SUNING Sports said yesterday it has completed a series of financing led by Alibaba Group and Goldman Sachs as it seeks to cash in on China’s booming sporting industry.
This follows a share-swap between Alibaba and retail conglomerate Suning Commerce Group in 2015. Suning Sports didn't reveal the actual amount of the latest fund raising.
The company is a subsidiary of Suning Commerce Group which owns almost 70 percent stake in Italian soccer club Inter Milan, and has been striving to drive synergies between Suning's core retail business and its video streaming unit PPTV.
Alibaba’s video streaming affiliate Youku Tudou would serve as a platform for content collaboration after the financing deal.
Sunday’s FIFA World Cup fiinal between France and Croatia drew 24 million viewers to Youku, which attracted 180 million viewers during the series.
PPTV will focus on the streaming of professional sports events and Youku wil leverage its expertize in sports entertainment.
Suning Sports vice president Mi Xin said the two parties would complement each, combining online and offline resources in line with their collaboration of the past few years.
President of Alibaba’s media and entertainment business group Yang Weidong said the partnership seeks to dive further convergence through collaboration on sporting events. The central government aims to build a sports industry worth 5 trillion yuan (US$813 billion) by 2025, and online platforms have been vital in driving fan engagement.
THE European Union’s trade commissioner said yesterday she hopes an EU mission to Washington will ease a transatlantic trade dispute but the bloc is preparing a list of US imports to hit if the United States imposes tariffs on EU cars.
Trade Commissioner Cecilia Malmstrom will travel to Washington on July 25 with European Commission President Jean-Claude Juncker, with the latter due to hold talks focused on trade with President Donald Trump.
The US imposed tariffs on EU steel and aluminum on June 1 and Trump is threatening to extend them to EU cars and car parts. Malmstrom said the US car sector was healthy and that no one involved in the sector had called for tariffs.
“We are preparing together with our member states a list of rebalancing measures there as well. And this we have made that clear to our American partners,” Malmstrom said.
The EU has already imposed its own import tariffs on 2.8 billion euros (US$3.25 billion) worth of US products ranging from bourbon to motor-bikes.
Corresponding measures for cars would be far higher.
EU steel and aluminum exports to the United States, which are now subject to tariffs, are worth some 6.4 billion euros per year. EU car and car part exports are worth 51 billion euros.
The Commission on Wednesday briefed representatives of EU countries on possible action.
One EU diplomat familiar with Wednesday’s talks said the Commission gave no examples of US products that might be hit, but said they could in theory total 9 billion euros, although it could also go for a larger list of products with lower tariffs.
Trump’s top economic adviser, Larry Kudlow, said on Wednesday he expected Juncker to come with a significant trade offer.
EU officials have downplayed suggestions Juncker will arrive with a novel plan to restore relations.
“The aim of President Juncker’s visit is to try to try to see how we can de-escalate the situation,” Malmstrom said.
“We don’t go there to negotiate anything.”
THE European Union will consider introducing tariffs on coal, pharmaceuticals and chemical products from the United States if President Donald Trump imposes restrictions on European cars, Germany’s Wirtschaftswoche magazine reported yesterday.
“Depending on progress made during the visit of European Commission President Jean-Claude Juncker, the member states will decide on their future strategy at the end of next week,” an unnamed EU diplomat was quoted as saying.
The list of countermeasures could then be agreed on. Juncker heads to Washington next week to discuss strained relations after Trump imposed tariffs on EU steel and aluminum, and following threats to extend those to cars.
CHINESE automaker Guangzhou Automobile Group Co Ltd and battery manufacturer Contemporary Amperex Technology Ltd said yesterday they will set up two new joint ventures to produce and sell batteries for new-energy vehicles.
“The joint ventures are going to deepen cooperation between CATL and GAC Group in the field of new-energy vehicles. We will fully take advantage and leverage the resources of both parties to further expand business scale, and enhance profitability and competitiveness,” CATL said in a statement.
China plans to accelerate development of battery-related technologies to boost the new-energy vehicle sector.
The business scope, registered capital and shareholding structure of the two new joint ventures, both in Guangzhou, are different. With registered capital of 1 billion yuan (US$148.9 million), the first joint venture, temporarily named Amperex GAC Power Battery Co Ltd, will focus on manufacturing, development, sales, after-sales service and technology consultation of lithium batteries, batteries with large-scale energy storage capacity and battery systems.
The second, temporarily named GAC Amperex Power Battery System Co Ltd, will focus on manufacturing, development and sales of battery systems, technological development, consultation and service.
CHINA Xintiandi, a subsidiary of Shui On Land, said the first batch of INNO projects, its newest generation office brand, will initially open in Nanjing and Shanghai during the second half of this year.
Located in New Jiangwan City of northeastern Yangpu District, INNO KIC, an over 40,000-square-meter development consisting of office and retail space, is scheduled be unveiled by the end of 2018.
“Our newest office brand INNO, initiated earlier this year, mainly comprises six modules that cater to clients of various sizes with different demands,” said Allan Zhang, executive director of Shui On Land and China Xintiandi.
“The INNO projects are positioned to provide office space solutions for both individual and corporate tenants with a distinguished focus on business social.”
The six modules are INNO office, which provides traditional office space, INNO Social, which combines meeting and recreational activity services, INNO Work, which offers decorated office space for small and medium-sized companies, INNO Studio, which provides one-stop service for startup firms, as well as INNO Live and INNO Space, which offer apartments and maker spaces, respectively.
HYPERLOOP Transportation Technologies said yesterday it will team up with a southwestern Chinese city to build a new 10-kilometer test track for its high speed hyperloop transportation system.
California-based HyperloopTT is one of several ventures to take Elon Musk’s idea for a new type of transport system propelling capsules through vacuum-sealed tunnels and attempt to make it a reality.
It has struck similar agreements with several other countries, with construction of its first capsules — intended to magnetically levitate in low friction tubes — underway in France.
The remote city of Tongren in impoverished Guizhou Province will host the latest demonstration project.
“China leads the world in the amount of high-speed rail constructed by far,” HyperloopTT chairman Bibop Gresta said. “And now they are looking for a more efficient high-speed solution in hyperloop.
“We have spent the past few years finding the right partners to work with in China. Now, with a strong base network of relationships in place, we are ready to begin work to create the system.”
HyperloopTT said financing would come from a public-private partnership, with Tongren contributing 50 percent.
“HyperloopTT will be responsible for providing technology, engineering expertise, and essential equipment,” the company said, without providing further details.
Chinese media said Tongren and HyperloopTT would invest in the demonstration track on a one-to-one basis. State-owned China Aerospace Science and Industry last year announced a similar project in the city of Wuhan.
CHINESE commercial banks reported net forex purchases in the first half of the year, the first time in three years, the country’s forex regulator said yesterday.
Chinese lenders bought US$928.2 billion of foreign currencies and sold US$914.4 billion from January to end-June, resulting in a net purchase of US$13.8 billion, according to Wang Chunying, spokesperson for the State Administration of Foreign Exchange.
In the same period last year, banks saw a net forex settlement deficit of US$93.8 billion, Wang told reporters.
Commenting on the change from deficit to surplus, Wang said it is of testimony to the greater steadiness and balance in China’s forex market.
She said Chinese banks had seen continued “great” deficits in forex settlement in the past three years during the January-June period, with a net sales of US$173.8 billion registered in the first half of 2016.
“External complexity, volatility, and uncertainties have significantly mounted,” Wang said.
“However, China’s economy remained stable with opening-up deepening and the forex market stable in the first half of the year, which is quite remarkable.”
She noted the stable exchange rate of the Chinese currency is another sign of the health of China’s forex market.
The currencies of major developed economies weakened by 2.7 percent against the dollar in the first six months, while emerging market currencies shed 7.3 percent, Wang said.
“In contrast, the renminbi’s central parity rate against the dollar dipped 1.2 percent.”
Amid the turbulence in emerging markets, China has seen solid economic fundamentals, a sound balance of payments, a safe foreign debt ratio and abundant forex reserves, the spokesperson said.
“External impact has been well handled, leaving no major impact on cross-border capital flow,” Wang said.
China’s economy expanded steadily in the first half of 2018, with gross domestic product up 6.8 percent year on year, exceeding the government’s annual growth target of around 6.5 percent, official data showed Monday.
DIDI said yesterday it has set up a joint-venture with SoftBank called Didi Mobility Japan Corp and aims to roll out the service starting in autumn this year.
Didi aims to launch the ride-matching app for riders, drivers and taxi operators in Osaka, Kyoto, Fukuoka, Tokyo and other major Japanese cities.
The Chinese mobility service provider has been keen on overseas expansion in recent years and entered into a number of partnerships to drive synergies using its local business and technology capability.
“We look forward to developing extensive collaborations with all industry players to assist in smart city initiatives in Japan and around Asia,” says Jean Liu, president of Didi Chuxing.
“Combining Didi’s outstanding innovation with SoftBank’s extensive business base including advanced network infrastructure, I believe the joint venture can provide new value to both the consumers and taxi companies of Japan,” says Ken Miyauchi, president and CEO of SoftBank Corp.
Japan’s taxi market has been tough to crack for Internet mobility service providers due to stiff transport regulations and taxi companies’ unwillingness to respond to changing market situations, although it still remains the world’s third largest taxi market.
Uber is also targeting the market, of which Softbank is also a minority stake holder.
Didi said new customized roaming features will be added to Didi’s Chinese application, including real-time in-app Chinese-Japanese instant message translation, allowing Chinese customers to directly access Japanese car-hailing functions.
Didi Japan also aims to support the Japanese taxi industry to capture these new opportunities in anticipation of the 2020 Tokyo Olympics.
Didi last month said it will launch a separate application for its chauffeur service called Didi Premium following safety concerns over private cars operation on its car-haling platform.
SHANGHAI, Beijing and Shaanxi Province plan to cooperate as inbound tourism hubs, with support from travel agencies including the country’s top online operator, Ctrip.
It is the first inter-provincial cooperation plan for inbound tourism and aims to promote Chinese culture and boost economic development in the regions, government and industry officials said yesterday.
A memorandum of understanding signed by the three provincial-level regions yesterday calls for an annual conference to share experiences and a special fund to promote and develop inbound tourism in the regions.
The hubs will “tell Chinese stories, spread Chinese culture and showcase the wonders of China,” which will boost the economy and cultural development of the provinces.
About 139 million tourists visited China last year.
CHINA’S nascent health insurance market is a huge “blue sea” with strong potential, but also significant challenges, said a new report by Ernst & Young and CPIC Allianz Health Insurance Co Ltd released yesterday.
With China’s population aging, more people suffering chronic diseases and a growing middle class, needs for health insurance are becoming more diverse.
Health insurance companies must become more efficient and seek more external cooperation, the joint report said.
Building a commercial health insurance market is not only crucial to developing a multi-level market but is also a key part of China’s “Healthy China 2030” initiative — which sees public health as a criticial for economic and social development — said Jack Chan, EY’s China financial services managing partner, adding major challenges remain to break previous patterns.
CHINA yesterday refuted the remarks made by a senior US official who blamed China for the bilateral trade dispute, saying his words distorted the facts.
According to reports, Larry Kudlow, head of the White House Economic Council, said the United States and China failed to reach an agreement to resolve the trade dispute, and China should take the responsibility for that.
He said China could end the US tariffs by providing a more satisfactory approach.
Chinese Foreign Ministry spokeswoman Hua Chunying told a news briefing that Kudlow’s remark distorted the facts and is astonishing and beyond imagination.
The arbitrary and unreasonable decisions and discreditable behaviors of the US are the direct and fundamental reason for the dispute, Hua said.
China has made utmost efforts to push for a resolution to the issue through dialogue and consultation and avoid escalation of the trade dispute, Hua said.
The US behavior will only seriously damage its own reputation, and it is completely unhelpful to resolving the issue, she said.
“We have confidence and enough capabilities to safeguard our legitimate interests, and make joint efforts with other countries to maintain international rules and the multilateral trading system,” she said.
On Wednesday, Chinese Ambassador to the US Cui Tiankai said China will not yield to trade bullying and “maximum pressure” by the US government.
In an article published in USA Today, Cui said China showed “maximum sincerity and patience” to engage in four rounds of high-level economic talks with the US from February to June this year.
“Unfortunately, the US has betrayed its own words. It brazenly abandoned bilateral consensus and insisted on fighting a trade war with China, forcing us to take countermeasures,” he said.
China, on the other hand, will continue its reform and opening-up, he said, citing some recent major steps.
“Tariffs on 1,500 types of consumer goods have been lowered considerably. The import tariff on automobiles has been cut from 25 percent to 15 percent. The revised negative list for foreign investment released late last month substantially eased market access restrictions for foreign investors. In November, China will host our first International Import Expo in Shanghai,” he said.
“With all of this as a backdrop, it is absolutely beyond our understanding that the US government initiated the trade war with such determination,” said Cui. “Does the US government genuinely believe China would possibly yield to such unreasonable policy?”
“Anyone familiar with Chinese history knows that ‘maximum pressure’ doesn’t work for our nation,” he said. “Trade bullying will only backfire. There is no winner in a trade war. The US will only end up hurting itself and the world.”
China’s policy has long been geared toward dialogue and consultation when attempting to resolve trade disputes, the Chinese diplomat said.
“To be sure, there is room for China to improve its trade policy and address structural economic issues. We certainly are open to addressing reasonable American concerns,” he said. “But the two sides should conduct dialogue and cooperation on the basis of mutual respect and trust.”
“For great powers like China and the US, competition — even conflict — is natural. It is, however, vital for us to manage such competition in an effective and constructive way,” Cui said.
He said China’s economic success “has never been achieved by stealing from anyone, and never will be.”
In the article, Cui rebutted the US government’s accusations of China forcing technology transfers and stealing intellectual property rights.
He wrote that China is “strategically committed to and has recently made demonstrably significant strides” in IPR protection.
“We have codified a robust IPR protection legal system, including setting up IPR courts and dedicated tribunals that enhance the dominant role of the judiciary in IPR protection,” he said.
“Indeed, improving IPR protection is crucial to China’s own development, particularly technological innovation,” stressed the Chinese diplomat.
On alleged “forced technology transfer,” Cui said, “Let’s be clear: The Chinese government has never made any such request to foreign companies.”
DESPITE mounting external uncertainties, China’s economy remained resilient with a sustainable growth pattern that will help it meet its growth target for the year.
The country’s gross domestic product expanded 6.8 percent year on year in the first half of 2018, well above the government’s annual growth target of around 6.5 percent, data from the National Bureau of Statistics showed.
In Q2, China’s GDP rose 6.7 percent year on year, the 12th straight quarter the GDP growth rate has stayed within the range of 6.7 to 6.9 percent.
At a time when rising protectionism dampens global growth prospects, such strong performance is a hard-won result that proves the effectiveness of government-led structural reforms.
A closer look at the economic data for H1 showed that China’s growth is less reliant on exports and more dependent on internal factors such as consumption and entrepreneurship.
Final consumption contributed 78.5 percent of the economic expansion in January-June, up from 58.8 percent for the whole year of 2017, according to NBS data.
The almost 20-percent hike didn’t tell the whole story. A rising middle class is fueling demand for high-quality and innovative products, boosting sectors including tourism, culture and health care.
As consumption contributes more and more to economic growth, China’s economy will likely remain stable in the short term, CITIC Securities said in a research paper.
Entrepreneurship and innovation are also providing sustained support for the economy. In the past five years, the number of market entities increased by 80 percent, reaching over 100 million. In H1, nearly 10 million new market entities were added, up 12.5 percent year on year.
High-tech sectors, as well as strategic emerging industries, registered stellar performance in H1, with the increase of output in these sectors all outpacing average industrial output growth.
Thanks partly to the structural improvement, China is confident and capable of achieving its annual growth target, according to Yan Pengcheng, spokesperson for the National Development and Reform Commission.
Years of economic transformation has turned China into an economy mainly driven by consumption, services and domestic demand instead of investment and exports, which will provide support for China’s future economic development, Yan said.
Meanwhile, China has experience in managing risks and challenges from previous financial crises, as well as sufficient room to adjust policies to cope with shocks from uncertainties in the world economy, he said.
In the second half of the year, China will make macro-policies more flexible and coordinated to keep economic fundamentals stable, Yan said, pledging to further unlock domestic demand, push forward reform in key areas, improve the business environment and continue opening-up.
“We have the confidence, strength, and conditions, and we are capable enough to counter uncertainties in the world economy with certainties from China’s economic resilience and sustainability,” Yan said.
CHINA’S rising affluent population — expected to hit 280 million by 2020 — showed more financial confidence despite economic headwinds, a survey showed yesterday.
The 2018 China Rising Affluent Financial Well-Being Index, which gauges financial confidence among those earning between 125,000 yuan and 1 million yuan (US$18,601-US$140,000) annually, increased 2.17 points from last year to 68.2.
The survey was conducted by Shanghai Jiaotong University’s Shanghai Advanced Institute of Finance, with international financial sevices provider Charles Schwab & Co Inc.
It assessed the sentiment, opinions and investment behavior of more than 2,600 people in nine major cities, including Beijing, Shanghai, Guangzhou and Chengdu.
The increasing confidence among the affluent population — forecast to account for 25 percent of consumption by 2020 — comes despite global trade tensions, stock market fluctuations and China’s far-reaching regulatory de-risking campaign.
“Financial de-risking and market opening-up are having a positive effect on China’s rising affluent investors,” said SAIF Professor Wu Fei. “But while confidence is growing, the expectations of the rising affluent class are also shifting.”
The rising affluent class increasingly view property as a core part of their financial future. Almost half those surveyed identified real estate as a critical component of their financial planning, indicating too heavy a reliance on property and ignorance of other opportunities, said Lisa Hunt, executive vice president of business initiatives at Charles Schwab.
SUZHOU-BASED Ascentage Pharma said it has raised US$150 million in series C funding for its pipeline of innovative cancer drugs as Chinese drug developers move to turn lab work into new drug launches in the world’s largest pharmaceutical market.
The new financing will be used to fund its R&D and manufacturing facilities as well as new hiring at a time when the government is urging the introduction of innovative treatments for prevalent severe diseases, such as cancer and cardiovascular diseases, by encouraging startups in the pharmaceutical industry.
Ascentage plans to build its team up to 300 members within six months, and 400 by the end of next year.
“With this financing, we are well positioned to achieve key data milestones as we continue to advance our growing pipeline of novel small molecule candidates,” said Chairman and CEO Yang Dajun.
The latest round takes the total amount of capital raised by Ascentage to date to US$240 million, and was led by existing investors YuanMing Prudence Fund and Oriza Seed Venture Capital, as well as new investor Teng Yue Partners.
FOREIGN insurance brokers are riding on the wave of China’s reform and opening-up policies after they won approval to widen the range of their operations.
Willis Insurance Brokers Co Ltd, a subsidiary of the London-based Willis Towers Watson Group, was the first to get the nod from the Shanghai bureau of the China Insurance Regulatory Commission to expand its business scope.
The firm’s business was previously confined to large-scale enterprises, but now it can serve companies of all sizes, as well as individuals.
Willis Insurance chief executive officer Xu Huizhi said that about 80 percent of its clients are state-owned companies. He believes that as China opens its door wider to the outside world, it offers plenty of room for foreign companies to bring more global expertize to the world’s second largest economy.
In developed markets, more than 90 percent of companies use insurance brokers, Xu said, but in China the rate is only 20-30 percent.
To better capture the opportunities in this round of opening-up in the financial sector, JLT Insurance Brokers Co Ltd (JLT China) has moved its headquarters from Guangzhou to Shanghai.
“It makes sense for us to do so, as Shanghai is building itself towards being an international financial hub and we will have closer cooperation with our partners here,” said JLT China chief Rong Honggang.
Rong said JLT would now target the rising number of affluent Chinese with tailor-made products. JLT set up a new company this year offering risk management and insurance services for engineering enterprises.
President Xi Jinping announced at this year’s Boao Forum for Asia, a non-profit group hosting forums of regional leaders, that China will expand foreign players’ access and speed up opening up the insurance industry.
In response to a call from the central government, the Shanghai Financial Services Office rolled out a slew of measures to boost the city’s financial reforms in May.
The plan raises foreign equity caps in the banking, securities and insurance industries and widens their business scopes.
CHINA will work to tackle the weak areas in its business environment to further improve overall competitiveness and sustain the sound momentum of steady economic performance, the State Council’s executive meeting chaired by Premier Li Keqiang decided yesterday.
The Chinese government places high importance on improving the country’s business environment. Li has urged government authorities to address the top concerns of businesses and tackle institutional deficiencies to cultivate a world-class business environment in China.
“In the face of growing international competition, we must fully appreciate the pressing need for stepping up the reforms of our government’s functions, which are crucial for energizing market entities and grassroots initiative and for improving China’s overall business environment,” Li said at the meeting.
Recent years have seen the government’s relentless efforts in cutting red tape in light of market bottlenecks and bringing the country up to advanced global standards in terms of business-friendliness. These reform endeavors have achieved notable results.
Latest figures from the Ministry of Commerce showed that in the first half of this year, 29,591 foreign-invested enterprises were established, up 96.6 percent year on year.
According to the 2017 report of the World Bank, China ranked the 78th in ease of doing business, up by 18 spots over 2013. In the revised negative list for foreign investment the Ministry of Commerce issued in June, the number of restrictive items was cut to 48 from 63 in 2017.
It was decided yesterday that another 17 administrative permits will be no longer required, including in establishing nursing home for the elderly, declaring invalidity of business licenses, project approval for foreign businesses to invest in road transport, and work permit for Taiwan, Hong Kong and Macau residents to work on the mainland.
Six of the above 17 items will be revoked through applying for legal revisions.
Customs clearance and quarantine will be further integrated, and procedures for import and export registration will be streamlined. Statistics from the departments of market oversight and commerce will be used directly for customs registration.
Taxation procedure will be streamlined, and time required for enterprise tax payments will be reduced. Procedure required for immovable property registration will be completed within 15 working days, and time required for a mortgage registration will be shortened to within seven working days.
At the same time, reforms on the enterprise investment project commitment system will be accelerated, with government authorities setting criteria and businesses keeping good credit record. A new negative list for businesses will be issued, and any restrictions hampering a level playing field for businesses will be abandoned. Behaviors such as counterfeiting, infringements and illegal charges will be cracked down.
Meanwhile, efforts will continue to be made in facilitating public services and reforming administrative examination and approval system by reducing the time, documentation and cost required, and enhancing transparency.
“Our efforts in streamlining administration, delegating powers and improving government services boil down to striking a proper balance between the government and the market and truly allowing the market to play a decisive role in allocating resources,” Li pointed out.
“Instead of redistributing powers among government departments, we should give full respect and delegate due powers to market entities.”
It was also decided at the meeting that China will carry out phased evaluations of the businesses environment across the country and offer further incentives for better performers. Some 28 steps of improving the business environment that have worked well in some regions, including the one-stop service model, and Internet Plus medical insurance, will be disseminated to encourage competition in the quality of business environment across the country.
“The market and our people will have final judgment on the success of our efforts to streamline administration.” Li said. “A key responsibility of the government is to give timely response to public concerns and faithfully live out our commitment to people-centered development.”
THE fast-growing market demand for civil aircraft and the rapid development of the aviation industry offer unprecedented opportunities for cooperation between China and Europe, which has seen remarkable progress in recent years.
At the Farnborough International Airshow southwest of London, Aviation Industry Corporation of China (AVIC) announced the establishment of AVIC Cabin Systems Co Ltd (ACS).
The operational headquarters of ACS, with its products covering most segments of the cabin interiors industry with high-profile customers such as Boeing and Airbus, is based in London.
“The fact that the company’s operational headquarters is based in London demonstrates AVIC’s confidence about the business environment in the UK and Europe and it is another important step of AVIC’s globalization,” said Chairman of AVIC Tan Ruisong at the launching ceremony.
Statistics show that the global market for cabin interiors in 2017 was valued at US$12.6 billion and is anticipated to grow to US$14.4 billion in 2020 and US$18.4 billion in 2025 with an annual growth rate of nearly 5 percent.
Gary Montgomery, CEO of Thompson Aero Seating, a major ACS supplier of first class and business class seats based in Belfast, Northern Ireland, said the establishment of ACS will help create synergy across the cabin companies and provide better products and services to global customers, adding that he is optimistic about the prospects for ACS.
Chinese ambassador to the UK Liu Xiaoming, who also attended the ceremony, said it is exciting to witness “China-UK cooperation on aviation moving up to a new level.”
The event has a significant impact on the aviation sector in both China and the UK and world aviation development, he said.
As early as 1997, the Aviation Working Group was set up under the China-UK Joint Economic and Trade Commission in a move to enhance cooperation on aviation technology and engineering.
In 2017, a major outcome was reached at the 9th China-UK Economic and Financial Dialogue to expand air traffic rights. Under this arrangement, the number of direct flights between the two countries was to increase by 50 percent to 150 per week. Recently, Chinese airlines opened five new direct flights between China and Britain.
“It is amid such an exciting development that AVIC Cabin Systems is born. This meets the need of upgrading China-UK ‘air corridor’. It is a vivid example of the thriving cooperation between our two countries on aviation,” said the Chinese ambassador.
The Chinese aviation industry, although a late starter, has grown rapidly to become an important pillar of China’s economic restructuring. China is considered the world’s most promising aviation market. By 2020, China will have over 500 general aviation airports and more than 5,000 general aviation aircraft.
Last month, China issued a Special Management Measures (Negative List) for the Access of Foreign Investment (2018) to further increase access to the manufacturing sector. Foreign-ownership limits for manufacturers of certain aircraft, including trunk route aircraft, regional aircraft, general-use aircraft, helicopters, drones and aerostats, were removed.
“These measures will help accelerate the integration of China’s aviation industry in the global supply chain. They will also create growth opportunities for global partners, including those in the UK,” said the ambassador.
The week-long Farnborough International Airshow kicked off on Monday with exhibitors from nearly 100 countries. The presence of more than 20 Chinese aviation companies is the largest in the show’s history, with a 70 percent growth in participation since the last show in 2016.
Xu Gang, CEO of Airbus China, said the long-standing cooperation between Airbus and China is an typical example of China-Europe cooperation in the high-tech field.
Airbus has committed to raising A320 production capacity at its final assembly line in Tianjin in north China, from four to six per month by 2020. It has delivered more than 370 aircraft since the FAL started operation in 2008 as the first Airbus single aisle Final Assembly Line outside Europe.
The increase in production also requires strengthened capacity from the Chinese partners, said Xu. The Airbus A320 FAL in Tianjin is a joint venture involving Airbus, the Aviation Industry Corporation of China and the Tianjin Free Trade zone.
Meanwhile, Airbus has announced that its second global innovation center will be established in Shenzhen, in Guangdong province, to accelerate innovation and shape the future of flight.
“China enjoys huge capability and potential in the aviation industry, and I have full confidence in the future of Chinese aviation market,” Xu said.
CHINESE authorities have cut flag carrier Air China’s Boeing 737 flights and revoked the flying licences of the cockpit crew involved in a mid-air emergency sparked by a co-pilot’s vape smoke.
An Air China 737 made a rapid emergency descent last week after the co-pilot mistakenly turned off air-conditioning systems in a bid to conceal his e-cigarette smoke.
The incident, which resulted in the deployment of passenger oxygen masks, occurred on a flight from Hong Kong to Dalian, northeast China’s Liaoning Province.
The Civil Aviation Administration of China has cut the carrier’s Boeing 737 flights by 10 percent and ordered it to undertake a three-month safety overhaul, China Central Television said yesterday.
The cuts to the carrier’s Boeing 737 flights amount to 5,400 hours a month, it said.
The aviation watchdog also fined Air China 50,000 yuan (US$7,500).
Air China operated 269 Boeing 737s out of its 655-strong fleet at the end of December, according to its full-year report issued in March. It has 311 Airbus A320 and A321 jets.
BOCOM International analyst Geoffrey Cheng said the crackdown would likely have an impact on Air China’s flight schedules, especially as it enters peak travel season, but could also prompt the airline to cut poorly performing routes. “It could have pros and cons,” he said.
The CAAC has said the drama was triggered when the co-pilot, trying to prevent his vape smoke from spreading into the main cabin, accidentally switched off air conditioning.
That led to a decrease in cabin oxygen levels which in turn set off an emergency warning system indicating the jet may have flown too high and instructing the pilots to quickly descend.
Smoking is not allowed aboard Chinese commercial passenger flights.
Chinese media reports quoted passengers and flight-tracker sites as saying the plane quickly descended as much as several thousand meters.
There were no injuries to the 153 passengers and nine crew.
EU antitrust regulators hit Google with a record 4.34 billion euro (US$5 billion) fine yesterday for using its Android mobile operating system to squeeze out rivals.
The penalty is nearly double the previous record of 2.4 billion euros which the company was ordered to pay last year over its online shopping search service.
It represents just over two weeks of revenue for Google parent Alphabet Inc and would scarcely dent its cash reserves of US$102.9 billion. But it could add to a brewing trade war between Brussels and Washington.
EU antitrust chief Margrethe Vestager said she very much liked the United States, countering a reported remark by President Donald Trump that she “hated” the country.
“But the fact is that this has nothing to do with how I feel. Nothing whatsoever. Just as enforcing competition law, we do it in the world, but we do not do it in political context,” she said.
Google said it would appeal.
“We are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favour of proprietary systems over open platforms,” Google CEO Sundar Pichai said in a blog.
Vestager’s boss, Commission President Jean-Claude Juncker, is due to meet Trump next Wednesday in an effort to avert threatened new tariffs on EU cars amid Trump’s complaints over the US trade deficit.
Vestager also ordered Google to halt anti-competitive practices in contractual deals with smartphone makers and telecoms providers within 90 days or face additional penalties of up to 5 percent of parent Alphabet’s average daily worldwide turnover.
“Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere,” Vestager said.
Asked on if breaking up Google would solve the issue, a call made by a number of Google foes, she said she was not sure if that was the solution.
“I don’t know if it will serve the purpose of more competition to have Google broken up. What would serve competition is to have more players,” Vestager said.
On concerns that Google may decide to charge for Android, Vestager said her ruling was not related to the way the company operates.
“This is not a judgment on a business model. There is still a possibility to monetize its operating system. Revenue from its app store is quite substantial,” she said.
THE European Union will impose duties from today on Chinese electric bicycles in a move to curb cheap imports that European producers say are flooding the market.
The duties are the latest in a series of EU measures against Chinese exports ranging from solar panels to steel, which have sparked strong words from Beijing.
The EU shares US concerns about technology transfers and state subsidies but has called on countries to avoid a trade war. This month, the United States and China slapped tariffs on US$34 billion of each other’s imports.
The European Commission, which is carrying out an investigation on behalf of the 28 EU members, decided that tariffs of between 27.5 and 83.6 percent should apply for all e-bikes coming from China, the EU official journal said.
Taiwan’s Giant, one of the world’s largest bicycle makers with factories on China’s mainland as well as in the Netherlands, was subject to the lower rate of 27.5 percent.
The investigation is set to run until January, when definitive duties typically lasting five years could apply.
The Commission found Chinese exports of e-bikes to the EU more than tripled from 2014 to the 12 month period to September 2017. Their market share rose to 35 percent, while average prices fell 11 percent.
The European Bicycle Manufacturers Association, which brought the case, said it applauded the decision, adding the duties would give European e-bike makers the chance to recover lost sales.
EU producers include Dutch groups Accell and Gazelle, Romania’s Eurosport DHS and Germany’s Derby Cycle Holding. Imports of Chinese e-bikes were subject to registration from early May, meaning the duties could be backdated to then. There is a parallel EU investigation into whether Chinese e-bikes have benefited from excessive subsidies.
Volkswagen Group China sold a total of 1.99 million vehicles on China’s mainland and in Hong Kong in the first six months, up 9.2 percent year on year, to Volkswagen said on its official website yesterday.“The performance for the first half of 2018 is very positive with nearly double-digit growth, which provides us with a confident outlook for the rest of the year,” said Jochem Heizmann, president and chief executive officer of Volkswagen Group China.Heizmann added that sales growth is driven by the company’s strong sport utility vehicle offensive and the robust performance of sedan models.China’s auto sales climbed 5.6 percent from a year ago to 14.06 million vehicles in the first half of this year, according to data from the China Association of Automobile Manufacturers.The German automaker also said lower import tariffs on cars and auto parts, which came into effect on July 1, impacted sales in the overall market in June and July, as some consumers postponed their purchasing decisions. But VW said this did not affect its performance and sales remained strong.
GOOGLE Inc yesterday launched a mini game on WeChat, China’s most popular social media application with more than 1 billion users.
It’s the first mini game offered by Google in China’s mainland, where most Google services such as Gmail, Google maps and Google search are not available.
The game Caihua Xiaoge, so far has only a Chinese version. In the game, players are given a limited amount of time to draw an item and the goal is to get Google’s AI software identify the drawing. The results and sketches can be shared on WeChat.
It combines gaming company Zynga’s popular “Draw Something” functions, Google’s artificial intelligence technology and WeChat’s social network.
CHINA’S Nasdaq-listed iQiyi, an online video platform, said yesterday it was paying 2 billion yuan (US$300 million) to acquire Chengdu-based game developer Skymoons Technology as the Beijing-headquartered company diversifies its business.
IQiyi, which issued an IPO on the Nasdaq to raise US$2.25 billion in March, plans to establish a digital entertainment empire through expansion and technology upgrades, including gaming, virtual reality and artificial intelligence, the company said recently.
IQiyi’s chief executive officer, Yu Gong, said the Skymoons deal would broaden the platform’s “offering of entertainment content across multiple formats” and help create more ways to monetize its intellectual property.
“We believe Skymoons is a natural extension to our business and will strengthen iQiyi’s media platform and our overall ecosystem,” he said.
The deal includes a fixed payment of 1.27 billion yuan and additional 730 million yuan over the next two years, if Skymoons meets certain benchmarks.
IQiyi faces fierce competition with Tencent’s online video business and the Alibaba-backed Youku Tudou.
IQiyi has been dubbed China’s Netflix and some of its productions are available globally on Netflix. Online video services have become the darling of investors due to their strong potential as China moves towards a consumption-driven economic growth.
The Morgan Stanley building in New York. Morgan Stanley yesterday reported a 43 percent rise in quarterly profit. This was largely helped by an increase in revenue from its trading and investment banking businesses. Net income applicable to shareholders rose to US$2.27 billion in the quarter ended June 30 from US$1.59 billion a year ago.
CHINA is confident and capable of achieving its annual growth target and it has ample policy tools to address shocks from external uncertainties, a senior official with the top economic planner said yesterday.
“We have the confidence, strength and conditions, and we have sufficient competence to counter uncertainties in the world economy with certainties from China’s economic resilience and sustainability,” said Yan Pengcheng, spokesman for the National Development and Reform Commission.
Yan, also head of NDRC’s policy studies department, made the remarks when commenting on China’s economic performance in the first six months of 2018 and its future growth trend at a press conference.
China is aiming for annual economic growth of around 6.5 percent this year. In the first six months, China’s GDP rose 6.8 percent year on year, latest official data showed.
The country’s economy grew 6.9 percent in 2017, picking up the pace for the first time in seven years.
Yan said China’s major macro-economic indicators have remained stable in the first half of this year with continued improvement in economic structure, quality and efficiency.
Years of economic transformation has turned China into an economy mainly driven by consumption, services and domestic demand instead of investment and exports, which will provide support for China’s future economic development, Yan said.
Meanwhile, China has experience in managing risks and challenges from previous financial crises, as well as sufficient room for policy maneuver to cope with shocks from uncertainties in the world economy, he said.
In the second half of the year, China will make macro-policies more flexible and coordinated to keep economic fundamentals stable, Yan said, pledging to further unlock domestic demand, push forward reform in key areas, improve the business environment and continue opening-up.
He cited a number of supportive factors for the economy, including China’s low budget deficit ratio and government debt levels, commercial banks’ high capital adequacy ratio and provision coverage ratio, declining corporate debt levels, and plenty of policy tools that authorities can employ.
For firms impacted by the Sino-US trade frictions, China will provide “targeted” help after assessment of the impact, Yan said, without giving details.
He also said the economic planning agency approved 102 fixed-asset investment projects with a combined investment totaling 260.3 billion yuan (US$39 billion) in the first six months.
The projects were mainly in high-tech, social service programs and water conservation industries, Yan said.
Data on Monday showed China’s FAI grew 6 percent year on year in the first half of this year, 1.5 percentage points lower than that of the first three months.
FAI in high-tech manufacturing displayed strong momentum by growing 13.1 percent year on year, outpacing the country’s general FAI growth by 7.1 percentage points. FAI includes capital spent on infrastructure, property, machinery and other physical assets.
US industrial production increased in June, boosted by a sharp rebound in manufacturing and further gains in mining output, the latest sign of robust economic growth in the second quarter.
The Federal Reserve said yesterday industrial production rose 0.6 percent last month after a downwardly revised 0.5 percent decline in May. Economists polled by Reuters had forecast industrial production rising 0.6 percent last month after a previously reported 0.1 percent dip in May.
Industrial production increased at a 6.0 percent annualized rate in the second quarter, faster than the 2.4 percent pace logged in the January-March period.
Manufacturing output surged 0.8 percent in June after decreasing 1.0 percent in May. A 7.8 percent jump in motor vehicle production buoyed manufacturing output last month. Motor vehicle production declined 8.6 percent in May after a fire at a parts supplier caused a sharp drop in the assembly of trucks.
The data came on the heels of a report on Monday showing retail sales not only rose solidly in June, but were much stronger than previously reported in May.
Strong industrial production and retail sales, together with smaller trade deficits in April and June suggest economic growth accelerated sharply in the second quarter.
Gross domestic product estimates for the April-June quarter are as high as a 5.2 percent rate, more than double the first quarter’s 2 percent pace.
Manufacturing, which accounts for about 12 percent of the economy, is being supported by a strong domestic and global economy. But escalating trade tensions between the United States and its major trade partners, including China, Canada, Mexico and the European Union, could undercut business spending.
The International Monetary Fund warned on Monday that tit-for-tat import tariffs threatened to derail the global economic recovery, adding that the US was especially vulnerable to a slowdown in its exports.
Manufacturing output increased at a 1.9 percent rate in the second quarter after growing at a 1.7 percent pace in first quarter. In June, there was an increase in the production of wood, computer and electronic products as well as aerospace and miscellaneous transportation equipment.
Mining production increased 1.2 percent, adding to the 2.2 percent rise in May. Mining output has surpassed its previous historical peak, which was set in December 2014.
Oil and gas well drilling rose 2.9 percent in June, with further gains likely following recent increases in oil prices. Mining output accelerated by 19.4 percent in Q2 after 11.0 percent in the first quarter.
Utilities output fell 1.5 percent in June after declining 0.7 percent in May. With production increasing solidly last month, capacity utilization increased to 78.0 percent from 77.7 percent in May. It is 1.8 percentage points below its 1972-2017 average.
CHINA’S household consumption is expected to rise steadily in the second half of the year, international investment bank UBS said yesterday.
The rising domestic consumption is expected to be supported by the steady rise of disposable income per capita in China, which expanded 6.6 percent year on year in January to June, according to a UBS report.
China’s consumption showed ample resilience despite trade friction in the first half, with final consumption contributing to 78.5 percent of GDP growth, up from 58.8 percent last year, according to the National Bureau of Statistics.
In terms of possible policy adjustment, UBS economist Wang Tao forecast that loosening real estate policy would not be the top choice for the government due to worries about housing bubbles and related financial risks.
Instead, it is more likely that the government will increase the supply of houses in the market such as by building more public rental houses to boost the real estate market while avoiding speculation.
The government is dedicated to curbing rising house prices this year. In June, house prices in the first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen were stable compared with the prices in May, according to the NBS.
Wang said the possibility that China’s GDP would be dragged down by trade disputes was relatively small in 2018, since the 10 percent tariffs on US$200 billion of Chinese products would not come into effect before September.
Wang said that China’s GDP was expected to expand 6.5 percent in 2018, consistent with the government’s target.
CHINA saw steady tax revenue in the first half of this year, the taxation authority said yesterday.
A total of 8.2 trillion yuan (US$1.2 trillion) was collected in the first six months of this year excluding export tax rebates, up 15.3 percent year on year, data from the State Administration of Taxation showed.
Both the industrial and service sectors posted robust tax revenue growth, up 14.7 percent and 13.2 percent year on year respectively in H1 and maintaining double-digit growth for six quarters.
Emerging sectors continued to expand fast, with that revenue from the software and information technology sub-sector growing 29.3 percent year on year.
Tax revenue in the retail sector rose 20.5 percent year on year in H1, indicating strong consumption momentum. The accommodation and catering sector also saw tax revenue grow by 8.6 percent.
Gross domestic product expanded 6.8 percent year on year, above the government’s target of about 6.5 percent.
CHINA’S non-financial outbound direct investment saw steady growth in the first half of 2018, official data showed yesterday.
Domestic investors made US$57.2 billion of non-financial ODI in over 3,600 overseas enterprises in 151 countries and regions in the first six months, the Ministry of Commerce said, up 18.7 percent from the same period last year.
ODI in Belt and Road Initiative countries rose 12 percent from a year earlier to US$7.4 billion.
The structure of outbound investment continued to improve, with investment mainly going into leasing and business services, manufacturing, mining and retail and wholesale sectors.
No new projects were reported in sectors such as property development, sports and entertainment.
By end-June, China had 113 economic and trade cooperation zones in 46 countries, with a total investment of US$34.9 billion. The zones earned total tax revenue of US$2.9 billion dollars.
SHANGHAI’S economy grew 6.9 percent year on year in the first half, up from 6.8 percent in the first quarter and also 0.1 percentage points higher than the national growth rate, the Shanghai Statistics Bureau said yesterday.
Gross Domestic Product hit 1.56 trillion yuan (US$234 billion) in the six months ended June 30, with services accounting for 69.2 percent, or 1.08 trillion yuan — up 7.4 percent year on year.
Gross industrial output value of enterprise above designated size rose 5.2 percent to 1.7 trillion yuan.
Of the city’s six key industrial sectors, the output of automobile manufacturing rose 12.3 percent year on year and that of biomedical producers gained 15 percent. The output of complete equipment manufacturing and electronic information product manufacturing also rose, up 4.2 percent and 2.2 percent respectively.
Output of high-quality steel manufacturing and petrochemical and fine chemicals, however, fell from the same period last year.
The industrial added value of strategic emerging industries grew 8.1 percent to 506.31 billion yuan, up 1.3 percentage points from the same period last year.
The bureau pointed to the sharp rise in new energy vehicles, at 29.6 percent year on year. The biological industry and new generation of information technology also jumped 15 percent and 14.2 percent respectively.
Shanghai’s foreign trade in the first half grew 3.8 percent from a year earlier, to 1.62 trillion yuan, according to data from the Shanghai Customs.
Imports were up 5.1 percent to 978.9 billion yuan while exports rose 1.8 percent from the first half last year to 637.18 billion yuan.
The total contract value of Shanghai’s foreign direct investment amounted to US$21.50 billion in the first six months, up 18.1 percent from a year earlier.
Fixed-asset investment rose 6 percent year on year to 317.03 billion yuan, with the industrial sector up 22.9 percent — the fastest rate in almost 10 years.
State-owned enterprises’ FAI rose 2.1 percent to 84.07 billion yuan, while non-SOEs’ investment surged 7.5 percent.
Infrastructure FAI jumped 9.5 percent and that in real estate development grew 3.6 percent to 181.69 billion yuan.
The city’s general public budgets increased 6.1 percent to 420.03 billion yuan, with spending on energy saving and environmental protection up 76.8 percent. Spending on urban and rural communities rose 26.7 percent, and that on health care and family planning was up 18.7 percent.
Prices in consumer products advanced 1.5 percent in the first half year on year, 0.3 percentage points lower than the first quarter.
Prices in services gained 1.6 percent from a year earlier amid a consumption upgrade and rapid growth in consumer demand for services.
DIDI Chuxing said yesterday online accommodation and travel services provider Booking Holdings has invested US$500 million in the ride-hailing company as the Chinese firm links with partners to offer services beyond its core business.
Didi and Booking Holdings will leverage each other’s technology and local operating expertize to offer more comprehensive and personalized quality travel experiences across the world, the companies said in a joint statement.
Didi users will be able to use Booking Holdings’ sites including booking.com, priceline.com and agoda.com to book hotels and Booking Holdings users will have access to Didi’s on-demand service.
“Didi has clear advantages in technology and scale in the shared mobility industry,” said Todd Henrich, senior vice president and head of corporate development for Booking Holdings.
“We believe that together we can offer smarter transportation services to our brands’ customers, and help Didi’s customers with seamless access to the products and services the brands in our company provide throughout the world.”
Didi Chuxing vice president for strategy Stephen Zhu said:“We look forward to seamlessly connecting every segment of the journey and improving everyone’s traveling experience through more collaborative innovation with the Booking brands on products, technology and market development.”
Didi last month said it will launch a separate application for its chauffeur service called Didi Premium following safety concerns over private cars on its platform. It has also been stepping up overseas expansion by teaming up with Grab, Lyft, Ola, Uber, 99, Taxify, and Careem.
SHANGHAI-HEADQUARTERED discount platform Pinduoduo is seeking to raise US$1.63 billion in an initial public offering on the NASDAQ as it joins a number of Chinese Internet companies seeking offshore listing as competition with domestic rivals heats up.
Pinduoduo plans to sell about 85.6 million American Depositary Shares at between US$16 and US$19 each, according to an updated prospectus filed with the US Securities and Exchange Commission yesterday.
About 40 percent of the funds will be used to enhance and expand business, 40 percent for research and development and the remainder for general corporate purposes.
Two of the firm’s biggest shareholders, Tencent Holdings Ltd and Sequoia Capital, have shown interest in buying US$250 million of shares in the IPO, according to the filing.
Other major shareholders include Gaorong Capital and Banyan Partners Funds.
Last month Pinduoduo said in its prospectus that it had 103 million monthly active users of its mobile platform at the end of March.
Thanks to a large user base, largely accumulated through Tencent’s WeChat, 3-year-old Pinduoduo has been quickly catching up with top e-commerce firms including Alibaba’s Taobao and JD.com.
The Pinduduo app allows users to participate in group-buying with discounts of up to 90 percent by spreading the deal among friends and contacts through social networking.
Following the listing, founder and Chairman Colin Huang, a former Google engineer, will hold a 46.8 percent stake and 89.9 percent of the voting rights.
Tencent will own 17 percent.
Pinduoduo targets low-income customers in lower-tier cities and towns.
It connects with 48,000 vendors in 730 poorer counties and will continue to connect consumers with rural fresh food vendors and help them become more efficient in production and logistics.
The company’s revenue has grrown 37-fold from a year earlier, reaching 1.38 billion yuan (US$219 million) in January-March.
PING An Bank said yesterday it aims to build a high-quality investment information-sharing platform for its high net-worth clients through systematic joint operations with fund management companies.
The Shenzhen-based joint-stock commercial lender said that it would work with fund managers on personnel training, products and after-sales service.
During the next one to three years, the bank would establish a platform offering comprehensive solutions for high-wealth customers, said Cai Xinfa, the special assistant to Ping An Bank’s president.
HOUSING prices in major Chinese cities remained stable in June as local governments continued to curb the property sector, official data showed yesterday.
On a year-on-year basis, new residential housing prices in China’s four first-tier cities saw no change last month, the National Bureau of Statistics said in a statement.
But their average month-on-month growth of new home prices rose to 0.6 percent in June from 0.3 percent in May, according to the bureau’s data based on a survey of 70 cities. Prices were unchanged in Beijing and Shanghai, but increased 1.9 percent in Guangzhou and 0.3 percent in Shenzhen.
New home prices declined year on year in seven of the 15 “hotspot” cities, where speculative home purchases are monitored, with the most significant price drop of 2.2 percent last month, while eight other cities posted growth. In month-on-month terms, prices rose in 10, one more than in May, fell in two, and remained steady in the other three.
“Local governments have been firm on achieving housing control goals and implemented control measures in June,” the bureau’s senior statistician Liu Jianwei said.
During previous years, rocketing housing prices, especially in major cities, fueled concerns about asset bubbles. To curb speculation, local governments rolled out restrictions on purchasing homes and increased the minimum down payment required for a mortgage.
“China’s home prices are relatively stable given the figures of the 70 cities,” said Mao Shengyong, spokesman for the statistics bureau. “But structural problems still exist in the housing market.”
Mao said third and fourth-tier cities have experienced price spikes since the beginning of this year, and some “hotspot” cities face challenges to tame price surges of properties.
In the 31 second-tier cities, new home prices climbed an average 1.2 percent from May, and 0.7 percent in the 35 third-tier ones.
But year on year, prices jumped 6.3 percent in the second-tier cities, and rose 6 percent in the third-tier ones.
The government will continue to work on the property tax scheme and policies that allow tenants to enjoy the same rights as homeowners, Mao said. “A long-term mechanism will be developed to promote the steady and healthy development of the housing market.”
Haikou in south China’s Hainan Province witnessed the biggest month-on-month increase — 3.9 percent, compared with 2.1 percent in May. In Sanya, prices increased 3.2 percent in June, 0.8 percentage points faster than the monthly figure in May.
Jinan in Shandong Province and Dandong in Liaoning Province also saw strong month-on-month rises — 3.6 percent and 3.3 percent.
“Market momentum picked up in June, which is the traditional month for real estate developers to gear up for half-yearly performance,” said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co. “As a result, only four cities recorded a monthly decrease in new home prices, compared with two in May.”
Prices of pre-occupied homes generally remained unchanged in the first-tier cities in June compared with May, climbed 0.7 percent in the second-tier cities and 0.6 percent in the third-tier cities, the statistics bureau said.
Data released on Monday by the bureau showed 5.66 trillion yuan (US$845 billion) of new homes were sold in the first half of 2018, a year-on-year rise of 14.8 percent — up from 12.8 percent in the first five months.
So why are we here? Perhaps a better question would be why wouldn’t we be? After all, Dubai and China are longstanding partners. There are around 200,000 Chinese nationals living and working in the UAE today. Last year, bilateral trade between China and the UAE jumped 15 percent to top US$52 billion, which has grown an impressive 800 fold since 1984, making China one of the UAE’s top trading partners.
But most importantly there are parallels between Dubai and China in our economic approach. Recently, the UAE Cabinet announced a range of measures to remove barriers to trade to encourage foreign investment.
China’s Belt and Road Initiative is also continuing to present commercial opportunities for all of us. In fact, DMCC’s latest global thought leadership research on the Future of Trade found that the Belt and Road Initiative is developing faster than expected. Today, nearly 70 countries are connected in some way to the Belt and Road. That’s equivalent to 62 percent of global GDP. Asia’s emergence as the world’s economic center of gravity is happening now, and it’s happening fast.
It was only a couple of months ago the UAE had the honor of hosting President Xi Jinping’s Special Representative Yang Jiechi to discuss the expansion of strategic ties with China. This also builds on the establishment of the US$10 billion strategic co-investment fund, launched in 2015 to focus on diversified investments in a range of growth sectors, further supporting the Belt and Road Initiative.
So you see, there is an important synergy here, both Dubai and China are committed to boosting our economies keeping doors to trade open, despite the rising trend of protectionism around the world. And, DMCC’s International Roadshow, Made for Trade Live, is designed to form strong bilateral trade relations, highlight the opportunities presented by Dubai, and explain how DMCC, as a global hub, can connect companies with unprecedented growth opportunities in some of the most exciting, and fastest growing marketplaces in the world.
This opportunity is one a number of Chinese businesses have taken advantage of to date — in fact, we see them thrive in our Free Zone: Registrations of Chinese companies in DMCC grew at 46 percent on average, annually, in the five years up to July 2018. Major Chinese companies such as Hisense, Sinopec, China Harbor Engineering Company, Hikvision, Powerchina, Sepcoii Electric Power Construction Corporation, Shenyang Yuanda Aluminium Industry Engineering and Skyworth have their offices in DMCC.
And to give you a sense of what can result from our international outreach program, and the effort to forge partnerships with the Chinese business community, let me share a few examples:
Dubai Gold and Commodities Exchange was the first foreign exchange to list Shanghai Gold Futures outside of China last year. Also, a partnership with Mega Capital and Yunnan State Farms will see us open a DMCC Coffee Centre for the trade later this year.
DMCC will be the first in the UAE with the capacity to handle up to 20,000 tons of green coffee beans at a value of up to US$100 million annually. In June, we signed an agreement with Meishan representing the Ningbo Province, to leverage DMCC’s to knowledge and expertise when it comes to launching, growing and retaining a successful global Free Zone environment.
Last week, we signed a Memorandum of Understanding with China Council for the Promotion of International Trade, the largest official institution for the promotion of foreign trade in China. Designed to strengthen the commercial collaboration between the Wuhan business community and DMCC, the collaboration further highlights Dubai’s position as a global gateway and the ideal partner for leading Chinese enterprise to access some of the fastest-growing markets in Central, South and South-East Asia, Europe, the Middle East, Africa and beyond. Much has been achieved already, but positively, there is scope to do a lot more.
We also offer the opportunity to connect with some of the biggest economic projects of the day such as Dubai’s Expo 2020. It’s estimated that Expo 2020 will contribute US$24 billion to Dubai’s GDP and generate over 200,000 jobs. The six-month exhibition offers great potential for Chinese business, with opportunities in a range of areas, such as infrastructure development and service provision.
And, DMCC is certainly a natural first place to go for those looking to learn more about business opportunities such as the Expo 2020 or Free Trade Zones in Dubai. Dubai and China already enjoy a fantastic relationship, and its economic connection is going from strength to strength, especially with Expo 2020 and Belt and Road collaboration in mind.
But there remains a huge opportunity for Chinese firms to access the fast growing and exciting global markets through Dubai. Established in 2002, DMCC is now the leading Free Zone in the world and the combined revenue generated by our 15,000 plus member companies, and community of over 100,000 people accounts to nearly 10 percent of Dubai’s GDP.
Commodities, be it agricultural products, gold, diamond, tea, or coffee – is of course a huge focus for us, but we also have an interest in property of course with the much anticipated Uptown Dubai on the horizon. At DMCC, we stand ready to support Chinese companies which come to seek to leverage the government’s decision to further reduce trade barriers and enhance future trade collaboration.
CHINA’S economy extended its steady growth, expanding higher than expected by 6.8 percent year on year in the first half of 2018, data released by the National Bureau of Statistics showed yesterday.
The gross domestic product rose 6.8 percent to 41.9 trillion yuan (US$6.3 trillion) in the first half from the same period of last year, the bureau said. The economic growth in the first quarter was 6.8 percent, and 6.7 percent in the second, thus maintaining a consistent growth of between 6.7 and 6.9 percent in 12 straight quarters.
“Despite the increasing uncertainties from external sources, the Chinese economy rose with the optimization and upgrading of economic structures as well as improvements in quality and efficiency,” said Mao Shengyong, spokesman for the statistics bureau.
The industrial output rose 6.7 percent in the first six months from a year earlier, but was 0.1 percentage points slower than the growth in the first quarter.
The mining industry posted 1.6 percent year-on-year growth in the value-added output; manufacturing rose 6.9 percent; and electricity, heat, gas and water production and supply industry advanced by 10.5 percent.
Output of the high-technology industry and the equipment manufacturing industry grew 11.6 percent and 9.2 percent, respectively, 4.9 percentage points and 2.5 percentage points faster than the overall industrial output growth, indicating optimization of the industrial structure, the bureau said.
The service sector expanded 7.6 percent year on year in the first half, outpacing a 3.2 percent increase in primary industry and 6.1 percent in secondary industry, according to the bureau.
The output of the service sector accounted for 54.3 percent of the total GDP in the first half, 0.3 percentage points higher than the same period of last year, and 13.9 percentage points higher than the industrial sector.
“Also, the contribution from the service sector to the overall economic growth has increased 1.4 percentage points to 60.5 percent from a year earlier, indicating that the services sector is playing an increasingly more important role in the steady economic growth,” Mao said.
Fixed-asset investment grew 6 percent year on year in the first half, lower than 7.5 percent in the first quarter.
Private investment picked up in the January-June period, growing 8.4 percent year on year, which is 1.2 percentage points higher than that of the same period of last year. Meanwhile, fixed-asset investment in high-tech manufacturing displayed particularly strong momentum by growing 13.1 percent.
While noting increasing external uncertainties, Mao said the impact of China-US trade frictions, if any, would have been limited on the Chinese economy in the first half.
The trade frictions, unilaterally stirred up by the United States, have not put much pressure on China’s domestic consumer prices, Mao said.
He expects China’s consumer prices to maintain mild growth in the second half, as the prices of food items including pork and cooking oil, likely to be pushed up by more expensive imported soybeans, are still relatively low.
Meanwhile, it requires further observation to judge the potential impact on the economy in the second half, he said.
“Rising trade protectionism has posed a major challenge to world economic recovery, which has also brought us some challenges and uncertainties,” he said.
The trade war, currently involving US$50 billion, will slow China’s GDP growth by 0.2 percentage points with full consideration of the second and third rounds of the impact of reduced exports on related industries, according to a research team led by central bank economist Ma Jun.
Ma, a member of the monetary policy committee of the People’s Bank of China, added that the trade war would not necessarily have much impact on the capital market and exchange rates.
Mao also highlighted the improvement in employment. The surveyed unemployment rate in urban areas stayed below 5 percent for three straight months, and was 4.8 percent in May and June, which was a record low since the statistics bureau set up the national monthly labor force survey system in 2016.
The urban surveyed unemployment rate in 31 major cities was 4.7 percent in June, unchanged from a month earlier and down 0.2 percentage points from a year ago.
CHINESE carmaker BYD Company Limited said yesterday police were investigating a woman who it said had falsely claimed to work for BYD and who signed contracts for advertising on its behalf but had not paid the advertisers.
The company said it will talk with advertising agencies used by a woman named Li Juan, who is now in police custody.
“BYD welcomes face-to-face communication with relevant companies to discuss reasonable solutions,” the company said in a statement.
On Thursday, BYD said in a statement that Li Juan and several other people had posed as company executives and signed contracts using forged BYD seals.
The company said Li and others had rented office space in the Shanghai International Finance Center in Pudong New Area. She posed as the Shanghai BYD Electric Vehicle Co Ltd marketing department general manager.
But advertising agency Jingzhipr said Li and her team had been operating openly for three years. The compay said it had conducted outdoor advertising and organized test drives for BYD.
“BYD said someone offers free advertising activities and brand promotion worth a total of 1.1 billion yuan (US$16.4 million) and the carmaker denied awareness of such activities and brand promotion,” Jingzhipr said.
Yesterday, BYD denied Li or anyone associated with her worked for the auto company.
“As the injured party, BYD will, together with all parties, cooperate with the police to investigate and protect our legitimate rights and interests according to the law,” BYD said in a statement.
“Li Juan was suspected of committing a crime by faking the identity of staff of BYD and using a forged seal to sign contracts, which BYD has reported to the police,” the company said.
“The aforesaid actions of Li Juan harmed the interests of related parties and damaged greatly the reputation of BYD.
Jingzhipr said last night the company and other advertising firms are willing to discuss the matter with BYD.
Jingzhipr said it welcomed communication between the general manager of BYD’s purchasing department and Jingzhipr. Jingzhipr also said the company will protect its legitimate rights and interests according to the law.
A financial regulator yesterday unveiled a strategy to monitor whether crypto currencies such as Bitcoin pose a threat to world economic stability.
In a statement, the Financial Stability Board, which oversees regulation among G20 economies, said it believes “crypto assets do not pose a material risk to global financial stability at this time.”
But, the FSB added, the speed at which crypto currencies are spreading, the lack of solid data on their use and uncertainty over which rules apply in the sector should spur major economies to redouble their scrutiny.
The framework also calls of an examination of whether crypto currencies are evolving from a method of paying for goods and services into a securities product, which individuals are holdings as a savings device instead of a stock or a bond.
The FSB also underscored “the scarcity of reliable data on banks’ holdings of crypto assets.”
That point serves as a chilling reminder of the 2008 financial crisis, which was made worse by the fact that some banks did not know their level of exposure to securities backed by junk mortgages, even after those mortgages started to fail.
The FSB said an affiliate called the Basel Committee on Banking Supervision was “conducting an initial stocktake on the materiality of banks’ direct and indirect exposures to crypto assets.”
It warned that the exposure of financial institutions to crypto currencies will serve as a key measurement of the “risks to the broader financial system.”
The FSB said it expects its plan will face hurdles from the outset, given the “data gaps” and “lack of transparency” in the sector, especially concerning the individuals trading coins on a daily basis.
The FSB, currently chaired by Bank of England chief Mark Carney, said it will formally present the framework to G20 finance ministers when they meet in Buenos Aires later this month.
PLANEMAKERS racked up more than US$20 billion of deals on the opening day of the Farnborough Airshow yesterday, suggesting demand for new passenger jets remains in good health despite worries over trade tensions and Brexit.
The deal-making came as host Britain tried to convince a sceptical aerospace industry about its plans to leave the European Union, saying supply chains would continue to run smoothly and pledging money for a new fighter jet program.
European jetmaker Airbus and US rival Boeing have been enjoying an almost decadelong boom thanks to rising emerging markets growth and a need among Western airlines to upgrade their fleets, and order books are bulging.
Higher oil prices, rising interest rates, global trade tensions and uncertainty over Brexit have all raised concerns that demand may slow.
But business was brisk on the first day of the July 16-22 air show, though analysts will be watching closely to see how many of the deals are new, and how many involve adjusting earlier business or switching models — something not always easy to spot at first.
Even before the first displays had taken to the skies over a sun-baked southern England, Boeing said delivery firm DHL, part of Deutsche Post DHL Group, had placed a US$4.7 billion order for 14 777 freighters, and purchase rights for seven additional freighters.
It followed that up with a US$3.5 billion deal for 30 of its hot-selling single-aisle 30 737 MAX 8 aircraft with US aircraft leasing firm Jackson Square Aviation, while Qatar Airways finalized an order for five 777 freighters.
Meanwhile, Airbus announced a memorandum of understanding for Taiwan startup StarLux Airlines to buy 17 of its A350 wide-body planes worth around US$6 billion at list prices, and another MoU with an unidentified leasing firm for 80 A320neo single-aisle jets worth about US$8.8 billion.
The Farnborough Airshow is the industry’s biggest event this year. It alternates with the Paris Airshow and collectively they account for over a quarter of industry order intake each year.
CHINA’S crude oil output fell 2.3 percent year on year in June, data from the National Bureau of Statistics showed yesterday.
Crude oil output came in at 15 million tons last month.
And 48 million tons of crude were refined, up 8 percent year on year. China is one of the world’s largest oil buyers, with over 60 percent of its oil consumption coming from imports.
The country imported 221 million tons of crude oil in the first half of the year.
This was up 5.8 percent from the same period last year.
Meanwhile, natural gas output in June totaled 12.18 billion cubic meters, gaining 5.6 percent year on year.
China aims to increase domestic crude oil output to 196 million tons by 2020.
Supply capacity for natural gas should exceed 360 billion cubic meters.
Major tasks for the oil industry include accelerating exploration to ensure domestic oil supply, speeding up construction of pipeline networks, and developing clean alternatives.
SALES of new homes continued to pick up in the first half of this year, data released yesterday by the National Bureau of Statistics showed.
About 5.66 trillion yuan (US$842.2 billion) worth of new homes, excluding government-subsidized affordable housing, were sold between January and June nationwide, a year-on-year rise of 14.8 percent, the bureau said in a statement posted on its website. That compared with a 12.8 percent expansion of the first five months.
The area of new homes sold in the first six months climbed 3.2 percent from the same period a year earlier to 668.52 million square meters, compared with the 2.3 percent increase registered in the first five months, the bureau said.
“Housing prices remained generally stable in major Chinese cities, while imbalanced performance still exists with some third and fourth-tier cities seeing rapid price growth and a few others, particularly in remote areas, continuing to be plagued by high inventories,” said bureau spokesman Mao Shengyong.
“Looking forward, local governments should continue to adopt differentiated control policies and the country will move faster to implement a long-term mechanism for property regulation that ensures supply through multiple sources, provides housing support through multiple channels, and encourages both housing purchases and rentals.”
The inventory of new homes continued to shrink. Newly-built homes available for sale as of the end of June were 22.1 percent lower than the same time a year ago to around 274.14 million square meters, the bureau’s data showed.
That compared to 280.56 million square meters registered as of the end of May.
Investment in residential property development, which accounted for 70.2 percent of total real estate investment in the first six months, rose 13.6 percent year on year to nearly 3.9 trillion yuan, slightly lower than the 14 percent growth recorded in the first five months, according to the bureau.
NEW home sales in Shanghai retreated last week despite a surge in fresh supply, ending a three-week rally and dragging the transaction volume below the 100,000-square-meter threshold again.
The area of new residential properties sold, excluding government-subsidized affordable housing, fell 22.9 percent to 94,000 square meters during the seven-day period ending Sunday, Shanghai Centaline Property Consultants Co said in a report released yesterday.
Outlying districts including Jiading, Qingpu and Songjiang performed well. In Jiading new home transactions rose 20 percent from the previous week to around 18,000 square meters, while Qingpu and Songjiang both registered weekly sales exceeding 10,000 square meters.
The average cost of a new home dropped 16.6 percent from the previous week to 49,203 yuan (US$7,321) per square meter, Centaline said.
Citywide, a housing project in Jiading became the most popular development last week after selling 8,344 square meters, or 81 units, for an average price of 51,729 yuan per square meter.
“After rebounding for three consecutive weeks, the city’s new housing market just lost its steam somehow and recorded a major setback,” said Lu Wenxi, senior manager of research at Centaline. “However, we should probably expect a notable rebound very soon mainly due to a significant improvement in supply.”
About 406,000 square meters of new homes spanning six projects, most of them medium to low-end developments with price tags of between 30,000 yuan and 60,000 yuan per square meter, were launched onto the market for sale last week, a week-over-week jump of 570 percent — the highest in 12 weeks.
A separate report released by Shanghai Homelink Real Estate Agency Co showed that new home supply is set to reach some 5,100 units this month, the highest this year after April.
Such abundant new supply might help monthly transactions exceed 4,000 units again in July, and boost performance further through August, according to Homelink forecasts.
SHANGHAI Pharmaceutical Holdings Shenxiang Health Medicine Co said yesterday it has entered into a strategic partnership with Northland Ginseng Farms in Ontario, Canada, to set up a planting site for ginseng.
Shanghai Shenxiang will procure raw material directly from the standardized planting site at Northland Ginseng Farms and provide growing standards and guidance so that they can meet local food and drug standards.
It’s also an important step towards the company carrying out its blueprint of setting up planting sites near the source of raw materials to ensure quality.
Chairman of Shanghai Pharmaceutical Shenxiang and general manager of Shanghai Traditional Chinese Medicine Co Yu Weidong said this is the latest move for Shanghai Pharma to grab opportunities presented by China’s trillion dollar Belt and Road Initiative to shore up its raw material supplies.
The total amount of sourcing would represent about 50 million yuan (US$7.5 million) of annual retail sales at Shanghai Pharma Shenxiang.
It will also continue to push forward sustainable manufacturing and sourcing by collaborating with other potential overseas planting sites.
SHENZHEN-LISTED Vatti surged 4 percent today, despite the Chinese home appliance firm preparing to pay 79 million yuan (US$12 million) in refunds after France won the World Cup.
Vatti promised in June that consumers would be fully refunded for buying related kitchen products if the French soccer team won the World Cup. The company is an official sponsor of the French soccer team.
France celebrated their second World Cup win in 20 years on Sunday, overcoming Croatia 4-2 in one of the most gripping finals of recent history.
The company said the total cost, including refunds and related spending, is 79 million yuan, still “limited” compared with the 1 to 2 billion yuan for official sponsorship of the World Cup.
Vatti’s share price jumped 3.97 percent to close at 15.18 yuan, compared with a 0.10 percent decrease of the Shenzhen index yesterday.
For any purchase of a “champion package” in June, Vatti promised a full refund if France won, covering a set of four kitchen appliances worth 16,100 yuan.
The first customer applying for a refund was in Taiyuan City in Shanxi Province early yesterday morning, just after the France-Croatia match ended about 1am.
The whole refund process will last for “several weeks,” with processes covering application, authorization and refunds.
Online orders will be easier as consumers can receive automatic refunds to their accounts, Vatti said.
During the whole event, Vatti’s offline sales revenue jumped 20 percent year-on-year to hit 700 million yuan, the company said.
Other Chinese companies like Oppo and Mengniu sponsored stars in Brazil and Argentina.
Vatti’s sponsorship seems relatively valuable in terms of brand awareness, analysts said.
More than 1 million people read the refund post of Vatti’s official WeChat account within 30 minutes.
CHINA and the European Union yesterday agreed in Beijing to jointly work to safeguard the rules-based international order, promote multilateralism and support free trade.
The agreement was reached during the 20th China-EU leaders’ meeting, co-chaired by Chinese Premier Li Keqiang, European Council President Donald Tusk, and European Commission President Jean-Claude Juncker.
According to the agreement, both sides agreed that faced with the current complicated international situation, especially the rise of unilateralism and protectionism, China and the EU, as two major forces and economies of the world, have the joint responsibility to safeguard the rules-based international order, advocate multilateralism and support free trade so as to promote world peace, stability and development.
Both sides agreed to jointly safeguard the UN charter and international law, and enhance dialogues on diplomacy and security policy to address common challenges.
The two sides are firmly committed to fostering an open world economy, promoting trade and investment liberalization and facilitation, and resisting protectionism and unilateralism.
Both sides strongly support the rules-based multilateral trading system with the World Trade Organization as its core and were committed to complying with existing WTO rules.
The two sides agreed to set up a joint working group to discuss the WTO reform.
China and the EU exchanged market access offers of the ongoing investment agreement negotiations during the leaders’ meeting and agreed to make the negotiation of the agreement a top priority and strive to build an open, transparent, fair and predictable business environment for investors.
The two sides also called on efforts to promote dialogue and cooperation in areas including environment, energy, circular economy, scientific innovation, intellectual property rights, industry, digital economy and urbanization.
Both sides agreed to set up dialogues on drugs and humanitarian assistance, and launch a joint feasibility study on deepening cooperation in the wines and spirits sector.
Both sides pledged to deepen China-EU Dialogue on IPR and strengthen their collaboration in IPR protection.
The two sides stressed their commitment to expanding two-way opening-up, improving market access and investment environment, promoting synergies between the Belt and Road Initiative and EU’s initiatives, and accelerating the negotiation of the agreement on the cooperation on and protection of geographical indications.
Both sides agreed to further advance the activities within the framework of the 2018 China-EU Tourism Year and facilitate tourism cooperation and two-way people-to-people exchanges.
The two sides are committed to supporting the G20, as the premier forum of international economic cooperation, in continuing to play its active role in global economic and financial governance.
Both sides agreed that the common interests between China and the EU are far more than the differences and will continue to adequately solve the differences in the spirit of mutual respect, equality and mutual benefit.
Noting that China-EU ties are at a crucial period, Li said during the meeting that China firmly supports the European integration and hopes to see the EU maintain unity, stability and development.
China is willing to enhance strategic communication and pragmatic cooperation with the EU to forge ahead the China-EU comprehensive strategic partnership, Li said.
Stressing that China’s door will only open wider to the world, Li said the Chinese government issued a negative list for foreign investment not long ago and will further ease market access.
He encouraged the EU to grasp the opportunity to expand investment in and trade with China, ease the limitations on high-tech exports to China, and create a fair and transparent environment for Chinese investment in Europe.
Li also briefed Tusk and Juncker on the 7th China-Central and Eastern European Countries leaders’ meeting held in Bulgaria, saying the China-CEEC cooperation (also dubbed 16+1 cooperation) is an open, transparent and inclusive transregional platform and a helpful supplement to China-EU ties.
The China-CEEC leaders’ meeting agreed to set up a 16+1 Global Partnership Center of CEECs and China in Sofia, Bulgaria, to help enterprises from 17 countries to better understand EU laws and regulations, he said.
Li welcomed European countries and EU institutions to conduct third-party cooperation with China in the CEECs to reach a win-win situation.
This year marks the 15th anniversary of forging a comprehensive strategic partnership between China and the EU.
Both Tusk and Juncker said the two sides had scored achievements in areas of trade, investment, diplomacy, connectivity and climate change in the past 15 years.
The current international structure is undergoing major changes which will affect world peace and development, they said.
After the meeting, Li, Tusk, and Juncker witnessed the signing of a series of documents in the areas of investment, environment protection, circular economy, a partnership for the oceans and customs. Both sides agreed to issue a joint statement of the 20th China-EU summit and China-EU leaders’ statement on climate change and clean energy.
AEROSPACE firms are setting out products from luxury jets to lethal drones at back-to-back British air shows this week, hoping trade tensions will not deter airlines from buying jetliners even as geopolitical uncertainty allows them to sell more weapons.
The quintessentially English atmosphere of the Royal International Air Tattoo, where straw-hatted VIPs watch fighters thunder over picturesque Cotswolds villages, gives way on Monday to the Farnborough Airshow, where the hard-nose business deals in the US$800 billion aerospace and defence sector will be done.
Trade tensions between the United States and both China and Europe, disputes over the consequences of Britain’s exit from the European Union and an increase in global protectionist rhetoric have barely dented a prolonged industry boom.
“The overall environment will reflect industry health, despite the dark clouds of Brexit and other global trade setbacks in the background,” said analyst Richard Aboulafia of Teal Group.
“In short, we’ll see more of what we’ve seen for years: aviation remaining a strangely protected and happy corner of a turbulent world.”
Boeing is expected to confirm demand for air transport is rising after Airbus lifted forecasts last week, citing strong economic growth in emerging markets and the need to replace older planes in Western markets.
The bullish outlook was underscored ahead of the show by forecasters Flightglobal Ascend.
The two giants will add to record orders for benchmark narrowbody jets, whose waiting lists underpin their near-record share prices, while seeking a recovery in sales of bigger jets.
After a lull, Boeing will be looking for a boost to its largest twinjet, the future 777X. Sources said recently it is in talks for an eye-catching deal with Saudi Arabia.
Airbus will hope to end uncertainty over AirAsia’s support for its A330neo jet after a showdown on prices. That could also involve a deal for smaller planes, though doubts have been expressed over financial commitments to Airbus.
Farnborough is the first such event since Airbus and Boeing shook up the industry by agreeing to absorb key commercial programs of smaller rivals Canada’s Bombardier and Brazil’s Embraer as they prepare for competition from China.
The result should be a fierce contest for sales in the 100-150-seat sector even before Boeing closes its Embraer deal.
A new airline, Moxy, is expected to confirm a large order for the rebranded Airbus A220, the former Bombardier CSeries.
The event is also expected to provide new evidence of strong demand for freight planes as e-commerce drives up shippers’ profits.
Analyst predictions for total commercial orders and commitments vary from last year’s 900 to about half that. While high fuel prices make efficient new planes attractive, they hurt the bottom line of buyers, delaying some decisions.
“We are not blind: there are things that need to remain on watch,” the head of major engine-maker CFM said.
BRITISH jet engine maker Rolls-Royce has designed a propulsion system for a flying taxi and is starting a search for partners to help develop a project it hopes could take to the skies as soon as early next decade.
Rolls-Royce said yesterday it had drawn up plans for an electric vertical take-off and landing vehicle, or flying taxi, which could carry four to five people at speeds of up to 400 kilometersper hour for approximately 800 kilometers.
The company, which makes engines for planes, helicopters and ships, joins a variety of companies racing to develop flying taxis, which could revolutionise the way people travel.
Long the stuff of science fiction and futuristic cartoons such as “The Jetsons”, aviation and technology leaders are working to make electric-powered flying taxis a reality, including Airbus, US ride- sharing firm Uber and a range of start-ups including one backed by Google co-founder Larry Page, called Kitty Hawk.
Rolls-Royce’s design will be showcased in digital form at the Farnborough Airshow, which starts today. The company is looking for an airframer and a partner to provide aspects of the electrical system to help commercialise the project.
Rolls-Royce said it was well-placed to play a leading role in the “personal air mobility” market.
“The initial concept vehicle uses gas turbine technology to generate electricity to power six electric propulsors specially designed to have a low noise profile,” the company said, adding the design used its existing M250 gas turbine. Rolls’ design would not require re-charging because the battery is charged by the gas turbine.
China’s central bank is taking measures to ban businesses refusing or discriminating against cash payments to deal with the over-hype of a cashless society.Some consumers have complained about being denied using cash in places like tourist areas, restaurants, and retail stores, which harms the legal status of the Chinese yuan as well as consumers’ rights to choose means of payment, according to a statement released Friday by the People’s Bank of China.Banking institutions and non-banking payment platforms should not require or induce business entities or individuals to refuse or take discriminatory measures against cash payments, and these practices should be rectified within one month, the statement said.Mobile payments are popular across the country with a growing community of consumers using WeChat Pay, Alipay, and other mobile payment tools.A report from global market research firm Ipsos showed that China reached about 890 million mobile payment users in the first half of this year. For sales from online or unstaffed stores, cashless payment only is allowed if cash payments are impossible.
MALTA and Chinese technology giant Huawei signed a memorandum of understand on Saturday that will improve Maltese businesses via 5G, especially digital infrastructure for smart cities.
The agreement, which was signed by Huawei Technologies Italia CEO Miao Xiaoyang and Maltese Parliamentary Secretary for Digital Economy Silvio Schembri, comes two years after Malta and Huawei signed another MOU that had seen the company test its flagship 5G Internet connectivity in Malta.
Miao said that the technology would offer greater bandwidth and facilitated mass connections that could eventually be harnessed to create smart cities.
Schembri said Huawei would commit to sustaining academic research with a focus on addressing real world challenges related to public safety, video analytics, data processing and IT systems.
The MOU would also create opportunities through education, starting with an ICT training program for Maltese students at Huawei’s training center in China. Schembri said he was happy that Huawei had selected Malta to test its “avant garde 5G technology.
CLOSE to 70 percent of US companies doing business in China opposed tariffs, according to a survey by the American Chamber of Commerce in Shanghai.
The survey also pointed out that most US companies operating in China expected to raise investment in 2018
China and the US are engaged in a tit-for-tat retaliatory tariff battle but 69 percent of the 434 respondents in the survey opposed tariffs while only 8.5 percent supported them. Another 22.6 percent were unsure how they felt, the report released by AmCham today showed.
“Opposition to retaliatory tariffs was firmest in sectors likely to be targeted by Chinese counter-retaliatory tariffs, including non-consumer electronics (95 percent), chemicals (85 percent) and agriculture and food companies (78 percent),” said Kenneth Jarrett, president of AmCham Shanghai.
Faint support for tariffs was concentrated in services, led by education and training as well as legal services because these businesses felt they had little to lose, Jarrett added.
On a slightly brighter note, the survey also highlighted that 61.6 percent of US companies operating in China would increase their investment in 2018, led by those in the technology, services, and aviation sectors. This more optimistic note came despite a mild drop in investment growth in 2017.
More companies are also beginning to prioritize China in their investment strategies.
Companies whose first investment priority was China rose 3 percent to 27 percent, while 30 percent said it was their second to third priority, the survey revealed.
Overall 80 percent of the companies were optimistic, identical to last year, the chamber said.
Companies also believe that in the past few years Chinese government policies and regulations toward foreign companies have improved slightly with 34 percent of the respondents seeing improvements, a 6 percent rise from a year earlier, according to the survey.
Meanwhile a clear majority of respondents hailed China’s increasing consumption for the opportunities afforded to them over the next three to five years. Companies also welcomed innovations in technology, media, telecommunications and urbanization, according to the survey.
But 44 percent of the companies reported that policies and regulations had remained the same. Over 20 percent of the respondents said the environment had worsened, according to the survey.
In the next three to five years, companies will face the top three challenges of labor cost concerns, domestic competition, and an economic slowdown, the survey showed.
Also noteworthy, respondents said that lack of intellectual property rights protection and enforcement as well as obtaining licenses were seen as the top two regulatory obstacles.
Hyundai Motor Co’s labor union said yesterday that steep auto tariffs the US is considering could cost tens of thousands of American jobs, echoing concerns of the global auto industry as spiraling trade conflicts between the US and other major economies heat up.The labor union at South Korea’s largest auto company said in a statement that if President Donald Trump goes ahead with imposing 25 percent auto tariffs, it will hurt Hyundai’s US sales and jeopardize some 20,000 jobs at a Hyundai factory in Alabama.The labor union, which has 51,000 members in South Korea, said its contracts with Hyundai Motor mandate Hyundai to shut down overseas factories first before closing its plants in South Korea in the event that restructuring becomes inevitable.“If South Korean car exports to the US get blocked and hurt sales, the US factory in Alabama that went into operation in May 2005 could be the first one to be shut down, putting some 20,000 American workers at risk of layoffs,” the statement said. The union said it expects South Korea to win an exemption from auto tariffs.The union also said that South Korean carmakers were already penalized during the renegotiations of the bilateral trade agreement. Seoul and Washington agreed to postpone the removal of tariffs on Korean pickup trucks by another 20 years, a measure that the auto industry was unhappy with but won South Korea an exemption from US steel tariffs.Hyundai Motor is the world’s fifth-largest automaker along with Kia Motors.The US Department of Commerce is investigating whether auto imports pose enough national security threats to justify tariffs. While there are views that the threat of auto tariffs is a negotiating ploy, there are also concerns that the Trump administration could deliver on the threats.The move has already met pushback from global automakers. The Association of Global Automakers, a coalition representing major global automakers including Toyota Motor Corp, Volkswagen AG, BMW AG and Hyundai Motor Co, warned last month that high tariffs on imported vehicles and auto components could slash hundreds of thousands of jobs in the US auto sector and dramatically raise vehicle prices for consumers.
EIGHT firms, including several Chinese tech startups, started trading in the Hong Kong market yesterday, cementing the city as a destination for mainland technology initial public offerings.
Inke, a live streaming service provider, Qeeka, an online home decoration platform and game developer Zhijian-Yd are among the firms.
Inke, which has grown quickly during China’s live streaming frenzy since 2016, closed at HK$4.65 (59 US cents) in its first trading day yesterday, up 10.65 percent from the IPO price. Qeeka, however, tumbled 6.39 percent to close at HK$4.54 yesterday.
On Monday, Xiaomi become the first listed firm in Hong Kong to sell shares with a dual-class structure after the city changed listing rules to allow company founders to keep outsized voting rights.
Shares of Xiaomi, which was valued at US$54.3 billion in its IPO, fell 6 percent from its IPO price of HK$17 on its debut in Hong Kong on Monday. But Xiaomi rebounded by 1.37 percent to close at HK$19.26 yesterday.
Hong Kong is now a popular destination for technology IPOs from the mainland and in the past two years, the market has seen IPOs from online health care platform Ping An Good Doctor, game gadget vendor Razer, online car-financing provider Yixin Group and online finance payment service provider ChinaPnR.
Internet giant Meituan-Dianping, online education platform Hujiang and online housing platform E-House all have plans to list in Hong Kong.
AIHUISHOU, an online second-hand consumer electronics trading platform, said yesterday that it raised US$150 million in the latest round of financing, giving the company a market value of US$1.5 billion.
Tiger Global Management and JD.com led the latest investment. Previously, Aihuishou had secured four rounds of financing valued at a total of US$132 million, with investors including Morningside, JD.com, IFC, Cathay Capital, Tiantu Capital and Greenwoods Investment.
Aihuishou will use the US$150 million to invest in information security. The company will open more directly-owned outlets in China, said Chen Xuefeng, founder and CEO of Aihuishou.
Founded in 2011, Aihuishou pays consumers for used smartphones and iPads and re-sells them for profit.
Its 100,000 outlets in China generate an annual trade volume of 4 billion yuan (US$6.06 billion).
BRITAIN yesterday cleared the way for Rupert Murdoch’s 21st Century Fox to take full control of pan-European TV giant Sky after Fox agreed to address media plurality concerns.
Despite the clearance, satellite pay-TV group Sky could still end up being bought by Comcast or Disney amid a US media industry tug-of-war.
“It is now a matter for the Sky shareholders to decide whether to accept 21CF’s bid,” Britain’s Culture Secretary Jeremy Wright said in a statement.
Fox’s long-running pursuit for all of Sky had been plagued by UK government fears over media plurality and broadcasting standards — and the influence of Australian-born US citizen Murdoch.
Critics say that allowing Murdoch — who owns major British newspaper titles The Times and The Sun — full control of Sky News would give him too much influence in the UK news business.
To remedy this, Fox has proposed to sell the rolling TV news channel to Disney should it win full control of Sky.
The UK government’s statement meanwhile comes one day after both Comcast and 21st Century Fox raised their bids for Sky, escalating a takeover battle as media giants reposition themselves for the streaming era.
Comcast lifted its offer to 26 billion pounds (US$34.3 billion) only hours after Fox boosted its offer for the 61 percent of Sky it does not own.
Fox’s latest bid values Sky at 24.5 billion pounds.
The battle for Sky comes as Comcast is also embroiled in a takeover battle with Disney for Fox entertainment assets that are being split off from Murdoch’s empire.
Some analysts have said Comcast could drop its bid for the Fox assets should it win Sky.
Media giants such as Disney and Comcast have been looking to beef up their creative offerings to compete with Netflix and other streaming services that are eroding the value of conventional cable television assets.
Sky’s jewel in the crown is its live coverage of English Premier League football, while the group also provides broadband Internet and telephone services.
“The stock market continues to believe that the winner of the Sky takeover battle will pay more than has currently been offered,” said Russ Mould, investment director at AJ Bell.
“Takeover battles don’t go on forever and at some point one of the competing parties will have to admit defeat,” he added.
Sky changed its name from BSkyB after agreeing in 2014 to purchase Sky Italia and a majority holding in Sky Deutschland.
PIZZA chain Papa John’s International Inc said on Wednesday its founder and former chief executive, John Schnatter, resigned as chairman of the board.
The company said Olivia Kirtley would act as lead independent director, and added it would appoint a new chairman in the coming weeks.
The resignation comes after Forbes reported earlier in the day that Schnatter used a racial slur on a conference call.
“Papa John’s condemns racism and any insensitive language, no matter the situation or setting ... We take great pride in the diversity of the Papa John’s family, though diversity and inclusion is an area we will continue to strive to do better,” the company said in a separate statement.
Schnatter, who founded the company in 1984, resigned as chief executive in December last year, after drawing criticism for comments he made at the National Football League leadership.
SOUTH Korea’s financial regulator said yesterday it had found intentional breaches of accounting rules at Samsung Biologics, the drugmaking unit once seen as Samsung’s future growth engine.
The Financial Services Commission said it will bring the case to prosecutors and ask Samsung Biologics to dismiss executives in charge of accounting breaches. It will also penalize an accounting firm that audited Samsung.
The FSC said the company failed to notify investors of crucial information related to its joint venture agreement with Biogen, a US biotechnology company. The missing information affected the valuation of Samsung Biologics and its subsidiary, allowing Samsung Biologics to suddenly become profitable for the first time in 2015 before its listing on a Seoul stock market in 2016.
The FSC said Samsung Biologics was aware that leaving out such information could violate accounting rules.
CHINA’S centrally-administered state-owned enterprises reported fast profit growth in the first half of the year with a lower debt-asset ratio, data showed yesterday.
Combined profits of China’s central SOEs totaled 887.79 billion yuan (US$133.1 billion) in the first six months, up 23 percent from a year earlier, the State-owned Assets Supervision and Administration Commission said.
The growth rate was 2.1 percentage points higher than the pace in the first quarter.
In June, central SOEs’ profits rose 26.4 percent year on year to a historic high of 201.88 billion yuan, said SASAC spokesperson Peng Huagang .
The total revenues of central SOEs stood at 13.7 trillion yuan in the first half, up 10.1 percent year on year.
“Such strong performance was partly due to China’s ongoing supply-side structural reform,” Peng said.
From January to June, central SOEs in the industrial sector raked in 515.28 billion yuan in profits, up 33.9 percent year on year, 10.9 percentage points higher than the average level.
Strategic emerging industries and new growth drivers contributed to the fast growth, with revenues of new businesses including Internet applications taking up over 50 percent of total revenues.
Central SOEs’ debt-asset ratio declined in the first half due to government deleveraging efforts.
FOREIGN direct investment into the Chinese mainland rose 1.1 percent year on year to 446.29 billion yuan (US$66.9 billion) in the first six months of 2018, official data showed yesterday.
In dollar terms, FDI inflow grew 4.1 percent to US$68.32 billion in the first half, Gao Feng, spokesman with the Ministry of Commerce, said at a press conference.
In June, FDI inflow added 0.3 percent year on year to 100.7 billion yuan.
The number of new overseas-funded companies set up in the first half surged 96.6 percent from a year earlier to 29,591, Gao said.
Investment into high-tech industries rose 1.6 percent and accounted for 20.9 percent of the total FDI, with the high-tech manufacturing sector attracting 43.37 billion yuan in overseas investment, up 25.3 percent. FDI into the instrument and apparatus sector jumped 179.6 percent.
In the six-month period, China’s 11 pilot free trade zones saw FDI inflow rise 32.6 percent to 57.84 billion yuan, with 4,281 new overseas-funded companies established.
Regions in western China used 28.84 billion yuan of overseas investment, up 13.2 percent in the same period.
Investment from countries along the Belt and Road surged 24.9 percent, while other major FDI sources also grew sreadily, Gao said.
China has rolled out a number of measures to significantly broaden market access since the beginning of 2018, a year that marks the 40th anniversary of the country’s reform and opening-up policy.
In late June, China unveiled a shortened negative list for foreign investment, which cuts the number of items on the list to 48 from 63 in the previous version and detailed 22 opening-up measures in several sectors. Enditem
THE second prototype of China’s domestically made narrow-body passenger aircraft, the C919, completed its first long-distance flight yesterday.
The single-aisle aircraft, labeled No. 102, took off from Pudong International Airport in Shanghai at 2:57pm and arrived at the Dongying Testing Base in east China’s Shandong Province at 4:43pm after covering a distance of more than 750 kilometers.
The Commercial Aircraft Corp of China (COMAC), C919’s developer, said it was the start of intensive flying tests. It will be tested for complicated weather conditions and high-risk test flying.
The second C919 aircraft, which rolled out from the assembly line on November 28 and had its first test flight in December, has completed a series of inspections on operation stability and flying performance before flying to Shandong, COMAC said.
The aircraft will test C919’s power unit as well as fuel, electrical and environment control systems.
The first and second prototypes of C919 will carry out a series of experiments simultaneously. The first C919, which made its maiden flight from Shanghai on May 5, 2017, is currently in Yanliang Testing Base in Xi’an, northwest China’s Shaanxi Province.
Some modifications have been made on the trailing cones and other systems of the first C919 prototype, COMAC said.
The company said there will be six C919 planes for various flight tests, and two others for static and fatigue tests on the ground, before the aircraft begins commercial operation around 2020. They will carry out more than 1,000 ground and air tests on power, performance, stability, flying control, frozen, high and low temperatures to acquire the airworthiness certificate.
During one of the ground tests, the aircraft was tested for extreme plate load. The test has been deemed as a major challenge for C919 because the ARJ21, China’s first domestically developed regional jet, had failed its first extreme plate load test in December 2009.
A series of other load tests will be conducted to ensure the C919 can meet the most advanced international airworthiness standard, COMAC said.
Also, another testing base for C919 will be set up in Nanchang in east China’s Jiangxi Province. The prototype jets will then have their main testing base at Shanghai’s Pudong Airport along with three supportive bases in Yanliang, Dongying and Nanchang. The prototypes will also conduct test flights to other domestic airports in special weather conditions.
The European Aviation Safety Agency has said it is in the process of certifying the C919, a key step for the single-aisle aircraft to get access to the European market.
Global access for the C919 will also be boosted by a Sino-US aircraft certification agreement signed in October, according to COMAC. The agreement between the Civil Aviation Administration of China and the US Federal Aviation Administration aims to widen mutual recognition of each country’s aviation products.
The C919, with 168 seats and a range of 5,555km, will compete for orders with the updated A320 (A320neo) and the new-generation Boeing 737 (737Max).
COMAC has secured 815 orders from 28 foreign and domestic airlines. Overseas buyers include Germany’s PuRen Airlines and Thailand’s City Airways, as well as Asia-Pacific and African carriers.
Rupert Murdoch’s 21st Century Fox has raised its offer for Britain’s Sky in an agreed deal valuing the pay-TV group at US$32.5 billion, seeing off rival bidder Comcast for now.Fox, which has been trying to buy the pan-European group since December 2016, offered to pay 14 pounds per share, a 12 percent premium to Comcast’s offer, but below the 15 pounds Sky shares were trading at yesterday.Analysts said the bid threw down the gauntlet for Comcast, the world’s biggest entertainment company, to return with a higher offer.The US cable group gatecrashed Murdoch’s attempt to buy the 61 percent of Sky his group did not already own in February, when Fox was still firmly stuck in the regulatory process.One top-40 Sky shareholder said they expected Comcast to come back with a counter bid for Sky.“The end price really depends on the appetite of those companies and how much they are willing to take their leverage up and at what stage their shareholders say enough is enough,” the shareholder, who did not wish to be identified, said.The fight for Britain’s leading pay-TV group is part of a bigger battle being waged in the entertainment industry as the world’s media giants offer tens of billions of dollars in deals to be able to compete with Netflix and Amazon.Comcast and Walt Disney are locked in a separate US$70 billion-plus battle to buy most of Fox’s assets, which would include Sky.Disney secured conditional US approval to buy the assets last month, giving it an edge over Comcast’s bid.Hong Kong-based hedge fund Case Equity Partners, a Sky investor, said the fact Disney was in a slightly more favorable position for Fox’s US media assets meant Comcast would fight even harder to get Sky.“Today’s Fox bid is unlikely to be the end game as we see a final Sky deal outcome at well over 15 pounds per share,” said managing partner Michael Wegener.Comcast declined to comment on Fox’s new offer.Present in 23 million homes across Europe, Sky is a prized asset, with a direct relationship with its customers and a slate of top sport and original drama content.“This transformative transaction will position Sky so that it can continue to compete within an environment that now includes some of the largest companies in the world,” Fox said.Its offer represents an 82 percent premium to Sky’s shares in 2016 before the takeover drama started, and a multiple of 21 times 2017 earnings per share.Sky’s senior independent director Martin Gilbert welcomed the move. “This offer reflects the strong position the business is in and is an attractive premium for shareholders,” he said.However, British regulators have indicated that if Disney succeeds in buying Fox, including the 39 percent stake in Sky, it would be required to offer the same price for the remainder of Sky. According to some shareholders, that has set an implied higher floor for Sky’s shares.Hedge funds including Elliott have bought into Sky in recent months and other vocal shareholders such as Crispin Odey have demanded that the independent directors secure a better deal.“It’s too low,” Odey, a former son-in-law of Murdoch whose eponymous hedge fund is a Sky shareholder, said of the sweetened Fox offer.“Disney’s internal forecasts now, on the basis of the cash flows they’ve published for Sky, would value it at 16 pounds,” he said.Investors argue that Sky’s continued strong trading performance, and its deal this year to secure the rights to English Premier League football at a lower than expected price, meant it warranted a higher offer.Fox said the performance of Sky since 2016 justified its new bid. Analysts said it was not a knock-out, and Fox did not say it was its final offer.“Fox coming back in for Sky isn’t a surprise in itself, but the fact the offer is slightly behind what some had anticipated brings another twist,” said George Salmon, equity analyst at Hargreaves Lansdown.The British government is expected to finally allow Fox to buy Sky this week, after the US group agreed to sell Sky’s award-winning news channel to Disney to prevent Murdoch from owning too much of the British media.Fox, run by Rupert’s son James who is also the chairman of Sky, has made a string of guarantees to help secure backing for its deal, including investment in British TV production, technology and protection for Sky News.Murdoch had previously tried and failed to buy Sky in 2011.
UBER Technologies Inc’s Chief People Officer Liane Hornsey resigned in an email to staff on Tuesday, following an investigation into how she handled allegations of racial discrimination at the ride-hailing firm.
The resignation comes after Reuters contacted Uber on Monday about the previously unreported investigation into accusations from anonymous whistleblowers that Hornsey had systematically dismissed internal complaints of racial discrimination.
Hornsey is head of Uber’s human resources department and one of the firm’s top spokespeople on diversity and discrimination issues. She had been in the role for about 18 months, as the company was rocked by claims of widespread issues of gender discrimination and sexual harassment.
The allegations raise questions about Chief Executive Dara Khosrowshahi’s efforts to change the toxic culture of the firm after he took over in August last year from former CEO Travis Kalanick following a series of scandals.
Khosrowshahi praised Hornsey in an email to employees, which was seen by Reuters, as “incredibly talented, creative, and hard-working.” He gave no reason for her departure.
Hornsey acknowledged in a separate email to her team at Uber, also seen by Reuters, that her exit “comes a little out of the blue for some of you, but I have been thinking about this for a while.”
She also gave no reason for her resignation and has not responded to requests for comment about the investigation.
The allegations against her and Uber’s human resources department more broadly were made by an anonymous group that claims to be Uber employees of color, members of the group told Reuters.
They alleged Hornsey had used discriminatory language and made derogatory comments about Uber Global Head of Diversity and Inclusion Bernard Coleman, and had denigrated and threatened former Uber executive Bozoma Saint John, who left the company in June.
US producer prices increased slightly more than expected in June amid gains in the cost of services and motor vehicles, leading to the biggest annual increase in 6-1/2 years.
The report published by the Labor Department yesterday also showed a pickup in underlying producer inflation last month. The data supports views of steadily rising price pressures, which will probably allow the Federal Reserve to increase interest rates two more times this year.
Tariffs imposed by the Trump administration on imports of lumber, steel and aluminum pushed up prices last month.
“Tariffs are negative for economic growth but they are also inflationary,” said John Ryding, chief economist at RDQ Economics in New York. “We expect these price pressures will flow through into higher core inflation at the consumer level as the year unfolds.”
The producer price index for final demand added 0.3 percent last month after rising 0.5 percent in May. In the 12 months through June, the PPI rose 3.4 percent, the largest gain since November 2011. Producer prices added 3.1 percent year on year in May.
Economists polled by Reuters had forecast the PPI gaining 0.2 percent in June and rising 3.2 percent year on year.
A key gauge of underlying producer price pressures that excludes food, energy and trade services rose 0.3 percent last month. The so-called core PPI edged up 0.1 percent in May.
In the 12 months through June, the core PPI rose 2.7 percent after adding 2.6 percent in May.
SALES of pre-occupied homes stayed above the 15,000-unit threshold in Shanghai for the second straight month, while the existing housing index continued to fall, according to recent market data.
The index, which monitors month-over-month price changes in 130 areas citywide, fell 0.35 percent, or 12 points, from May to 3,928 in June, extending weakness for the seventh straight month, Shanghai Existing House Index Office said in a report released yesterday.
Around the city, some 15,500 pre-used homes changed hands last month, down 3.5 percent from May and an increase of 30.7 percent from the same period a year earlier. By sales price, those costing below 3 million yuan (US$447,961) took up 61.1 percent of the total, and pre-used homes costing over 5 million yuan made up about 14.6 percent.
“The city’s existing housing market remained generally stable, backed by above-15,000 unit monthly transactions as well as a slower pace of decrease in the price index,” the office said. “Looking forward, as the market has entered its traditional low season for property sales, we expect to see some fluctuation in sales but probably no big ups or downs in home prices.”
Prices of pre-owned homes climbed in 33 areas, fell in 79 areas, and were flat in 18 areas, according to the office.
Citywide, the three most sought-after areas were Pujiang in Minhang District, Sanlin in the Pudong New Area, and Nanqiao New City in Fengxian District, where 433, 383 and 364 pre-owned homes were sold, respectively, last month.
On the inventory side, the city had 84,800 pre-occupied homes available for sale as of the end of June, a month-over-month drop of 2.3 percent and a year-on-year plunge of 50 percent, according to data compiled by the office.
Between January and June, transactions of pre-occupied homes totaled 81,100 units across the city, slightly higher than the 77,900 units sold during the first six months of 2017, according to a separate report released earlier by Shanghai Homelink Real Estate Agency Co.
SHANGHAI expects to implement over 90 percent of the newly-released 100 measures aimed at promoting opening up by the end of 2018.
The city will ensure that the 100 measures, which it unveiled on Tuesday, will be put in practice in accordance with the central government’s plans while local issues not related to the central government will be launched immediately from the date of the release, Zhou Bo, Shanghai’s executive vice mayor, said at a press conference yesterday.
“In principle, most of the measures are planned to be implemented in the third quarter,” Zhou said, adding that the measures relating to the central government are mainly in the financial field.
“Among the 100 measures, 34 need to have the nation’s support, accounting for one-third of the total number,” Zhou said.
The city’s Free Trade Zone will be encouraged to innovate further, and the municipal government will support districts to open wider and promote the development of four brands — Shanghai Manufacturing, Shanghai Services, Shanghai Shopping and Shanghai Culture.
Li Jun, vice director of the Shanghai Financial Service Office, said that the city government will expend efforts to ensure the Shanghai-London Stock Connect go live this year. The stock connect program is planned to link the markets of the two cities through depositary receipts, Li said. Shanghai unveiled the 100 measures on Tuesday in finance, advanced industries, intellectual property, supportive platforms for imports, and business environment.
SHANGHAI’S Grade A office market will see abundant new supply in the second half of this year, leaving upward pressure on vacancy rates, according to recent forecasts by global real estate services provider Savills.
During the six months through December, nearly 1.4 million square meters of Grade A office space will be launched across the city in both core and decentralized locations, Savills’ research showed.
“The second half of 2018 will remain tough for landlords, especially those of older projects which are confronted with increasing competition from new supply,” said Chester Zhang, associate director at Savills China research.
“These landlords are more open to discussion during renewal negotiation with existing tenants, while large space occupiers will have more room to bargain on their rental prices.”
Between April and June, five new Grade A office projects totaling 426,300 square meters were launched in core locations, raising vacancy rates by 2.2 percentage points to 12.4 percent. In the decentralized market, new supply of Grade A office space reached 563,400 square meters during the same period, pushing up vacancy rates by 1.7 percentage points to 35.5 percent, the highest over the last three years, according to Savills.
A separate report released by global property adviser JLL said that Grade A office rents edged up in both CBD and decentralized areas in the second quarter of this year amid continuously robust leasing demand mainly from co-working operators, TMT (technology, media and telecom) and financial service companies.
SHANGHAI was ranked the world’s fifth best international financial center for a second time in a row, according to a survey released yesterday by China Economic Information Service under Xinhua news agency.
The survey was based on indicators including market size, growth, services and overall business environment. London, New York, Hong Kong and Tokyo were the top four global financial centers.
Shanghai aims to further open its financial industry to foreign firms, including abolishing share limit for foreign-funded banks and financial asset management companies, and backing foreign banks to issue more government bonds.
CHINA Mobile’s Migu and Suning are tying up to jointly tap into the 3-trillion-yuan (US$448 billion) sport industry in China, both companies said yesterday.
The partners will cooperate on sport content production, distribution and smart device and data analysis. As people spend more on culture and sport products, the Chinese sport industry will be worth 3 trillion yuan annually, the companies added.
MAJOR camera makers are showing new models featuring artificial intelligence at the Photo & Imaging Shanghai 2018 (P&I Shanghai) show in the city.
Sony, Canon, Epson, Kodak, Fujifilm and China-based Lucky Film are displaying products and services during the four-day show, which opened today at the Shanghai New International Expo Centre in Pudong New Area.
CAINIAO Network has made a US$290 million cash investment in Hangzhou-based crowdsourcing courier platform Dianwoda. Cainiao Network will become Dianwoda’s controlling shareholder and will also merge its existing outsourcing business with Dianwoda.
UNIONPAY International said yesterday it has expanded its tax refund service to seven countries along the Belt and Road region in the first half of 2018. Users can also enjoy early refund service in 14 countries and regions, which allows merchants to initiate refunds at POS terminals for refunds directly to cardholders’ accounts or in cash.
THE Chinese market has made the most contribution to automaker Audi’s sales increase in the first half of the year, a statement from Audi said.
The German automaker’s sales from January to June totaled around 949,300 units worldwide, with 306,590 units sold to Chinese customers during the period, representing a year-on-year increase of 20.3 percent, the statement said.
After China, the carmaker has seen the second-most sales increase of 4.8 percent in the United States, where 107,942 automobiles have been delivered in the first six months of 2018.
Sales during the period in Europe and Germany both fell by 4.2 percent and 6.3 percent.
“Despite the difficult environment, we performed well thanks to the positive development in Asia and North America in the first half of the year,” says Bram Schot, interim CEO and board member for sales and marketing.
Chen Jiawei and Lin Jinghan were quick off the mark when buying new cars this year. They went to a dealership once and a week later inked purchase agreements.Chen, who was born in 1990 and works as an assistant accounts manager in a commercial bank, bought a Mercedes-Benz C200 L sedan a few months back.“Before visiting the dealership, I had already decided what brand and model I wanted to buy,” he said. “I checked some of the detailed specs with the dealership staff, but it didn’t take me long to make a final decision.”Lin, who was born in 1992 and works as a senior analyst for an autoparts company, bought a Dongfeng Honda Civic sedan in June.“My communication with the car dealership went well, so I decided to make a quick decision,” he explained. “I was familiar with the vehicle because of the recommendation of a friend.”Chen and Lin are symbolic of the young generation of car buyers. Unlike the older generation, they are more concerned about vehicle efficiency and digital gadgetry. And they are impatient to take ownership once a decision is made.A recent J.D. Power’s survey of 24,625 new car buyers in China found purchasers were the youngest ever measured. Some 57 percent are 33 years or younger.The survey also showed consumers who born in the 1980s or later account for 81 percent of the total number of respondents.“Youth is the important trend in the Chinese auto market,” said Ann Xie, senior research director of J.D. Power China. “The trend portends a change in selling and services tactics. For young consumers, a vehicle is not an asset but a consumer commodity.”The young are not only interested in the appearance of a vehicle but also in its Internet intelligence, online services, driving pleasure and individuality. Car dealers need to understand these preferences if they want to succeed in this changing market.Liu Le, a sales manager who works in a dealership of Shanghai-based automaker SAIC Motor Co, said young consumers crave sporty, streamlined models. Internet-connected features also play an important role in their decision-making, he said. The young generation wants a vehicle that can connect online with navigation aids, positioning, shopping and their mobile phones. “Young car buyers especially want interconnection between their cars and their phones,” Liu said. “They want to be able to turn on air conditioning and unlock the vehicle via a mobile app. They can also check the overall status of the vehicle through apps. We take the time to help young consumers learn how to use these features.”Budget factorJacob George, vice president and general manager of J.D. Power Asia Pacific, said young consumers are good at making smart, wise purchase decisions, which means looking for the best-performing cars within their budget.“Understanding a potential buyer’s budget is as important as understanding what they want in a vehicle,” he said.The survey also revealed the speed at which young people can make decisions. It found 54 percent of them will make a decision within one week, much more quickly than older buyers. Liu said most of his clients typically visit the showroom about three times.“In general, the whole decision-making process takes one to two months, but young car buyers take less time,” he said. “They also care about when the vehicle can be delivered.”Dealers aside, young car buyers are digitally savvy and do a lot of their vehicle research online. Chen and Lin said it took them less than a month to review and compare car models. Young buyers are also more impatient about delivery times and often base decisions on test drives. According to the survey, when a test drive exceeds 30 minutes, the satisfaction rate drops. That’s a sharp contrast to older generations, whose satisfaction rate remains relatively stable no matter how long a test drive lasts.Car dealers need to become more adept at tapping a range of digital communications channels to entice the young into showrooms. “I would definitely welcome digital services provided by car dealers,” said Tong Liying, who is a student at Tongji University. “I would like information on vehicle configuration so I can compare prices online.”Young consumers also want less paperwork and dealership sales staff that can answer their questions. Some dealerships are recruiting younger employees who are more adept at talking with young buyers. “When I visit a dealership, I pay attention to the sales person,” Chen said. “I certainly expect the staff to understand my needs and give me reasonable advice about vehicles. Sometimes, that interaction is a deciding factor in whether I return to the dealer.”
China’s auto sales beat expectations by rising 5.6 percent from a year ago to 14.06 million vehicles in the first half of this year, according to data from the China Association of Automobile Manufacturers.Growth in vehicle sales and production remained stable last month, CAAM said. In June, auto sales climbed 4.8 percent from a year earlier to 2.27 million vehicles, data from CAAM showed.“The 5.6 percent sales growth rate in the first half of this year is 1.8 percentage points faster than that of the previous year. The overall performance in the first six months was better than what we expected at the beginning of this year,” CAAM said.Sales increase in the first six months was mainly powered by robust sales of new-energy vehicles and rising market demand amid a stable economic environment, according to CAAM.In the first six months of this year, production of new-energy vehicles surged 94.9 percent from the same period last year to 413,000, while vehicles sold jumped 111.5 percent year on year to 412,000. Between January and June, sales of electric vehicles surged 96 percent to 313,000 units year on year. Sales of plug-in hybrids jumped 181.6 percent from a year earlier to 99,000 units.“New-energy vehicles have become the main driver behind the sales growth of China’s automobile market,” said Cui Dongshu, secretary-general of the China Passenger Car Association, another industry group.
US electric carmaker Tesla will set up a wholly owned factory in Shanghai, which will be the city’s largest foreign-invested manufacturing project.
With an annual capacity of 500,000 cars, the factory in Lingang in the Pudong New Area will be Tesla’s first Gigafactory outside the United States.
“The city government is pleased to have a strategic cooperation with Tesla,” Shanghai Mayor Ying Yong said yesterday at a ceremony, where the US company signed agreements with Shanghai Lingang Area Development Administration and Lingang Group.
“Shanghai welcomes Tesla to put its entire industry chain of research and development, manufacturing and sales of electric car in the city,” Ying said. “The government will fully support the construction of Tesla’s factory, and create a better business environment and provide better services for all types of enterprises, including Tesla,”
Tesla’s Chief Executive Elon Musk said the Shanghai plant will be a leading electric car factory which is expected to be a good example for sustainable development.
“I sincerely hope Tesla’s Gigafactory will be built as soon as possible and make contribution to Shanghai’s development,” he said.
As per the agreements, Shanghai will support Tesla’s development, including the establishment of Tesla (Shanghai) Co and its research and development unit.
The city government says it will promote innovation and accelerate the pace of development of high-end manufacturing. The city aims to turn itself into a leading automobile center.
Tesla (Shanghai) Co and Tesla (Shanghai) Electric Vehicle Research and Development Innovation Center were inaugurated yesterday.
The R&D center will mainly focus on innovation, research and development of electric cars and actively work to transform the technology and innovation into actual results.
Earlier this year, China abolished ownership limits for foreign companies on electric vehicle manufacturing plants.
In May, Tesla’s Hong Kong subsidiary set up Tesla (Shanghai) Co with a registered capital of 100 million yuan (US$15 million), according to the National Enterprise Credit Information Publicity System. The new company’s business scope includes technology development, service, consultation and transfer of electric cars, spare parts, batteries, energy-storage equipment and photovoltaic products.
Huang Weifang, an official from the Lingang Management Committee of the Pudong New Area, said the city government “is supportive on the innovation and development of new-energy vehicles and optimistic on Tesla’s development in China.”
Lingang area is already home to international brands such as MG Rover.
Tesla currently imports all the cars it sells in China from the US. The company ships more than 15,000 cars a year to China.
A factory in China will cut Tesla’s shipping and tariff costs while also meeting the demand of the world’s largest auto market.
In response to tariffs imposed by the US, China increased the import duty on US-made cars to 40 percent last week, forcing Tesla to raise the prices of its Model X and S cars by about 20 percent. Tesla’s Model S sedan now costs about 849,900 yuan, compared with 710,579 yuan in May. The price of its Model X sport-utility vehicle rose to about 927,200 yuan from 775,579 yuan.
CHINA’S consumer inflation rose slightly faster in June amid higher food prices.
The Consumer Price Index, a main gauge of inflation, rose 1.9 percent year on year in June, faster than the 1.8 percent annual growth in May, the National Bureau of Statistics said yesterday.
On a monthly basis, the CPI dipped by 0.1 percent in June, and this dip was 0.1 percentage point slower from May.
Sheng Guoqing, the bureau’s senior statistician, cited the faster consumer inflation to a 0.3 percent rise in food prices, which lifted CPI growth by 0.05 percentage points.
Prices of eggs and vegetables surged 17.1 percent and 9.3 percent respectively to add 0.27 percent to CPI growth, while pork and fruit prices fell 12.8 percent and 5.3 percent year on year respectively.
Non-food price inflation was flat from May at 2.2 percent year on year, the bureau said.
Monthly food price inflation added 0.5 percentage points to a negative 0.8 percent, from its recent low of negative 4.2 percent in March.
Pork prices rose after falling for three straight months, up 1.1 percent in June from May, lifting the month-on-month CPI growth by 0.02 percentage points.
“The steady trend of CPI indicated moderate inflation, providing a good environment for policy regulation,” said Lian Ping, chief economist of the Bank of Communications.
Lian predicted pork prices to rebound in the third and fourth quarters, which may lift food prices slightly.
More costly services will continue to support the headline CPI, according to the Australia and New Zealand Banking Group.
The services sector saw costs rise 2.7 percent annually in the first half of the year, with prices in education, tourism, and health care up 2.7 percent, 3.3 percent, and 6.4 percent respectively.
“The uptrend will continue, in our view, as demand for services will remain strong,” said David Qu, markets economist of ANZ Group.
The Producer Price Index, which measures costs of goods at the factory gate, rose by a stronger-than-expected 4.7 percent year on year, up 0.6 percentage points from the May figure to a six-month high.
By industry, PPI inflation rose markedly in petroleum and natural gas extraction, petroleum and coal processing, ferrous metal processing, nonferrous metal processing, chemical material and products, and coal mining.
These industries together contributed an increase of 0.49 percentage points to the year-on-year headline number, data from the bureau showed.
Prices of oil and natural gas prices rose 32.7 percent year on year in June, and for the first half of the year they have risen 17 percent from the same period last year.
“With Brent crude futures surging 66 percent to US$78 from US$47 over the past 12 months, we expect domestic fuel prices in China to continue to accelerate, which will exert further upward pressure on the PPI,” Qu said.
On a monthly basis, PPI inflation dipped 0.1 percentage point to 0.3 percent in June.
“Looking ahead, we expect PPI inflation to fall in the second half of the year from a high base in the same period of 2017, a stable oil price and weakening end-demand, and CPI inflation to stay at a subdued 2 percent as household purchasing power is hit by a rising debt burden,” said Lu Ting, Nomura’s economist.
AIRBUS unveiled a new identity for the 110-130-seat CSeries passenger plane yesterday as it prepares to broaden its battle with Boeing to small passenger jets.
The European firm said it was rebranding the plane as the A220, slotting it just under its longstanding A300 portfolio which stretches from the 124-seat A319 to the 544-seat A380.
Airbus expects to sell a “double-digit” number of the jets this year and sees demand for at least 3,000 of them over 20 years, said CSeries sales chief David Dufrenois.
The makeover seals the European takeover of one of Canada’s most visible industrial projects and ends Bombardier’s efforts to go it alone in the mainline jet market against larger rivals.
Airbus officials stressed it would be positive for jobs in Quebec where the lightweight jet is built.
The 110-seat and 130-seat models, previously known as CS100 and CS300, will be known as A220-100 and A220-300 respectively.
A deal for Airbus to take majority control of the loss-making Montreal-based aircraft program with Bombardier and Quebec as minority partners officially closed on July 1.
The move also sets the stage for a broader confrontation with Boeing, which last week announced a tentative deal to take over the commercial unit of Bombardier’s competitor Embraer of Brazil.
The change of identity came in a branding ceremony as the Canadian-developed passenger jet performed a flypast over Airbus’s Toulouse facilities.
TAKEDA Pharmaceutical Co Ltd yesterday said it has received US approval for its US$62 billion acquisition of London-listed Shire Plc, taking the Japanese firm one step closer to its goal of becoming a global top 10 drugmaker.
Takeda said in a press release it received unconditional clearance from the United States Federal Trade Commission.
The Tokyo-listed firm is still awaiting approval from regulators in China, the European Union and elsewhere, as well from shareholders of both parties.
Chief Executive Christophe Weber has been working to persuade investors about the deal’s cost-saving merits. However, concerns of the financial burden the combined company will carry have weighed heavily on Takeda’s stock price which closed flat yesterday ahead of the announcement. The stock is down 16 percent since the firm first said at the end of March it was eying bidding for Shire.
The drugmaker expects the deal to close in the first half of 2019.
More foreign asset management firms are expanding into China as the country’s capital market offers more investment opportunities.Altogether 13 foreign institutions have received Private Securities Investment Fund Manager licenses from the Asset Management Association of China.Hedge fund giants Bridgewater Associates and Winton Group were the latest to be approved, according to AMAC.The newly-registered institutions will launch investment products in China within six months, in accordance with regulations.Bridgewater Associates, the world’s biggest hedge fund, has been involved in and studying the Chinese economy and markets for over 30 years, David McCormick, the co-chief executive officer of the firm, said in a statement.He called China “a globally impactful economy” and Chinese assets “a valuable source of diversification.”With the new license, the firm plans to expand its presence across China, the statement said.Winton Group is upbeat about the outlook of the Chinese market.“We highly value our development in the Chinese market,” said Fred Tian, head of investment solutions for China at Winton Capital Asia Limited. “The opening up came as an inevitable result of the capital market’s development.”Winton Group is developing investment strategies in China on futures and A shares, according to Tian.As the capital market opens up further, China’s increasing participation will benefit the diversity and sustainable development of the international market, while a more transparent, fair, and innovative Chinese market will see healthier growth, Tian believes.China has been taking gradual but resolute steps to open up the financial sector to boost its international competitiveness and ability to serve the real economy.In recent months, the government has announced a series of new opening-up measures, including expanding the daily quotas for mainland-Hong Kong stock connect programs and scrapping foreign equity restrictions on domestic banks and financial asset management firms.
ERNST & Young yesterday launched its first China “wavespace” flagship center in the Shanghai World Financial Center to help local startups embrace innovation and to seek new business growth by combining new digital technologies.
The Shanghai center is the 15th for EY globally, and three more will be unveiled in the second half of this year, joining its connected global network of growth and innovation centers.
EY intends to leverage its global knowledge to lower costs for enterprises by using external resources while improving efficiency.
It provides virtual reality gadgets, cloud computing facilities and Internet of Things trial solutions for startups, as well as external collaboration opportunities with industry players and investment institutions.
The EY Shanghai “wavespace” includes a design studio and an incubator which will specialize in emerging technologies such as artificial intelligence, Blockchain and the IoT.
HONG Kong property conglomerate HKR International wasn’t a household name in Shanghai until its swank HKRI Taikoo Hui retail, office and hotel complex opened in the Jing’an District in 2017.
The complex at the intersection of Nanjing and Shimen roads is HKR International’s flagship project on the mainland.
Developed jointly with Swire Properties, HKRI Taikoo Hui has become a commercial landmark in Puxi and a trendy venue for shopping, dining and entertainment.
In its home base Hong Kong, HKR International made its name over the years with the ongoing development of Discovery Bay, a large resort-style residential community on the city’s Lantau Island.
In an exclusive interview, Victor Cha, deputy chairman and managing director of HKR International, discussed with Shanghai Daily his company’s future on the mainland and how the market requires developers to move beyond the build-and-sell strategies of the past.
Cha, who holds an MBA from Stanford University, is the son of Cha Chi-ming, a Hong Kong industrialist and philanthropist who was born in Zhejiang Province and died in 2007.
Q: When did HKR International first tap the Chinese mainland property market and what prompted the decision to expand beyond Hong Kong?
A: We decided to enter the Chinese mainland market in the 1990s after seeing rapid economic development and massive urban construction following nationwide implementation of the reform and opening-up policy in 1978. It was not until 2000 that we bought our first real estate project — Chelsea Residence, a deluxe serviced apartment development on Huashan Road in Shanghai. It was later sold through strata title sales.
As for real estate development, we signed our first contract with the Jing’an District government in 2002 to acquire the Dazhongli site on Nanjing Road W. for construction of HKRI Taikoo Hui, our flagship property project on the mainland.
Q: Tell us something about the HKRI Taikoo Hui project.
A: It comprises a retail mall, two Grade-A office towers, two boutique hotels, one serviced apartment building and the “Cha House,” a revitalized historic building. It cost 17 billion yuan (US$2.56 billion) and covers 323,000 square meters. It’s a 50-50 venture between HKR International and Swire Properties, a partner we brought into the project in 2006.
The opening of this flagship project has greatly boosted our revenue in the Chinese mainland, which remains one of the three key markets for the group. Looking back, we feel it was a wise decision to approach the district government after our acquisition of the site and get the development permit changed from its original designation as a two-third residential site.
Q: How large is your portfolio here and what are your plans for future development?
A: At the moment, our business on the mainland is very focused on the Yangtze River Delta region — in particular, Shanghai, Jiaxing and Hangzhou in neighboring Zhejiang Province.
The Cha family has deep roots in Haining, a county-level city under the jurisdiction of Jiaxing. We always prefer to do business in a place or environment with which we are familiar.
Our current portfolio here includes the following projects: HKRI Taikoo Hui (mixed-use, Shanghai), Elite House (residential, Shanghai), Riviera One (residential, Jiaxing), City One (residential, Jiaxing), Oasis One (residential, Hangzhou) and The Exchange (office and retail, Tianjin).
We have also acquired two additional land parcels designated for residential purposes in Jiaxing’s economic development zone.
We celebrated our 40th anniversary last year, and we remain extremely upbeat about the prospects of the real estate industry on the Chinese mainland. Looking forward, we will stick to our strategy of spreading our business evenly across our three core markets: Hong Kong, the Chinese mainland and other parts of Asia, such as Bangkok and Tokyo.
Q: What are the most impressive changes you’ve seen in China’s real estate industry over the past decade?
A: The most notable change is the ever-increasing demand for real estate developers to go beyond pure builders and become providers of comprehensive urban services.
In the past, most developers focused only on property development according to a build-and-sell strategy. Now real estate companies need to have the ability to provide integrated services to survive in a highly competitive market. That means projects that combine a number of elements, such as residential, commercial, retail and other functions.
Q: What future major opportunities do you see for Chinese real estate developers?
A: First of all, the country’s Belt and Road Initiative will certainly provide great opportunities for Chinese enterprises, including real estate developers keen to expand overseas. More Chinese developers are expected to tap markets outside of China, work out new business models for new markets and optimize their global asset allocations.
Secondly, a series of 2035 master plans announced recently by major city governments that include Beijing, Shanghai and Guangzhou will offer more opportunities for real estate developers who are active participants in urban construction and vibrant players in city renewal projects.
BANK of Shanghai will provide at least 30 billion yuan (US$4.5 billion) of loans, discounts, trade finance and bonds to Taiwan-invested companies registered in Shanghai over the next two years under a cooperation pact signed yesterday between the bank and the Taiwan Affairs Office in Shanghai.
It’s the seventh agreement signed and would help Taiwan businesses cut their manufacturing and operating costs in the city as well as accelerate transformation and upgrading.
“There are more than 12,500 enterprises with Taiwan investment in Shanghai and over 80 percent of them are medium or small sized, who have difficulties to obtain financing,” Li Zhenghong, director of the Shanghai Association of Taiwan Investment Enterprises, said. “The agreement will definitely provide them the necessary help.”
The bank has given over 100 billion yuan of financial support to Taiwan-invested companies since 2006 when the first pact was signed.
CHINA yesterday unveiled measures taken to relieve the impacts of China-US trade frictions on companies.
“In response to new US tariffs imposed on July 6, China had to take necessary countermeasures,” a spokesman for China’s Ministry of Commerce said yesterday.
When formulating the list of US products that would be subject to countermeasure tariffs, China took into full consideration the substitutability of the imported products and the overall impacts on trade and investment, the spokesman said.
At the same time, China will take the following measures:
— Continuously evaluate the impacts on different kinds of companies.
— The new tax income from the countermeasures will be mainly used to relieve the impacts on companies and their employees.
— Encourage companies to adjust import structure, and increase the imports of agricultural products such as soybeans and soybean meal, aquatic products, and automobiles from other countries and regions.
— Step up the implementation of the guidelines released by the State Council on June 15 on making active and effective use of foreign investment and promoting high-quality economic development to reinforce the protection of corporate interests and create a better investment environment.
The spokesman added that the policies will be constantly improved, and opinions and suggestions in this respect will be welcomed.
“For companies that are severely impacted, we suggest they report to local government departments,” the spokesman said.
Also yesterday, China publicized guidelines on expanding imports for balanced foreign trade, with policy incentives detailed in several areas.
China should keep exports stable while at the same time further expand imports, according to the guidelines, which were approved and released by the State Council.
China will optimize the structure of imports to support upgrading production and consumption, with tariff cuts in certain products and clean-up of unreasonable price markups, the guidelines said.
Policy incentives will be given to imports of daily consumer goods, medicine, and equipment for rehabilitation and elderly care.
China will optimize the layout of its international market, focusing on the expansion of imports from countries related to the Belt and Road Initiative.
China will also actively explore multiple channels to boost imports, including hosting the China International Import Expo.
The country’s investment environment should be improved so that foreign investment could play an important role in boosting imports, the guidelines said.
The country will further facilitate trade through cultivating pro-import platforms and strengthening intellectual property rights protection, the guidelines said.
XIAOMI Corp’s US$4.7 billion initial public offering suffered a 6 percent drop in share prices when the company started trading in Hong Kong yesterday.
The shares in the world’s fourth-largest smartphone maker recovered somewhat, closing at HK$16.8, a 1.2 percent discount to its offer price of HK$17.
The issue, once ballyhooed as the biggest in the world this year, was scaled back to its lowest price range. Among the setbacks confronting the offer were concerns about mounting China-US trade tensions that have roiled the technology sector, and the company’s backdown from earlier plans to issue Chinese depositary receipts.
Lei Jun, Xiaomi’s chairman and chief executive officer, tried to put a brave face on the poor showing.
“It’s a new start for Xiaomi after an IPO for more innovation and global expansion,” he said at the Hong Kong Exchange and Clearings, adding that “it’s a tough timing for an IPO.”
Investors in the IPO included Hong Kong billionaire Li Ka-shing, Tencent Chairman Pony Ma and Alibaba Chairman Jack Ma.
One factor in Xiaomi’s disappointing debut may hinge on how investors view the company’s business.
Some investors think Xiaomi is not an Internet company but “a purely consumer firm with the genes of technology,” according to Sinolink Securities in a research note.
The Chinese market is a “cashcow” of Xiaomi but the whole market is “shrinking.” That is the reason why xiaomi has to get listed now for capital on research and overseas expansion despite of the bad timing said Jia Mo an analyst of Canalys.
Meanwhile Xiaomi internet services like reading and game are not competitve compared with tier-one players like Tencent in China industry insiders said.
Xiaomi is sometimes called the “Apple of China.” Its products include smartphones, TVs, routers and other smart devices. The company reported a two-thirds surge in revenue last year to 114.6 billion yuan (US$17.25 billion). A third of that income comes from global sales, Lei wrote earlier in a public letter.
The company is the first in Hong Kong to sell shares with a dual-class structure since the city changed listing rules to allow company founders to keep outsized voting rights.
Hong Kong is now a popular destination for technology IPOs, especially for mainland firms.
In the past two years, online health care platform Ping An Good Doctor, game gadget vendor Razer, online car-financing provider Yixin Group and online finance payment service provider ChinaPnR all held IPOs in Hong Kong.
Businesses in the “new economy” will continue to boost IPO activities on both the mainland and in Hong Kong in the second half, EY predicted in a report in June.
Online-to-offline giant Meituan-
Dianping, Tencent’s online music subsidiary QQ Music and online education platform Hujiang are among Chinese tech firms considering Hong Kong listings. How Xiaomi’s performance may affect those plans remains to be seen.
When Xiaomi priced its IPO at the bottom end of a range between HK$17 and HK$22, it effectively reduced its valuation to about US$54 billion — roughly half of the initial goal set by the company. The deflated issue now ranks as the second biggest in the world this year.
Some institutional investors saw bids as low as HK$15.20 in gray-market trading ahead of the formal start of trading, 11 percent below the IPO price, according to a Bloomberg report.
Shanghai’s stock index is down almost 20 percent so far this year, while Hong Kong’s Hang Seng Index has dropped about 5 percent.
Analysts cite the mounting trade dispute between China and the US, which has been especially heated in the technology sector.
Xiaomi earlier applied to issue shares via China depositary receipts in the mainland market, along with the Hong Kong listing. It later put the depositary receipts plan on hold.
Xiaomi was among the first companies to submit an application to issue the depositary receipts when China issued rules for a pilot program in the new market in June as part of plans to encourage the domestic listing of innovative companies.
Xiaomi’s sprawling businesses, which include artificial intelligence speakers, air purifiers and wristband, still depend on smartphones for 80 percent of revenue.
Founded in 2010, Xiaomi launched its own mobile system and introduced aggressive pricing. It grabbed market share rapidly with online-only phone models and competitive prices.
Then Xiaomi gradually expanded into other smart devices and opened off-line stores nationwide.
It also moved aggressively into India where its phones have become popular sellers.
Lei insisted that Xiaomi had evolved beyond just smartphones into a maker of intelligent and Internet of Things devices. He said the company had limited the margin of hardware products to 5 percent
In 2017, Xiaomi generated revenue of 114.6 billion yuan, the first time the company surpassed the 100-billion-yuan line. Excluding one-time charges, profit was 5.36 billion yuan.
SHANGHAI’S consumer confidence rose moderately in the second quarter but its investor confidence, although still optimistic, retreated, a survey showed yesterday.
The Index of Consumer Confidence in Shanghai, a quarterly gauge compiled by Shanghai University of Finance and Economics, gained 2.4 points from the first three months to 120.5 points in the April-June quarter, up 2.9 points from the level in the same period last year.
A reading above 100 points indicates optimism.
Consumer confidence in Shanghai’s economy was attributed to its steady economic growth as well as the optimistic outlook for transformation and upgrading, according to Xu Guoxiang, director of the university’s Applied Statistics Research Center, and deputy directors Cui Chang and Wu Chunjie.
Despite the trade tension between China and the US, the index’s rise indicated consumer confidence in the Chinese economy and a recognition of the “enhanced comprehensive strength and crisis resilience of the country,” Xu said.
The component index measuring intention by residents to buy homes rose 5.7 points from the previous quarter to 64 points and also increased sharply by 7.4 points from the same period last year to hit a new high since the fourth quarter of 2016. The index of consumer intention to buy cars added 5.1 points from the January-March quarter, but it fell 2.5 points from the same period a year earlier.
However, investor confidence fell 5.59 points from the first three months to 106.86 in the second quarter, up 3.22 points from the same period last year. But investors still remained optimistic although the recent trade disputes and an uncertain A-share market clouded their confidence.
New home sales in Shanghai rose for the third consecutive week as buyers bought medium to high-end properties, the latest market data showed.The area of new homes sold, excluding government-subsidized affordable housing, climbed 6.9 percent to 122,000 square meters during the seven-day period ending Sunday, Shanghai Centaline Property Consultants Co said in a report released yesterday.Pudong New Area led with weekly transactions of 22,000 square meters, a surge of 175 percent from the previous week. Remote areas such as Nanhui and Jiading District continued to see seven-day sales stay above the 10,000-square-meter threshold, according to Centaline data.The average cost of a new home jumped 14 percent from the previous week to 59,013 yuan (US$8,880) per square meter, due to a structural shift toward medium to high-end projects.“Eight of the 10 most popular developments cost more than 50,000 yuan per square meter, with prices in two of them exceeding 90,000 yuan per square meter,” said Lu Wenxi, senior manager of research at Centaline. “By contrast, only one project in the top 10 list cost less than 30,000 yuan per square meter.”A housing project in Yuqiao of Pudong became the best-selling development after unloading 6,154 square meters, or 60 apartments, for an average unit price of 61,200 yuan per square meter. Next was a development in Nanhui area, which sold 6,000 square meters, or 71 units, for an average unit price of 28,845 yuan per square meter during the same period.New home supply, meanwhile, rebounded to an eight-week high of 61,000 square meters, Centaline data showed.
TENCENT, China’s most valuable tech company and the operator of the popular WeChat social media platform, says it plans to spin off its streaming music service on a US stock exchange.
The company said in a statement issued through the Hong Kong stock exchange that the share price and other details of the stock offering in Tencent Music Entertainment Group have yet to be decided.
Tencent Holdings Ltd’s other businesses include WeChat and online games and video. Most of its activity is concentrated in its faster-growing home market but the company is gradually expanding abroad.
Tencent Music competes in China with streaming services operated by Netease Inc and Baidu.com Inc.
The company, headquartered in Shenzhen in Guangdong Province, reported a first-quarter profit of 23.3 billion yuan (US$3.7 billion).
Tencent’s stock market value yesterday was $480 billion, placing it among the 10 most valuable publicly traded companies globally.
MERCEDES-BENZ and its smart brand achieved a 14 percent year-on-year increase in deliveries to 348,004 vehicles in China in the first half of this year, according to a statement published by the company yesterday.
From January to June, sales of Mercedes-Benz sedans grew an average of over 20 percent and took up nearly half of total passenger car sales while those of locally made models expanded 17 percent year on year, the German premium carmaker said.
“We maintained healthy, sustainable growth in the first six months of this year,” said Nicholas Speeks, president and chief executive officer of Beijing Mercedes-Benz Sales Service Co.
Mercedes-Benz delivered 58,179 new vehicles in China in June, up 12 percent from the same period last year.
The steady sales growth were driven by its S-Class, C-Class, GLC sport-utility vehicles and other car models, Speeks said.
The carmaker attributed its double-digit sales growth in the first half to a strong product line-up, innovative customer experience and cooperation with dealer partners.
A man uses a virtual reality device at Beijing International Consumer Electronics Expo yesterday. The three-day event, held at the China National Convention Center in Beijing, shows products like intelligent hardware, AR/VR device and service robot technologies.
THE number of mergers and acquisition deals among the top 50 global consumer goods giants last year jumped 45 percent year on year to the highest in 15 years, a recent report by consultancy OC&C Strategy said.
There were more M&As because big FMCG companies responded to the challenges in driving growth as well as pressure from activist investors to increase margins.
The report also said that about 60 deals worth a total of US$145 billion were driven by reasons for market consolidation and investments for innovation and access to growth.
The combined revenue of the top 50 global FMCG companies grew 5.7 percent last year from just 0.5 percent in 2016. The annual revenue of the top 20 Chinese companies, however, rose 15 percent in the past year.
The study also showed that intense competition in most food and drink categories in China has crimped growth, and companies are avoiding to invest in R&D, product innovation and marketing in a bid to shore up margins.
MOST Chinese stocks gained yesterday, with the Shanghai Composite Index surging 2.47 percent in its biggest daily rise in 25 months to 2,815.11 points.
The Shenzhen Component Index closed 2.8 percent higher at 9,160.62 points.
The sharp increase came after the securities regulator said on Sunday that China planned to allow more foreign individual investors to trade A-shares.
The move, part of the country’s broader plan to further open up its financial sector, will attract foreign capital and boost market sentiment, analysts said.
The Industrial and Commercial Bank of China, the country’s largest commercial bank, rose 4.54 percent to 5.53 yuan (84 US cents).
CHINA will allow foreign individuals working on the Chinese mainland to open A-share accounts, the China Securities Regulatory Commission said in a statement yesterday.
Foreign employees with equity incentives working in A-share listed companies overseas will also be allowed to open a securities account to trade in A-shares, according to the CSRC which is also seeking public opinion until August 8 on the issue.
The securities regulatory body of the countries of qualified foreigners should have already established a regulatory cooperation mechanism with the CSRC, according to the statement.
The revision in the draft rules aims to further open the mainland’s capital market to foreign investors as well as attract talents from all over the world to enhance the international competitiveness of the A-share market.
“The revision to the A-share securities account opening system is of great significance, will broaden the channels for capital inflow, optimize the market structure, and improve the openness and internationalization of the capital market,” the statement said.
Current rules only allow foreigners with China green cards to open A-share securities accounts and only lets foreigners who work in the mainland as board directors, senior managers, core technical personnel and core business staff to enjoy equity incentives.
The CSRC will release the revised rules following procedures.
Related tax and foreign exchange policies will also be released to support the rules.
MYANMAR is negotiating with a Chinese consortium to carry out a strategic deep-sea port in Kyaukphyu, western Rakhine state, as part of the planned special economic zone in the region, according to a report of the official Global New Light of Myanmar yesterday.
The negotiation between Myanmar’s Commerce Ministry and the China International Trust and Investment Corporation is expected to reach an agreement soon.
Kyaukphyu deep-sea port project represents part of the economic corridor of China’s Belt and Road Initiative and the two countries are approaching this in a way to ensure it becomes a win-win situation all round, said Myanmar Minister of Commerce Than Myint.
The sea-port project will bring about the development of Rakhine state, emerging job opportunities and the development of the country, he said.
A consortium of six group companies, led by China’s CITIC, won a tender in December 2015 for the implementation of two projects — an industrial park and a deep-sea port on 1,737 hectares of land, two of the three components of the project of the Kyaukphyu Special Economic Zone.
The CITIC consortium also comprises China Harbor Engineering Company, China Merchants Holdings (International) Co, TEDA Investment Holding and Yunnan Construction Engineering Group as well as Thailand’s Charoen Pokphand Group Company.
The CITIC consortium will form project joint ventures together with Myanmar local enterprises for the construction and operation of the two projects which will be implemented under the framework of the “Myanmar Special Economic Zone Law” promulgated by Myanmar government in 2014.
The deep-sea port project consists of the MADE Island Terminal and YANBYE Island Terminal, with a total of 10 berths. It also includes the road and bridge connecting the industrial park and deep-sea port. The deep-sea port project will be built in four phases over 20 years.
After the completion of project, the expected annual capacity of the deep-sea port will be 7.8 million tons of bulk cargo and 4.9 million TEU containers.
THE Shanghai Banking Association, a non-profitable and non-governmental industry organization, celebrated its centennial yesterday.
The SBA, whose members are banks and non-banking financial institutions, is committed to building itself into a highly professional and international trade body by practising self-discipline, protecting rights, and offering services to members. As of the end of June, the SBA has 222 members which include banks, trust companies and financial leasing companies.
It was founded as the Shanghai Bankers’ Association in 1918.
At the end of the 1990s, as China’s reform of its financial industry gathered pace, Shanghai saw a rising number of foreign and domestic financial institutions expanding their business. Inter-bank cooperation became closer and more widespread. The bankers’ body was then renamed the Shanghai Banking Association.
CHINA’S COSCO Shipping Holdings said yesterday a key US review body has cleared its planned US$6.3 billion acquisition of shipping firm Orient Overseas International.
COSCO said on June 30 that all pre-conditions for the OOIL offer made last year had been met after receiving approval by the Chinese anti-monopoly regulator. It already has approvals from European and US anti-monopoly regulators.
In a regulatory filing yesterday, the company said the US Committee on Foreign Investment had notified it that it does not have any outstanding security issues following an agreement with the US government to divest the Long Beach container terminal business to a third party. COSCO said ownership of the container terminal business will be transferred to a trust while a buyer is sought.
COSCO’s acquisition of OOIL will see the Chinese shipper become the world’s third-largest container shipping line.
The deal is the latest in a wave of mergers and acquisitions in global container shipping that has left the top six shipping lines controlling 63 percent of the market.
CHINA’S economy is seen to grow 6.7 percent in the first half of 2018, slightly below the growth in the first quarter but showing continued resilience, said a forecast by financial institutions and economists.
Despite some external uncertainties, China’s economy continued to improve amid a global economic recovery, rising new growth momentum and a warming property market, said a report released by the international financial research institution with the Bank of China.
Lian Ping, chief economist of the Bank of Communications, also forecast growth of 6.7 percent.
In the second quarter, the contribution of consumption and investment to economic growth may come in at 70 percent and 35 percent. Although net exports made negative contribution to growth, the fast growth of exports helped lift manufacturing production and investment, Lian said.
For the second half of the year, chief economist of CITIC Securities Chu Jianfang believes there will be no big risk of recession as the economy continues its resilience.
CHINA’S securities regulator has imposed 6.4 billion yuan (US$965 million) of fines or confiscation orders in the first half of the year, a record high as a crackdown on capital market violations continues, CSRC Vice Chairman Yan Qingmin said at a conference.
The crackdown on the capital market is to ensure financial stability and prevent risk, Yan said.
Boeing Co will buy a controlling stake in the commercial aircraft arm of Brazilian planemaker Embraer SA under a new US$4.75-billion joint venture, the companies said yesterday, cementing a global passenger jet duopoly.The new company, encompassing Embraer’s commercial aircraft and services businesses, should make Boeing the market leader for smaller passenger jets, creating stiffer competition for the CSeries aircraft program designed by Canada’s Bombardier Inc and backed by European rival Airbus SE.The deal values Embraer’s commercial aircraft operations, the world’s third-largest, at US$4.75 billion and Boeing’s 80-percent ownership stake in the joint venture at US$3.8 billion, the firms said.Boeing is expected to pay for its share of the venture in cash, according to a person familiar with the matter. The statement gave no indication of any payment Boeing was making under the deal.Embraer will hold the remaining 20 percent of the venture and keep control of its defense and business jet operations. Concern over US influence in Brazilian military programs had raised red flags in Brasilia, which can still veto the deal.However, recent signals from Brazil’s President Michel Temer and military officials suggested the government is satisfied with the new structure of the tie-up, as long as Brazilian jobs are maintained and Embraer continues to develop new technology.With timely approval from the government, regulators and shareholders, Boeing and Embraer said they expect to close the deal by the end of next year.The partnership is expected to add to Boeing’s earnings per share from 2020, generating annual pre-tax cost savings of about US$150 million by the third year, the companies said.The deal took shape more than two years after the idea was first presented internally to Boeing’s board and reflects a longstanding affinity between the two planemakers, a person familiar with the discussions said.However, the pressure for a tie-up accelerated when Airbus last year said it would take control of the CSeries jet from rival Bombardier, which had been struggling in its long-running battle with Embraer in the 70- to 130-seat segment of the market.For Embraer, the Canadian deal put marketing force behind a fragile competitor, while for Boeing the tie-up threatened to expand the revenue base and cash-generating potential of its European arch-rival.
China has made steady progress in deleveraging and the country’s leverage ratio will gradually be lowered, the Economic Daily has reported.“China has entered a stage of stable leverage as the country’s deleveraging efforts have delivered primary effects,” Liu Shijin, vice president of the China Development Research Foundation, a government think tank, told the Economic Daily.Since 2017, the growth of China’s leverage ratio has slowed down substantially. The leverage ratio in 2017 was 2.4 percentage points higher than 2016. The growth was 10.9 percentage points lower than the average annual growth rate from 2012 to 2016, Liu said.The slowdown came after a rapid growth of corporate profits and fiscal revenues boosted by the supply-side structural reform, the implementation of a prudent, neutral monetary policy and stronger financial rules, said Liu, who is also a member of the monetary policy committee of the People’s Bank of China. He added that China’s leverage structure has become optimized with corporate, government and personal leverage ratios all lowered.Liu believes China will be able to continue stabilizing its macro leverage and gradually cut the leverage ratio, citing a quality-oriented economic shift, tighter financial supervision, and progress in cutting overcapacity.
Shui On Land Ltd, in partnership with China Pacific Life Insurance Co and Shanghai Yongye Enterprise (Group) Co, acquired three land plots in Shanghai’s downtown Xintiandi yesterday for over 13.6 billion yuan (US$2.05 billion).The average gross floor area price for the three parcels sitting on 34,824 square meters in Huangpu District was 44,963 yuan per square meter, or a premium of 0.2 percent.Shui On Land will own 25 percent, CPIC Life 70 percent and Yongye 5 percent interests, the Shanghai-based developer, who will be the project development manager and asset manager on completion of the project, said in a statement.The project, with a total built-up floor area of 390,700 square meters, will be developed into a commercial and office complex, said the statement. Office space will take up 197,100 square meters, retail and culture purposes will occupy 105,600 square meters and 88,000 square meters will be alloted for a car park, according to the statement.
The first China International Import Expo said on its official WeChat account late Wednesday that professional visitors are welcome to register at its registration channel.Professional visitors are defined as purchasers, government authorities, government-sponsored institutions and social organizations. Visitors need to get an invitation code by calling the hotlines of the various trading groups whose numbers are published on the expo’s official WeChat account. They then use the code to register on the expo website. The expo has also opened a hotline — +86-21-968888 — to offer information on the CIIE which will be held in November in Shanghai.