APPLE Inc’s iCloud services in China will be operated by a domestic firm from next month in response to consumer complaints over the slow speed and loss of data, the company said yesterday.
The move also helps Apple to better comply with Chinese cyber security laws on data privacy, which require all foreign companies to store data of Chinese users domestically, according to analysts.
The iCloud service will be operated by Guizhou Cloud Big Data, a government-backed firm based in Guizhou Province in south China. iCloud data will be transferred from 28 February. However, iCloud accounts registered outside China are not affected, according to Apple.
“It’s a natural move for Apple to be more localized in China, as many foreign Internet firms do,” said Jia Mo, analyst at research firm Canalys. “Chinese operators are expected to offer better services for local consumers.”
It is hoped that the move will "improve the speed and reliability” of iCloud services while also “complying with newly passed regulations,” Apple said.
Consumers complained that the iCloud, which allows iPhone and iPad users to store and synchronize pictures, videos, and documents online, has caused them to lose data, is hard to access and suffers slow upload speed.
Apple China offers them limited technical support as its iCloud team is based outside the mainland, Shanghai Daily learned.
Apple previously said that it would invest US$1 billion in Guizhou to build the data center and to set up new research hubs in Shanghai and Suzhou.
Amazon and Microsoft also plan to transfer data hubs in China to local partners.
SHANGHAI shares notched a nine-day rising streak yesterday, helped by bank and oil companies.
The Shanghai Composite Index gained 0.23 percent to 3,421.83 points.
Industrial Bank Co rose 5.82 percent to 18.18 yuan (US$2.79) and China Construction Bank Corp added 2.91 percent to 7.78 yuan.
Banking shares climbed amid expectations of liquidity being loosened as “the central bank shows few signs of raising interest rates,” said Kang Shuiyue, an analyst at Sun Investments, a domestic asset management company.
Oil giants were lifted by surging crude prices, given that Brent crude closed at US$68.82 per barrel yesterday, the highest level since December 2014.
PetroChina Co gained 2.82 percent to 8.75 yuan while China Petroleum & Chemical Corp rose 2.14 percent to 7.15 yuan.
Oil prices rallied amid political turmoil in oil producer Iran, and shrinking crude inventory in the US, said Luo Libo and Wang Ke, analysts at GF Securities.
They added the continuous output cuts among members of the Organization of the Petroleum Exporting Countries would further raise crude prices in the coming days.
TELECOMS carrier AT&T has dropped plans to sell China’s Huawei smartphones in the United States, dealing a setback to the No. 3 global phone maker’s expansion plans, according to news reports.
The Wall Street Journal, which reported the development on Tuesday, gave no reason for AT&T Inc’s decision. Hong Kong’s South China Morning Post said Huawei Technologies Ltd’s vice president for consumer business, Richard Yu, confirmed the move in a text message to the newspaper and wrote, “We have been harmed again.”
A Huawei spokesman declined to comment.
Yu said in December the company would announce smartphone sales through a US carrier this week. Huawei sells some models in US electronics stores and online but has a minimal share of an American market in which most sales are through carriers.
Ahead of the planned announcement, Huawei had issued a statement that said, “Over the past five years Huawei has proven itself by delivering premium devices with integrity globally and in the US market. On Tuesday Huawei will introduce new products to the US market, including availability.”
Globally, Huawei’s handset business trails Samsung and Apple by shipments. But it leads in China, the biggest market, and says it expects to ship a total of 150 million units this year.
Huawei’s shipments rose 16.1 percent in the latest quarter over a year earlier to 39.1 million handsets, ahead of Apple’s 2.6 percent growth to sales of 46.7 million, according to IDC.
CONSUMER finance is seen as the driver in boosting consumption growth in China which, in turn, will greatly impact the country's economic transformation, according to a report of Tsinghua University yesterday.
“I believe that consumer finance will be an important industry, as consumer finance is substantially serving the real economy,” said Li Daokui, professor at the Center for China in the World Economy in Tsinghua University.
Li spoke at third China Consumer Finance Forum held by the center which released a research report on Chinese consumer credit market in 2017.
Consumer financial services are a good way to complement traditional financial services because the former can be a catalyst to help people to pursue new consumption patterns, the report said.
The report suggests that the consumer finance market should emphasize regulation and innovation in order to ensure the healthy and sustainable development of the market.
THE central parity rate of the yuan weakened 239 basis points to 6.5207 against the US dollar yesterday, a two-week low.
The lowest rate since December 29 came after drops in the offshore yuan against the dollar on Tuesday following rumors that the country’s central bank had notified lenders to suspend the “counter-cyclical factor” in the pricing mechanism of the yuan’s central parity rate.
The People’s Bank of China said in response that parameters of the “counter-cyclical factor” are determined by market-making banks based on their own judgment on the macro-economy and the foreign exchange market.
Last May, authorities introduced the “counter-cyclical factor” to the existing pricing model of the yuan’s central parity rate against the dollar, aiming to moderate pro-cyclical fluctuations driven by irrational sentiment in the forex market.
In China’s spot market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day. The central parity rate of the yuan against the dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market.
The China Foreign Exchange Trade System said China’s forex market is prone to irrational expectations due to a certain level of “pro-cyclicality,” which distorts market demand and supply, and increases the risk of the market exchange rate overshooting. Adding the “counter-cyclical factor” to the existing model will help to correct the trend and steer market attention to the macro-economy, it said.
China has been pushing reform of the yuan’s exchange rate formation system to make the currency more market-oriented and help to stabilize expectations. The yuan has seen sustained strength this year, with its central parity rate strengthening to a 20-month high against the dollar on Monday.
FRENCH President Emmanuel Macron said yesterday that a contract with China for 184 Airbus A320 narrow-body jets would be finalized soon and that his country also had ambitions to sell A350 and A380 planes to China in coming weeks or months.
The potential A320 order, which had not been previously announced, would be worth more than US$18 billion at list prices. “On the order for 184 A320s, it’s something that will be finalized shortly,” Macron said, adding that it was confirmed to him by Chinese President Xi Jinping.
“President Xi confirmed to me that China will maintain the volume of orders in the coming years and preserve parity with the market shares of Airbus and Boeing,” Macron said.
“And we also have ambitions on A350 and A380 mid-range and large carriers in the weeks or months to come,” Macron said as he wrapped up a visit to China with several business deals.
The A320s would be delivered in 2019 and 2020, a French presidency official said.
Ahead of Macron’s trip, sources had said that Airbus was in talks about an order for 100 or more jets.
New jet orders have historically featured during such tours by French leaders.
While no deal has been finalized over the current official visit, Macron said Chinese officials had assured him that Beijing would respect market-share parity between Airbus and Boeing.
China regularly splits large orders between Europe and the United States to cope with its fast expanding airline traffic, but the momentum has recently been with rival Boeing, which sold 300 jets during a visit by US President Donald Trump last November.
China, however, placed a large order for 140 Airbus jets during a visit to Germany by Xi last July.
Airbus signed a provisional deal on Tuesday to boost the number of A320 family jets assembled in Tianjin to six a month by 2020 from four currently.
Other business deals were made during Macron’s visit, including one for French state energy giant Areva to help to build a nuclear spent fuel reprocessing plant in China.
CHINA’S consumer inflation cooled last year while factory-gate prices rose for the first time in six years amid stable economic growth, National Bureau of Statistics data showed yesterday.
The Consumer Price Index, a main gauge of inflation, rose 1.6 percent year on year in 2017, lower than 2016’s 2 percent. The 2017 increase was in line with market expectations.
The Producer Price Index, which measures changes of prices at the factory gate, rose 6.3 percent last year, ending a falling streak over the past five years.
Last month, consumer inflation was 1.8 percent, up from November’s 1.7 percent. PPI in December rose 4.9 percent year on year, down from November’s 5.8 percent and the slowest pace since November 2016.
Sheng Guoqing, a senior statistician of the bureau, said food prices fell in 2017 for the first time since 2003 led by pork and fresh vegetables, contributing to the milder consumer inflation data. Non-food prices rose 2.3 percent year on year, 0.9 percentage points faster than 2016, as service prices rose 3 percent.
The rising factory-gate prices were led by oil and gas, coal, and metal sectors, said Sheng, though the pace has been slower in the second half.
Lian Ping, chief economist of the Bank of Communications, said the core CPI, which doesn’t include food and fuel prices, rose 2.2 percent last year, indicating stable domestic demand and economic growth.
A recovery of food prices this year may see CPI reach 2 percent, he added, while weakening momentum of commodity prices will slow down the PPI increase this year to 3.5 percent.
“Prices conditions this year will support stable economic growth and will not press adjustment in monetary policies,” Lian said.
Australia and New Zealand Banking Group economists said in a note that China’s capacity-reduction program for steel and coal will likely be completed this year and extended to other sectors, sustaining growth in factory-gate prices.
The ANZ economists expected China’s central bank to steer money market interest rates up by 35 basis points in an effort to support its deleveraging campaign.
GDP grew 6.9 percent year on year in the first three quarters of 2017, above the government’s annual target of around 6.5 percent.
The statistics bureau is due to release 2017 GDP growth next Thursday.
Wang Tao, UBS chief China economist, said on Tuesday she expected China’s economy to grow 6.8 percent last year and 6.4 percent this year.
She said a weaker home market and infrastructure investment will overshadow growth in industrial profits and consumption.
THE State Council has decided to ease regulations for enterprises investing in free trade zones to promote reform and opening up, a notice said yesterday.
According to the decisions endorsed by Premier Li Keqiang, China will allow wholly foreign-owned entertainment venues to provide services in FTZs and permit foreign investors to invest in Internet access business.
China will remove the restriction that at least 70 percent of equipment in foreign-funded urban-rail traffic projects should be made in China.
Wholly foreign-owned companies were allowed to open gas stations and to design, produce and repair aircraft with a maximum takeoff weight of 6 tons.
Investment proportion curbs on helicopters with a takeoff weight of at least 3 tons were also lifted.
Foreign investors were also allowed to be controlling shareholders in international shipping agencies.
China’s FTZs, which have grown from the first in Shanghai to 11 across the country, are a way of testing new policies, including interest rate liberalization and fewer investment curbs.
FACEBOOK and Xiaomi will release a virtual reality headset in the Chinese mainland market even though the US-based social giant’s service is not accessible here.
The VR device, Mi VR standalone, will be the first Facebook device officially sold in the mainland market which has the world’s biggest number of Internet users. The device will feature both Xiaomi and Facebook’s Oculus logos in China. It’s the Chinese version of Facebook’s Oculus Go, which costs US$199 in the US market.
Both sides, which announced the VR device yesterday, declined to reveal more information like revenue sharing or price and timetable of the release domestically.
The standalone headset doesn’t require a personal computer or mobile phone to work with.
INTEL has big plans to steer toward new business in self-driving cars, virtual reality and other cutting-edge technologies. But first it has to pull out of a skid caused by a serious security flaw in its processor chips, which undergird many of the world’s smartphones and personal computers.
Intel CEO Brian Krzanich opened his keynote talk on Monday night at the annual CES gadget show in Las Vegas by addressing the hard-to-fix flaws disclosed by security researchers last week. At an event known for its technological optimism, it was an unusually sober and high-profile reminder of the information security and privacy dangers lurking beneath many of the tech industry’s gee-whiz wonders.
Some researchers have argued that the flaws reflect a fundamental hardware defect that can’t be fixed short of a recall. But Intel has pushed back against that idea, arguing that the problems can be “mitigated” by software or firmware upgrades. Companies from Microsoft to Apple have announced efforts to patch the vulnerabilities.
And Krzanich promised fixes in the coming week to 90 percent of the processors Intel has made in the past five years, consistent with an earlier statement from the company. He added that updates for the remainder of those recent processors should follow by the end of January. Krzanich did not address the company’s plans for older chips.
To date, he said, Intel has seen no sign that anyone has stolen data by exploiting the two vulnerabilities, known as Meltdown and Spectre.
VIRTUAL aides battled to rule “smart homes” on the eve of the official opening of the Consumer Electronics show gadget gala in Las Vegas.
Samsung, LG Electronics, Panasonic and others touted a future in which homes, cars and pockets brim with technology that collaborates to make lives easier.
Google and Amazon are key players in the trend, with their rival Assistant and Alexa voice-commanded virtual aides being woven deeper into consumer electronics and vehicles. Samsung meanwhile is playing catch-up with its Bixby assistant.
“The biggest theme is the fight for the connected home between Google and Amazon,” Patrick Moorhead of Moor Insights & Strategy said during a day of back-to-back CES press briefings.
“The notion that there is this new layer that can replace apps and operating systems means the stakes are high.”
If voice-commanded assistants become the new norm for interacting with computers and the Internet, being the virtual aide of choice could be a powerful and profitable position.
“Competition is heating up for the smart assistant ecosystem, and the question is who is going to be the smart assistant of choice in 2018,” Gartner analyst Brian Blau said at CES.
Apple and Google have big leads, since their rival digital assistants are already on millions of smartphones and computers, according to Blau.
“That is why Amazon is being so aggressive; they need millions of more endpoints for Alexa in people’s hands,” Blau said.
“The loser, if any, is Cortana, because nobody is talking about them,” he added, referring to Microsoft’s digital assistant.
But, Moorhead countered, Microsoft is likely playing to its strength by angling to be the dominant digital assistant in workplaces and Cortana is already on some half a billion computers powered by Windows 10 software.
Consumer electronics titan LG proclaimed this year a “tipping point” for smart homes during a press event that featured an ignoble on-stage fail.
A cute, table-top smart hub called CLOi went awry, with the voice-commanded, small snow-person shaped device quickly ignoring an LG executive.
“CLOi doesn’t like me evidently,” quipped LG US marketing vice president David VanderWaal.
“Even robots have bad days.”
Such moments are playfully referred to as “the curse of the live demo” in Silicon Valley.
LG is developing technology designed to enable its appliances, televisions and other devices adapt to users and collaborate to handle tasks.
The artificial intelligence platform is “open” to utilizing software made by other companies, LG chief technology officer I.P. Park said.
“The world has become just too complex for just any single company to insist on a proprietary, closed solution,” Park said.
LG collaborators include Google and Alexa creator Amazon, according to the South Korea-based consumer electronics titan.
Google Assistant is being integrated into LG products including televisions, headphones and smart speakers.
THEY grind and gyrate around a pole, with moves like a real stripper.
But these dancers are robots, brought in to offer a new entertainment twist to the crowds descending on Las Vegas this week for the 2018 Consumer Electronics Show.
The robo-strippers are the creation of British artist Giles Walker, who said he designed the vaguely humanoid machines as an expression about surveillance, power and voyeurism.
No one would confuse the robots with real strippers, with a head made from a jettisoned surveillance camera and the rest from bits of scrap material from mannequins and car parts.
“I wanted to do something sexy with rubbish,” Walker said at the Sapphire Gentleman’s Club, a few blocks off the Vegas Strip, at a media event on Monday night which was not part of the official CES program.
Artificial intelligence? Don’t even think about it. These strippers are powered with recovered windshield wiper motors and the artist’s sense of feminine style.
Peter Feinstein, the club’s managing director, said he invited Walker and his robots to add variety at a venue which has long hosted attendees to one of the world’s largest tech shows.
“This is our 18th year for the club, and we felt we needed to come up with something new and unique,” Feinstein said.
At the club, where human dancers were also performing, the robots got mixed reviews.
“I think it’s a good idea,” said one male customer who asked not to be identified, but added that he preferred the real thing.
“This is just the first step. They’re not there yet.”
One of the club’s dancers who gave her name only as Rouge said she was not worried about the competition.
“I think there are a lot of people with weird fetishes so I am sure somebody will get turned on by that. But nobody can beat the beauty of someone, and our talent with our brains, the way we talk, the way we use our bodies,” she said.
A leading Chinese investment firm raised its forecast for China’s economic growth in 2018, citing stronger external demand and strength in consumption and manufacturing investment.
China International Capital Corp raised its forecast for China’s 2018 gross domestic product growth to 7 percent year on year, up from a previous estimate of 6.9 percent, said a report from the company.
An expected tax cut in the United States will boost external demand for China, contributing to faster export growth, according to Liang Hong, chief economist at CICC.
Stronger-than-expected external demand growth in 2018 will add to the inflationary pressure, and the consumer price index is predicted to rise 2.6 percent year on year in 2018, up from 2.5 percent in the previous estimate, according to the report.
CICC is also optimistic about China’s domestic demand, citing growth potential in consumption and investment.
“Consumption growth will likely pick up on the back of rising disposable income growth, especially that of lower-income households that have higher consumption propensity,” Liang said.
Meanwhile, manufacturing investment growth is expected to accelerate, driven by a notable rebound of corporate investment returns, Liang said.
CICC also expected acceleration in property investment growth and resilience in actual infrastructure investment activity this year.
For 2019, CICC expected the real GDP growth to remain robust at 6.9 percent.
With higher hopes for growth and inflation, CICC forecast that China’s central bank will raise the benchmark deposit and lending rate by 25 basis points this year.
China’s GDP grew 6.9 percent year on year in the first three quarters, above the government’s yearly target of 6.5 percent. The official GDP figure for 2017 is set to be released next week.
CHINA’S leading ride hailing application Didi Chuxing said it would launch its own bicycle sharing platform in the near future, and at the same time, it is set to acquire local bike rental startup Bluegogo.
Bluegogo riders can continue to use the service through Didi’s application, and new riders as well as existing ones will have security deposits waived.
In an e-mail statement yesterday, it says it plans to work with partners and collaborators to offer more shared mobility options for riders in the ride-sharing and bike-rental sectors.
It will gradually roll out a deposit-free shared bike rental service for Didi users, although no specific timetable has been given.
Bluegogo’s riders can transfer their deposits and account balance to Didi riding or car-hailing coupons starting from January 17, and for those who do not wish to shift to Didi’s platform, Bluegogo is still working out a solution.
Didi’s proprietary bike rental platform will connect with ofo, Bluegogo and a number of other service providers.
Dozens of bike-sharing startups have mushroomed in Chinese cities over the past two years, where riders can unlock public rental bikes using their smartphones and pay a small amount for each bike ride. But smaller players are facing difficulties amid stricter urban traffic management rules and stiff competition.
Didi’s takeover of Bluegogo is the latest step in the car-hailing giant’s plans to expand into the booming bike-sharing sector. Didi has been an active investor in ofo, and remains ofo’s biggest shareholder after participating in two rounds of fundraising last year.
It is also eying electric vehicles and other transport sectors.
Didi last month said it has raised US$4 billion in funding from domestic and overseas investors as the company seeks to boost global expansion and new energy vehicle initiatives.
Tech giants are eager for a foothold in the bike rental market in order to gain access to user behavior and other data.
THE world economy is likely to grow more than 3 percent this year after it expanded a better-than-expected 2.9 percent in 2017, the Shanghai Academy of Social Sciences said in its world economic report released yesterday.
The academy estimated the world economy to grow 3.12 percent in 2018 and 3.31 percent in 2019, while China’s gross domestic product may expand 6.7 percent this year.
The academy based its forecast on a recovery in the US, Japan and the eurozone, as well as stable expansion in emerging markets like China which contributed one third to the global growth.
“The world economic performance is set to improve with developed countries gradually moving out of the shadow of the 2008 global financial crisis,” said Quan Heng, director of the Institute of World Economy under SASS.
The growth in the US is predicted to be 2.4 percent for this year, and the eurozone may grow 1.94 percent. Japan may achieve a growth of 1.1 percent amid strong imports and consumption demand. The report, however, cautioned that potential geopolitical crisis, uncertainties of interest rate rises in the US and its tax reform, trade conflict, and industrial transformation are set to impact the world economy profoundly this year.
CHINA’S corporate profits are expected to grow more slowly this year compared to last year, with the country’s gross domestic product likely to slow as well, according to UBS.
A-share companies are forecast to see a 7.6 percent growth in earnings in 2018, a sharp drop from the 20 percent surge in the first three quarters in 2017, mainly due to the influence of a GDP slowdown, UBS’ latest research showed. Meanwhile, the authorities are set to intensify financial supervision this year as they implement stricter regulations and risk control.
China’s GDP growth may slow to 6.4 percent, down 0.4 percentage points from last year, according to UBS.
“We expect economic growth to extend this year, but at a lower pace, mostly as the government is trying to take the steam out of the real estate market,” said Gao Ting, chief strategy analyst of UBS Securities China.
Investments in real estate are seen to drop to 3-5 percent this year from 7-9 percent in 2017, according to UBS. Also, investments in infrastructure are set to slow slightly, while the consumer market is slated to stay robust with the Consumer Price Index seen to rise to 2.5 percent from 1.6 percent.
The target point of the A-share index is 4,450 points this year, while the earnings per share of MSCI China may rise 12 percent, slower by 4 percentage points than in 2017, according to UBS.
SHANGHAI stocks edged up yesterday for an eighth straight trading day, with investors pursuing shares of liquor firms and pharmaceutical companies.
The Shanghai Composite Index rose slightly by 0.13 percent to 3,413.90 points.
Food and beverage shares were the biggest gainers, with Xiangpiaopiao Food Co Ltd hitting the maximum daily limit of 10 percent. Anhui Kouzi Distillery Co Ltd rose 5.17 percent to 47.80 yuan (US$7.33) and Chongqing Brewery Co Ltd added 4.86 percent.
Kweichow Moutai Co Ltd gained 4.04 percent to a record high at 782.52 yuan, giving the firm a total market value of 983 billion yuan, close to a trillion yuan.
Pharmaceutical shares also gained, with Shanghai Jiaoda Onlly Co Ltd surging by the daily limit of 10 percent, and Zhejiang Medicine Co Ltd adding 7.66 percent.
Toys are on show at Asia’s largest toy fair, which kicked off in Hong Kong yesterday. The 44th annual Toy and Games Fair, the world’s second largest toy show, brought together 2,100 exhibitors from 45 countries and regions to the Hong Kong Convention and Exhibition Centre.
NEW home transactions fell below the 100,000-square-meter threshold for the first time in four weeks despite continuously recovering supply, the latest market data showed.
The area of new homes sold, excluding government-subsidized affordable housing, plunged 44.3 percent to 69,000 square meters during the seven-day period ending on Sunday, Shanghai Centaline Property Consultants Co said in a report released yesterday.
The city’s outlying Nanhui in the Pudong New Area doubled its weekly sales to around 18,000 square meters, the most among all districts. It was immediately trailed by Qingpu, where some 14,000 square meters of new houses were sold, a week-over-week drop of 30 percent.
The average cost of new houses fell 9 percent from the previous week to 47,498 yuan (US$7,313) per square meter. Seven of the 10 most sought-after projects cost no more than 50,000 yuan per square meter, according to Centaline data.
A residential project in Nanhui’s Lingang port area managed to sell 116 apartments alone for an average price of 24,559 yuan per square meter, making it the most popular project of the week. A development in Qingpu trailed closely behind with seven-day sales hitting 89 units at an average cost of 42,838 yuan per square meter each.
Notably, two projects whose units cost more than 100,000 yuan per square meter each managed to squeeze into the top 10 list though they only sold eight and two units, respectively, according to Centaline data.
On the supply side, about 96,000 square meters of new homes were released to the local market last week, a weekly surge of 21.3 percent.
“It was the highest weekly supply since the fourth quarter of 2017, and those in the low to medium-end categories remained the mainstream products,” said Lu Wenxi, senior manager of research at Shanghai Centaline.
“Looking forward, as supply continues to rebound, buying sentiment might improve as well over the next couple of weeks as the Spring Festival holiday won’t fall until the middle of next month.”
SHANGHAI consumer confidence hit a record high in the fourth quarter of 2017 amid positive economic growth, but investor confidence fell slightly in the same period, a survey showed yesterday.
The Index of Consumer Confidence in Shanghai, a quarterly gauge compiled by the Shanghai University of Finance and Economics, rose 2.5 points from the third quarter to 123.9 points in the October-December quarter, up 12 points from the level in the same period last year.
A reading above 100 points indicates optimism.
"The index reached a record high, indicating that the Shanghai economy achieved notable structural transformation amid China's steady economic growth," said Xu Guoxiang, director of the university’s Applied Statistics Research Center.
He said the overall structure of Shanghai’s economy is becoming more balanced, and economic growth is gradually recovering, boosting consumer confidence in the city.
The component indexes showed intention by residents to buy homes rebounded by 8.1 points from the previous quarter to 59.1 points but dropped sharply by 14 points from the same period last year. Consumer intention to buy cars rose 1.6 points from the July-September period.
“Overall, the survey showed that consumers are optimistic about the general economic situation,” Xu added.
However, the Index of Investor Confidence dipped 3.53 points from the third quarter to 113.42 points in the fourth quarter, but on a year-on-year basis it expanded 8.18 points.
LANZHOU in Gansu Province has eased property curbs amid a nationwide clampdown on housing speculation, raising concerns that other cities may follow suit which will further inflate price bubbles in the sector.
The provincial capital, with a population of 3.6 million, lifted property tightening measures in the suburbs while relaxing some restrictions on home purchases in downtown areas, according to a notice posted on the website of the city’s housing authority late on Friday.
The country’s real estate market has been on a two-year tear, giving the economy a major boost but stirring fears of a bubble. More than a hundred Chinese cities have rolled out tightening curbs in a bid to halt housing speculation.
The Lanzhou government had imposed property tightening measures in the suburb areas only just four months ago. While the city did not provide explicit reasons for the move, analysts said they were likely aimed at addressing high inventories.
Yan Yuejin, an analyst with Shanghai-based E-house China R&D Institute, said the suburbs had been under pressure as inventories remained high in face of rigid government curbs.
Analysts also said Lanzhou’s easing may be followed by other second-tier cities where property destocking has not made much progress.
“Lanzhou’s move signals the market that there is room for some overly-strict tightening measures to be adjusted,” said Zhang Dawei, an analyst with Hong-Kong based property agency Centaline.
Lanzhou also eased home buying curbs in its downtown districts, the housing authority said.
SALES of excavators in China jumped 99.5 percent last year from a year ago as producers tapped the rise in construction activity and also on a rally in the mining industry, official data showed.
Domestic producers sold 140,303 excavators in 2017, the best year since 2011. A total of 130,559 were sold domestically, up 107.5 percent from a year prior, and 9,672 were exported, up 32 percent annually, said the China Construction Machinery Association.
Increased sales were helped by a rebound in the mining sector along with expanding construction, said China Securities Journal which cited an unnamed analyst from Essence Securities.
China produced 3.14 billion tons of coal over the first 11 months last year, up 3.7 percent from a year ago, said the National Bureau of Statistics.
SHANGHAI stocks edged up yesterday after gains by coal and real estate counters.
The Shanghai Composite Index gained 0.52 percent to end at 3,409.48 points.
Investors were drawn to real estate shares in anticipation that regulations over property markets in Lanzhou in Gansu Province and Hefei in Anhui Province may ease.
This policy easing seeks to proactively maintain the stability of the real estate market, Zhongtai Securities said in a note.
ShangHai ShiMao Co Ltd surged by the daily limit of 10 percent. Greenland Holdings Corp Ltd and China Fortune Land Co Ltd both gained over 8 percent.
Investors were cheered by a new plan, released by 12 ministries and commissions, that aims to merge and reorganize coal enterprises and coal and power pool projects.
Yanzhou Coal Mining Co Ltd surged 9.65 percent to close at 17.39 yuan, Shanxi Coal Internationl Energy Group Co Ltd rose 8.08 percent and Shanxi LuAn Environmental Energy Development Co Ltd gained 7.55 percent.
AFTER a rollercoaster year for the tech world, many industry leaders are looking to the cutting edge for salvation.
As tech industry players converge in Las Vegas for the 2018 Consumer Electronics Show, an overriding theme is that gizmos, artificial intelligence, cloud computing and superfast Internet connections hold answers to many if not all ills — the new religion.
One of the world’s largest trade shows, CES is drawing an expected 170,000 people and 40,000 exhibitors from dozens of countries showing wares in robotics, digital health, artificial intelligence, sports and more.
Technology will continue to improve communication, enchanting us with bolder and brighter screens, exhibitors say — but it additionally vows to end urban congestion, treat cancer and depression, and help us live fitter and more productive lives.
Jensen Huang, CEO of the computer chip and artificial intelligence group Nvidia, said advances in machine learning have opened up vast possibilities, including the ability of software writing software.
“This means we can solve previously unsolvable problems,” Huang told a media event on Sunday, ahead of the official opening of the trade event today.
Some exhibitors envision a world where self-driving cars could be summoned any time of the day, eliminating struggles to find parking or petrol stations.
Machines would tend to the tedium of traffic, which would run smoother since vehicles would wirelessly “talk” to one another to optimize travel efficiency.
While tech is being touted as a solution to many ills, there is also a darker side, noted analyst Bob O’Donnell of Technalysis Research.
“Tech is being seen as the cure for everything, but it can also be the cause of societal issues,” O’Donnell said, citing concerns over cybersecurity and a recently revealed flaw in computer chip technology that could leak data.
“Most people in tech are optimistic, but they may be naively optimistic.”
Robin Raskin, who heads the CES segment called Living in Digital Times, pointed to advances in health and medicine in recent years, particularly new technologies to assess cancer and treatment possibilities.
Startups and major firms are also using new apps and technologies to tackle diabetes and depression.
One startup on Sunday unveiled eye-tracking technology to analyze ailments including autism, concussions and Parkinson’s disease.
RightEye co-founder and chief executive Adam Gross heralded the technology as “a game-changer” for the health care and sports industries, emphasizing the ability to quickly and accurately generate “amazing insights” into health, vision and performance.
In collaboration with doctors or trainers, the information could be used to guide therapies or exercise routines.
Technology will automate and augment the treatment of disease in the years ahead, predicted Consumer Technology Association research manager Lesley Rohrbaugh.
“You can talk with a health care provider through an app, and get remote monitoring,” Rohrbaugh said, speaking at CES.
Chinese carmaker Geely plans to sell 1.58 million vehicles this year, an increase of 27 percent from last year’s sales.The company’s ambitious sales goal in 2018 exceeds an expected market growth of 3 percent because the automaker is confident of its current and future products, the company said yesterday. Geely also aims to sell 2 million vehicles annually by the end of 2020.The China Association of Automobile Manufacturers predicted earlier in December that China’s auto market is set to rise 3 percent this year.An industry report released in November by Nomura Holdings Inc indicated car sales under Geely’s brand Lynk & Co will also contribute to the sales increase in 2018.“Geely remains our sector’s top pick as the company launched its brand called Lynk & Co in 2017. We are even more bullish on Lynk & Co’s potential and competitiveness. We expect Lynk & Co first model’s sales volume will reach 12,000 units in 2018 from 7,500 units in 2017,” Nomura Holdings Inc said in the report.Geely said that its sales volume for 2017 totaled 1.24 million, up 63 percent from 2016. This figure exceeded the company’s earlier sales target of 1.1 million units. In 2016, Geely sold 765,851 vehicles, up 50 percent year on year.The company attributed the sales growth in 2017 to strong demand for its sport-utility vehicles and sedans, and this momentum will continue this year. Geely’s Bo Yue SUV, a crossover SUV named Emgrand GS and sedan Emgrand GL performed strongly last year, according to the automaker.“We have implemented a strategy of utilizing our strength in the sedan market whilst pivoting to sport-utility vehicles in order to create models that are leaders in all segments,” Geely said in a statement. “The balanced development of sedans and sport-utility vehicles has led to stable growth across key segments and has enhanced competitiveness, performance and image.” Geely is also expanding its nationwide sales and service network from over 850 dealers to meet the needs of a new generation of consumers. Most of the dealerships are expected to open in Beijing, Shanghai and Tianjin, according to the company.
A Chinese startup unveiled its vision for the automobile of the future on Sunday, promising to deliver an “intuitive and intelligent” car to global markets starting next year from around US$45,000.
The electric-powered concept car shown by Byton at the Consumer Electronics Show in Las Vegas is touted as a computing device on wheels, equipped with a “digital” lounge featuring a panoramic display acting as a hub for navigation, entertainment and even monitoring the health of its occupants.
Backed by more than US$200 million from investors including Chinese tech giant Tencent, Byton — whose name was chosen to suggest “bytes on wheels” — is among the latest entrants to a crowded field of startups and established players looking to emulate Tesla in the race for a new kind of vehicle which can be adapted for autonomous driving.
“This is a product which is tailor-made for the future, which is autonomous and shared,” said Daniel Kirchert, president and co-founder of the Nanjing-based startup.
Byton, led by former executives from Tesla, BMW, Apple and Google, said it expects to launch in China by 2019 and in the United States and Europe by 2020.
“This will be the most advanced vehicle in the market as of 2019,” said chairman and chief executive Carsten Breitfeld, a former BMW executive, at a presentation in one of the first media events at the huge electronics show.
The Byton car will use facial recognition to unlock and adapt to the driver and offer a range of other ways to interact including voice control with Amazon Alexa, touch and gesture.
It will include 5G connectivity to the Internet cloud and improve its functions with artificial intelligence.
“It will improve your experience the more it knows you,” said Kirchert.
While other concept electric cars have been promoted at prices of US$100,000 or more, the new Byton will face competition from the Tesla Model 3 and offerings from major automakers.
Byton said the car will have a range of more than 500 kilometers before needing a recharge and will be able to “top up” its battery in 15 to 30 minutes.
It will be offered with “level 3” autonomy which enables some functions without a driver and be capable of “level 4” for near-autonomous function from 2020, according to the company.
China already leads globally in EV sales, passing the US in 2015. Sales of new-energy vehicles — including EVs, plug-in hybrids, and fuel-cell vehicles — may have topped 700,000 units last year on their way to 1 million this year, said Xu Haidong, assistant secretary-general of the China Association of Automobile Manufacturers. Almost all those cars are Chinese brands.
Crew members set up an exhibition booth of Huawei prior to the CES 2018 at the Las Vegas convention Center on Saturday in Las Vegas, Nevada. The four-day CES, the world’s largest annual consumer technology trade show, will end on Friday. The show features about 3,900 exhibitors showing off their latest products and services to over 170,000 attendees.
CHINA’S foreign exchange reserves rose for the 11th month in a row to US$3.14 trillion at the end of December, data from the central bank showed yesterday.
This marked the highest level since September 2016, according to the People’s Bank of China.
The reserves gained US$20.7 billion from a month earlier, faster than the market forecast, which estimated the reserves to stand at US$3.13 trillion.
The State Administration of Foreign Exchange attributed the continued increase to stronger non-dollar denominated currencies and higher asset prices, while cross-border capital flows and transactions remained stable.
In January, the forex reserves fell below US$3 trillion, but as the economy is on firmer footing and the yuan continues to stabilize, the stockpile has increased steadily since February.
The country’s steady economic growth and improving momentum have kept cross-border capital flows more stable and balanced, SAFE said on its website. The sound international balance of payments data supported the continued rebound in forex reserves.
Looking ahead, SAFE said given the increasing stability and resilience of the economy, as well as further reform in the financial markets, China will keep its forex reserves and international balance of payments balanced and stable in 2018.
The country’s economy grew 6.9 percent year on year in the first three quarters of 2017, above the government’s annual target of around 6.5 percent.
Yesterday’s data also showed the country has kept its December gold reserves unchanged at 59.24 million ounces from the beginning of the year, equivalent to US$76.47 billion.
NEW home transactions in 50 Chinese cities fell 18 percent year on year in 2017 amid tough government curbs on speculation, a private survey showed.
The annual figure came in after transactions of new homes shed for the 10th consecutive month in December 2017, which was down 13 percent year on year to 27.37 million square meters, according to statistics compiled by E-house China R&D Institute.
New home transactions in Beijing and Shanghai slumped 38 percent and 28 percent in December, respectively, compared with the same period in 2016.
“This has reflected a cooling trend in the market,” said Lai Qin, researcher with the institute.
China’s property market has cooled as home prices have faltered or posted slower growth in major cities amid government policies to curb speculation.
Real estate investment in China rose 7.5 percent year on year during January-November last year, down from 7.8 percent in the first 10 months, official data showed.
Lai said local governments are set to maintain stable and consistent property policies, which could lead to a further drop in home transactions in January.
HANDOUTS to Saudi Arabian citizens to compensate them for cost of living increases will cost the government about 50 billion riyals (US$13.3 billion) this year, the information minister was quoted as saying yesterday.
“The allocation of 50 billion riyals for this decree indicates the leadership’s concern for the people’s comfort and quality of living,” Minister of Culture and Information Awwad bin Saleh Alawwad told the Saudi-owned Al Sharq Al Awsat newspaper.
On Saturday, King Salman ordered a monthly payment of 1,000 riyals to state employees over the year in compensation for the rising cost of living after Riyadh hiked gasoline prices and introduced value-added tax. Pensioners and soldiers will also be given bonuses, while the government will bear the cost of VAT in some situations, such as the first purchase of a home.
Alawwad also repeated previous government statements indicating Riyadh would spend 30 billion riyals this year on the Citizens Account, a household allowance scheme designed to reduce the impact of austerity policies on low and middle-income Saudi families.
Saudi Arabia, the world’s top oil exporter, roughly doubled domestic gasoline prices last week as part of reforms aimed at diversifying its economy. A 5 percent VAT on a broad range of goods and services came into effect on the same day.
Private economists have estimated the government will raise about 40 billion riyals in 2018 through VAT. The government did not say how much money it expected to make from the gasoline price hike, but previous statements by officials have suggested it would be in the tens of billions of riyals.
CHINA’S top banking regulator on Saturday issued rules to tighten management over entrusted loans, a form of business-to-business lending that involves commercial lenders as intermediaries.
The new rules see commercial banks as intermediaries and they should neither participate in the decision-making of entrusted lending nor provide guarantees of any kind, according to the China Banking Regulatory Commission.
The entrusting parties should choose qualified borrowers independently, and they should bear the credit risk from entrusted lending.
The rules also tightened supervision on funding sources, which ask commercial banks to stay away from entrusted loans that use bank credit, funds with special purposes and other forms of borrowed capital as funding sources, as well as loans with unproven funding sources.
Meanwhile, entrusted loans should not be used in production, operation or investment in government-banned sectors, and they are also prohibited from investments such as bonds, futures, financial derivatives and asset management products.
The entrusted loan business has grown fast and played a positive role in serving the real economy, but there are “certain hidden risks” due to a lack of unified rules, the CBRC said in a statement.
Commercial banks should strictly separate entrusted loan business from their own business to enhance risk control and business management, said the CBRC.
CHINA has launched an investment fund of 30 billion yuan (US$4.6 billion) to guide the development of the service trade industry.
The government-led fund is aimed at facilitating the transformation of China’s foreign trade patterns and fostering new growth pace for the economy.
Approved by the State Council, the fund was jointly launched by the Ministry of Finance, Ministry of Commerce and China Merchants Capital Investment Co Ltd.
China will step up support for service trade businesses, build an effective cooperation mechanism and improve the use of resources, said Vice Finance Minister Hu Jinglin.
Trade in services refers to transactions in transport, tourism, telecommunications, construction, advertising, computing and accounting.
China suffers a deficit in service trade due to huge domestic demand. The service trade gap was 120.8 billion yuan in November 2017, up from 117.5 billion yuan in October, official data showed.
Ant Financial, an affiliate of Alibaba, has apologized for a checked-by-default option on Alipay’s annual bills that allowed its credit scoring system to access user data.
Alipay bills and the Annual User Footprint Report that analyzes how customers have spent their money over the past year are widely shared on China’s social media.
People tend to show off their purchasing power, especially as the new year begins, but that joy of sharing soon turned into fear and anger.
A button checked by default on the landing page meant users looking up their bills automatically agreed to use Sesame Credit, the credit scoring system of Ant Financial, allowing Sesame to collect and analyze their data and share the analysis with partner institutions.
Users accused the company of infringing their privacy. In response, Sesame Credit late on Wednesday apologized and immediately had the default option canceled. Users who have already unwittingly entered into the agreement can deselect the service in the Alipay app.
There were more than half a billion Internet users in China by the middle of 2017, and more than 90 percent use mobile payment in street stores, according to a report by China Internet Network Information Center. Many of those use Alipay.
Sesame Credit claims that more than 200 million users used Alipay to pay for over 100 public services. This has put cyber security at the top of the priority list.
According to the cyber security law, companies and online services that store user data on servers must acquire authorization from the users and make all clauses clear.
Han Zheng, a professor with Tongji University, said the incident showed how Chinese people are increasingly aware of privacy issues.
“We are more willing to share our data and compare with people in other parts of the world, and it has been very easy for companies to collect user data, but that situation is changing now.”
Businessmen and women pray for a good business to bring in the New Year at Kanda shrine in Tokyo yesterday. Over 3,500 firms were expected to hold prayers for the start of the new year at the shrine on the first two business days of the year.
China’s Dalian Wanda Group is considering a Hong Kong listing for its sports assets as part of efforts to rationalize its portfolio that could also include other sales, according to five people familiar with the situation.The conglomerate last month tapped investment banks for a potential initial public offering of its sports businesses, three of the sources said. CITIC Securities, China’s largest brokerage, is one of the banks involved, added one of them.A spokesman for CITIC Securities declined to comment.Wanda’s businesses range from real estate to football and cinemas but it has been rattled in the past year by a government-led crackdown on overseas deals and high leverage. The company is owned by Wang Jianlin, one of China’s richest men.An IPO of Wanda’s sports assets would include Infront Sports & Media AG, a Swiss sports marketing company, and World Triathlon Corp, the organizer and promoter of the Ironman race, according to three of the people.The two were acquired in 2015 for US$1.2 billion and US$650 million respectively.The share offering would also include Wanda’s smaller sports assets in China, such as cycling and basketball leagues, one of them said. The public float would not involve Wanda’s 20 percent stake in the Spanish football club Atletico Madrid, valued at 67 million euros (US$81 million) after a recent capital raise, the source said.The IPO would most likely take place in Hong Kong, but bankers have also pitched for a US listing, according to the people.Wanda is separately looking to sell Sunseeker International, a British yacht maker it bought in 2013 for US$495 million but whose financial performance it has failed to turn around, two other people said.Wanda declined to comment. The people could not be named as the plans are confidential.Wanda’s interest in property, sports and entertainment — accounting for over US$13 billion of its deals in the past five years — ran into official opposition last year when Beijing labeled overseas deals in those areas “irrational.”In addition to sports, its holdings also include the cinema chain AMC Entertainment Holdings and movie studio Legendary Entertainment.The company is also considering the merits of a pre-IPO funding round for the sports unit, according to one of the people. All plans are still at an early stage however as Wanda is seeking a chief financial officer for the sports business to lead the fundraising efforts, said another of the people.Property forms the basis of the Wanda empire — its mixed use Wanda Plaza developments are common across China.Last year, Wanda sold a portfolio of hotels and tourism assets, including 13 theme parks, for US$9 billion to Guangzhou R&F Properties and Sunac China. Five flagship overseas developments — in London, Chicago, Los Angeles, Sydney and Australia’s Gold Coast — are also for sale, said one source.
Tesla Inc delayed a production target for its new Model 3 sedan for the second time on Wednesday, disappointing investors even as it claimed “major progress,” overcoming manufacturing challenges that have hampered the vehicle’s rollout.The electric vehicle maker headed by Elon Musk said it would likely build about 2,500 Model 3s per week by the end of the first quarter, half the number it had earlier promised. Instead, Tesla said it now plans to reach its goal of 5,000 vehicles per week by the end of the second quarter.The Model 3 is critical to Tesla’s long-term success, as it is the most affordable of its cars to date and is the only one capable of transforming the niche automaker to a mass producer amid a sea of rivals entering the nascent electric vehicle market.Building the car efficiently and delivering it without delays to customers is also critical, as the money-losing company faces high cash burn. Delays increase the risk that reservation-holders will cancel orders.“The further delay to (production volume) will leave analysts and investors focused on the implications for cash as we head through the first half of the year,” Evercore analyst George Galliers said.The company burned through US$1.1 billion in capital expenditures in its third quarter and said in November that fourth-quarter capex would also be about US$1.1 billion.RBC Capital Markets analyst Joseph Spak wrote in a note that he did not believe Tesla will be required to do a capital raise.“We have them hovering about US$1 billion in cash ... They don’t have a ton of wiggle room though in our view,” Spak said.In delivering 1,550 of its new Model 3 electric vehicles in the fourth quarter, Tesla fell short of Wall Street expectations. Analysts had expected 4,100 Model 3 sedans to be delivered in the fourth quarter, according to financial data and analytics firm FactSet.The estimates for Model 3 deliveries by different brokerages varied widely. While Evercore analysts estimated 5,800 deliveries, Cowen analysts expected just 2,250.Tesla said 860 Model 3 vehicles were in transit to customers at the end of the fourth quarter.The company said it delivered a total of 29,870 vehicles in the fourth quarter, including 15,200 Model S vehicles and 13,120 Model X cars. Analysts had expected total deliveries of about 30,000.Tesla had initially predicted to reach the milestone of 5,000 vehicles per week in December, but in November deferred the target to the end of the first quarter.Tesla said on Wednesday its production rate had increased significantly despite the delays.
SOUTH Korea’s Samsung has overtaken US rival Intel as the world’s biggest maker of semi-conductors as sales in the sector boom, a study published by consultancy Gartner showed yesterday.
Samsung Electronics “gained the most market share and took the number one position from Intel — the first time Intel has been toppled since 1992,” said Gartner analyst Andrew Norwood.
The total global market for semi-conductors grew by 22 percent to US$419.7 billion in 2017, fueled by growth in smartphones and other connected devices, Gartner calculated.
Samsung’s sales jumped by 52.6 percent to US$61.2 billion, giving it a market share of 14.6 percent, the study showed.
Intel’s sales, on the other hand, grew by just 6.7 percent to US$57.7 billion, or a market share of 13.8 percent.
Booming demand for memory chips was the main factor driving growth in the semi-conductors market, Gartner said.
“Memory accounted for more than two-thirds of all semiconductor revenue growth in 2017, and became the largest semiconductor category,” said Norwood.
CHINA’S 90 major coal companies produced 2.25 billion tons of coal in the first 11 months of last year, up 7.6 percent from a year ago as the nation bids to streamline the industry’s structure, said the China National Coal Association today.
Production at the top 10 plants came to 1.35 billion tons to account for 60 percent of the total output. China Shenhua Energy Co was top by producing 403.55 million tons from January to November, followed by China National Coal Group Corp which produced 149.67 million tons and Shaanxi Coal and Chemical Industry Group’s 128.71 million tons.
China has cut the number of coal plants to 7,000 by the end of 2017 from 10,800 in 2015, coal giants are encouraged to merge to help enhance the industry’s competitiveness. Mergers and acquisitions have become the means to “help state-owned coal plants perform better,” China Business Journal said by quoting an unnamed analyst.
The merger of China Shenhua with China Guodian Corp last year created the nation’s largest power group. The Shanxi government, meanwhile, has shifted equities from 14 listed coal plants into an investment group to consolidate synergies among local coal companies.
China has constructed over 1,200 large-scale modern coal mines. Of them, 59 mines have the capacity of producing over 10 million tons per year and 47 mines are equipped with automated facilities, according to China Business Journal.
Cranes are seen in Yantian Port in Shenzhen. The port handled 25.2 million containers last year, a record high, an increase of 5.13 percent, the fastest in a decade.
NEW businesses gave a boost to China’s services activity which expanded in December by the quickest momentum in four years, a private report showed yesterday.
The Caixin China General Service PMI rose to 53.9 at the end of the year from 51.9 in November, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.
It said the growth in services activity was due to a greater volume of new business.
The PMI showed services companies posted the strongest upturn in new orders since May 2015 as around 14 percent of monitored companies noted an increase.
Services companies continued to increase their payroll numbers at the end of the year amid reports of rising business requirements.
Released on Wednesday, the Caixin manufacturing PMI rose to a four-month high of 51.5 for December from November’s 50.8 to confirm steady economic growth in 2017.
“The December readings of the Caixin PMI surveys point to improving economic sentiment,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group. “Expansion in total new orders and new export business revealed that manufacturers and service providers are optimistic over the business outlook for 2018.”
Meanwhile, the official non-manufacturing PMI released last week edged up to 55 for December from 54.8 in November.
The official non-manufacturing PMI survey covers 4,000 large and small companies, while the Caixin service PMI measures over 400.
The services sector contributed to more than half of China’s gross domestic product in recent years as the country is in the midst of transforming its economy from investment-driven to consumption-driven.
The Bank of Communications wrote in a report yesterday that China’s GDP may have grown 6.8 percent in 2017, above the government target of 6.5 percent.
The bank’s economists expect GDP this year to dip to 6.7 percent, with growth of tertiary industries continuing to outpace the industrial sector.
German carmaker Mercedes-Benz has begun recalling 4,572 imported cars in China over problems with the electronic stability program, according to China’s quality watchdog.The affected vehicles are 889 imported Mercedes-Benz C-Class AMG models which were manufactured between June 11, 2014 and May 31, 2016, as well as 3,683 imported Mercedes-Benz G-Class vehicles which were made between September 2, 2015 and September 11, 2017, according to a statement from the General Administration of Quality Supervision, Inspection and Quarantine. The recall took effect from December 26 last year.The problem with the 889 affected Mercedes-Benz C-Class AMG vehicles lies in the electronic stability program which lacks the ability to recognize and control peak-torque under extreme conditions. This may cause the car to lose power and increase the risk of vehicle collision, the statement said.For 3,683 Mercedes-Benz G-class vehicles, the telecommunication system of the electronic stability program may encounter errors under some conditions. The poor telecommunication may require a driver to brake more in order to stop the vehicle. This will lengthen the distance needed to stop the vehicle and increase the risk of a traffic crash, according to the statement.The carmaker said it will upgrade the software of the electronic stability program in the affected vehicles to rectify the defects. It added that it will upgrade the software in cars which have not been sold yet.Mercedes-Benz will inform owners of the affected vehicles via registered mail. Car owners could contact the company at 400-818-1188 for information about the recall.
DIDI Chuxing said it is acquiring Brazil’s ride-hailing business, 99, marking another major step in the Chinese company’s global expansion.
Didi made a strategic investment in 99 in early 2017 and the partnership between the two companies seeks to further accelerate market growth in Latin America and give more transport choices to consumers.
“Building on the deep trust between our two teams, this new level of integration will bring to the region more convenient, value-added mobility services,” said Didi founder and CEO Cheng Wei.
“Globalization is a top strategic priority for Didi, and with enhanced investments in artificial capabilities and smart transportation solutions, we will continue to advance the transformation of the global transportation and automotive industries through diversified international operations and partnerships.”
After becoming a strategic investor in the Brazilian firm in January last year, 99 and Didi collaborated closely from technology to product innovation, market development and operational management in Brazil.
“We are confident that being part of Didi Chuxing will vastly enhance our capability to expand our services throughout Brazil to bring critical value to users, drivers and cities,” Peter Fernandez, CEO of 99, said in a statement.
Didi last month said it has raised US$4 billion in funding from domestic and overseas investors as it seeks to lift global expansion and new energy vehicles initiatives.
HSBC has launched a business desk in Poland to facilitate trade and investment flows between China and countries in Central and Eastern Europe as two-way business increases dramatically under the Belt and Road Initiative.
The bank’s new China Desk will focus, in particular, on Poland, the Czech Republic, Slovakia, Hungary and Romania, which together have attracted the bulk of China’s investment in the region.
According to research consultancy Rhodium Group, Chinese investment in these five countries increased to 4.5 billion euros (US$5.4 billion) between 2000 and 2016.
The new service in Warsaw brings the number of HSBC's China Desks to 24 globally.
Officially launched in 2012, HSBC’s China Desks now cover six continents, including 11 markets in the Asia-Pacific region, five in Europe, four in the Middle East and Africa, and four in the Americas.
These operations, covering major destinations for China’s outbound direct investments, support domestic companies and their foreign counterparts in identifying new business opportunities and accessing financial products in a range of currencies, including yuan, along the Belt and Road Initiative region.
CHINESE smartphone brands will expand overseas in 2018 because the domestic market has become saturated, research firms said yesterday.
Both leading and startup brands will have to turn to emerging overseas markets to grow their sales and market share, as Xiaomi has done in India and Transsion in Africa, they said.
By 2017, Oppo led the Asian smartphone market with a 15 percent share, followed by 13 percent for Vivo, 12 percent for Xiaomi, 12 percent for Samsung and 11 percent for Huawei, said research firm Counterpoint.
Global smartphone output hit 1.46 billion units in 2017, up 6.5 percent from a year ago. For 2018, TrendForce forecasts production at around 1.53 billion units, up just 5 percent.
A cyclist passes an advertisement in Frankfurt yesterday. Germany’s unemployment rate hit a record low of 5.5 percent in December, the lowest level since German reunification in 1990, the Federal Labour Office said. In 2017, the rate fell to 5.7 percent from 6.1 percent.
WHILE the world economy has seen a broad-based recovery in the past year, Chinese observers are wary that some “black swan” events could dampen growth prospects in 2018.
Unique, eye-catching, and hard to find, a black swan is as a metaphor to describe rare events that could cause catastrophic ramifications.
“One of the reasons behind economic strength last year was that we hardly saw any black swans,” said Zhang Ming, a researcher with the Chinese Academy of Social Sciences.
A report by the Institute of World Economics and Politics under the CASS predicted that the global economy would expand 3.5 percent in 2018 on purchasing power parity terms.
The rate is below previous estimates by international bodies including the International Monetary Fund, which predicted in its World Economic Outlook in October that the global economy would grow by 3.7 percent in 2018.
“The lower prediction reflected our concerns over issues including asset price bubbles, high debt levels and geopolitical conflicts,” said Yao Zhizhong, another researcher with CASS.
According to Zhang, there are at least six black swans that observers should keep an eye on to cushion against their impact.
“The fact that risks did not happen does not mean that they do not exist,” Zhang said.
One of the major uncertainties comes from the political realm. The long-simmering rivalry between global and regional powers in the Middle East could become even more complicated, adding pressure to fluctuations in global crude oil prices.
Elections in Italy could also lead to black swan events such as the country leaving the eurozone or defaulting on its treasury bonds, derailing recovery in Europe, according to Zhang.
While anti-globalization sentiment did not deter major economies from benefiting from trade in 2017, any change in the trade policy stance of the Trump administration could affect global growth.
The US economy has maintained mild inflation recently, but a sudden rise could speed up rates hikes and balance sheet reduction by the Federal Reserve.
Such incidents, though unlikely, could slow economic growth in the United States and have widespread spill-over effects.
Another outlier would put an end to the nine-year-long bull market in the United States. The price-earning ratio of the US stock market is reaching historic highs, and some analysts worry that a downturn in the market could be sharp and long-lasting.
“Once the US stock market takes a downturn, it could have a negative impact on asset prices in other countries, and curb consumer spending in the United States, which was the most important driver for its recent recovery,” Zhang said.
Such black swans could also have interrelated effects, causing other rare events to happen, Zhang said.
Faster-than-expected rates hikes in the United States, for example, would lead to a stronger US dollar that could possibly result in capital outflows and currency depreciation in some emerging economies, which enjoyed short-term capital inflows in 2017.
A top European Central Bank official yesterday called for governments to regulate and tax Bitcoin, labeling the cryptocurrency an object of speculation and a tool for money laundering.
“One ought to apply what the basic rule is in any other financial transaction: everyone involved should reveal their identity,” ECB governing council member Ewald Nowotny told the German daily Sueddeutsche Zeitung.
“We need a value-added tax on Bitcoin, since it’s not a currency,” said Nowotny, who is head of Austria’s central bank.
Nowotny’s comments echo those by other ECB officials, who regard the Bitcoin’s spectacular surge in value as a bubble, rather than a sign it could be a digital competitor to the euro single currency used by its 19 member nations.
Nevertheless, the “digital gold” is a concern for central bankers as it can allow money launderers to dodge around increasingly strict rules in the traditional financial system.
“It can’t be allowed that we’ve just decided to stop printing 500-euro notes to fight money laundering, that we’ve slapped strict rules on every tiny savings club, and then have to watch people blithely laundering money around the globe with Bitcoin,” Nowotny said.
Bitcoin, launched in 2009, is a virtual currency created from computer code. It and other virtual currencies use blockchain, which records transactions that are updated in real time on an online ledger and maintained by a network of computers.
Electric or hybrid vehicles accounted for more than half of all new cars sold in Norway last year, official data showed yesterday, confirming the country's pioneering role in carbon-free transport. Zero-emission, mainly all-electric as well as a few hydrogen-powered cars, accounted for 20.9 percent of total sales in 2017, while hybrid vehicles accounted for 31.3 percent, the OFV Advisory Council for Road Traffic calculated.That represents an increase over the previous year, when zero-emission and hybrid cars accounted for 15.7 percent and 24.5 percent respectively of total sales.Norway, the biggest producer of oil in western Europe, has set itself the ambitious goal of no longer selling new cars with a combustion engine by 2025.Unlike heavily taxed diesel or gasoline cars, electric cars benefit from a very generous tax system making their purchase prices relatively competitive.Their owners also enjoy many privileges such as free city tolls, ferries, parking and recharging in public car parks as well as having the right to drive in bus lanes.Authorities plan to gradually reduce some measures whose benefits and costs are disputed by critics.
China's auto sales are set to drop in January from December last year on weak consumer demand and an increase in the vehicle purchase tax, according to a survey published by China Automobile Dealers Association yesterday.Around 42.5 percent of car dealers expected consumer demand to fall in January compared with December while 35.6 percent of them believed demand would stay flat and 21.8 percent said demand would increase, the survey revealed.The association blamed the decline to an increase in the purchase tax for vehicles with engines below 1.6 liters. The Ministry of Finance has raised the purchase tax of small-engine vehicles from 7.5 percent last year to 10 percent this year.Car dealers are eying lukewarm operating conditions generally in January as the survey revealed that 60.3 percent of the dealers expect normal operating conditions this month while 27 percent believe theirs will perform well and 12.6 percent see poor conditions.
CHINA’S central bank told a top-level government Internet finance group that the monetary authority can tell local governments to regulate the power usage of Bitcoin miners to gradually reduce the scale of their production, a source said.
While the People’s Bank of China can’t directly regulate Bitcoin miners’ power usage, it can ask local authorities to do so, the central bank told members of the Leading Group of Beijing Internet Financial Risks Remediation at the end of 2017, the source said. Experts say China is one of the world’s biggest sources of Bitcoin mining, where miners solve complex mathematical puzzles with computers in order to be awarded virtual coins. The intensive use of computers for Bitcoin mining has boosted demand for electricity.
LAND sales increased in Chinese cities last year as the government moved to cool the market with higher supply, according to the China Index Academy, a property research organization.
Land sales in 300 Chinese cities rose 8 percent from 2016 to 950.36 million square meters in 2017, while sales of land for residential projects jumped 24 percent year on year to 354.33 million square meters.
Land sales in major cities like Beijing, Shanghai and Guangzhou were particularly robust, as local governments increased land supply to cool runaway house prices which were fueled by huge demand and limited supply.
In China’s first-tier cities, land sales jumped 46 percent year on year to 29.79 million square meters last year, according to the academy.
Boosted by surging sales, revenue from land transactions rose 36 percent to 4.01 trillion yuan (US$620 billion) in 300 Chinese cities.
China’s property market — that was once deemed a major risk for the broader economy — cooled in 2017 amid tough curbs such as purchase restrictions and increased downpayment requirements as the government sought to rein in speculation.
Due to these efforts, both investment and sales in China’s property sector slowed. Real estate investment rose 7.5 percent year on year during January to November, a drop from 7.8 percent in the first 10 months.
Property sales in terms of floor area climbed 7.9 percent in the first 11 months, retreating from 8.2 percent in January-October.
With the market holding steady, Chinese authorities are aiming for a “long-term mechanism” for real estate regulation, and a housing system that ensures supply through multiple sources and encourages both housing purchases and rentals.
A report from the National Academy of Economic Strategy predicted that the country’s property market would remain stable in 2018 if there were no major policy shocks.
PAKISTAN will allow the yuan to be used for imports, exports and financing transactions for bilateral trade and investment activities, in a move economists said yesterday would simplify a massive Chinese investment project.
Both public and private sector enterprises may use the yuan for bilateral trade and investment, the central State Bank of Pakistan said in a statement issued on Tuesday.
“As per current foreign exchange regulations, Chinese Yuan is an approved foreign currency for denominating foreign currency transactions in Pakistan,” it said.
“In terms of regulations in Pakistan, CNY is at par with other international currencies such as USD, Euro and JPY,” it added.
The central bank said that in light of a massive Chinese infrastructure project in Pakistan, the move would “yield long-term benefits for both the countries.”
The China-Pakistan Economic Corridor, a US$54 billion project launched in 2013 linking western China to the Indian Ocean via Pakistan, has been hailed as a “game changer” by Pakistani officials.
They hope the power stations and transmission lines built as part of the project will help ease Pakistan’s chronic power crisis.
Economic analyst and former government adviser on finance Salman Shah welcomed the State Bank’s move, saying that avoiding dollar transactions in the implementation of CPEC would “simplify matters very considerably”.
The Chinese economy is now one of the biggest in the world, he said, justifying the use of the yuan.
CHINA’S shares closed yesterday higher, after firms linked to the Xiongan New Area as well as aviation and communications stocks made strong gains.
The Shanghai Composite Index added 0.62 percent, or 20.78 points, yesterday to close at 3,369.11.
The Shenzhen Component index rose 0.91 percent, or 102.25 points, to 1,1280.30, and the Nasdaq-style ChiNext jumped 1.45 percent to 1,795.38.
Stocks related to the Xiongan New Area advanced broadly, with around 30 shares rising by the maximum daily cap of 10 percent, including Jiangsu Zhongshe Group Co Ltd, an engineering consultancy, which ended at 51.61 yuan and Shenzhen-listed Tianjin Keyvia Electric Co Ltd.
THREE provinces and one autonomous region are planning for entrusted pension investment to deal with mounting payment pressure, a social security official said yesterday.
Gansu, Zhejiang and Jiangsu provinces as well as Tibet Autonomous Region are considering entrusting some of their pension funds, totaling 150 billion yuan (US$23.05 billion), to the National Council for Social Security Fund to be invested professionally, said Tang Xiaoli, an official of the Ministry of Human Resources and Social Security.
China is facing increasing pension payment pressure due to the acceleration of economic restructuring and an aging population, requiring new ways to bolster the funds’ value, Tang said.
Pension investment is a major way to preserve and increase fund value, and nine provinces have entrusted about 430 billion yuan to the NCSSF to be invested professionally.
China has about 4 trillion yuan in its pension fund balance, and more provinces should be encouraged to try entrusted investment, Tang said.
SWISS global financial services company UBS expects China’s December data will show steady economic activity, while GDP growth in the fourth quarter will slow slightly.
The Swiss company predicted stable industrial production and property activity, firm fixed-asset investment, and faster export growth in a research note yesterday. The indicators are scheduled to be released in mid-January.
“We expect December’s industrial production growth to have stabilized at 6.1 percent year on year,” UBS said.
China’s value-added industrial output, which measures factory activity, rose 6.1 percent in November, largely stable compared with earlier this year, as high-tech and equipment manufacturing sectors posted strong gains.
UBS believes stronger external demand and a rebound in power generation will help sustain industrial expansion, while noting the air quality campaign is likely to restrict northern China’s upstream sectors.
Overall FAI growth is set to rise to 6-7 percent for December, leaving the year-to-date rate at 7.2 percent, said UBS, adding that infrastructure investment is likely to hold up and manufacturing investment will be slower.
It also predicted robust export growth partly due to a low base, higher consumer prices, falling factory-gate inflation, and a stable credit increase. Foreign exchange reserves will likely rise thanks to eased capital flight pressures.
UBS projected economic growth will ease to 6.7 percent annually in the fourth quarter, and dip to 6.4 percent in 2018.
The headquarters of the music streaming service Spotify is seen in Stockholm in file photo. The music streaming company was sued by Wixen Music Publishing Inc last week for allegedly using thousands of songs without a license and compensation to the music publisher. Wixen is seeking damages worth at least US$1.6 billion along with injunctive relief.
ABOUT 10 years ago, when well-to-do Shanghai resident Gao Junqing first heard the term “private banking services,” he wasn’t sure what it meant.
“Even the client-relationship manager at my commercial bank had little idea about it when I asked her,” Gao recalled.
Private banking is an umbrella term for an array of customized services offered to wealthy people. There is no precise figure for just how rich you have to be to join this exclusive coterie, but Investopedia.com puts the minimum at US$1 million in liquid financial assets.
The asset threshold for becoming a private client of a commercial bank here has been set at 6 million yuan (US$922,069) by the China Banking Regulatory Commission.
Unlike ordinary customers, affluent clients are assigned their own account managers to give them personalized attention. The services they provide include investment management, financial advice on protecting and increasing wealth, and information on how to structure legacies for heirs.
Gao, 40, was among the first group of clients to tap private banking back in its early days. He made his money working in information technology for a multinational company and invested it wisely.
He told Shanghai Daily that he remembers his first client-relationship manager.
“She had some traditional Chinese medicine with her and explained that it was for the next client she was scheduled to see,” he said. “I was awed by such considerate service.”
The idea of private banking for the moneyed class is not really new. More than 200 years ago, Lombard Odier, the world’s first private bank, was founded in Switzerland. Over time, as more people in the world became rich, the concept of elite banking took hold.
With private wealth on the rise in China, banking catering to the well-heeled was inevitable.
That segment of financial services has “huge potential” for growth, according to the 2017 annual report released by China Merchants Bank and Bain & Co. Total investible assets of the super rich nationwide will rise by 14 percent in 2017 to 188 trillion yuan.
In the past decade, that segment surged fivefold to 165 trillion yuan in 2016, with 1.6 million people classified as super rich, the report said.
This means that about 400 “new faces” joined the high-net-worth club every day during the period, the report said.
Bet on technology
“We Chinese people are born to financial investment because we have a tradition of saving for a rainy day,” Gao said. “I started thinking about how to manage my money as early as 2002, but at that time, there were limited options and only conventional banking products available. Private banking services opened more diversified investment channels with greater convenience.”
Private banking clients enjoy discounts on financial services. For example, customers in export businesses have access to more favorable foreign-exchange rates.
Bankers, of course, are eager to court the super rich.
Bank of China, the first Chinese bank to offer private banking services in 2007, now boasts an aggregate 100,000 super-wealthy clients, with assets under management totaling 1.2 trillion yuan, Liu Qiang, vice president of the bank, told a recent gathering.
Last month, Bank of China opened a new academy dedicated to training more professionals in this expanding sector.
To ride the wealth management wave, Liu said, the bank will embrace artificial intelligence technology to enhance services to private banking clients.
Shu Wei, who made her money in the tea business and now is a private client of the bank, told Shanghai Daily that she values such quality, personalized services.
“Whenever I have some financial need, my client manager will come to my home and offer me the best advice and solutions,” she said. “Ten years ago, everybody, including me, dreamed of becoming rich overnight. We used to seek higher investment yields from the private banks, but now that’s not only thing.”
Bank of China’s global facilities help in both her business and in her personal travel, Shu said.
Tech-savvy clients like Gao want faster response times and a better quality of digital services. For him, the private banking arm of PingAn Bank has outperformed many of its peers in that regard.
Gao said there are too few qualified professionals in the private banking sector and more personalized products are badly needed. He said he hopes that big data and artificial intelligence technologies like machine learning will enable banks to provide more personalized solutions for clients.
“Machines know us better,” he said. “They can record our investment behavior and give us some early warning about possible problems. Technology can also remove some unqualified investment consultants.”
Indeed, the China Merchants Bank-Bain report predicts that digital experiences will have a “critical” impact on customer loyalty and a “revolutionary” impact on the services and operational models of wealth managers.
ANT Financial’s plan to acquire the American money transfer company MoneyGram International has collapsed.
A government panel in the United States rejected the plan over national security concerns, the most high-profile Chinese deal to be torpedoed under the administration of US President Donald Trump.
The US$1.2 billion deal’s failure represents a blow for Jack Ma, executive chairman of Chinese Internet conglomerate Alibaba Group, who owns Ant Financial together with Alibaba executives. He was looking to expand Ant Financial’s footprint amid domestic competition from rival Tencent’s WeChat payment platform.
Ant Financial and MoneyGram jointly announced the termination of the proposed takeover on Tuesday, after the Committee on Foreign Investment in the US rejected their proposals to mitigate concerns over the safety of data that can be used to identify US citizens, according to sources familiar with the confidential discussions.
“Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS will not approve this merger,” MoneyGram Chief Executive Alex Holmes said.
The news comes almost a year after Ma met Trump, promising to bring a million jobs to the US. The personal relationship did not sway the Trump Administration. The US government has toughened its stance on the sale of companies to Chinese entities, at a time when Trump is trying to put pressure on China to help to tackle North Korea’s nuclear ambitions and be more accommodative on trade and foreign exchange issues.
The MoneyGram deal is the latest in a string of Chinese acquisitions of US firms that have failed to clear CFIUS, including the US$1.3 billion purchase by China-backed buyout fund Canyon Bridge Capital Partners of US chipmaker Lattice Semiconductor.
In November, China Oceanwide Holdings Group and Genworth Financial Inc extended a deadline to April 1 for the Chinese group’s planned US$2.7 billion takeover of the American life insurer.
In response to a question about the deal, Chinese foreign ministry spokesman Geng Shuang yesterday said cooperation on economic and trade matters was of mutual benefit.
“We hope the US can create a fair and predictable environment for Chinese enterprises to invest and start up businesses,” Geng added.
In a commentary, Xinhua news agency described a fading bonhomie between the two countries, with the US “stuck in a zero-sum mentality.”
China and the US “are about to ride a bumpy journey in trade in 2018 if the US government goes its own way, and retaliatory measures by China could be on the table,” Xinhua said.
The MoneyGram deal’s demise is also the latest example of how CFIUS’ focus on cyber security and the integrity of personal data is prompting it to block deals in sectors not traditionally associated with national security, such as financial services.
The US Treasury said it is prohibited by statute from disclosing information filed with CFIUS and declined to comment on the MoneyGram deal.
Other US financial services deals by Chinese firms are waiting for approval from CFIUS, including HNA Group’s acquisition of hedge fund-of-funds firm SkyBridge Capital from Anthony Scaramucci, the Trump administration’s former communications director.
Dallas-based MoneyGram has approximately 350,000 remittance locations in more than 200 countries and regions. Ant Financial was looking to take over MoneyGram not so much for its US presence but to expand in growing markets outside China.
Ant Financial and MoneyGram said they will now explore and develop initiatives to work together in remittance and digital payments in China, India, the Philippines and other Asian markets, as well as in the US. This cooperation will take the form of commercial agreements, one of the sources said.
Any arrangements reached by Ant Financial and MoneyGram that do not involve a transaction would not be subject to review by CFIUS.
“What is more likely to happen at this point is that MoneyGram will sell to another company, and one company that has shown interest in the past is Euronet,” said Gil Luria, an equity analyst at D.A. Davidson & Co.
Ant Financial agreed an US$18 per share all-cash deal to acquire MoneyGram in April, seeing off competition from US-based Euronet Worldwide, which had made an unsolicited offer for MoneyGram and openly lobbied US lawmakers, saying Ant’s proposal created a national security risk.
Ant Financial said it paid MoneyGram a US$30 million termination fee for the deal’s collapse.
NEW home sales stayed above the 100,000-square-meter threshold for the third consecutive week in Shanghai, despite a minor retreat as sluggish momentum extended through the end of 2017, latest market data showed.
The area of new homes sold, excluding government-subsidized affordable housing, dipped 1 percent to 124,000 square meters during the seven-day period ending on Sunday, Shanghai Centaline Property Consultants Co said in a report released yesterday.
Outlying districts continued to outperform their downtown counterparts with medium to low-end houses remaining the most sought-after properties among local buyers.
Qingpu, despite a 16.7 percent drop from the previous week, registered weekly sales of 20,000 square meters. It was closely followed by Jiading, where seven-day new home sales jumped 58.3 percent to 19,000 square meters. Baoshan, which suffered a weekly plunge of 63.3 percent, and Songjiang, which saw growth of 22.2 percent, both recorded sales of around 11,000 square meters, according to Centaline data.
The average cost of new houses rose 8.3 percent from the previous week to 52,213 yuan (US$8,018) per square meter. Eight of the 10 most sought-after projects cost between 30,000 yuan per square meter and 50,000 yuan per square meter.
“Weekly sales of new homes barely managed to stay above 120,000 square meters while the most popular project sold less than 50 units, evidence that weak sentiment continued to dominate the market which often records a major rebound at the end of a month,” said Lu Wenxi, senior manager of research at Shanghai Centaline. “The slack momentum will probably extend further as the beginning of a year is usually a low season for property sales.”
A housing project in Chongming District became the best-selling development after selling 5,502 square meters, or 49 units, for an average 36,295 yuan per square meter.
It was trailed by a Shui On Land project in central Hongkou District which sold 3,358 square meters, or 15 apartments, for an average price of 103,457 yuan per square meter.
The monthly statistics show new home buying sentiment recovered in Shanghai for the second straight month in December with average cost rising again amid stable performance in the medium-end housing segment.
Around 467,000 square meters of new homes, excluding government-funded affordable housing, were sold across the city in December, a month-over-month increase of 24.9 percent, Shanghai Centaline Property Consultants Co said in a report released yesterday. On an annual term, that represented a drop of 28 percent. The average price of the new homes rose 1.3 percent from November to 49,648 yuan (US$7,624) per square meter, a historic high in the city.
“Out of the 10 most popular projects, eight cost between 30,000 yuan per square meter and 60,000 yuan per square meter, suggesting continuing strong demand from first-time upgraders,” said Lu Wenxi, senior manager of research at Shanghai Centaline. “That was also true on the supply side as a majority of the new homes launched last month cost between 30,000 yuan per square meter and 50,000 yuan per square meter.”
Some 226,000 square meters of new houses were released for sale locally last month, up 343 percent from November, according to Centaline data.
GUIZHOU and Shanxi are the top ranking provinces for mobile payments through Alipay, with 92 percent of the payments done via users’ smartphones, according to the latest figures from Alipay.
Residents in the two provinces generally adopt mobile payments faster than anywhere else in the country, with the nationwide mobile payment proportion at 82 percent, Alipay said yesterday.
There are a total of 11 provinces and autonomous regions where mobile payments contribute to over 90 percent of total spending through Alipay, include Xinjiang Autonomous Region, Hainan Province, Inner Mongolia Autonomous Region, Qinghai Province, and Tibet Autonomous Region.
Mobile payments made up 71 percent of the overall number of payments in 2016, and a growing number of consumers no longer find it necessary to bring along their wallets whenever they're dining or shopping.
Mobile payment is increasingly popular when paying for public transport, too.
Xi’an became the latest Chinese city whose subway system accepted Alipay from Monday, following Shanghai and Hangzhou Metros which have started to allow a simple smartphone swipe to enter and exit subway stations.
Overseas expansion also rose in the past year. Alipay is now connected with tens of thousands of merchants in 36 countries and overseas regions. The total number of payments in these regions rose three times from a year ago.
Apart from connecting with both online and offline micro and mini merchants, Alipay has also been pushing forward environmental protection strategies that are closely linked with its payment business.
Ant Forest, an environmental initiative to encourage Alipay users to keep track of their low-carbon activities, such as selling second-hand home electronics and using public transport, has been launched.
GIANT Interactive has invested nearly US$10 million in online house rental platform Mogoroom as part of the Shanghai-based game firm's latest move to expand its business portfolio, Shanghai Daily learned yesterday.
Founded in 2014, Mogoroom has raised a total of US$30 million in the latest round of financing including Giant’s investment of US$9.5 million. The platform offers 2 million rooms for rent in 16 cities including Shanghai, Beijing and Guangzhou.
Shenzhen-listed Giant, with its main business being online and mobile games, said it aims to expand business presence to various online services.
In November, Giant invested 520 million yuan (US$79 million) to become a major shareholder of a Shenzhen-based online finance firm. In July, it invested 300 million yuan for a minority stake in a fund that invests in companies covering Internet services.
CHINA will invest 732 billion yuan (US$113 billion) this year to expand its railway by 4,000 kilometers so that by 2025 the country will boast a 175,000-kilometer network.
China Railway, the nation’s state-owned railway company, said that 3,500 km of the new network are high-speed railway. The network will cover most of the cities by 2025, of which high-speed railway will total 38,000 kilometers, the national railway operator said yesterday.
Although the budget is below last year’s investment of 801 billion yuan, China is still expected to lead the world in developing a modern railway network by 2035, the operator said.
By the end of last year, China had 127,000 km of railway lines, including 25,000 km of high-speed rail — 66.3 percent of the world’s total by length.
The operator said that 60 percent of the railway will be double-track — which helps ensure safety and enhance efficiency by running one track in each direction instead of making trains in both directions share the same track — and 70 percent of the network will be electrified by 2020.
China now leads the world by proportion of electrified railway and is No. 2 by the number of double-track rails, according to peoplerail.com, the official railway news portal.
In 2017, a total of 3.04 billion passenger trips were made on railways, an increase of 9.6 percent year on year. More than 56 percent of those trips were made on high-speed railways.
CHINA’S manufacturing activity expanded in December at the quickest pace in four months to confirm steady economic growth in 2017, a private report showed yesterday.
The Caixin China General Manufacturing Purchase Managers’ Index increased to a four-month high of 51.5 for December from November’s 50.8, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media Co.
A reading above 50 indicates expansion, while a reading below reflects contraction.
An increase in production led to higher purchasing activity, with the rate of growth accelerating to a four-month high.
At the same time, capacity pressures continued to build, with backlogs rising as workforce numbers declined further, the report said.
Sub-indices showed that input prices eased to a four-month low, while growth in output prices slowed marginally.
“Manufacturing operating conditions improved in December, reinforcing the notion that economic growth has stabilized in 2017 and has even performed better than expected,” Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, said.
However, Zhong warned that growth this year may face downward pressure due to the government’s tightening monetary policy and strengthening oversight on local government financing.
Released last week, the official PMI in December dipped to 51.6 from November’s 51.8.
The average reading for the past year was 51.6, the highest in seven years.
Divergence of the official data from Caixin data is common as the official manufacturing PMI survey covers 3,000 large and small companies while the Caixin PMI measures 500 small and medium sized businesses.
The Bank of Communications in a report said the December official PMI showed China’s domestic demand weakened but global economic recovery helped sustain exports.
BoCom economists said they expected China’s economic growth to ease this year as slower investment growth would offset continued recovery of exports and consumption.
China’s solar power generation has risen amid the government’s efforts to expand clean energy to curb pollution.Solar power generation totaled 106.9 billion kilowatt hours in the first 11 months of 2017, up 72 percent from a year earlier, according to data released by the National Energy Administration yesterday.This was equivalent to 33 million tonnes of standard coal, and helped cut carbon dioxide emissions by 93 million tonnes, the NEA said.By the end of November, China’s installed solar power generation capacity surged 67 percent annually to 125.79 gigawatts, and took up 7.5 percent of the total, up from 4.8 percent in 2016.China has been promoting green resources such as wind and solar in recent years to cope with pollution and to boost the quality of its growth.Pollution control will be kept as a priority, as the government has made it one of the “three tough battles” for the next three years, together with major risk prevention and poverty reduction.The country aims to cap its coal-fired power capacity at 1,000 gigawatts in 2020, and non-fossil fuel will account for half of the country’s total power generation by 2030.
CHINA shares ended the first trading of the new year higher yesterday following gains made by cyclical stocks.
The Shanghai Composite Index gained 1.24 percent, or 41.16 points to close at 3,348.33, hitting a new high in over a month.
The Shenzhen Component index rose 1.25 percent, or 137.6 points, to 1,1178.05, and the Nasdaq-style ChiNext added 0.97 percent to 1,769.67.
Cyclical shares like Shangfeng Cement, Huaxin Cement and Tongli Cement all rose by the maximum daily limit of 10 percent.
Dai Kang, chief strategy analyst at Guangfa Securities, said that he was bullish on cyclical stocks because these companies would benefit from the central government's supply-side reform.
The People’s Bank of China introduced a new policy tool last Friday to unfreeze more cash for commercial banks during the coming week-long Spring Festival in February.
Analysts said the measure will prepare the banks to deal with strong demand for cash during the holiday.
THE number of newly-listed companies on the Chinese mainland is expected to slow in 2018 from a historic high last year, PwC said.
The number of initial public offerings on the A-share, Shenzhen SME Board and ChiNext markets is slated to slow to 300 to 350, with capital raised expected at 180 to 200 billion yuan (US$28-US$31 billion) in 2018, according to PwC’s report released yesterday.
Frank Lyn, markets leader of PwC Mainland and Hong Kong, said that the number of IPOs in 2018 “is expected to decline following the recently formed IPO review committee, which adheres to stricter criteria and is tightening regulations governing IPOs.”
The tighter regulations and criteria for IPOs have already led to a drop in their approval rate, according to PwC.
“Due to recent regulatory measures, it is likely that more companies looking at an IPO will begin to reappraise if listing is really the best route forward for them or not,” said Jean Sun, assurance partner of PwC China.
In 2017, there was a historic high of 437 IPOs on the Shanghai and Shenzhen stock markets, up 93 percent from the 227 in 2016. The IPOs netted 235.1 billion yuan last year, up 56 percent from the 150.4 billion yuan in 2016.
CHINA will invest US$1 billion in the construction of three 60-story buildings at a mega-project near Sri Lanka’s main port, Colombo said yesterday.
The deal follows an earlier Chinese investment of US$1.4 billion to carry out reclamation work for the wider Colombo International Financial City development, strategically located next to Sri Lanka’s harbor, the only deep sea container port in the region.
The countries hope the project, initiated by former Sri Lankan president Mahinda Rajapakse, will create a financial center in the Indian Ocean comparable with those in Singapore and Europe, drawing billions in foreign investment and thousands of jobs.
Sri Lankan officials said 60 percent of the 269 hectare reclamation, due to finish next year complete with yacht marina, had already been completed.
No completion date was given for the buildings, the first for the development.
“China Harbour (company) will put in US$1 billion to build three buildings,” Sri Lanka’s Urban Development Minister Champika Ranawaka said in the capital.
“These three 60-storey buildings will be able to attract more foreign companies into Sri Lanka.”
The project was formally launched after a visit to Colombo by President Xi Jinping in 2014 but work was suspended by the new administration, which came to power in January the following year.
It resumed after the state-owned China Communications Construction Company entered into a fresh agreement with the new government in August 2016, despite geopolitical concerns from regional super power India.
Colombo is a key hub for Indian import-export cargo. Beijing has been accused of seeking to develop facilities around the Indian Ocean in a “string of pearls” strategy to counter the rise of its rival and secure its own economic interests.
After protests by New Delhi, Colombo removed freehold rights granted to the Chinese company and offered the land on a 99-year lease instead.
ONCE again it is time for resolutions. For China, which sailed through a difficult year safe and sound, and with government promises of a more efficient and open economy, the country is ready to start a new journey.
Despite some turbulence along the way, China’s economy ended 2017 stronger than expected: headline growth is sure to meet targets, financial risks are being contained, the property market is cooling down, and key reforms are making steady progress.
So far, the world’s second-largest economy has proved to be a key engine for global growth. Will its role continue to improve, and how will China navigate troubled waters? The following are some key areas to watch.
Deeper supply-side reforms
China’s wide-ranging structural reforms, designed to improve the supply side of the economy, have produced desired outcomes in 2017 and are expected to gear up in 2018.
In the battle against overcapacity, a major task for the reforms, China has accomplished its plans to slash steel production capacity by around 50 million tonnes and coal by at least 150 million tonnes last year.
Progress has also been reported on the other four fronts, including deleveraging, destocking, lowering costs and enhancing weak links.
The annual Central Economic Work Conference last month pledged that China will press ahead with supply-side structural reform in 2018 with more efforts to improve economic quality.
In what some dubbed the “toughest year” for China’s financial industry, authorities have taken real steps to curb widespread malfeasance in the rapidly expanding financial market.
Banks, insurance and securities companies have received heavy fines for flouting market rules, and internet finance companies once prospering on easy and fat profits are having a difficult time surviving with the enhanced rules.
The hardline stance is set to continue as senior leaders agreed to maintain the resolute crackdown on irregular and illegal activities in the financial sector to forestall risks.
Although a statement released after the key economic meeting did not mention deleveraging, financial risk control is still a priority given that defusing major risks is one of the three tough battles that the country has vowed to fight.
Escalating war on pollution
There is no better gauge than the clear and blue skies in Beijing this winter to demonstrate the effects of China’s anti-pollution drive.
Once a rarity, blue winter skies are no longer a luxury in Beijing due to a government campaign for increased use of clean fuel for heating and tough punishments against polluting enterprises.
Pollution control has also been listed as one of China’s “three tough battles” for the next three years, targeting a significant reduction in the emissions of major pollutants and an improvement in the overall ecological environment.
To win the battle, efforts should be focused on adjusting the structure of industries, strengthening energy conservation and making the skies blue again, according to the Central Economic Work Conference.
Real estate control to stay
In 2017, the property market, once deemed a major risk for the broader economy, cooled down amid tough curbs such as purchase restrictions and increased downpayment requirements as the government sought to rein in speculation.
With the market holding steady, Chinese authorities aim for a “long-term mechanism” for real estate regulation and a housing system that ensures supply through multiple sources and encourages both housing purchases and rentals.
In large and medium-sized cities, the government will step up the development of housing rental market, especially long-term leases. Meanwhile, reducing unsold housing will still be a priority for the third- and fourth-tier cities and counties.
A report from the National Academy of Economic Strategy predicted that the country’s property market should remain stable in 2018 if there is no major policy shock.
SOE reform quickens
Reforms of state-owned enterprises (SOEs) will also go into deeper waters in 2018 as the Chinese government expects them to play a bigger role in leading excess capacity cuts, keeping the debt ratio under control and driving high-quality economic development.
In 2017, up to 68.9 percent of the central SOEs were involved in mixed-ownership reforms, and authorities are reviewing plans for more to join the drive.
At the 19th National Congress of the Communist Party of China (CPC), the Chinese leadership pledged to further reforms to make SOEs “stronger, better and bigger,” and turn them into “world-class, globally competitive firms.”
The government will press ahead with stronger restructuring and deleveraging efforts, as well as furthering mixed-ownership experiments at more SOEs, authorities said.
Doors to open wider
The year 2018 will mark the 40th anniversary of China’s reform and opening up policy, and Chinese leaders have promised that its door to the world will only open wider.
China will increase imports and cut import tariffs on some products to promote balanced trade, according to the Central Economic Work Conference.
To give foreign firms greater opportunities in China’s booming market, a negative list approach to market entry, which states sectors and businesses that are off limits to foreign investment, will be expanded nationwide in 2018.
The country will also grant more power to pilot free trade zones and explore the opening of free trade ports, according to the 19th CPC National Congress.
CHINA’S foreign exchange regulator will cap overseas withdrawals using domestic bank cards at 100,000 yuan (US$15,370) per person per year in an effort to target money laundering, terrorist financing and tax evasion.
Individuals who exceed the annual quota will be suspended from overseas transactions for the remainder of the year and an additional year, the State Administration of Foreign Exchange said in a notice posted on its website.
Under the new rules, SAFE will submit a daily list of individuals banned from making overseas bank card withdrawals, and banks must suspend the users by no later than 5pm the same day. Domestic card users will also be barred from withdrawing over 10,000 yuan a day abroad, the authority said.
Since 2003, the quota for overseas withdrawals has been 100,000 yuan per card each year. The new rules can “prevent law breakers from withdrawing a large amount of cash with different cards from different banks,” the authority said.
In 2016, 81 percent of domestic cards saw overseas cash withdrawals of less than 30,000 yuan. Thus, the new rules can meet normal cash needs and curb illegal activities.
The new rules come into effect today, and reporting adjustments must be adopted by banks by April 1, SAFE said.
China has strengthened regulatory oversight of overseas card transactions in the past year, targeting illegal cross-border transfers and money laundering.
In September the authority brought in regulations requiring Chinese banks to report daily their bank card holders’ overseas withdrawals as well as every transaction exceeding 1,000 yuan.
CHINA’S manufacturing activity edged down in December, official data showed yesterday, but largely maintained momentum despite curbs on heavy industry aimed at taming the country’s chronic air pollution.
The manufacturing purchasing managers’ index (PMI), a gauge of factory conditions, stood at 51.6 last month, the National Bureau of Statistics said, compared to 51.8 in November.
Anything above 50 is considered growth, while under 50 points to contraction.
China has curbed activity in heavy industries in the northeast to reduce surplus capacity and the heavy smog that typically blankets the region in late autumn and winter.
The index in December is on par with the annual average, still pointing to a strong resilience in China’s growth, according to NBS senior statistician Zhao Qinghe.
Sub-indexes for production and new orders came in at 54 and 53.4, respectively. However, the sub-index of raw material inventory stood at 48 in December, down 0.4 percentage points from November, indicating continuously decreasing raw material inventory in the manufacturing sector.
China’s manufacturing PMI has been in positive territory for 17 months in a row.
The data also showed that the country’s non-manufacturing sector expanded faster in December, with non-manufacturing PMI at 55 in December, up from 54.8 in November.
The service sector continued steady growth, with business activity index standing at 53.4 in December.
“Early indicators for December show China’s economy pushing into 2018 with growth steady, if unspectacular,” said Tom Orlik, Bloomberg chief Asia economist, as “the official purchasing managers’ indexes show the manufacturing sector slowing slightly and non-manufacturing sector picking up.”
“Growth remains remarkably robust, underpinned by resurgent global demand, stimulus-boosted infrastructure spending, and a deleveraging program that remains more honored in the breach than the observance.”
Vehicles run on a solar expressway in Jinan, Shandong Province. China yesterday opened a 1-kilometer section solar expressway for testing. Solar panels are laid beneath part of a ring road surrounding Jinan. The road surface is made of a transparent, weight-bearing material that allows sunlight to penetrate. The panels, covering 5,875 square meters, can generate 1 million kilowatt-hours of power in a year, enough to meet the everyday demand of around 800 households.
SHANGHAI needs to promote internationalization of the yuan and develop a financial market and institutions with global influence to enhance the city’s status as an international financial hub, the Shanghai headquarters of the People’s Bank of China said in a report yesterday.
Although Shanghai has achieved much for the goal of becoming an international financial center, it still trails New York and London which are unchallenged in global financial operations, said the third edition of the central bank’s Development Report on International Financial Centers.
The report tracks the latest trend in international financial centers.
Shanghai has been urged to deepen financial and economic reforms to develop sound, stable and transparent market regulations, and build a rule-of-law environment that is just, open and fair, the report advised.
The city should also improve its services and its supporting infrastructure to meet the standard of an international financial center, the report added.
“Shanghai has basically confirmed its status as a domestic financial center with the financial market system as its core,” the central bank said in the report.
“In future, Shanghai should make more efforts in promoting international aspects,” especially in yuan internationalization, global influence of the financial market and developing globally dominant financial institutions.
The opening of Shanghai Insurance Exchange, Shanghai Commercial Paper Exchange, and China Trust Registration Co were listed among major innovations and indicated the wider opening of the financial market, the report said.
Also, more international financial institutions have set up operations in Shanghai including the Global Association of Central Counterparties, China Development Bank, and the National Internet Finance Association of China.
The report said the PBOC will support Shanghai’s endeavor in boosting financial innovation.
CHINA’S banking regulator has issued draft measures for amending its licensing and oversight of some foreign-funded bank activities, a move it says is aimed at promoting investment in the country’s fast growing financial sector.
In a statement yesterday, the China Banking Regulatory Commission said it is preparing to implement amended administrative measures to “standardize market access” for foreign lenders, and cut red tape to create a level playing field for such activities as branch openings, debt fundraising and examination of senior executives.
The CBRC said the amended measures will also put in place procedures “to provide a clear legal basis” for foreign-funded banks to make equity investments in Chinese financial institutions.
A notification system also will be installed for four types of activities, including securities fund custody business and the provision of wealth-management services for foreign customers, the CBRC said.
In October, CBRC Chairman Guo Shuqing said China was preparing to further open up its banking system to foreign investors. The market share of foreign banks in China has fallen to 1.2 percent from 2.4 percent 10 years ago, Guo said, which “is not beneficial for promoting competition.”
In November, Vice Finance Minister Zhu Guangyao said China will hike foreign ownership caps in some joint ventures in futures, securities and funds to 51 percent from 49 percent.
CHINA said yesterday that it will temporarily exempt foreign companies from paying provisional income tax on profits they re-invest into the economy, in a bid to stop foreign firms shifting their operations out of the country.
The move will help “promote growth of foreign investment, improve quality of foreign investment and encourage overseas investors to continuously expand their investment in China,” the finance ministry said on its website.
Analysts say a planned tax cut by US President Donald Trump, which could lead to a repatriation of earnings by US firms, poses a challenge China’s bid to lure foreign investment.
The temporary exemption on provisional income tax is retroactive from January 1, 2017, which means firms that have paid taxes this year will be refunded.
But foreign firms must meet several conditions to be eligible for the exemption, the ministry said. These include making direct investment into sectors encouraged by the Chinese government while investments must be transferred directly to invested companies.
China’s standard corporate tax rate is 25 percent although it gives firms more leeway to make profit deductions when they make charitable donations.
Some Chinese and foreign-funded firms have complained about rising business costs.
Guangzhou Automobile Group Co (GAC) and Shanghai-based electric carmaker NIO will set up a joint venture to collaborate on intelligent cars and new-energy vehicles.The two companies yesterday signed an agreement for the joint venture which will have a registered capital of 500 million yuan (US$76.5 million). The venture will focus on research and development of smart and new-energy vehicles, according to a statement from GAC.GAC and NIO each own 45 percent of the joint venture. The management team of the new company will take the remaining 10 percent, the two partners said.“We believe the joint venture will fully tap advantages of both sides, as NIO has deep research capability in the field of Internet and GAC has advantages in traditional automotive industry and vehicle manufacturing industry chain,” said Feng Xingya, general manager of GAC.William Li, founder and chairman of NIO, said: “In future, we will further cooperate with each other on sharing of technology, research and development resources, supply chain and manufacturing resources. Both parties will also share resources to enter global markets and infrastructural facilities of electric vehicles.”The new company will not be involved in manufacturing. A factory, set up by GAC in Guangzhou, will be completed by the end of next year and will make new-energy vehicles developed by the joint venture.According to the statement, the two companies also intend to collaborate on car sharing and car leasing business in future and to cooperate in auto parts.
SHANGHAI stocks rallied yesterday, boosted by distilleries as Kweichow Moutai raised the price of its fiery liquor.
The Shanghai Composite Index gained 0.63 percent to end at 3,296.38 points.
Distilleries surged, with the sub-index up 5.16 percent.
Kweichow Moutai Co, China’s leading liquor maker, jumped 8.21 percent to 718.69 yuan (US$110) after announcing a rise of at least 10 percent in its product prices next year and forecasting a 58 percent increase in 2017 profit on the back of a 50 percent gain in revenue.
Moutai’s gains spilled over to other distilleries. Sichuan Swellfun Co rose 3.84 percent, and Shanxi Xinghuacun Fen Wine Factory Co added 3.32 percent.
Nonferrous-metal makers such as Zijin Mining Group Co, Henan Zhongfu Industrial Co and Jiangsu Lidao New Material Co all surged by the daily limit of 10 percent, boosted by news that world copper futures prices hit a record high over the past 55 months at US$7,240 yuan per ton on the London Metal Exchange.
Xining Special Steel Co also jumped by the daily 10 percent cap to 5.68 yuan. Industrial raw materials such as nonferrous metal and steel have enjoyed profit and price gains over the year on the back of China’s supply-side reform and industrial upgrading, Chuancai Securities said in a note.
STANFORD Residences have just added several more prestigious serviced apartment awards to the illustrious honor’s list they have already, to end an incredible 2017.
Stanford Residences, founded by the Hong Kong-based K. Wah International Holdings Ltd (KWIH), scooped the “Best Serviced Apartment Brand” by “iDEAL Shanghai Awards 2017”, “Serviced Apartment (Puxi and Pudong) of the Year” by “Time Out Family Awards Shanghai 2017”, “Serviced Apartment Operator of the Year” by “China Travel & Meetings Industry Awards 2017” and “2017 China’s Best Upscale Long Rental Residence Brand” by “Golden-Pillow Award of China Hotels”.
A relatively new player in the city’s increasingly crowded serviced residency realm, Stanford Residences seems to have worked out its own recipe for success: To grow at its own pace, making a footprint in the industry and sticking to a philosophy of “Where Enchanted Living Comes Together”. In essence, to offer its residents a true living experience instead of just luxury accommodation.
“Since the debut of our first project in March 2015, we have expanded our local portfolio to three projects, or 350 rooms, with total leasable space reaching nearly 70,000 square meters,” said Leo Lee, associate director of K. Wah (China) Investment Co Ltd. “We feel so proud that all of our projects boast satisfactory occupancy and room rates, which are probably among the highest of its kind in the city.”
The first property opened under the Stanford Residences brand, Stanford Residences Jing An, located in the prosperous CBD of West Nanjing Road and launched in three phases with a total capacity of 129 units starting from 227-square-meter three bedrooms, has managed to maintain its overall occupancy at around 90 percent.
As for the other two projects, which both came into the market earlier this year, client feedback is also encouraging.
Located on the prestigious West Jianguo Road with convenient access to the city’s multi-dimensional transportation system as well as a wide range of shopping, dining and entertainment venues, Stanford Residences Xu Hui has achieved a 90 percent occupancy within just a few months since the launch of its first phase — 66 apartments housed in two buildings — in June.
Evoking classic French elegance and conveying a poetic ode to European art, the Xu Hui project is definitely a standout with its high-rise lobby that combines luxury and sophistication. Residents are entitled to access to the Palace amenities, which includes a stunning 3,600 square meter private club, and the Palace Lane lifestyle center, where a wide selection of international groceries are offered. There is also a 5-star butler service, 24-hour concierge service, all-day room service, attentive baby care and business center service, to make sure residents’ every single request is taken care of quickly.
Under the company’s plan, an additional two towers, comprising 53 luxury units, will be rolled out at Stanford Residences Xu Hui during the first half of next year, which will then increase units to 119 apartments in total.
Stanford Residences Jin Qiao, the third and the newest member in the city under the brand, has also registered steadily rising occupancy over the past few months.
The first Stanford Residences property on the other side of the Huangpu River, the Jin Qiao project, introduced in September, has 102 modern units with a broad selection of layouts which caters to all that a family needs. The interior design, crafted by Indigo, which is a leading brand in residence and hotel design, features carefully selected color palettes and finishing to create simplicity and subdued sophistication. Best-in-class brands, including Kohler for the bathroom, Kuppersbusch for the kitchen and King Koil for the bedroom, offer residents a sense of luxury and extreme comfort.
Sitting next to the Biyun international community, a high-end neighborhood in Shanghai for expatriates, most renowned for its well-established educational and medical facilities for overseas residents, Stanford Residences Jin Qiao has set itself apart with the highest standards in environmental sustainability. Designed with the concept of “health and life”, the project boasts landscapes featuring lush greenery, a natural river nearby and a jogging trail surrounded by fruit trees.
Notably, the Jin Qiao project offers clients more flexibility in leases, allowing tenants to stay for one month instead of a minimum 12 months required at the other two properties in Puxi.
“For the next two to three years, we aim to achieve 90 percent occupancy at each of our projects, which should be all operated under full capacity,” Lee said. “From the brand’s perspective, we hope to build Stanford Residences into an industry benchmark in Shanghai’s highly competitive serviced residency market.”
In the longer term, the company will also keep an eye on expansion opportunities in other gateway cities where demand for high-end serviced residency is robust, as well as key second-tier ones with great business potential.
“We expect the high-end serviced residency industry to experience notably faster growth in China over the next couple of years amid a nationwide trend of consumption upgrading in almost all aspects as well as continuously-increasing accommodation demand from travelers who have grown more and more sophisticated,” Lee said. “Out of all, players with great operational capability and outstanding strength in branding and service quality will most likely emerge as ultimate winners in the market.”
ALMOST a third of medium-sized Chinese companies consider having a sustainable impact on the community and environment as one of their top three long-term objectives, an HSBC survey has found.
The proportion is slightly above the global average of 30 percent, HSBC said in a report yesterday.
More than half of the surveyed Chinese firms said sustainable business practices will improve their growth and profitability, while 34 percent of the companies believed becoming a more sustainable business would contribute to improving their financial performance over the next three years, the survey found.
The survey covered more than 1,400 decision-makers at companies with between 200 and 2,000 employees across 14 countries and regions.
The growing green awareness of companies echoes with Chinese authorities’ determination to protect environment.
China’s economic development has entered a new era and the basic feature is that the economy has shifted from high-speed growth to a stage of high-quality development, according to a statement issued last week after the annual Central Economic Work Conference.
SHANGHAI Junzheng Network Technology Co, which owns the Hellobike brand, said yesterday that it has raised 1 billion yuan (US$153 million) in the latest round of financing, which makes it the third-biggest bike-sharing company in China.
The latest fundraising followed Hellobike’s previous round of financing of US$350 million on December 4 from investors, including Alibaba’s Ant Financial.
The company has raised a total of just over US$500 million this month.
The 1 billion yuan financing was led by Fosun Capital and GGV, among other investors.
Hellobike will be integrated with Fosun’s business covering Big Data, the Internet of Things, tourism, real estate and other sectors, according to the company’s statement yesterday.
The investment represents heated competition among bike-sharing firms in China, which has seen smaller players close down.
Hellobike, which has 88 million users and processes 10 million daily users, offers services in third and fourth-tier cities and scenic areas, according to analysts.
BIKE-SHARING company ofo said yesterday that it now sees 32 million rides every day.
The company has 10 million shared bikes globally and 200 million users in 250 cities around the world, said its Vice President Xiang Jigui.
“Riding is a gigantic market. According to our calculation, ofo users could reach 2 billion in the future,” he said.
“Shared bikes could provide great space for development for the Internet of Things. Imagine street lights turning on or off with the arrival of ofo riders.”
SHANGHAI stocks fell yesterday, led by heavyweight financial and transport counters, as investors worried about tightening liquidity in the run-up to the year-end.
The Shanghai Composite Index lost 0.92 percent to 3,275.78 points amid lukewarm trading sentiment ahead of the New Year.
Profits at China’s major industrial companies rose in November at the slowest pace in seven months on cooler prices, the National Bureau of Statistics said yesterday.
Industrial companies’ profits totaled 785.82 billion yuan (US$120 billion) last month, rising 14.9 percent from a year earlier but that was a drop from 25.1 percent in October.
AVIC Securities wrote in a research note that the tight liquidity situation would pose pressure for the market in the near term.
Financial shares were weak amid the liquidity squeeze. Ping An Insurance (Group) Co tumbled 4.86 percent while China Merchants Bank lost 3.2 percent.
Airliners also fell, with China Southern Airlines losing 3.25 percent, Air China dropping 3.08 percent and China Eastern Airlines declining 2.76 percent.
Automakers moved up after the government extended the purchase tax exemption on new-energy vehicles until the end of 2020.
Yangzhou Yaxing Motor Coach Co and Shenyang Jinbei Automotive Co both surged by the daily limit of 10 percent.
THE number of initial public offerings on the yuan-denominated A-share market and the Hong Kong exchange hit a 10-year high in 2017, a latest report showed.
This year will close with more IPO listings than any year since 2007, driven by lower market volatility across regions, high-valuation levels and a renewed appetite for cross-border IPOs, an EY report said yesterday.
The Shenzhen Stock Exchange topped with 222 IPOs, followed by 214 IPOs in Shanghai, giving a total of 436 on the Chinese mainland. The Hong Kong exchange was third globally with 160 IPOs launched.
“The year 2017 has registered 1,624 IPOs with US$188.8 billion raised, indicating a year-on-year increase of 49 percent by the number of deals and 40 percent by capital raised,” said Lawrence Lau, EY assurance partner.
“Although these figures do not reach the level of 2007 (1,974 IPOs with US$338.4 billion of funds raised), investors are anticipating that as markets return to the pre-crisis level. IPO activities will rise with more mega deals, increasing the global proceeds in 2018.”
The 436 IPOs in the A-share market in 2017 raised a total of 230.4 billion yuan (US$35 billion), up 92 percent by volume and 53 percent by proceeds compared with last year.
“Driven by SMEs, IPOs in the A-share market reached over 400 by annual deal number for the first time, exceeding the previous record of 347 IPOs in 2010, hitting a record high,” said Wang Yang, EY assurance partner.
“However, funds raised were only 47 percent of that in 2010, mainly due to the absence of large individual IPOs of over 5 billion yuan, while the SMEs dominated the IPO market with individual proceeds of less than 1 billion yuan,” Wang said.
IPOs in the A-share market included 18 companies which exited the National Equities Exchange and Quotations this year and successfully launched IPOs, raising a total of 6.96 billion yuan.
By sectors, industrial enterprises continued to rank first in IPO number and funds raised, with 137 IPOs netting 63.9 billion yuan in total, followed by the TMT (technology, media and telecom) sector, consumer products, retail, materials and health care industries.
EY expects A-share listings in industrials, TMT and materials to be the top three industries in the IPO pipeline in 2018, and forecasts more IPOs from the health care industry.
THE People’s Bank of China announced plans yesterday to regulate QR code payment to contain risks arising from the popular service.
Payment institutions must obtain proper permits to offer barcode-based payment services, according to a document released by the PBOC.
Both banks and non-banking payment institutions must channel cross-bank transactions involving barcodes through the clearing system of the PBOC or other legal clearing houses.
The institutions should also enhance their security to prevent data breaches, the document said. The new standards on barcode payment will be put into trial use from April next year.
Paying through QR code is increasingly popular.
By scanning QR codes at convenience stores, subway stations or street vendors, people can buy almost anything.
The number of China’s mobile payment users has exceeded 520 million, according to Alibaba’s affiliate Ant Financial.
But the growing popularity of the payment method has also brought concerns such as security issues and unfair market competition, the PBOC said, adding that it always seeks a balance between encouraging innovation and controlling risks.
TESLA founder and CEO Elon Musk said the electric car company will make a pickup truck after the release of its next model.
In a message on Twitter late on Tuesday, Musk said: “I promise that we will make a pickup truck right after Model Y.” The Model Y is an electric SUV that’s due for release in about two years. He said the pickup would probably be slightly bigger than a Ford F-150.
Musk was responding to suggestions he had solicited through Twitter about what the company could improve.
Tesla has focused on producing passenger cars over the past decade but has branched out in recent years. It plans to make electric semis and has invested in battery production.
CHINA will extend the exemption of a purchase tax on new-energy vehicles until the end of 2020, a boost for makers of hybrid and electric cars.
The extension signals the strong determination of the government to encourage sales and use of green cars to help reduce dependence on fossil fuels and clean up the skies in major cities.
Buyers of qualified electric vehicles, plug-in hybrid vehicles and fuel-cell vehicles will not have to pay the 10 percent vehicle purchase tax — which was set to expire at the end of this year — from January 1, 2018, through December 31, 2020, according to a statement issued yesterday by the Ministry of Finance, the Ministry of Industry and Information Technology, the State Administration of Taxation and the Ministry of Science and Technology.
The extension comes as automakers in China brace to meet strict green-car quotas starting in 2019 that are sparking a flurry of electric car deals and new launches of electric and hybrid models.
Amid the shift, some global automakers have called on China to maintain financial support for the market, citing concerns consumer demand alone will not be sufficient to drive sales without state-backed incentive schemes to lure buyers.
“The policy will further support the innovative development of the new-energy vehicle industry,” the statement said.
China introduced the tax exemption three years ago. New-energy vehicles already qualified for the rebate will continue to be exempted from the tax.
Cui Dongshu, secretary-general of the China Passenger Car Association, said the policy is a positive signal to both industry and consumers.
“The policy will effectively promote consumers to choose new-energy vehicles and result in a steady and rapid growth of the new-energy vehicle market,” Cui said.
China’s auto market, the world’s largest, has slowed sharply this year, but new-energy vehicles has been a bright spot.
In the first 11 months, 609,000 new-energy vehicles were sold in China, up 51.4 percent year on year, according to data from the China Association of Automobile Manufacturers.
“Sales of new-energy vehicles in China are expected to exceed 700,000 units this year,” Cui added.
The extension of the exemption lifted shares of new-energy vehicle makers. Shenyang Jinbei Automotive Co surged by the daily 10 percent cap to 5.71 yuan (87 US cents), and Xiamen King Long Motor Group Co rose 3.33 percent to 13.03 yuan.
CHINA’S Geely Holding, which already owns the Volvo Car Group, is buying an 8.2 percent stake in Swedish truckmaker AB Volvo from activist investor Cevian Capital for around US$3.3 billion.
Volvo Car Group was split from AB Volvo almost 20 years ago, and Geely said it was not its current intention to try to reunite the two businesses.
“Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo,” Geely Chairman Li Shufu said in a statement yesterday.
Geely’s expertise in the Chinese market and skills in developing electric and autonomous vehicles should help the truckmaker to expand, he added.
AB Volvo owns 45 percent of Dongfeng Commercial Vehicles, one of China’s largest truckmakers, and also has a significant construction equipment business in China.
The value of the investment amounted to around 27.2 billion Swedish crowns (US$3.3 billion), a Reuters calculation showed, although Geely and Cevian did not disclose the exact value of the transaction in their statement yesterday.
The deal makes Geely the biggest individual shareholder in AB Volvo and second ranked in terms of voting rights behind Swedish investment firm Industrivarden.
Volvo shares have gained more than 50 percent this year as it and rivals in the truck industry such as Germany’s Daimler and Volkswagen hit a sweet spot thanks to robust demand in major markets.
Cevian, who has held shares in Volvo since 2006, this year called for a break-up, suggesting the smaller Volvo Construction Equipment and engine and technology firm Volvo Penta should be separated from the main truck making business.
As well as Volvo Car which it acquired in 2010, Geely also owns the company that makes London’s black cabs and sports carmaker Lotus.
In a sign of its ambitions, Geely last month offered to take a stake of up to 5 percent in Daimler via a discounted share placement but was rebuffed, according to sources with knowledge of the talks.
In the latest deal, Geely will acquire 88.5 million A shares and 78.8 million B shares to give it 15.6 percent of Volvo voting rights. Industrivarden owns mostly A shares and controls 22.8 percent of the votes.
Nomura International Plc and Barclays Capital Securities Ltd have agreed to acquire Cevian Capital’s shares, and will sell them to Zhejiang Geely Holding Group when the necessary regulatory approvals have been obtained, the companies said.
SHANGHAI yesterday welcomed a new industrial software park in Qingpu District that will help boost local industry development in artificial intelligence and the Internet of Things.
Shanghai Shixi Software and Information Park, located in the west of the city, will focus on development of IOT, AI, industrial software and applications for location, health care and logistic sectors.
The park expects the revenue of all the companies located there to hit 60 billion yuan (US$9.2 billion) in 2020 and 150 billion yuan in 2025, according to the Shanghai Commission of Economy and Information Technology, the city’s industry regulator.
But the commission didn’t reveal the number of companies it hopes to draw to the park.
Shanghai expects to post an AI industry revenue of 100 billion yuan by 2020, and AI is set to become the city’s new growth engine.
Software and service has been touted as one of Shanghai’s strategic industries to help develop the economy into a more innovative one, the regulator said.
ARTIFICIAL intelligence technologies have been used in dealing with non-performing assets (NPAs), which may be a market worth 10 trillion yuan (US$1.5 trillion) within the next five years, a Shanghai-based technology provider said yesterday.
Toproperty, which serves finance firms such as banks and peer-to-peer platforms, offers management systems and data analysis tools to help clients recover accounts.
In 2016, the value of NPAs suffered by banks was 4.06 trillion yuan and it is expected to touch 10 trillion yuan annually within five years, said Shang Jieli, founder and CEO of Toproperty.
With new AI-featured products, Toproperty helps clients better manage the process to recover accounts and loans based on data analysis and other AI technologies.
Toproperty has about 180 enterprise clients.
PROFITS at China’s major industrial companies rose in November at the slowest pace in seven months on cooler prices, the National Bureau of Statistics announced yesterday.
Industrial companies’ profits totaled 785.82 billion yuan (US$119.86 billion) last month, up 14.9 percent year on year but that was a drop from 25.1 percent in October.
For the first 11 months combined, industrial profits rose 21.9 percent year on year to 6.88 trillion yuan.
Of the 41 industries surveyed, 39 posted year-on-year profit growth from January to November. The statistics bureau tracks companies with annual revenue of more than 20 million yuan.
Bureau statistician He Ping attributed the slower profit growth to cooler inflation at the factory gate.
The Producer Price Index, tracking product prices of industrial companies, rose 5.8 percent year on year in November, the lowest in four months.
He said the price factor dragged the industrial profit growth by 13.8 percentage points. The slower price increase also hurt companies’ cost as some materials were purchased by them at higher prices previously, He added.
For each 100 yuan of revenue, companies had to spend 85.52 yuan, up 0.29 yuan from the same month of last year, according to the latest bureau figures.
By the end of November, the debt-asset ratio of the industrial companies dipped 0.5 percentage points from a year ago to 55.8 percent.
Profits at coal, steel, chemicals, and petroleum sectors contributed to over half of the total profit at industrial companies.
Profit growth at advanced manufacturing and strategic new industries outpaced the average, bureau data showed.
Profits at state-owned enterprises jumped 46.2 percent to 1.58 trillion yuan in January to November, compared with a 48.7 percent surge in the first 10 months.
Private companies reported profits growing 12.7 percent to 2.19 trillion yuan in the first 11 months, down from 14.2 percent in the first 10 months.
November’s manufacturing Purchasing Managers Index stood at 51.8, above the boom-bust mark for the 16th month in a row.
FROM tequila to avocados, the state of Jalisco in west central Mexico is seeing its exports to China increase, thanks to the expanding Chinese middle class.
Still, the export of avocado to China is currently somewhere between the thoughts of some Jalisco local officials and a development blueprint.
On November 11 Singles Day, consumers purchased nearly a million avocados via online sales site Tmall, part of e-commerce giant Alibaba.
Such a scenario has led some local officials to believe that the avocado, the bright-green protein-rich fruit the Chinese consumers have proven fond of, will be another local export with notable potential for growth.
Ignacio Gomez, a spokesman for Jalisco’s Association of Export Avocado Producers, said he’s confident that his state’s produce will be available to Chinese consumers soon.
Right now in Mexico, only Jalisco’s neighboring state of Michoacan ships avocados to China.
“It is a market that is responding very well, and the trend indicates that in a few years China will be a very, very important market for Mexican avocados,” said Gomez.
Jalisco currently exports 80,000 tons of avocados to countries in Europe, Central and South America, and the Middle East, as well as Canada and Japan.
One of Mexico’s breadbasket states, Jalisco first launched tequila exports to China five years ago. In June of this year, the state made its first shipment of cranberries to China, sending 420 cases.
“We have to continue to strengthen the relationship with China, which is exceptional,” said Hector Padilla, Jalisco’s secretary of rural development.
“It is a market that is moving forward, that is growing, that is diversifying, and that we are cultivating so that volumes keep increasing,” said Padilla.
Padilla noted that producers of Jalisco’s other well-known fruits such as berries, mangoes and limes, also see China’s market as a great booster of business.
“The space (for growth) in China is huge. They have enormous purchasing power that is growing year by year. It’s just a question of time” before the state exports to China take off, said Padilla.
“We are barely in the initial stage of penetrating the Chinese market,” the state official added.
Mexico benefited from China’s growing consumer demand in 2017, with its exports to the Asian giant increasing 28 percent, the highest rate among its trading partners, and far higher than the 9 percent growth in trade it saw with its neighbor to the north, the United States, the Inter-American Development Bank (IDB) said.
Government statistics show trade exchanges between Mexico and China grew a whopping 185 percent from US$26 billion in 2006 to US$74 billion in 2016.
Over recent years, Mexico has also received more than US$74 million in foreign direct investment from China.
Mexico’s productive sector is looking to diversify its exports markets given the climate of uncertainty affecting the two-decade North American Free Trade Agreement between Canada, the United States and Mexico, since US President Donald Trump took office.
China’s Latin American purchases were the most dynamic in 2017, and centered on basic products that are seeing higher prices compared to previous years, according to economist Paolo Giordano, an IDB expert in trade and integration.
Following four years of negative growth, Latin America saw a 13 percent increase in exports in 2017, driven in large part by increased demand from Chinese consumers, according to IDB.
The region’s small and medium-sized businesses are also looking to break into Asian markets, especially China, said Alejandro Salcedo, head of the Mexican chapter of the Latin American Association of Micro, Small and Medium-Sized Businesses (ALAMPYME).
“There are basic products that they need in order to produce and we want to see whether it is viable to supply these types of products to establish a marketing scheme,” said Salcedo.
ALAMPYME, which gathers 300,000 small and medium businesses from 13 Latin American countries, believes China could serve as a gateway to Asia.
THE year 2017 has seen the overland Silk Road Economic Belt and the 21st Century Maritime Silk Road reach more peoples and more lands.
The year may mark a milestone in materializing the Belt and Road initiative. Both a vision and a solution from Chinese wisdom valuing peace and harmony, the initiative seeks common prosperity and safeguards globalization amid uncertainties and challenges such as a surge in protectionism, nationalism and isolationism in Western countries.
“China is an inspiring example for many countries,” said Andrei Vinogradov, a political expert with the Russian Academy of Sciences. “Its success and historical experience make it possible to provide the world with a solution based on win-win cooperation.”
Four years after it was put forward by Chinese President Xi Jinping, the initiative has blended well with the respective development strategies of participating countries.
For example, in mid-March, the United Nations resolution on Afghanistan highlighted the Chinese plan as key to rebuilding the war-ravaged country and boosting regional integration.
The initiative aims to expand infrastructure, trade and investment networks to connect Asia, Europe and Africa along and beyond ancient Silk Road routes.
Furthermore, the Belt and Road is set to lead the world toward “a common community of a shared future for humankind,” another vision devised by China out of its responsibility to respond to changes in the global landscape, and inscribed in multiple UN resolutions.
The initiative well serves the UN 2030 Agenda for Sustainable Development, according to UN Secretary-General Antonio Guterres. In a message to a November forum in New Zealand, Guterres noted “clear synergies” between them.
Both strive to “stitch countries together in networks of trade and mutual gain,” and aim to “deepen global connectivity,” he said.
The initiative has in the past year responded to more calls for openness, inclusiveness, innovative growth, and freer and fairer trade at multilateral forums such as the World Economic Forum, G20 summit and BRICS summit. It has pushed for more partnerships and is lauded as a welcomed public good.
Its prospect charmed over 1,500 representatives from over 130 countries and 70 international organizations and effected the signing of close to 70 agreements at the Belt and Road Forum for International Cooperation held in Beijing in May, a milestone marking a new implementation phase for the initiative.
With policy support from the Chinese leadership on top of confidence built on China’s steady growth, the initiative has this year convinced more onlookers and skeptics than ever before.
Notably, in November over 250 Japanese business leaders showed interest in playing a role in the initiative’s grand narrative.
The infrastructure plan received a vote of confidence in December when the Asian Infrastructure Investment Bank, a major source of funding for the initiative, expanded in less than two years to a broader geographical area represented by 84 member countries and regions, up from its founding 57.
“The Belt and Road offers new opportunities for development and the billions of people in areas it touches,” said deputy speaker of the Czech parliament Vojtech Filip during a December visit to Beijing.
An increasing number of economic corridors, railways, highways, ports and power plants, among others, are being mapped out on paper while substantiated on the ground along the Belt and Road.
The collaboration is based on extensive consultation with participating countries, who see the project as a means to boost economic growth.
Under the initiative, Chinese enterprises have invested roughly US$50 billion and helped build 75 economic and trade cooperation zones in 24 countries, generating more than 209,000 jobs, according to official data.
It plays a significant role in Australia in the development of its north, former Australian trade minister Andrew Robb said.
It helps lay “one of the key cornerstones to Kenya’s journey of transformation into an industrial, prosperous and middle-income country,” said Kenyan President Uhuru Kenyatta during the launch of the passenger train service of the 472-kilometer Mombasa-Nairobi Standard Gauge Railway in May. The railway is the African country’s single largest infrastructure project since its independence in 1963.
In land-locked Laos, a railway under construction will make it land-linked.
Railways built with Chinese expertise elsewhere will connect cities in and out of Thailand, Serbia, Hungary and other countries, while putting local development on a faster track, or simply bringing faster and easier travels to everyday life, not to mention jobs with better pay.
In parallel with the progress on land, most recently in December the operation of the port of Jambantota in Sri Lanka was launched enabling it to join other hubs along the Belt and Road, including Piraeus in Greece and Gwadar in Pakistan.
Not even the Arctic is left out. Russia and China in July agreed to find a shortcut between the Pacific and the Atlantic through the frigid north. Annual global freight costs could be cut by US$50 billion to US$120 billion.
The Silk Road on Ice via the Arctic is widely seen as the third arch of the Belt and Road, adding another sea route to ones starting from the South China Sea, to the Indian Ocean, Africa and the Mediterranean, and to the South Pacific and Oceania.
A man rides an escalator at a commercial building in Tokyo. Japan’s unemployment rate in November dipped to its lowest level since November 1993, official data showed yesterday, offering another sign that the world’s third-largest economy is on track to recovery even if the pace is slow. Unemployment stood at 2.7 percent last month while the jobs-to-applicants ratio improved 0.01 percent from the previous month to 1.56 in November, the highest in almost 44 years. — Reuters
Health care, technology and Japanese small-cap stocks look poised to outperform the broader market in the year ahead, according to some of the best performing US-based stock fund managers of 2017.Small-cap stocks should be among the largest winners of the newly signed Republican-led tax law, which slashed corporate taxes at home and made it cheaper for companies to bring back their profits from overseas. Yet small-cap fund managers from Loomis Sayles, Federated Investors and Wasatch Advisors whose funds are up 30 percent or more for the year say that a bigger factor in the year ahead will be continued global growth.“The tax bill is going to make some balance sheets look better on the margin, but we think the larger factor is that the recovery is still going on internationally,” said Kenneth Korngiebel, a co-portfolio manager of the US$335 million Wasatch Micro Cap fund, which is up 36.1 percent year-to-date. That performance makes it the 13th-best small-cap fund of the year, according to Lipper data, which tracks about 1,800 small-cap funds.As a result, Korngiebel is shifting more of his portfolio into international stocks, which often trade at lower valuations than their US counterparts and have better growth characteristics, he said.Korngiebel is adding to stocks like Japanese outsourcing company UT Group Co, whose shares are up 243 percent for the year to date, and which he expects to grow its revenue by more than 30 percent in the year ahead. He is also adding to his position in US-based Tabula Rasa Healthcare Inc, which helps doctors screen for potential drug interactions. Shares of the company are up 97 percent in 2017.“The percentage of the population who take five or more medication is going up and adverse drug events are expensive and can lead to loss of life. What we see here is opportunity to take advantage of an under-covered company that is unique and meets a large need,” he said.Overall, companies in the small-cap benchmark Russell 2000 index pay a median effective tax rate of 31.9 percent, while the larger, multinational companies in the S&P 500 pay a median effective tax rate of 28 percent, according to Thomson Reuters data. The median for the 30 mega-cap stocks in the Dow Jones Industrial Average is 23.8 percent.Some of the benefits of the tax cut are already reflected in stock prices. The iShares Russell 2000 ETF, which tracks the benchmark Russell 2000 index of small-cap shares, is up 14 percent for the year to date, with about half of that gain coming over the last three months as Republicans rolled out their tax plan.John Slavik, a co-portfolio manager of the US$18 million Loomis Sayles Small/Mid Cap Growth fund, the 16th-best performing small-cap fund this year, said that industrial machinery companies such as Gardner Denver Holdings Inc should benefit if corporations reinvest part of their tax windfalls into improving their factories.The fund’s largest position is in supply chain company XPO Logistics Inc, which Slavik expects to gain from both corporate capital reinvestment and global economic growth. Shares of the company are up 78 percent for the year, and now trade at a trailing price to earnings ratio of 65.9, but Slavik said that he expects its revenues and cash flow to accelerate as the global manufacturing sector continues to expand.“The valuation of the stock has been more challenging but we still thinks it works into the future,” he said.He has also been selling his position in clear-braces maker Align Technology Inc, whose shares are up 135 percent this year and now trade at a market value of more than US$18 billion, making it too large for his fund.“This is a company that has done very well for us but we are looking to start to redeploy that cash elsewhere,” he said.Stephen DeNichilo, a portfolio manager of the US$872 million Federated Kaufmann Small Cap fund, the ninth-best small-cap fund this year, said that fund holdings such as plastics molding manufacturer Milacron Holdings Corp will benefit from a pickup in capital spending because its products help improve a factory’s efficiency. “This kind of investment pays for itself very quickly,” he said.Yet he has a larger position overall in biotech companies, which have greater growth potential, he said.
CHINA will enhance key manufacturing technologies in nine areas as the government aims to drive the country to be a top manufacturer in the world by accelerating technology upgrading.
The National Development and Reform Commission, the country’s top economic planner, has made three-year (2018-20) targets for railway transport, advanced shipping and maritime engineering, intelligent robots, smart cars, modern agricultural machines, advanced medical devices and medicines, new materials, smart manufacturing and key equipment. The targets are aimed at catapulting China into the top league of manufacturing.
China expects to succeed in producing maglev trains that can run at 600 kilometers per hour and automating the operations of railways in the next three years. It also expects to “realize significant achievements in producing large cruise ships” and building a vessel capable of carrying 22,000 TEUs (twenty-foot equivalent units), which will be the world’s largest container ship.
China is expected to expand its global market share in advanced agricultural machines.
The NDRC aims to cut domestic medical expenses by introducing at least 10 new medicines to the domestic market and has plans to sell them abroad.
The targets also include intensifying the development of key components for smart manufacturing, such as programmable logic controllers and robots. Development of artificial intelligence and augmented reality will also be vital under the plan.
New materials such as graphene, specialty steel, advanced organic and composite materials are identified to help the development of advanced machines, save energy and cut carbon emissions.
China needs to deepen efforts on technology upgrading to enhance its manufacturing capability, the NDRC said, adding that the country hopes to rapidly integrate Big Data and AI with manufacturing.
CHINA’S securities regulator has ordered the founder of indebted tech conglomerate LeEco to return to China and sort out a mounting debt pile linked to his firms, ramping up pressure on the head of the embattled entertainment-to-auto group.
The heavy debt of LeEco, which is still controlled by Jia Yueting, has “seriously infringed investor rights.” Jia must return to China before Sunday, said the Beijing branch of the China Securities Regulatory Commission.
It did not specify where Jia was, although he has business interests in the United States.
A spokeswoman for LeEco’s main listed unit Leshi said Jia’s personal behavior would not have a major impact on the listed company’s overall operations and his ties with the firm were no longer that close. Jia stepped down as CEO of Leshi in May, but remains the head of parent LeEco.
The companies faced heavy debts and cash problems after LeEco’s aggressive expansion into the new-energy car market, which sucked up the capital of Leshi and forced it to halt trading for over seven months.
SHANGHAI stocks rebounded yesterday after investors were buoyed in the wake of the approval for the city’s master plan to become an “excellent global city” and also China’s plans to enhance the country’s manufacturing capacity.
The Shanghai Composite Index gained 0.78 percent to 3,306.12 points.
Shanghai Shine-Link International Logistics Co, a logistics company based in the Shanghai free trade zone, jumped by the daily limit of 10 percent on investor hopes that Shanghai’s plan for 2035, approved by the State Council on Monday, would benefit FTZ shares.
First Tractor Co also surged 10 percent as the National Development and Reform Commission forecast most of China’s advanced agricultural machines would be made domestically by 2020 and not imported.
A woman looks at an LG Electronics’ TV, which is made with LG Display flat screen, at its store in Seoul. South Korea’s trade ministry said yesterday that a committee had approved LG Display’s plan to build a new organic light-emitting diode panel production facility in China. The approval comes five months after LG Display said it would invest in large-size OLED production in Guangzhou to respond to fast growing demand in overseas markets.
CHINA’S non-fossil fuel production has gained steam amid a government campaign for more clean energy use to curb pollution, official data showed yesterday.
China’s energy production is set to reach 3.6 billion tons of standard coal equivalent in 2017, among which non-fossil fuel output accounts for 17.6 percent, up 6.4 percentage points from the percentage in 2012, according to information from a national work conference on energy.
By the end of 2017, China’s installed power generation capacity is slated at 1.77 billion kilowatts, and non-fossil fuel generation capacity accounts for 38.1 percent of the total.
China’s newly added renewable energy installed capacity accounts for 40 percent of the global growth, according to Nur Bekri, head of the National Energy Administration.
“China is actively adapting to the green trend in the energy supply,” he said, adding the country has become a global leader in the development of non-fossil fuel.
China has been promoting green resources such as wind and solar in recent years to cope with pollution and boost the quality of its growth.
China’s non-fossil fuel will account for half of its total power generation by 2030.
China will become the world’s second-biggest importer of liquefied natural gas this year as it overtakes South Korea, shipping data showed.This is a huge boost to Asia’s emerging spot market as Chinese buyers rely much more on short-term purchases to meet their needs than their counterparts in Japan and South Korea.Shipping data in Thomson Reuters Eikon showed that China’s imports of LNG will have risen by more than 50 percent in 2017 from the previous year to around 38 million tons.Comparatively, import-dependent Japan and South Korea will have taken around 83.5 million tons and just over 37 million tons by the end of the year, respectively.Analysts, though, say China’s LNG imports will rise further.“We are expecting to see even higher surges in winter demand over the next three to four years as the Chinese government pushes more broadly its gas-for-coal drive,” said Wang Wen, Beijing-based gas analyst with consultancy Wood Mackenzie.China’s soaring LNG import demand is a result of a huge government gasification program that saw millions of households switch from using coal for household heating this year to natural gas.Beyond virtually doubling Asian spot LNG prices since June to US$11.20 per million British thermal units — their highest since November 2014 — China’s rapid growth in purchases also changed the structure of the market.Despite efforts to change the market, LNG trading has remained dominated by long-term contracts under which fixed monthly volumes are supplied at prices linked to the oil market, although within certain price ranges.Such deals have been preferred by Japan and South Korea, which meet all their gas demand through LNG imports, as it gives them security of supply and prevents price volatility.China is different. The country has significant domestic natural gas reserves and also brings in supplies via pipeline from Central Asia.This means its utilities may order LNG cargoes only when they require gas at short notice — for instance during the current winter cold snap and supply crunch — possibly bringing a sudden spurt of purchases to a spot LNG market that in the past has seen limited activity.“China will surely become a key driver for Asian spot LNG prices,” Wang said.Japan, China and South Korea together make up 60 percent of global LNG demand.The world’s biggest LNG producers are Qatar, Australia and Malaysia, which together meet around 60 percent of global demand.
Shanghai taxi operator Qiangsheng plans to drive into the online ride-hailing business around the Spring Festival, the company said yesterday.Qiangsheng is cooperating with State Grid Corp, Geely Group and Tokyo MK — a Japanese taxi firm — to put 1,600 new-energy cars in the market.Geely has offered Qiangsheng 600 new-energy cars as the carmaker aims at “integrating with the Qiangsheng platform,” said Dong Kainan, manager of Youxing Technology, which owns Geely’s online car-hailing app Caocao Zhuanche.Passengers can book the cars through Caocao Zhuanche or Qiangsheng’s hotline service and app. However, no price has been set yet for hailing cars online.Qiangsheng is now recruiting drivers for its online hailing service.“All drivers must meet standards of online ride-hailing,” said Zhang Liang, an official of Qiangsheng. “They will also undergo an elementary English course to cater to the needs of foreign passengers.”Zhang said drivers will also receive service training from Tokyo MK to enhance their service awareness and quality.Qiangsheng owns 12,000 taxis, taking up 25 percent of Shanghai’s total.