SHANGHAI DAILY

Students learn to become entrepreneurs

Tue, 04/10/2018 - 18:01
LOCAL universities are active in educating students on innovation and entrepreneurship. By the end of last year, 35 universities in Shanghai, or more than half of the total in the city, have set up over 1,000 innovation and entrepreneurship courses, including over 200 delivered online, according to the Shanghai Education Commission. In about 30 universities, the innovation and entrepreneurship courses are compulsory. Fudan University plans to integrate the innovation and entrepreneurship courses into its liberal arts education system that covers all undergraduates by 2020, according to a new plan released last year. Nearly 400 teachers in local universities and 600 from outside are mentoring students who are interested in startups. Among them, 217 have been selected into the national pool of mentors for innovation and entrepreneurship. Shanghai Jiao Tong University, Fudan University and ShanghaiTech University have been selected as national demonstration bases for innovation and entrepreneurship. The city has also organized innovation and startup competitions under the theme of “Internet Plus” for three years. Last year, 14,950 students participated in the event, double the number in the previous year. They accounted for 2 percent of all the students in local universities. They presented 3,679 projects, up 260 percent from the previous year. Universities are also encouraged to explore new ways to commercialize their scientific and technological achievements and reward researchers in a bid to stimulate them to be more active in innovation. The total value of 4,220 contracts for translating university research achievements to applications exceeded 2 billion yuan (US$320 million) for the first time last year, up 8.8 percent from the previous year. These include a case in Fudan University which permitted American Huya Co to use its anti-cancer drug patents, worth not more than US$65 million, for clinical development and sales globally except the Chinese mainland, Hong Kong, Macau and Taiwan.

Shanghai shares jump on Xi’s speech at Boao Forum

Tue, 04/10/2018 - 18:01
SHANGHAI shares jumped yesterday after President Xi Jinping said that China would continue to open up further and commit to deeper reform, seen as a gesture that might ease trade tension between China and the US. The Shanghai Composite Index rose 1.66 percent to close at 3,190.3 points. Xi’s remarks in his speech at the Boao Forum for Asia included a wide range of measures such as lowering import tariffs for autos and other products, as well as enforcing legal intellectual property of foreign firms. Steel makers led the gains after steel prices rebounded, suggesting a pick-up of demand in near future. Liuzhou Iron and Steel Co surged by the daily limit of 10 percent and Fangda Special Steel Technology Co gained 5.87 percent to 14.06 yuan. Transport companies also took off, with Air China rising 6.66 percent while China Eastern Airlines added 3.99 percent. Stocks also rose on Wall Street yesterday. The Dow Jones Industrial Average climbed as much as 400 points in early trading. In Asia, Japan’s Nikkei 225 gained 0.5 percent to finish at 21,794.32. Australia’s S&P/ASX 200 edged up 0.8 percent to 5,857.00. South Korea’s Kospi added 0.3 percent to 2,450.74 and Hong Kong’s Hang Seng increased 1.7 percent to 30,728.74.

Debt removed from trade

Mon, 04/09/2018 - 18:01
DEBT issued by Russian company Rusal has been removed from bond trading platform MarketAxess after it was included in a new round of US sanctions against Moscow. MarketAxess, one of the largest multi-dealer platforms for bonds trading in the world, along with Tradeweb and Bloomberg, confirmed the move through a spokesman yesterday. Russian stock indexes, the rouble and shares in major Russian companies fell sharply yesterday.

Retailers see faster rise in March sales

Mon, 04/09/2018 - 18:01
CHINESE retailers saw faster sales increase last month, according to an official survey. Combined sales of 5,000 retail companies across the country grew 5 percent year on year in March, up from 4.2 percent in the first two months and 4.5 percent in the same month a year ago, the Ministry of Commerce said in a report. Their sales rose 4.5 percent in the first quarter, also up from 4.1 percent a year earlier. The data suggested the country’s consumer market remained robust as policymakers have been working to push for a consumption-led economy and to reduce reliance on investment and exports. “The consumer market has steadily picked up its pace,” the ministry said, citing stronger online shopping and more spending in services such as film and tourism. E-commerce maintained rapid expansion as online platforms tracked by the ministry reported an average 20-percent rise in turnover from January to March. Brick-and-mortar retailers also recovered, with sales of convenience stores and franchise houses up 7.2 percent and 5.9 percent respectively. Box office sales exceeded 20 billion yuan (US$3.17 billion) in the first three months, up nearly 40 percent year on year, partly driven by the week-long Spring Festival holiday, which saw a record-setting 5.72 billion yuan in tickets. The ministry has predicted a 10-percent growth in consumer goods sales for the first quarter.

Smartphone shipments fall again in Q1

Mon, 04/09/2018 - 18:01
CHINA’S smartphone shipments continued to drop in the first quarter of this year, industrial data showed yesterday. Domestic smartphone shipments reached 81.87 million in the first three months of 2018, down by 27 percent year on year, said a report by the China Academy of Information and Communications Technology. Smartphone shipments fell by 28.6 percent year on year last month. China’s mobile phone shipments started to fall about one year ago, with last December registering the biggest monthly year-on-year drop of 33.2 percent. Analysts said that the Chinese smartphone market is expected to see restructuring as smartphone consumption slows, with almost all Chinese people owning at least one mobile phone. Facing fierce market competition, domestic players like Xiaomi and Huawei started to bet on artificial intelligence, dual cameras and other trendy functions to woo customers.

Uber makes the JUMP to offer e-bicycle services

Mon, 04/09/2018 - 18:01
RIDE-HAILING company Uber Technologies Inc said yesterday it has agreed to buy electric bicycle service JUMP Bikes, allowing Uber to offer US passengers an alternative to cars and further consolidating the crowded bike-sharing industry. JUMP is a dockless electric bike service that has rolled out in San Francisco, where it has 250 bikes, and Washington. About 100 JUMP employees will join Uber, an Uber spokeswoman said. Terms of the deal were not disclosed. The deal furthers Uber’s goal of offering “the fastest or most affordable way to get where you’re going, whether that’s in an Uber, on a bike, on the subway, or more,” said Uber Chief Executive Dara Khosrowshahi. JUMP bikes had already integrated its service with Uber’s smartphone app in San Francisco, so that users could find one of JUMP’s bright red bicycles by opening the Uber app. The Uber spokeswoman said the company had no plans to withdraw the standalone JUMP app. “We’re excited to begin our next chapter and to play a significant part in the transition of Uber to a multi-modal platform” and help “shift millions of trips from cars to bikes,” said JUMP CEO Ryan Rzepecki. With the addition of bicycles, Uber is taking a page from the playbook of competitors such as China’s Didi Chuxing. Uber has at times lagged rivals in certain markets because it has been limited to private car-hailing. JUMP started in 2010 as Social Bicycles, evolving over the past eight years from selling bikes to operating its own fleets. JUMP bikes are unlocked and locked using a smartphone app. Because they are dockless, they can be left at any bike rack and their location is tracked via GPS.

US sanctions on Rusal set to benefit Rio Tinto

Mon, 04/09/2018 - 18:01
RIO Tinto will be among the biggest winners from the US sanctions imposed on Russian aluminum giant United Company Rusal as the penalties further shake up the global metals trade and boost costs for US consumers, industry sources said yesterday. The United States imposed the sanctions on Friday. Rusal, the world’s second-largest aluminum producer, and its former President Oleg Deripaska were included on the list. Rusal said the sanctions “may be materially adverse to the business and prospects of the group.” Shares plunged 50 percent in Hong Kong yesterday. Traders and analysts said the sanctions would accelerate a rerouting of global aluminum shipments that began last month after the US imposed a 10 percent duty on aluminum imports under the so-called “Section 232” of US trade laws. “It probably reroutes a lot of the trade flows,” said analyst Daniel Morgan at UBS in Sydney. “It is beneficial if you are a producer that is (compliant with the section 232 tariffs) because you’ve got an ability to sell into the US and other markets.” After President Donald Trump announced the tariffs, he later exempted the European Union and other trading partners including Canada and Australia until May. The new sanctions on Rusal would disrupt unwrought Russian aluminum imports, which in 2017 were 695,778 tons out of a total of about 5 million tons, according to the International Trade Centre. Rio Tinto would be well placed to replace that metal with any unsold metal if the sanctions stuck, Paul Adkins, managing director of consultancy AZ China said. Rio Tinto declined to comment. The company produced 3.6 million tons of aluminum last year from its operations including in Canada and Australia, which are exempted from the section 232 tariffs. “All this does is make things more expensive for Americans,” said one aluminum trader in Singapore. “Everyone who has a duty free exemption is laughing.” US aluminum premiums traded at 18.4 US cents per pound, or about US$405 per ton on top of futures prices. Those premiums are expected to climb. “Overall, it should be near-term bullish for the premium and price,” said another physical metal trader in Singapore. Rising premiums could draw more Chinese aluminum to the US since the additional cost of the section 232 tariff is below the US premium, said Adkins. A source at a Japanese aluminum fabricator said his company does not plan to change its supply contract with Rusal. However, if their customers, such as automakers, decide to follow the US sanctions, then the company may have to think twice about buying metal from Rusal, he said.

SenseTime nets US$600m to boost AI

Mon, 04/09/2018 - 18:01
SENSETIME, one of China’s leading artificial intelligence companies, said it has successfully raised US$600 million in its Series C round of funding led by e-commerce giant Alibaba Group, Suning and Singapore’s Temasek in the largest funding raised by an AI startup so far. The funds will build SenseTime’s AI platform to advance the company’s technological innovation and also help open up new business opportunities. “Our latest funding will maximize our advantages, including robust research, deep industry collaboration, and diverse partnerships, while accelerating the development of a global footprint with a larger ecosystem incorporating both domestic and overseas partners,” Xu Li, SenseTime co-founder and chief executive officer, said in a statement. “The funding will also help us widen the scope for more industrial applications of AI, thus increasing the value of SenseTime’s global ecosystem.” In July, SenseTime set a new record for venture capital funding in the AI sector when it raised US$410 million in funding. “Alibaba is already seeing tangible benefits from our investments in AI and we are committed to further investment and our strategic partnership with SenseTime will spark more innovation and create value for society,” Joe Tsai, executive vice chairman of Alibaba Group, said. SenseTime earlier said it would invest 6 billion yuan (US$938 million) in Shanghai. It has also signed cooperation deals with state-owned Shanghai Lingang Group and Shanghai Inesa to develop AI. SenseTime will set up headquarters for global research, intelligent car, smart chip and smart education in Shanghai. China aims to grow the value of its core AI industries to over 150 billion yuan by 2020 and 400 billion yuan by 2025.

Shanghai sees average price of new homes soar

Mon, 04/09/2018 - 18:01
NEW homes in Shanghai sold for an average cost exceeding 50,000 yuan (US$7,917) per square meter for the first time this year despite cooling sentiment among buyers, latest industry data showed. The area of new homes sold, excluding government-subsidized affordable housing, plunged 60.4 percent last week to around 67,000 square meters, Shanghai Centaline Property Consultants Co said in a report released yesterday. The city’s outlying districts of Songjiang and Baoshan were the two most sought-after areas after 12,000 square meters and 9,000 square meters of new homes were sold, respectively. The new homes cost 50,449 yuan per square meter on average, a week-over-week increase of 3.7 percent, according to Centaline data. “A structural shift led to the price gain as more medium-end homes were sold during the seven-day period ended on Sunday,” said Lu Wenxi, senior manager of research at Centaline. “The beginning of a month usually registers comparatively sluggish sales while the three-day Qingming Festival also affected sentiment among home seekers as well as real estate developers.” Four of the 10 best-selling developments cost above 50,000 yuan per square meter. A Poly Real Estate project in Baoshan, which sold 7,342 square meters, or 71 apartments, at an average 50,757 yuan per square meter, was the most popular. A project in Jinshan, which sold 41 units at 17,991 yuan per square meter on average, was the cheapest in the top 10 list. On the supply side, 65,000 square meters of new houses spanning two projects were released to the local market — a sharp contrast to 394,000 square meters of supply launched in the previous seven-day period, Centaline data showed. Notably, a high-end project in Jing’an released 319 units for sale with most units asking for between 80,000 yuan and 90,000 yuan per square meter, one of the most expensive developments in the local market recently.

Jing’an to go 100% digital

Mon, 04/09/2018 - 18:01
JING’AN will go 100 percent digital in September when dealing with applications by people who want to start business in the district. The move means that entrepreneurs don’t need to pay repeated visits to different government departments. Instead, they can go through all administrative procedures via the Internet, and they just need to wait at home for the business operation license to be sent by express delivery. Jing’an, home to the Shanghai Data Exchange, is a pioneer in the city in building a “smart guide” system to create a “personalized” application form for entrepreneurs. People who want to set up restaurant and beverage shop need to offer different documents, but they also all need the food operation permit. The system can tell them what exactly to prepare and they can obtain a tailor-made guide. Previously, they found it cost them time because they had to commute between different departments to ask for information. Jing’an has also been chosen as a pilot district by the city government to launch “digital business operation license.” The digital license is designed to break “walls between government departments” by sharing data. A man who wants to sell alcohol has to get a business operation license first before applying for an alcohol retail license. But the digital license will allow different departments to see it on the online platform and saving him visits. Also, his request to apply for an alcohol retail permit can be processed in advance. However, it hasn’t been decided when to launch the digital license.

Convenience for eateries

Mon, 04/09/2018 - 18:01
CAFéS and dessert and beverage shops in Minhang District can now get their operation permits within the same day after their application and start operation on the second day due to a service the district launched on January 18. Minhang is the first in the city to provide such convenience to eateries. Previously after they have been issued business certificates, eateries would have to prepare documents and receive inspections on food safety and dining environment which might take weeks, sometimes even months, before they got the permit. Now all the shops have to do is to provide a written guarantee that they will follow all regulations and instructions on food safety and device placement. The district’s market supervision authority will issue the operation permit afterwards. The authority will examine their operation within two months to evaluate whether they have kept their promises. “If they failed to do so, we will revoke the permits and ask them to rectify,” said Mao Hui from the market supervision authority. This service is one of the 12 measures Minhang unveiled in January to provide a better business environment. So far 324 eateries have got their operating permits ahead of inspections. Luckin Coffee, a chain coffee shop which has been rapidly expanding around the city opened a new branch in Powerlong Square near Qibao in Minhang on March 8. They got their permit one day before.

Robots at your service

Mon, 04/09/2018 - 18:01
ROBOTS have been employed at the administrative service center of Xuhui District to guide procedures, further accelerating the paperwork process. They have been assigned to deliver applicants’ documents to the center’s staff, so staff are now able to focus on the evaluation process, an official with the service center said yesterday. Each robot, which can take elevators and speak, is able to make 20 round trips a day on average, saving over four hours for the staff and cutting the waiting time of applicants, the center said. Five face-recognition facilities have also been installed at service windows to check the identity of applicants within a second. Artificial intelligence robots can answer questions from applicants and guide them to specific window.

Starting business is easier as rules eased

Mon, 04/09/2018 - 18:01
STARTING up a new business in Shanghai is getting easier and more time efficient. A total of 555 businesses have received licenses since the city launched a one-stop service platform on March 31 to cut red tape and improve the business environment, according to the Shanghai Industry and Commerce Administration. The new reform cuts the time of starting a new business in the city to five days from 22. The one-stop platform merges the systems of different government authorities and allows online application and approval of licenses, company seal making and tax affairs. It means businesses no longer have to submit several reports to a range of government agencies, including industry and commerce, tax and police, as well as banks. The number of procedures has also been cut. The platform includes sections allowing new businesses to set up bank accounts to deal with social security procedures. Under the new system, government departments can share information and receive information from businesses at the same time, significantly boosting efficiency. “The practice aims to make it easy, quick and convenient to open a new business in the city,” said Chen Xuejun, director of the administration. Wu Linxi, legal representative of Shanghai Shengmo Information and Technology Co Ltd, was the first person to receive a business license, in Fengxian District, after the new system was introduced. He submitted registration information regarding industry and commerce, police, tax and banking through the platform early on April 4, and the information was reviewed and approved quickly — he got his license by noon. “The efficiency amazes me — it saves precious time for businesses,” said Wu. Wang Jing, who helps companies in the Linhai Industrial Zone in Fengxian lodge their applications, also gave a thumbs-up for the platform. “Although it took time to adjust to the new platform, approval speed is surprisingly improved, which is unbelievable,” she said. “The reforms have brought great convenience for doing business in Shanghai,” said Xue Yincong, leasing manager of Longwin Trade (Shanghai) Ltd. “For instance, the name check for registering a new business can be done within a much shorter time, and processes have been simplified to a great extent,” Xue said. Shanghai had 1.91 million registered businesses at the end of February, or equal to 77 businesses per 1,000 people in the city — surpassing the figure in cities such as London and Tokyo, according to the administration. The number of new businesses registered daily in the city rose to 1,174 last year from 431 in 2013. The administration plans to trial whole-process electronic registration — with all steps online and paperless — within the year, which will further boost the ease of opening businesses, officials said. The willingness of Shanghai authorities to encourage business innovation and operation in the city goes beyond streamlined procedures and improved efficiency. The city’s food authorities have also broadened their services to include several new styles of catering operations. Fifteen such companies have applied for licenses, and 13 have either passed reviews or been approved so far, the Shanghai Food and Drug Administration said yesterday. On the list are automatic vending machines selling freshly squeezed orange juice, freshly brewed coffee, pizza, and noodles. “We want companies to be innovative and are willing to help them if their business operations benefit the public,” said Zhang Zhunmin, deputy director of the administration. “Automatic vending machines are new business models, and the fact they have been allowed to take root in Shanghai shows flexibility on the part of authorities in charge of supervision and management,” said Zhang. These business models are not covered in existing food regulations, making it hard to obtain a license. “We are changing our supervision and management mindset,” Zhang said.

Cutting red tape helps firms boost the bottom line

Mon, 04/09/2018 - 18:01
SHANGHAI has taken a number of measures to cut red tape and improve its business environment, particularly by cashing in on the efficiency and convenience brought about by the Internet. Among these measures is “yiwang tongban” initiative, which means that government departments, in serving market entities and municipal residents, should strive to have their businesses done by one visit to a website or one visit to a government office, with a view of further coordinating different functions of governmental service providers so that in the future all businesses could be handled more efficiently. These initiatives are taken in view of long-standing popular perception that the administrative procedures were often time-consuming and needlessly cumbersome. Shanghai has already made some headway in this area. For instance at municipal level, as many as 100 business approvals could be obtained online every step of the way. Jiefang Daily reported yesterday that a streamlined administrative procedure adopted in Hongkou District on March 9 had enabled 398 businesses to be licensed the same day when the applications were submitted online. In a similar case, one milk tea franchise in Minhang District was able to obtain its business license and food business permit on February 8, the same day it submitted its application. “This speed is unprecedented in our prior experience in launching over 70 franchises across the country,” said Liu Kai, a manager for the franchise. The speed translates into good profits. As the milk tea shop was able to start its business before the Spring Festival, this resulted in an additional 100,000 yuan (US$12,000) in revenue. This is a marked departure from the old practice where obtaining food business permit might take at least one month, involving such procedures as an on-the-spot inspection of the shop before it went into operation. This on-the-spot inspection procedure was dispensed with and replaced by the business’ promise that their operation fully complies with the operating conditions as required. According to the relevant authority in Minhang, since this scheme went into trial operation in the district in February, 304 food businesses have already obtained their food operating permits by this means. This simplified procedure does not mean businesses could afford to take lightly of their promises. Businesses found guilty of foul play or wrongdoing later will not only have their license revoked, but also be disqualified from using this streamlined procedure in their future application. These erring businesses would also be listed as high risk and subject to intensified routine supervision. Shanghai always scores high in term of the quality of its general services. These measures will further consolidate the city’s position as a business center by continually improving its business environment.

China’s March forex reserves gain to US$3.14t

Sun, 04/08/2018 - 18:01
CHINA’S foreign exchange reserves edged up 0.27 percent from a month earlier to US$3.14 trillion at the end of March, the People’s Bank of China said yesterday. The increase reversed a slight drop in February. Previously, the forex reserves gained for 12 straight months between February 2017 and January. “The foreign exchange market continued to see generally balanced supply and demand,” the State Administration of Foreign Exchange said in a statement. SAFE mainly attributed the slight gain to the global financial market’s efforts to avert risk, the appreciation of some major currencies against the US dollar, as well as asset price changes. “The yuan’s exchange rate against the dollar has continued two-way fluctuations and remained basically stable, and the foundation for generally balanced cross-border capital flow has become stronger,” SAFE said, citing sound growth, better economic structure and higher growth quality in China. Looking into the future, SAFE sees the forex reserves holding steady, after taking into account both domestic and external factors, including volatility and uncertainties in the global financial market. According to PBOC data, China’s gold reserves remained unchanged in March at 59.24 million ounces, worth US$78.42 billion, an increase from US$78.06 billion in February.

JD to partner Xiangtan

Sun, 04/08/2018 - 18:01
JD.COM said it will invest 10 billion yuan (US$1.6 billion) in Hunan Province’s Xiangtan. It has also signed a strategic cooperation deal to enhance its initiatives in the city in logistics, cloud computing, driverless vehicles and robotic couriers. The setting up of a demonstration base for “Internet Plus” initiatives such as cloud computing, artificial intelligence, and financial services has also been planned, as well as supportive measures for Xiangtan to develop its own digital economy. The Xiangtan government will also combine the two sides’ resources to build a logistics network to allow local agricultural product vendors to sell their merchandise to shoppers all around the country. The two parties will also jointly set up a smart manufacturing innovation center, while the JD will help with the deployment of Xiangtan’s modern agricultural strategy. JD’s chairman and CEO Liu Qiangdong said in a statement that the rich talent pool and strong entrepreneurship in Hunan are offering growth opportunities for new economic formats and technologies.

Power use rises fastest over 5 years in 1st 2 months

Sun, 04/08/2018 - 18:01
CHINA’S power consumption rose the fastest over the past five years during January and February as industrial growth accelerated, the National Development and Reform Commission said yesterday. In the first two months, 1.06 trillion kilowatt-hours of power were consumed, up 13.3 percent from a year ago to hit the highest rate over the past five years, the NDRC said. While electricity consumption gained across several sectors, “the industrial sector is the key to drive power use” as it contributed 55.6 percent to the growth by rising 11.2 percent from a year ago, China’s top economic planner added. The consumption growth occurred after China’s industrial output expanded 7.2 percent year on year in the two months, accelerating from the 6.2 percent rise in December 2017 and quicker than the 6.3 percent gain during the same period last year, the NDRC added. Power consumption by advanced manufacturing, including information and communications technologies, “grew rapidly in the past year,” with electronics producers seeing a 18.5 percent growth year on year, while power use by software and communications firms surged 19.4 percent from a year ago, the NDRC said.

GM sells more

Sun, 04/08/2018 - 18:01
GENERAL Motors and its joint ventures in China delivered 352,346 vehicles in March, up 2 percent year on year, said a statement published by GM on its official website yesterday. GM said that sales in the first three months of this year totaled 986,052 units, up 8 percent from the same period last year. Its brands Cadillac and Chevrolet performed well in March. Sales of Cadillac rose 46 percent year on year to 18,007 units last month. Chevrolet grew 35 percent from a year earlier to 47,017 units, and Buick deliveries rose 4 percent to 92,007 units. But sales of Wuling and Baojun vehicles fell 7.9 percent and 5.4 percent in March when compared to a year earlier.  

‘NBA-like’ e-sports

Sun, 04/08/2018 - 18:01
CHINA will have its own “NBA-like” e-sport matches within 5 to 10 years as the game market is set to continue to boom, game industry officials said yesterday. Xiao Hong, CEO of Shenzhen-listed game firm Perfect World, said China will develop e-sport matches along the lines of NBA in the US amid a booming market with a big pool of players. In 2017, the worldwide e-sport market revenue was US$1.5 billion and the figure is set to rise to US$2.3 billion in 2020, according to researcher SuperData. Perfect World has set up a special team for e-sport to take care of management, intellectual property development and professional training, Xiao said during the DAC (DOTA 2 Asia Championship) held in Shanghai. Perfect World, distributor of DOTA 2 in China, is the major organizer of DAC in Shanghai.

Corporate fees to be cut

Wed, 04/04/2018 - 18:01
CHINA will lower corporate fees by more than 300 billion yuan (US$47.6 billion) annually to further boost development of the real economy. The decision was made at a State Council executive meeting chaired by Premier Li Keqiang yesterday. The latest round of reductions will cover fees related to water conservancy projects, energy use and logistics, according to a statement released after the meeting. The government will scrap fees for administrative procedures like first-time applications for citizen identity cards and patent registrations, it said. China will also cut telecommunication charges to boost the development of the digital economy.

Meituan to fully acquire Mobike

Wed, 04/04/2018 - 18:01
LIFESTYLE service platform Meituan Dianping yesterday said it will fully acquire bike-sharing startup Mobike in a US$2.7 billion deal. Mobike’s founding members will continue to lead the management team. Wang Xing, Meituan’s chief executive, will be chairman of Mobike, and the company said it would connect with Meituan’s existing business such as food and grocery delivery, online travel and ride hailing while maintaining its branding and operational independence. “Bringing bicycles back to cities is the heart and vision of Mobike, and the mission of Meituan is to ‘eat better, live better,’” said Mobike’s Chief Executive Davis Wang. “We will continue to prioritize creating user value as the center of both companies’ business.” Mobike handles about 30 million rides with 200 million users in domestic and overseas markets. Set up three years ago, Mobike raised US$600 million last June in a financing round led by Tencent to contest its arch rival Ofo, which is backed by e-commerce giant Alibaba. Mobike and Ofo have waged a price war to win market share, offering free rides and even cash incentives. However, both have begun phasing out free-riding coupons for bike riders as investors are eager to cut down on their losses. Yicai.com reported that Meituan will spend US$1.6 billion in cash and US$1.1 billion worth of shares to acquire the outstanding shares of Mobike. Meituan, which started as an online platform for ordering food and booking movie tickets, is now facing strong competition after Alibaba bought Ele.me to strengthen the group’s online-to-offline service. Industry watchers said Meituan will have more muscle to compete against Didi’s ride-hailing business, while Mobike will be better placed to focus on raising operation efficiency.

Meituan Dianping said buying huge stake in Mobike

Tue, 04/03/2018 - 18:05
CHINA’S largest provider of on-demand online services, Meituan-Dianping, is buying a large stake in bike-sharing firm Mobike, business magazine Caixin said yesterday, citing unnamed sources. Caixin said the deal was brokered by Pony Ma, chief executive of Tencent Holdings, which is a backer of both companies.  Representatives for Meituan and Mobike did not immediately respond to Reuters’ requests for comment. Tencent also did not immediately respond to a request for comment.  A report from tencent.com, the new online portal of Tencent, said Meituan was not the only company interested in investing in Mobike.  Chinese ride-hailing giant Didi Chuxing and its Japanese investor SoftBank are also keen to invest, the report said.  Mobike was due to decide by yesterday evening whether to accept the Meituan offer, or go with an alliance of Didi and SoftBank, said a separate report from mainland business magazine China Entrepreneur yesterday.  Chinese technology portal Lanjing TMT said earlier yesterday that Meituan will acquire Mobike for US$3.7 billion. But Caixin cited a source close to Meituan’s board as saying the amount is incorrect because the deal is not yet sealed.  Mobike, one of China’s largest bike-sharing firms, raised US$600 million last June in a financing round led by Tencent. Mobike’s arch rival Ofo is backed by e-commerce giant Alibaba Group Holding.  Meituan-Dianping, an online platform for ordering food and booking movies and restaurants, was valued at US$30 billion last October. (Agencies) 

Beijing and Shanghai top cashier-less service use

Tue, 04/03/2018 - 18:01
BEIJING and Shanghai top the number of users of cashier-less vending machines and self-service retail outlets, according to a latest report by the China Commerce Association for General Merchandise. Other cities in the top five also include Shenzhen, Guangzhou and Hangzhou, the report said. The consumer satisfaction rate jumped to 85 percent from 55 percent after mobile payment options were added to automatic vending machines and self-checkout vending stations. The product categories have also expanded to include not only coffee and instant noodles but also fresh coconut and even tailor-made dresses. Those born during the 1990s are the majority users of cashier-less vending machines and self-service retail outlets. WeChat payment’s usage data also show that male consumers outnumbered female shoppers when it comes to using self-service vending machines. The report also revealed the emergence of new retail locations such as community neighborhoods, parking lots and office buildings. A joint report by the Ministry of Commerce’s Department of Circulation Industry Development, China Commerce Association for General Merchandise and Fung Business Intelligence said the retail industry started to reap the benefits of business upgrading in the past year and that customers have welcomed the transformation and emerging retail formats. “We fully support retailers and e-commerce giants’ push into the cashier-less retail formats and this innovative business models are helping the retail industry to gain new development momentum,” said Chu Xiuqi, director at the China Commerce Association for General Merchandise.

Ctrip among new players driving into ride-hailing

Tue, 04/03/2018 - 18:01
PASSENGERS in China’s ride-hailing market may benefit from new players driving into the sector unveiling new business models and subsidies, Shanghai Daily learnt yesterday. Ctrip Inc said yesterday it has regulatory approval to operate own-brand car-hailing service as China’s biggest online tourism firm expands into the fiercely-competitive market. Other firms like Meituan Dianping, Yidao and AutoNavi have made huge investment and introduced new business models into the car-hailing services market as they prepare to do battle against each other and challenge the dominant market leader Didi Chuxing. Latest players Shanghai-based Ctrip has received a national car hailing license through a subsidiary in Tianjin. But the firm still requires approval from city regulators to officially start own-brand services locally. But Ctrip said today that it was unable to reveal the date it could debut its service in Shanghai. By 2017, China had 225 million car-hailing users — a market with great potential for all firms. The market is still “short of supply” even with taxis and current car-hailing firms, said Li Qiao, chief executive of Ctrip car-hailing business. Ctrip has offered related services since 2015 through partnership with firms including Didi Chuxing and Yidao. It plans to offer “high-quality and reliable” own-brand services for passengers besides providing subsidies, the firm said. AutoNavi has offered car-hailing services since the end of last month, banking on its map and navigation services. Yidao, which used to be a subsidiary of LeEco, unveiled new business models like no commission fee charged for drivers. Didi Chuxing, whose stakeholders include tech giants Apple, Alibaba Group Holding and Tencent Holdings, has taken the lion’s share in the domestic ride-hailing market after its merger with smaller rival Kuaidi in early 2015. Lifestyle services website Meituan Dianping launched a car-hailing service in Shanghai at the end of last month to take on leading player Didi Chuxing, and raising concerns over a new round of price war. It offered discount of up to 14 yuan (US$2.23) for each ride in the first week of its launch, but some riders complained that its mapping and location services were poor. The company also provides an additional 50 yuan subsidy if riders invite friends to use the new service. Meituan Dianping is said to capture one-third of the Shanghai market within two weeks of the launch, media reports said. Fighting back so that it does not lose market share to new entrants, Didi also gave discounts for riders. It offered a 300 yuan subsidy to new drivers who complete three rides within one day so that there is a sufficient supply of vehicles on its platform. New business models Industry watchers noted that the era of rapid growth for ride-hailing services is over, and it almost cost nothing for users to switch between several ride hailing services. Didi is also eying alternative growth potential such as a public bike rental service to keep its user base active. Unlike previous rivals, Didi Chuxing now faces new competitors with resources such as capital, a huge user base and employ advanced technologies, analysts said. Meituan Dianping, which is known for its online-to-offline business model offering services from restaurant reviews, food delivery, movie ticketing and travel booking, said car-hailing is an indispensable part of its O2O ecosystem that helps link consumers with various kinds of service providers. In the first three months of its operation in Shanghai, Meituan Dianping would waive an 8 percent commission from drivers, while Didi drivers are charged around 25 to 30 percent commission. Yidao, boasting new investors, said it is testing a new business model of not charging drivers. Compared with other firms, Ctrip has a unique advantage in that it integrates car-hailing with its tourism business covering airport and taxi pickups in other cities, which reap the firm a high profit margin, according to industry insiders.

Return of Chinese unicorns to boost new economy

Tue, 04/03/2018 - 18:01
THE return of overseas-listed Chinese unicorn companies to the A-share market will facilitate the rise of the new economy, an expert said. ICBC International economist Cheng Shi said in an article that such tech firms, valued at over US$1 billion, will attract more private capital into innovative startups and break the domination of the traditional sector in the country’s capital market. The China Securities Regulatory Commission on Friday announced a pilot program to help leading tech firms having gone public abroad re-issue shares in the mainland market via depositary receipts. Tech giants, such as US-listed Alibaba and Baidu, will be able to reach domestic investors. Businesses in high-tech and emerging sectors including big data, cloud computing, artificial intelligence, chipmaking, and biomedicine will be the first group to come back to the mainland market, Cheng said. For years, the capital market was dominated by property developers, banks and other traditional companies, with innovative firms blocked by legal and technical barriers, such as profitability requirements. Many tech firms turned to markets in Hong Kong and New York. As regulators started to loosen rules for the new economy, overseas-listed firms have become optimistic about a return. Qihoo 360, China’s largest Internet security company, returned from the New York Stock Exchange in February and saw its market value peak at above 440 billion yuan (US$70 billion), nearly seven times the value when it delisted from the US market.

Private steel firms making bigger cuts

Tue, 04/03/2018 - 18:01
CHINA’S private steel companies are playing a bigger role in reducing capacity in the industry, according to the sector’s chamber of commerce. China slashed crude steel capacity by over 50 million tons in 2017, with private steel companies contributing 40 million tons of the cuts, or 80 percent. In 2016, 65 million tons were cut, with 38.8 million tons, or 60 percent, from private firms. The steel price index came in at 121.8 at the end of December, up 22.4 percent from the beginning of the year, according to the Ministry of Industry and Information Technology. China plans to cut 100 million to 150 million tons of crude steel capacity in the five years by 2020.

Insurers and steel makers pull shares down

Tue, 04/03/2018 - 18:01
SHANGHAI stocks fell yesterday after insurers and iron and steel producers declined amid cautious investor sentiment. The Shanghai Composite Index shed 0.84 percent to 3,136.63 points. Iron and steel producers, insurers and carmakers were among the biggest decliners. Iron and steel firms as a whole fell 1.99 percent and insurers shed 1.43 percent, said financial information provider Tonghuashun. China’s insurance regulator said yesterday that total premiums of the industry were 970.34 billion yuan (US$154.41 billion) in the first two months of this year, down 18.48 percent year on year. Xinjiang Bayi Iron & Steel Co Ltd shed 4.61 percent to 12.42 yuan (US$1.98), China Life Insurance Co Ltd lost 1.38 percent to 25.06 yuan and Bank Of Chengdu Co Ltd fell 2.21 percent to 10.62 yuan.

Emperor Kangxi’s bowl nets US$30.4m

Tue, 04/03/2018 - 18:01
AN extremely rare Qing Dynasty (1644-1911)bowl made for the Chinese emperor Kangxi fetched US$30.4 million at auction yesterday, Sotheby’s said. The bowl, just under 14.7 centimeters in diameter, is decorated with falangcai — painted enamels combining Chinese and Western techniques — and flowers, including daffodils which are not typically depicted on Chinese porcelain. The bowl, said to have been used by the emperor in the early 18th century, was sold within five minutes to an unnamed phone bidder from China, said chairman of Sotheby’s Asia, Nicolas Chow. “This is the absolute finest example to exist. There are only three examples altogether that use this beautiful pink (background),” Chow said. The bowl was created in an imperial workshop within Beijing’s Forbidden City by a small team of craftsmen, with the help of Jesuits from Europe who had brought new techniques and materials, according to Sotheby’s. Hong Kong’s auction houses have seen frenzied bidding among Asian buyers in recent years, with sales of diamonds, handbags and ancient ceramics shattering world records. Last year a 1,000-year-old bowl from China’s Song Dynasty (960-1279) sold for US$37.7 million, a record for Chinese ceramics.

Fox proposes selling Sky News to Disney

Tue, 04/03/2018 - 18:01
RUPERT Murdoch’s 21st Century Fox yesterday proposed selling rolling TV channel Sky News to Disney in order to finally seal control of pan-European satellite broadcaster Sky. Fox — which for a long time has sought to buy the 61 percent of British pay TV giant Sky that it does not already own — has also offered to ring-fence the 24-hour news channel instead, it said in a statement, as it looks to allay concerns over Murdoch’s increasing media influence. Britain’s Competition and Markets Authority provisionally ruled earlier this year that Murdoch’s planned takeover was not in the public interest and that a deal would hand him too much power in swaying public opinion. “We believe that the enhanced firewall remedies we proposed to safeguard the editorial independence of Sky News addressed comprehensively and constructively the CMA’s provisional concerns,” Fox said in a statement yesterday. New York-listed entertainment titan Fox has already bid 11.4 billion pounds (US$16 billion) for the 61 percent of Sky it does not already own but in Britain concerns linger over the strengthening influence of Australian-born US tycoon Murdoch. At the same time however, Disney said last December that it would buy Fox for US$52.4 billion. Fox stressed yesterday that Disney would in any case purchase Sky News even if it didn’t buy Murdoch’s group. “21st Century Fox (21CF) proposed new ring-fencing remedies which would effect the legal separation between Sky News and the rest of Sky, establishing Sky News as a distinct company within the Sky Group, with its own fully independent board and under the management control of the head of Sky News,” it said. “Under this proposal, Sky News would operate entirely independently with guaranteed funding by 21CF for 15 years.” It added: “Alternatively, The Walt Disney Company has expressed an interest in acquiring Sky News, with a view to adding it to Disney’s existing portfolio of television channels, whether or not Disney’s proposed acquisition of 21CF proceeds.” The CMA had also stated in January that its media plurality concerns would fall away on completion of Disney’s Fox takeover. London-listed Sky yesterday stated that both of the Fox proposals would “comprehensively address any plurality concerns.” The CMA, which published the Fox concessions in full yesterday, is conducting a review and will submit a final report to the British government on May 1. Britain’s Culture Secretary Matt Hancock will then issue his verdict. Fox is meanwhile ramping up its Sky takeover efforts after US cable giant Comcast offered over 22 billion pounds for the entire group in February. The Fox bid, pitched at US$10.75 per Sky share, is sharply under the Comcast offer of US$17.55.

This is a bank? Yes! Retail finance takes on new appearance

Tue, 04/03/2018 - 18:01
WHEN Zhou Wenxin, 30, and her husband were recently at the K11 Art Mall, she peered through the window of what she assumed was a shop and was surprised to see the Standard Chartered logo. In a setting of restaurants, high-end shops and entertainment venues, Zhou said she hadn’t expected to find a bank there at all. Curious, she and her husband walked into what is the Huangpi Road South sub-branch of Standard Chartered Bank China, which features what it likes to call the “dream cabin.” Unlike the usual layout of bank arms, the couple found facilities inside to play virtual reality games. Opened this January, the branch is split into two parts. The “dream cabin” uses interactive equipment to grab the attention of potential clients. The other part, located on Floor B2, provides cashless financial services and stays open until 8pm every day. The extended hours and the integration of banking and entertainment puts Standard Chartered at the forefront of a new trend in retail finance. The Huangpi branch relies on its proximity to Xintiandi, a top commercial and entertainment site in Shanghai, to attract well-heeled customers. The British lender is also teaming up with China Eastern Airlines to offer clients special packages, including discounts of as much as 3,000 yuan (US$475) on some designated trips. That’s in tune with a recent survey by the National Bureau of Statistics that found travel ranks high on Chinese wish lists. “The bonus is really attractive,” said Ying Xiaoyan, who happened upon the new Standard Chartered branch last weekend. A worker in the financial industry, Ying said her experience with foreign lenders is mainly in corporate banking, but for the needs of daily life, foreign banks are “high-end, magnificent and classy” and even somewhat “mysterious.” Standard Chartered also hosts a variety of offline events, like Lego-themed parent-child activities and flower arrangement salons, to offer extra benefits to clients. When Ying learned that the threshold to enjoy such privileges is 500,000 yuan, she said she might consider personal banking with the lender. Rising wealth has increased the sophistication of banks in searching for ways to penetrate that customer base, said Zhu Yaming, managing director and head of retail banking at Standard Chartered China. “We keep enriching our products to satisfy the whole life cycle of clients,” she said. Zhu, a veteran in consumer banking, said banks need to upgrade their traditional branches to focus more on a “finance-plus-lifestyle” model that connects their services more closely to the daily lives of customers. One staffer at the new Standard Chartered arm put it this way: “We do not just focus on wealth management needs of our customers. We think about why people want to save money. Obviously, they want to create and enjoy a better quality life.” The British lender isn’t the only bank recognizing the need to adapt. Niche concepts Taiwan-based Fubon Bank has introduced “exquisite” financial services to the mainland, creating specialty branches such as the “art gallery bank,” the “coffee bank” and the “book bank” in big cities like Shanghai, Nanjing and Chengdu. Fubon Bank China has redecorated its outlets to create a home-like setting, with paintings, comfortable sofas and lifestyle magazines. It’s part of the bank’s “small but beautiful” strategy combining finance with the air of socializing. “People do not have to come to our branch to do transactions,” according to a manager at the Lujiazui branch. “We want our clients to know they can come here to relax or just chat.” The outlet taps the Chinese 24 solar terms, like jingzhe, xiazhi and qiufen, as names for their outlets. These seasonal shifts also symbolize the different stages of the lives of their customers. Take jingzhe, which literally means “the awakening of hibernating insects.” Fubon Bank uses the term as the name of the office dealing with basic banking services. The term implies youth and their awakening to opportunities like starting a company. In the outlet, there’s a stool in front of each counter where clients can put their luggage while transacting business. It’s a nod to the many Taiwan clients who come to the bank straight from the airport, an officer at the bank said. There is even a massage armchair in the office for clients who need some de-stressing while going through the time-consuming procedure of perusing and selecting wealth management products. Fubon Bank China has partnered with major payment services providers to make payments more convenient, and it also sponsors sessions on health, education and other issues of daily importance to clients. Darren Buckley, country business manager of global consumer banking at Citi China, told Shanghai Daily that relationship managers are the bank’s “key assets.” In 2015, he said, Citibank and Wharton business school at the University of Pennsylvania began an executive education program aimed at helping front-line managers cultivate conversations with clients to build trust and long-term relationships. “Competitors can replicate our products and offerings, but it will be very hard for them to replicate the trusted relationships we have built with our clients,” Buckley said. China has become the second-largest individual asset market behind the US — a goldmine for banks seeking to expand their business. According to Citi Research, China’s individually held, investable assets have grown fivefold from a decade ago, to 188 trillion yuan. Xu Min, head of retail banking at the US lender, said the bank’s global network is a boon for Chinese students in the US. “Just think about the 320,000 students who further their studies in the US every year,” he said. “You see a long-term trend. Those who have global financial needs are our target clients.” Traditionally, Citibank relied on word of mouth to acquire new customers. The bank is now using social media to target a wider audience. Last year, it launched four live-streaming promotional campaigns that attracted more than 1 million views. A series of videos of the stories of satisfied customers is in the works.

Alibaba’s hunger for Ele.me brings about multibillion deal

Mon, 04/02/2018 - 18:01
CHINESE e-commerce giant Alibaba is to acquire full ownership of food delivery firm Ele.me in a deal that values the Shanghai-based startup at US$9.5 billion. Alibaba and its affiliate Ant Financial currently own 43 percent of the app-based Ele.me and said in a statement yesterday that it would acquire all remaining shares. “Ele.me can leverage Alibaba’s infrastructure in commerce and find new synergies with Alibaba’s diverse businesses to add further momentum to the new retail initiative,” said Daniel Zhang, Alibaba Group’s chief executive. Buying Ele.me is a major step for Alibaba to expand its local lifestyle services within its “e-commerce ecosystem” and to provide new shopper experience, Zhang said. The acquisition will advance the e-commerce giant’s new retail strategy that was put forward by Chairman Jack Ma last year and aims to combine online and offline technologies to offer consumers wide-ranging products and services. By combining Ele.me’s online home delivery services with Koubei’s data analyzing capability to optimize restaurants’ supply chain and menu offerings, Alibaba hopes to provide an integrated experience to online and offline consumers. Ele.me will keep its own brand after the deal is finalized and will continue to work closely with its existing partners and merchants. Founder Zhang Xuhao said in Shanghai yesterday that he and other founding members will stay in the company, whose ultimate goal is to provide on-demand delivery service within 30 minutes. Capital plays a small role in the deal and the bigger picture is the integration of online and offline resources and a strong retail ecosystem. The collaboration with Alibaba will help to fulfill that purpose, he said. Ele.me, meaning “are you hungry” in Chinese, was set up as an online food-ordering system by three co-founders from Shanghai Jiao Tong University with 100,000 yuan (US$15,930) startup capital. It soon became a unicorn company — a startup that evolves into a firm worth over US$1 billion — receiving US$1.25 billion investment from Alibaba and Ant Financial in 2016. Ele.me’s delivery network is expected to serve as infrastructure for merchants to leverage technology capability under Alibaba’s new retail blueprint so that they can access consumers more efficiently. Koubei, a lifestyle service joint venture between Alibaba and Ant Financial, will also combine resources with Ele.me’s delivery network. Alibaba’s Vice President Wang Lei will become chief executive of Ele.me while Zhang Xuhao will be chairman of Ele.me and special adviser to Alibaba with regard to the new retail strategy. The booming of on-demand delivery service will require capital and integrated resources from both online and offline, analysts said. By the end of this year, the food delivery market size will be worth 240 billion yuan, according to iiMedia Research, with the top players including Tencent-backed Meituan Dianping and Ele.me. Both firms have been offering big discounts in an effort to keep market share amid fierce competition. According to the Internet consultancy firm China E-commerce Research Center, fiercer competition between food delivery platforms is likely. “Alibaba is set to confront Meituan Dianping not only in the food delivery service but also cloud computing and a wide-ranging business initiatives,” said director Cao Lei. Internet giants with deep pockets such as Alibaba and Tencent have spent billions investing in both offline and online retail companies. Alibaba’s alliance includes home electronics retailer Suning, Intime Retail, Sanjiang Shopping Club and Lianhua Supermarket, while Tencent has tied up with JD.com, Meituan Dianping, Wal-Mart and Yonghui Supermarkets.

Audi aims to double China sales

Mon, 04/02/2018 - 18:01
A worker works next to a car on the assembly line of the Audi TT roadster in file photo. Audi, Volkswagen’s premium brand, aims to double sales in China over the coming six years, sales chief Bram Schot told Automobilwoche. “In 2023 we want to sell 1.2 million cars in China,” the German trade magazine quoted him as saying. Audi sold 597,000 vehicles in China last year.

Weak export demand affects factory activity

Mon, 04/02/2018 - 18:01
CHINA’S manufacturing activity expanded at its weakest pace in four months in March as export demand faltered, prompting companies to shed staff more quickly as they looked to cut costs, a private survey showed yesterday. The Caixin/Markit Manufacturing Purchasing Managers’ index fell to 51.0 in March from February’s 51.6, countering economists’ hopes for a slight uptick to 51.7. While the index remained above the 50-point mark that divides growth from contraction on a monthly basis, it was the weakest reading since November. The findings contrasted with official data on Saturday, which showed manufacturing growth picked up more than expected in March in response to stronger domestic and overseas demand. The two reports often diverge due to differences in the number and type of businesses surveyed. The Caixin PMI, which tends to focus on smaller firms, suggested output and new orders grew only modestly in March, with growth in export orders slumping to a 10-month low even as fears grow of a possible trade war between the US and China. The survey cited subdued foreign demand and the pace of production level growth slackened. A resurgent yuan could also be weighing more on smaller exporters. The currency has gained more than 3 percent against the US dollar this year, on top of a 6.7 percent rise in 2017. Chinese manufacturers also continued to reduce headcounts in March to cut costs, with the rate of job shedding still modest but the quickest since last August, the survey showed. “Overall, the manufacturing PMI reading in March showed that demand was not as strong as expected, leading to lower willingness of manufacturers to produce and restock,” Zhengsheng Zhong, director of Macro-economic Analysis at CEBM Group, said in a note accompanying the release. “However, the ability of manufacturers to make a profit was beefed up by the stable increase in new orders and the much slower jump in input costs.” Input price inflation continued to cool, hitting a nine-month low, while firms raised their selling prices at a slightly quicker pace than the previous month. But many businesses appear to believe the weakness in March orders was only a soft patch, with optimism about the one-year outlook picking up to the highest in a year, underpinned by expectations that greater investment, improved market conditions and new products will all help to boost demand. Overall, China’s economic data so far this year suggest the economy has carried solid growth momentum into the first quarter from last year, with a government think tank forecasting the economy will grow 6.9 percent in the first half. “The growth momentum of the Chinese manufacturing economy may have weakened in March, but at a marginal pace,” said CEBM Group’s Zhong. Economists are sticking to forecasts that China’s pace will slow to around 6.5 percent by the end of the year, weighed down by the cooling property market and rising borrowing costs. China is aiming for economic growth of around 6.5 percent this year, the same target as in 2017, while pressing ahead with its campaign to reduce risks in the financial system, Premier Li Keqiang said in March.

Shanghai to improve tax system for businesses

Mon, 04/02/2018 - 18:01
SHANGHAI will further improve the services and regulations of the tax system to improve the business environment. The city has launched measures to streamline administration and delegate power to lower levels of the government, regulate innovation, improve services and enforce tax laws in a standard way, Ma Zhengwen, director of Shanghai Municipal Administration of Taxation, said at a press conference yesterday. Shanghai Party Secretary Li Qiang said on March 28 that more efficient taxation is an important part in the city’s overall business environment, and authorities should further improve the management and services of the tax system in a lawful, standard and transparent manner. The city’s tax bureau will focus its work on three aspects as it improves the tax environment in the next stage. The city will comprehensively implement the preferential tax policies to ensure companies enjoy the benefits from tax reduction and to alleviate burden on them. Shanghai will also consolidate and deepen existing achievements and further promote better and more efficient tax payment. The authorities will also aim to complete cross-department procedures so that companies can start business within three days. Meanwhile, innovative measures will be launched to promote improvement in service quality. On April 1, the city also started to issue certificates for tax payment online. Ninety-eight percent of the city’s businesses notify the tax bureau online when their employees’ annual salaries exceed 120,000 yuan (US$19,105) per annum, up from 35 percent in 2016.

Shares dip as investors turn cautious

Mon, 04/02/2018 - 18:01
SHANGHAI stocks fell yesterday as investors turned cautious after China‘’s manufacturing production grew at its weakest since last December. The Shanghai Composite Index dipped 0.18 percent to close at 3,163.18 points. Market sentiment dimmed after the Caixin Manufacturing PMI dipped to a four-month low last month. The Caixin/Markit Manufacturing Purchasing Managers’ Index stood at 51 for March, down 0.6 points from February, according to the survey done by financial information service provider Markit and sponsored by Caixin Media Co Ltd. Production and total new orders both expanded at their weakest for four months while exports rose marginally, according to the report from Caixin. Banks, coal producers and consumer shares were among the biggest decliners. Shanxi Xinghuacun Fen Wine Factory Co Ltd shed 3.77 percent to 52.90 yuan (US$8.43), China Construction Bank Corporation lost 3.10 percent to 7.51 yuan and Zhengzhou Coal Industry & Electric Power Co Ltd fell 3.41 percent to 5.39 yuan.

Banks team up to tap B&R in SE Asia

Mon, 04/02/2018 - 18:01
OCBC Bank signed its second Memorandum of Understanding with Bank of Shanghai yesterday to tap rising opportunities along the Belt and Road initiative in Southeast Asia. As Bank of Shanghai does not have a presence in Southeast Asia, one of the top investment destinations for Chinese companies venturing overseas, the Singapore lender can be their strategic collaborative partner, according to analysts. “The collective strength of Bank of Shanghai and OCBC, especially our combined networks and franchises, can effectively attract and engage Chinese enterprises that are both ‘Going Out’ and ‘Coming In,’” Samuel Tsien, group CEO of OCBC Bank, said. Southeast Asia, which is along the 21st Century Maritime Silk Road, is a “strategic” economic corridor at the heart of the B&R, Tsien added. The two banks aim to provide clients with trade finance, corporate banking, treasury, and investment banking solutions for their cross-border needs. The tie-up offers corporate clients of the Shanghai-based city commercial lender access to OCBC Bank’s comprehensive suite of funding and risk management solutions, its deep experience in Southeast Asia and an extensive network across the region.

22 global firms set to take part in 1st import expo

Mon, 04/02/2018 - 18:01
TWENTY-TWO global companies yesterday inked an agreement to take part in the first China International Import Expo in November when they will display the latest technology, products and solutions. The companies signed the agreement with China International Import Expo Bureau and Tang Guifa, CEO of the National Exhibition and Convention Center (Shanghai), inked the contracts on behalf of the expo organizer. One of the companies taking part is science and engineering company DuPont which will show its intelligent and high-end equipment as well as solutions from its global research and development. “We will actively make preparations in seven months, and plan to bring products such as smart wearable devices which can be used in various fields including family, sports and medical treatment,” Huang Chen, managing director of DuPont China was quoted as saying by Xinmin Evening News. L’Oréal is another globally renowned company that has agreed to take part. “This year marks the 40th anniversary of China’s reform and opening-up, (and) the first CIIE shows China’s determination on further reform and opening-up,” Stephane Rinderknech, CEO of L’Oréal China, said during the signing ceremony. He said that L’Oréal will show off their most aspirational brands and high quality innovative products as well as reveal the most disruptive new retail and the leading sustainable development concept. Australian natural health company Blackmores will display their medical equipment and health care expertise. Peter Osborne, CEO of Blackmores Asia-Pacific, said the company aims to use CIIE to expand their market and plan to set up branches in China, Xinmin Evening News reported. Other multinationals such as Emerson Electric Company, famous yacht brand Ferretti, and technology company Nokia were also present at the ceremony. By the end of March, more than 1,600 companies from over 120 countries have registered for the first CIIE which will occupy over 120,000 square meters. More than 600 companies have signed contracts to participate. President Xi Jinping said during the Belt and Road Forum for International Cooperation on May 14, 2017 that China would host CIIE in 2018.

Worst new home sales seen in 7 years

Mon, 04/02/2018 - 18:01
SHANGHAI’S new home market suffered its worst-performing March in seven years as sentiment among buyers failed to rebound as quickly as expected. The area of new homes sold, excluding government-funded affordable housing, totaled 489,000 square meters last month, a surge of 139.7 percent from February and a fall of 34.1 percent from the same month a year ago, Shanghai Centaline Property Consultants Co said in a report released yesterday. “The first two weeks of March both recorded seven-day transactions of below 100,000 square meters, while it was not until the last week of the month that we began to see a major rebound,” said Lu Wenxi, senior manager of research at Centaline. “Hopefully, buying momentum will continue to pick up this month with more homes in the medium to high-end category being purchased amid steadily climbing market supply.” During the seven-day period through Sunday, new home sales rose 47 percent to around 170,000 square meters in Shanghai, the second-highest weekly volume seen so far this year, boosted by strong sales in the outlying districts of Jiading, Qingpu and Songjiang, said a separate Centaline report. By price, new homes were sold at an average of 45,634 yuan (US$7,279) per square meter in March, a month-on-month rise of 7.3 percent, according to Centaline data. A COFCO project in Fengxian District emerged as the most sought-after development last month after selling 33,490 square meters, or 322 apartments, at an average 36,660 yuan per square meter. That was followed by a project in Minhang District, which sold 28,064 square meters, or 241 units, for an average 68,873 yuan per square meter. Among the top 10 best-selling projects of March, three cost no more than 30,000 yuan per square meter, and one was listed at above 50,000 yuan per square meter, according to Centaline data. About 394,000 square meters of new homes spanning 13 projects were released to the local market last month, a surge of 310 percent from February.

Canada and Shanghai to tap new economy

Mon, 04/02/2018 - 18:01
CANADA will seek to collaborate with Shanghai to tap investment opportunities in the new economy like financial technologies as the city strives to become a global technological innovation hub, William Bill Morneau, minister of finance, said on his visit to the city yesterday. Shanghai and Hong Kong were added as stops for the first time this year as the relationship with China and the entire Asia-Pacific Region is a priority for the government of Canada. Shanghai’s capital market presents great opportunities and China’s futures market has potential, Morneau said. He said that four of Canada’s top five trading partners are members of APEC, the Asia-Pacific Economic Cooperation, with China its second largest trading partner after the US. Earlier this month, the country launched a new federal agency called “Invest in Canada,” which will simplify the process for global businesses to make Canada their home. More regular meetings will be held with government officials as well as business community leaders and Canada will increase the number of trade commissioners based in China, Morneau said. Canada also aims to expand its relationship with China to other areas like education and tourism. Morneau said he sees enormous growth opportunities for travel between the two countries as 2018 is the year of tourism between Canada and China.

Values lure firms to tap AI potential

Mon, 04/02/2018 - 18:01
SHANGHAI is home to one-third of the artificial intelligence professionals nationwide, drawing firms and organizations to the city to tap the talent pool and potential AI development, a top city government official said yesterday. Shanghai also has an advanced capital market and a huge volume of tradable data, which account for half of the national level, Wu Qing, the city’s vice mayor, said during a meeting with visitors from Massachusetts Institute of Technology and SenseTime, one of the leading AI firms in China. Wu, however, didn’t mention the figure of AI professionals in the city. SenseTime, which plans to invest 6 billion yuan (US$938 million) in Shanghai, inked cooperation deals with state-owned Shanghai Lingang Group and Shanghai INESA to develop AI. SenseTime will set up a base for global research, intelligent car, smart chip and smart education in Shanghai, said Tang Xiao’ou, founder of SenseTime.

VR and AR sales set to rebound

Mon, 04/02/2018 - 18:01
THE global virtual reality and augmented reality headset market is expected to rebound in 2018, said a research report yesterday. Despite the weakness the market suffered in 2017, global AR/VR headset sales are predicted at 12.4 million units this year, a 48.5 percent growth year on year. The VR/AR headset sales will surge to 68.9 million units in 2022, an annual growth rate of 52.5 percent, said International Data Corp, a US-based IT research firm. HTC, one of the three major VR device vendors globally, aims to expand VR applications in art, fashion and film, Shanghai Daily learned. During the ongoing Shanghai Fashion Week, HTC is showing VR technology to design clothes. Meanwhile, Lenovo is offering users a “Star Wars” experience through its Mirage AR headset in another example of VR/AR combining with the film industry.

Manufacturers shift to high gear in March as demand increases

Sun, 04/01/2018 - 18:01
GROWTH in China’s manufacturing sector picked up more than expected in March as authorities lifted winter industrial pollution restrictions and steel mills cranked up production as construction activity swings back into high gear. The official Purchasing Managers’ Index released on Saturday rose to 51.5 in March, from 50.3 in February, and was well above the 50-point mark that separates growth from contraction on a monthly basis. Analysts surveyed by Reuters had forecast the reading would pick up slightly to 50.5. February’s figure had been the lowest in 18 months, but many analysts suspected it was due to disruptions related to the long Lunar New Year holidays. The March survey showed manufacturers shifted into higher gear as seasonal demand picked up. The sub-index for output jumped to 53.1 from 50.3 in February, while total new orders rose to 53.3 from 51.0 and export orders climbed to 51.3 from 49.0. Driving the positive sentiment are better-than-expected exports in the first two months of the year, particularly in tech shipments, the fastest-growing segment of China’s industrial sector. A sub PMI for the high-tech manufacturing sector stood at 53.2 in March, down from 54.0 in February. This spring could see a major test of Chinese manufacturers’ surprising 18- month run. In the first quarter, China’s steel companies defied expectations for a winter lull and continued to ramp up output in response to strong sales, while boosting borrowing, capital expenditure and hiring, a survey from the China Beige Book showed on Wednesday. Production increased further after winter smog controls expired on March 15 in many areas. A separate PMI on the steel sector rose to 50.6 in March from 49.5 in February, according to the China Logistics Information Center. But the burst in output has pushed steel inventories to multi-year highs, sending prices sharply lower and reducing mills’ profit margins. At the same time, growth in property sales and new construction starts appears to be slowing, and the government has hit the brakes on some local governments’ infrastructure spending due to concerns over high debt levels. Overall, China’s economic data so far this year suggest the economy has carried more growth momentum into the first quarter from last year than expected, with a government think tank forecasting the economy will grow 6.9 percent in the first half. That would keep synchronized global growth on track for a while longer. But economists are sticking to forecasts that China’s pace will slow to around 6.5 percent by the end of the year, weighed down by the cooling property market and rising borrowing costs, even if there are no global trade shocks. Boosted by government infrastructure spending, a resilient housing market and unexpected strength in exports, China’s manufacturing and industrial firms helped the economy produce better-than-expected growth of 6.9 percent in 2017. A sister survey showed activity in China’s service sector rose in March. The official non-manufacturing Purchasing Managers’ Index rose to 54.6 from 54.4 in February. A sub-reading for construction activity stood at 60.7 in March, up from 57.5 in February. The services sector accounts for over half of China’s economy, with rising wages giving Chinese consumers more spending clout. Chinese policy-makers are counting on growth in services and consumption to rebalance their economic growth model from its heavy reliance on investment and exports. China is aiming for around 6.5 percent economic growth this year, the same as in 2017, while pressing ahead with its campaign to cut risks in the financial system, Premier Li Keqiang said in the annual parliament meeting earlier this month.

Home rental online platform goes on trial

Sun, 04/01/2018 - 18:01
SHANGHAI is trialing an official online platform for home rental for three months to better regulate the city’s home rental market and foster its steady development. Launched at the weekend, the public service platform www.shzfzl.gov.cn, backed by the Shanghai Housing and Urban-Rural Development Administration and the Shanghai Housing Administration Bureau, will verify listings, register users’ real names and allow for online contract signing. To enhance the platform’s operation, Shanghai has set up a city level residential leasing service center which will provide policy-related consultancy through its 962269 hotline. District-level service centers have also opened around the city to offer online contract signing service. Residential leasing companies and real estate agencies should register with the platform while individual users such as the lessor, lessee and property agent should complete real-name registration with the platform which will adopt a number of verification methods, including face-recognition, to ensure proper identification. Both institutional and individual lessors can list their houses for rent directly on the platform after their homes have been checked while individual lessors may also go to the district residential leasing service center to get their online listing verified. A standardized leasing contract will be available on the platform for online signing.

China-Europe freight train traffic climbs

Sun, 04/01/2018 - 18:01
CHINA-EUROPE freight trains have made 1,000 trips in the first three months, up 75 percent compared with the same period last year, China Railway Corporation said. The record was made due to more rail routes and accelerated train speed on the Chinese side. The cross-border rail network has bridged 43 Chinese cities with 41 European cities in 13 countries. More than 7,600 journeys have been made between cities in the two continents since March 2011 when the service started. The China-Europe rail service is seen as a significant part of the Belt and Road initiative. It is set to boost trade between China and Europe, China’s largest trading partner. There are likely to be 4,000 train trips in 2018, said Zhao Jun, head of the freight department of CRC.

Shoddy steel products targeted

Sun, 04/01/2018 - 18:01
CHINA will launch an inspection on shoddy steel products and excess steel capacity from May to June, according to the nation’s top economic planner. The inspection aims to prevent steel companies from breaking a ban on low-quality steel made from scrap metal or restoring excess capacity that has been eliminated, said Shui Hengyong, an official with the National Development and Reform Commission. The inspection will be organized by an inter-ministerial mechanism, which has staff from 25 government agencies and industry associations. China plans to cut ineffective steel capacity by 30 million tons this year. Government efforts will be focused on disposing of “zombie firms” in the industry this year, Shui told a forum on Saturday.

Pilot aims to aid companies to list on the mainland

Sun, 04/01/2018 - 18:01
NEARLY 40 innovative companies qualify for a pilot program launched by the China Securities Regulatory Commission to help them go public in the mainland market or to issue depository receipts, according to its statement. The program is aimed at helping companies in high-tech or strategic emerging industries, including the Internet, big data, cloud computing, artificial intelligence, software and integrated circuit, high-end equipment manufacturing, and biological medicine, to issue shares or depository receipts on Chinese mainland. For foreign-listed Chinese companies to become pilot companies, the program requires them to have a market value of no less than 200 billion yuan (US$31.88 billion). This move paves the way for overseas-listed technology giants such as Alibaba, JD.com, Tencent, Baidu and NetEase to issue domestic CDR (Chinese Depository Receipt). Innovative companies not listed abroad need to have a valuation of no less than 20 billion yuan and an operating incomes of not under 3 billion yuan to qualify for the pilot program. Meanwhile, around 30 unicorn companies (startup companies with a value of over US$1 billion) also qualify for the program, according to data from the Ministry of Science and Technology. The Torch High Technology Industry Development Center of the ministry and Greatwall Strategy Consultants jointly released a 2017 development report on Chinese unicorn companies which showed China has 164 unicorn companies with a total valuation of US$628.4 billion. Ten of them are super unicorns with valuations of over US$10 billion — Ant Financial (US$75 billion), Didi Chuxing (US$56 billion), Xiaomi (US$46 billion), Aliyun.com (US$39 billion), Meituan.com (US$30 billion), CATL (US$20 billion), Toutiao.com (US$20 billion), Cainiao (US$20 billion), Lufax (US$18.5 billion) and Jiedaibao (US$10.77 billion). Unlisted firms can also become pilot companies if their revenue grows rapidly, conduct independent research and development, boast leading technology, and have relative advantages in their industries, the statement said. CSRC will specify standards for these pilot enterprises. Companies taking part in the program must treat domestic and foreign investors equally, according to the statement. Their prospectuses should reveal voting right differences and any special company structure arrangements.

Reform of VAT likely to ease tax burden on sectors

Sun, 04/01/2018 - 18:01
CHINA’S new value-added tax reform measures are expected to reduce the burden on a range of sectors in the real economy, analysts said. China will cut VAT rates as part of a tax reduction package amounting to 400 billion yuan (US$63.6 billion) this year, according to a decision made at a State Council executive meeting on Wednesday. Starting from May 1, the tax rate will be cut from 17 percent to 16 percent for manufacturing and some other industries, and from 11 percent to 10 percent for transport, construction, basic telecommunication services, and farm produce. While it will be only a 1 percentage point cut in each tax bracket, the reduction will impact a wide range of sectors in the real economy, according to Li Xuhong, a researcher with Beijing National Accounting Institute, a government think tank. It was estimated the reduction of taxes from lower VAT rates could reach 240 billion yuan. Li said the estimate was rather conservative, as tax cut in the manufacturing sector alone could reach that amount. VAT cuts in the transport industry will lower the logistics costs for the real economy, Li said. China International Capital Corporation estimated that firms in the two tax brackets will see their VAT tax burden drop by 6 percent and 9 percent, respectively. “We believe that lower VAT rates will help reduce the prices of products and services in a number of competitive sectors, benefiting households and other sectors,” CICC said in a research note. In addition to the VAT rates cut, the reform also offers tax incentives for some high-tech companies, a measure that analysts said is aimed at supporting innovation-driven growth. Eligible enterprises in advanced manufacturing, modern services, and electric utilities will receive a lump-sum refund for their input VAT payments yet to be deducted. The measure will have a “far-reaching impact,” said Li, as it could release capital previously frozen on companies’ balance sheets. However, successful implementation of the refund policy depends on advanced tax collection measures and the overall level of honesty of taxpayers across society, Li noted. The reform also includes measures to unify the standard for small-scale taxpayers, as it raises the threshold of taxable annual sales volume for industrial and commercial enterprises from 500,000 yuan and 800,000 yuan, to 5 million yuan. “Raising the revenue ceiling to 5 million yuan for industrial and commercial sectors will help level the playing field and support the growth of medium and small firms in all sectors,” CICC said.

Roaming fees end

Sun, 04/01/2018 - 18:01
CHINA Mobile, which has more than 20 million mobile subscribers in Shanghai, has abolished national roaming fees under its new packages which also offer broadband services at competitive prices, Shanghai Daily learned. All Shanghai Mobile users can enjoy the new packages automatically without paying national roaming charges on voice and data. The data package also comes with free cloud storage and favorably-priced broadband services. Shanghai Mobile’s new broadband package costs 10 yuan (US$1.5) per month, a competitive pricing which is expected to challenge broadband market leader Shanghai Telecom. The move comes after government officials at the “two sessions” meetings in Beijing last month pledged to abolish national data roaming charges. The measure will cover more than 1 billion mobile phone users nationwide.  

Oppo bets on AI, AR

Sun, 04/01/2018 - 18:01
OPPO, the world’s No. 4 smartphone brand, has started selling its new flagship R15 model nationwide yesterday as it bids to draw young consumers with artificial intelligence and augmented reality features. Oppo is banking on the AI and AR features in the new model which offers young users the ability to take better low-light, selfie and group pictures in various environments, said Oppo which has more than 200 million young users globally. In 2017, Oppo was the world’s No. 4 smartphone brand with a market share of 7.6 percent, behind Apple, Samsung and Huawei. It sold 118 million smartphones globally, up 12 percent year on year, said International Data Corp, a US-based research firm.

Poverty relief projects get US$64b funding lift

Sun, 04/01/2018 - 18:01
CHINA Development Bank, a major policy bank, plans to lend 400 billion yuan (US$63.8 billion) to support targeted poverty relief projects this year. The loans will be used to fund infrastructure construction, relocate poor residents, develop local industries, and improve education and health care in poverty-stricken areas, according to the bank. It said it has extended 919 billion yuan of loans in the past five years for targeted poverty relief projects in 987 poor counties. Founded in 1994, the CDB provides finance to major national projects and development needs. It has become the world’s largest development finance institution. The government aims to lift over 10 million people out of poverty in 2018, including relocating 2.8 million people from inhospitable areas. More than 68.5 million rural people were lifted out of poverty in China between the end of 2012 and the end of 2017. The national poverty rate fell from 10.2 percent to 3.1 percent. China is aiming to eliminate poverty by 2020 in a bid to create a “moderately prosperous society.”

US posts rapid GDP growth at end of 2017

Thu, 03/29/2018 - 18:01
The US economy grew significantly faster at the end of 2017 than previously reported, as consumer spending hit a three-year high and business investment rose, the government has reported.The rosier revised estimate for the October-December period was a modest shot in the arm for President Donald Trump, whose trade policies face stiff opposition at home and abroad and have sent shudders through global stock markets.GDP grew 2.9 percent in the final three months of last year, 0.4 points higher than the prior estimate, the Commerce Department said. And that rate was a significantly faster growth than analysts were expecting.The third and final quarterly estimate, based on a fuller set of data, marked the third quarter in a row at or around Trump’s target of 3 percent annual growth.And the new estimate does not account for December’s US$1.5 trillion tax cuts, which economists say should boost growth in the near term at least for a short time.“Consumer spending appears to have had its strongest quarter in three years,” Oxford Economics said in a research note, adding that tax cuts and stronger government spending should fuel GDP in 2018.But 2017 the growth rate was flat at a modest 2.3 percent, faster than the 1.5 percent posted in 2016, but still well below Trump’s goal and the 2.9 percent expansion seen in 2015.The Trump administration is counting on an acceleration of growth to pay for the December tax cuts, which are set to swell the budget deficit and add to the mounting US sovereign debt.

PBOC to clean up various virtual currencies in 2018

Thu, 03/29/2018 - 18:01
China’s central bank said it would clean up various sorts of virtual currencies in 2018, its latest effort to step up financial supervision. Last September, Chinese authorities including the People’s Bank of China ordered a ban on initial coin offerings, in which technology startups issue their own digital coins to investors to access funds, and shut down all virtual currency exchanges in the country. The tough measures led to a sharp decline in virtual currency transaction volumes in China, according to Financial News, a publication run by the PBOC. PBOC deputy governor Fan Yifei said the bank will step up reform and innovation and continue to steadily carry forward the central bank’s research and development of digital currency. To ensure order in the circulation of the yuan, the PBOC will tighten supervision and strengthen quality management and control, according to an online statement released yesterday.

CME to buy NEX for US$5.5b in cost-cutting deal

Thu, 03/29/2018 - 18:01
US exchange giant CME Group has agreed to buy British operator NEX for about 3.9 billion pounds (US$5.5 billion) in a deal aimed at cost-cutting and diversifying their businesses, it said yesterday. The cash-and-shares takeover offer, worth US$5.4 billion, valued each NEX share at 10 pounds, Chicago-based CME announced in a statement. NEX will shift headquarters to Chicago, but the company will keep its European headquarters in London in a Brexit boost to Britain’s financial services sector. “The boards of CME and NEX are pleased to announce that they have reached agreement on the terms of a recommended acquisition,” the pair said in a statement issued in London. CME Group, which owns the Chicago Mercantile Exchange, the Chicago Board of Trade and the New York Mercantile Exchange, added that there was a “compelling strategic and financial rationale” for the deal. “At a time when market participants are seeking ways to lower trading costs and manage risk more effectively, the acquisition will allow us to create significant value and efficiencies for our clients globally,” said CME chairman and chief executive officer Terry Duffy. “As one organization, we will be able to employ the complementary strengths of each company, while diversifying our combined businesses across futures, cash and OTC (over-the-counter) products and post-trade services.” NEX chief executive Michael Spencer added the move to maintain CME’s European base in London was a “tremendous” boost to the sector, which continues to face uncertainty before Britain’s departure from the European Union in one year. “CME’s decision to choose London as its European headquarters is also a signal of tremendous support for Britain’s financial services sector,” Spencer said. “The combination of NEX and CME will be an industry-changing transaction. Bringing together cash and futures products and OTC services will be unique, offering clients improved access to trading, greater financial efficiencies and highly valuable data sets.”

Switzerland is virtual currency hub

Thu, 03/29/2018 - 18:01
SWITZERLAND has become a global hub for cryptocurrencies and the blockchain technology they are built on, with investors flocking to the wealthy Alpine nation to get in on the virtual action. The country’s largest city, Zurich, set up its first bitcoin ATM four years ago, while the Swiss national rail company has since 2016 provided the possibility of purchasing the virtual currency at over 1,000 distributors across the country. Just a half-hour drive from Zurich is the small town of Zug, which thanks to a business-friendly taxation scheme has long been a global economic hub and is home to tens of thousands of companies, including large investment firms, pharmaceutical companies and commodity trading groups. But for the past few years, a new category of company has descended on the town, which in high-tech circles has been dubbed “Crypto Valley.” That is the name of an association set up in Zug in 2013 with the explicit aim of drawing startups dabbling in virtual currency technologies, creation and trading to the town. The push worked. Out of the world’s six biggest Initial Coin Offerings — an unregulated means to raise funds for new cryptocurrency ventures — last year, four took place in Switzerland, according to Swiss financial watchdog Finma. Blockchain technology allows for the development of peer-to-peer payment systems. It runs by recording transactions as “blocks” that are updated in real time on a digitized ledger that can be read from anywhere and does not have a central record keeper. Zug is currently home to some 200 blockchain companies including the foundation behind ethereum, the second largest cryptocurrency after bitcoin. The town has also since 2016 accepted bitcoin payments for council services. The southern Italian-speaking Swiss town of Chiasso, which is attempting to compete with Zug as a “CryptoPolis,” has meanwhile decided to accept bitcoin payments for some taxes. Faced with a “sharp increase” in the number of ICOs, Finma last month published guidelines detailing the regulatory requirements for such fundraising schemes. “Creating transparency at this time is important given the dynamic market and the high level of demand,” Finma said. It warned that it was particularly important to protect against money laundering, since the risk was high “in a decentralized blockchain-based system, in which assets can be transferred anonymously and without any regulated intermediaries.” Switzerland’s famous banking sector has been divided in the face of the flood of new virtual currencies on the markets. Some Swiss banks were among the first to dive into the cryptocurrency pool. Vontobel for instance created the first structured bitcoin product, a tracker which allows for investment in shifting values of the virtual currency without purchasing the coins directly. Falcon Private Bank has meanwhile offered asset management services for a range of cryptocurrencies, including bitcoin and ethereum, while financial and trading services group Swissquote offers trading in five virtual currencies. Switzerland’s two largest banks UBS and Credit Suisse have however so far kept their distance from the crypto boom. In an interview with the NZZ am Sonntag weekly late last year, UBS chairman Axel Weber, a former head of the German central bank, warned of significant “design flaws” in cryptocurrencies like bitcoin. UBS has decided to warn clients against investing in the virtual currency, he said, because the bank does “not consider it valuable and not sustainable.”

PBOC to clean up various virtual currencies in 2018

Thu, 03/29/2018 - 18:01
CHINA’S central bank said it would clean up various sorts of virtual currencies in 2018, its latest effort to step up financial supervision. Last September, Chinese authorities including the People’s Bank of China ordered a ban on initial coin offerings, in which technology startups issue their own digital coins to investors to access funds, and shut down all virtual currency exchanges in the country. The tough measures led to a sharp decline in virtual currency transaction volumes in China, according to Financial News, a publication run by the PBOC. PBOC deputy governor Fan Yifei said the bank will step up reform and innovation and continue to steadily carry forward the central bank’s research and development of digital currency. To ensure order in the circulation of the yuan, the PBOC will tighten supervision and strengthen quality management and control, according to an online statement released yesterday.

US posts rapid GDP growth at end of 2017

Thu, 03/29/2018 - 18:01
THE US economy grew significantly faster at the end of 2017 than previously reported, as consumer spending hit a three-year high and business investment rose, the government has reported. The rosier revised estimate for the October-December period was a modest shot in the arm for President Donald Trump, whose trade policies face stiff opposition at home and abroad and have sent shudders through global stock markets. GDP grew 2.9 percent in the final three months of last year, 0.4 points higher than the prior estimate, the Commerce Department said. And that rate was a significantly faster growth than analysts were expecting. The third and final quarterly estimate, based on a fuller set of data, marked the third quarter in a row at or around Trump’s target of 3 percent annual growth. And the new estimate does not account for December’s US$1.5 trillion tax cuts, which economists say should boost growth in the near term at least for a short time. “Consumer spending appears to have had its strongest quarter in three years,” Oxford Economics said in a research note, adding that tax cuts and stronger government spending should fuel GDP in 2018. But 2017 the growth rate was flat at a modest 2.3 percent, faster than the 1.5 percent posted in 2016, but still well below Trump’s goal and the 2.9 percent expansion seen in 2015. The Trump administration is counting on an acceleration of growth to pay for the December tax cuts, which are set to swell the budget deficit and add to the mounting US sovereign debt.

Bilibili offers IPO of 42m ADS

Thu, 03/29/2018 - 18:01
Crowds gather around a Bilibili booth at a comic show in this file photo. Bilibili Inc, a Chinese online platform for animated video, rang the Nasdaq Stock Market opening bell on Wednesday in celebration of its initial public offering. Bilibili priced its IPO of 42 million American depositary shares at US$11.50 per ADS for a total offering size of US$483 million, assuming the underwriters do not exercise their option to purchase additional ADSs.

Top tier cities may turn into global metropolises

Thu, 03/29/2018 - 18:01
CHINA’S top tier cities may elevate themselves from regional centers to future global metropolises, with advantages in sectors such as smart cities and artificial intelligence. International investors from global giants like Boeing, Merck and Siemens shared this view at the Annual Investment Conference in Guangzhou on Wednesday. The conference is a major event aimed at promoting the city to potential investors and listening to their comments on its business environment. Over 1,800 enterprises from around the world attended the conference. Many investors stated that China is now more than just a large market for them. This year China is celebrating the 40th anniversary of its reform and opening-up. Merck, a world leading company in health care, life science and performance materials, has been operating in China for over 80 years. As well as its existing research and development centers and labs in Beijing and Shanghai, the company set up a new China Innovation Center in Shanghai in February. “The opening-up of China has made a great difference to our business and it allowed us to advance business sectors in liquid crystal and pigments,” said Allan Gabor, managing director of Merck China. Similarly, John Bruns, vice president of Boeing International, said China is now “a source of innovation” from the company’s perspective. Boeing will soon open its first finishing and delivering center for 737 planes outside the United States in east China near Shanghai, and recently signed an agreement with China Southern Airlines to initiate a 737 converted freight project in Guangzhou, and to include a local maintenance company in its 787 global care program. Beijing, Shanghai, Guangzhou and Shenzhen, and the Greater Bay Area of Guangdong, Hong Kong and Macau, are becoming the key players in investors’ global strategies. Guangzhou is focusing on the new generation of information technology, artificial intelligence, bio-pharmaceuticals, as well as new energy and new materials. The output of its new generation Internet technology and panel display industries have both exceeded 100 billion yuan (US$15.9 billion). It is also ambitious in becoming a smart city, by teaming up with global giants like Cisco and Siemens. Three months ago, SHV Energy, the world’s largest distributor of LPG energy solutions, signed an memorandum of understanding with Guangdong Province, to build a LPG terminal in the city’s Nansha District.

Leshi loss like ‘chopping one’s head off’

Thu, 03/29/2018 - 18:01
SUNAC China has written off 97 percent of its investment in Leshi Internet Information and Technology amounting to a total loss of 16.6 billion yuan (US$2.6 billion), chairman Sun Hongbin said yesterday. But Sun, who resigned as chairman of Leshi two weeks ago after only eight months in office, still has “positive view about the development prospects of large-screen operations and content in the long run,” despite of the failure of the Leshi investment. “It’s not a broken-wrist pain but as painful as chopping one’s head off (on investment in Leshi),” Sun said. Sunac has set aside 16.6 billion yuan for losses related to Leshi, comprising 9.98 billion yuan to write down debt, impaired loans valued at 2.1 billion yuan and 4.48 billion yuan in investment losses, the Tianjin-based company said as it released its 2017 financial results. Sunac has invested a total of 17.1 billion yuan in Leshi, including 15.4 billion yuan in Leshi and its parent firm LeEco, in January 2017. Sun decided to quit as chairman, Leshi said in a filing to the Shenzhen stock exchange on March 14. Leshi was not available to comment on Sun’s remarks. Leshi’s founder Jia Yueting expanded LeEco’s business from online video to smartphone and even electric car as he had hoped to establish China’s Netflix-to-Tesla contender. But LeEco ran into a cash crunch in 2016 and 2017 after expanding too fast. Jia left China to continue developing the electric car business in the United States.

Coal firms quadruple profits as prices rally

Thu, 03/29/2018 - 18:01
PROFITS of Chinese coal producers nearly quadrupled last year as China’s ongoing capacity cut prompted a recovery in coal prices, a report said. Coal mining companies with annual turnover over 20 million yuan (US$3.17 million) reaped 295.93 billion yuan in profit in 2017, up 290.5 percent from a year earlier, according to the China National Coal Association. Their combined turnover rose 25.9 percent year on year to 2.54 trillion yuan. Some 90 major companies hiked their profit more than fourfolds from 2016 to 145.19 billion yuan. CNCA vice president Jiang Zhimin attributed the performance to rising prices driven by a nationwide campaign to downsize the saturated sector. Addressing overcapacity in bloated industries like steel and coal has been high on the government work agenda in recent years as gluts of production bit into corporate profit and dragged down economic growth. China slashed 250 million tonnes of coal capacity last year, outperforming the annual target. Despite the solid progress, addressing the overcapacity remains an arduous task as there are still numerous small and outdated mines across the country. China has more than 3,200 coal mines with capacity under 300,000 tons and nearly 2,000 mines with capacity below 90,000 tons, said the report. Jiang cautioned against lingering problems in many coal producers, including rising debt, financing difficulties and a shortage of workers. “Some companies have yet to completely step out of the operation hardship.”

Pledge to cut taxes lifts shares

Thu, 03/29/2018 - 18:01
SHANGHAI stocks rallied yesterday, led by real estate developers and consumer firms as investors hunted for bargains, while the central government’s vow on tax cuts also gave them something to cheer about, analysts said. The Shanghai Composite Index gained 1.22 percent to end at 3,160.53 points. Premier Li Keqiang’s pledge on Wednesday that China would cut value-added tax rates as part of a tax reduction package amounting to 400 billion yuan “has lifted confidence among investors on China’s economic outlook,” said Li Lifeng, chief strategic analyst at Sinolink Securities. Nacity Property Service Co jumped by the daily limit of 10 percent to 38.63 yuan (US$6.15), while liquor maker Anhui Kouzi Distillery Co gained 4.48 percent to 43.15 yuan. Property developers also gained, with China Vanke Co surging 9 percent to 34.16 yuan. Investors bought these stocks as they feared a price rebound, said Chen Jian, investment consultant at Datong Securities.

Greenland HK sees rosy 2017

Thu, 03/29/2018 - 18:01
Greenland Hong Kong Holdings Ltd, the only overseas-listed real estate platform of state-backed developer Greenland Group, posted a surge in profit for 2017, mainly due to robust growth in sales.The Hong Kong-listed developer’s net profit jumped 73 percent from 2016 to 1.84 billion yuan (US$293 million) between January and December, it said in a filing to the Hong Kong stock exchange.Net profit attributable to owners of the company totaled 1.32 billion yuan during the same period, an annual rise of 19 percent.Contracted sales soared 65 percent to 30.11 billion yuan, while sales area climbed 55 percent to 2.27 million square meters, the company said.Greenland Hong Kong is also tapping into other areas such as health care to boost its future growth, it said.

Huawei unveils new P20 models

Wed, 03/28/2018 - 18:01
Telecom equipment company Huawei CEO Richard Yu presents the new P20 smartphone in Paris yesterday. China’s tech giant launched its new generation of smartphones that include “an unprecedented” triple camera with artificial intelligence capabilities. Prices of the 5.8-inch screen P20 and 6.1-inch screen P20 Pro will range from 649 euros (US$803) to 899 euros.

Platform to drive intelligent autos

Wed, 03/28/2018 - 18:01
CHINA is building a national-level innovation platform to further accelerate the development of intelligent vehicles, the National Development and Reform Commission said during a seminar held in Beijing yesterday. “The platform will be established in order to solve the problems and obstacles in the development of intelligent vehicles and ensure the effective implementation of national strategies,” said Nian Yong, director-general department of industry of the National Development and Reform Commission, at a connected and automated vehicle international seminar. The NDRC plan envisages the platform to comprise government department officials, industry professionals and scholars as well as auto companies. The nation’s top economic planner said that through the platform, China hopes to attract key enterprises, encourage overseas mergers and acquisitions and enhance research and development capabilities of intelligent vehicles. “At present, China has started preparing for intelligent vehicles which includes strengthening intellectual property protection, emphasizing supervision and law enforcement, enhancing a credit system, talent training, supporting cross-border mergers and acquisitions and encouraging foreign-invested companies to participate in the development of an intelligent and connected vehicle industry,” Nian said. China is actively encouraging the development of intelligent vehicles. On Tuesday, the Ministry of Industry and Information Technology and the Standardization Administration of China jointly issued key tasks for standardization in intelligent and connected vehicles in 2018. The key tasks include formulation and revision of standards of intelligent and connected vehicles and strengthen international exchanges. China will enhance communication with US, France, Germany, Japan and other countries to discuss technology and standards of intelligent and connected vehicles. To promote development of the industry, China issued licenses for road testing of intelligent and connected vehicles. Shanghai issued the country’s first batch of licenses allowing testing of intelligent vehicles on public roads on March 1 to China’s largest automaker SAIC Motor Co and Shanghai-based electric carmaker NIO. Beijing also released its first license for Baidu’s self-driving vehicles for public road testing on March 22. Auto manufacturers said they are optimistic about the future prospects of intelligent and connected vehicles in China. Li Shufu, chairman of Zhejiang Geely Holding Group and Volvo Car Group, said that “China already has a strong market base which will lead the development of intelligent and connected vehicles in the world. We are optimistic on the development of automated driving in China.”

SOEs record 25% jump in profits

Wed, 03/28/2018 - 18:01
CHINESE state-owned enterprises reported solid profit growth in the first two months of 2018 as the economy started the year with better-than-expected performance, official data showed yesterday. Combined SOE profits rose 25.3 percent year on year to 367.3 billion yuan (US$58.5 billion) for the January-February period, the Ministry of Finance said. The growth was higher than the 23.5-percent jump seen in 2017. SOE business revenue rose 11.2 percent from a year earlier to 8.3 trillion yuan during the period. Operating costs gained 10.6 percent to 8.1 trillion yuan. By the end of February, total SOE assets stood at 163.6 trillion yuan, up 9.7 percent, with liabilities at 107 trillion yuan, up 9.3 percent. SOEs in petrochemical, steel and power generation enjoyed relatively large profit increases, but non-ferrous metal firms suffered significant declines. China has thousands of SOEs, but many have stagnated due to lack of competition. The government is improving their performance through a series of reforms, moving toward mixed ownership and market-oriented management. China has undertaken several rounds of mixed-ownership reform, including one covering telecom giant China Unicom, to bring in private investment mainly by issuing shares. Earlier this month, policymakers vowed to make Chinese SOEs front runners in pursuing high-quality development through reform and innovation. China welcomes all types of enterprises, including foreign ones, to participate in mixed-ownership reform of SOEs, the state assets regulator has said.

Security experts gap to double

Wed, 03/28/2018 - 18:01
CHINA suffers a shortfall of 700,000 online security experts and the shortage is set to double to 1.4 million by 2020, which will bring on cyber security threats targeting national security, online fraud and privacy leakage, the country’s biggest online security firm 360 said yesterday. The threats have become more serious due to development of artificial intelligence and cloud computing which requires huge volume of data and transmission, industry officials said. There are only 30,000 online security experts in China now but the real demand is for over 700,000 experts. As only 10 percent of colleges and universities have set up specific cyber security classes, the shortage is expected to grow to 1.4 million by 2020, industry insiders said. White-hat hackers, who test and expose system loopholes to improve online security, will play a more important role, said 360, which has set up China's biggest vulnerability response platform Butian.

Shanghai to use fair for hub goal

Wed, 03/28/2018 - 18:01
SHANGHAI will use the sixth China (Shanghai) International Technology Fair next month to help the city build up its manufacturing and service brands as it bids to transform into a global innovation hub, authorities said yesterday. The fair, whose theme is “boosting innovation, protecting intellectual property and promoting trade,” will also focus on services to boost collaboration between companies to commercialize latest technology, said Dong Chao, president at Shanghai International Technology Exchange Center, a division of Shanghai Commission of Commerce. This year’s fair has added an area for companies to launch their latest products and technologies, while an officer from the Shanghai Intellectual Property Administration said a “service booth” will be set at the fair to help companies deal with disputes over intellectual property. Chi Hong, CEO at Donghao Lansheng (Group) Co, said the key difference of the Shanghai fair is that it is “focusing on latest high-technology results.” “Instead of expanding the fair by number of exhibitors, we’ve selected applicants to ensure all the projects to be presented are latest results or newest launches,” Chi said. The fair will be held from April 19 to 21 at the Shanghai World Expo Exhibition & Convention Center.

Shares fall on ‘fragile’ sentiment

Wed, 03/28/2018 - 18:01
SHANGHAI stocks fell to a nearly 10-month low yesterday as consumer firms declined amid profit-taking while investor sentiment remained “fragile” amid uncertainties over US-China trade, analysts said. The Shanghai Composite Index lost 1.4 percent to 3,122.29 points, its lowest since June 6 last year. Consumer firms led the loss, with SDIC Zhonglu Fruit Juice Co tumbling by the daily limit of 10 percent to 12.93 yuan (US$2.06) and liquor maker Anhui Kouzi Distillery Co dropping 5.32 percent to 41.30 yuan. Shen Meng, director of domestic investment bank Chanson & Co, said investor sentiment remained “fragile” amid concerns caused by trade fractions between US and China, especially after the US stock market fell on Tuesday, “which made investors worry about the economic outlook.” But computer and communication equipment makers rose again, with Shenzhen Gongjin Electronics Co surging by the daily 10 percent cap to 7.88 yuan, while Beijing Tricolor Technology Co rose 3.78 percent to close at 54.09 yuan.

China unveils cuts to VAT as part of US$64b tax reform

Wed, 03/28/2018 - 18:01
CHINA will cut value-added tax rates as part of a tax reduction package amounting to 400 billion yuan (US$64 billion) this year. The decision, which is expected to boost high-quality development, was made at a State Council executive meeting chaired by Premier Li Keqiang yesterday. The tax rate, from May 1, will be lowered from 17 percent to 16 percent for manufacturing, and from 11 percent to 10 percent for transportation, construction, basic telecommunication services and farm produce. Li said the VAT reform was a major step in China’s tax regime reform. “The VAT reform has helped to reduce the overall corporate tax burden, and improve the tax regime. The reform has proven to be conducive to the transformation and upgrading of the economy, unifying the tax structure and making taxation fairer,” Li said. This round of tax cuts will apply to all manufacturing companies. All businesses registered in China, be they joint ventures or wholly foreign-owned companies, will be treated equally, the premier said. The VAT reform was first piloted in Shanghai before it was rolled out nationwide. It has delivered a total tax cut of 2.1 trillion yuan over the past five years. The services sector has expanded significantly as a result. Its added value rose to 51.6 percent of GDP in 2017. The reform has also boosted entrepreneurship, innovation and the development of new industries and new forms of business. Li said in his government work report this month that efforts will be made to further lighten the tax burden on businesses. The government will reform and improve VAT, consolidate the three tax brackets into two and adjust tax rates, prioritize lowering rates in manufacturing and transportation, and raise the threshold for the annual sales volume for small-scale taxpayers. As part of the tax cut package, eligible enterprises in advanced manufacturing, modern services and electric utility will receive a lump-sum refund for their input VAT payments yet to be deducted. The meeting also decided to unify the standard for small-scale taxpayers as it raises the threshold of taxable annual sales volume for industrial and commercial enterprises from 500,000 yuan and 800,000 yuan, to 5 million yuan. Enterprises registered as general taxpayers will be allowed to switch their status to small-scale taxpayers within a given time. Li said reducing the three tax rate brackets to two in one go was a hugely challenging job, as reforms are normally pursued step by step. No industry should see its tax burden increase in the course of VAT reform, he said. The meeting also decided to set up a state financing guarantee fund with initial funds of no less than 60 billion yuan.

US tariff plan ‘contradicts commitment to the WTO’

Tue, 03/27/2018 - 18:01
AMERICA’S latest tariff plan on imports from China contradicts its commitments that such a decision be based only on the World Trade Organization Dispute Settlement Body, said China’s top envoy at the WTO on Monday. Speaking in Geneva, Zhang Xiangchen, the Chinese ambassador to the WTO, said that what the United States had done contradicts its commitments made at the WTO more than a decade ago. Zhang said the US had “explicitly, officially, repeatedly and unconditionally confirmed” that it would base a Section 301 decision only on adopted Dispute Settlement Body findings. Section 301 is a measure that allows the US president to take action if an investigation finds foreign trade practices burden or restrict American commerce or are unreasonable or discriminatory. “According to the WTO rulings and the US commitment, the US shall by no means determine unilaterally based on a 301 investigation that other members have violated the WTO rules,” Zhang said during a meeting of WTO’s Council on Trade in Goods. Last Thursday, US President Donald Trump signed a memorandum that could impose tariffs on up to US$60 billion of imports from China.

UN and Alibaba to empower e-commerce entrepreneurs

Tue, 03/27/2018 - 18:01
THE United Nations agency dealing with trade and development has teamed up in Hangzhou with the Alibaba Group in a special 11-day course to empower over five years 1,000 e-commerce entrepreneurs from developing countries. Thirty-seven e-commerce entrepreneurs from Asia have enrolled at the UN Conference on Trade and Development and Alibaba Business School’s eFounders Initiative at the Alibaba campus in Hangzhou, UNCTAD said. The 11-day course is part of a commitment by Jack Ma, founder and executive chairman of the Alibaba Group and a UNCTAD special adviser. “We want to reach out to youth and include them in the work we do for inclusive and sustainable economic growth,” said Arlette Verploegh, coordinator for the eFounders Initiative at UNCTAD. She noted that the initiative seeks to bridge the digital divide for young entrepreneurs, helping them to unlock their potential. “It is part of a set of smart partnerships UNCTAD is creating to reach the Sustainable Development Goals,” said Verploegh. The launch of the first program for Asian entrepreneurs comes after the success of the inaugural class for 24 African participants last November. Following a rigorous selection process, the final candidates from Cambodia, Indonesia, Malaysia, Pakistan, the Philippines, Thailand and Vietnam will study e-commerce innovations from China and around the world and become eFounders Fellows. The aim is that the young entrepreneurs will become catalysts in their home countries for the digital transformation of their economies. All the participants are founders of startup companies in e-commerce, Big Data, logistics, financial technology, payment solutions and tourism. “We are excited to extend this fellowship to entrepreneurs from Asia for the very first time as part of our commitment to empower digital champions and communities around the world,” said Brian Wong, vice president of Alibaba Group, who heads the Global Initiatives program.

Earnings rise spurts for industrial firms

Tue, 03/27/2018 - 18:01
CHINA’S major industrial firms posted rapid profit growth in the first two months of this year, the National Bureau of Statistics said yesterday. Profits of industrial enterprises above a designated size in China gained 16.1 percent year on year from the same two-month period last year to 969 billion yuan (US$111 billion), which was 5.3 percentage points faster than that of December 2017, according to the bureau. Profits of major state-owned industrial companies surged 29.6 percent year on year to 291.81 billion yuan in January and February. “The faster growth of industrial production and sales offset the negative influence of the price rollback of industrial products, buoying the profit growth,” said bureau statistician He Ping. He also highlighted the improvements the enterprises made in profitability and capital efficiency. The profit margin of industrial companies in their main businesses rose 0.33 percentage points year on year to 6.1 percent during the two-month period. Data from the bureau showed that 29 of the 41 industries surveyed posted year-on-year profit growth in the two months. Profits of industries including coal mining, pharmaceuticals and textiles all grew faster during the two months. Meanwhile, Chinese industrial firms continued to see their leverage ratio drop as deleberaging measures take effect. The debt-asset ratio fell 0.8 percentage points from a year ago to 56.3 percent at the end of February. Lower costs also helped the profit growth. The costs per 100 yuan of revenue fell by 0.33 yuan in the first two months from the same period last year, according to He. “With the supply-side structural reform being further pushed forward, achievements and effects of deleveraging and cost reduction continued to emerge,” He said. Value-added industrial output rose 7.2 percent yearly in the first two months, from 6.2 percent in December 2017.

Upbeat mood ends 4-day loss

Tue, 03/27/2018 - 18:01
SHANGHAI stocks ended a four-day loss yesterday, led by gains in high-tech firms as investors turned upbeat on news that China and the US were trying their best to prevent a trade war. The Shanghai Composite Index gained 1.05 percent to 3,166.65 points, “with investor sentiment being upbeat on the economic outlook after news that the Chinese and US officials were negotiating to prevent an all-out trade war,” analysts said. Premier Li Keqiang also called for a rational and earnest attitude when addressing the problem of China-US trade imbalance on Monday. “Fears over tightening trade frictions started to subside,” said Yang Hai, senior strategic analyst at Kaiyuan Securities, adding that this change in sentiment might help the stock market to rally in the following days. Software developer Hundsun Technologies Inc jumped by the daily limit of 10 percent to 56.53 yuan (US$9.01), while electronic equipment producer Dawning Information Industry Co surged 9.07 percent to 109.29 yuan.

ICBC, AgBank see profits rebound

Tue, 03/27/2018 - 18:01
TWO of China’s big state-owned banks said yesterday their profits rebounded in 2017 after a pair of moribund years thanks to an accelerating domestic economy, and analysts expect further gains as a government credit clampdown favors big lenders. The Industrial and Commercial Bank of China, the world’s biggest lender by total assets, said full-year profit grew 2.8 percent to 286.05 billion yuan (US$45 billion). The Agricultural Bank of China said its net income rose 4.9 percent to 182.97 billion yuan. Their earnings were reported in filings to the Hong Kong stock exchange, where both have shares listed. The remaining half of the “Big Four” Chinese banks — Bank of China and China Construction Bank — are set to also release positive earnings news later in the week. China’s economy grew a forecast-beating 6.9 percent in 2017, picking up steam for the first time since 2010. Analysts said the big banks also are benefiting from the Chinese government’s campaign to clean up bad loans and risky lending in its often chaotic and murky financial system. The crackdown is seen as hitting smaller lenders and wealth management companies hardest, driving them to seek loans from the established banks in order to clean up their balance sheets. China’s banking regulator is also believed to have recently lowered bad-loan provisions for banks, according to a Bloomberg News report, which frees up more cash for lending. “China’s banks have shaken off the doldrums,” Richard Cao, a Shenzhen-based analyst at Guotai Junan Securities Co, was quoted by Bloomberg News as saying. “Their earnings growth will accelerate for the next two to three years.” The big banks’ profit growth was largely flat in the preceding two years as concerns grew over rising bad loans. But both ICBC and AgBank reported lower non-performing loans for 2017. ICBC’s ratio of NPLs shrank to 1.55 percent as of end-December 2017, from 1.62 percent the previous year. AgBank’s ratio fell to 1.81 over the same period, from 2.37 a year earlier.

Budgets for cybersecurity safety to rise

Tue, 03/27/2018 - 18:01
OVER 90 percent of respondents expect to spend more on cyber security measures this year, up from 55 percent last year, according to the 20th Global Information Security Survey released by Ernst & Young. However, a gap still exists between the desired budget amount and the actual amount of spending increase amid rising information threat levels. A total of 87 percent of the surveyed organizations said that they need up to a 50 percent rise in the budget while only 12 percent expect to get a rise of over 25 percent. Around 80 percent of the cyber attacks employed common methods that leveraged known vulnerabilities of organizations, and increasing connectivity also creates new risks and vulnerabilities across organizations. The survey revealed that 43 percent of the global organizations considered both ransomware and phishing mails the biggest threat to them, while 16 percent of companies in China pinpointed malware as their top concern and 12 percent chose phishing mails. The survey also pointed out that spending will rise on how to react to cyber security breaches while previously most spending were targeted at protection and detection of cyber security malpractices. The survey covers nearly 1,200 senior executives of the world‘’s largest and most recognized organizations and examined their concerns about cyber security and their efforts to manage them. Cybersecurity Ventures said in its Cybercrime Report 2017 that the global cost of cyber security breaches is estimated at US$6 trillion, doubling from 2015. “”Considering the information security implications of their current strategy will be the new trend of enterprise risk management in the future,“” says Keith Yuen, cyber security chief of EY (China) Advisory.

Test drive cars chosen from a ‘vending machine’

Tue, 03/27/2018 - 18:01
A gigantic “vending machine” for cars allowing self-service test drives has opened in Guangzhou. The multi-story facility was launched by Tmall, an online retail arm of China’s e-commerce giant Alibaba. The steel building, located in Baiyun District, covers nearly 1,000 square meters and holds up to 42 vehicles. Customers can make an appointment for a three-day test drive by searching the keywords “super test drive” on the Tmall or Taobao apps, providing their identification details, and paying a deposit and a fee for the service on their mobile phones. They can then access the vehicles in the garage by themselves. Customers are eligible for discounts on the deposit and fee based on their score on Alibaba’s credit scoring unit Sesame Credit. During the first month of operation, the facility will only offer Ford vehicles. The service fee is 99 yuan to 198 yuan (US$15.80-US$31.60) depending on the model, and the deposit is 3,000 yuan. After the test drive, customers can buy the vehicle at a Ford retail store. The cooperation is part of innovative efforts between Alibaba and the US automaker in digital marketing. Tmall is in talks with other auto brands interested in the test drive service.

Shortfall of 5 million AI experts

Tue, 03/27/2018 - 18:01
CHINA has a shortfall of 5 million artificial intelligence experts and the country must strengthen training and education in order to boost innovation, said industry officials yesterday. China’s AI talent gap of 5 million includes 500,000 core engineers who master programming and related technologies, said dajie.com, an online recruitment firm. Shenzhen-listed iFlytek Co, one of the biggest public AI firms in the country, which offers voice recognition and real-time translation services, has opened an “online AI college” whose online courses have drawn 40,000 participants. The college is expected to train 500,000 professionals by the end of 2018 through partners like dajie.com and the University of Science and Technology of China. AI has been used in security, education, medical, smart manufacturing, aerospace and various industries. China plans to develop an AI market worth over 150 billion yuan (US$22.66 billion) by 2020, said the State Council.

Xiaomi bets on AI for growth

Tue, 03/27/2018 - 18:01
XIAOMI Corp, which is seeking an initial public offering, has formed an artificial intelligence team with about 500 employees, the company said in a new product release conference held in Shanghai yesterday. Xiaomi released new products like its AI-featured flagship model Mi Mix 2S and a new speaker, both of which are powered by intelligent assistant Xiaoai. Among top Chinese smartphone brands, only Xiaomi has its own intelligent assistant, like Apple’s Siri and Samsung’s Bixby. With Xiaoai, Xiaomi has collected “sufficient” database on AI application development, and increased use of AI will make Xiaomi’s AI “smarter.” To this end, Xiaomi has established a team of “400 to 500” people for AI research, Lei Jun, Xiaomi’s founder, said in Shanghai yesterday. Xiaomi is seeking to issue an IPO in China’s mainland, which values the Beijing-based firm at US$100 billion, according to Bloomberg News.

Tencent ranks as most valuable brand for 4th time

Tue, 03/27/2018 - 18:01
TENCENT has retained the title of China’s most valuable brand for the fourth time, valued at US$132.2 billion, according to the latest ranking of brand value. The combined value of the top 100 brands in China jumped 23 percent to a total size of US$557.1 billion, the largest annual increase since “BrandZ Top 100 Most Valuable Chinese Brands” was first published in 2014. Education, logistics and technology brands continue to gain in value as a result of the Chinese people’s pursuit of higher qualifications, e-commerce and urbanization of inland regions, the ranking said. “The game is changing for brands that want to compete successfully in China,” said David Roth, CEO of Europe, the Middle East, Africa and Asia for WPP’s global retail practice. “The country’s leadership expects brands to pursue a higher purpose: one that improves the lives of Chinese people, helps drive greater economic equality and strengthens the nation.” “Chinese consumers are also more sophisticated in their purchasing decisions and they’re responding to brands that grab their attention and meet their needs in relevant ways, with products and services that are both innovative and different,” he added. Five logistics brands entered the top 100 ranking for the first time as courier services rose amid the e-commerce boom. SF Express ranked the highest at 11th. Alibaba saw its brand value surge 53 percent from a year ago to US$88.6 billion. Overall, the combined value of China’s top 100 brands climbed 80 percent over the past five years, outpacing the global average growth of 27 percent. The fast shifting competitive landscape in China also saw some brands fall out of the top 100 rankings.

China, India pledge to boost trade

Mon, 03/26/2018 - 18:01
CHINA and India pledged yesterday to further enhance their trade and economic cooperation so as to build a new international economic order and safeguard the interests of developing countries. Addressing the 11th meeting of China-India Joint Group on Economic Relations, Trade, Science and Technology, Chinese Minister of Commerce Zhong Shan said the trade volume between China and India reached a record US$84.4 billion last year, up 20.3 percent from 2016. China has remained as India’s largest trading partner, he added. Bilateral investment has also seen a steady increase, the minister said. The accumulated investment in India by Chinese enterprises amounted to over US$8 billion, while India’s investment in China rose an average of 18.5 percent annually over the past three years. “Both countries have closely cooperated and supported each other in the multilateral trading system and regional economic cooperation, and contributed greatly to the joint building of a new international economic order and safeguarding of the interests of developing countries,” Zhong said. The minister put forward a seven-point proposal to further develop the China-India trade and economic cooperation. First, connecting development strategies. China is willing to join hands with India in dovetailing the Belt and Road initiative with India’s 15-year Vision Plan, Make in India and Digital India programs. Second, welcoming India’s participation in the China International Import Expo to be held in November in Shanghai. China hopes India could lift its exports to China by taking part in the expo. Third, enhancing bilateral trade and investment. China proposes establishing a trade facilitation joint working group and upgrading the joint working group on industrial parks to investment cooperation. Fourth, strengthening communication in trade remedies. China is expected to hold the fourth meeting of trade remedy cooperation mechanism as soon as possible and mulls specific measures to properly settle trade disputes. Fifth, improving the business environment for Chinese products. China hopes the Indian authorities to protect the rights and safety of Chinese enterprises and staff. Sixth, conducting cooperation on human resources. China is willing to expand cooperation in the development of human resources. Seventh, boosting multilateral and regional economic cooperation. China is ready to jointly send a positive signal together with India in safeguarding and supporting the multilateral trading system. China also hopes for an early signing of the high-quality and mutually beneficial Regional Comprehensive Economic Partnership. Indian Commerce and Industry Minister Suresh Prabhu expressed willingness to jointly implement the consensus reached by leaders of both countries, and connect the development strategies of both sides and share the development experiences. He said India will learn from China’s experiences in setting up special economic zones and push forward the cooperation in industrial park projects. India welcomes Chinese businesses to increase investment and boost their market share in India. Prabhu added that India supports the multilateral trading system and wishes to strengthen communication and coordination with China in a bid to maintain and boost the development of regional and global trade. During Zhong’s tour in India, businesses of both countries signed 101 trade agreements, with a total contract value of US$2.4 billion.

China seeks voice over global oil pricing with yuan crude futures

Mon, 03/26/2018 - 18:01
CHINA launched yuan-denominated oil futures contracts in Shanghai yesterday in a move to help domestic producers hedge crude price fluctuations and win for the country a greater voice over oil pricing. Trading started at 9am at Shanghai International Energy Exchange, also known as INE and a unit of the Shanghai Futures Exchange. By the 3pm close INE had conducted 42,300 transactions worth 18.3 billion yuan (US$2.9 billion). The first trading day got off to a good start, with the most traded contract for September delivery rising 3.34 percent to 429.9 yuan by 3pm. Investors can trade between 9am and 11:30am, and 1:30pm to 3pm, as well as from 9pm to 2:30am during working days, with each contract’s volume being 1,000 barrels. China imported 420 million tons of crude last year, taking up 69 percent of its total consumption, the National Bureau of Statistics said. The rising imports have propelled China to surpass the US to become the world’s largest importer of crude last year, so the futures product’s launch is seen as a move to meet China’s increasing need to help its producers hedge against price fluctuations, said Jiang Mingde, chief counselor at domestic private equity Yixinweiye Fund. “China is the world’s largest importer of crude oil and the introduction of the yuan-denominated crude oil futures contract represents a milestone for China’s futures market,” said David Martin, Asia Pacific Head of Global Clearing at JP Morgan. While China’s oil producers have been trimming production in line with the tumbling crude prices in the past several years, “our reliance on imports has, however, increased as the demand continued to grow,” said Li Zhoulei, an analyst with Everbright Futures Co. “We thus need a tool to help establish an oil pricing system reflecting supply and demand in China and even Asia,” he added. “It helps domestic producers better manage risks.” With London’s Brent and US West Texas Intermediate having long dominated the world’s crude pricing, it is hoped that the China’s oil futures will help establish for the first time an Asia crude pricing system, Jiang said. “That helps stabilize crude prices in this region against continuous struggles between US and Middle East countries which cause increasing uncertainties to China’s oil market,” he added. In Asia, Singapore and Japan have been trading forward crude futures for years, yet a pricing system for this market hasn’t emerged so far, partly because demand in the two countries didn’t grow fast enough to boost trade. The oil futures contract launched today is likely to help China “perform such a task, with our huge (crude) demand,” said Yin Qiang, deputy secretary general of China Petroleum Circulation Association which comes under the Ministry of Commerce. A total of 156 domestic brokerages have registered at the Shanghai Securities Exchange to deal the oil future contracts by March 21, alongside 19 brokerages from abroad. The oil futures contract is China’s first futures product allowing foreigners to trade, and is settled in yuan “echoing (China’s) call for an increasing voice over global oil pricing and financial market,” Jiang said. He said that such mechanism would create more stable prices for oil futures, which should be the first step to attract foreign traders. But Li Yan, crude analyst at oilchem.net, a Shandong-based petrochemical consultancy, still thinks it is “too early to judge whether Shanghai crude will become a rival to Brent and WTI.” Jiang said that the key to that question lies in liquidity “which is now clouded with too many uncertainties.” “Too many factors would sway the result, such as the changing global trading relations which would affect China’s futures regulations,” Jiang said. The crude’s trading time is relatively short compared with other markets in the world, with WTI contracts able to be traded 23 hours per day, as “we have to open phase by phase, in case trading volume is too low at the beginning,” China petroleum circulation association’s Yin said. Another factor that affects liquidity is the development of the domestic crude industry. Trading in the near term would be dominated by China’s state-owned giants which long have rights to import crude, “but in fact the participation of more private oil refining companies will be a great bolster for higher liquidity following their rising capacity,” said Lin Boqiang, dean of China Institute for Energy Policy Studies at Xiamen University. In Shandong, over 90 private oil refiners supply almost 70 percent of the nation’s oil refining capacity. They were once looked down on by global players as “teapots” due to their small scale and poor quality, but now “they deserve a larger attention to boost China’s crude industry,” Lin said.

Shanghai cuts red tape to help business owners

Mon, 03/26/2018 - 18:01
SHANGHAI has cut about 40 percent of administrative approvals, saving business owners nearly half of their time, in a reform to cut red tape and improve business environment. Shanghai’s action plan aims to develop a city that has the most convenient trade and investment environment, scores highly in administrative efficiency, practices a standard service management and applies the finest law system, according to a notice issued by the city government and Party committee. The move comes in response to businesses’ concerns about the old system for doing business, which they regarded as cumbersome and expensive. The city has recently revamped policies regarding business registration, application for electricity connection, construction permits, property registration, cross-border trade and tax payment. Now it takes only 6 days to apply for a permit to start a new business, down from 22 days previously, and the number of procedures has been cut from seven to five. The city aims to complete the processing of over 90 percent of services online by 2018. Shanghai has scored well in many internationally recognized evaluations, ranking 9th on the Globalization and World Cities and 6th on the Global Financial Centres Index, the authorities said. Shanghai is also one of the two sample cities for China (the other is Beijing) in the business environment evaluation of the World Bank’s Doing Business report which is an indicator with broad international influence. Shanghai has adopted 24 of the 28 short-term reform suggestions from the World Bank on business environment as it aims to develop into a global city of excellence. “Business environment can always get better,” said Ma Chunlei, director of the Shanghai Development and Reform Commission. Shanghai will further enhance efforts to improve the business environment and speed up the development of a new open economic system to get closer to advanced global level. China was ranked 78th out of 190 economies for ease of doing business, according to a 2017 report by the World Bank, up from 96th spot in 2013.

Uber sells SE Asian business to Grab

Mon, 03/26/2018 - 18:01
UBER sold its Southeast Asian business to rival Grab yesterday, ending a bruising battle between the ride-hailing behemoths and marking the US firm’s latest retreat from international markets. Singapore-based Grab is taking over the ride-sharing and food delivery operations of Uber in the region. The California-headquartered company will receive a 27.5 percent stake in the business in return. The sale is Uber’s latest withdrawal from a market where it had faced tough competition, as new chief executive Dara Khosrowshahi seeks to stem huge losses and move past a series of scandals. After a fierce battle, Uber sold its China operations to rival Didi Chuxing in 2016 in return for a stake, and last year the US firm merged in Russia with the taxi-hailing app of Internet giant Yandex. The deal with Grab — which operates in eight Southeast Asian countries — is similar to the one struck with Didi, and ends a fight for market share in a region that is home to some 650 million people and an increasingly affluent middle class. “Today’s acquisition marks the beginning of a new era,” said Grab chief executive Anthony Tan. “The combined business is the leader in platform and cost efficiency in the region.” Khosrowshahi, who is joining Grab’s board as part of the agreement, said: “This deal is a testament to Uber’s exceptional growth across Southeast Asia over the last five years. It will help us double down on our plans for growth.” The value of the deal, which Grab said was the largest ever acquisition by a Southeast Asian Internet company, was not disclosed. Grab has long been the dominant force in ride-hailing in Southeast Asia.

SAIC to set up car plant in Egypt

Mon, 03/26/2018 - 18:01
SAIC Motor seeks to set up a car-making factory in Egypt, the country’s Minister of Trade and Industry Tarek Kabil said on Sunday.Kabil said in a statement that he reviewed with a visiting SAIC delegation the advantages and incentives provided by Egypt's newly approved investment law to encourage full car manufacturing, not just assembling parts, in Egypt.“The Ministry of Trade and Industry is ready to provide all support and assistance to help SAIC Motor enter the Egyptian market for auto manufacturing, especially in light of the state’s current policy that targets boosting auto manufacturing and putting Egypt on the map of this industry,” Kabil said.The factory that SAIC seeks to build in Egypt aims to not only meet the needs of the Egyptian market but also become a central point of SAIC exports to Arab and African states that have free trade agreements with Egypt.

Geely to sell autos under Lynk & Co

Mon, 03/26/2018 - 18:01
Chinese automaker Geely, which owns Sweden’s Volvo Cars, plans to sell cars under its brand Lynk & Co in the European market from 2020, a statement provided by the company said yesterday.Lynk & Co’s first model — 01 PHEV — will be made at Volvo's plant in Belgium in 2019 and sold in the European market in the first half of 2020. Lynk & Co said it will open its first European store in Amsterdam in 2019.The plan envisages Lynk & Co to open stores in Barcelona, Berlin, Brussels and London in the future and gradually expand its footprint to other European cities. Geely said it will also promote online sales in Europe.“Lynk & Co will manufacture vehicles in Europe and for Europe, with a key focus on hybrid vehicles at the first stage. We will target young consumers who are connected and live in urban areas,” said Alain Visser, senior vice president of Lynk & Co. Volvo Cars said in a statement that it is backing the expansion of Lynk & Co in Europe.“We see a big potential for this new brand entering the European market,” said Hakan Samuelsson, president and CEO of Volvo Cars.

New home sales surge on supply

Mon, 03/26/2018 - 18:01
NEW home transactions exceeded the 100,000-square-meter threshold for the first time in seven weeks in Shanghai amid a rebound in supply, latest market data showed. The area of new homes sold, excluding government-subsidized affordable housing, jumped 39 percent to about 116,000 square meters last week, Shanghai Centaline Property Consultants Co said in a report released yesterday. The outlying districts of Jiading and Qingpu kept their leading positions amid rather ample supply compared to their more centrally-located counterparts. Some 25,000 square meter of new houses were sold in Jiading during the seven-day period through Sunday, a week-over-week rise of 8.7 percent. Qingpu, where seven-day sales totaled around 21,000 square meters, saw a surge of 40 percent, Centaline said. The average cost of the new homes further rose to 46,562 yuan (US$7,369) per square meter, up a moderate 4.6 percent from the week earlier. Mid-end homes priced between 30,000 yuan per square meter and 50,000 yuan per square meter continued to dominate the local market with seven out of the 10 best-selling developments falling into that range, according to Centaline data. A project in southern Minhang District costing 68,881 yuan per square meter became the most sought-after after selling 14,770 square meters, or 128 units, during the seven-day period. About 126,000 square meters of new homes spanning four projects were released locally last week, compared to zero supply in the previous week.

No time to waste on e-commerce for watchmakers

Sun, 03/25/2018 - 18:01
A boom in online luxury goods sales is finally convincing high-end watchmakers, long sceptical that customers would pay thousands to buy intricate timepieces on the web, to step up their investments in e-commerce. Courting younger shoppers, brands large and small are joining an online push sweeping the luxury goods world, where web sales are already major growth drivers for fashion labels. “We didn’t realize the speed at which millennials would take to buying cars or watches online,” said Jean-Claude Biver, head of LVMH’s watch business, in an interview at the Baselworld watch trade fair. LVMH’s Tag Heuer, a label long associated with motor racing, is looking to fully build out its own shoppable sites over the next 18 months, Biver added. Tag already operates online stores in five countries including the United States and Britain, and has a partnership in China with JD.com, the company said. LVMH sister brands Hublot and Zenith are yet to follow suit. Many watchmakers have flirted with web sales, though often through one-off collaborations with multi-brand web retailers. Tech-savvy shoppers in Asia have partly inspired a drive to do more — China overtook the United States last year as the leading source of traffic to luxury watch websites, according to consultancy DLG. And watchmakers have reasons to take control of their online image, as websites run by unofficial resellers proliferate. “We want to reassure people, while taking into account that today clients also might like to buy their watch at home in the evening while they drink a glass of wine,” said Jerome Biard, chief executive of Corum, owned by China’s Citychamp. The Swiss brand’s first e-commerce site will be fully operational in about two months, Biard said. Web sales are expected to make up a quarter of all global luxury goods sales by 2025, up from around 9 percent last year, consultancy Bain & Co projects. There are notable holdouts — France’s Chanel shuns e-commerce for its coveted clothing, quilted handbags or watches. Watchmaker Rolex, owned by a private foundation, is not known to have any plans to build its own online shop. But others are stumping up serious cash, betting on online growth. Richemont, owner of Cartier and Baume & Mercier, is offering up to 2.8 billion euros (US$3.4 billion) for full control of multi-brand site Yoox Net-a-Porter. “There is no taboo with buying online anymore,” said Anish Bhatt, a watch enthusiast with 1.7 million followers on Instagram who works with brands such as Rolex, Richard Mille and Chopard on social media campaigns. Watchmakers were long hobbled by the perception sales could only happen in a certain environment, with “shop assistants wearing silk gloves, while you sipped champagne,” Bhatt added. Independent Swiss watchmaker Oris, Breitling, now owned by private equity firm CVC, and RJ, formerly known as Romain Jerome, have also confirmed plans to expand online operations. LVMH’s Italian watchmaker Bulgari already sells via its sites in the US, China, Japan and the UK, and is launching e-commerce to all of Europe by year-end.

Mutual funds land in Hongkou

Sun, 03/25/2018 - 18:01
Shanghai’s Hongkou District has lured one tenth of China's mutual funds by tapping its regional advantages and offering favorable policies to support the development of financial services, according to the district during the Eighth North Bund Wealth and Culture Forum held yesterday.As of the end of 2017, Hongkou — located in the city’s northeast — is home to 1,405 financial institutions, which manage over 4 trillion yuan (US$633.8 billion) of assets.Last year, Hongkou launched the North Bund Financial Hub to facilitate the development of fund companies within the district. A financial “golden triangle” has formed between the North Bund financial zone, Lujiazui in Pudong New Area, and the Bund.

Yuan crude oil futures start today

Sun, 03/25/2018 - 18:01
China will officially launch its new crude oil futures contract today at the Shanghai Futures Exchange in a move that is “an important measure of further opening up” of China’s futures market.The contract will be traded on the Shanghai International Energy Exchange, a unit of the Shanghai Futures Exchange, and will allow Chinese buyers to lock in oil prices and pay in yuan.The launch of the yuan-denominated trading will potentially shake up pricing of crude oil markets globally and challenge the dominance of the current global benchmarks.“Crude oil futures, as the first internationalized futures in China, is an important measure of further opening up ... and more importantly, improve the internationalization level of our futures market,” Cao Yanwen, an official of the Shanghai Financial Service Office, said at a press conference on Saturday.The contract aims to offer companies a hedging tool which can better reflect market conditions in the Asia-Pacific region, according to the exchange.

Sinopec to hike spending by nearly 18%

Sun, 03/25/2018 - 18:01
China’s Sinopec Corp said yesterday it would raise spending by 17.7 percent this year after posting its best annual earnings since 2013.The company, officially known as China Petroleum and Chemical Corp, said net income rose by 10.1 percent year on year to 51.1 billion yuan (US$8.1 billion) in 2017, while revenues climbed 22.2 percent to 2.36 billion yuan as oil prices advanced.Fourth-quarter net profit, however, came in at 12.746 billion yuan, down 26.1 percent year on year, according to Reuters calculations.In a statement to the Shanghai Stock Exchange, Sinopec said it had allocated 117 billion yuan of capital expenditure for 2018, up from an actual spending of 99.38 billion yuan last year.That includes a 55 percent hike in upstream spending to 48.5 billion yuan, as China’s biggest refiner looks to make the most of a rally in oil prices since early February to over US$70 a barrel.Rival PetroChina on Thursday said it would also lift spending on exploration and production in 2018, by 3.5 percent, despite a drop in fourth-quarter earnings.Sinopec said some of the funds would go toward producing more shale gas in southwest China, as well as on boosting output from oil projects in the country’s northwest.The company expects to produce 290 million barrels of crude oil in 2018, or around 795,000 barrels per day, which is slightly down from 293.7 million barrels in 2017 and would mean Sinopec’s oil output declining for a fourth straight year.It also plans to produce 974.1 billion cubic feet of natural gas, up 6.8 percent from 2017.“We expect the natural gas market to grow rapidly and international oil prices to be stable,” Sinopec said.

Swiss watcmakers see China driving sales growth

Sun, 03/25/2018 - 18:01
SWISS watchmakers expect further sales growth this year, driven by demand from China where a younger generation of shoppers discovers its appetite for watches, executives said. “The recovery is there,” Jean-Claude Biver, head of French luxury giant LVMH’s watch business, said in an interview at the Baselworld trade show. “Maybe it’s not quite as powerful as it seems but China is the driving force.” Swiss watch exports, the industry's best measure for market growth, rose 12.8 percent in the first two months of the year, with Hong Kong and Chinese mainland both rising around 30 percent. That followed a recovery in 2017 as a whole when exports added 2.7 percent — the first rise after two years of declines. Luxury firms from handbag makers to fashion labels are tapping into demand from a new generation of Chinese middle class spenders for branded goods. Biver said younger Chinese were now taking an interest in Swiss timepieces, often preferring wacky and striking designs or sporty models, to the small, discreet watches their parents favored, and benefiting LVMH brands like Hublot for instance. “Hublot only entered the Chinese market a few years ago, but in January and February, China was its No. 1 market,” Biver said, adding he expected Hublot and LVMH stablemates TAG Heuer and Zenith to outperform overall market growth this year, helped by improvements in Europe and the United States too.

ADB praises success across the economy

Sun, 03/25/2018 - 18:01
CHINA has made phenomenal achievements over the past 40 years, Takehiko Nakao, president of the Asia Development Bank, said yesterday. Rapid economic growth has driven its per capita income from one of the poorest in the world to the level of an upper-middle income country, Nakao said at the China Development Forum 2018 which opened yesterday. Poverty levels in China have fallen significantly. While 250 million people in rural areas lived below the national poverty line in 1978, the figure fell to 30 million at the end of 2017, he said. China has transformed from an economy with basic agriculture and technology to a global manufacturing powerhouse, and it is now transitioning to an economy driven more by consumption and services, he said. “China has become a frontrunner in areas such as e-commerce and shared economies. New technology and entrepreneurs are fostering the emergence of innovative industrial clusters.” As to the reasons behind China’s success, he pointed to “social drivers” as the key. “Reforms that started in 1978 unleashed people’s aspirations to grow, to invent and to live better lives.” He also noted China’s “unwavering” determination to adopt market systems and open trade and investment regimes. On challenges for the world’s second-largest economy, Nakao said China must ensure the entire population can enjoy the results of growth more equally and people enjoy better lives overall. Nakao noted that tackling climate change, promoting a better environment and an aging population are among other major challenges facing China.

Braced for any external financial impacts

Sun, 03/25/2018 - 18:01
CHINA’S financial sector is capable of resolving external impacts, the country’s central bank governor said yesterday when responding to questions on possible new risks from rising global uncertainties. “If external impacts spread to China, our banking system and securities and insurance markets, equipped with quantity and price regulation, are fully capable of defusing the risks,” Yi Gang, head of the People’s Bank of China, said at the China Development Forum in Beijing. Yi stressed the significance of forestalling systemic risks and dealing with domestic issues. “If we can handle our own issues properly, we will have a sound foundation to fend off external impacts.” When addressing the forum, the newly appointed PBOC chief listed the country’s main financial work as to implement prudent and neutral monetary policy, promote financial reform and opening-up, and defuse major financial risks to maintain stability. As the economy has produced a better-than-expected performance, China will keep its policy stance and strengthen financial support for the real economy, Yi said. The macro prudential regulatory framework will be improved, and M2 — a gauge of broad money supply — new loans and total social financing will see reasonable growth. Steady progress has been made in China’s financial opening-up and more measures are in the pipeline to ease access control, Yi said. “China will in the next step comprehensively adopt a negative list for market access management to propel two-way opening-up in its financial sector.” China will steadily push for the internationalization of the yuan, with efforts to further liberalize the capital account and enhance the global use of the currency. Yi also highlighted the battle against financial risks, saying the country will move to fix short links in financial supervision and crack down on illegal activities. China will adopt market-based measures including the debt-to-equity swap to rein in the rapid growth of social overall debts, Yi said.

Tax reform on the agenda

Sun, 03/25/2018 - 18:01
CHINA will step up making its taxation system and structure as effective as possible while paying close attention to international tax reform, Minister of Finance Liu Kun said yesterday. Value-added tax rates will see further adjustments, and those in sectors including manufacturing and transportation will be lowered. A total of 918.6 billion yuan (US$145.6 billion) was saved last year via China’s reform program to replace business tax with VAT. China will also reform its personal income tax system to raise tax breaks in relation to spending on children’s education and critical illness.

Shanghai economy grows steadily

Thu, 03/22/2018 - 17:01
SHANGHAI’S economy grew steadily in February as industrial output, consumer prices and foreign trade all rose. Its foreign trade increased 8.9 percent to 239.47 billion yuan (US$37.84 billion) from the same month last year, according to Shanghai Statistics Bureau. Imports rose 2.5 percent to 141.62 billion yuan while exports jumped sharply by 19.7 percent to 97.86 billion yuan compared to February last year. For January-February, the city’s total foreign trade rose 10.2 percent from a year earlier to 529.17 billion yuan. Shipments to Japan jumped 59.8 percent to 11.64 billion yuan in February. Exports to the United States rose 12.5 percent and those to the European Union gained 11.1 percent. Shanghai’s foreign direct investment grew 12.9 percent in contract value while capital that’s invested surged 30.8 percent in February. The tertiary industry accounted for 97.6 percent of the city’s total FDI contract value as it sealed 256 FDI projects worth US$394.7 million, up 19.1 percent year on year. Meanwhile, the city's value-added industrial output in January-February jumped 9 percent from a year earlier to 548.68 billion yuan, up from the 7.3 percent rise in the same period last year. Of the city’s six key industrial sectors, the output of biological medicine grew fastest by 15.7 percent to 16.24 billion yuan year on year, while the output of high-quality steel manufacturing fell 5.9 percent and that of petrochemical and fine chemicals shed 0.2 percent. Fixed asset investments in the city rose 10.2 percent to 87.54 billion yuan in January and February year on year, with investments in infrastructure up 12.4 percent and those in real estate added 10.1 percent. Shanghai port’s cargo throughput sank 1.3 percent to 49.80 million tons from February 2017. The container throughput rose 11.3 percent to 2.95 million TEUs (twenty-foot equivalent units). The city’s Consumer Price Index, a main gauge of inflation, rose 2.6 percent in February year on year, and grew 1.8 percent in January-February from a year earlier.

Higher-quality FDI and ODI in ‘new era’

Thu, 03/22/2018 - 17:01
CHINA sees recovery and steady growth in higher-quality inbound and outbound investment as the country enters a historic “new era” in its economic, political, cultural and social development, according to a KPMG report yesterday. This will support the ongoing transformation and upgrading of the Chinese economy as well as the vitality and resilience of global trade and investment flows, according to a report of KPMG China released at a closed-door meeting yesterday. “Without a doubt, China will continue to be an important source of growth for companies around the world – not only because of the ongoing expansion and transformation of its economy, but also because the Belt and Road initiative will lead to more win-win-win cooperation between Chinese and foreign companies in third-country markets,” Bill Thomas, chairman of KPMG International, said at the meeting. While growth in inward foreign direct investment has slowed, the market and policies for foreign investment are still expected to improve as China transitions to a “new economic cycle,” leading to a rebound in high-quality FDI, the report said. KPMG also forecast that China’s outbound investment will keep a medium-high level of growth in tandem with the B&R initiative while tighter scrutiny on outbound investment will, hopefully, lead to Chinese companies to focus on high-quality, value-added investments, according to the report. These efforts will create more opportunities for international private capital to invest alongside Chinese state capital, sovereign wealth funds and Chinese private investment in these projects.

Lanxess’s sales surge 30% in 2017

Thu, 03/22/2018 - 17:01
LANXESS posted a 30 percent surge in its sales in China last year as the German specialty chemicals company rode on the country’s “fast upgrading” in the auto and building markets. It didn’t unveil specific figures on China’s sales, but said the 30-percent jump in sales propelled China to account for 13 percent of its global sales in 2017. The group reaped 9.66 billion euros (US$11.93 billion) in sales worldwide last year. Although growth in China’s auto sales fell to 3 percent in 2017 from 13.7 percent in 2016, “its upgrading has brought higher-than-expected profit to us,” said Qian Mingcheng, Lanxess’s chief executive officer for China. The group’s engineering plastics and synthetic rubbers business also helped its “high growth” in China as these materials are replacing metal in cars to help reduce weight, he said.

ZTE’s unit to focus on China

Thu, 03/22/2018 - 17:01
ZTE Corp will set up an independent subsidiary for mobile business as its focus returns to China as the world's biggest smartphone market, the Shenzhen-listed firm said yesterday in Shanghai. The world’s No. 8 smartphone vendor will develop the potential of the Chinese market, which now only accounts for 10 percent of its global smartphone sales. Comparatively, ZTE is among the top 5 in major overseas markets including the United States, Canada, Mexico, Australia and Spain, said Cheng Lixin, CEO of ZTE Mobile Devices and chairman of the unnamed mobile business subsidiary. The subsidiary’s business will cover devices with cloud and connection technologies and industrial-use phones with special security features, according to ZTE. The company added that research, manufacturing and sales in the domestic market will also be part of the subsidiary’s purview.

Midea taps demand for robotics

Thu, 03/22/2018 - 17:01
MIDEA Group plans to increase industrial robot production capacity by fourfolds to 100,000 units annually by 2024, the Shenzhen-listed firm said yesterday. Midea will do so by building a new manufacturing and research plant in its headquarters in Shunde in Guangdong Province with expected annual production capacity of 75,000 units in 2024. Combined with Midea-Kuka’s current capacity, the annual production capacity will hit 100,000 units then, Midea said in a statement to the Shenzhen Stock Exchange. Midea and Kuka, which the former acquired last year, also decided to set up three joint ventures to “ultimately boost a fast and comprehensive growth in the automation business”, to tap the rising demand in smart manufacturing, smart healthcare and smart logistics in China. The joint ventures will be equally owned by the two partners.

Driverless cars tested on Beijing’s roads

Thu, 03/22/2018 - 17:01
BEIJING released its first temporary license plates for Baidu’s self-driving vehicles for public road testing yesterday. The capital has opened 33 roads with a total length of 105 kilometers for autonomous car testing outside the Fifth Ring Road and away from densely-populated areas on the outskirts. According to regulations for managing road testing for self-driving vehicles, autonomous vehicles are eligible for public road testing only after they have completed 5,000km of daily driving in designated closed test fields and passed assessments. The test vehicles must be equipped with devices that can monitor driving behavior, collect vehicle location information and check whether a vehicle is in self-driving mode. Test drivers must have received no less than 50 hours of self-driving training. Beijing has built its first closed test fields in Haidian District, covering about 13 hectares. The licenses for road testing are valid for 30 days and license holders can apply for renewal after self-driving cars pass assessments.

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