupting his son with his own answers.
During his tenure, Li Ka-shing increased the pace of overseas acquisitions, helping boost the group’s profits with growth in the European telecoms business offsetting a drop in the value of the British business following Brexit.
Through his flagship CK Hutchison, Li controls the biggest container port operator in the world, Canadian oil giant Husky Energy Inc, one of Europe’s leading telecoms operators, as well as infrastructure assets and a long-time interest in Britain that saw him awarded a knighthood in 2000.
“Li Ka-shing is remarkable — he’s a role model and I regard him as such,” said Stuart Gulliver, former CEO of HSBC who in a 38-year career with the bank worked closely with Li.
It was HSBC’s 1979 sale to Li of a stake in Hutchison Whampoa, a colonial-era trading house, that vaulted him into the first rank of Chinese tycoons.
Commending Li’s long laid-out succession plan, unusual among tycoons in a region where discussing death is often viewed as unlucky, Gulliver praised Victor for being extremely capable.
Reinforcing the view that the transition will be seamless, Victor said: “Tomorrow morning when I go to work there won’t be any difference ... (My father and I) are also upstairs-downstairs neighbors, how could we not chat?”
The news of retirement came together with the announcement of better-than-expected results at some of Li’s biggest firms.
CK Hutchison reported a 6 percent rise in 2017 profit to HK$35.1 billion (US$4.5 billion), versus the average forecast of HK$34.6 billion from 12 analysts polled by Thomson Reuters.
The real estate arm, CK Asset Holdings Limited, saw annual profits surge 55 percent, also beating estimates.
“Healthy and synchronised growth in major economies gathered pace in 2017. Provided this trend continues and inflation remains benign, the environment in 2018 should remain supportive for global trade and for our businesses,” Li said.
He declined to forecast, however, whether the red-hot local property market, one of the world’s most expensive, had peaked.
“I dare not speculate on property prices ... property prices have gone out of reach for the public,” he said, while urging the government to build more public housing.
Li, who ranked 23rd on the world’s rich list by Forbes, is the wealthiest tycoon in Hong.
Self-driving cars will hit the roads in China “within three to five years,” the founder of Chinese Internet giant Baidu, one of the world’s leading designers of driverless cars, said yesterday.
That is a lot sooner than predicted by China’s information technology minister, who last week said it would only be a reality in 8-10 years, citing constraints related to security.
“I’m more optimistic than him, I think it will come sooner,” Baidu CEO Robin Li said.
Baidu, often referred to as China’s Google, operates the country’s leading search engine and also invests heavily in services ranging from online payments to connected devices and artificial intelligence.
Like Google, the Chinese company is spending on research and development to put a driverless car on the road.
In 2019, in cooperation with local manufacturers, the Beijing-based company plans to launch a car featuring “a high degree of autonomy,” Li said.
“Highly automated driving means ... for example, on a Beijing to Shanghai trip, as long as you stay on the highway, you will not have to worry about anything — you can eat hotpot or sing inside while you’re waiting to arrive,” he said.
The driver would still, however, need to take the wheel again as soon as the car moved away from major highways.
“But in the next three to five years, I believe totally autonomous cars will make their appearance on the roads,” he said.
In September the company established a US$1.5 billion fund dedicated to developing driverless cars.
It also manages an open platform where it shares its technologies with designers and builders.
FOREIGN direct investment into the Chinese mainland rose 0.5 percent year on year in the first two months of 2018, official data showed yesterday.
FDI in January and February reached 139.4 billion yuan (US$22.1 billion), the Ministry of Commerce said in a statement.
During the period, 8,848 foreign-invested enterprises were created, a jump of 129.2 percent year on year.
FDI to the high-tech sector continued to grow, up 27.9 percent annually, accounting for 19.5 percent of the total.
Around 14.5 billion yuan flowed into the high-tech manufacturing industry, up 89.7 percent from a year earlier, with investment in medicine up 129.6 percent and medical equipment manufacturing up 321.8 percent.
FDI into western China frew rapidly, up 76.3 percent, while that in central China rose 35.3 percent.
FDI from Singapore, South Korea and the United States increased 62.9 percent, 171.9 percent and 56.8 percent, respectively.
Meanwhile, investment made by countries along the Belt and Road climbed 75.7 percent year on year.
As the business environment continues to improve, China is set to attract steady foreign investment inflows by opening up and easing market access.
FDI is expected to keep steady in 2018 despite uncertainties in the world economy, the ministry has said.
In 2017, the country’s FDI rose 7.9 percent year on year to 877.6 billion yuan.
TOP Chinese online tourism firms performed strongly in 2017 as they tapped the market for outbound tourists, Shanghai Daily learned yesterday.
Shanghai-based Ctrip posted a net profit of 2.1 billion yuan (US$329 million) in 2017, reversing a 1.4 billion yuan loss in the previous year. Its revenue totaled US$4.1 billion last year, after it acquired smaller domestic rival Qunar and international air ticket service provider Skyscanner.
Nasdaq-listed Ctrip said offering quality services for out-border tourists is one of its key strategies.
Tuniu cut its net loss to 771.3 million yuan last year from 2.4 billion yuan in 2016. Its 2017 revenue surged 53 percent annually to 2.2 billion yuan.
YIRENDAI Ltd, a leading financial technology company in China, earned a net profit of 1.37 billion yuan (US$220 million) in 2017, up 23 percent from the prior year, said its unaudited annual financial report.
Its total net revenue surged 71 percent to 5.54 billion yuan during the same period, the report said, showing great potential of the fast expanding online financing sector. For 2017, the US-listed company extended 41.4 billion yuan of loans to 649,154 qualified individual borrowers through its online marketplace, up 102 percent year on year.
Yirendai said that around three quarters of its borrowers were acquired from online channels during the past year and nearly all of the loan volume originating from online channels was done through mobile.
Thanks to its expanded online business, the financial technology firm helped 592,642 investors with a total investment of 48.07 billion yuan from January to December 2017.
Total fees billed, a major contributor to the company’s net income, were 2.94 billion yuan in the fourth quarter of 2017, up by 81 percent from the same period of 2016.
Fang Yihan, chief executive of Yirendai, said it will grow its online lending, online wealth management and technology businesses in 2018.
SHANGHAI stocks closed generally flat yesterday after a decline by recently-listed companies offset gains made by consumer shares following the securities regulator’s warning of risks and bubbles.
The Shanghai Composite Index dipped 0.01 percent to end at 3,291.11 points.
The index was dragged by “sub-new shares,” referring to firms listed within one year and haven’t issued dividends, after the China Securities Regulatory Commission on Wednesday warned of risks in these firms where speculation is rife.
Recently listed shares Xuancheng Valin Precision Technology Co tumbled 8.70 percent to 25.09 yuan (US$3.97) and Nacity Property Service Co fell 5.11 percent to 41.22 yuan, “offsetting rises in consumer firms today,” said Zhou Jianbing, chief analyst at Sinolink Securities.
Meanwhile, consumer goods producers such as Shanxi Xinghuacun Fen Wine Factory Co gained 5.02 yuan to finish at 58.60 yuan while ShangHai JinFeng Wine Co added 4.15 percent to close at 8.28 yuan.
CHINESE e-commerce giant Alibaba Group Holding Ltd is working on a plan to list on a stock exchange in its home country, the Wall Street Journal said yesterday, citing people familiar with the matter.
Alibaba is evaluating ways in which its shares could be traded by investors on the Chinese mainland, the newspaper said.
The news of a probable listing comes a few weeks after it was reported that China may allow its offshore-listed tech giants to sell depositary receipts, a form of shares, on the mainland.
The China Securities Regulatory Commission will start accepting applications from interested firms toward the end of the year, according to a previous report.
Alibaba, which is listed on the New York Stock Exchange, is one of the world’s biggest tech companies listed offshore. Others include Baidu Inc, JD.com Inc and Tencent Holdings Ltd.
Alibaba did not immediately respond to a request for comment.
ANGLO-DUTCH consumer giant Unilever yesterday named The Netherlands over London to host its headquarters, dealing a blow to Britain’s efforts to keep multinational companies onside following Brexit.
Unilever, whose famous brands include yeast extract Marmite, PG Tips tea and Persil washing powder, announced in a statement that it “intends to simplify from two legal entities, NV and PLC, into a single legal entity incorporated in The Netherlands.”
The news represents a blow to British Prime Minister Theresa May, analysts say, as her Conservative administration battles to secure a Brexit trade deal with Brussels.
Unilever’s decision comes after a swathe of big-hitting financial institutions, including British bank HSBC, Swiss peer UBS and US giants JPMorgan and Morgan Stanley, have already confirmed plans to move some London activities to Paris and elsewhere.
Many large international companies insist however that they will retain their London presence as a platform for post-Brexit growth in Europe.
Unilever was founded in 1930 after the Dutch margarine producer Margarien Unie merged with British soapmaker Lever Brothers.
Until now, it has maintained a dual-headed structure since then, with listings on the London, Amsterdam and New York stock exchanges.
Unilever said yesterday that the headquarters of its beauty and home care divisions would be located in London, while its food and refreshment division will remain in Rotterdam.
The move will have no impact on its 7,300 employees in Britain and 3,100 in the Netherlands, the company said.
While analysts saw the decision as a consequence of Britain’s plans to leave the European Union in March 2019, the government said Brexit had nothing to do with it.
“Unilever has today shown its long-term commitment to the UK by choosing to locate its two fastest-growing global business divisions in this country, safeguarding 7,300 jobs and 1 billion pounds (US$1.4 billion) a year of investment,” a government spokesman said.
“As the company itself has made clear, its decision to transfer a small number of jobs to a corporate HQ in the Netherlands is part of a long-term restructuring of the company and is not connected to the UK’s departure from the EU.”
However Jos Versteeg, an analyst at the Amsterdam-based InsingerGilissen private bank said he believed Unilever’s choice indeed had to do with Brexit.
“I think they chose in favor of a Dutch entity because of Brexit and that its better to be in Europe,” he said. “It’s a hard blow for Britain to see Unilever’s headquarters disappear.”
THE demise of Toys R Us will have a ripple effect on everything from toymakers to consumers to landlords.
The 70-year-old retailer is headed toward shuttering its US operations, jeopardizing the jobs of some 30,000 employees while spelling the end for a chain known to generations of children and parents for its sprawling stores and Geoffrey the giraffe mascot.
The closing of the company’s 740 US stores over the coming months will finalize the downfall of the chain that succumbed to heavy debt and relentless trends that undercut its business, from online shopping to mobile games.
And it will force toymakers and landlords who depended on the chain to scramble for alternatives.
CEO David Brandon told employees on Wednesday the company’s plan is to liquidate all of its US stores, according to an audio recording of the meeting obtained by The Associated Press.
Brandon said Toys R Us will try to bundle its Canadian business, with about 200 stores, and find a buyer. The company’s US online store would still be running for the next couple of weeks in case there’s a buyer for it.
It’s likely to also liquidate its businesses in Australia, France, Poland, Portugal and Spain, according to the recording. It’s already shuttering its business in the UK. That would leave it with stores in Canada, central Europe and Asia, where it could find buyers for those assets.
Toys R Us had 60,000 full-time and part-time employees worldwide last year.
Brandon said on the recording that the company would be filing liquidation papers and there would be a bankruptcy court hearing yesterday.
“We worked as hard and as long as we could to turn over every rock,” Brandon told employees.
When the chain filed for Chapter 11 bankruptcy protection last fall, saddled with US$5 billion in debt that hurt its attempts to compete as shoppers moved to Amazon and huge chains like Walmart, it pledged to stay open.
But Brandon told employees its sales performance during the holiday season was “devastating,” as nervous customers and vendors shied away. That made its lenders more skittish about investing in the company. In January, it announced plans to close about 180 stores over the next couple of months, leaving it with a little over 700 stores.
The company’s troubles have affected toymakers Mattel and Hasbro, which are big suppliers to the chain. But the likely liquidation will have a bigger impact on smaller toymakers that rely more on the chain for sales. Many have been trying to diversify in recent months as they fretted about the chain’s survival.
Toys R Us has been hurt by the shift to mobile devices taking up more play time. But steep sales declines over the holidays and thereafter were the deciding factor, said Jim Silver, who is editor-in-chief of toy review site TTPM.com.
The company didn’t do enough to emphasize that it was reorganizing but not going out of business, Silver said. That misperception led customers to its stores because they didn’t think they would be able to return gifts.
Now, the US$11 billion in sales still happening at Toys R Us each year will disperse to other retailers like Amazon and discounters, analysts say. Other chains, seeing that Toys R Us was vulnerable, got more aggressive. J.C. Penney opened toy sections last fall in all 875 stores. Target and Walmart have been expanding their toy selections. Even Party City is building up its toy offerings.
“Amazon may pick up the dollars, but won’t deliver the experience needed for a toy retailer to survive and thrive in today’s market,” said Marc Rosenberg, a toy marketing executive.
Toys R Us had dominated the toy store business in the 1980s and early 1990s, when it was one of the first of the “category killers” — a store totally devoted to one thing. Its scale gave it leverage with toy sellers and it disrupted general merchandise stores and mom-and-pop shops. Children sang along with commercials about “the biggest toy store there is.”
But the company lost ground to discounters like Target and Walmart, and then to Amazon, as even nostalgic parents sought deals elsewhere. GlobalData Retail estimates that nearly 14 percent of toy sales were made online in 2016, more than double the level five years ago. Toys R Us still has hundreds of stores, and analysts estimate it still sells about 20 percent of the toys bought in the US.
It wasn’t able to compete with a growing Amazon: The toy seller said in bankruptcy filings that Amazon’s low prices were hard to match. And it said its Babies R Us chain lost customers to the online retailer’s convenient subscription service, which let parents receive diapers and baby formula at their doorstep automatically. Toys R Us blamed its “old technology” for not offering its own subscriptions.
But the company’s biggest albatross was that it struggled with massive debt since private-equity firms Bain Capital, KKR & Co and Vornado Realty Trust took it private in a US$6.6 billion leveraged buyout in 2005. Weak sales prevented them from taking the company public again. With such debt levels, Toys R Us did not have the financial flexibility to invest in its business. The company closed its flagship store in Manhattan’s Times Square, a huge tourist destination that featured its own Ferris wheel, about two years ago.
In filing for bankruptcy protection last fall, Toys R Us pledged to make its stores more interactive.
THE China Securities Regulatory Commission has fined a company a record 5.5 billion yuan (US$870 million) for manipulating stock prices of listed firms, the regulator said yesterday.
The huge fine was imposed on Xiamen Beibadao Logistics Group, a private company, which made 945 million yuan by using over 300 trading accounts to manipulate the stock prices of listed companies including two banks, Jiangsu Zhangjiagang Rural Commercial Bank Co Ltd and Jiangsu Jiangyin Rural Commercial Bank, and an industrial firm Guangdong Hoshion Aluminium Co Ltd.
“Beibadao Group made use of the small circulation and new concepts of these stocks” to manipulate their prices, said Xia Bing, head of an investigation group at the CSRC. “Beibadao’s bulk buying misled investors in their decisions severely.”
Jiangsu Zhangjiagang Rural Commercial Bank jumped sharply by over 600 percent from 4.37 yuan to 30.41 yuan in two months since it was listed in January 2017.
The CSRC revealed the penalty at a press conference today at which it also made public that it had investigated a case of information disclosure and second case involving another market manipulation.
The penalty for Beibadao Group is not an exceptional case because an equities trader was fined 54 million yuan for manipulating 15 stocks to make a profit of 27 million yuan in December last year.
The CSRC said they will stick to strict supervision in line with the law to serve the capital market and to develop an open and fair market environment.
CHINA will continue investing in the strategically vital semiconductor and flat panel display sectors to alleviate its dependence on imports and overseas technologies, industry officials told a Shanghai IT fair yesterday.
Chips and new technology panels are widely used in TVs, computers, mobile phones, cars and new devices like virtual reality and robotics.
“It’s a long term (goal) for China to cultivate its own semiconductor industry,” said Zhou Zixue, chairman of China Semiconductor Industry Association. He is also chairman of SMIC, the Chinese mainland’s biggest made-to-order chip producer.
In 2018, global semiconductor spending will hit US$63 billion following a record high spending of US$57 billion last year. Chip producers will move into the heavily-invested production lines on the Chinese mainland this year, making it the regional market with spending second only to the South Korean market. The Chinese mainland is expected to become the top region by semiconductor spending in 2020, with booming demand for artificial intelligence and 5G, SEMI, a global industry alliance, said during a forum of Semicon China 2018 which opened yesterday.
China’s capacity share of AMOLED, a new screen technology used in smartphones and new devices, will account for 29 percent globally in 2021, up from 13 percent this year, industry officials told another forum FPD China 2018.
The forums are parts of SIIEF (Shanghai International IT & Electronics Fair), the city’s biggest IT show held annually.
The IT fair, set to draw 4,000 exhibitors and 245,000 professional visitors, is held from yesterday to tomorrow at the Shanghai New International Expo Centre and from March 20 to 22 at the National Exhibition and Convention Center (Shanghai).
SHENZHEN-BASED Ping An Bank said it earned a net profit of 23.18 billion yuan (US$3.67 billion) in 2017, boosted by its robust retail banking business growth, its annual report released yesterday said.
The joint-stock commercial lender said its net profit was up 2.61 percent year on year despite a 1.79 percent drop of its revenue in the past 12 months.
The bank cited the good performance of its retail banking business as a main contributor to its growth in 2017. This segment saw a 41.72 percent growth of its revenue to 46.69 billion yuan. The segment earned 15.67 billion yuan in net profit, up 68.32 percent annually and contributed to 67.62 percent of the bank’s overall net profit in 2017.
Its assets under management totaled 1.08 trillion yuan as of the end of 2017, up by 36.25 percent annually, said the bank in its filing to the bourse.
SHENZHEN-LISTED Leshi stopped trading yesterday afternoon because of “excessive volatility”, the firm said yesterday in a statement while Sun Hongbin, chairman of Leshi, said he will step down.
Rumors have been swirling that Leshi is facing bankruptcy as it faces heavy debt and cash flow problems. Its shares surged 7.1 percent to close at 6.60 yuan (US$1.05) in the morning session, following a rise by the 10 percent daily cap on Tuesday.
Leshi fell by the daily 10 percent cap over 11 trading days since it resumed trading last month. Its accumulation of heavy debts forced Leshi, which was a flagship firm in the Nasdaq-like GEM or Growth Enterprise Market, to stop trading in April.
Market whistleblowers said on Tuesday that Leshi had applied for bankruptcy.
Leshi was set to post a loss of 11.6 billion yuan in 2017, compared with a net profit of 554.8 million yuan in 2016, because of “capital shortage and liquidity problems,” the company had said previously.
Sun, chairman of property developer Sunac China, became Leshi’s chairman after Sunac invested about 15 billion yuan in the firm last year.
SINGAPORE-BASED Broadcom Ltd withdrew its US$117 billion bid to acquire Qualcomm Inc on Wednesday, two days after US President Donald Trump blocked the attempt citing national security concerns.
The company said it has also withdrawn its slate of independent director nominees for Qualcomm’s annual shareholder meeting.
Broadcom, however, expects to continue with its plan to redomicile to the United States.
“Although we are disappointed with this outcome, Broadcom will comply with the order,” the chipmaker said.
Broadcom’s board met late on Tuesday to formalize plans to move its base to the US, at a cost of about US$500 million a year under a higher tax rate, the sources said.
Being based in the US as opposed to Singapore should make it easier for Broadcom to make acquisitions of US companies without falling under the jurisdiction of the Committee on Foreign Investment in the United States.
NEW home sales in China continued to rise in the first two months of this year, data released yesterday by the National Bureau of Statistics showed.
About 1.06 trillion yuan (US$166.7 billion) worth of new homes, excluding government-subsidized affordable housing, were sold between January and February, a year-on-year rise of 15.7 percent, the bureau said in a statement posted on its website. That compared to the annual pace of 11.3 percent in 2017.
The area of new homes sold in the two-month period climbed 2.3 percent from the same period a year earlier to 127.2 million square meters, down from the 5.3 percent growth last year, the data showed.
Investment in residential development, which took up 68.1 percent of total real estate investment in the first two months, climbed 12.3 percent year on year to 737.9 billion yuan, up 2.9 percentage points from 2017.
“For the beginning of a year, this seemed to be a higher-than-expected investment growth,” said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co. “Real estate developers across the country were picking up their pace in housing starts so as to restock their inventories following generally strong sales registered over the past year.”
Nationwide, 301.2 million square meters of new hpmes were available for sale as at the end of February, down from 301.6 million square meters as of the end of 2017.
BROADCOM Ltd, led by dynamic Chief Executive Hock Tan, is unlikely to put the brakes on an acquisition spree after its US$117 billion bid for Qualcomm Inc was blocked by US President Donald Trump.
That was the immediate reaction from Wall Street’s tech sector analysts to Trump’s surprise intervention on Monday afternoon to block what would have been the biggest ever tech merger.
Most assumed Broadcom would walk away from the Qualcomm deal and some identified San Jose-based Xilinx Inc and Israel’s Mellanox Technologies Ltd as its likely next targets.
“We’ll see if there is anything else Broadcom can do to fight but given a likely long timeframe for a battle, and the fact that (US government panel) CFIUS seems so arrayed against them, we suspect they may be near the end of their rope,” Bernstein analyst Stacy Rasgon said.
While a Qualcomm deal would have made Broadcom the dominant supplier of chips used in smartphones and brought the company to the forefront of developing technology for the next generation of 5G mobile network technology, it can still make a string of smaller deals to build heft.
“We believe Broadcom’s options start with a continuation of broadly-scoped communications-focused M&A,” B. Riley analyst Craig Ellis said. “Broadcom covets high-margin, technology-rich moderate growth businesses with complimentary end market and customer exposure.”
Xilinx and Mellanox would be a good fit for Broadcom, though not as a transformational level like Qualcomm. Xilinx makes chips used for wireless communication and Mellanox’s products connect servers and storage systems, complementing Broadcom’s broad portfolio.
Xilinx has a market capitalization of US$20 billion and Mellanox just under US$4 billion.
Neither company was immediately available for comment.
Broadcom CEO Tan is a serial acquirer who has turned Avago, the small chipmaker he was running with a market value of just US$3.5 billion in 2009, into a giant with a market capitalization of over US$100 billion in less than a decade.
Tan bought Broadcom for US$37 billion in a leveraged deal in 2015 and followed it up with a US$5.5 billion deal to acquire Brocade Communications two years later.
The Committee on Foreign Investment in US, which raised concerns about the Qualcomm deal, listed the highly-leveraged nature of Broadcom’s bid for its larger rival as a major concern and a risk to Qualcomm’s leadership on mobile technology.
APPLE Inc and Alphabet Inc’s Google corporate brands dropped in an annual survey while Amazon.com Inc maintained the top spot for the third consecutive year, and electric carmaker Telsa Inc rocketed higher after sending a red Roadster into space.
IPhone maker Apple dropped to 29th from its previous position of No. 5, and Google dropped from 8th to No. 28. Apple had ranked No. 2 as recently as 2016, according to the annual Harris Poll Reputation Quotient poll released yesterday.
The poll, conducted since 1999, surveyed 25,800 US adults from December 11 to January 12 on the reputations of the “most visible” corporate brands.
John Gerzema, CEO of the Harris Poll, said in an interview that the likely reason Apple and Google fell was that they have not introduced as many attention-grabbing products as they did in past years, such as when Google rolled out free offerings like its Google Docs word processor or Google Maps and Apple’s then-CEO Steve Jobs introduced the iPod, iPhone and iPad.
“Google and Apple, at this moment, are sort of in valleys,” Gerzema said. “We’re not quite to self-driving cars yet. We’re not yet seeing all the things in artificial intelligence they’re going to do.”
Meanwhile, Amazon.com held on to the No. 1 spot, which it has kept for five years with the exception of 2015, when it slipped to No. 2. Gerzema attributed Amazon’s ranking to its expanding footprint in consumers’ lives into areas like groceries via its Whole Foods acquisition.
Elon Musk’s Tesla climbed from No. 9 to No. 3 on the strength of sending Tesla Roadster into space aboard a SpaceX rocket — despite fleeting success delivering cars on time on earth, Gerzema said.
“He’s a modern-day carnival barker — it’s incredible,” Gerzema said of Musk. “This ‘The Right Stuff’ attitude is able to capture the public’s imagination when every news headline is incredibly negative. They’re filling a void of optimism.”
German plastics and chemicals producer Covestro said China became its largest single market last year as the company’s sales volume grew 8 percent annually, which rode on China’s rising chemicals prices.Covestro reaped over 3 billion euros (US$3.7 billion) in sales in China, which accounted for 22 percent of its global sales of 14 billion euros last year, it said today.The company’s sales volume in China was followed by Germany where they gained 6 percent while the United States came in flat from a year ago.Covestro has benefited from rising prices of specialty chemicals and its applications, “both echoing China’s rising efforts in sustainability,” said Bjoern Skogum, the company’s president for China.China’s chemical industry grew fastest over six years in 2017 with profit rising in most of the chemical products, according to the Ministry of Industry and Information Technology.Covestro has benefitted from rising prices of methylene diphenyl diisocyanate, or MDI, one of its main materials in China, which have doubled from January to October last year to 45,000 yuan (US$7,113) per ton. MDI outperforms most composite materials in insulation and flexibility to help save energy and cut carbon emissions.Covestro’s Caojing factory in Shanghai, its largest globally, will lift MDI capacity to 500,000 tons per year in coming years from 460,000 tons a year, according to Skogum.
The chief executive of the world’s largest carmaker Volkswagen said yesterday he was convinced of a comeback for diesel motors, two-and-a-half years after the firm admitted to emissions cheating on a massive scale.“I don’t only hope that diesel won’t be talked to death, I am convinced that diesel is experiencing a renaissance,” Matthias Mueller said in Berlin.While the automaker is engaged in a massive push to develop new electric and hybrid models, “we will create the technical conditions for existing drive concepts and electric vehicle concepts to co-exist,” he added.Over the coming five years, VW plans to spend more than 34 billion euros (US$42 billion) on research and development and investments in its range of future projects, from electric cars to autonomous driving.But the same time period will see the Wolfsburg-based group pump more than 90 billion euros into traditional diesel, petrol and natural gas motors, with a new generation of internal combustion engines set for release next year.“We are investing strongly in tomorrow’s mobility, but without neglecting the current technologies and vehicles that will continue to play an important role for decades,” Mueller said.The diesel’s market share in Germany has slumped to just 33 percent since September 2015, when VW admitted to cheating regulators’ tests for harmful emissions on 11 million vehicles worldwide.Fallout from the scandal cost it 3.2 billion euros last year, it said in February, but did not stop it from booking 11.4 billion euros in profit — around the same level as the year before “dieselgate” became public.
CHINA’S listed iron and steel producers have posted strong profits for 2017 as the country’s production capacity cuts reduced outdated supply and led to rising steel prices.
In an annual report filed with the Shanghai Stock Exchange on Monday, Xinjiang Bayi Iron and Steel Co said its net profit surged over 30 times last year to 1.17 billion yuan (US$185 million). Its operating revenue rose 69.44 percent to 16.76 billion yuan.
The company also plans to double the number of shares owned by all shareholders using its capital reserves, which will involve no change in the total market value of shares as the share price will be halved.
The Shanghai Stock Exchange soon sent an inquiry letter to Bayi, asking it questions about the reasons for and sustainability of the rapid profit growth, the feasibility of the share doubling plan and the risks associated with its current share price and price earning ratio.
The company reported losses of more than 2 billion yuan in both 2014 and 2015, and shook off losses in 2016 with a net profit of 37 million yuan.
As profitability improved, the company’s share price surged more than 105 percent in 2017 and above 10 percent so far this year.
The company yesterday announced that trading of its shares will be suspended as it prepares to respond to the inquiry. Trading will resume after it files its answer with the Shanghai bourse.
A similar inquiry was made to Hunan Valin Steel, which had been under “special treatment” starting in May 2017 due to losses in previous years.
Valin made 4.12 billion yuan in net profit in 2017, one of the largest among listed steel companies. This was a sharp contrast with a loss of over 1 billion yuan in 2016 and nearly 3 billion yuan in 2015.
The report was also questioned by the Shenzhen Stock Exchange, but after responding to the questions, the company was moved off the ST list last week.
The improved performance in both companies showed the positive outcome for the steel sector from China’s capacity reduction efforts.
By last Wednesday, 11 steel companies that had released their annual reports made total profits of 20.13 billion yuan last year, against a loss of 1.25 billion yuan in 2016, data showed.
Cutting overcapacity in bloated sectors like steel and coal has been high on the government work agenda in recent years as production gluts ate into corporate profits and dragged economic growth.
In the past two years, China cut steel production capacity by about 115 million tons as part of the country’s supply-side structural reform.
Lowered capacity meant less supply and allowed the sector to focus more on raising the quality of products instead of engaging in price wars.
In the reply to the Shenzhen bourse, Valin said it undertook reforms in recent years, including slashing costs, adjusting its production line and putting its automobile steel plate subsidiary into production.
THE Chinese government’s emphasis on supply-side reform and higher expectations for an economic downturn have led to a rebound of growth stocks, UBS Securities said in its latest liquidity report.
Since late February, China’s Nasdaq-styled ChiNext has rebounded by over 10 percent, with institutional investors preferring growth stocks whose valuations matched earnings, such as small and medium size enterprises in new-energy vehicles or media, the report said.
“The ChiNext’s rebound was partly due to the Government Work Report’s setting the tone that supply-side reform will gradually shift focus to innovation,” said Gao Ting, head of China Strategy at UBS Securities.
Expectations of an economic downturn were raised after the government managed to control the fiscal deficit, which made innovative growth stocks more appealing. China’s intention to accelerate the A-share placement of US-listed Chinese stocks and the looser liquidity conditions year to date also lifted the growth stocks.
The US-listed Chinese stocks’ return to the A-share market via the Chinese Depositary Receipts, which allow foreign companies to have both Chinese institutional and private investors own their stock, could gather pace, the report said.
Based on current market value, the four leading Chinese Internet firms, including Tencent, would raise 370 billion yuan (US$58.5 billion) via a 5-percent additional issuance in the A share market, which could be equal to 20 percent of the total funds raised in the market in 2017.
LATVIA welcomes Chinese institutional and individual investors to boost the trade link between both countries under the Belt and Road initiative, Latvia’s ambassador said yesterday in Shanghai.
Trade volume between China and Latvia has grown 10 percent annually in recent years. The two countries have great potential to trade and cooperate in agriculture, food processing, information technology and telecommunications, biomedicine, culture, education and tourism, said Ambassador Maris Selga.
Latvia has also issued bonds, authorized by its central bank, to lure Chinese investors who can enjoy benefits like getting visas by investing in the European Union. Latvia has also set up a new office in Shanghai to attract local investment.
BIKE-SHARING platform ofo said it has completed a new round of financing valued at US$866 million led by Alibaba Group, as the cash-tight company seeks ambitious expansion in its home country and overseas markets.
Other investors, including Haofeng Group, Tianhe Capital, Ant Financial and Junli Capital, participated through a combination of debt and equity financing, the firm said in a statement.
The new round of funding was the highest so far, following a US$700 million round last July, which was backed by investors including Alibaba.
The company has been accelerating its expansion overseas, launching services in over 50 cities in the US, Europe and Singapore.
The sharing economy boom has been sweeping across China, with related transaction volume up 47 percent from a year ago to 4.92 trillion yuan (US$781 billion) in 2017, said the State Information Center.
The booming non-docking public bike rental service also led to an oversupply of shared bicycles, and created issues for urban management and transport authorities.
CHINA yesterday dismissed Canadian accusations that it was flooding global markets with cheap steel, saying overcapacity in the industry was an international problem.
Canadian Prime Minister Justin Trudeau said on Monday that Canada was “very concerned” about actions taken by China and that his country has already taken steps to prevent “dumping.”
But Chinese foreign ministry spokesman Lu Kang responded yesterday that China “has taken practical measures to address the overcapacity in the steel industry and at very great expense.”
“But I should stress that overcapacity of the steel industry is a global issue and cannot be resolved by any single party alone,” Lu told a regular press briefing.
“We hope that all steel-producing countries can make concerted efforts to reduce the capacity of the steel industry. This calls for international cooperation.”
Goldman Sachs Group Inc said yesterday that Harvey Schwartz will retire from the bank, leaving David Solomon as sole president and chief operating officer and the most obvious successor to Chief Executive Lloyd Blankfein.The bank did not say why Schwartz was retiring. He was seen as one of two contenders along with Co-Chief Operating Officer Solomon to take over the top spot at what is considered as the most powerful US investment bank.Schwartz, 53, has served in his current role since January 2017. He will retire on April 20.Goldman shares were up nearly 1.4 percent to hit a lifetime high in morning trade.The Wall Street Journal reported on Friday that Blankfein was expected to retire as soon as this year and the bank was not looking beyond Schwartz and Solomon to replace him. Goldman did not comment on the report.At the start of 2017, Schwartz became co-chief operating officer alongside Solomon, 56, after Gary Cohn left Goldman to become President Donald Trump’s chief economic adviser.He was a co-head of trading for years before being named chief financial officer in 2012. He moved up the ranks at Goldman after starting in the trading division like Blankfein.The unexpected announcement comes as Goldman Sachs has been trying to reinvent itself after market trends and regulations implemented since 2010 sapped profits from its once lucrative trading business.Schwartz outlined a target to grow revenue by US$5 billion a year in September.
Germany’s massive car industry is the biggest investor worldwide in electric vehicles, a study published yesterday found, as it scrambles under increasing pressure to adopt low-emissions technology.Over the past two years, German carmakers Volkswagen, Daimler and BMW announced 4.7 billion euros (US$5.8 billion) of investment worldwide in electric cars, the study by consultancy EY found.That far outstripped the 335 million euros invested by US manufacturers and just 19 million euros by Japanese firms.Adding up investments announced by the world’s biggest 16 manufacturers over the past two years, Germany was the biggest destination with some 3.2 billion euros poured into electric cars — far more than China’s 990 million euros or the 887 million in the US.“The importance of electric-powered cars will grow considerably in the medium term,” forcing automakers to ratchet up spending on the technology, EY car industry specialist Peter Fuss said.As elsewhere around the world, German carmakers have a slew of electric and hybrid models slated for release over the coming years.The sector has “taken its time” to get serious about battery power, Fuss said.But major spurs to adoption of the technology have emerged in recent years.In China, the biggest car market worldwide, manufacturers will from next year face stringent quotas for “new energy vehicles” as a proportion of their total sales.At home in Europe, pressure on the industry has grown after a series of scandals, including VW’s 2015 admission to manipulating 11 million diesel vehicles worldwide to make them appear less polluting in the lab than they are in on-road driving.And a recent German court ruling that cities can ban the most polluting diesels from city centers to reduce harmful smog has set government and consumers clamoring for cleaner alternatives.Volkswagen is spending close to two billion euros to convert two factories in Germany to electric car manufacturing, while Mercedes-Benz maker Daimler plans a battery plant in the US.
Volkswagen vehicles recalled and fixed after the worldwide “dieselgate” emissions cheating scandal are using more fuel and still failing pollution tests, according to a study by Australia’s peak motoring body released yesterday.VW admitted in 2015 to equipping about 11 million cars worldwide with “defeat devices”, which allowed them to deceive emissions laboratory tests but emit up to 40 times the permissible levels of harmful nitrogen oxide during actual driving.The tainted cars were recalled by VW, but the Australian Automobile Association said tests it commissioned on local vehicles before and after being updated showed they were still exceeding regulations in real-world settings.“Emissions analysis... found an affected VW diesel vehicle to be using up to 14 percent more diesel after recall, and still emitting noxious emissions more than 400 per cent higher than levels observed in laboratory testing,” the AAA said in a statement.The emissions were lower than before the fix, but higher than the limits allowed in Australia, added the AAA, which conducted the tests in partnership with motorsports’ governing body Federation Internationale de l’Automobile.Volkswagen yesterday rejected the comparison and said Germany’s KBA motor vehicle authority had approved its software update, and the fixed vehicles “continue to satisfy European and Australian emissions standards.”
CHINESE shares rose broadly yesterday — with ChiNext posting the biggest gains — after technology companies rose strongly.
The Nasdaq-style ChiNext jumped 1.40 percent to 1,882.41, while the Shanghai Composite Index edged up 0.59 percent to close at 3,326.70 and the Shenzhen Component index gained 1.17 percent to end at 11,326.27.
Shares of Mindata Group, a Shenzhen-based Internet service provider, rose by the 10 percent daily cap to 10.08 yuan (US$1.59).
Shares of Beijing Easpring Material Technology Co Ltd, a lithium battery producer, also rose by the 10 percent daily cap to 27.96 yuan.
GREENLAND Hong Kong Holdings said in Shanghai yesterday it is tying up with Provectus Care, an Australian aged care group, and Shanghai International Medical Center to launch the first institution in Shanghai that provides professional care for Alzheimer’s patients.
Scheduled to open in July at SIMC with a capacity of 60 beds, the joint venture institution is 70 percent held by Hong Kong-listed Greenland Hong Kong, part of state-backed developer Greenland Group, 20 percent by Provectus Care and 10 percent by SIMC.
“Greenland Hong Kong is vigorously expanding its health care businesses which cover various sectors including medical treatment, rehabilitation and aged care,” said Chen Jun, chief executive officer of Greenland Hong Kong. “We feel very positive about the potential of the health care and aged care industry in China which is seeing a rapidly growing aging population mainly due to longer life expectancy and declining fertility rates.”
There were 230 million people aged over 60 years in China at the end of 2016, accounting for 6.7 percent of the country’s total population, according to official statistics released earlier.
WEWORK, an international co-working space operator, is teaming up with Sesame Credit, the third-party credit scoring unit under Ant Financial, to provide a deposit waiver that could be used to cut the operating costs for eligible enterprise clients at its China network, the US-based company said yesterday.
The initiative, touted as the first of its kind offered globally, will be available at all of its locations in Beijing, Shanghai and Hong Kong, according to Alan Ai, general manager of WeWork’s China operation.
The newly launched initiative, aimed at slashing enterprises’ operating costs, will allow those with a credit score above 1,350 points with Sesame Credit to enjoy a 50-percent cut or a maximum waiver of 100,000 yuan (US$15,780) in deposit when they lease WeWork spaces.
“First entering the China market in 2016, WeWork has been expanding its presence vigorously here and its operating portfolio currently stands at 13 locations spanning Beijing, Shanghai and Hong Kong,” Ai said.
NEARLY 45 percent of smartphones sold in 2018 are expected to feature bezel-less screens, which offer consumers “full display experience” of better image quality, an industry report said yesterday.
Top Chinese smartphone makers such as Vivo, Xiaomi and Oppo will launch new bezel-less screen models featuring “full display” features within the following weeks.
This year, 44.6 percent of smartphones sold globally will have bezel-less “full display” screen, up sharply from 8.7 percent in 2017. The figure will hit 92.1 percent in 2021, according to TrendForce, a Taiwan-based research firm.
But many vendors have also adopted the “notch” design used in Apple’s iPhone X, industry insiders said.
The “notch” design, which supports facial recognition, will be adopted in many new models, according to industry insiders.
CHINA’S share regulator and stock exchanges have released draft rules that will force companies to exit the equity market for serious law violations.
If companies are found guilty of fraudulent initial public offerings, making false financial disclosures or violating the law, they will be thrown out of the market, according to draft rules released by the Shanghai and Shenzhen stock exchanges.
The move came amid tougher market oversight and more severe punishment for illegal trading in recent years.
China had more than 3,500 listed firms, with a total value of nearly 58 trillion yuan (US$9.16 trillion), as of the end of last year.
While rapidly growing in size, the A-share market is struggling with problems such as inadequate implementation of delisting policies, which keeps dysfunctional companies in the market and undermines market confidence.
Since the first delisting in 2001, China’s A-share market has only seen 57 firms exit the exchange, according to Wind, an information service provider.
In rules published earlier this month, the China Securities Regulatory Commission said the country would enhance efforts to delist “zombie companies” and those with long-term losses and severely poor financial status.
The move will be a key step to foster an orderly market and improve investor protection, said Jiang Mingde, a consultant with Yixinweiye Fund.
The CSRC has also tightened approval procedures for IPOs as it rejected or suspended over half of IPO applications.
THE Agricultural Bank of China said yesterday its net profit rose 4.9 percent in 2017 as its asset quality improved.
State-owned AgBank ended last year with 193 billion yuan (US$31 billion) in net earnings, according to its unaudited annual report. The bank’s revenue grew 6.13 percent year on year.
The bank’s bad loans fell by 15.94 percent from 2016 to 194.03 billion yuan during the past 12 months, with its non-performing loan ratio dipping by 0.56 percent to 1.81 percent in 2017.
AgBank’s provision coverage ratio against bad loans stood at 208.37 percent in the past year, well above the 150 percent required by the China Banking Regulatory Commission. The ratio, which shows the amount of funds set aside by banks to cover bad loans, surged by more than a third compared with that of 2016.
By the end of 2017, AgBank extended nearly 1.001 trillion yuan of new loans, up 10.3 percent, and 1.156 trillion yuan in new deposits, a rise of 7.69 percent, according to the report.
CHINA’S steel prices tumbled last week as demand growth failed to meet expectations, analysts said.
Over the past week Lange Steel Information Center's steel price index fell 2.39 percent while Mysteel’s shed 3.03 percent.
Prices fell bigger than 100 yuan (US$19) per ton for most of the steel products, led by rebar which plunged over 200 yuan per ton nationwide to around 3,663 yuan per ton, the lowest since January, Lange said in a report yesterday.
While prices rallied for a week after the Lunar New Year festival as investors anticipated demand would surge after domestic industrial companies resumed production, the drop has actually “totally offset” the rebound as “demand didn’t recover so fast,” said Fang Shi, analyst at Lange.
Wang Guoqing, Lange’s research director, blamed the "slower demand growth for steel" to construction nationwide starting later due to a shortage of funds among local governments.
Lange said domestic steel inventories have climbed for 12 weeks, especially stocks of building steel which totaled around 13.2 million tons nationwide by last Friday, up 41.05 percent from a year ago.
The price drop in the spot market occurred after the futures market plunged, with the most traded rebar contract for May delivery losing 6.81 percent last week to 3,709 yuan per ton after four consecutive days of decline.
CHINESE institutions are preparing for the launch of much-anticipated yuan-denominated crude oil futures, a move seen to give the country greater pricing power over commodities.
Trading of the crude oil futures contracts will start at 9am on March 26 at the Shanghai International Energy Exchange, or INE, according to a statement yesterday.
The trading margins for the futures have been set at 7 percent of the contract value, the statement said.
The upward and downward trading limits will be 5 percent, with the trading limits on the first trading day set at 10 percent of the benchmark prices.
The INE will release the benchmark prices one trading day before the launch of the futures.
“All institutions concerned should get ready for the launch of the crude oil futures, strengthen risk prevention, and ensure stable operation of the market,” said INE in the statement.
Futures companies are offering training to clients and helping companies better understand how the financial product can mitigate risks, Gu Jingtao, an analyst with Chinese investment bank BOCI, told the Economic Observer.
“The launch of the oil futures will greatly improve the risk management capability of small and medium-sized firms,” Gu said.
Futures brokerages have been competing for clients while testing technical systems to ensure smooth trading, according to Jia Shuchang of Industrial Futures, the Economic Observer reported.
The China Securities Regulatory Commission announced the launch of the crude oil futures in February.
Preparations are almost complete, and there have been several system tests ahead of the launch.
Analysts say Shanghai crude will be able to compete for the crude price benchmark in the Asia-Pacific region, hopefully becoming part of the 24-hour global trading system, together with Brent and WTI futures.
The Asia-Pacific region has surpassed America and Europe in crude consumption, but a benchmark with high recognition is still missing.
China is the world’s second largest oil consumer after the United States. Demand is likely to soar in the future as the country is thirsty for energy to fuel its economic growth.
Gu said he expects sufficient demand for the crude futures contracts from both industrial and financial clients as they needed a tool to manage risk, and hedge against inflation.
Individual investors can also benefit from the launch as their interests are better protected in exchanges rather than through over-the-counter trading, according to Gu.
The yuan-based futures may also help China’s effort to promote the yuan as a global currency.
However, Gu said that there were still uncertainties over liquidity as well as concerns over contract settlements.
While foreign investors are allowed in the petro-yuan trade, Gu said there have been relatively few accounts opened by overseas clients, indicating concerns over market liquidity and regulatory uncertainties.
BMW China Automotive Trading Ltd will recall 3,501 vehicles in China for defective front fork arms.The recall, which will start on March 30, will involve 118i, 120i, 125i, 218i, 220i and X1 series, according to a notice released by the General Administration of Quality Supervision, Inspection and Quarantine. These vehicles were manufactured between December 19, 2017 and December 26, 2017, said the notice.The defective front fork arm will cause vehicles to lose control and lead to potential safety hazards. The company will replace the defective parts free of charge.
German energy giant EON plans to take over Innogy, the renewables subsidiary of competitor RWE, in a complex deal valued at around 20 billion euros (US$25 billion), both companies said yesterday.The in-principle agreement involving asset swaps is part of a major restructuring of Germany’s energy market as Europe’s top economy switches from conventional to renewable power.The aim is for EON to focus on the retail, energy networks and customer solutions business, while RWE would take over the renewables power generation of both companies. Chancellor Angela Merkel’s decision to phase out nuclear power after Japan’s Fukushima nuclear disaster of 2011, and her government’s focus on raising “clean” energy output have pressured profits and forced utilities to radically restructure in order to remain viable.RWE plans to sell its 76.8 percent stake in Innogy to EON in a deal that includes “a far-reaching exchange of assets and participation,” said EON, which also plans a cash offer to the remaining Innogy shareholders.RWE would, in turn, gain an effective participation of 16.67 percent in EON.EON would also transfer to RWE most of its renewables business and the minority interests held by its subsidiary PreussenElektra in two RWE-operated nuclear power plants.RWE would receive the Innogy renewables and gas storage business and Innogy’s stakes in the Austrian energy supplier Kelag. The deal, still subject to antitrust clearances, would also see RWE make a cash payment of 1.5 billion euros to EON.Following approval of both companies’ boards, the deal was expected to be signed shortly, said EON.Innogy, a network, renewable and retail energy utility, has been in turmoil since Chief Executive Peter Terium resigned in December and Chief Financial Officer Bernhard Guenther fell victim to a recent acid attack.It has also has been the target of persistent takeover speculation, with sources saying recently that RWE had talked to France’s Engie and Italy’s Enel about a possible asset-swap deal.Business daily Handelsblatt said that “for decades EON and RWE were bitter rivals. Now they have agreed on a spectacular deal that will shake up the European energy market.”Under the country’s “energy transition,” Germany has raised the share of solar, wind and other renewables to about one third of electricity production.As wholesale power prices have dropped, the big utilities have been forced into an ongoing process of restructuring.
BROADCOM Ltd has promised not to sell critical national security assets to foreign buyers if its deal to buy chipmaker Qualcomm Inc is approved, another effort by the Singapore-based firm to appease US security concerns.
Separately, Qualcomm Inc said it discontinued the role of executive chairman and named a new non-executive chairman as it seeks to curry favor with shareholders ahead of a proxy fight with Broadcom now slated for April 5.
Qualcomm also said Tom Horton would continue as its lead director. Horton has been a member of the company’s board since December 2008, having previously served as chairman and chief executive officer of American Airlines Group Inc.
Broadcom’s US$117 billion bid for Qualcomm has warped into a complex fight over regulatory approvals and the best way forward financially for one of the world’s dominant chipmakers.
In an open letter to the US Congress on Friday, Broadcom promised to invest US$3 billion in research and engineering and US$6 billion in manufacturing in the United States annually. It did not say how those numbers compared with current spending by the two companies.
Broadcom spent about US$3.3 billion in 2017 on research and development and US$2.7 billion in 2016, while Qualcomm’s R&D investment was significantly higher with about US$5.5 billion in 2017 and US$5.2 billion in 2016.
Qualcomm’s annual shareholder meeting, now slated for April 5, was postponed by 30 days after the Committee on Foreign Investment in the United States last week ordered a national security review of the takeover.
FRENCH President Emmanuel Macron yesterday pledged hundreds of millions of dollars for solar projects in developing countries, as world leaders met in India to promote greater investment in renewable energy.
Macron, who in December warned that the global shift to a green energy future was too slow, said France would extend an extra 700 million euros (US$861.5 million) through loans and donations by 2022 for solar projects in emerging economies.
France had already committed 300 million euros to the initiative when it co-founded with India a global alliance in 2015 to unlock new cash for solar projects in sunny yet poor nations.
“We need to remove all obstacles and scale up,” Macron said at the launch of the International Solar Alliance in New Delhi yesterday.
Prime Minister Narendra Modi, who has committed to reducing India’s sizeable carbon footprint through a massive scale-up in renewable energy, said it was vital that nations were not priced out.
“We have to make sure that a better and cost-effective solar technology is available to all,” Modi told the gathering of investors and world leaders from about 20 mainly African nations.
“We will have to increase solar in our energy mix.”
India, the world’s third-largest polluter, is undergoing spectacular growth in its solar sector and is on track to become one of the world’s largest clean energy markets.
It pledged at the Paris climate summit in 2015 to source at least 40 percent of its energy from renewables by 2030, mainly via solar.
The energy-hungry giant of 1.25 billion people is banking on solar to electrify homes for hundreds of millions of its poorest citizens.
CHINESE exports of steel products may continue to fall this year due to strong domestic demand and reductions in capacity due to environmental commitments, the chairman of Fujian Sangang Group Co Ltd said.
The prediction follows a 30.5 percent plunge in Chinese steel exports last year to 75.43 million tons, as strong domestic prices and high profits at home led to a drop in shipments abroad.
The supply and demand trends are now more in line following the supply-side reforms “while most of the downstream sectors have shown signs of recovery,” Li Lizhang said.
Demand from property, infrastructure, manufacturing and shipbuilding sectors will increase, he said, while steel supply would also pick up this year compared to 2017.
China, the world’s top steelmaker, produced 831.73 million tons of crude steel last year. It aims to cut 30 million tonnes of excess capacity as part of the country’s effort to curb air pollution.
Cities across China are carrying out stringent steps to cut fine particulate matter (PM2.5) readings. The steelmaking hub of Tangshan in Hebei Province said it will extend production curbs for another eight months after current ones expire next week.
The accelerating demise of diesel, long used by carmakers to boost fuel-efficiency, is undermining their plans to meet looming European Union carbon dioxide (CO2) goals and avoid big annual fines.Executives gathered last week at the Geneva auto show are grappling with unpalatable choices: re-engineer existing vehicles at huge expense, restrict sales of some profitable models; or risk hundreds of millions of euros in penalties.Others are clinging to the hope that the image of the latest Euro 6 diesels may yet be rehabilitated, and their fortunes restored.“I am worried,” Volkswagen Chief Executive Matthias Mueller said in an interview.“But it’s our job to solve these problems,” he said. “I’m firmly convinced that diesel will experience a revival.”But a fresh flurry of bad headlines and the growing prospect of outright diesel vehicle bans are already sending their sales into a steeper tailspin.While diesels produce more toxic nitrogen oxides (NOX) and particulates than gasoline engines, their efficiency has been instrumental in cutting greenhouse gases. As consumers shun diesels, more carmakers are on track to miss tougher EU carbon dioxide goals taking effect in 2020-2021.Sales restrictionsSome industry insiders predict carmakers will be forced to rein in sales of larger models by raising prices to avoid overshooting the EU’s 95 grammes/kilometre CO2 target.Ford is reviewing its European line-up in light of diesel’s slide and is likely to “restrict the sale of some vehicles that push us over the limit,” a company source said.Steven Armstrong, the carmaker’s head of European operations, played down that prospect.“We’re not having to rethink the model lineup,” he said. “Of course we’ll have to finetune the volume by powertrain by vehicle, but it’s not going to be a fundamental shift for us.”VW brand sales chief Juergen Stackmann said his business would have to consider price increases for larger models and/or restricting sales.“We are required to be compliant (with EU targets) — which steps will become clear in up to one and a half years. A significantly lower mix of diesels is not helpful,” he said.Initially sparked by VW’s 2015 emissions test-cheating scandal and subsequent studies exposing the true levels of NOX emissions, the diesel slump has since deepened rather than stabilising, as Mueller and others had hoped it would.Sales of diesel cars fell 8 percent in Europe last year, reducing their market share to 44 percent from a 55 percent peak in 2011. Partly as a result, average CO2 emissions increased in Europe in 2017 for the first time in a decade, according to researchers JATO Dynamics.That was before the latest PR setbacks, in which VW admitted using monkeys and humans to test exhaust gas, and a court ruled that German cities were free to ban older diesel cars — joining Paris, London and a host of other urban centres that have vowed to run them off the road.Diesel sales were down another 19 percent in Germany last month, and a whopping 24 percent in Britain, amid concern that the decline in second-hand values would give way to collapse.‘Too late’French carmakers, which have relied heavily on diesels to meet CO2 goals, are now scrambling for alternatives. Renault has stepped up development of a low-cost hybrid known as “Locobox,” but the powertrain won’t even begin rolling out until 2021.PSA Group Chief Executive Carlos Tavares insisted last week the Peugeot maker remained on track. In a newspaper interview the same day, however, he urged governments to suspend penalties for non-compliance until electric car charging networks are better developed.Tavares said he would seek backing for his demands from Europe’s ACEA car industry lobby group, which he currently chairs.Fuel-saving 48-volt hybrids being rushed out across the Peugeot, Citroen and newly acquired Opel line-ups are not expected to arrive before 2022 under current plans.“It’s not just at PSA that it’s happening too late — it’s happening too late everywhere,” said Philippe Houchois, a London-based automotive analyst with investment bank Jefferies.“The cost of CO2 compliance is one of the potential triggers of the next auto recession,” Houchois said. “Manufacturers are going to have to raise prices on larger petrol cars to meet their emissions targets, and that’s going to hit sales overall.”Already last October, investment research house MSCI was warning that “all carmakers apart from Toyota are at risk of missing regulatory targets for fleet emissions in 2021.”The Japanese carmaker is dropping diesels from its European fleet as it benefits from two decades of dominance in petrol-electric hybrids. Fiat Chrysler is expected to announce a diesel phase-out in its mid-term plan, due in June.German premium automakers are also better resourced to absorb the shock, by ramping up sales of plug-in hybrids already in their portfolios or pipelines while rushing out 48-volt technology to curb emissions across existing model lineups — including the two-year-old Mercedes E-Class.But the strategy of leaning on costly plug-ins for CO2 compliance has limits, as well as profitability perils.BMW admits it is already taking a hit on the hybrid version of its X5 SUV, priced 600 euros below the diesel version at 72,500 euros (US$89,500), despite its higher cost.“The profitability of plug-in hybrids is below that of cars with pure combustion engines,” a company spokesman said.That spells bigger trouble for volume brands, which lack the lucrative luxury models to offset “compliance cars” sold at lower profit or even a loss to meet CO2 goals.“If everybody wants to sell a lot of electrified vehicles, the prices are going to collapse,” said one PSA Group engineer.“And since it’s a market that’s already quite unprofitable, people are just going to lose their shirts.”
China’s steelmakers need to heed US tariffs that are likely to trigger trade frictions despite little damage being done in the short term, according to analysts.China exported 9.5 million tons of steel in the first two months this year, down 27.1 percent from a year ago, the General Administration of Customs said last week.Although the drop was mainly caused by increases in domestic steel prices, “whether the situation will improve is now linked with US further steps after the tariffs on steel and aluminum,” said Chen Kexin, chief analyst at Lange Steel Information Center, a steel industry consultancy.One day after the release of Chinese export data, US President Donald Trump announced that a global 25-percent tariff will be imposed on steel imports and 10-percent on aluminum. Previously, he railed against China as the world’s largest steel exporter accounting for most of global overcapacity.The move, aimed at protecting American industry, has triggered worldwide anxiety, with the Ministry of Commerce in China warning the rebound of protectionism in the US will lead to opposition from the globe while hurting its own industries as well.In fact, the action currently “will have little direct impact on China’s steel industry as Chinese steel only accounted for less than 2 percent of US steel imports last year,” Chen said.“But domestic steelmakers should still stay alert, in case the friction expands to more products,” he said. Despite low exports in steel, China’s economy is boosted by exports of heavy machinery and electronics products, which are downstream from steel.China exported 8.95 trillion yuan (US$1.41 trillion) of machinery and electronics last year, up 12.1 percent from a year ago, 58.4 percent of the nation’s total exports.Heavy machinery, which takes up around 15 percent of China’s steel consumption, posted a record high of US$20.1 billion in exports last year, with the United States being the largest foreign buyer.Despite the fact that China’s portion of US steel imports is minimal, “but what if the steel tariff is just the first step? The influence could be immense if the policy extends into areas such as heavy machinery and electronics,” Chen said.In many analysts’ view, that could be possible, “as for years US has been squeezing China out of its use of steel, likely to protect its industrial development as a whole from China’s expanding clout as steel is the main industrial raw material,” said Wang Guoqing, Lange’s research director.While in 2006 the US bought 12.56 percent of China’s exported steel, the figure dropped to 1.57 percent last year, “amid more and more frequent and stringent anti-dumping investigations from US to China,” Wang said.The US proposed 169 items concerning anti-dumping in steel industry last month, of which 29 were aimed at China. It said that China’s steel overcapacity had exceeded total US steel production.While Trump aims to boost the US steel industry via the tariffs, “he has been long calling for the return of US manufacturing,” said Jiang Mingde, chief counselor at domestic private equity Yixinweiye Fund.“Steel and aluminum could be just the start of his massive actions,” as the nation aims at consolidating its “real economy” to lower the portion of finance and consumption in its economy, Jiang added.“In that sense, although the steel and aluminum tariffs seem friendly fire at this moment, fear exists that a larger range of trade frictions would hurt China,” he said.China has been upgrading its steel industry in recent years by cutting oversupply and phasing out inefficient plants, with the price of steel rising 23 percent in 2017 after jumping 66 percent in 2016 amid a cut of 115 million tons in capacity over the two years.But, meanwhile, the parallel task is to fight for higher competitiveness in the global market, backed also by mergers among giants such as Baosteel and Wuhan Steel, in a move to “enhance the industry’s competitiveness and better resist price fluctuations in global trades,” the nation’s steel industry association said.The aim, however, could contradict with the current situation amid the US restrictions.Despite being the largest steel exporter, China’s domestic market accounts for over 90 percent of its steel consumption.“It is for sure steelmakers also eye the global market for profit,” Wang said. “But more or less, they are now under pressure of US restrictions, with further moves to see.”
China’s stock market regulator may be opening a new fast track for the public share sales of startup companies with a value of at least US$1 billion to support what the government views as high-profile innovators.Startups with a value of US$1 billion or more are called “unicorns,” a reference to their statistical rarity.In his report to the 13th National People’s Congress on March 5, Premier Li Keqiang told deputies that the government will support the public financing of high-quality, innovative companies.At the end of last year, there were some 220 “unicorns” with an aggregate value of US$763 billion in China, according to CB Insights. The list includes Didi Chuxing, Xiaomi, China Internet Plus Holding and Lu.com.The more relaxed stance of the China Securities Regulatory Commission toward their initial public offers was highlighted earlier this month when Foxconn Technology Group, the world’s largest contract electronics manufacturer and the fourth-largest information technology company by revenue, won approval for its Foxconn Industrial Internet Co subsidiary to be listed on the Shanghai Stock Exchange.The approval process took only 36 days, and the company may list as early as next month. The speedy green light compares with an average 15 months for listing approval last year, and up to three years or longer before that.The government has decided to shorten approval time for the IPOs of “unicorns” in four sectors: biotechnology, cloud computing, artificial intelligence and high-end manufacturing. It will also loosen the profitability requirements for listing of such companies, according to regulatory commission.IPO reform is at the top of the regulator’s priorities, according to commission Vice Chairman Jiang Yang. Xiaomi Inc, a Chinese electronics and software company, is also in the preparatory stages of going public in a pending share sale that is drawing considerable attention of investors.Xiaomi was valued at US$46 billion in 2014, becoming the world’s fourth most valuable technology startup after it received US$1.1 billion in outside funding from investors. The company is targeting a valuation of US$80-$100 billion.After Baidu, Alibaba, Tencent and JD.com, the top technology companies in China, chose to go public overseas, Chinese regulators have pondered policy changes to ensure that the next round of technology IPOs list in China. Regulators are also helping US-listed Chinese companies create Chinese depositary receipts to tap trillions of dollars in domestic savings.Chinese depository receipts are certificate issued by a Chinese bank that represents a pool of foreign equity traded on local Chinese exchanges. The receipts can be used by foreign companies to allow both Chinese institutional and private investors to buy their stock.Li Daokui, a professor at Tsinghua University and member of the national committee of the Chinese People’s Political Consultative Conference, said supervisory regulations must be improved to attract innovative companies to list in China’s A-share market.“Chinese depositary receipts and the sectors supported by the government reflect policies that are inclined to encourage high-tech and emerging industries,” said Gao Ting, a chief strategic analyst at UBS Securities China. “The policies are promoting industrial upgrading. I think it will be a gradual process, with some technical obstacles, but regulators will make early preparations.”Although the IPO of Xiaomi still remains a matter of speculation at present, expectations are rising that Xiaomi is considering the addition of an A-share listing to its global float. That has boosted the share prices of unicorn-related stocks on Chinese exchanges since March 1.“As far as I know, many ‘new economy’ enterprises listed overseas are willing to return to the A-share market, and I believe more well-performing technology companies will do so in the future,” said Zhou Hongyi, chairman of Qihoo 360 Technology Co, the first Internet company to return to an A-share listing from New York.The chief executives of companies such as Baidu, Sogou, JD.com and Lenovo have all shown some willingness to return to A-share listings if their path is smoothed by regulators.Regulators will help “build the road” to encourage that return, but whether or not the companies actually decided to come back remains to be seen, said the stock regulator’s Jiang.
Standing in a long bank queue to withdraw money can be very hard on wobbly, old legs. Forgetting to bring along reading glasses makes it difficult to figure out which button to push on the machine that provides queue tickets. And where’s the nearest bathroom anyway?For elderly residents, especially those who can’t manage online banking, handling personal finances can be an ordeal. Many banks are addressing the problem with services especially tailored to the needs of the older generation.Wang Junjuan, a 72-year-old Shanghai resident, said she has been very impressed by the considerate services in the south Shaanxi Road sub-branch of the Bank of Communications, China’s fifth largest state-owned commercial lender by assets. “On one occasion, I had to go to the toilet in a hurry,” she said. “A bank clerk guided me to the staff bathroom, and I was surprised to see the toilets had arm rests. Banks generally do not let customers use their internal restrooms, let alone have facilities designed for old people.”Even more impressive than the restroom to Wang is the array of other items made available to the elderly in the bank, including a paper shredder, umbrellas, folding wheelchairs, paper clips, a currency calculator, bandages and even essential balm. “We pay great attention to detail,” Gu Ye, president of the sub-branch, proudly told Shanghai Daily. The sub-branch is located in the busy district of Huangpu, surrounded by a cluster of high-rise residential buildings that house many retirees. China’s population is aging and the needs of the older generation are coming under increasing scrutiny. The number of people 60 years and older reached 241 million at the end of last year, with a record annual 10 million people joining the “silver club.”In 2017, that older generation comprised 17 percent of China’s population. By 2025, that ratio is expected to hit about 35 percent.Older people come from a generation prone to saving and proverbially comfortable stashing money under a mattress. Though most do use banks nowadays, modern finance can be confusing, especially in an age when so much is done online and requires computer savvy. Gu at the Shaanxi bank outlet said around one third of his customers are 60 years or older. The aim is to make banking an easy, pleasant experience for them, he said.Hearing aids, reading glasses and sugar-free drinks are offered at a special counter dedicated to older customers, who can enjoy privileged services for one hour in the morning and one hour in the afternoon.Inside the bank are brochures and a scrolling electronic screen advising the elderly to beware of financial scams. There’s even a special room where bank personnel can discuss fraud with emotional older customers. Among those who have been taken in by dubious investment deals, Wang said she was once coaxed into buying bonds by the sales pitch at another bank. She lost money on the deal and transferred her business to Bank of Communications. Staff there try to build trust with the elderly on a personal level. Lu Sen, a client manager at the Shaanxi sub-branch, told Shanghai Daily that it’s important to listen to what customers like Wang have to say.“I want to understand her needs instead of just selling products to her,” Lu said.Lu learned that Wang was planning to take courses at a school for the aged and that she likes to play Douyin, a popular short-video application in China. Lu has been giving Wang advice on how to do financial planning for her grandson, who is studying in Japan.Song Yiyun, 27, is a “five-star” client manager at the bank with a black belt in karate.Though he is a tough guy on the mat, Song is described by colleagues as “professional and patient” with elderly customers. He often helps them up and down the steps at the front of the sub-branch. “I treat aged clients just like my grandpa or grandma, which means doing my best to provide services,” Song told Shanghai Daily.Sometimes those clients ask his advice on home repairs or Internet access. For those who are physically unable to come to the bank branch, home assistance is provided. Last winter, one elderly customer who was bedridden couldn’t remember his bank account password. Song and a colleague went to his home to arrange a new password. An 82-year-old retiree surnamed Chen has been banking with the Shaanxi outlet for almost 10 years. He praises the services of the team there. “Unlike security staff at other banks who can intimidate a customer, the security men at the sub-branch are warm and friendly,” he said. Chen, who declined to be identified by his full name, often transfers money to his children living abroad, and he welcomes the efforts of bank staff to ensure that his savings thrive. He said client manager Song once explained to him in simple language what the “household leverage ratio” means. “Professional proficiency and work ethics are what I value most,” he said. “We elderly tend to be anxious and lack self-confidence. We are afraid of making mistakes while doing the transactions by phone or online due to bad eyesight. So as long as we can walk, we prefer to go to a branch and talk face-to-face with the bank staff.” Bank of Communications is not alone in addressing the special needs of the older generation. Shanghai Pudong Development Bank has developed senior-friendly facilities, including wheelchair accessible passageways and emergency pagers. The An Ting branch of the Agricultural Bank of China, upon learning that a centenarian had lost her passbook, worked with the local public security bureau to resolve the problem. The Shanghai branch of the Industrial Bank, a joint-stake commercial lender, has set aside an exclusive hotline to deal with concerns and complaints from elderly customers. And at Bank of China, senior citizens, sanitation workers and traffic police have access to hot ginger tea, heaters and chargers in the “warm corner” of Shanghai branches.
CHINESE retailers were cashing in on International Women’s Day, offering discounts on sportswear, cosmetics and health care to get women to spend more, dubbing the day “Queens’ Day” and “Goddesses’ Day.”
In China, the day was dominated by sales campaigns from online retailers.
One gym pushed memberships by saying “it only takes three months to become a queen,” while Alibaba encouraged shoppers to “give life to your women-power.”
The women-targeted market, or the so-called “she economy,” a term coined by China’s education ministry in 2007, is expected to account for US$700 billion by 2019, according to securities firm Guotai Junan.
“If you look at how companies are thinking about their ad spending, how they think about product selection, probably they are thinking, 70 to 75 percent of our spending really needs to be targeted directly at women,” said Ben Cavender, Shanghai-based principal at China Market Research Group.
Women spent 64 percent more in 2017 than in 2015, with a majority of purchases made in major cities such as Beijing, Shanghai and Guangzhou, according to a report by Alibaba, which controls the largest share of retail e-commerce sales in China.
Purchases were more than cosmetics and shoes.
The number of women who bought running outfits rose over 13 times in the last 12 months, while spending on boxing gloves by women soared 75 percent, according to a separate Alibaba report.
The drive by Chinese companies is not only focused on consumer goods.
To entice increasingly health-conscious women, Alibaba is this year for the first time collaborating with private hospitals to offer around 50 percent off vaccines for human papilloma virus, the sexually transmitted disease.
WOMEN are having more say in China’s business world as females at helm of A-share listed firms have become more visible.
As of Wednesday, the day before International Women’s Day, a total of 174 A-share listed companies run by female chairpersons posted 2.12 trillion yuan (US$335.2 billion) in aggregate market value, according to data from Securities Times.
With 65 listed in the Shanghai Stock Exchange and the rest in Shenzhen, the companies accounted for only 4.98 percent of the country’s total domestically-listed companies.
Female executives are showing strong leadership skills, as Dong Mingzhu, chairperson of Gree Electric, topped the Forbes China’s annual ranking of China’s most successful businesswomen in 2017.
Among 43 A-share listed firms with their market value exceeding 10 billion yuan, Gree Electric has a latest market value of 311.1 billion yuan, second largest in the home appliances sector.
Song Guangju, chairperson of Poly Real Estate with market value of 182.7 billion yuan, has increased its annual profit from 660 million yuan to 15.7 billion yuan since she took the position.
He Qiaonu, who chairs Beijing Orient Landscape, holds 21.55 billion yuan in market value based on the latest share price.
CHINA Resources Beer (Holdings) Co Ltd is in talks to acquire Heineken NV’s China business in a deal that could be worth over US$1 billion, as the country’s largest brewer seeks new growth from premium brands, five people close to the discussions said. The negotiations come as global beer giants such as Heineken, AB InBev and Carlsberg are facing fierce competition from local rivals and each other in emerging markets, which have been touted as the growth engine for the world’s biggest brewers.
China is the world’s largest beer market by volume. CR Beer’s biggest brand, Snow, is the world’s top-selling beer, but is almost exclusively sold in China.
One of the sources said the deal between CR Beer and Heineken would most likely include three breweries — in Guangdong, Hainan and Zhejiang provinces — Heineken’s distribution operation and its brands in China.
The two brewers have discussed a share-swap as part of the transaction, the source said.
Details have not been finalized and talks could yet fall apart, the sources said. They declined to be identified as the information is not public.
Heineken, which entered China in 1983, has struggled to set up a strong distribution network and to make a mark with its flagship Heineken lager, which lags far behind AB InBev’s Budweiser in the premium market, industry analysts say.
The Dutch brewer had a 0.5 percent share of the China market by volume in 2016, according to research firm Euromonitor International, while CR Beer took up more than a quarter.
Heineken sells its premium lagers Heineken, Tiger and Sol in China, along with cheaper local brands Anchor and Hainan Beer.
The company has invested millions of dollars in promoting Heineken as the global lager of choice, predominantly through sports, including soccer and Formula One. Next month will mark its second time as prime sponsor of the Chinese Grand Prix.
SHANGHAI’S economy grew 6.9 percent in 2017, the municipal statistics bureau said yesterday.
It kept pace with China’s gross domestic product growth and was slightly higher than the 6.8-percent increase in 2016.
Shanghai’s GDP was 3.01 trillion yuan (US$475 billion) last year with the largest contribution from the tertiary sector, which made up 69 percent of the total.
Value added in the primary industry fell 9.5 percent, while growth in secondary and tertiary industries was 5.8 percent and 7.5 percent, respectively.
Shanghai’s total investment in fixed assets rose 7.2 percent to 724.7 billion yuan last year, with the largest part seen in the tertiary industry which made up 85.7 percent of the total.
Strategic emerging industries in Shanghai saw an 8.7 percent increase in industrial added value to 494.4 billion yuan, taking upr 16.4 percent of the city’s total GDP last year, up 1.2 percentage points.
ROBOTICS, big data and artificial intelligence are making electronics more user-friendly and intelligent, Shanghai Daily learnt at the AWE show which opened yesterday in the city.
“Intelligence is the future of the household appliance industry in China with integration between software and hardware, development of AI and cloud and upgrading to smart manufacturing,” said Jiang Feng, president of the China Household Electrical Appliances Association.
Robots are playing a role in the era of smart homes, companies said during AWE 2018 (Appliance & Electronics World Expo 2018), China’s top home appliance show held annually in Shanghai. Over 800 exhibitors are attending the show which ends on Sunday.
Home appliance giant Haier is teaming up with Japan-based Softbank to show off Pepper robots which can help users book air tickets as well as control air conditioners and air purifiers by voice control.
Advanced AI that are able to integrate with human beings and customized “minds” have become a trend in the market, said Shanghai-based Machinemind, which develops the system for Pepper in the domestic market.
The next stage AI, which requires huge volume of data, will be used both in smart home and various business sectors, said He Jia, founder of Machinemind.
Toppers, a smart device brand under Shanghai-listed Boxin Investing & Holdings Co, showcases an AI speaker able to order food and call taxi, a wireless headset for real-time English-Chinese translation and a smart locker which works by fingerprint recognition.
Shenzhen-listed ASD, which makes crock pots for more than 40 years, has expanded into smart manufacturing by investing in industrial robots.
CHINA’S exports surged at the fastest pace in three years in February, suggesting both its economy and global growth remain resilient even as trade relations with the United States deteriorate after President Donald Trump announced planned US tariffs on steel and aluminum.
China’s February exports soared 44.5 percent from a year earlier, above analysts’ median forecast for a 13.6 percent increase and January’s 11.1 percent gain, official data showed yesterday.
Imports grew 6.3 percent, missing forecasts for 9.7 percent growth and down from a sharper-than-expected 36.9 percent jump in January.
Analysts caution that Chinese data early in the year can be heavily distorted by the timing of the Lunar New Year holiday, which fell in February this year but in January in 2017.
But combined January-February data also showed a dramatic acceleration in export growth, good news as China tries to crack down on risks in the financial system without sharply braking economic activity.
Exports rose 24.4 percent in January-February on-year, eclipsing 10.8 percent in December and up from single-digit growth in the same period last year. The gains came despite a much stronger yuan which is worrying the country’s exporters.
“The broad-based recovery in China’s major export markets could explain part of the reason why exports were still quite strong,” said Betty Wang, senior China economist at ANZ in Hong Kong.
But tension with the US is definitely a near-term concern and a near-term downside risk to China’s trade outlook, she added.
China’s goods surplus with the US, a sore spot in relations between the two nations, narrowed slightly last month but is higher so far this year than at the same point last year.
China’s trade surplus with the US was US$20.96 billion in February against US$21.89 billion in January.
Boosted by a global trade boom, China’s exports last year grew the fastest since 2013 and served as one of the key drivers behind the economy’s forecast-beating 6.9 percent expansion.
But tough US trade talk last year is now turning into action.
Trump was set to sign a proclamation today to impose the steel and aluminum tariffs, to counter imports.
The measures are set to go into effect in two weeks, but economists see little immediate impact on China.
China has already reduced steel exports to the US to a trickle in response to strong demand at home and US anti-dupming duties, and while aluminum shipments account for around 10 percent of its global exports of the metal, the number is still small compared with China’s total exports, said ING economist Iris Pang.
“All in all, the direct impact on China is minimal,” Pang said in a note published yesterday.
While China’s global steel exports have fallen by a third this year, tariffs on aluminum may be an easier sell for Trump, as China’s shipments rose over 35 percent in the first two months of the year.
Over time, however, any additional punitive US measures and retaliations by its major trading partners would cut global trade flows, disrupt international supply chains and drag on global growth.
At home, China’s domestic demand also appears solid, despite a cooling property market and rising borrowing costs that are expected to eventually rob the economy of some momentum.
While February import growth softened, it climbed 21.7 percent in the first two months of the year, compared with 4.5 percent in December. Imports of commodities again led the way, with steel mills replenishing inventories of iron ore ahead of the seasonal construction pick-up in spring.
China’s trade surplus widened to US$33.74 billion for February, beating forecasts for US$600 million and January’s US$20.35 billion. For January-February combined, the surplus rose 43.6 percent from the year earlier period to US$54.32 billion.
The strong trade performance suggests a possible upside surprise in China’s industrial output data next week and in economic growth for the first quarter as a whole. Analysts polled by Reuters earlier this year expected momentum to ease slightly to 6.6 percent this quarter from 6.8 percent late last year.
Premier Li Keqiang said on Monday that China aims to grow its economy by around 6.5 percent in 2018, flat from 2017.
CHINA’S securities regulator is set to reform stock exchange listing to invigorate the country’s capital market and foster the new economy.
Jiang Yang, vice chairman of China Securities Regulatory Commission, said reform to the listing mechanism was the top priority for the regulator.
The CSRC will reform the listing mechanism, deepen reform of the main board and ChiNext board, and support “new technology, new industry, new industry forms and new business models,” Securities Daily cited Jiang as saying.
Analysts have said that if implemented, the reform will reverse a trend in recent years which saw many Chinese tech firms prefer to list overseas because of more flexible listing rules and access to international investors.
Jiang’s remarks came amid a slew of government statements that vowed changes to the listing process to grant easier access to emerging and innovative businesses.
As China tries to transition its economic growth model to an innovation-driven model, the last thing that the CSRC wants to do is to turn away firms in the new economy sector, which has contributed to a growing share of the economy.
But China’s capital market remains dominated by traditional industries such as property development, finance and industrial materials.
Innovative firms, tech startups in particular, face legal and technical barriers to list on the A-share market, including curbs on weighted voting rights, or dual-class shares, and mandatory requirements on IPO applicants’ profitability.
Companies are now required to have a net income for the last three fiscal years and have combined profits of over 30 million yuan (US$4.7 million) during the period to list on the main board. The conditions are lower to list on ChiNext, but still challenging for most tech startups.
CHINA has approved the Shanghai listing of an Internet and industrial-focused subsidiary of Taiwan’s Foxconn, the world’s largest contract electronics manufacturer.
China Securities Regulatory Commission confirmed the approval in statements issued yesterday.
Foxconn, formally known as Hon Hai Precision Industry Co, has been aiming to list the unit, Foxconn Industrial Internet Co Ltd (FII), on the Shanghai Stock Exchange to help fund projects in smart manufacturing, cloud computing and 5G solutions.
So far, it has not announced details of the IPO. Foxconn Industrial Internet made a net profit of 16.2 billion yuan in 2017.
CHINA led a group of 18 World Trade Organization members yesterday that urged US President Donald Trump to scrap his planned tariffs on steel and aluminium.
The pleas from a broad coalition of members including the European Union, Japan, Canada and Russia came at the WTO’s General Council meeting, according to a trade official with direct knowledge of the meeting.
The Chinese representative, who spoke first, said Trump’s intention to justify the tariffs on national security grounds would pose a systemic threat to the rules-based global trading system safeguarded by the 164-member WTO.
Canada expressed concern that “the United States might be opening a Pandora’s Box that we would not be able to close,” according to the official.
Fears of an all-out trade war have risen since Trump announced the planned tariffs — 25 percent on steel and 10 percent on aluminium — last week.
The world’s major economies have vowed to defend themselves, including through legal action at the WTO.
“Many members said they had fears of tit-for-tat retaliation which could spiral out of control,” the trade official said.
The EU said yesterday it is ready to retaliate against the proposed tariffs on steel and aluminum, with counter-measures against iconic US products like Harley Davidson motorcycles, Levi’s jeans and bourbon.
Trade Commissioner Cecilia Malmstroem said yesterday that the EU, the world’s biggest trading bloc, rejects Trump’s reasoning that the tariffs are backed by the international legal right to protect national security.
Should tariffs be introduced, the EU and other partners would take the case to the WTO, she said. The EU is circulating among member states a list of US goods to target so that it can respond as quickly as possible.
Trump’s top economic adviser Gary Cohn has resigned in apparent protest over the controversial tariffs.
Commerce Secretary Wilbur Ross said Washington is not seeking a trade war and the decision to impose steep tariffs on steel and aluminium imports was “thought through.”
SHANGHAI’S merchandise sales are set to grow 8 percent this year, with retail sales to rise 8 percent and e-commerce to jump 20 percent, the Shanghai Commission of Commerce said yesterday.
The city set the same 8 percent year-on-year target for merchandise sales and retail sales this year.
E-commerce is set to soar 20 percent, with online transactions exceeding 1 trillion yuan (US$ 160 billion) this year. The import and export of goods and services are set to grow 5 percent each.
In 2017, the city’s merchandise trade rose 12 percent year on year to 11.3 trillion yuan, 4.1 percentage points faster than 2016, the commission said.
Shanghai ranked first in China for retail sales at 1.2 trillion yuan, up 8.1 percent yearly, with the growth pace 0.1 percentage point faster than 2016’s.
E-commerce transactions soared 21 percent annually to pass 2.4 trillion yuan last year, and online shopping rose 31 percent to 734 billion yuan.
“Shanghai will continue to improve the business environment and emphasizes consolidating and enhancing our status as an international trade center,” said Shang Yuying, director of the commission.
Shanghai is also focusing on developing a legalized, international and convenient business environment, she added.
The commission plans to promote the liberalization measures which have been trialed in the free trade zone for over a year to the whole city.
Also, city officials plan to visit headquarters of foreign-owned companies to publicize Shanghai’s investment environment and enhance foreign investors’ confidence in the city.
CHINA’S insurance watchdog will enhance its supervision of the equity structure of insurers by tightening criteria on market entry for investors as well as monitoring shareholders’ behavior and scrutinizing share capital strictly.
The China Insurance Regulatory Commission will require insurers to set clear, reasonable and transparent equity structures to protect the rights and interests of policyholders, insured and beneficiaries, according to a statement detailing revised policies on its website.
Investors are now categorized into four types — finance type I, finance type II, strategic and controlling — and they are subject to strict restrictive standards to become shareholders.
A company hoping to become a qualified finance type I shareholder of an insurance company must show that it has been operating well, has sound finances and is profitable for the last fiscal year.
Also, any single shareholder’s stake in an insurance company has been cut from the previous 51 percent to a third, the statement said.
The CIRC also drafted a negative list on market entry by forbidding investors who have unclear ownership structures and hold poor record in the industry to become shareholders of insurance companies.
Investors should not transfer their shares within five years of becoming the controlling shareholders of the company, with a three year limit for strategic shareholders, two years for financial II shareholders and one year for financial I shareholders, the CIRC said.
The CIRC will strengthen its deep supervision of the equity structure, sources of funds and actual controllers of the insurance companies. Any change of actual controllers needs to be reported to the CIRC.
GERMAN auto-parts supplier Continental and Chinese battery manufacturer Sichuan Chengfei Integration Technology Co agreed in Shanghai yesterday to form a joint venture to develop and produce battery systems.
The joint venture, in which Continental holds 60 percent and Sichuan Chengfei Integration Technology Co 40 percent, will develop and produce 48-volt battery systems whose battery cells will be provided by CITC’s subsidiary China Aviation Lithium Battery Co while Continental will manage the battery system.
The joint venture expects to begin operations in mid-2018 and launch its first product in 2020.
48-volt technology is a mild hybrid technology offering higher voltage that allows a car’s electrical system to engage more with its functions, and promises higher savings in fuel use.
ELECTRONICS giant Midea Group aims to develop artificial intelligence and industrial Internet with Kuka robots and intelligent devices, the Shenzhen-listed firm said yesterday in Shanghai.
Midea now invests 100 million yuan (US$15.4 million) annually to form a special AI team in Shenzhen and the Silicon Valley. They work on adding connection and intelligence features in devices, from air conditioners, washing machines, electric rice cookers to water heaters. It sells over 300 million home appliance devices annually globally, giving the firm a huge database to develop AI, said Xu Chengmao, vice president of Midea Corporate Research Center.
THE head of the International Monetary Fund warned yesterday that a trade war US President Donald Trump apparently intends to provoke with tariffs on steel and aluminium would snuff out global growth.
“If international trade is called into question by these types of measures, it will be a transmission channel for a drop in growth, a drop in trade and it will be fearsome,” Christine Lagarde said on RTL radio.
“In a trade war that will be fed by reciprocal increases of customs tariffs, no one wins,” she added.
Trump boasted last week on Twitter that trade wars are “easy to win” after his initial announcement of 10 percent tariffs on imports of aluminium and a 25 percent levy on steel brought into the United States provoked a global outcry.
SHANGHAI telecom firms announced plans yesterday to upgrade packages to cut roaming data traffic charges and to drop rates for data consumption and broadband services to boost digital economy development.
The move followed a related announcement by government officials at the “two sessions” in Beijing to cut national data roaming charges. The new policy will cover more than 1 billion mobile phone users in China.
China Telecom’s Shanghai branch announced yesterday that it will upgrade packages with unlimited local data traffic to national traffic.
The carrier aims to offer consumers “best and affordable” packages, the company said.
Rates for mobile Internet services will be cut by at least 30 percent this year, according to the government work report delivered by Premier Li Keqiang on Monday at the opening of the first session of the 13th National People’s Congress, China’s top legislature.
China scrapped domestic roaming fees for long-distance calls last year as telecom operators turned to mobile Internet services for business growth.
At the end of last year, China had more than 1 billion 4G mobile users, who are expected to benefit from the new rates, said Miao Wei, minister of industry and information technology.
Until last year, telecom carriers just offered unlimited and huge-volume data packages in local regions, forcing users to spend more if they traveled to other provinces.
China Mobile said yesterday that it will support government targets such as a 30 percent drop in charges to boost Internet Plus development and innovation.
China Unicom also released a new package yesterday in Shanghai offering unlimited data traffic nationwide.
Shanghai Telecom’s latest family package costs 199 yuan (US$32) a month for unlimited national data, a broadband line with 500 megabytes per second bandwidth and services like 4K high-definition video stream.
Shanghai Unicom’s new package costs 99 yuan, with unlimited data traffic nationwide.
Chinese telecom carriers cut international roaming fees last year.
CHINA’S private sector has made a key contribution to economic growth, the head of the country’s industry and commerce federation said yesterday.
The sector now contributes to over 60 percent of China’s GDP growth and brings in over half of China’s fiscal revenue, said Gao Yunlong, head of the All-China Federation of Industry and Commerce.
Meanwhile, more than 60 percent of China’s fixed-asset investment and outbound investment has been made by private investors, Gao told a press conference on the sidelines of the first session of the 13th National Committee of the Chinese People’s Political Consultative Conference.
The private economy is also playing a stronger role in China’s job creation and innovation drive by providing over 80 percent of jobs and contributing more than 70 percent of technological innovation and new products in the country, according to Gao.
He said that last year, more than 90 percent of new jobs were created by private businesses.
At the end of 2017, there were 65.79 million individually owned businesses and 27.26 million private enterprises in China, which employed some 340 million people.
Private investment grew 6 percent year on year, 2.8 percentage points higher than a year earlier, to 38.2 trillion yuan (US$6 trillion) last year.
KOBE Steel said yesterday its CEO will step down to take responsibility for a widespread data fraud scandal, although doubts remain over a corporate culture mired in malfeasance and the possibility of future fines.
Japan’s third-largest steelmaker, which supplies steel parts to manufacturers of cars, planes and trains around the world, admitted last year to supplying products with falsified specifications to about 500 customers, throwing global supply chains into turmoil.
Kobe Steel, in announcing the results from a four-month-long investigation by an external committee, said it found a new case of impropriety affecting a total of more than 600 clients.
Hiroya Kawasaki will resign as CEO and chairman on April 1, with his successor to be decided at a board meeting to be held soon, the company said.
“We discovered that inappropriate actions were widespread, and were carried out with the knowledge and involvement of many, including management,” it said.
“Considering the multiple compliance issues that we’ve had in the past, we must say that there are deep-rooted problems, not only in terms of compliance but also in the corporate culture and mindset of employees and management.”
It also said the resignation of Executive Vice President Akira Kaneko and temporary pay cuts of up to 80 percent for all internal executive officers.
The case was one of the country’s biggest industrial scandals in recent memory, which set off a rash of malfeasance revelations by other Japanese heavyweights, hitting the country’s reputation for manufacturing excellence.
In the past several months, Mitsubishi Materials Corp, Toray Industries and Ube Industries have also admitted to product data fabrication while automakers Nissan Motor and Subaru Corp have revealed incorrect final inspection procedures.
Kobe Steel said the data cheating started in the 1970s, and those who know the 112-year-old company say its problems are entrenched.
“What you see is a pattern, a culture,” said Steven Bleistein, CEO of Tokyo-based consultancy Relansa. “Company culture is something that a leader creates, so the very least you have to do is to remove the leader and the people who were complicit, from the CEO downwards.”
Kobe Steel admitted earlier to taking part in bid-rigging for a bridge project in 2005, and failing to report income to tax authorities in 2008, 2011 and 2013.
In 2006, it also exceeded set limits for ground and water pollution, and admitted to falsifying soot-emissions data from blast furnaces at Kobe Works and Kakogawa Works. Illegal political funding to candidates in local assembly elections in 2009 prompted the resignations of the then CEO and chairman.
For now, the data fraud scandal appears to have left Kobe Steel’s finances unscathed.
In February, the company reinstated a forecast for its first annual profit in three years for the year ending March 31, backed by strong profits in steel and machinery.
NEW orders for US-made goods recorded their biggest decline in six months in January and business spending on equipment appeared to be slowing after strong growth in 2017.
Factory goods orders dropped 1.4 percent amid a broad decrease in demand, the Commerce Department said yesterday. That was the largest drop since July 2017 and ended five straight months of increases.
December’s report was revised to show orders rising 1.8 percent instead of the previously reported 1.7 percent.
Orders for transport equipment dropped 10 percent, weighed down by a 28.4 percent plunge in the volatile orders for civilian aircraft. Economists polled by Reuters had forecast factory orders shedding 1.3 percent in January. Orders surged 8.4 percent on a year-on-year basis.
Orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, fell 0.3 percent in January instead of declining 0.2 percent as reported last month. Orders for these so-called core capital goods shed 0.5 percent in December.
That was the first back-to-back drop since May 2016. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, slipped 0.1 percent in January instead of edging up 0.1 percent as reported last month.
Core capital goods shipments added 0.7 percent in December. Business spending on equipment is cooling after growing by a robust 4.8 percent in 2017.
But it is likely to remain supported as companies are expected to use some of their windfall from a US$1.5 trillion tax cut package to buy machinery and other equipment as they seek to boost sluggish productivity.
The Trump administration slashed the corporate income tax rate to 21 percent from 35 percent effective in January. The tax cuts, a weakening US dollar and strengthening global economy are expected to support manufacturing, which makes up about 12 percent of the US economy.
Sentiment among manufacturers remains bullish, a survey last week showing a measure of factory activity rising in February to its highest level since May 2004. But supply constraints and labor shortages are emerging, which could hurt factory output.
In January, orders for machinery fell 0.4 percent, the biggest drop since October 2016, after rising 0.6 percent in December.
ROBERT Dingemanse has heard the comparisons many, many times. The Jetsons, Harry Potter, James Bond.
As CEO of a Dutch company developing a flying car, he’s used to curious people whose only frame of reference for his new vehicle comes from cartoons or movies.
But as of this week, Dingemanse’s dream of letting commuters (albeit well-heeled ones) choose whether to drive or fly to work comes a significant step closer. He is unveiling the first production model of the PAL-V Liberty, a three-wheeled, two-seat car and gyroplane rolled into one, at the Geneva motor show.
“Flying cars have been in movies many, many times and they will be available next year,” Dingemanse said at an airport near the southern Dutch city of Breda as he stood next to a sleek, black prototype of the PAL-V Liberty.
The PAL-V Liberty is one of several flying cars in development around the world such as The Transition, a folding wing two-seater being developed by US-based Terrafugia, and an all-electric vertical take-off and landing jet being developed by German startup Lilium.
Carlo van de Weijer, director of Eindhoven’s Technical University’s Smart Mobility program, doesn’t see flying cars as much more than a niche market.
“It’s not really going to be a substantial part of the total mobility industry,” he said. “It’s a nice gadget to combine it with a car so ... it might be a successful company in selling quite a few,” he said of the PAL-V.
In the air, the PAL-V is pushed forward by a rear mounted propeller driven by two engines. It is stabilized by a larger roof-mounted rotor that bolsters safety.
“The rotor is not powered,” Dingemanse said, “so it’s actually a parachute which is always available.”
Its makers say the PAL-V will drive at up to 170 kilometers per hour, fly up to 180 kmh and can fly about 500 kilometers on a single tank of regular unleaded gas.
Land it and the rotor and propeller fold away, the tail retracts and the PAL-V is ready to drive. Switching from road to aircraft mode takes about 10 minutes including performing the necessary checks, the company says.
With a price tag expected at around 500,000 euros (US$615,000) for the first production run of 90, the flying cars are not for everybody, but Dingemanse said he has plenty of buyers lined up. They will have to become certified gyroplane pilots to take their PAL-V into the sky and the company is offering training courses, too.
Just don’t expect this flying car to lift off vertically if it gets caught in a traffic jam. The PAL-V needs a short runway or grass airstrip to take off and land.
With the first production model of the car now ready, the company can begin the final stages of certification with road and aviation authorities in Europe and elsewhere.
CHINA’S ubiquitous WeChat social media platform has crossed the 1 billion accounts mark as its messaging, game and shopping services attract more and more users.
The symbolic threshold was announced by Pony Ma, CEO of its parent firm Tencent, on the sidelines of China’s parliamentary session yesterday.
The all-in-one app, known as Weixin in China, is a daily necessity for most Chinese, bringing together messaging, social media, mobile payment, games, news and other services.
Half of WeChat users spend over 90 minutes daily on the app.
In its last company results in September, Tencent had reported that WeChat users had opened 980 million accounts, a 16 percent increase from the previous year.
“WeChat’s worldwide monthly active users have surpassed the critical one billion mark,” said Ma, who is a delegate at the two-week session of the National People’s Congress.
“In the future we hope to use technological innovation to push forward the next developmental step of reform and opening,” Ma said.
He was referring to China’s economic liberalization policy that has fueled four decades of breakneck economic growth.
Although Ma said WeChat’s monthly active users had crossed the one billion threshold, a company spokesman said he was referring to its total number of accounts.
Still, the one billion figure indicates the huge user base which Tencent has built up both inside and outside China for the app.
It compares with 2.1 billion monthly active users on Facebook and 1.5 billion on its messaging app WhatsApp.
The popularity of WeChat — and profits from its addictive mobile games — have pushed Tencent’s earnings and share price sharply upwards.
The company surpassed Facebook in market value last year as it became the first Asian firm to break into the US$500 billion league, while the 47-year-old Ma has rocketed to near the apex of China’s rich list.
Another popular feature of WeChat is its payment service, which allows people to pay at restaurants, buy goods from shops or even send money to friends.
Most WeChat users are based in China’s mainland, though Tencent is trying to gain customers in other countries.
THE chief of the International Energy Agency said on Monday that China will continue to be a main driving force for the growth of global oil demand.
Fatih Birol, executive director of IEA, said in a press conference at the CERAWeek by IHS Markit that “China continues to be the main driver of global oil demand growth.”
In 1983, Cambridge Energy Research Associates was founded in Cambridge, Massachusetts, the United States. Each year, CERA clients gathered for a few days in Houston, the US energy capital, to attend the executive conference where they gained insight into the energy future while connecting with their peers. Over time, the program was expanded to five days of informative sessions and networking opportunities — and named CERAWeek.
This year’s CERAWeek started on Monday in Houston. The annual energy conference features presentations and discussions by energy industry and government leaders. The theme for this year’s event is “Tipping Point: Strategies for a New Energy Future.”
Birol added that India follows China in terms of growth in the demand for oil, and together the oil demand of those two countries accounts for about half of the growth in global oil demand.
He said China’s demand is weakening, due to saturation and new Chinese policies regarding pollution mitigation.
SHANGHAI stocks closed up yesterday as investors believe China’s GDP growth target will be met, and the country will continue to lure foreign investment.
The Shanghai Composite Index rose 1 percent to close at 3,289.64 points.
Investors were lifted by the National Development and Reform Commission’s remarks at a press conference in Beijing yesterday that China will be able to meet the 6.5 percent growth target for its gross domestic product in 2018.
“We are confident of achieving the growth target of 6.5 percent this year. The 6.5 percent growth target of 2018 is in line with expectations,” He Lifeng, head of NDRC, said at the press conference. "The commission is also taking a series of measures to boost investment in the real economy. In 2018, the commission will further promote private enterprise.”
Ning Jizhe, deputy head of the NDRC, said at the same press conference that “in order to promote steady growth of foreign investment, the commission will relax market access, facilitate investment and encourage entry of foreign capital in more regions.”
Ning also said China will open the door wider to foreign investment in the services and manufacturing.
Yang Quan Coal Industry Group Co Ltd surged 9.24 percent to 8.87 yuan (US$1.40), Gree Real Estate Co Ltd rosed 7.96 percent to 5.83 yuan and Top Choice Medical Investment Co Inc added 6.61 percent to 40.99 yuan.
COMPANIES now have a new channel to finance their Belt and Road projects as China has introduced Belt and Road bonds to fund the massive initiative.
Zhejiang-based Hengyi Petrochemical Co on Monday issued 500 million yuan (US$79 million) of three-year B&R corporate bonds on the Shenzhen Stock Exchange.
The proceeds from the bonds will be used to fund the company’s petrochemical project in Brunei, it said in a statement to the bourse.
This came after China allowed domestic and overseas companies as well as government-backed institutions in countries along the B&R to issue such bonds via the Shanghai and Shenzhen stock exchanges.
The China Securities Regulatory Commission said on Friday that it had approved applications from seven domestic and overseas firms to issue a combined 50 billion yuan in B&R bonds to fund the initiative.
Proposed by China in 2013, the Belt and Road initiative aims to build trade and infrastructure networks connecting Asia with Europe and Africa based on ancient land and maritime trade routes.
Chinese companies have built 75 zones for economic and trade cooperation in 24 countries along the B&R routes, contributing more than US$2.21 billion of taxes and creating almost 209,000 local jobs.
Jiang Chao, senior researcher at Haitong Securities, sees B&R bond issuances to rise.
THE Industrial and Commercial Bank of China became the biggest bond issuer on Nasdaq Dubai after listing two new bonds yesterday, Dubai International Financial Center said.
The two fixed income securities, worth US$700 million each, bring the total value of the ICBC listings on Nasdaq Dubai to US$3.56 billion in seven issuances, noted DIFC, the international exchange of the biggest financial free zone in the Middle East.
ICBC, the world’s largest bank by assets, set up its Dubai (DIFC) branch in 2008, which is the first branch set up in the Middle East by a Chinese bank.
“The listings underline the strong financial and economic relationship between Dubai and China, which is the largest trading partner of the United Arab Emirates,” DIFC said in a statement.
A construction made of Lego bricks is pictured at the Lego headquarters in Billund, Denmark yesterday, on the sidelines of the company’s financial statement for 2017. Lego’s sales fell last year for the first time since 2004 as the Danish toymaker struggled with tough retail markets in Europe and North America, highlighting the challenges facing the new chief executive. Sales fell 8 percent to 35 billion Danish crowns (US$5.8 billion) in 2017, compared with a 6 percent increase in 2016 and a far cry from the 25 percent growth achieved in 2015.
Japan H2 Mobility President Hideki Sugawara (5th left) and representatives of its joint establishment companies hold hands at a joint press conference in Tokyo yesterday. Eleven top Japanese carmakers said yesterday they were teaming up to nearly double the number of hydrogen stations in Japan. The Japan H2 Mobility venture aimed to develop hydrogen stations for fuel cell vehicles.
CHINA’S services activity eased in February amid cooling demand but an index measuring the activity level still ended in positive territory, according to a private report yesterday.
The Caixin China General Service Purchasing Managers’ Index inched down to 54.2 last month from 54.7 in January, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.
A reading above 50 signals growth while one below 50 means contraction.
The report said that despite slowing expansion since January, the growth in services activity held close to January’s 68-month record and remained solid generally. The overall Chinese business activity still remained in positive territory in February.
The growth in new orders fell slightly across the service sector in February from a month earlier.
Employment continued to rise for the 18th consecutive month to meet business requirements but the pace was slower than in January.
“The input prices index declined from the previous month’s high, but the index for prices charged unexpectedly moved up, indicating the profitability of services business was moving in a positive direction,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group.
The future output expectations index, which reflects services’ outlook for the next 12 months, increased, according to the report.
Released last week, the Caixin manufacturing PMI inched up to a nine-month high at 51.6 in February from 51.5 in January.
The Caixin Composite PMI, which covers both manufacturing and services, came in at 53.3 for February, down from January’s high of 53.7, as manufacturing output and services business activity indices fell from the previous month.
Meanwhile, the official non-manufacturing PMI released last week also dipped 0.9 from January to 54.4 in February but was 0.2 higher than the same month last year.
The official non-manufacturing PMI survey covers 4,000 large and small companies, while the Caixin service PMI measures over 400.
The services sector contributed to over half of China’s economy in recent years as it is transforming its investment-driven economy to a consumption-powered model.
CHINA aims to get its home-grown, overseas-listed companies to float on the domestic exchanges through the depositary receipts route, people with knowledge of the matter said, in a plan that would pit Shanghai and Shenzhen against Hong Kong in the battle to host China’s technology giants.
The move forms part of efforts by China to counter the trend of a large number of its domestic tech companies opting for New York or Hong Kong listings instead of their home market, one of the people said.
The guidelines for China depositary receipts, similar to American depositary receipts, are likely to be finalized in the second half of this year by China’s securities regulator, said the two people.
The China Securities Regulatory Commission will start accepting CDR applications from interested firms toward the end of the year, they said, declining to be identified due to the sensitivity of the matter.
A depositary receipt is a financial instrument representing a firm’s publicly traded shares. Trading in depositary receipts rather than the underlying shares reduces administration and transaction costs, both for companies and for investors.
These receipts represent ownership of a set number of company shares that can be listed and traded independently from the underlying stocks, and are often used by emerging market companies to raise capital in the United States and London.
The CSRC plan, if implemented, could give Chinese investors access to leading overseas-listed domestic tech companies including Alibaba Group Holding Ltd, Baidu Inc, JD.com Inc, and Tencent Holdings Ltd.
HOME buyers and real estate developers’ hopes were raised last week following a recovery in the market after the Spring Festival holiday.
The area of new homes sold, excluding government-subsidized affordable housing, jumped 175.2 percent from the previous week to about 71,000 square meters during the seven-day period ending on Sunday, according to a report released today by Shanghai Centaline Property Consultants Co.
The city’s outlying Jiading District transacted around 16,000 square meters of new homes last week. It was closely trailed by the remote districts of Chongming and Qingpu, where sales both stayed below the 10,000-square-meter threshold.
“The market seemed to be well on its track to recover and we can expect a major rebound in both sales and supply this month if momentum is maintained,” said Lu Wenxi, senior manager of research at Centaline. “On the policy side, we don’t anticipate further tightening at least in the near term.”
The average cost of the new homes rose 15 percent week on week to 44,423 yuan (US$7,010) per square meter, Centaline data showed.
Last week’s top four best-selling projects all sold for under 40,000 yuan per square meter and only one out of the 10 most popular developments costs over 50,000 yuan per square meter.
A residential project by Tahoe Group on Changxing Island in Chongming District remained the most sought-after development after selling 8,242 square meters, or 75 units, for an average 30,437 yuan per square meter.
Two projects with 75,000 square meters of new houses were launched for sale last week, up 57.4 percent weekly, according to Centaline data.
APPLE Watch users in the Chinese mainland will be able to enjoy cellular services from today, according to a China Unicom source.
Apple and its partner China Unicom will debut the new eSIM service tomorrow, which allows Watch users to access Internet services independently, Shanghai Daily learned yesterday. Shanghai, Tianjin, Guangzhou, Shenzhen, Zhengzhou and Changsha will be first batch of cities offering the service. A ceremony will be held in Shanghai tomorrow to welcome the service, the source said yesterday.
Apple Watch users can access cellular services in “selected cities” initially and nationwide later this year, said Apple China website.
A cellular connection or eSIM technology is the biggest new feature on the latest Apple Watch, which allows people to use the Watch independently of the iPhone. The eSIM tech marks one of the most important tech upgrades and is a major selling point of the device.
But no China’s telecommunication carriers have supported the service since its debut in September.
CHINESE banks saw a surge in mobile payments last year, official data showed yesterday.
Banking institutions handled 203 trillion yuan (US$32 trillion) in mobile payments in 2017, up 28.8 percent, according to the People’s Bank of China.
A total of 37.6 billion payments were made through mobile banking services in the period, an increase of 46.1 percent, the PBOC said.
China’s mobile payment sector has seen rapid development, driven by improved Internet infrastructure, increased use of mobile phones and innovation of financial services.
In 2017, bank card transactions in China rose 2.7 percent to 762 trillion yuan, while the number of bank cards in use surged 9.3 percent to 6.7 billion by the end of 2017, according to the PBOC.
CHINA’S manufacturing sector rose modestly in February to a nine-month high, bolstered by firmer client demand and increasing prices, according to a private survey released by Caixin yesterday.
The Caixin China General Manufacturing Purchasing Managers’ Index, an indicator of manufacturing activity, climbed to 51.6 in February from 51.5 in January, notching a peak since August last year, the survey conducted by financial information service provider Markit and sponsored by Caixin Media Co showed.
The index showed continuous improvement in business conditions across China’s manufacturing sector, pushing it further above the 50-point threshold separating expansion from contraction.
“This suggests that the durability of China’s economy will persist,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group.
The increase was backed by increases in output and prices, with output across the manufacturing sector rising at a modest rate due to growing new orders amid firmer client demand, the survey showed.
Total new orders placed with Chinese manufacturers grew slightly faster from January, led by consumer and intermediate goods sectors.
That may suggest an upbeat outlook for China’s economic growth, as demand generated at the beginning of the year would set the direction for the whole year, Zhong added.
Meanwhile, output prices in the sector rose for nine straight months by February, “driven by higher costs caused by more costly raw materials, especially steel, copper and chemicals”, the survey showed.
The survey results came a day after the official manufacturing Purchasing Manager’s Index — which fell to 50.3 from January’s 51.3 — was published by the National Bureau of Statistics. The private survey compiles more data from light industry and private companies, while the official survey focuses more on larger and state-owned firms.
While the larger state-owned firms posted the sharpest drop over six years due to suspension of work during the Chinese New Year holiday, private businesses kept bolstering the economy, with companies making active preparations to start work in March, Zhong said.
CHINESE tourists are using mobile payment overseas far more frequently than foreign counterparts, according to a survey, which added that more than 90 percent of Chinese tourists would use mobile payment overseas given the option.
The joint survey, conducted by Nielsen and Alibaba's payment affiliate Alipay, showed that about 65 percent of Chinese respondents have used mobile payment while traveling overseas, compared with only 11 percent of non-Chinese tourists.
As many as 93 percent of the Chinese tourists said they will consider using mobile payment more frequently if more overseas merchants support the use of Chinese mobile payment brand in future, with 91 percent suggesting that if indeed overseas merchants support the use of Chinese mobile payment brands, it will only increase their desire to shop.
The survey spoke to 2,009 Chinese respondents aged between 20 to 50 who have traveled overseas in the past year and 613 foreigners traveling to overseas destinations.
According to the survey, the average spending of Chinese tourists during one overseas trip was US$5,565, and the figure is expected to increase by 3 percent to US$5,715 this year.
MORE executives of Chinese firms believe global economic growth will improve in 2018, according to a report released by PwC yesterday.
The survey by the multinational services firm found that 69 percent of executives in China expect faster global economic growth over the next 12 months, against 31 percent last year. This outstripped the optimism by global CEOs, with a record 57 percent of them believing the economy will improve, up from 29 percent last year.
“Looking at the global markets, our survey results found that in terms of ranking the US and China among attractive markets for growth, the attractiveness of China is stable,” said SiuFung Chan, Deals Strategy Leader of PwC China. “Executives on the mainland told us that the US and Hong Kong continue to be the top two growth markets. And what’s different this year is that Japan has replaced Germany as the other top growth market.”
The vast majority of Chinese respondents (81 percent) expect a world of regional trading blocs rather than a single global marketplace in the future, while 60 percent also expect to see greater fragmentation as opposed to political union.
Despite this, 70 percent of China CEOs believe there will be greater harmonization of global tax rules, compared to 41 percent for the global average. This may partly reflect the extensive tax reform process under way in China, the report said.
AN extremely rare Qing Dynasty (1644-1911) bowl — one of only three known to exist — is expected to fetch US$25.6 million and could even break the record for Chinese ceramics, auction house Sotheby’s said yesterday.
Measuring 14.7 centimeters in diameter, the dainty pink bowl is decorated with falangcai (painted enamels combining Chinese and Western techniques) and flowers, including daffodils which are not typically depicted on Chinese porcelain.
Hong Kong’s auction houses have seen frenzied bidding among Asian buyers in recent years, with sales of diamonds, handbags and ancient ceramics shattering world records.
Sotheby’s Hong Kong expects the Qing Dynasty bowl, used by the Kangxi Emperor in the 1720s, to make history again in an upcoming sale on April 3.
“Definitely we will see the most important collectors of Chinese porcelain active,” deputy chairman for Sotheby’s Asia Nicolas Chow said. “We will see quite a battle this season.”
The bowl was created in an imperial workshop within Beijing’s Forbidden City by a small team of craftsmen, with the help of Jesuits from Europe, according to Sotheby’s.
Last year, a 1,000-year-old bowl from the Song Dynasty sold for US$37.7 million, setting a record for Chinese ceramics.
NEW home buying sentiment dipped to its lowest level in Shanghai in six years as the weeklong Spring Festival holiday kept most buyers sitting on the sidelines.
The area of new residential properties sold, excluding government-funded affordable housing, totaled 204,000 square meters in February, a month-on-month plunge of 59.2 percent and a year-on-year decrease of 43.8 percent, according to a report released by Shanghai Centaline Property Consultants Co yesterday.
“That was the lowest monthly transaction of new homes in Shanghai since 2012, mainly due to the holiday factor,” said Lu Wenxi, senior analyst at Centaline. “The market is expected to recover in March amid gradually improving new supply.”
Average cost of new homes, meanwhile, fell 1.8 percent from January to 42,544 yuan (US$6,706) per square meter, as projects in remote areas of the city targeting budget-tight clients remained the most popular.
Citywide, a residential development by Tahoe Group in outlying Changxing Island, Chongming District, outperformed all counterparts with monthly sales hitting 252 apartments, or 25,491 square meters. Average cost of the project stood at no more than 30,000 yuan per square meter.
It was closely followed by a project in suburban Jiading District, which sold 179 units, or 16,561 square meters, for a similar price point.
On the supply side, about 96,000 square meters of new houses spanning four projects were released on to the local market last month, a plunge of 78.2 percent from January and a dive of 66.4 percent from the same period a year ago, according to Centaline data.
CHINESE stocks rebounded from earlier losses as consumer and banking firms rose, after a private survey showed the country’s factory growth rose to the highest level in six months in February.
The benchmark Shanghai Composite Index ended up 0.44 percent to 3,273.75 points yesterday, recovering from losses in the morning session, with small caps also leading the gains.
Growth in China’s manufacturing sector picked up to a six-month high in February as factories rushed to replenish inventories to meet new orders.
Everbright Securities rose 1.39 percent to 13.09 yuan and China Merchants Securities edged up 0.53 percent to 17.19 yuan. Ping An Insurance Group Co jumped 1.73 percent to 68.93 yuan.
Real estate developers went south. Gemdale Corp sank 3.98 percent and China Vanke Co lost 0.89 percent.
Retailers and consumer goods companies led the gains with Suning.com Co picking up 0.8 percent to 12.60 yuan and Joyoung Co adding 1.28 percent to 17.47 yuan while Aucma Co Ltd rose 1.86 percent to 4.37 yuan.
Bank of China International said in a research note that the current liquidity situation is still favorable and fundamentals remain stable.
THE 28th East China Fair, the largest regional trade fair in China, opened in Shanghai yesterday.
Nearly 4,000 Chinese companies and more than 460 overseas businesses are taking part in the four-day event. Over 5,700 booths, arranged under five categories from garments to modern lifestyle, cover an exhibition area of 123,600 square meters.
A memorandum on trade facilitation and cooperation among Belt and Road countries was signed on the first day.
Customs figures show China achieved a trade volume of 7.37 trillion yuan (US$1.14 trillion) with Belt and Road countries in 2017, accounting for 26.5 percent of the country’s total foreign trade.
The annual fair, established in 1991, is regarded as an important barometer of China’s foreign trade.
IN a bid to further promote the development and commercialization of intelligent and connected vehicles, Shanghai yesterday issued the country’s first batch of licenses allowing testing of autopilot vehicles on public roads.
China’s largest automaker SAIC Motor Co and Shanghai-based electric carmaker NIO received the licenses.
The licenses will allow the two companies to test their ICVs on a 5.6-kilometer stretch of public road in suburban Jiading District.
Testing features include identification and response to speed limit information, traffic light identification, identification of pedestrian and non-motor vehicle, lane keeping and other functions. The licenses are effective from March 1 to May 29, 2018.
“Shanghai is going to further accelerate testing, application, research and development of intelligent and connected vehicles. The city will seize opportunities, take the initiative to meet challenges, boost innovation and speed up the industrial development of high-end, electric cars and intelligent vehicles,” said Huang Ou, vice chairman of the Shanghai Commission of Economy and Informatization.
“Shanghai will open more roads for testing smart cars,” said Huang.
The license came after Baidu boss Robin Li test drove the company’s autonomous vehicle on Beijing’s open roads in July last year, causing controversy as there were no rules regarding such a test in the country.
Cao Guangyi, political commissar of the Shanghai traffic police, said police would pursue the responsibility of test drivers in cases of road accidents involving smart cars under road tests.
The city yesterday also released a basic guideline on public road test rules for ICVs. The guideline will help in better regulating and managing road tests of such vehicles and meet auto companies’ testing needs on public roads.
According to the guideline, auto companies are required to establish a remote monitoring data platform for their testing vehicles, with data being accessed by data platform of a third-party organization. Carmakers need to purchase traffic accident insurance of at least 5 million yuan (US$788,034) per vehicle or have a letter of compensation guaranteeing the same amount. Test drivers should have more than 50 hours’ experience of automated driving systems, 40 hours of which must be driving experience for applied projects before testing on public roads.
Shanghai is the first city in China to push forward road tests of ICVs from enclosed areas to public roads. Before, testing of such vehicles was allowed only in special closed areas such as the National Intelligent Connected Vehicle Shanghai Pilot Zone.
“Shanghai has a good foundation and environment in terms of development of intelligent and connected vehicles. The automobile industry is an important part of the real economy and supports Shanghai’s economic development. The city will speed up the construction of advanced manufacturing and further promote Shanghai manufacturing,” Huang said.
Shanghai’s effort is also part of China’s ambitious plan to become a world leader in the development of ICVs. The government hopes that half of new vehicles will be equipped with driver-assistance features by the end of 2020.
Li Lin, chief engineer of strategy and business planning department of Shanghai International Automobile City, said road testing of ICVs is expected to further enhance auto makers’ technology and testing capabilities. “A real traffic environment is important for intelligent and connected vehicle testing. Vehicle testing on public roads will support rapid development of automated driving vehicle technology.”
Rong Wenwei, general manager of Shanghai International Automobile City, said: “As the first step today we conducted road tests of intelligent and connected vehicles on 5.6 kilometers of public road in Jiading District. In the future, Shanghai will gradually extend the range of road tests to cover the entire Anting Town based on technology progress, traffic risk assessment and other considerations. The expansion will also cover urban and highway scenarios,” Rong said.
Zhang Cheng, general manager of research and advanced technology department of SAIC Motor Co, said that road test will bring technology improvement and boost enterprises’ research and development level.
Qin Lihong, co-founder and president of NIO, said: “The license provides a legal basis for us to test intelligent and connected vehicles on public roads. It will also greatly promote our research and development of automated driving system.”
CHINA yesterday expressed its strong displeasure with US steep import duties on aluminum products from China, with an official saying that the country will take “necessary measures” to defend its interests.
“The United States ignored rules of the World Trade Organization and seriously damaged the interests of Chinese aluminum foil exporters,” Wang Hejun, head of the trade remedy and investigation bureau under the Ministry of Commerce, said in an online statement.
The US Department of Commerce on Tuesday announced a final ruling to impose stiff anti-dumping and anti-subsidy duties on Chinese aluminum foil.
China has accused Donald Trump’s government of disrupting global trade regulation by taking action under US law instead of through the WTO.
In the investigations, the US still treated China as “a non-market economy” based on its domestic laws and used the “surrogate country” approach to calculate unreasonably high anti-dumping duties ranging from 48.64 percent to 106.09 percent, Wang said.
Under the “surrogate country” approach, importing countries can easily adopt trade remedies by using production and price data in a third country to calculate the degree of dumping. It expired on December 11, 2016, according to the protocol on China’s accession to the WTO nearly two decades ago.
Wang said the anti-subsidy duties ranging from 17.16 percent to 80.97 percent were also groundless. “The US Department of Commerce wrongly identified Chinese raw material providers and financial institutions as ‘public institutions.’”
“China will take necessary measures to defend its interests in response to the wrong practice of the United States,” Wang said, without providing more details.
The US has said aluminum foil imports from China jeopardize its domestic industries.
Many US businesses withdrew from aluminum foil production to direct more resources into other aluminum markets that were more profitable more than 20 years ago, Wang said.
“Dropping US aluminum foil output and shrinking market shares are attributed to the choices of US producers, rather than imports.”
Instead of reviving domestic industries, the unreasonable, excess trade remedy measures by the US will curb domestic employment and harm the benefits of US consumers, Wang said.
The independent US International Trade Commission is due to vote in April on the separate question of whether domestic industry has been harmed by the imports.
Should the ITC fail to find in the affirmative, the tariffs will be canceled. The commission rarely blocks the imposition of tariffs.
The US Department of Commerce claims to have launched 102 such trade cases, nearly doubling the number of actions brought by the prior administration during the same period.
THE number of Chinese billionaires pulling away from the United States is growing every year with as many as 819 billionaires from China, compared with 571 from the US, the Hurun Rich List showed yesterday.
A total of 2,694 billionaires from 69 countries and regions are included in the list — up 437 from a year ago. Among them, 567 are new entrants, with 210 from China.
Their total wealth increased 31 percent to US$10.5 trillion, the report said, adding that the wealth was still concentrated in the hands of few people. The combined net worth of the Chinese billionaires was US$2.5trillion.
“A boom in China, a weak dollar and a 26 percent hike in the Nasdaq have led to a surge in dollar billionaires across the world,” said Rupert Hoogewerf, Hurun’s chairman and chief researcher of the report.
Global economic growth recorded the fastest pace since 2011, adding 3 percent last year, and a significant acceleration compared with 2.4 percent the previous year.
China and the US made up over half of the billionaires in the world. Beijing is now the undisputed billionaire capital of the world, adding 37 to 131 billionaires.
Two years ago, China and the US were neck-and-neck with 534 and 535 billionaires, respectively, with China going through an amazing period of entrepreneurship.
There are 85 billionaires aged 40 or under, seven people more than last year, among them 47 are self-made while 38 inherited their wealth.
China also leads the world in terms of self-made billionaires and is home to 80 percent of the world’s self-made female billionaires.
Tencent Chairman Ma Huateng is the highest ranking Chinese billionaire, rising eight positions to 15th on this year’s list. His wealth more than doubled after Tencent’s share prices soared last year.
Billionaires’ wealth from TMT (technology, media and telecom), real estate, manufacturing and investment account for 44 percent of the cumulative wealth. Real estate has generated the most number of billionaires (164), followed by manufacturing (159) and TMT (105).
SUN Yafang, chairwoman of tech giant Huawei, topped Forbes China’s list of 100 outstanding businesswomen whose firms have created a total market capitalization of more than 7 trillion yuan (US$1.1 trillion).
Sun replaced Dong Mingzhu, president of Gree Electric Appliances, who was No. 1 last year but dropped to third this year. Sun was credited for building Huawei into an industry leader.
Li Qingping, chairwoman of China CITIC Bank, was close behind in second place. Li, who has been a banker for more than 30 years, has transformed and improved CITIC Bank, Forbes said.
Song Guangju, chairwoman of Poly Real Estate Group, moved up one place to fourth this year, while last year’s third-placed Lucy Peng, chief executive of Ant Financial, dropped to fifth this year.
Wang Jianjun, president of Shanghai Media Group, was 30th, and Belinda Wong, chief executive officer of Starbucks China, was 34th.
For the first time, Forbes listed 25 most promising Chinese businesswomen in this year’s list. They include Qu Fang, co-founder of cross-border online shopping site Xiaohongshu, Mi Wenjuan, founder of online English education startup VIPKID, and Zhu Haiqin, founder of restaurant chain Mystic South-Yunnan Ethnic Cuisine.
The humanoid “5G Robot”, that uses 5G to mirror the operator’s movements in real-time and perform tasks remotely, is seen performing a live Japanese calligraphy demonstration during the Mobile World Congress in Barcelona, Spain, yesterday.
CHINA’S manufacturing activity retreated in February with the biggest monthly fall since May 2012, the National Bureau of Statistics said on Wednesday.
The official manufacturing Purchasing Managers’ Index, which measures vitality in the manufacturing sector, dropped by 1.0 percentage point in February to 50.3 from January’s 51.3, posting a largest month-on-month decline in 69 months.
The non-manufacturing PMI also dipped from the previous three-month rise, down by 0.9 from January to 54.4 this month but was 0.2 higher than the same period last year.
The general PMI, which covers both manufacturing and services industries and figures for which began to be released this year, retreated to 52.9 from January’s 54.6.
A reading above 50 signals expansion, and below 50 indicates contraction. Despite the sharp decline this month, the manufacturing PMI has been in positive territory for 19 straight months.
“The fall back of PMI in February was normal for the months of Spring Festival each year, with production activities and growth in demand both slowing down,” said Zhao Qinghe, a senior statistician of the bureau.
The period around the Chinese New Year is a slack season for traditional manufacturing production, as most companies suspend operations or slash production and market activities slow down, Zhao added.
The sub-index for production fell sharply by 2.8 points to 52.2, and for new orders it was down to 51.0 from 52.6 in January. Sub-indices for raw material inventory, employment and suppliers’ delivery time were still lower than 50.
Data suggests a weakening of growth momentum in the manufacturing sector, possibly led by a slowdown in property and fixed asset investment, according to Nomura.
Despite the general drop back, Zhao said that the manufacturing PMI still showed an overall expansion trend as high-tech manufacturing extended development under the government’s policies which promote strategic emerging industries.
The PMI for high-tech manufacturing was 54.0 in February, higher than the 53.2 for January and the 50.3 for the whole manufacturing sector.
Economists at Bank of Communications said in a note that the lower PMI can be mainly attributed to seasonal reasons, but the range of the slowdown surpassed expectations.
Prices of some industrial primary and semi-finished products rose rapidly after the holidays, which may indicate a rebound in demand, they said.
MOODY’S Investors Service said yesterday that the issuance of Chinese securitization transactions for all asset classes rose in the 4th quarter of 2017 from a year ago, both in terms of number of deals and value, while loan performance was steady.
A total of 59 transactions with an aggregate volume of 324.5 billion yuan (US$ 51.25 billion) were issued between September 1, and December 31, 2017, under the credit asset securitization scheme managed by the China Banking Regulatory Commission and the People’s Bank of China, four deals and 92.7 billion yuan more than the same period in 2016.
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, auto loans or credit card debt obligations and selling their related cash flows to third party investors as securities.
Investors are repaid from the principal and interest cash flows collected from the underlying debt.
Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS).
Within this total, issuance for residential MBS exceeded all other asset classes, amounting to 96.4 billion yuan, it said.
Moody’s expects overall delinquencies to stabilize with continued economic growth, improving corporate profits and steady commodity prices.
In addition, the average 30+ days delinquency rate for outstanding auto loan ABS stood at 0.12 percent at the end of the 4th quarter, up from 0.10 percent for the previous quarter.
GLOBAL investment in financial technology ventures reached another all-time high in 2017, buoyed by a surge in funding for startups in the United States, United Kingdom and India, according to a report from Accenture.
Financial technology financing throughout the world rose 18 percent to US$27.4 billion in the past year, with the value of deals in the US jumping 31 percent to US$11.3 billion. Deal values almost quadrupled in the UK to top US$3.4 billion and soared nearly fivefold in India to US$2.4 billion.
The number of fintech deals soared from just over 1,800 in 2016 to nearly 2,700 in 2017, as investors continued to scour the globe for innovation in insurance, banking and capital markets startups, according to Accenture’s analysis of data from CB Insights, a global venture-finance data and analytics firm.
“Much of the growth, particularly in the US and UK, has been driven by big new investment flows from China, Russia, the Middle East and other emerging economies,” said Julian Skan, senior managing director in Accenture’s financial services practice.
The rapid rise of ‘insurtech’ ventures was another contributor to the growth as traditional carriers see new opportunities for business, the report said.
The past year saw more deals in China but fewer megadeals in the fintech space, as investors pulled back after pouring billions of dollars into giant-sized transactions, it found.
Fintech funding in China fell 72 percent in 2017 to US$2.8 billion from a record high of US$10 billion in 2016, when several companies, including Ant Financial Service Group, had multi-billion-dollar financing rounds.