SHANGHAI DAILY

PBOC: China’s macro leverage rise likely to slow

Sun, 05/13/2018 - 18:01
China’s macro leverage growth will likely continue to slow, said the People’s Bank of China. The PBOC said in a report that the country’s overall leverage rose to 250.3 percent last year, up by only 2.7 percentage points from a year ago. “The growth rate dropped substantially,” it said. China’s liabilities had been rising rapidly during previous years, with the macro leverage ratio rising 13.5 percentage points each year from 2012 to 2016.The slowdown came after expansion of supply-side structural reform, a firmer economy and the effective implementation of a prudent, neutral monetary policy, the central bank said.The PBOC believes China will be able to continue stabilizing its macro leverage and gradually push forward structural deleveraging, citing supportive factors such as a quality-oriented economic shift and strengthened financial supervision.“The economic transition from high-speed expansion to high-quality development requires higher utilization ratios of debt capital, which will help prompt a downturn in leverage ratios,” the PBOC said. “Stronger financial regulation and improved financial markets will curb shadow banking-driven leverage growth.”The PBOC also expects slower monetization in commodity and factor markets, standardized fund-raising of local governments, and continued reforms to contribute to stable leverage.In 2017, corporate leverage dipped to 159 percent from 159.7 percent a year ago, marking the first drop since 2011.Government leverage fell 0.5 percentage points to 36.2 percent, and household leverage rose 4 percentage points to 55.1 percent, slower than a year ago.

Private space firms drawn to launching rockets

Sun, 05/13/2018 - 18:01
LAUNCHING rockets and satellites has long been the preserve of China’s state-owned aerospace companies, but private space firms are now popping up hoping to find gold in the space dust. A report by Beijing-based investment institution FutureAerospace says more than 60 private Chinese firms have entered the commercial space industry over the past three years, focusing on the production and launch of satellites and rockets. Most of the companies are based in Beijing, home to many space experts, as well as Guangdong, Shaanxi and Hubei provinces, where the manufacturing industry is more developed. This follows a government policy in 2015 to encourage private enterprises in space. Analysts say commercial space activity could help lower costs and increase efficiency of space activities, and accelerate the technology development. Companies like SpaceX, Blue Origin and Virgin Galactic are developing cost-effective carrier vehicles with the aim to make space travel possible for ordinary people. They have also inspired Chinese entrepreneurs. Founded in June 2015, LandSpace, a private rocket-maker, has gained investment of over 500 million yuan (US$78.61 million). Its technicians are former state-owned aerospace industry workers. “This is the best time for China’s commercial space companies. The core advantage of private firms is rapid decision-making and rapid technical upgrading,” said Zhang Changwu, CEO of LandSpace, which signed a contract with a Danish firm this year to provide launch services. LandSpace has designed a small solid-propellant rocket that can carry up to 300 kilograms into a low-Earth orbit. It is expected to come out of the factory in the second half of 2018. The company is now focusing on developing a liquid-propellant engine and a medium-sized rocket fueled by liquid oxygen and methane. LandSpace is not alone in the launch market. When Shu Chang declared three years ago he would produce rockets, his acquaintances said he was crazy. Braving questions and mockery, he set up OneSpace in August 2015. Four months later, SpaceX launched the Falcon 9 rocket and recovered the first stage of the rocket for the first time. Some praise Shu as China’s Elon Musk, but some call him a swindler. With investment totaling 500 million yuan, OneSpace has developed a rocket engine that passed factory trials. Its first mini-rocket, capable of sending a 100-kg payload to an altitude of 800 km, is set to launch soon. “SpaceX has inspired China’s space industry. But I don’t want to duplicate the SpaceX story. I want my company to have our own advantages,” Shu said. Producing satellites is believed to have a lower entry threshold and greater commercial potential than rockets, and has drawn many start-ups and investment. With the development of autonomous driving, the Internet of Vehicles and the Internet of Things, remote sensing and communication satellites are said to have a lot of good prospects. Shanghai-based SpaceOK plans to produce and launch up to 40 small communication satellites in the next three years to help develop the IoT. The value of the global space market is estimated at US$485 billion in 2020, when the value of China’s space market is projected to be 800 billion yuan.

Banks’ profits gain faster

Sun, 05/13/2018 - 18:01
CHINA’S commercial banks saw faster growth in profits for the first quarter of the year, with a stable bad loan ratio, data showed. The banks made combined net profits of 522.2 billion yuan (US$82.2 billion) in the first three months, up 5.86 percent year on year, data from the China Banking and Insurance Regulatory Commission showed. The growth was 1.25 percentage points faster than the same period last year. By the end of March, the non-performing loan ratio of commercial banks stood at 1.75 percent, almost flat from the end of 2017. Outstanding bad loans from commercial banks totaled 1.77 trillion yuan by the end of first quarter, up 68.5 billion yuan from the end of 2017. The CBIRC recently rolled out a set of measures to rein in risk in the banking sector. In a rule released earlier this month, the CBIRC limited commercial bank’s risk exposure.

‘Flying’ with VR tech

Thu, 05/10/2018 - 18:21
A woman tries out a pair of wings with the help of VR technology at the 14th China International Cultural Industries Fair, which opened yesterday in Shenzhen. The five-day event, focusing on fashion design, film and animation, press and publications, art and intangible cultural heritage, has drawn 2,308 organizations, including 130 from abroad, said the organizers. — Xinhua

Weak mood continues for home buyers

Thu, 05/10/2018 - 18:00
SHANGHAI’S existing housing index fell for the fifth consecutive month in April amid sluggish sentiment among home buyers. The index, which tracks month-over-month price changes in 130 areas citywide, lost 16 points, or 0.43 percent, from March to 3,959 last month. Some 13,550 pre-occupied homes changed hands around the city, down 22 percent from March and a drop of 9 percent from the same month a year earlier, Shanghai Existing House Index Office said in a report released yesterday. “It was the lowest April volume registered in six years as the market failed to capitalize on a seasonal rebound in March,” the office said. “As mortgage policies remained tight in the city and price caps continued to be imposed on new residential projects, buying momentum for pre-used residential properties would most likely remain slack while prices might go southward as well.” Citywide, prices of pre-owned homes rose in 14 areas, fell in 93 areas, and were flat in 23 areas, according to the office. The three most sought-after projects were in Huinan in Pudong New Area which sold 356 pre-owned homes, Pujiang in Minhang District where 336 homes were sold and Jinshan New City with 330 homes sold last month. Around 91,819 pre-occupied homes were available for sale as of the end of April, a monthly fall of 12.4 percent, and an annual plunge of 45 percent, according to data compiled by the office.

China’s foreign trade to further stabilize in 2018

Thu, 05/10/2018 - 18:00
CHINA’S foreign trade development is expected to further stabilize and improve in 2018, the Ministry of Commerce said yesterday. “China’s foreign trade continued to stabilize and improve in the first four months this year and the trend will continue through the year,” said Gao Feng, the ministry spokesperson. China’s goods exports rose 6.4 percent year-on-year to 4.81 trillion yuan (US$756 billion) in the January-April period, while imports grew 11.7 percent to 4.3 trillion yuan, resulting in a trade surplus of 506.24 billion yuan, which narrowed by 24.1 percent, data from the General Administration of Customs showed. “Growing global demand amid a recovering world economy, as well as China’s sound economic fundamentals and supply-side structural reforms, have supported foreign trade,” Gao said. In April, the goods trade surplus shrank by 27 percent to 182.8 billion yuan, as exports rose 3.7 percent year-on-year to 1.27 trillion yuan, while imports grew 11.6 percent to 1.09 trillion yuan. “Trade surplus is not our goal,” said Gao, adding the current trade surplus is totally driven by market forces, and trade balance conditions will vary with market changes. China hoped the development of its foreign trade would not only benefit Chinese people, but also the rest of the world and the global economy, to bring the community with a shared future for mankind even closer, according to the spokesman. Speaking of Sino-US economic and trade ties, Gao said China and the United States should strengthen cooperation and properly manage differences. Gao expressed expectations that under the guidance of the two heads of state, China and the United States would earnestly continue in-depth communication under the principles of mutual respect and equal consultation. The two heads of state have reached important consensus on properly solving bilateral economic and trade issues during a phone conversation on May 8, according to Gao. As to possible imposition of additional tariffs on Chinese products announced by the U.S. side, Gao reiterated that China’s position on the issue has not changed and will not change. “China objects to the practices of unilateralism and trade protectionism, and the US should put away its threatening stick,” Gao said, adding that “the Chinese side will resolutely defend the interests of the state and its people.”

Passenger car sales climb 10% in April

Thu, 05/10/2018 - 18:00
PASSENGER car sales in China rose nearly 10 percent annually in April and the growth pace is expected to continue this month, according to the China Passenger Car Association. Around 1.81 million passenger vehicles were sold last month, up 9.6 percent year on year, data from the association showed. April’s growth rate easily beat the average growth rate of 4.5 percent from January to March. Premium cars and new-energy vehicles drove the sales growth in April. Premium car sales jumped 17 percent year on year, said the association whose data didn’t reveal detailed figures. Premium car brands all rose strongly last month in China. Mercedes-Benz sold 57,221 new cars, up 20.1 percent while Audi sold 52,411 vehicles, up 13.5 percent. BMW hasn’t released its sales figures for April. The spotlight of the passenger car market was that sales of new-energy passenger cars propelled 150 percent year on year to 730,145 in April Electric car sales surged 131.8 percent to 56,468 units in April from a year ago while sales of plug-in hybrids soared 243 percent annually to 16,677 units last month. “The sales growth momentum in May is likely to continue from April. Passenger car sales will further grow steadily. We are expected to see a relatively high growth rate of car sales this month,” said Cui Dongshu, secretary-general of the association. The higher number of 22 working days in May is set to fuel the sales pace, said Cui, adding that new models shown at the recent Beijing auto show “will also boost car sales in May.”

Li Ka-shing officially steps down

Thu, 05/10/2018 - 18:00
HONG Kong tycoon Li Ka-shing yesterday officially stepped down as leader of a business empire after showing up as chairman of CK Hutchison and CK Asset at the two companies’ annual general meetings. Li, who will turn 90 in July, was succeeded by his elder son, Victor Li Tzar Kuoi, 53. After retirement, he will serve as a senior adviser of the companies and focus on his charity foundation which was set up in 1980. The changes are in line with his announcement made in March. “Tomorrow, I will continue to go to office as usual. A lot of work needs to be handled in the foundation,” Li said. Born in July 1928 in Guangdong Province, Li started his career in 1950 as a plastic-flower maker and gradually built a global conglomerate in real estate, infrastructure, ports and telecommunications.

Chinese AI patents take 22% of world total

Thu, 05/10/2018 - 18:00
CHINA’S patents in the artificial intelligence industry accounted for 22 percent of the total globally, according to an official with the Ministry of Industry and Information Technology. China had more than 2,000 AI companies by the end of 2017, Wang Xinzhe said at the Global AI Products Application EXPO 2018 in Suzhou, Jiangsu Province. About 150 AI companies and institutions from 10 countries and regions are participating in the three-day exposition, which began yesterday, showcasing more than 1,000 AI products. Wang said China’s AI companies are mainly clustered in the Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Pearl River Delta. Beijing and Shanghai as well as Guangdong, Jiangsu and Zhejiang provinces have more than 100 AI companies each. By 2020, the value of China’s AI industry is expected to reach 150 billion yuan (US$23.6 billion), Wang said.

Google Assistant talks almost like a real person

Thu, 05/10/2018 - 18:00
THE new Google digital assistant converses so naturally it may seem like a real person. The unveiling of the natural-sounding robo-assistant by the tech giant this week wowed some observers, but left others fretting over the ethics of how the human-seeming software might be used. Google chief Sundar Pichai played a recording of the Google Assistant independently calling a hair salon and a restaurant to make bookings — interacting with staff who evidently didn’t realize they were dealing with artificial intelligence software, rather than a real customer. Tell the Google Assistant to book a table for four at 6pm, it tends to the phone call in a human-sounding voice complete with “speech disfluencies” such as “ums” and “uhs.” “This is what people often do when they are gathering their thoughts,” Google engineers Yaniv Leviathan and Yossi Matias said in a Duplex blog post. Google Assistant artificial intelligence enhanced with “Duplex” technology that let it engage like a real person on the phone was a surprise and, for some unsettling, star of the Internet giant’s annual developers conference this week in its home town of Mountain View, California. The digital assistant was also programed to understand when to respond quickly, such as after someone says “hello,” versus pausing as a person might before answering complex questions. Google pitched the enhanced assistant as a potential boon to busy people and small businesses which lack websites customers can use to make appointments. “Our vision for our assistant is to help you get things done,” Pichai told around 7,000 developers at the Google I/O conference, along with an online audience watching his streamed presentation on Tuesday. Google will be testing the digital assistant improvement in the months ahead. The Duplex demonstration was quickly followed by debate over whether people answering phones should be told when they are speaking to human-sounding software and how the technology might be abused in the form of more convincing “robocalls” by marketers or political campaigns. “Google Duplex is the most incredible, terrifying thing out of #IO18 so far,” tweeted Chris Messina, a product designer whose resume includes Google and bringing the idea of the hashtag to Twitter. Google Duplex is an important development and signals an urgent need to figure out proper governance of machines that can fool people into thinking they are human, according to Kay Firth-Butterfield, head of the AI and machine learning project at the World Economic Forum’s Center for the Fourth Industrial Revolution. “These machines could call on behalf of political parties and make ever more convincing recommendations for voting,” Firth-Butterfield reasoned. “Will children be able to use these agents and receive calls from them?” Digital assistants making arrangements for people also raises the question of who is responsible for mistakes, such as a no-show or cancellation fee for an appointment set for the wrong time. At a time of heightened concerns about online privacy, there were also worries expressed about what kind of data digital assistants might collect and who gets access to it.

US sees CPI pick up in April on gasoline price rise

Thu, 05/10/2018 - 18:00
US consumer prices rebounded in April after dipping in March, driven by a surge in gasoline prices and an uptick in housing costs, the Labor Department said yesterday. Food prices also rose, as did medical services, but cell phone services — which had been blamed for the bafflingly low inflation last year — were flat after finally rising in March. The Consumer Price Index, which tracks costs for household goods and services, rose 0.2 percent compared to March, seasonally adjusted. CPI was up 2.5 percent from April 2017, putting it a half point above the Federal Reserve’s inflation target. The monthly increase was pushed by a three percent jump in gasoline prices last month, which recouped a large part of the 4.9 percent decline posted in March, the report showed. Shelter costs were up a more modest 0.3 percent, but that category has a much bigger impact on the headline CPI number and has been trending up in recent months. Food prices also rose 0.3 percent in the month. However, excluding the volatile food and energy components, “core” CPI rose just 0.1 percent and was 2.1 percent higher than the same month of last year. The CPI results were weaker than analysts had been hoping. But for the first four months of the year CPI is running at a 2.6 percent seasonally adjusted annual rate, while core is 2.4 percent, both a full point higher than at this point in 2017, according to Labor Department calculations. Meanwhile, wage data showed hourly earnings, adjusted for inflation, were flat in the month. Fed policy-makers closely watch wage and price data to decide when to raise interest rates, although they focus on a different inflation indicator, the Personal Consumption Expenditures price index. But the CPI remains an important benchmark and the April price data could calm Wall Street, which has been on edge about the possibility the Fed could raise interest rates more aggressively. They might be cheered by one data point in the CPI report: the cost of whiskey at home fell 0.3 percent in April.

Court battle kills Apple plans for US$1b Irish data center

Thu, 05/10/2018 - 18:00
US tech giant Apple announced yesterday it had shelved plans to build an 850-million-euro (US$1 billion) data center in Ireland over a court battle with conservationists seeking to preserve a forest. “Several years ago we applied to build a data center at Athenry. Despite our best efforts, delays in the approval process have forced us to make other plans and we will not be able to move forward with the data center,” the company said in a statement. “While disappointing, this setback will not dampen our enthusiasm for future projects in Ireland as our business continues to grow.” The Silicon Valley giant believed it had got the green light in October when a High Court judge dismissed appeals brought by three campaigners, who were concerned about the environmental impact of the project which was to occupy nearly 166,000 square meters, or roughly 40 Premier League football pitches, in County Galway, west Ireland. But last week the campaigners won their Supreme Court bid for their appeal to be heard, delaying the process even further. Apple said it was “proud of the many contributions we make” to the Irish economy, and insisted it was still “deeply committed to our employees and customers” in Ireland. The project, which was first announced three years ago, would have been the biggest private investment in western Ireland. Apple has its European headquarters based in the southern Irish city of Cork, but has run into problems in the country. The Irish government last month said it was signing a deal for the US tech giant to pay 13 billion euros in back taxes as ordered by the European Commission, which said it had received favorable terms that amounted to state aid. The government claimed that Apple has paid the full amount due to the Irish state from 2004 to 2014 and denies it gave it “selective treatment.” But the European Commission said Apple paid an effective corporate tax rate of just 0.005 per cent on its European profits in 2014 — equivalent to just 50 euros for every million. Paul Keane, founder of Facebook group “Athenry for Apple,” which comprises 6,000 members, called the decision “an absolute hammer blow to the locality and to rural Ireland.” “Thanks to a very poor planning system and objections we are now left in limbo in the west of Ireland,” he said. “The people of Athenry are going to be very angry and upset with government and objectors once they hear the news.” Apple had promised to hide the center in the forest, make good any damage done and use renewable energy to power the center.

Uber may take to the skies

Wed, 05/09/2018 - 18:42
US Federal Aviation Administration’s Acting Administrator Dan Elwell (right) is accompanied by Uber’s chief product officer Jeff Holden as they stand beside a subscale sized model of the Uber flying taxi concept eCRM-003 at the second annual Uber Elevate Summit on Tuesday at the Skirball Center in Los Angeles, California. — AFP

Shanghai to help businesses slash cost burden by US$7.85b

Wed, 05/09/2018 - 18:00
SHANGHAI will help companies and businesses to reduce their cost burden by 50 billion yuan (US$7.85 billion) in 2018 with a series of policies and measures. “In 2018, we will stick to pushing forward the supply-side reforms and focus on streamlining administration and lightening burden on companies to improve the business environment and vitalize the market in Shanghai,” said Ma Chunlei, director of the Shanghai Development and Reform Commission. To meet the 50-billion-yuan target, Shanghai has implemented 18 policy measures in 9 areas to slash cost on businesses. The measures will help cut taxes, lower the ceiling of imposed government funds, lessen charges, reduce costs of labor, energy, financing, and institutional transactions as well as encourage regional pilot programs. One of the measures will help businesses qualify as “small-scale VAT taxpayers” and pay only a 3-percent VAT because the threshold for general value-added tax payers including industrial and business enterprises has been raised from 500,000 yuan and 800,000 yuan respectively to 5 million yuan from May 1. “By now, 368 businesses have applied for the registration” to become small-scale VAT taxpayers, said Li Ming, chief auditor of the Shanghai Bureau of Taxation. “The applications can be accepted until the end of the year.” Also, businesses will now have to pay only twice the amount of the average wage for insurance for the disabled, down from three times. Shanghai has also cut fees for city road repairs, land use for foreign-funded companies, registration for drugs and medical equipment, and testing charges for special equipment. Meanwhile, costs of institutional transactions are reduced in tandem with deepening reform of the administrative approval system. The city has implemented measures to further promote the pilot reform in separating operating permits and business licenses, optimizing administrative approval processes, and promoting the “Internet Plus Government Services” to streamline administration and delegate power to lower levels. In 2017, Shanghai issued 15 policies in six areas and cut over 53 billion yuan in line with deepening supply-side structural reform.

China hopes expo to lift soft power

Wed, 05/09/2018 - 18:00
CHINA hopes to boost its soft power to enhance its influence globally by hosting an Exposition on China Indigenous Brand yesterday that seeks to share Chinese brands with the world. The expo, which will feature an International Forum on China Brand Development, is designed to help domestic companies build influential brands to enhance the country’s overall competitiveness, as well as help transition toward a consumption-driven economy from one relying on investments. Around 800 to 1,000 guests from home and abroad will exchange views and share ideas on the global sharing of Chinese brands at the forum. China aims to use the three-day expo, which ends on Saturday, to build up its soft power to enhance its influence internationally by having well-admired and recognized brands. The expo, hosted by the National Development and Reform Commission jointly with the Publicity Department of the Communist Party of China, the Ministry of Agriculture, and the Ministry of Commerce, is the first of its kind after the State Council last year designated a Chinese Brands Day to be held on May 10 each year. Five sections, Shanghai services, Shanghai manufacturing, Shanghai shopping, Shanghai culture and Shanghai innovation, will feature the history and current situation of Shanghai-origin brands as the city hosts the first China Brand Day. China’s Huawei, Lenovo, Haier, Gree, and Tsingtao Beer have been gaining increasing global influence in recent years. They are beefing up their distribution channels globally to increase the footprint and influence of Chinese products worldwide. A dozen state-owned enterprises and exhibition groups from over 30 cities and provinces will present their latest developments in brand building.

Rising use of blockchain in various sectors

Wed, 05/09/2018 - 18:00
LOGISTICS, government and media industries are among the areas that will benefit most from adapting blockchain technology, according to a joint survey by PwC and VeChain, a blockchain platform that focuses on supply chain management and smart contracts. Retail, education and science are among the industries that are seeing the most impact from the technology, while logistics is viewed as the industry that most naturally fits with the utilizing of blockchain outside of finance. The survey covered about 130 respondents in nearly 20 industries including IT and technology, the service industry, and manufacturing, which examines the application of blockchain in non-financial areas. Respondents also pointed out that the formation of standardized policy to guide the further development of the technology is the most pressing challenge. More than half of respondents believe blockchain will have a significant impact on the business community and as many as 88 percent pointed out “tamper-resistance” as a core feature of the technology. “With people’s increasing awareness and knowledge of blockchain, ‘killer’ applications are sure to emerge, and initially these are most likely to occur outside of the financial sector,” said Sunny Lu, CEO of VeChain.

Bitcoin maker seeks US$1b IPO in HK

Wed, 05/09/2018 - 18:00
CANAAN Creative, China’s second-largest bitcoin mining device maker, plans an initial public offering in Hong Kong to raise US$1 billion, media reported yesterday. If Canaan is listed, it will become the first pure Bitcoin and blockchain-related firm listed in China, which has blocked personal Bitcoin and ICO (initial coin offerings) trading. Hangzhou-based Canaan Creative, which offers Avalon Bitcoin mining machines, plans to issue the IPO in Hong Kong to raise US$1 billion, the South China Morning Post said yesterday, citing an identified sources. Canaan Creative was not available to comment on the issue yesterday. Canaan had previously said it was looking at a listing on the Chinese mainland, Hong Kong or the US. A final decision has not been made and things can still change, SCMP reported. A top China Securities Regulatory Commission official visited the company last month and “welcomed” it to list domestically after the Chinese government’s call to develop domestic chip technologies amid US sanctions against ZTE. “You are essentially a chip firm. You are welcome to issue IPO in the domestic markets,” said Jiang Yang, vice chairman of CSRC.

Banks don’t want to be weakest link in blockchain revolution

Wed, 05/09/2018 - 18:00
BLOCKCHAIN, the cutting-edge technology behind virtual currencies like bitcoin, has the potential to play a disruptive role in the global finance sector, experts say, as banking behemoths seek to connect with its opportunities. While banks could reduce their costs, the gains could eventually shift to consumers who could benefit from quicker and cheaper services. “Any disruptive shock — be it technology, economic or political — tends to result in winners and losers, and blockchain is no different,” said Colin Ellis, managing director for credit strategy at Moody’s. “It could reduce costs for banks but at the same time could foster more competition that would put downward pressure on fees.” A shared, encrypted “ledger” that cannot be manipulated, blockchains offer the promise of secure transactions that allow anyone to get an accurate accounting of money, property or other assets. Much like it underpins trading in bitcoin and other cryptocurrencies, blockchain or so-called distributed ledger technology could also support trading of other assets, thus posing a risk to banks who earn hefty fees helping their clients trade currencies and other assets. Key areas of financial services where blockchain could have an impact are the settlement and clearing of transactions. But a recent report by Moody’s found that while blockchain technology could slash cross-border transaction costs for financial institutions, it would likely ramp up competition among banks. Anish Mohammed, a cryptography expert and academic at Berlin University, told AFP that the losers would be those who failed to adapt to the latest technological trend. “There will be winners and losers, the losers will be those who do not make any changes.” The world’s biggest financial institutions are already experimenting with blockchain, although recent data indicates that they risk lagging behind other sectors in its use. Cheaper and quicker Two months ago, Dutch bank ING and its Swiss peer Credit Suisse successfully traded securities through a blockchain-style network. The pair transmitted 25 million euros (US$29.6 million) of bonds almost instantaneously. The deal would normally have taken one day or more. Ellis believes that international transactions are an area where banks could cut their costs by using blockchain technology. Currently international bank transfers often take several days as several banks are often needed to act as intermediaries. But a blockchain could eliminate the need for those intermediaries, thus speeding service and reducing costs. Santander last month began using a blockchain to allow its retail customers in Spain, Britain, Brazil and Poland to complete international transfers the same or following day. “One Pay FX uses blockchain-based technology to provide a fast, simple and secure way to transfer money internationally — offering value, transparency, and the trust and service customers expect from a bank like Santander,” the bank’s chief executive Ana Botin said at the launch of the service. One Pay FX uses a blockchain service for banks developed by Ripple, a start up firm with offers a cryptocurrency with the same name. Around US$2.1 billion will be invested via blockchain globally in 2018, according to US-based consultancy IDC. One third of that will represent the financial services industry, IDC said. Other notable sectors using blockchain include distribution and services, retail and professional services, and manufacturing and resources. “The technology is still at a relatively early stage” so “it is too soon to know what the final impact will be,” said Ellis. “But it could ultimately make banking cheaper and quicker for consumers,” he concluded.

Manufacturing brands innovative amid reform

Wed, 05/09/2018 - 18:00
CHINA’S continuing supply-side reform has pushed manufacturing brands above consumer and realty brands in innovation value, a survey showed in Shanghai yesterday. The survey, conducted by Fudan University and Shanghai Institute of Corporate Culture and Brand, ranked the 100 most valuable brands out of over 16,000 listed Chinese companies by innovation ability, said Jiang Qingyun, chairman of the department of marketing at Fudan University who led the survey. Urged by China’s efforts in supply-side reform, which aims at upgrading the country’s competitiveness in manufacturing by phasing out inefficient capacity and nurturing high-tech industries, “manufacturing companies, especially those giants, are speeding up innovation faster than many other industries,” Jiang said. They are increasing investment in both scientific research and marketing, which can suggest a company’s competitiveness in strategic actions and business management. “These are the main factors to bolster a brand’s value in innovation, which is the focus of our research,” he said. The latest ranking added 13 manufacturing brands compared with a year ago, with eight manufacturers such as automaker SAIC, China State Construction and China National Petroleum Corp listed among the top 20. By contrast, realty giant Vanke fell to 15th from 7th place, despite a growth in its sales, “as its research and marketing investment didn’t grow as significantly as other brands,” Jiang said. Liquor maker Yanghe fell from 24th to 40th spot, while jewelry brand Chow Tai Fook dropped to 50th from 22nd. While many manufacturers were hurt by a surge of raw material prices over the past two years, “their value in innovation remains robust, driven by supply-side reform,” Jiang said. “They have to do more, such as merging with rivals or taking in new technologies, to keep a place in the market.” The survey is based on public data of the 16,232 Chinese companies listed both domestically and in the US, covering all sectors except financial institutions “as banks normally don’t release data of scientific research,” Jiang said.

AIA and WeDoctor seal health care deal

Wed, 05/09/2018 - 18:00
AIA Group announced a strategic partnership yesterday with China’s leading technology-enabled health care solutions platform WeDoctor Holdings Ltd, aiming to provide innovative quality health and wellness offerings, as well as financial protection solutions for Chinese consumers. With the deal, the insurance giant’s customers will gain preferred access to WeDoctor’s leading health care services including appointment making, online consultation and offline clinics, as well as its network of 2,700 top-tier hospitals, 220,000 doctors, and over 15,000 pharmacies in 30 provinces in China. AIA will become WeDoctor’s preferred provider of life and health insurance solutions. Over 110 million registered customers of the health care service provider will be able to access AIA’s protection solutions in areas where its China company operates, helping to reduce the protection gap for millions of WeDoctor users. AIA said it also made a concurrent minority equity investment in WeDoctor to further solidify the relationship and commitments of their cooperation. Through this partnership, the two companies will combine to develop innovative health and wellness services and protection solutions that will enhance their respective leadership positions in both China and across the Asia-Pacific region, according to John Cai, regional chief executive of AIA Group. Jerry Liao, chairman and CEO of WeDoctor, said the alliance will help expand their international presence “in the years to come” by leveraging AIA’s long history and extensive operations across the Asia Pacific region.

Unit of asset firm gets quota of US$50m

Wed, 05/09/2018 - 18:00
BNP Paribas Asset Management’s wholly foreign-owned enterprise has been granted a Qualified Domestic Limited Partner quota of US$50 million, the company said yesterday. The Shanghai-based QDLP scheme allows global asset managers to raise funds from domestic investors in China to buy overseas assets such as equities and real estate investment trusts. BNP Paribas Overseas Investment Fund Management (Shanghai) Co Ltd will be the first firm under the program to introduce an Environment, Social and Governance-related product to cater to the growing appetite from onshore investors on sustainable investing. “China is a key growth market for BNP Paribas,” said Ligia Torres, chief executive officer of BNP Paribas’s asset management business in Asia-Pacific, “Through this program, qualified high net worth and institutional investors in China seeking to diversify their investments across an expanding range of asset classes and geographies can now access our global expertise as an investment solutions provider.” BNP Paribas Asset Management’s unit became one of the first global asset management WFOEs operating in the Shanghai Pilot Free Trade Zone in December 2014. Since 2004, the French bank’s asset management arm has provided its global clients with access to the Chinese market as one of the largest global Qualified Foreign Institutional Investor managers. In September 2014, the firm received one of the first yuan QFII licenses in France and eurozone.

Expo on green buildings

Wed, 05/09/2018 - 18:00
GREENBUILD, the world’s largest conference and expo dedicated to green buildings, and Shanghai Tower, the second-highest building in the world, will jointly host the second Greenbuild International Conference and Expo in China in October. China’s tallest tower is a perfect venue to host this year’s Greenbuild China expo on October 23-24 because it is an early adopter of green building practices and a LEED Platinum high-rise, said Mahesh Ramanujam, president and chief executive officer of the US Green Building Council, yesterday. The council’s LEED, or Leadership in Energy and Environmental Design, is the world’s most widely used green building rating measurement. Outside of the US, the Chinese mainland ranks No.1 on the council’s list of top countries and regions with 1,240 LEED certified projects spanning over 48 million square meters.

12 startups get funding from Intel

Wed, 05/09/2018 - 18:00
INTEL Capital has invested a total of US$72 million in 12 startups, including three firms from China. The startups are involved in artificial intelligence, cloud, Internet of Things and silicon technologies, said Intel, the world’s top computer chipmaker. The Chinese firms with Intel Capital’s investment include Xiamen-based Reconova, an AI company engaged in computer vision and machine learning technologies, Beijing-based Alauda, a cloud service provider, and Shanghai-based Espressif Systems, a chip designer for IoT products covering tablets, wearables and smart home devices. The latest new funding has brought Intel Capital’s total investment to above US$115 million so far this year, said Intel, which is seeking new business opportunities in mobile and cloud sectors. Intel didn’t provide detailed investment figures.

Major banks lift rates for 1st home buyers

Tue, 05/08/2018 - 18:49
FOUR major Chinese commercial banks have raised their mortgage rates for first-home purchasers in Beijing, a move expected to further cool the local property market. The Beijing branches of the Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China have decided to lift their floor mortgage rates for first-home buyers from 1.05 times to 1.1 times of the central bank’s benchmark interest rate. For a first-home buyer on a one-million yuan (US$157,100) mortgage over 25 years, the rate change means an extra 145 yuan would have to be paid each month. The mortgage rate for buying second homes remains flat at 1.2 times of the central bank’s key interest rate. The four banks said the decision was made in line with market changes and their development plans. Analysts predict that commercial banks might continue to raise mortgage rates as the current level is still comparatively low. Jiang Han, a researcher with Suning Institute of Finance, believes the move will impact property prices.

Shanghai to build up world shopping hub

Tue, 05/08/2018 - 18:49
SHANGHAI will use the first pilot program of tax-free policies to attract more Chinese, who now shop overseas, to do their shopping in the city which has high ambitions to become a world-class shopping hub. A recently-released three-year action plan to create a Shanghai Shopping brand will see the city develop into a testing field and a competitive hub for new business by 2020. The plan will foster consumption as a tool to grow the economy steadily into a high-quality one. “The city will take various measures to build a global consumer market and create commercial activities to match with a global city of excellence to foster an international consumption city with global influence,” said Shang Yuying, director of the Shanghai Commerce Commission, at a press conference yesterday. Although Shanghai has been among the first choice of leading brands to launch their new products, it still trails international cities like New York and Paris for consumption. Shanghai will unveil a program launch ceremony at the end of May to entice more brands to debut or release new products in the city first, Shang said. The city will nurture commercial zones in downtown landmark areas and shopping streets featuring traditional Shanghai style to enhance its allure to global shoppers.

Alibaba buys Daraz to grow overseas

Tue, 05/08/2018 - 18:49
ALIBABA has expanded its e-commerce presence in South Asia after acquiring Daraz to strengthen its globalization footprint. Daraz, which operates online marketplaces in Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal, will be able to leverage Alibaba’s leadership and experience in technology, online commerce, mobile payment and logistics to grow further in the five South Asian markets, said a joint statement yesterday. “Together with Alibaba, we are ready to empower entrepreneurs in the region and to fulfill our promise to offer our customers the best selection of products with a high-level of convenience,” said Daraz Co-CEO Jonathan Doerr. Daraz would keep its brand name after the transaction, whose details were not released. The deal also helps increase Alibaba’s presence in South Asia and drive development there. “We believe that a technology-enabled commerce ecosystem will play a critical role in driving the long term economic development in South Asia,” Alibaba Group CEO Daniel Zhang said. Founded in Pakistan in 2012, the Daraz platform hosts 30,000 sellers and 500 brands and offers about two million products to its five million shoppers. Last month Alibaba’s Ant Financial invested in Bangladesh mobile financial service provider bKash.

China’s exports rebound while trade surplus with US widens

Tue, 05/08/2018 - 18:49
CHINA’S exports rebounded in April and its trade surplus with the United States grew for the first time in five months at a time of escalating friction between China and US over the imbalance. Data released yesterday show exports jumped 21.5 percent from the same month the year before, rebounding from a contraction the previous month due to resurgent global demand. Imports in April also grew more robustly than anticipated, signalling China’s domestic demand is holding up well, good news for policy-makers looking to soften the blow from any trade shocks. Imports expanded 12.9 percent year-on-year in dollar terms, leaving the country’s global trade surplus for the month at US$28.8 billion, a turnaround from a US$5 billion deficit in March. China’s trade surplus with the United States in April widened by 43.8 percent from March to US$22.19 billion. It is the first increase since November. Exports to the US rose to US$36.12 billion in April from US$30.69 billion a month earlier, with the trade surplus with the US widening to US$22.19 billion from US$15.43 billion. From January to April, China’s trade surplus with the US rose to US$80.4 billion from US$50 billion in the same period last year. “The widening China-US trade surplus reflects the difficulty of significantly closing the trade gap between the two countries in the near term, but it is unlikely to obstruct the constructive progress made recently,” said Betty Wang, senior China economist at Australia and New Zealand Banking Group. China’s global exports of steel and aluminium, a major point of contention with Washington and other countries, both rose in April. Exports of electrical products and automatic data processing gained 15 percent and 22.4 percent year on year in April respectively, up from 2.4 percent and 15.2 percent in March. Exports of electronic integrated circuits also continued to grow by double-digits of 25.7 percent annually last month. “We think it may have been due to exporters bringing forward their shipments to avoid near-term disruptions to the supply chain amid the trade tensions,” Wang said. Imports also beat expectations, growing 21.5 percent on-year, beating forecasts of 16 percent growth, and accelerating from a 14.4 percent rise in March. The strong data suggests China’s domestic demand remains resilient. Imports were driven by China’s continued appetite for resources and agricultural commodities as well as high-tech products, especially electronic integrated circuits, which have surged 36 percent since the start of the year. Imports of major commodities, including iron ore and crude oil, rebounded in April as domestic business activities resumed after the Lunar New Year festival. Imports of high-tech products rose by double digits of 27.5 percent year on year in April, an indicator of China’s economic transition from a low-end to a high-end value chain, Wang said. China imported US$94.7 billion of chips in the first four months of the year, taking up nearly 15 percent of total imports and possibly signalling solid growth in electronics exports for at least a few more months.

No to forced retrofit of diesel cars

Tue, 05/08/2018 - 18:49
GERMAN carmakers cannot be forced to retrofit polluting diesel cars unless excessive pollution is caused by deliberate fraud, an expert report being reviewed by Germany’s transport ministry showed yesterday. The expert opinion supports Germany’s current stance of relying on software upgrades rather than compulsory rebuilds of exhaust management systems on cars with high pollution levels. So far, no manufacturer other than Volkswagen has admitted to using software to recognize when a car is being put through an emissions test cycle in order to deliberately mask pollution levels under normal driving conditions. A regulatory clampdown on toxic emissions has, however, revealed several carmakers often exceed pollution limits because they make use of a so-called “thermal window” to legally throttle back emissions filtering systems to protect engines from condensation. German environmental groups argue upgrades to exhaust systems on polluting cars should be made compulsory, but Transport Minister Andreas Scheuer has said software updates to improve the effectiveness of filtering systems is sufficient. The expert group was divided on the cost and merit of retrofits. Retrofitting diesel cars would cost at least 5,000 euros (US$5,935) per vehicle for cars with Euro-5 engines, and the environmental benefits would only become effective in three to four years, some members said. Others calculated retrofits would cost only about 2,500 euros and recommended them as a viable solution. A federal court ruled in February that German cities could ban the most heavily polluting diesel cars from their streets.

Takeda buys Shire in US$62b drugs deal

Tue, 05/08/2018 - 18:49
TAKEDA Pharmaceutical agreed to buy London-listed Shire for 45.3 billion pounds (US$62 billion) yesterday, the biggest yet in a wave of deals sweeping the drugs industry. Assuming it wins the backing of shareholders, the deal will be the largest overseas purchase by a Japanese company and propel Takeda, led by Frenchman Christophe Weber, into the top 10 rankings of global drugmakers. The tie-up crowns a hectic few months of M&A activity as big drugmakers, including Novartis and Sanofi, have brought in promising medicines developed by younger firms. The enlarged group will be a Japanese national champion in pharmaceuticals and a leader in gastroenterology, neuroscience, oncology, rare diseases and blood-derived therapies, used for serious conditions such as hemophilia. Shire has profitable businesses selling drugs for hyperactivity and rare disorders but the size of the deal will make Takeda one of the most indebted drugmakers, prompting Standard & Poor’s to warn of a potential credit downgrade. To pay off debts quickly, Takeda plans to slash thousands of jobs and cut back on duplicated drug research. The deal, struck on the last day Takeda had to make a firm bid, is around 46 percent cash and 54 percent stock, leaving Shire shareholders owning around half of the combination. Shire had rejected four previous offers, due to price concerns and the fact that the Japanese company is proposing to pay for much of the acquisition in stock. Shire investors will receive US$30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda American depositary shares for each share, valuing the offer at 48.17 pounds a share based on the latest price and exchange rate. That is a 60 percent premium to the price before Takeda first declared its interest six weeks ago. “I think it is a good deal for Shire shareholders but not everybody may think that. However, the risk is that if shareholders vote this down then the shares are going to go down a lot,” said Polar Capital fund manager Dan Mahony, who owns both Shire and Takeda stock.

Audi halts A6 output over alleged fixing of controls

Tue, 05/08/2018 - 18:49
GERMAN luxury brand Audi has halted production of its latest A6 model over suspicions it contains software to manipulate emissions controls, local media reported yesterday, as the “dieselgate” scandal continues to dog parent company Volkswagen. Confirming a report in news weekly Der Spiegel, Germany’s transport ministry told AFP it was investigating the use of a new “illegal defeat device” in some 60,000 Audi cars, half of which are driving on German roads. According to Spiegel, the current A6 model is equipped with software that deliberately slows down the use of a special pollution-cleaning fluid in the final 2,400 kilometers of its life span, to avoid drivers having to refill the so-called AdBlue liquid in between regular service updates. But reducing the AdBlue function also drastically lowers its effectiveness in neutralising the engine’s harmful nitrogen oxides, making the diesel cars far more polluting during that time. “An official recall for at least the affected Audi cars registered on German roads is highly likely,” Spiegel wrote, without citing its sources. “Production of the model has been halted in the meantime,” it added. The ministry said its KBA vehicles licensing had opened a probe into suspicions that Audi equipped some 60,000 “A6/A7 models” with a cheating device, “around 33,000 of them in Germany.” Audi said it would release a statement on the matter later yesterday. It’s not the first time the German car industry has been accused of AdBlue tampering, with Daimler and Volkswagen both facing the threat of mass recalls over similar accusations in February. The alleged AdBlue scam differs from the one that sparked Volkswagen’s “dieselgate” crisis in 2015, when the auto giant admitted to installing software in some 11 million diesels worldwide that could detect when a vehicle was undergoing pollution tests and reduce emissions accordingly. Outside the lab however, the cars were vastly more polluting, spewing up to 40 times more toxic gases than legally allowed. The scandal, which affected VW’s own brand cars but also those made by Audi, Porsche, Skoda and Seat, has so far cost the group over 25 billion euros (US$31 billion) in buybacks, fines and compensation, and it remains mired in legal woes at home and abroad.

India eying China for pharma exports

Tue, 05/08/2018 - 18:49
INDIA is committed to promoting its pharmaceutical exports to untapped markets, including China, said Indian companies at a three-day international exhibition of pharma and healthcare which started yesterday. The exhibition has been organized by the Pharmaceuticals Export Promotion Council of India in which more than 650 delegates from 130 countries and regions are participating. China has exempted import tariffs for 28 drugs, including all cancer drugs, from May 1, which was seen as a good news for India’s pharmaceutical industry and medicine exports to China, as it would help in reducing trade imbalance between the two countries in the future. Leading Indian companies participating in yesterday’s event hailed and welcomed China’s move saying it would benefit both sides, as it would address India’s trade imbalance and China would get quality drugs at cheaper prices. Dinesh Dua, the chief executive officer of Nectar Lifesciences Ltd based in Chandigarh in northern India, said that he expected China, which is the second largest drugs market after the United States, would benefit a lot as Indian drugs prices are excellent. Indian firms can do excellent business in the future in China, which augurs well for Indian pharmacompanies, he added. Besides cancer drugs, Dua said, other drugs which India can export to China include “monoclonol antibodies” and also “chemotherapeutic agents” which Indian companies are very successfully making for other countries at a fraction of cost which innovators are making available. “The multinational companies are making available these generic drugs in China as local generic companies can’t make them. India has proven to the rest of the world, so China will greatly benefit by Indian pricing and quality of drugs coming in at a fraction of cost of the MNCs,” Dua said. Indian generics take up 20 percent of global exports by volume.

Artist explores what’s behind the mask

Tue, 05/08/2018 - 18:00
“FAKE i Real Me” is a photographic series by French artist and photographer Corinne Mariaud, who explores the importance of physical beauty and what is hidden behind the mask. The works on display at Art+ Shanghai Gallery not only express the character of the photographed models but also communicate with the artist's own vision. The “Portrait” series, created by Mariaud in Singapore and Seoul, is a highlight. Young women, captured in the photos, symbolize a generation consumed by the desire to possess a “perfect” body. Through the use of makeup and plastic surgery, viewers get to see faces or bodies as a sculptural object or a piece of art. The “Disorder” series features individuals alone or eccentric in a commonplace setting, where they do not behave “appropriately.” Instead, in some of the situations, the individuals seem “dead.” Their bodies remain isolated in the surrounding environment, like an empty shell that has been beached for days. Similarly, in the “Trophees” series, Mariaud again raises the topic on the loss of the “I” in our modern society. The artist portrays the ideal woman as a frozen figure trapped in her appearance — the victim of the stereotypes attached to femininity. The works on display represent the artist's exploration of human identities and their roles in society — a reflection of an ideal and its distorted representation.   Date: Through May 20 (closed on Mondays), 10am-7pm Venue: Art+ Shanghai Gallery Address: 191 Nansuzhou Rd

Ireland committed to strengthening China ties

Tue, 05/08/2018 - 18:00
IRELAND has become a hub for many multinational corporations because of its low taxes and business-friendly incentives. It provides a favorable springboard to the European Union. Shanghai Daily recently interviewed Simon Coveney, deputy prime minister of Ireland and also minister for foreign affairs and trade, with special responsibilities for Brexit. He shared his views on bilateral trade between Ireland and China. Q: What opportunities does Brexit bring to Ireland in terms of finance and foreign trade? A: First of all, we think Brexit is a bad idea that is not going to be good for the European Union, Britain or Ireland. So we need negotiations to try to protect the close economic and political relationship between Britain and Ireland, and also between Britain and the EU. Having said that, Britain is leaving the European Union. I think there will be opportunities for Ireland, particularly in terms of hosting companies and businesses that want to be part of the European single market, that want an English-speaking country, that want a country based on a common law system and that want a stable country in terms of trade. So I do think there are opportunities in financial services, high-end manufacturing, technology and research, particularly around businesses that rely on data and data protection. Q: According to Eurostat, China ranks sixth among your major trade partners in imports and eighth in exports. Does Ireland want to enhance trade with China and other Asian-Pacific regions in the future? A: Total trade between Ireland and China increased by 16 percent between 2015 and 2016, to 12.9 billion euros (US$15.34 billion). It is expected that 2017 statistics will show a rise to about 15 billion euros. That would mean that overall trade between Ireland and China has more than doubled between 2013 and 2017, led mainly by a jump in Irish exports. Priority sectors for Ireland in China are agriculture, education, financial services, science and technology, and culture and tourism. It is significant that the areas of innovation, green technology, higher education, research and technology are all strongly prioritized in China’s national development plan. These priorities match very closely with Ireland’s major strengths. Sino-Irish complementary areas will remain strong as the Chinese economy continues to grow. Therefore, Ireland will remain well placed to continue to grow its trade and investment links with China. Q: How do you view China’s Belt and Road Initiative? A: We see this as part of China’s policy to open up to the rest of the world, which is a good news for China and also for Europe and Ireland. Our relationship with China has been very positive in recent years. We now have about 3,500 Chinese students in our universities, and we’re starting to see Irish students in Chinese universities, particularly in Shanghai. The opening-up policy is very positive, particularly at a time when some countries in the world are moving away from free trade. The size and scale of China is so significant that it is going to be a big part of shaping the global economy in the future. The Belt and Road Initiative is a big part of that. So I think we are at the start of what can be a very positive journey in terms of mutual benefit for both China and Ireland. Q: A promotional meeting for the November China International Import Expo was held in Dublin on March 7. Do you think this kind of exhibition helps promote bilateral trade? A: I think it’s a good idea because it can bring people together. Ten years ago, many Irish companies would never have seen China as a market, but now things are very different. Irish people see China as a place with great opportunities. And I hope it’s the same story in the other direction — that Chinese companies now see Ireland as a place where international investment is welcome and where a global trade platform provides an entry into the EU that Chinese companies can be part of. The way to really bring this relationship to life is to make sure that people meet each other. That is why we are increasing our presence here in terms of agencies, government representatives, support for Irish companies expanding internationally, and organizations focusing on bringing non-Irish companies to Ireland. So you will see Irish presence in the trade fairs planned in Shanghai, and I hope we’ll see a strong Chinese presence in trade fairs in Ireland. Q: In terms of technology and innovation, how do you see opportunities for Shanghai to collaborate with Ireland? A: We’ve already seen some collaboration, and we would like to see a lot more. Cork, the second largest city in Ireland, has been a sister city of Shanghai since 2005. It is a big hub for technology companies. Apple, for example, employs 6,000 people in the city. So we think that projects like the serious “twinning” of cities can be a source of new opportunities and new partnerships between universities or companies, particularly in the areas of technology and innovation. Ireland has lots of entrepreneurs creating new companies every day on the basis of good ideas, technology and innovation. That is the kind of mindset that Shanghai excels in because this is a city all about innovation, change and modernization.

Shares rise on positive economic view

Mon, 05/07/2018 - 18:00
SHANGHAI shares jumped yesterday after a leading overseas bank’s report said that major indicators of the Chinese economy pointed to continued growth. The Shanghai Composite Index rose 1.48 percent to close at 3,136.64 points. Investor turned optimistic after Standard Chartered Bank noted in the report that China’s economy is likely to have remained stable in April, with major indicators pointing to continued growth. The UK-based bank expects China’s producer price index, which has not been released yet, to have picked up to 3.4 percent after slowing for five consecutive months. The report also said that April saw resilient growth in retail sales as well as a likely recovery in exports. “A flurry of Chinese data in the coming weeks is expected to show that the world’s second-largest economy remained strong in April, underpinned by a pickup in industrial output and a rebound in exports,” Reuters reported. Liquor makers, health care firms and chemical companies grew strongly. Kweichow Moutai Co Ltd jumped 5.33 percent to 698.17 yuan (US$109.72). According to local media the Paper, the company named Li Baofang as its new chairman on Sunday night. Kweichow Moutai Co Ltd also saw a net profit of 8.51 billion yuan in the first quarter of this year, up 38.9 percent year on year. Tsingtao Brewery Co Ltd surged by the daily limit of 10 percent to 47.25 yuan and Shanxi Xinghuacun Fen Wine Factory Co Ltd added 6.57 percent to 59.55 yuan. “Liquor makers performed well as investors see them having potential to grow further,” said Qin Hong, analyst with Jingbailing Consulting firm.

May sees good start despite fall in new home sales

Mon, 05/07/2018 - 18:00
MAY got off to quite a promising start despite a retreat in sales from the previous week as medium to low-end projects in remote areas continued to lure buyers. The area of new homes sold, excluding government-subsidized affordable housing, fell 25.4 percent week on week to around 138,200 square meters during the seven-day period ended on Sunday, Shanghai Centaline Property Consultants Co said in a report released yesterday. “Despite the week-over-week drop, the seven-day transaction volume was still good if we take into consideration that a retreat occurs pretty often at the start of a month as real estate developers usually gear up for sales during the closing days of a month to boost their performance,” said Lu Wenxi, senior manager of research at Centaline. The outlying Qingpu, Jiading and Songjiang districts were the three most sought-after areas during the week where new home sales totaled 28,500 square meters, 27,400 square meters and 20,700 square meters respectively, Centaline data showed. The average cost of new houses fell 4.5 percent from the previous week to 44,803 yuan (US$5,876) per square meter, mainly due to a structural shift. Two of the 10 best-selling projects, including the second-most popular development, sold for under 30,000 yuan per square meter. A residential development in Jiading became the most popular project of the week when it sold 20,104 square meters, or 240 units, last week for an average price of 30,102 yuan per square meter. Notably, three other projects also managed to register weekly sales of more than 100 units, a rare thing in the current market. “That was obviously a very positive sign for continuously recovering momentum among home buyers,” Lu said. “We therefore feel quite upbeat about May’s overall new home sales which might exceed 700,000 square meters if the current momentum is maintained.” About 23,900 square meters of new homes spanning two projects were launched last week, a dive of 92 percent from the previous week, according to Centaline data. New home supply totaled around 9,100 units in Shanghai in April, and some 2,600 units, or less than 30 percent, were sold during the same month, Shanghai Homelink Real Estate Agency Co said in a separate report.

TV host fined US$14m for fixing market

Mon, 05/07/2018 - 18:00
A Chinese securities TV program host has been fined 86.2 million yuan (US$13.56 million) by the country’s securities watchdog for fixing market. Liao Yingqiang, a popular host of a Shanghai-based stock market analysis TV program, was found seeking illegal gains by selling stocks shortly after peddling them to audiences via social media platforms, according to a statement released by the China Securities Regulation Commission. In addition to the heavy fine, the CSRC also decided to confiscate his illegal gains worth 43.1 million yuan. Liao was found to have used 13 stock accounts to buy and sell shares of 39 manipulated stocks from March to November 2015. China has been stepping up crackdown on irregularities in the stock and futures markets in recent years. The CSRC rolled out a draft regulation last Friday urging stock and futures companies to operate within the law.

China’s forex reserves drop to 5-month low

Mon, 05/07/2018 - 18:00
CHINA’S foreign exchange reserves in April fell more than expected, to a five-month low, as the US dollar rebounded and on growing signs that Chinese regulators are less worried about capital flight. Reserves fell US$17.97 billion in April to US$3.125 trillion — the lowest since November 2017, compared with a rise of US$8.34 billion in March, central bank data showed yesterday. Economists polled by Reuters had forecast reserves would drop around US$10 billion in April to US$3.133 trillion, with a stronger US dollar versus other currencies expected to depress the value of China’s dollar-denominated reserves. The fall in non-dollar currencies against the US dollar and correction in asset prices led to the small reserves drop in April, the State Administration of Foreign Exchange, China’s foreign exchange regulator, said. “The drop reflected almost exclusively the valuation effect of a firmer USD in April,” said Andy Ji, currency strategist at Commonwealth Bank of Australia in Singapore. “In other words, there are no signs of capital outflows at the current juncture.” But Julian Evans-Pritchard at Capital Economics said he believed China’s current account returned to a healthy surplus in April from a seasonal deficit in March, implying a sharp reversal in capital flows from net inflows to net outflows. “This is nothing to worry about, however. Such volatility in net cross-border flows is not uncommon at this time of year and net outflows look to have remained well within regulators’ comfort zone,” he said in a note. The dollar index, measuring it against other major currencies, rose 2 percent last month. Capital flight was seen as a major risk for China at the start of 2017, but a combination of tighter capital controls and a faltering dollar helped the yuan stage a strong turnaround, bolstering confidence in the Chinese economy. Last year, China’s reserves rose for the first time since 2014 and its cross-border capital flows went from net outflows to basically stable. Trade disputes between China and the United States could hurt exporters on both sides and weigh on their economic growth, while adding to volatility in global financial markets. But SAFE said in April that any potential impact on its cross-border capital flows stemming from Sino-US trade frictions can be controlled. The yuan lost around 1 percent against the resurgent greenback in April, but it is still up about 2.5 percent so far this year. Indeed, in recent weeks, Chinese authorities have announced moves which suggest they are less worried about capital outflows, including allowing domestic investors to put more money into global financial markets. At the same time, China has moved to give foreign investors more access to its equity, bond and commodity futures markets, which will help support the yuan and offer greater balance to cross-border flows. The value of China’s gold reserves fell to US$77.788 billion at the end of April, from US$78.419 billion at the end of March.

UN urges money transfers be cheaper and easier

Mon, 05/07/2018 - 18:00
MIGRANT workers from the Asia-Pacific region sent US$256 billion home last year, but more needs to be done to cut costs and make money transfers easier, said a United Nations report yesterday. Remittances, which have risen about 5 percent since 2008, helped about 320 million family members across the region last year, according to the United Nations’ International Fund for Agricultural Development. “It is crucial and critical to make sure these flows arrive fast and cheap,” said Pedro de Vasconcelos, a remittance expert at the IFAD. “It is a lifeline for millions of families.” According to the report, 80 million migrant workers sent money home an average eight to 10 times per year. They usually paid about seven percent in charges to use cash-to-cash transfers, which enable money to be sent overseas often without using a personal bank account. A decade ago, remittances to people in rural areas could cost as much as 20 to 25 percent in fees, charges and currency exchange rates, said De Vasconcelos. But rates are still too high despite increased competition, he added. He urged those making and receiving remittances to embrace digital technology such as mobile phones for transferring money, and he predicted that such methods would soon overtake cash-to-cash. Regulators and the private sector must also work together to harmonize the legal and regulatory frameworks between countries and support new technologies that enter the market, he added. The three largest remittance-receiving nations were India at US$69 billion, China at US$64 billion and the Philippines at US$33 billion, the report said.

Nestle seals US$7b deal to sell Starbucks products

Mon, 05/07/2018 - 18:00
SWISS-BASED food giant Nestle will pay Starbucks US$7.15 billion in cash for the rights to sell the US coffee chain’s products around the world in a global alliance aimed at reinvigorating their coffee empires. The deal yesterday for a business with US$2 billion in sales reinforces Nestle’s position as the world’s biggest coffee company tries to fortify its place atop a fast-changing market. Bernstein analyst Andrew Wood said that Nestle’s third-biggest acquisition would allow the Swiss company to expand the brand through its global distribution network. Seattle-based Starbucks, the world’s biggest coffee chain, said it will use proceeds to speed-up share buybacks and the deal would add to earnings per share by 2021 at the latest. Nestle said it expects the deal to sell Starbucks bagged coffee and drinks adding to earnings by 2019. It will not involve any of Starbucks’ cafes, but does let Nestle sell Starbucks coffee in individual pods and expand sales of soluble coffee. The Nestle name will not appear on Starbucks products. “We do not want the consumer to perceive that Starbucks is now part of a bigger family,” a Nestle source said. Starbucks, strong mostly in the United States, will have the final say on expanding its product range. “This global coffee alliance will bring the Starbucks experience to the homes of millions more around the world through the reach and reputation of Nestle,” said Starbucks Chief Executive Kevin Johnson. Nestle and Starbucks are joining forces in a highly fragmented consumer drinks category that has seen a string of deals lately. JAB Holdings, the private investment firm of Europe’s billionaire Reimann family, has fueled the consolidation wave with a series of deals including Douwe Egberts, Peet’s Coffee & Tea and Keurig Green Mountain, narrowing the gap with Nestle. Coffee is popular with younger customers who have grown up with Starbucks. A willingness to pay up for exotic beans and specialty drinks means companies can brew up richer profit margins than in mainstream packaged food. Starbucks said it now expects to return around US$20 billion in cash to shareholders in share buybacks and dividends through fiscal year 2020. It said the transaction was expected to add to earnings per share by the end of fiscal year 2021 or sooner, with no change to the company’s currently stated long-term financial targets. In a separate statement, Nestle said it expected the business to contribute positively to its earnings per share and organic growth targets from 2019. The company source said it would pay market-linked royalties to Starbucks after the initial fee. It will not buy any industrial assets as part of the deal, but could step in to produce in markets where Starbucks is not present. Nestle, which will take on about 500 Starbucks employees, said its ongoing share buyback program would remain unchanged.

CapitaLand taps segment

Mon, 05/07/2018 - 18:00
CAPITALAND, one of Asia’s largest real estate owners and investors, yesterday launched its first co-working space in Shanghai’s Yangpu District as the developer seeks to better adapt to fast-changing customer needs. The 2,700 square meter co-working space operated under the C³ brand is located at Innov Center, an office and retail complex acquired by the Singapore-headquartered company in mid 2017, near Jiangwan Stadium. “The C³ co-working space marks our first trial to embrace the co-sharing trend as we keep growing with our clients who seek not only fixed spaces but flexibility as well,” said Lim Ming Yan, president and chief executive officer of CapitaLand. “By the end of this year, we will have three more co-sharing spaces, not confined to co-working, opened across the country.” The co-sharing spaces, ranging from hundreds to thousands of square meters, will be unveiled at its existing integrated developments — Raffles City Shanghai, Raffles City Beijing and Raffles City Shenzhen, the company said. The co-sharing concept will also be introduced to CapitaLand’s future office projects across the country as part of its office eco-system, according to the company.

Game sector sees growth

Mon, 05/07/2018 - 18:00
SHANGHAI’S game industry has great potential to grow by embracing e-Sport and artificial intelligence, industry officials told a game industry forum yesterday. Local game firms are looking for “new power and new form” to transform business and develop unique opportunities, the Shanghai Municipal Administration of Culture, Radio, Film & TV told a Transformation and Upgrade of Shanghai Online Game forum. Another area of immense potential is e-Sport as Shanghai aims to build itself into an e-Sport “highland” nationwide, said the administration. China’s e-Sport market revenue may come in at 78.6 billion yuan (US$12.3 billion) in 2018, up from 64.7 billion yuan last year, amid a huge pool of gamers, rising sales of mobile game gadgets and professional tournaments offering big prize money, said China Insights Consultancy. Shanghai’s game industry output surged 24 percent year on year to 56.9 billion yuan in 2017. Game has become the “top” digital entertainment attraction for people born after 1995, industry observers said.

FMCG market rises 2.3%

Mon, 05/07/2018 - 18:00
CHINA’S fast moving consumer goods market rose 2.3 percent in the first quarter which was a low shopping season, compared to a full-year growth of 4.3 percent last year. Sales of fast moving consumer goods through e-commerce channels jumped 26 percent from a year ago amid stiff competition between Tmall and JD.com as they fight for market share. Yonghui overtook Carrefour to become the fourth largest retailer in the urban market, according to a latest report by Kantar Worldpanel. Yonghui’s growth and higher penetration in the first quarter was due to new store openings. Sun Art Retail, which operates Auchan and RT Mart in China’s mainland, had a combined 8.7 percent in the urban market followed by CR Vanguard’s 7.2 percent and Walmart’s 5.5 percent.

More deals seen at Canton Fair

Sun, 05/06/2018 - 18:00
CHINA’S largest trade fair concluded its 123th session on Saturday in Guangdong Province, reporting more foreign buyers and deals. The China Import and Export Fair, known as the Canton Fair, had received 203,346 buyers from 214 countries and regions by Thursday, said fair spokesman Xu Bing. The number of buyers, the largest in five years, represented an increase of 5.3 percent from last spring session, Xu said. The export turnover reached 189.2 billion yuan (US$30 billion), up 3.1 percent year on year. The fair, held every spring and autumn in Guangzhou, is seen as a barometer of China’s exports.

Fines on 3 banks for breaches

Sun, 05/06/2018 - 18:00
THE China Banking and Insurance Regulatory Commission recently fined three commercial banks for improper practices in wealth management. China Merchants Bank, one of the country’s biggest, was fined over 65.7 million yuan (US$10 million) for 14 violations, including guaranteeing principle on some wealth management products, the CBIRC said in an online statement on Friday. Shanghai Pudong Development Bank was fined more than 58.5 million yuan for 19 offences including allocating too much money raised from WMPs to risky assets. Industrial Bank Financial Leasing Company, a wholly-owned subsidiary of Industrial Bank, was fined 1.1 million yuan for bundling the sales of WMPs with financial leasing business, among others. The fines come as China’s regulators toughen their stance on market irregularities, targeting risky business such as shadow banking. Last month the central bank tightened regulations on asset management businesses of financial institutions. The new rules unify regulatory standards for asset management products and address issues such as implicit guarantees by banks on many WMPs.

BOC opens yuan operations in Pakistan

Sun, 05/06/2018 - 18:00
THE Bank of China has officially launched its services in Pakistan for clearing and settlement mechanism of the yuan for bilateral trade, investment activities, imports, exports and financing transactions, a statement said on Saturday. The bank’s commercial operations have already commenced at its first branch in Pakistan’s southern port city of Karachi in November last year. Earlier in January, the central bank of Pakistan declared the yuan as an approved foreign currency for denominating foreign currency transactions in Pakistan, declaring that the yuan is at par with other international currencies such as US dollar, euro, yen, and other currencies. Li Tao, country head and CEO of BOC Pakistan operations, highlighted the global recognition, importance and increasing utilization of the yuan and said that the yuan settlement amount of China’s cross-border trade exceeded 4.36 trillion yuan (US$686 billion) last year. The bank serves as yuan clearing bank in France, Australia, Malaysia, Hungary, South Africa, Zambia, the United States, according to the statement. Wang Yu, Counsel General of the Chinese Consulate in Karachi, said BOC’s yuan operations will build another financial artery in China’s Belt and Road Initiative as well as the China-Pakistan Economic Corridor. Pakistani bankers hoped that the yuan clearing and settlement mechanism will boost transactions, including trade settlement and direct investment with the increasing demand for yuan from enterprises and financial institutions in the two countries. The deputy Governor of the State Bank of Pakistan, Jamil Ahmad, hoped BOC can provide liquidity in the interbank market.

Buffett: World depends on US and China for progress

Sun, 05/06/2018 - 18:00
US billionaire investor Warren Buffett said on Saturday that the world depends on the United States and China for progress, dismissing concerns that the two countries’ trade tensions could potentially escalate into a trade war. Buffett, chairman and CEO of Berkshire Hathaway, made the remarks in response to a Chinese investor’s question about US-China trade relations at Berkshire Hathaway’s annual shareholders meeting. “The United States and China are going to be the two superpowers of the world, economically and in other ways, for a long, long, long time,” Buffett said. “We have a lot of common interests, and like any two big economic entities, there are times when there will be tensions, but it is a win-win situation when the world trades,” the investor said. Both Democrats and Republicans in the United States believe in the benefits of free trade, he said. The benefits of free trade are huge, and the world is dependent on it in a major way for its progress, Buffett said. Speaking of the US trade deficit, Buffett said he would not like the gap to get too wide, but “when you think about it, it’s really not the worst thing in the world to have someone send you the goods that you want and for you to send a piece of paper.” The only problem is when one side may want to win a little bit too much, he said, adding the world will not sacrifice its prosperity based on differences that arise in trade. The investor also implied that he is willing to invest more in China this year. He is turning 88 this August, and eight, he said, is a very lucky number in China. This could be the time to acquire something in China, Buffett said. While the primary focus of his company remains on US businesses, investment opportunities in other parts of the world, including emerging markets, will also be taken into account, Buffett said. Berkshire Hathaway is looking to “find big things to do” in big and growing economies that hold potential, such as China, Buffett said in a video released at the US-China Investor Forum held one day prior to the shareholders meeting. In the video, he called China’s growth in the past 60 years or so “a total economic miracle.” “I never would have thought it could have happened,” he said. Berkshire Hathaway has a stake in China’s automobile maker BYD. Buffett said the investment “has been doing so well lately.”

Apple and Buffett act to buy shares

Sun, 05/06/2018 - 18:00
APPLE Inc was not the only one to leap on a chance to buy its stock at a fat discount last quarter as Warren Buffett stepped in to scoop up an additional 75 million shares for Berkshire Hathaway at the same time. Between them — the two biggest players in the iPhone maker’s shares — they bought nearly one of every 10 Apple shares traded during the quarter, according to Thomson Reuters calculations. But the discount window did not stay open long, with Apple’s stock back at a record high above US$183 on Friday after trading in the mid-US$150s for part of the first quarter. The recovery in the share prices makes it less opportune for Apple’s corporate treasury to execute purchases as it proceeds with an extra US$100 billion of buybacks in an effort to further winnow down its mountain of cash. Apple bought over US$23 billion of its own shares in the first three months of the year at an average price of US$171.48, the company said last week. A Buffett representative on Friday confirmed Berkshire Hathaway added its stake in Apple by 75 million shares, for which the company looks to have paid between US$12 billion and US$13 billion, based on the stock’s trading range during the period. Funds from the repatriation of Apple’s US$252 billion overseas cash hoard arrived at an convenient time for traders working on behalf of Apple. The Cupertino, California, company’s massive share purchase in the March quarter coincided with a 10 percent slump in the S&P 500 between January 26 and February 8. That drop raised fears across Wall Street that a nine-year bull market was ending and made it easier for big players amassing shares in a company to find willing sellers.

Smaller firms to get more tax breaks and improved service

Thu, 05/03/2018 - 18:01
CHINA is stepping up its support for smaller businesses by offering new tax cuts and better financial services. Vice Finance Minister Cheng Lihua said at a press conference yesterday that seven new tax policies are expected to save the businesses a total of 60 billion yuan (US$9.4 billion) a year. The reduction will act as an incentive for enterprises in upgrading equipment and improving employee training, as well as encouraging research and development. Small and micro enterprises play a vital role in driving economic growth, employment and innovation, Cheng said, adding that China has created a framework of favorable policies to lower burdens, spur innovation and support financing. By eliminating excessive fees, the banking sector saw an increase last year of 44 billion yuan in revenue concessions from 2016, said Wang Zhaoxing, vice chairman of China’s top banking and insurance regulator. Banks are prohibited from charging small and micro firms fees other than loan interest, the rate of which is stable and declining, Wang said. “Commercial banks have been asked to weight more of their loans toward small and micro businesses,” he said, adding that qualified banking institutions are encouraged to issue financial bonds to these businesses in expanding their financing channels. Total outstanding loans to small and micro businesses stood at 31.7 trillion yuan at the end of the first quarter of 2018, up 1.02 trillion yuan from the end of 2017, data showed. China is speeding up reforms in the financial sector and focusing on resolving the problem of small and micro enterprises finding it tough and expensive to access financing, according to this year’s government work report.

New retail formats encouraged

Thu, 05/03/2018 - 18:01
SHANGHAI will encourage new retail formats to cater to consumer demand while the city also aims to revitalize time-honored brands as it bids to build itself into a world-class shopping hub. The Shanghai Commerce Commission’s three-year action plan envisages the city becoming a testing field for new business and retail formats such as those that integrate digital technologies and cashier-less vendors. The commission will also support the development of incubation and technology application platforms, as well as launching initiatives to foster commercial zones in various downtown landmark areas and shopping streets featuring traditional Shanghai styles. The Exposition on China Indigenous Brand to be held between May 10 and 12 will feature a number of time-honored local brands. A total of 500 local brands will take up 25,000 square meters of exhibition space. Shanghai Hero Group’s gold fountain pens and Shanghai Yimin No.1 Food Factory’s latest ice cream that is set to launch this summer will be among the merchandise on display during the exposition. The revival of time-honored brands and measures to support innovation are also part of the action plan to turn the city into a world leader in shopping. Shi Xiaolong, executive director at the economic operation department at Shanghai’s Bailian Group Co, said that it has been actively upgrading its retailer information technology system to help better manage inventory. “Consumers nowadays care more about the shopping experience and we’re working to reshuffle operation strategy to reflect changing consumer demands and stay closer to the community neighborhoods,” he said. It’s embracing the latest technology in facial recognition, RFID sensor, and electronic screens. The facial recognition technology, which will be unveiled later this year at selected stores in Shanghai, will provide data on when shoppers visit the shopping centers and how long they spend in each sector.

Xiaomi picks HK for world’s biggest IPO

Thu, 05/03/2018 - 18:01
XIAOMI Corp has applied to sell shares in Hong Kong in what is expected to be the biggest initial public offering globally this year. Although Xiaomi didn’t provide financial terms in its IPO application to the Hong Kong Exchanges and Clearing, bankers and industry insiders said the company is seeking to raise US$10 billion through the IPO which values the eight-year Beijing-based company at US$100 billion. That would make it the biggest new listing in the world since Alibaba’s US$25-billion debut in 2014 in New York. Its value will surpass those of Baidu and JD.com to become the third-biggest Chinese technology firm behind Tencent and Alibaba, they said. In 2017, Xiaomi generated a revenue of 114.6 billion yuan (US$18.2 billion) including one-third from overseas regions, a growth of 67 percent year on year. The company reported a net loss of 43.89 billion yuan last year. Excluding one-time charges, it said its profit was 5.36 billion yuan, according to the filing, which is the first time the company has reported financial details. It was accompanied by a bullish-sounding letter from the company’s founder and chairman Lei Jun saying Xiaomi intends to become a “part of the lives of billions of people globally in the future.” Lei holds a 31.4 percent stake in the company, which will probably make him one of the richest men in China. Xiaomi’s business now covers smartphones, mobile application stores and intelligent devices from routers and artificial intelligence speakers to air purifiers and wristbands. Despite its wide offering, 80 percent of business still comes from smartphone sales. Xiaomi also said it will cooperate with CK Hutchison Holdings, owned by billionaire Li Ka-shing, to establish a global strategic alliance yesterday.

Alibaba acquires sound firm

Thu, 05/03/2018 - 18:01
ALIBABA said it has acquired Beijing Sound Connect Technology Co to strengthen its sound recognition and human-machine interactive technologies. Founder Fu Qiang of Sound Connect and four other team members will join Alibaba and establish two acoustics labs that enable machines to detect human speech in complicated conditions. Fu and his team will help beef up the e-commerce giant’s audio signal processing technologies and push forward the integration of existing technologies to be applied under various circumstances, such as smart home furniture. They will also be working on the Internet of Things technologies and hardware and software solutions. Fu, a former researcher at the Institute of Acoustics of the Chinese Academy of Sciences, has been conducting research on speech signal processing, especially in the microphone array and machine learning based noise reduction sector.

Shanghai shares edge up

Thu, 05/03/2018 - 18:01
SHANGHAI stocks rose yesterday on news that Xiaomi planned an initial public offering in Hong Kong while investors were also cheered by China’s central bank injecting funds into the financial system. The Shanghai Composite Index added 0.64 percent to close at 3,100.86 points. Investor sentiment rose after Chinese smartphone maker Xiaomi applied for IPO. Data from Shanghai Securities News showed that shares related to Xiaomi jumped 2.23 percent today. Tongling Jingda Special Magnet Wire Co Ltd added 5.54 percent to 4.38 yuan (69 US cents) and Fujian Torch Electron Technology Co Ltd climbed 2.10 percent to 26.80 yuan. Investors cheered as the People’s Bank of China injected 50 billion yuan into the financial market yesterday, said a notice on its official website.

1st cloud AI chip unveiled

Thu, 05/03/2018 - 18:01
CHINESE chipmaker Cambricon Technologies released the country’s first cloud artificial intelligence chip yesterday in Shanghai. The AI processor unicorn debuted two processors in Shanghai that support cloud computing and further improve users’ experience. Cambricon 1M is designed for terminals and Cambricon MLU100 is meant for cloud computing. The MLU100 processor can meet the vision, voice, natural language processing and demand for intelligent processing of cloud computing such as data mining and other fields which could involve large data volume, multi task, multi-mode, low latency and high throughput. The cloud chip supports “deep learning” or neural networks that mimic human learning. Deep learning is machine learning involving algorithms that can analyze data, recognize patterns and make predictions.

JV asset management firm to tap funds

Thu, 05/03/2018 - 18:01
ICBC-AXA Life Insurance Company will set up a joint venture asset management company, the first after President Xi Jinping’s call to further open up China’s insurance sector at the recent Boao Forum. The Shanghai-registered asset management company will be a wholly-owned subsidiary of ICBC-AXA Life and has a registered capital of 100 million yuan (US$15.69 million), said a statement posted on the website of ICBC-AXA Life yesterday. Its business scope will include managing yuan and foreign currency funds entrusted by its clients, managing and utilizing its own yuan and foreign currency funds, carrying out insurance asset management product business, and other business approved by the China Banking and Insurance Regulatory Commission. The formation of the asset management arm will improve the investment capacity of ICBC-AXA Life and also better utilize insurance funds to serve China’s real economy, said Ma Jian, Party secretary and chairman of the board of directors at the insurer. Xi proposed at the Boao Forum in Hainan last month to speed up the opening-up the insurance industry. China will relax restrictions on the establishment of foreign-funded financial institutions, expand the scope of business of foreign-funded financial institutions and broaden the scope of cooperation between the Chinese and foreign financial markets. Shanghai-based ICBC-AXA Life Insurance Company is a joint venture between France’s AXA Group, the Industrial and Commercial Bank of China, and China Minmetals Corporation.

Shanghai launches services action plan

Thu, 05/03/2018 - 18:01
SHANGHAI is implementing an action plan to improve its ability to allocate global resources and achieve high-quality development in the service economy by 2020. On April 22, the city released a three-year plan on developing the Shanghai Service brand to enhance its capability to serve as an economic center, the city government said at a press conference yesterday. During the 2018-2020 period, the city will lay emphasis on enhancing the ability to serve the Yangtze River Delta, the area along the river, the country, the Belt and Road Initiative, and indeed the whole world. “Shanghai will focus on the brand influence, develop in accordance with the highest international standards to raise the city’s attraction, creativity and competitiveness,” said Ma Chunlei, director of the Shanghai Development and Reform Commission. Shanghai Party Secretary Li Qiang and Mayor Ying Yong told a conference to promote the city’s four brands — manufacturing, service, shopping and culture — on April 24 that the city should attach importance to improve the impact in the development of the Shanghai Services brand. To achieve greater impact, the city will enhance the ability of gathering and allocating resources, expand service scope, and make full use of various platforms. In terms of brand cultivation, Shanghai will put service quality at the top of the list and give priority to efficiency. Shanghai ranked as the ninth global city in the 2017 Advanced Producer Service Ranking released by GaWC, indicating that the city has strong advantages and influence in the producer service sector. “For the next step, the city will further push forward the opening-up and improve its international influence, aiming to build Asia-Pacific’s leading and the world’s famous professional service brand,” Ma said. The action plan also puts emphasis on people’s experiences and feelings. For instance, Shanghai will launch a batch of programs on aviation facility improvements to improve flight punctuality at both Pudong and Hongqiao airports by 2020. To achieve the goals of developing the Shanghai Service brand, the city will make plans and launch the first batch of 13 campaigns, three of which will focus on enhancing the urban service functions, three on upgrading the service economy level, and seven on serving citizens and improving the service environment. “The special programs in the three-year action plan are a open and comprehensive system, and will continuously include the qualified campaigns of all fields,” Ma said.

Apple set to buy back extra stocks worth US$100b

Wed, 05/02/2018 - 18:01
APPLE Inc on Tuesday reported resilient iPhone sales in the face of waning global demand and promised US$100 billion in additional stock buybacks, reassuring investors that its decade-old smartphone invention had life in it yet. Apple’s quarterly results topped Wall Street forecasts, which dropped ahead of the report on growing concern over the iPhone. The Cupertino, California-based company also was more optimistic about the current quarter than most financial analysts, driving shares up 3.6 percent to US$175.25 after hours. Suppliers around the globe had warned of smartphone weakness, playing into fears that the company known for popularizing personal computers, tablets and smartphones had become too reliant on the iPhone. Sales of 52.2 million iPhones against a Wall Street target of 52.3 million was a comfort and up from 50.7 million last year, according to data from Thomson Reuters I/B/E/S. Apple bought US$23.5 billion of stock in the March quarter, and said it planned to hike its dividend 16 percent, compared with a 10.5 percent increase last year. Analysts believe the heavy emphasis on buybacks will bolster share prices, but some investors wished Apple had found different uses for the cash. “I’d hoped for more on the dividend side or maybe a strategic investment,” said Hal Eddins, chief economist for Apple shareholder Capital Investment Counsel. “I assume Apple can’t find a strategic investment at the current prices that will move the needle for them. The US$100 billion buyback is good for right now but it’s not exactly looking to the future.” The cash Apple earmarked for stock buybacks is about twice the US$50 billion market capitalization of electric car maker Tesla Inc. Apple posted revenue for its March quarter of US$61.1 billion, up from US$52.9 billion last year. Wall Street expected US$60.8 billion, according to Thomson Reuters I/B/E/S. Average selling prices for iPhones were US$728, against Wall Street hopes of US$742. The figure is up over 10 percent from US$655 a year ago, suggesting iPhone X, which starts at US$999, has boosted prices.

VW eyes Didi JV for fleet and purpose-built autos

Wed, 05/02/2018 - 18:01
Volkswagen AG, the world’s biggest automaker, is in talks to form a joint venture with China’s Didi Chuxing to manage part of the ride-hailing company’s fleet of cars and help develop “purpose-built” vehicles for Didi’s services.As part of the deal between Volkswagen and China’s biggest ride-hailing service, expected to be signed early next month, the German automaker will initially manage a fleet of about 100,000 new vehicles for Didi, of which two-thirds will be Volkswagen Group cars, said a senior executive at the carmaker.Volkswagen will also jointly buy some new cars with Didi to allow the Chinese company to expand its fleet. The two eventually plan to collaborate to design and develop dedicated vehicles, he said, speaking on condition of anonymity as the details are still private.The executive did not give financial details of the deal but said that Volkswagen will get a slice of the revenue once the venture develops.The growing popularity of ride-hailing services for commuting and running errands in congested cities such as Beijing and Shanghai is showing early signs of reducing private car ownership. This could have serious consequences for existing carmakers and is forcing companies like Volkswagen to reinvent their businesses and seek out future revenue streams.“To succeed as a car company in this new ecosystem, we need to know who our customer is, what their journey is and what our strategy should be,” the executive said.He added this deal will eventually give Volkswagen access to some of Didi’s massive trove of data on customer behavior collected through the 30 million rides Didi provides in China each day.The ultimate goal is the production and use of autonomous cars, the Volkswagen executive said.

Chengdu Airlines flies ARJ21 to Harbin

Wed, 05/02/2018 - 18:01
CHINA’S first domestically developed regional jet, ARJ21, began flying to northeast China yesterday after the route became one of five new flight paths that Chengdu Airlines launched. The airline, the first operator of the 90-seater jet, flew the ARJ21 between Chengdu in Sichuan Province and Harbin in Heilongjiang Province with a stopover in Jinan in Shandong Province. Flight EU2239 took off from Chengdu Shuangliu International Airport at 6:31am yesterday and landed at Harbin Taiping International Airport at 11:28am. “The opening of the new routes marks the beginning of ARJ21’s commercial operation in the northeast,” said Commercial Aircraft Corporation of China , the jet’s developer. Another four regional routes have been launched between Harbin and four other cities, including Heihe City bordering Russia and the Wudalianchi Scenic Area, within Heilongjiang as the airline seeks to create a new operation base in Harbin to add to its hub in Chengdu. “The carrier aims to create a flight network, mainly operated by ARJ21, covering regional airports in Heilongjiang and other northeast provinces,” the airline said. The airline’s five ARJ21s are already flying in southwest, central and east China. They have flown over 65,000 passengers since commercial operations began in June 2016.

Apple’s fiscal Q2 revenue climbs 21% in ‘best market’

Wed, 05/02/2018 - 18:01
APPLE Inc’s revenue in China jumped 21 percent in its second fiscal quarter ended in March amid a boom in sales of iPhone X in the country which is the “best market for a consumer product company,” said chief executive Tim Cook. The US tech giant posted a revenue of US$13 billion in China in the quarter, up 21 percent year on year. It makes China Apple’s third biggest regional market behind the United States and Europe, the company said. Cook said during the company’s earnings call that the iPhone X was “the most popular smartphone in all of China last quarter.” “I think the (Chinese) smartphone market is the best market for a consumer product company in the history of the world,” said Cook. Apple’s revenue performance came amid a “hard landing” in the Chinese smartphone market whose sales dropped 21 percent in the first quarter, according to researcher Canalys.

PBOC injects US$58b via MLF in April

Wed, 05/02/2018 - 18:01
China’s central bank continued to pump cash into the money market in April to maintain reasonable liquidity.The People’s Bank of China said yesterday in an online statement that 367.5 billion yuan (US$58 billion) was added via the medium-term lending facility last month, down from a 432.5-billion-yuan injection in March.The funds will mature in one year at an interest rate of 3.3 percent, up from 3.25 percent in March.Total outstanding MLF loans fell to slightly over 4 trillion yuan at the end of April, down from 4.91 trillion yuan a month ago, as the PBOC cut required deposit reserves for some banks to help them pay back the MLF loans due on April 25.The MLF tool was introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the PBOC using securities as collateral.In April, the PBOC also injected 53.2 billion yuan of funds through pledged supplementary lending to China Development Bank, the Export-Import Bank of China, and the Agricultural Development Bank of China.Another 46.7 billion yuan was lent to financial institutions through the standing lending facility to meet provisional liquidity demand.

Caixin PMI inches up in April but exports shrink

Wed, 05/02/2018 - 18:01
CHINA’S manufacturing activity remained steady in April while exports shrunk for the first time since November 2016, a private report said yesterday. The Caixin China General Manufacturing Purchasing Managers’ Index inched 0.1 percent higher to 51.1 last month from March, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media. The trend differed from the official PMI released by the National Bureau of Statistics on Monday which dipped 0.1 percent to 51.4. The PMI is a composite indicator that provides a snapshot of operating conditions in the manufacturing sector. A reading above 50 indicates expansion, while a reading below reflects contraction. The Caixin report said the PMI showed operating conditions improved marginally across China’s manufacturing sector. Although output rose slightly quicker, growth in new orders slowed amid a renewed fall in new export shipments. Consequently, purchasing activity rose only modestly while firms noted higher inventories of both inputs and finished items. “Growth of new business moderated for the second straight month, reflecting weakening demand across the manufacturing sector,” said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group. “Overall, operating conditions across China’s manufacturing sector continued to improve in April. But uncertainty in exports has increased significantly,” Zhong added. Manufacturers faced a sharply deteriorating foreign demand environment as new export orders declined for the first time in 17 months in April. Inflation for output costs eased slightly while growth in input costs posted its first rise since September amid increases in crude oil prices. “This may squeeze the profit margins of manufacturers and has contributed to a decline in the sub-index of future output, a gauge of companies’ confidence in their business outlook over the next 12 months,” Zhong said. Inventories of finished goods increased faster in April from March, suggesting that supplies for manufacturers have remained rather high, according to the report.

2 nations raise AIIB membership to 86

Wed, 05/02/2018 - 18:01
THE Asian Infrastructure Investment Bank’s Board of Governors has approved two applicants to join the development bank, bringing its total approved membership to 86. The approved applicants include one regional member, Papua New Guinea, and one non-regional prospective member, Kenya in Africa. “We’re very happy to welcome Papua New Guinea and Kenya as prospective members of AIIB,” said Danny Alexander, vice president and corporate secretary of the multilateral development bank. “AIIB now has 86 approved members from six continents. This shows a strong commitment to promoting infrastructure development through rules-based multilateral cooperation with high standards of governance,” Alexander added. The two prospective members will officially join AIIB once they complete the required domestic process and deposit the first installment of capital with the bank. The shares allocated to the new prospective members come from AIIB’s existing pool of unallocated shares. At its launch in January 2016, there were 57 signatories to AIIB’s Articles of Agreement. In March, May, June and December 2017, the bank approved another 27 prospective members. With a mission to improve social and economic outcome in Asia and beyond, the Beijing-headquartered development bank is committed to investing in sustainable infrastructure and other productive sectors.

New home sales fall as buyers sidelined

Wed, 05/02/2018 - 18:01
SLUGGISH sentiment among home buyers continued to linger in Shanghai last month despite a surge in supply, the latest market data showed. The area of new homes sold, excluding government-subsidized affordable housing, fell 5.3 percent from March to 463,000 square meters, or the lowest April volume since 2010, Shanghai Centaline Property Consultants Co said in a report released yesterday. Year on year, that represented a fall of 31.6 percent. “With no sign of policy loosening, new home sales in Shanghai remained generally subdued for another month when the Qingming Festival and the Labor Day holiday also put some potential buyers temporarily on the sideline,” said Lu Wenxi, senior manager of research at Centaline. “As supply rebounded notably, we do expect to see a much better performing May.” Nearly 1.06 million square meters of new houses were launched into the market in April, a month-over-month surge of 168.3 percent, the highest in 22 months, Centaline said. “About 9,200 units of new homes were released last month across the city, outnumbering the total supply in the first quarter which stood at some 8,800 units,” Shanghai Homelink Real Estate Agency Co wrote in a separate report released yesterday. “In particular, some 7,500 units were rolled out in the second half of April, which might also help explain why sales didn’t jump along with the surge in supply.” The average cost of new homes climbed 2.9 percent from a month earlier to 46,947 yuan (US$7,373) per square meter in April, according to Centaline data.

Domestic IPO for ARM’s JV

Wed, 05/02/2018 - 18:01
ARM’S Chinese joint venture, which recently started operation, plans to launch an initial public offering in the domestic market, media reported yesterday. The Shenzhen-based joint venture, ARM mini China, is 49 percent owned by ARM and 51 percent owned by a fund with Chinese investors. The IPO is seen as a key localized step for ARM, the world’s top chip designer, in China. ARM is seeking the domestic IPO through JV that is expected to get a special express pass for listing, Japanese media reported, citing sources familiar with the issue. Both ARM and Softbank were unavailable to comment on the issue today. The JV licenses technologies to firms including Apple, Qualcomm and Samsung. UK-based ARM was acquired by Japan-based Softbank for US$31 billion in 2016. Sales of chips with ARM-licensed technologies jumped 110 times in the past decade in China, according to ARM’s statement.

Irish plant for Wuxi Biologics

Wed, 05/02/2018 - 18:01
HONG Kong-listed biopharma technology service provider Wuxi Biologics will invest 325 million euros (US$390 million) for a new biologics drug manufacturing facility in Ireland, the first overseas investment of its kind for a Chinese pharma company. The 260,000-square-meter manufacturing site will be located at an industrial park in Dundalk in northern Ireland and is expected to create 400 new jobs and 700 construction jobs in phases over five years. The site will begin construction in the first quarter in 2019 and be complete by the second quarter of 2021. “Wuxi Biologics is a strong addition to Ireland’s growing cluster of next-generation bio-pharmaceutical companies and it also shows great commitment to Ireland with this project,” said Martin Shanahan, CEO of the Industrial Development Authority of Ireland, on Monday.

Leading global city for manufacturing by 2020

Wed, 05/02/2018 - 18:01
SHANGHAI has implemented a three-year action plan to become a world leading manufacturing city by 2020, the city government announced yesterday. By 2020, the city aims to establish two world-class industrial clusters, and for added value of strategic emerging industry to account for more than 20 percent of Shanghai’s gross domestic product. The action plan also envisages that the manufacturing output of the strategic emerging industry to take up one third of the city’s total manufacturing production. From 2018 to 2020, the city also plans to establish leading brands, enterprises, professionals and demonstration zones in manufacturing. The government seeks to have three manufacturing companies on the list of the world’s top 500 enterprises. “For Shanghai manufacturing, the city needs to master key technologies, establish high-end industry clusters and focus on high-quality products,” Shanghai Party Secretary Li Qiang said. “The city will strive to become a hub of strategic emerging industry and high-end manufacturing industry. Efforts will be made to apply latest technologies such as Internet, big data and artificial intelligence.” Shanghai’s manufacturing focus will include advancing emerging industries such as health care, artificial intelligence, and quantum communication. The city plans to accelerate development of strategic emerging industries in information technology, intelligent manufacturing, new-energy vehicle and intelligent and connected vehicle. Shanghai will not neglect its traditional industries such as automobile, iron and steel and chemical by encouraging their upgrading. “Shanghai has a strong industrial base and advantages in terms of manufacturing industry,” said Wu Jincheng, deputy director of the Shanghai Commission of Economy and Informatization. “The city also has advantages in domestic and foreign resources allocation (and) has the ability to achieve the goal of building itself into a world leading manufacturing base. Shanghai manufacturing is one of the four city brands initiated by Li during a municipal government meeting at the end of last year. The other three are Shanghai services, Shanghai shopping and Shanghai culture, and together they aim to accelerate the city’s high-quality development, technology and innovation, industry transformation and upgrading. Under the action plan for Shanghai manufacturing, the city will accelerate the development of industrial parks to better distribute resources. An example is the construction of a chip industrial park in Shanghai Jiading Industrial Zone last month. The park, which aims to cluster 100 chip companies with a total investment of 500 million yuan (US$78.6 million), will facilitate research and development, design, assembly, testing and training. The city will also focus on the development of intelligent and connected vehicles. Shanghai-based automaker SAIC Motor Co unveiled its intelligent vehicle, Roewe Marvel X, last month at the Beijing auto show. The vehicle has augmented reality technology and can park automatically. The company is also testing its intelligent and connected vehicles on public roads in Shanghai.

Shares end flat amid weakened sentiment

Wed, 05/02/2018 - 18:01
SHANGHAI stocks closed flat yesterday, after computer, telecommunication and electronics firms declined amid weak investor sentiment. The Shanghai Composite Index edged down 0.03 percent to close at 3,081.18 points. Market sentiment weakened after UBS Securities expressed in a report yesterday that more downward pressure was expected to crimp the growth of corporate earnings of A-share companies in the next few quarters as the Swiss securities firm saw them to rise around 7 percent to 8 percent this year, a sharp drop from the 19 percent expansion in 2017. Gao Ting, head of China Strategy at the firm, said the A-share market was slowing and may ease further as the economy lost more steam. He pointed to the property sector likely to face more restrictions and pressure going forward. China National Software & Service Co Ltd lost 9.82 percent to 23.78 yuan (US$3.74), Anhui Sun Create Electronics Co Ltd fell 6.89 percent to 58.12 yuan and Aerospace Communications Holdings Group Co Ltd declined 4.47 percent to finish at 11.55 yuan.

Grouses rise 29% during 3-day holiday

Tue, 05/01/2018 - 18:01
CONSUMERS had a lot of grouses about online shopping, Internet service, accommodation and catering during the three-day May Day holiday, Shanghai’s market watchdog said yesterday. The number of complaints that the Shanghai Industrial and Commercial Administrative Bureau received during the holiday jumped 29 percent to 393 from the same period last year. Complaints about Internet service regarding disputes over online games and breakdown of broadband access surged 37 percent, the bureau said. A consumer complained that his game account was closed by the online game operator without a reasonable explanation, while another user said his game coins could not be transferred as the online game operator suspended his account without any reason. The bureau also encountered online booking disputes over accommodation, catering, entertainment and sports. A consumer complained that he booked accommodation at a hotel in the Dianshan Lake area, only to be told there was no vacancy just before his trip. Another consumer said he bought cinema tickets online but did not get them due to system problems. Home furnishing items, clothing, shoes, hats and home appliances received more than 60 complaints mainly concerning quality, delayed aftersales service, and exaggerated promotions, the bureau said. Meanwhile, the city’s parks received 2.72 million visitors during the holiday due to the pleasant weather and several flower exhibitions, with 99,800 visiting suburban parks, the Shanghai Greenery and Public Sanitation Bureau said yesterday. The best viewing spots for Azalea, a major draw at city parks, are Binjiang Forest Park in the Pudong New Area, Zuibaichi Park and Fangta Park in Songjiang District.

Steady as you go for manufacturing

Mon, 04/30/2018 - 18:01
CHINA’S manufacturing sector expanded at a slightly slower pace last month from March, but still maintained “momentum of steady growth,” data showed yesterday. The Purchasing Managers’ Index for the sector came in at 51.4 in April, down from 51.5 in March, the National Bureau of Statistics said. A reading above 50 indicates expansion, while a reading below reflects contraction. Despite the slight decline, the April figure was still higher than an average of 51 in the first three months of this year and 51.2 for April 2017. “The manufacturing sector continued the momentum of steady growth,” the bureau’s senior statistician Zhao Qinghe said. Production saw steady expansion and demand was “generally stable,” Zhao said, as the sub-index for production held steady at 53.1 and the new order sub-index dropped slightly to 52.9. Chen Zhongtao, an analyst with China Logistics Information Center, held a similar view about the sector’s performance, saying the new figures reflected stability in domestic demand, production and employment. The sub-index for employment was down 0.1 of a percentage point to 49, continuing to stay at a relatively high level for the “new normal” of economic growth, Chen added. Meanwhile, the decline in headline PMI was mainly dragged by large companies, while the reading for small and medium-sized enterprises has risen for two months in a row, showing the effects of China’s supporting policies, including cuts in taxes and fees, Chen said. The sub-reading for purchase of raw materials fell more than 15 points from its peak in 2017, showing that rapid price rises had shown signs of relief. In contrast, the sub-index for factory-gate prices rose 1.3 points to 50.2. The difference in the two price-related readings narrowed to 2.8 points, a 10-month low and a trend that will help to improve the profitability of most companies, Chen said. “The high-tech manufacturing sector continued to take the lead in pushing forward high-quality development,” Zhao Qinghe said. The PMI reading for high-tech manufacturing stood at 53.8 percent in April, higher than March and the headline manufacturing PMI. Chen forecast that the high-tech manufacturing sector will continue with robust growth as the country implements its innovation-driven development strategy and steps up efforts in core technology research and development this year. “A new cycle of high-quality development for the economy has begun,” Chen said, citing the strong momentum, high quality and efficiency in the first four months. In the first quarter, China’s economy grew 6.8 percent year on year, unchanged from the previous quarter and staying within the 6.7-6.9 percent range for an 11th straight quarter. The strong start will “lay a solid foundation” for steady economic growth and high-quality development in the latter part of this year, Chen said. Currently, companies are upbeat about future business prospects, with the business outlook index staying above 58 percent for a third month in April. The statistics bureau’s data also showed the non-manufacturing PMI rose from 54.6 in March to 54.8 in April, and the composite PMI output index, which covers both manufacturing and non-manufacturing sectors, rose from 54 in March to 54.1 last month.

Financial court to start work by August

Sun, 04/29/2018 - 18:01
CHINA’S top legislature has approved the establishment of a specialized court in Shanghai — to be inaugurated by the end of August — to deal with finance-related cases. The decision was adopted at the bimonthly session of the Standing Committee of the National People’s Congress, which ended on Friday. The court, at the intermediate people’s court level, will be responsible for commercial cases such as those involving securities, bills, financial lending and administrative cases. The leadership of the court, as well as the judges, will be appointed by the Standing Committee of Shanghai People’s Congress. Judges will be selected from outstanding members of the legal sphere, including lawyers and law experts. Lawmakers said setting up a special financial court could help to prevent major financial risks, protect national economic security, and provide legal support for financial activities. President of the Supreme People’s Court Zhou Qiang said in a report to the NPC Standing Committee that the financial court would bolster the international influence of China’s financial justice, forestall financial risk, steer the financial sector to serve the real economy, and build Shanghai into an international financial center by 2020.

New rules to boost foreign investment

Sun, 04/29/2018 - 18:01
CHINA has released new management rules on foreign investment in the securities sector as the government takes further steps to open its financial sector wider. The revised rules released by the China Securities Regulatory Commission allow foreign investors to take a controlling stake in joint-venture securities firms. The business scope of such firms will also be allowed to gradually expand. China will equalize foreign investors’ equity shares in listed and unlisted securities companies, according to the rules, which also set qualification requirements for overseas shareholders. Following the release of the new rules, the commission said it will update related administrative approvals to help eligible foreign investors apply to set up companies. China has also rolled out a set of measures to expand the business scopes of foreign-funded banks. The new rules will allow foreign-funded banks to conduct business such as the underwriting of government bonds, and will lift foreign ownership limits on banks and financial asset management firms, the China Banking and Insurance Regulatory Commission said. Foreign-funded insurance brokers will have the same business scope as their Chinese counterparts. China will encourage foreign investors to enter its trust, financial leasing, auto finance, money brokerage and consumer finance sectors, a move that will take effect before the end of this year, central bank Governor Yi Gang said at the Boao Forum for Asia annual conference this month. Furthermore, China has unveiled new rules that regulate the asset management businesses of financial institutions, a key step toward standardizing the country’s fast growing asset management industry. The long-expected guidelines, first released last November in draft form, unify regulatory standards for asset management products and address issues such as regulatory arbitrage, according to the People’s Bank of China. The transitional period of the new rules will run to the end of 2020, compared with the end of mid-2019 as set in the draft guidelines. The extension will allow financial institutions sufficient time to adjust to the new rules, the central bank said. The official guidelines also set different leverage ceilings on different asset management products according to their risk levels. For example, the total assets for an open-ended public offering product should not exceed 140 percent of the product’s net assets, while the total assets for a closed-end public offering product should not be greater than 200 percent of its net assets. China’s asset management businesses have been expanding rapidly in recent years.

‘Share a Coke’ for World Cup

Thu, 04/26/2018 - 18:41
FIFA Ambassador Victoria Lopyreva (fourth left), Executive Vice Chairman of Chinese Football Association Zhang Jian (fourth right), Chief Operating Officer of Coca-Cola China Marcelo Boffi (fifth left), Vice President of Coca-Cola China and Korea Zhang Jiantao (fifth right) and Chinese national football players Wu Lei (third right) and Yan Junling (third left) unveiled the FIFA World Cup Trophy at landmark Shanghai Oriental Pearl Tower yesterday, offering locals a chance to see the iconic trophy up close. Coca-Cola China kicked off the FIFA World Cup Coca-Cola “Share A Coke” summer campaign at the ceremony while releasing innovative Coca-Cola wristband bottles to celebrate the Russian World Cup with consumers.

Chinese investors favor key assets amid reform

Thu, 04/26/2018 - 18:01
CHINESE investor sentiment toward key asset classes rose this year as they were bullish over China’s economic reform, and the outlook for the global economy, according to the latest Manulife Investor Sentiment Index. The MISI, which measures and tracks investors’ view toward key asset classes, found that the domestic investors’ overall sentiment climbed from 33 points in 2017 to 40 points this year. The investors also expected their investment return for 2018 to climb to 8.8 percent, up 1 percentage point from the previous year. Their optimism stemmed from their belief that China’s economic reform would continue to breed new opportunities and they were also positive about the outlook for the world economy, Manulife said. The 2018 MISI data showed that investor sentiment for property rose 15 points to 32, cash added 10 points to 38, and fixed income climbed 6 points to 54. Sentiment for equity gained marginally due to the volatile stock market earlier this year. The sentiment index of respondents who are willing to hold cash on hand in 2018 was flat from a year ago, which could limit their investment return potential, the insurer said. The study also revealed that China’s investors on average have 11 percent of their total assets in insurance products, up 1 percent from last year. This shows a growing awareness among investors on the importance of having insurance in their investment portfolios. The percentage of investors with insurance saving plans rose 5 percent to 50 percent and those with personal health or medical insurance policies added 8 percent to 46 percent. Zhang Kai, chief executive officer of Manulife-Sinochem, said that investors are emphasizing insurance products given their protection value in one’s overall financial plan. The MISI survey in China was based on 1,000 online interviews from 8 January to 20 February. Respondents are middle class to affluent investors, aged 25 years and above who are the primary decision-maker of financial matters in the household and have investment products.

Leasing set to continue growing

Thu, 04/26/2018 - 18:01
CHINA’S leasing industry is set to continue to grow strongly in 2018 and refinancing demand is forecast to jump 85 percent year on year, Fitch Ratings said. The expected robust momentum is attributed to a strong increase of leasing assets, according to the rating agency. “We believe that the leasing sector will remain promising as it serves the real economy directly and will win support from policy-makers,” said Jonathan Lee, senior director of non-bank financial institutions in Asia Pacific at Fitch during the 2018 China Credit Conference held yesterday in Shanghai. But Fitch cautioned that because of the rising need for capital and tightening liquidity in the market, leasing companies will face higher funding cost and this may impact smaller-sized or weaker players in the industry. Fitch predicts that offshore bond issuing from lessors may increase this year but the scale might be smaller than that raised onshore. Chinese leasing companies raised US$33 billion from the capital market by issuing onshore bonds last year, more than doubling the number in 2016, according to industry data. Funds from offshore bond issuance in 2017 were on par with those raised in 2016 at US$9 billion while onshore asset-backed securities in the leasing sector increased from US$17 billion a year ago to US$22 billion last year.

Investment in e-sport

Thu, 04/26/2018 - 18:01
ORIENTAL Pearl plans to raise investment in e-sport by integrating media channels and game business, including setting up a 130,000-square-meter e-sport park in Shanghai, the firm said yesterday. The Shanghai-listed company plans to integrate media and e-sport business and hold e-sport events in landmark sites like the Oriental Pearl TV Tower in Pudong. It plans to set up a 130,000-square-meter e-sport park and a 13,000-square-meter hall for e-sport. Oriental Pearl is pushing the “Fast-Forward Button” on e-sport as it aims to tap China’s e-sport user base of 450 million in the near future, up from 200 million now, it said. China’s e-sport market revenue is expected at 78.6 billion yuan (US$12.5 billion) in 2018, up from 64.7 billion yuan last year, amid a huge pool of gamers, rising sales of mobile game gadgets and tournaments offering big prize money, said China Insights Consultancy.

Ctrip goes supersonic

Thu, 04/26/2018 - 18:01
SHANGHAI-BASED Ctrip.com Inc has invested in US-based supersonic airplane developer Boom Supersonic, which is developing next-generation airplanes to halve flight times from China to the United States, South Asia and Oceania. The two companies will work together to bring Boom’s still being developed Mach 2.2 airliner to China so that passengers can fly from Shanghai to San Francisco in 6 hours, down from the current 11 hours. The flight time between Beijing and Shanghai will shrink to 40 minutes from 2 hours now, the companies said. “Ctrip is making a strategic investment in the next generation of travel,” James Liang, the firm’s co-founder and executive chairman, said in a statement as China’s biggest online travel agency plans to diversify business to “all things related to traveling” through investment. No details of the investment have been released.

Enhancing freshness

Thu, 04/26/2018 - 18:01
ALIBABA’S logistics affiliate Cainiao Network said it aims to set up 100 fresh food warehouses at county level dispatch centers around China to help connect rural agricultural products with online shoppers. The first of its kind was unveiled in Wugong County in Shaanxi Province to help local farmers sell agricultural products through online vendors. It will leverage existing warehouses and also consider setting up new delivery facilities close to product place of origin over the next two years. Online fresh food vendor Yiguo, with Alibaba’s Tmall as a major stakeholder, has set up fresh food warehouses in 19 cities to help ensure freshness and improve delivery.

Shares take a tumble

Thu, 04/26/2018 - 18:01
SHANGHAI stocks tumbled yesterday after investors were spooked over rising US-China trade tension and on news that Huawei Technologies was being investigated for alleged Iran sales. The Shanghai Composite Index dropped sharply by 1.38 percent to close at 3,075.03 points. Huawei is now said to be under investigation by US authorities for Iran sales. This followed US President Donald Trump’s imposition of a seven-year ban on sales of technologies by American companies to ZTE Corporation last week. Southwest Securities said in a note that the China-US trade frictions continued to worsen, raising investor concerns in the broader A-share market, especially in sectors related to the high-tech industry chain. Electronic component shares declined the most, with Southwest Securities, Zhengjiang Huazheng New Material Co Ltd and Xiamen Hongxin Electron-tech Co Ltd all falling sharply by the daily limit of 10 percent. House appliances firms also fell. Xiamen Hongxin Electron-tech Co Ltd also fell by the 10 percent daily cap and KingClean Electric Co Ltd shed 6.86 percent to 27.98 yuan (US$ 4.4).

China supports REIT to finance rental housing

Thu, 04/26/2018 - 18:01
China has moved to support the issuance of rental properties-backed securities to help finance a burgeoning rental housing market, a crucial part of its planned policy package that aims to stabilize the real estate sector.The real estate investment trust, a means of property asset securitization, will be piloted for developers to raise funds, according to a document of the Ministry of Housing and Urban-Rural Development and China Securities Regulatory Commission.The program will enable companies to reduce their leverage ratio and diversify investment options. Large and mid-tier cities, the Xiongan New Area and some other cities will be the first to get the green light under the pilot program.It is the latest move in a government-led campaign to foster the home rental market as part of a long-term solution to an overheated real estate market.Developers have been encouraged to launch rental-only projects but many have hesitated, afraid of an unaffordable impact on their capital chain. While monthly-paid rents are far from enough to replenish cash flows, one-off payment plans are unattractive to tenants.China Vanke, one of the country’s top property developers, has drawn discontent as the minimum rent of its long-term leasing apartments still under construction in Beijing are reported to be triple the district average.The project is designed to offer over 1,000 rental housing units in 2020, with the rent for a three-room apartment of 90 square meters set at 15,000 yuan (US$2,370) to 18,000 yuan a month.Analysts believe government support of property asset securitization like REIT will ease developer concerns over cash flow and significantly widen financing channels for the rental housing market.“More businesses will be motivated to build up presence in the home rental market,” said Zhang Dawei, a Centaline Property analyst.Funds raised through rental properties-backed securities totaled over 50 billion yuan by March, and will likely grow more rapidly with the new favorable policies.For a long time, soaring property prices have put urban residents under pressure, making housing affordability a growing problem for policy-makers. Now the government wants to further tap the rental market to stabilize home prices and curb speculation, moving to provide tenants with the same public services that owners enjoy to encourage more people to rent rather than buy.Beijing municipal government has published a pro-rental policy that will guarantee the education rights of tenants’ children.With more favorable polices in the pipeline, the home rental market boasts huge potential. The number of Chinese who rent will amount to nearly 300 million people in 2030, up from the 190 million at present, and total rents will more than quadruple to 4.6 trillion yuan, according to a report of Guanghua School of Management with Peking University.A robust rental market will “avert drastic ups and downs in the property market and reduce irrational demand,” said Zhang, the analyst with Centaline Property.Partly by promoting home-leasing, the government is working on a long-term mechanism for property regulation that will ensure sustainable and steady development of the real estate market, which have stayed tame largely due to provisional purchase curbs. Hainan Province, the country’s youngest province, on Sunday imposed tougher rules to curb speculation.

HK’s Wharf sees mainland as key growth engine

Thu, 04/26/2018 - 18:01
THE Chinese mainland will continue to be a key growth engine for The Wharf (Holdings) Ltd as the Hong Kong specialist in high-end commercial and residential real estate development continues to cement its footprint aggressively across the country. “The Chinese mainland and Hong Kong properties will still form the group’s backbone in the foreseeable future,” said Andrew Chow, deputy chairman of Wharf. “Since the second half of 2017, we have acquired 19 land plots in major Chinese cities including Suzhou, Hangzhou, Beijing, Guangzhou and Foshan with total investment reaching 28 billion yuan (US$4.42 billion).” Hong Kong-listed Wharf has adopted a selective strategy in land acquisition for development properties on the Chinese mainland, and targets Beijing, Shanghai, Suzhou, Hangzhou, Shenzhen and Guangzhou as its six key cities, Chow said. Seven high-end residential projects are scheduled to be launched in Beijing, Shanghai, Hangzhou and Suzhou this year. The company’s single largest investment project on the Chinese mainland, Changsha IFS, a 20-billion-yuan, 1-million-square-meter mixed-use development, will be unveiled early next month in the capital of Hunan Province. Wharf’s revenue from its China development property was HK$34 billion (US$4.3 billion) last year, up 11 percent from 2016. Wharf’s major investment holdings in Shanghai include Shanghai Times Square and Shanghai Wheelock Square while its development portfolio comprises luxury residential projects in Jing’an, Yangpu and Pudong.

Fine for breaking business conditions

Thu, 04/26/2018 - 18:01
SHANGHAI will impose a fine of up to 300,000 yuan (US$47,462) on business applicants who violate commitments they made to government authorities or fail to ensure the necessary conditions for their operations. The fine is contained in measures the Shanghai government unveiled that will come into effect on Tuesday. The measures also allow for stricter supervision and regulations on businesses. The measures require applicants who fail to meet the approval conditions for their businesses to rectify the shortcomings within two months. The approval will be withdrawn if their businesses still do not qualify after the rectification. Applicants will be warned for violations of previous commitments they made. They will be liable to a fine of up to 300,000 yuan if their violations lead to harmful consequences such as food poisoning. Shanghai has been making efforts to improve and simplify the process for starting a business. It allows qualified firms to be approved for business permits before they have to submit required materials within a designated period in a move to make it more efficient and convenient for firms to do business. The city’s administrative approval authority will notify the applicant of the approval conditions and the materials required to be submitted together. The applicant can submit in writing his commitment to meet the approval conditions to get permits ahead of schedule. “These measures are developed for the purposes of optimizing the administrative approval procedures,” Mao Ronghua, director of the municipal government’s Legislative Affairs Office.

Takeover gets green light

Thu, 04/26/2018 - 18:01
GERMANY’S Economy Ministry has approved the takeover of German aerospace supplier Cotesa by China’s Advanced Technology and Materials. Cotesa’s chief executive officer Joerg Huesken confirmed to German newspaper Frankfurter Allgemeinen Zeitung on Wednesday that the deal finally got approval from the German government after a months-long investigation. It was the first takeover conducted by Chinese investors that was approved by the German government since it reformed its rules on foreign acquisitions in July 2017. Cotesa, a mid-sized German firm that makes composite fiber components for aircraft producers such as Airbus and Boeing, signed a takeover contract last September with AT&M for between 100 million and 200 million euros (US$122 million-US$244 million). But the ministry intervened last December and investigated the acquisition to “check whether it complies with Germany’s law on foreign trade.” The ministry has also raised the investigation time from previous two months to up to four months.

NEVs purr into spotlight at auto show amid promising prospects

Wed, 04/25/2018 - 18:01
New-energy vehicles take the spotlight at the 15th Beijing International Automotive Exhibition as automakers aim to tap the growing demand for green cars in China.Auto giants relish the potential of the Chinese market for new-energy vehicles as China aims to have such vehicles account for more than 20 percent of the country’s annual car sales by 2025.The show comes as China’s market hits a transition period — the explosive growth in car sales seen over the last decade slowed last year and data from early this year point to a continued slump for many vehicle types. Chinese consumers are following their American peers toward sport-utility vehicles while policy-makers push an all-electric future. Accounting for some 28.9 million car sales last year, the Chinese car market could soon match those of the European Union and United States combined.General Motors sold over 4 million cars here last year, more than in the US. Volkswagen sold more than 3 million, roughly six times its home market.The eight-day auto show, to be held today at China International Exhibition Center till May 4, will display 174 new-energy vehicles, according to the official website of the exhibition. Of the 174 new-energy vehicles, 124 are from domestic carmakers and 50 are from global automakers.Volvo Cars said yesterday that it targets electric cars to account for 50 percent of its total sales by 2025. “Today we reinforce and expand that commitment in the world’s leading market for electric cars. China’s electric future is Volvo Cars’ electric future,” said Hakan Samuelsson, president and chief executive officer of Volvo Cars.For the first time Volvo Cars will only display plug-in hybrid vehicles at the Beijing auto show. The company also said all of the three Volvo Cars plants in China will soon produce either plug-in hybrid or pure electric vehicles.German automaker BMW is driving its electrification strategy by extending the reach of its electric vehicle offering in China’s auto market. BMW showed its electric SUV concept car, the BMW Concept iX3, during a media preview at the auto show for the first time yesterday. BMW said it will produce the BMW Concept iX3 in China in 2020 at its BMW Brilliance Automotive joint venture.“China is leading the development of e-mobility. This is why we choose to showcase the BMW iX3 concept car for the first time in Beijing,” said Harald Krueger, chairman of the Board of Management of BMW AG. “2018 underlines the company’s commitment to the next step in its electrification strategy.”Domestic automakers, meanwhile, are not taking the backseat as they are also developing their own new-energy vehicles banking on the promising future of such vehicles in the country.Geely unveiled Bo Rui GE, its first intelligent plug-in hybrid sedan jointly developed by Geely and Volvo, at the show. This new-energy vehicle will be launched in the Chinese market in the first half of 2018.At the same time Geely has also unveiled a 48V mild hybrid version of the Bo Rui GE, which improves fuel economy by 15 percent over a traditional gasoline model. The Chinese carmaker said that more new-energy vehicles will follow the Bo Rui GE.An Conghui, president and CEO of Geely Auto Group, said that “China will ultimately become the global center of a new energy revolution. We aim to mass produce new-energy vehicles by the year 2020.”Chinese automaker Great Wall also unveiled its first plug-in hybrid SUV model WEY P8 and its electric concept car WEY-X at the show.

Financial and cyclical shares cloud index

Wed, 04/25/2018 - 18:01
SHANGHAI stocks slipped yesterday amid a collapse by cyclical shares and financial companies. The Shanghai Composite Index shed 0.35 percent to 3,117.97 points. Shanxi Antai Group Co Ltd dropping 5 percent and Yanzhou Coal down 3.07 percent. Oil and petrochemical companies were also among the biggest decliners. Sinopec Group lost 2.74 percent to 6.75 yuan, and Zhongman Petroleum&Natrl Gas Grp Corp Ld fell 1.8 percent. Financial shares also gave up their Tuesday’s gains. The Industrial Bank Co Ltd fell 1.89 percent, China Minsheng Bank Corp Ltd shed 1.65 percent and the Industrial and Commercial Bank of China Ltd lost 1.48 percent. New Life Insurance, Ping An Insurance and Pacific Securities Co Ltd also took their cue from the general decline in the market.

China’s PE market still flourishing

Wed, 04/25/2018 - 18:01
China’s private equity market achieved its second best results on record and continued to be the largest market in Asia Pacific, a private report said yesterday.The deal value in the PE market grew to US$73 billion last year from US$63 billion in 2016, and the average investment size stayed high at US$128 million, said Bain & Company’s 2018 China Private Equity Report.“The China private equity market has once again done exceptionally well and continues to show investors that it is maturing and becoming much more rational,” said Lucia Li, partner with Bain & Company’s Private Equity practice in China. “Our findings have shown that the country remains increasingly desirable and competitive, so all the players wishing to succeed in the country need to ensure that they have developed both short-term strategies and long-term plans to win,” Li said.The Internet and technology sectors were still favored by PE investors in 2017, according to the report. But the number of exits in China rose sharply to a record 393 last year, from 237 in 2016. But the value of the exits stayed flat from a year ago.The report also highlighted that corporate merger and acquisition activities have fallen significantly amid the Chinese government’s stricter capital control and policy.“Companies need to invest and focus on cost transformation and management going forward as macro conditions become less sanguine,” said Kiki Yang, partner with the firm’s PE practice.

China to cut tariffs for imported cars substantially to open up market

Wed, 04/25/2018 - 18:01
CHINA is working on what will be a “substantial” tariff reduction for imported cars, an official said yesterday, as the country is making more efforts to boost imports and further open up the domestic market. “We will publish [the new tariffs] as soon as possible after finalizing the details,” Chen Yin, chief engineer of the Ministry of Industry and Information Technology, said at a press conference. China has cut auto tariffs multiple times since 1986, with the tax rate down from 220 percent to the current 25 percent. The number of imported cars rose 16.8 percent year on year to 1.22 million in 2017. Plans have also been released to remove curbs on foreign investment in China’s auto industry. “We will scrap caps on foreign shares of new energy vehicle producers this year, and in makers of commercial and passenger vehicles in 2020 and 2022 respectively,” Chen said. “Foreign investors will also be allowed to set up more than two joint ventures.”

Beijing rejects US claims of WTO rule breaches

Wed, 04/25/2018 - 18:01
CHINA yesterday rejected American charges of “breaches of WTO rules,” saying such judgments should be made within the World Trade Organization framework rather than being decided by any single country. Kurt Tong, the United States consul general of Hong Kong said on Tuesday that China’s breaches of WTO rules are detrimental to the US. Tong said China’s size and international economic success had fostered the idea that it was acceptable for the country to ignore global trading rules. The US side has to provide evidence when it charges China on violations of WTO rules, Chinese Foreign Ministry spokesman Lu Kang told a press briefing. “It’s good that the US side is willing to talk about WTO rules,” Lu said, adding that recent discussions within the organization in Geneva clearly indicated that many WTO members expected the US itself to abide by WTO rules. “Since joining the WTO, China has been fulfilling the obligations as a member state and abiding by WTO rules,” Lu said, adding that China had always been an active participant, firm supporter and key contributor to the multilateral trade system. “As a matter of fact, China’s development results are achieved by following international rules and by the hard work of Chinese people,” Lu said. “Trade conflicts between China and the United States can be resolved through bilateral talks, or be managed under multilateral frameworks, but should not be handled unilaterally.” On Tuesday, US President Donald Trump said in Washington that Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer will travel to China in a few days for trade talks. Trump made the announcement at a press conference with visiting French President Emmanuel Macron at the White House. Chinese officials “came here, as you know, last week. And we’re having very substantive discussions on trade,” Trump said, referring to bilateral discussions of trade at meetings of the International Monetary Fund and the World Bank, which concluded in Washington last week. During the spring meetings, Christine Lagarde, managing director of the IMF, and other financial leaders around the world called on the US and China to resolve trade tensions through dialogues and rules-based multilateral institutions. “I believe the trade will work out ... hopefully it’ll be good for everybody concerned,” Trump said. His remarks came after Mnuchin said on Saturday that he was considering a trip to Beijing to discuss trade issues with his Chinese counterparts. “China has received the information about the US side hoping to come to Beijing for consultations on economic and trade issues and we welcome it,” Lu said. “I want to stress that China-US economic ties are mutually beneficial in nature.”

Sky’s no limit for Comcast offer

Wed, 04/25/2018 - 18:01
US media group Comcast submitted a 22 billion pound (US$30.7 billion) bid for Sky yesterday, prompting the European pay TV group to drop its support for a lower offer from Rupert Murdoch’s 21st Century Fox. Sky’s independent directors welcomed Comcast’s 12.50-pound-per-share bid and said they would now engage with both Comcast and Fox. They cautioned that neither bid could yet be put to shareholders and advised them to take no action for now. Fox, which already has a 39 percent stake in Sky, first announced its 10.75-pound-per-share cash offer in December 2016. The deal has been held up by concerns about the influence Murdoch could wield over public opinion through owning all of the broadcaster as well as British newspapers including The Times and The Sun. The proposed combination has been further complicated by Fox’s agreement to sell many of its TV and film assets to Disney, including its stake in Sky, for US$52 billion. Yesterday, Sky also welcomed commitments the US cable giant had made to address potential public-interest concerns over Sky News, its influential 24-hour news channel. “As a result of the announcement of this higher cash offer, the Independent Committee is withdrawing its recommendation of the offer announced by 21CF on 15 December 2016 and is now terminating the co-operation agreement entered into with 21CF on the same date,” Sky said in a statement. Comcast’s chairman and chief executive Brian Roberts said Sky withdrawing its recommendation was what it wanted to achieve by formalizing its offer yesterday. “The board confirming they are going to focus on the shareholders, that's the perfect step as far as we are concerned today,” he said. Sky is chaired by Murdoch’s son James, who played a key role in building the company into a major European broadcaster with operations in Germany, Austria and Italy as well as Britain. Sky formed a committee of independent directors to consider the bids, given James Murdoch's role as chief executive of Fox.

New financial court to be set up in Shanghai

Wed, 04/25/2018 - 18:01
China is considering setting up a financial court in Shanghai to deal with finance-related commercial and administrative cases in the city. The draft decision on the establishment of Shanghai Financial Court was submitted to the Standing Committee of the National People’s Congress yesterday. Briefing the lawmakers, the president of the Supreme People’s Court, Zhou Qiang, said the court would be good to bolster the global influence of China’s financial justice to forestall financial risk and steer the financial sector to serve the real economy, and to build the city into an international financial center by 2020. The court, at the intermediate people’s court level, will be responsible for commercial cases involving securities, bills, financial lending and administrative cases. The leadership of the court, as well as the judges, will be appointed by the Standing Committee of Shanghai Municipal People’s Congress. The judges will be selected from outstanding members of the legal fraternity, including lawyers and law experts.

Heytea gets US$64m investment

Wed, 04/25/2018 - 18:01
MILK tea chain store Heytea received a 400 million yuan (US$63.5 million) boost from Meituan Dianping which is tapping the boom in leisure dining as it seeks synergies between online and offline. DragonBall Capital, an investment fund affiliated to China’s leading lifestyle services platform, said the two parties would collaborate closely to enhance consumer experience and build new retail formats. Heytea was one of the most popular milk tea brands which created a buzz in China last year after consumers were said to be queuing for hours for its cheese-topped style tea and fruit tea at dozens of outlets. Chinese consumers spend an average of US$160 annually on out-of-home dining and non-alcoholic beverages annually, said a report by Kantar Worldpanel. Heytea targets opening 100 new stores this year to add to its current 90 outlets in 13 domestic cities.

Foreign firms invited to chip in for 2nd fund

Wed, 04/25/2018 - 18:01
CHINA is looking for billions of dollars in funds to propel its domestic ambitions in chips to cut a heavy reliance on imports, and has invited overseas investors to help it get there. The Ministry of Industry and Information Technology said yesterday that it welcomed foreign enterprises to invest in its top state-backed semiconductor fund. China is looking to accelerate plans to develop its domestic semiconductor market amid a fierce trade stand-off with the United States and a recent ban on US sales, including of American chips, to domestic phone maker ZTE Corp. China’s National Integrated Circuit Investment Fund is now putting together a second fund to support the sector, a MIIT official said. “We welcome foreign enterprises to participate,” the official said at a press conference in Beijing. Officials have previously said that the state-backed chip fund is open to investing in foreign semiconductor firms in China, though major projects have so far been local. The fund raised about 140 billion yuan (US$22.15 billion) previously. The second fund is expected to hit 200 billion yuan, industry insiders predict. Government officials were not available to confirm the figure yesterday. “The IC industry needs global cooperation — all parts are welcomed to take part in the fund,” Chen Yin, MIIT’s chief engineer and spokesperson said during a conference broadcast online. The fund, commonly referred to as the “Big Fund,” has previously backed major projects including a Tsinghua Unigroup memory chip plant worth US$24 billion that is now under construction in Wuhan, capital of Hubei Province. The supportive investment policies are designed to cut China’s reliance on foreign semiconductors, which are one of the country’s top imported products by value. That dependence was highlighted this month after the US banned American firms from selling components, including semiconductors, to ZTE, in a move that analysts said could be potentially fatal for ZTE’s smartphone business. US firms are estimated to provide 25-30 percent of the components used in ZTE’s equipment. Though China is the world’s No.1 chip market, the domestic IC industry can only meet 10 percent of local demand.

Total ad spending to rise 5.2% in 2018

Wed, 04/25/2018 - 18:01
TOTAL advertising spending in the Chinese market is set to rise faster at 5.2 percent year on year to 585.8 billion yuan (US$92.7 billion) in 2018, GroupM, WPP’s media investment company, said. The out-of-home advertising market remains buoyant as it is forecast to grow 9.2 percent annually, according to GroupM’s “This Year, Next Year: China Media Industry Forecast” report. Internet ad spending is set to grow by a slightly slower rate of 13.5 percent in 2018, and e-commerce ads will account for the majority of spending, the report said. However, overall spending on traditional TV commercials will continue its downward trend, set to fall 9.2 percent this year, the report said, adding that ad expenditure is set to pick up as advertisers continue to shift toward content marketing and digital marketing and brand placement in variety shows and dramas. “Improving the quality and personalization of brand marketing is also increasingly important and will be a strong driver of growth in the advertising ecosystem,” said Patrick Xu, CEO of GroupM China and WPP China.

Quotas to rise for 2 pilot models for foreign assets

Wed, 04/25/2018 - 18:01
CHINA will increase quotas for two pilot schemes that allow domestic investors to access foreign assets, as part of its broader efforts to open up the financial market, according to the country’s foreign exchange regulator. The quota for the Qualified Domestic Limited Partnership program in Shanghai and the quota for the Qualified Domestic Investment Enterprise scheme in Shenzhen will be expanded to US$5 billion each, the State Administration of Foreign Exchange said on Tuesday in an online statement. The QDLP program was first launched in Shanghai in 2013 while the QDIE was launched in Shenzhen in 2014. Both schemes offer channels for qualified domestic institutions to invest overseas. China has launched a new round of the programs since late last year. The QDLP program in Shanghai had a previous quota of US$2 billion, which was used up by the end of February, according to SAFE. The QDIE program in Shenzhen had a previous quota of US$2.5 billion, US$1.26 billion of which had been allocated by April 9. SAFE will steadily push forward the pilot programs and improve the macro-prudential management of the schemes, the statement said. The move came after a SAFE announcement earlier this month, which stated that the country will push the reform of the Qualified Domestic Institutional Investor program, a similar scheme for outbound investment. China has yet to fully liberalize its capital account, with programs such as QDII and Qualified Foreign Institutional Investors providing financial institutions with quotas for outbound and inbound investment, respectively. The reform measures for outbound investment come at a time when China is stepping up efforts to open its financial market.

More centers to protect IP to be established

Wed, 04/25/2018 - 18:01
CHINA on Tuesday pledged to set up more intellectual property protection centers, according to the State Intellectual Property Office. China has created 19 intellectual property protection centers nationwide, said Shen Changyu, head of the SIPO, at a press conference. Shen said China is revising its Patent Law and creating a punitive damages system for intellectual property infringement to raise the cost of illegal behavior and create a deterrent effect. “China will strengthen intellectual property protection,” he said.

DSM to be partner in shaping future

Wed, 04/25/2018 - 18:01
ROYAL DSM, a company in the health, nutrition and materials business, aims for its sustainable and innovative solutions to support the key trends shaping the future of China. The Dutch company sees its state-of-the-art material products and solutions to help the four trends — economic prosperity, innovation, sustainability and vitality — that are key to China’s future, Roeland Polet, president of engineering plastics at DSM, said. DSM is showing its connected car solutions which integrate all parts of the vehicle under the hood and inside the passenger compartment at the four-day 32nd International Exhibition on Plastics and Rubber Industries which ends tomorrow in Shanghai. China now leads in developing electric vehicles worldwide, said Tamim Sidiki, global marketing director of electronics at DSM, adding that there will be convergence of cars and electronics in the future. “You can see that now the automobile and electronics industries are converging. The car of the future will basically be a smartphone, as a lot of electronics will be integrated into cars,” said Sidiki, “Chinese and Silicon Valley companies are driving this global trend. And to make this happen, we need good materials and the right materials.” DSM will also respond to the evolving needs of environmentally-conscious Chinese consumers by developing green and sustainable products.

Aviation show opens in Germany

Wed, 04/25/2018 - 18:01
German Chancellor Angela Merkel (4th right) and Airbus CEO Thomas Enders (2nd right) pose in front of an Airbus A350 aircraft at the ILA Berlin International Aerospace Exhibition at Schoenefeld airport near Berlin yesterday. The organizers said over 1,000 exhibitors will showcase their expertise. The five-day exhibition will end on Sunday.

VW set to invest US$18b in e-vehicles in China

Tue, 04/24/2018 - 18:01
CAR giant Volkswagen announced yesterday investments of 15 billion euros (US$18 billion) in electric and autonomous vehicles in China by 2022, in a massive bet on the vital market. “China is our second home,” recently-installed chief executive Herbert Diess said at a Beijing press conference, with its market set to be “the biggest” worldwide for electric cars. He added that the cash — to come from both Volkswagen and local joint-venture partners — would “make mobility cleaner, safer and more intelligent to really improve people’s lives.” By 2021, the world’s largest carmaker aims to produce battery-powered cars in “at least six factories in China,” Diess said. It is due to launch 15 electrics and hybrids in the next two to three years as part of a 10 billion euro development plan announced in November. The VW chief also announced a new joint venture with Chinese firm Anhui Jianghuai Automobile (JAC) to launch a new car brand, SOL, which will offer an electric SUV with a range of “more than 300 kilometers” on a single charge. Accounting for some 28.9 million car sales last year, the Chinese car market could soon match those of the European Union and United States combined. VW, which said it would set up a business unit devoted entirely to China in a recently-announced restructuring, plans to release some 40 new models there in the coming eight years. Diess’ trip to the Beijing Auto Show, which opens today, is his first foreign visit since replacing former CEO Matthias Mueller, the crisis firefighter brought in after the “dieselgate” scandal broke in 2015. During his tenure, Mueller launched a massive reorientation of the mammoth group and its 12 brands toward electric-drive vehicles and digitally-connected and autonomous driving. But VW has yet to escape the shadow of its admission to cheating on regulatory emissions tests for 11 million diesel vehicles worldwide.

Quarterly power use sees fast rise

Tue, 04/24/2018 - 18:01
GROWTH in China’s quarterly power consumption rose the fastest in the first three months since 2012 as cleaner energy plays a greater role in electricity usage, the National Energy Administration said yesterday. Electricity use rose 9.8 percent in the first quarter, up 2.9 percentage points from a year ago and was the fastest quarterly growth since 2012. The growth was boosted by China’s coal-to-electricity policy which urges residents to use electricity instead of coal for heating, said Li Fulong, spokesman of the NEA. Around 2 million households were heated with 1.2 million kilowatt-hours of electricity, instead of coal, between winter and spring in north China, Li said. China will invest 40.5 billion yuan (US$6.4 billion) in upgrading electricity power grid in rural regions this year to replace coal which causes pollution. Investment in wind, hydro, nuclear and solar power surged 18 percent annually in the first quarter, “far above the average 10.5 percent for investment in electricity,” he added, as clean energy plays a larger role in China’s electricity use.

Demand for languages set to climb

Tue, 04/24/2018 - 18:01
THE demand for minor language fluency is set to surge as China’s connection with the world rises and also in tandem with its Belt and Road Initiative, with the growth likely to be fueled by new technology like artificial intelligence, said a report from Hujiang, an online education platform. The second foreign language market in China is set to reap a revenue of 30 billion yuan (US$4.77 billion) by 2020, fueled by national strategies, consumption upgrade and mobile Internet technology development, said Zhang Jing, general manager of Hujiang’s multi-language business division. The technology, including AI, is “creating more classrooms” besides professional courses in universities, said Hujiang. Over 25 to 30 percent of learners study minor languages online, and the proportion is forecast to climb amid surging demand to tap opportunities in BRI countries.

Funds keep investing in TMT

Tue, 04/24/2018 - 18:01
CHINA’S private equity and venture capital investment in telecommunications, media and technology continued strongly overall in the second half of 2017, a PwC report said yesterday. From June to December, 2,528 PE/VC investment deals totaling US$33.96 billion were sealed, the report said. Although the number of deals fell 3 percent and the value shed 12 percent from the first six months, the report said the second half notched the second-best half-year performance since 2015. There were 57 large-size deals of over US$100 million each in the second half of last year, the report said. China Unicom raised nearly US$5.89 billion in the fourth quarter, making it the largest single deal by value since 2015. “The total investments in TMT accounted for more than 50 percent of all investments over the period, further consolidating the pivotal position of TMT. The trend was helped by the expansion and growth of unicorn enterprises sealing high value deals,” said Jianbin Gao, TMT Leader of PwC China. “Overall, more large-sized deals were made particularly in Internet services and Internet finance sectors.” Investment in Internet and mobile Internet still led by both deal number and value among the four main sub sectors of TMT in the second half of 2017, with 33 deals valued at over US$100 million each. The technology sector followed with 17 deals valued at over US$100 million each, as capital favored artificial intelligence and corporate services companies.

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