Shanghai Daily Business
Updated: 1 min 10 sec ago
SHANGHAI stocks dropped today as investors took profit in blue chips such as banks and securities.
The Shanghai Composite Index lost 0.21 percent to 3,237.98 points after a three-day rebound.
Investors remain wary as several high-tech giants reported losses for their mid-year performance while the central government reiterated tightening regulations to dampen speculation, reported Sinolink Securities Co.
The share drops were led by banks and securities. The banking sector shrank 1.31 percent in the mainland market following an eight-day growth. Securities fell 0.98 percent after it jumped 6.08 percent on Wednesday, its biggest daily increase since the year beginning.
Wuxi Rural Commercial Bank Co lost 2.92 percent to 11.29 yuan (US$1.67), while Zheshang Securities Co declined 2.75 percent to 16.24 yuan.
Over the whole week however the benchmark index gained 0.48 percent, notching a five-week increase. Industrial sectors such as coal and steel bolstered the stock market following news that China has cut steel overcapacity ahead of schedule and most coal plants made profits after the supply cut.
China’s continuous industrial upgrading and supply control would help attract funds in these sectors to boost economy in the following days, Industrial Securities Co said in a note.
CHERY Jaguar Land Rover opened its new engine plant in Changshu, Jiangsu Province today, as the company aims to localize production of its vehicle engines and better adapt to the Chinese market.
“This is Jaguar Land Rover’s first new engine plant outside the UK,” said Murray Dietsch, president of Chery Jaguar Land Rover Automotive Co Ltd. “The new engine plant will apply cutting edge technologies and produce the vehicle engines, which are in par with the technologies in UK.”
China is now the largest market for Jaguar Land Rover and the new engines produced here will be used in its locally-produced models to better serve China's market.
Chery Jaguar Land Rover engine plant covers an area of 51,000 square meters with an initial production capability of 130,000 engines per year.
The engine plant consists of core function areas including an automated and flexible production line, machining hall, assembly hall, quality area, logistics area and office space for 149 staff members.
The company expect the new plant can help it upgrade from making whole vehicles only to producing key components of the vehicle. The new plant is to apply intelligent manufacturing which contributes to China’s “Made in China 2025” Plan.
Established in 2012, Chery Land Rover Automobile Co Ltd is a joint venture formed between Chinese auto maker Chery Automobile Co Ltd and UK car manufacturer Jaguar Land Rover.
LOGISTIC giant DHL yesterday announced to reduce all logistics-related emissions to zero by the year 2050.
To achieve the goal, the logistic company will operate 70 percent of its first and last mile services by bike and electric vehicle or other clean pick-up and delivery solutions, Christof Ehrhart, executive vice president, head of corporate communications & responsibility of DHL, told a press conference in Shanghai.
Globally, DHL will increase the carbon efficiency of its own activities and those of its transport subcontractors by half compared to the 2007 baseline, he added.
Though DHL currently has no domestic courier services in China, Ehrhart said the ambition will be applied to the inbound and outbound delivery services in the Chinese market.
The company will train and certify 80 percent of its employees as green specialists by 2025, and actively involve them in its environmental and climate protection activities. For instance, it plans to join with partners to plant 1 million trees every year.
Meanwhile, the logistic giant and Germany's FC Bayern Munich have announced to expand cooperation to the video gaming market in Shanghai.
The cooperation expansion between the world's leading logistics company and the world's biggest football club will mainly focus on the FIFA 18 game which is set to launch in September 2017.
The announcement marks DHL's bid to tap into the massive potential of the computer games market, whose revenue is expected to grow from US$493m in 2016 to US$1.1b in 2019.
DHL helped the club to launch its online flagship store on Tmall.com, China’s largest online shopping platform in 2015. As the team's official logistics partner and e-commerce full service provider, DHL delivers official merchandise to FC Bayern fans in China.
CHINESE firms filled an unprecedented 115 places on the Fortune Global 500 list for 2017, a 14th-straight-year that the country's firms have increased their presence on the list.
The U.S. retail giant Wal-Mart topped the list. China's State Grid and oil giant Sinopec Corp. were second and third, with revenue reaching 315 billion U.S. dollars and 268 billion dollars, respectively, in 2016.
Ten Chinese firms hit the list for the first time including Anbang Insurance Group, and Internet service giants Alibaba and Tencent. Country Garden was the only real-state developer.
Listed Chinese companies were mainly involved in Internet, retail, finance, energy, and property.
CHINA unveiled a national artificial intelligence development plan yesterday, laying out its ambitions to build world-leading technology amid heightened international friction over applications of AI in military technology.
The value of the country's core AI industries will exceed 150 billion yuan (US$22.15 billion) by 2020 and 400 billion yuan by 2025, the State Council said in a notice yesterday.
“The situation with China on national security and international competition is complex... we must take initiative to firmly grasp this new stage of development for artificial intelligence and create a new competitive edge,” it said.
The plan comes as the United States is poised to bolster its scrutiny of investments, including AI, over fears that countries including China could access technology of strategic military importance.
It follows a similar national AI development plan released by the US in October last year.
The report says China aims to catch up to global leaders by rectifying existing issues including a lack of high-end computer chips and equipment, software and trained personnel.
It outlines strategic plans to strengthen links between private firms, research bodies and military bodies to promote mutual development in AI.
It also says it will increase the role of government in guiding development of AI with policy support and market regulation as well as developing AI safety assessments and control capabilities.
China has already begun investing heavily in AI technology, including a mix of private and state-backed initiatives.
Several top Chinese firms have established research centers in the United States, including Baidu Inc and Tencent Holdings Ltd.
This year AI was named as a strategic technology by Premier Li Keqiang in an annual report that lays out the most important leadership priorities.
BOTH China and the United States recognized that steel overcapacity is a global issue that requires a global solution, a senior Chinese official said in Washington on Wednesday.
At a press briefing after the conclusion of the first China-US Comprehensive Economic Dialogue in Washington DC on Wednesday, Chinese Vice Minister of Finance Zhu Guangyao said the two sides discussed the issue of steel overcapacity during the one-day high-level economic dialog.
China shared the same view with the United States that steel overcapacity is a global issue, which requires a global collective response, Zhu said, adding China also emphasized that the excess steel capacity was a result of sluggish global economic recovery.
Meanwhile, the Chinese delegation told the US side that China had actively taken measures to cut steel overcapacity, Zhu said, citing China's plans to reduce steel capacity by 100 million to 150 million tons from 2016 to 2020.
As the world's two largest economies and co-chairs of the global forum on steel excess capacity, China and the US have kept policy dialog and communication regarding the steel glut, Zhu said, noting G20 leaders agreed to set up the forum at last year's Hangzhou summit.
At the G20 summit in Hamburg earlier this month, G20 leaders called on the forum to fulfill their commitments on enhancing information sharing and cooperation by August, Zhu said.
THE European Central Bank left its ultra easy monetary policy stance unchanged as expected yesterday, keeping rates at record lows and even leaving the door open to more asset buys if the outlook worsens.
After ECB chief Mario Draghi raised the prospect of policy tightening last month, he signaled that any policy tweaks would come only gradually, setting the scene for a possible discussion in September about a long-awaited tapering of its asset buys.
“We need to be persistent and patient because we aren’t there yet, and prudent,” Draghi told his regular news conference after a meeting of ECB policy-makers in Frankfurt.
He stressed the bank’s governing council was unanimous both on the decision to keep its guidance unchanged and to avoid setting a precise date for a discussion of future policy, noting only that it would occur in the autumn.
With the eurozone economy now growing for the 17th straight quarter, its best run since before the 2007-08 global financial crisis, that at least suggested the ECB is starting to contemplate easing off the accelerator, preserving some firepower after printing nearly 2 trillion euros (US$2.3 trillion) to jump start growth.
The prospect of reduced monetary stimulus has kept financial markets edgy, with investors sifting through clues to gauge how big central banks around the globe will unwind unconventional policy that have kept borrowing costs at rock bottom.
The euro and government bond yields across the bloc initially slipped after the statement. But as Draghi spoke, the euro edged back above US$1.15 and eurozone bond yields gained, ostensibly on his confirmation of hopes that the taper would be discussed in autumn.
The ECB earlier kept its deposit rate deep in negative territory and kept monthly bond purchases at 60 billion euros, in line with the expectation of most analysts in a Reuters poll.
“If the outlook becomes less favorable, or if financial conditions become inconsistent with further progress toward a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the program by size and/or duration,” it said.
WHILE Western drivers like the ‘new car’ smell fresh off the production line, Chinese would rather their cars didn’t smell of anything — a cultural divide that’s testing carmakers seeking an edge to revive sales in the world’s biggest auto market.
At Ford Motor Co, for example, 18 smell assessors — dubbed “golden noses” — at its research plant outside of Nanjing in Jiangsu Province test the smell of each material that goes inside a Ford car to be sold in China and around Asia.
The China smell test isn’t unique, but illustrates the lengths automakers go to to lure buyers in markets where consumer attitudes vary widely.
“In North America, people want a new car smell and will even buy a ‘new car’ spray to make older cars feel new and fresh. In China it’s the opposite,” says Andy Pan, supervisor for material engineering at the Ford facility, which employs around 2,300 people.
The smell of a new car in China can have an outsized effect. A J.D. Power report last year showed that unpleasant car smells were the top concern for Chinese drivers, ahead of engine issues, road noise or fuel consumption.
The smell assessors at Ford, whose China sales are down 7 percent this year, carry out 300 tests a year, a third more than their counterparts in Europe. They rate the odor of all materials used in a car from “not perceptible” to “extremely disturbing.”
Pungent materials — from carpets to seat covers and steering wheels — are noted as smelling of anything from “burnt tire” and “bad meat” to “moth balls” or “dirty socks,” Some are sent back to the supplier.
Seats for Ford cars in China are stored in perforated cloth bags to keep them ventilated before being installed, as opposed to plastic wrapping in the US market where consumers are less concerned about chemical smells.
“The smell inside the car can often be pretty pungent,” said Tom Lin, a 24-year-old high-school teacher in Zhejiang Province, who bought a local Roewe brand car last October. He said there was still a bit of an odor six months later.
“With the next car I buy, I’m going to take more care to check out any odd smells,” he said.
To be sure, smell is just one factor for automakers to get right in China, where picky buyers are always looking for fresh car models and Beijing is making a big drive toward new energy vehicles.
In a slower market — consultancy IHS forecasts vehicle sales will slip slightly this year — firms are looking for an extra edge to appeal to consumers, beyond price discounts, says IHS analyst James Chao.
Local rivals Geely Automobile and BYD Co Ltd tout their in-car air filters to protect drivers from harmful air pollution, and BMW says it is adding larger touch screens and tweaking colors to appeal to Chinese buyers.
Smell is key, reflecting a wider concern in China about chemicals and pollution.
CHINA is pushing development of the home rental market in large and medium cities to address a rising demand from urban newcomers.
Measures will be taken in cities with net population inflows, including increasing rental housing supplies and setting up a government-backed home rental service platform, according to a notice issued by the Ministry of Housing and Urban-Rural Development and other government departments.
With a migrant population of 245 million, and some 7 million college graduates starting work each year, newcomers to Chinese cities often find it hard to find a home to rent due to insufficient supply, market irregularities and lack of government support.
The ministry is asking local governments to increase the supply of land for rental housing and enhance financial support for companies to build houses and apartments for rent.
Some state-owned enterprises could turn into home-rental companies to lead development of the sector, it said.
The government is also encouraging real estate developers, housing brokers and property service providers to set up rental subsidiaries.
Authorities in large and medium cities with net population inflows should establish service platforms for home renting, where details of available housing can be exchanged and rental deals regulated, so as to protect the rights of both sides and enhance market supervision.
“This would help solve the long-standing issues of fake advertisements and intransparency in the market, so that people would feel assured about leasing a home,” said Chai Qiang, deputy head of the China Institute of Real Estate Appraisers and Agents.
Pilot projects will be established in 12 cities including Guangzhou, Shenzhen, Nanjing and Hangzhou, according to the ministry.
In its latest effort to increase the number of renters and curb property prices, local authorities in Guangzhou decided to give tenants and homeowners equal rights to education.
In many cities, the right to attend school is limited to the offspring of homeowners rather than tenants. Guangzhou is the first top-tier city to grant such rights to renters.
China also released a draft of housing rentals and sales regulation in May, which listed detailed rules that supervise market participants, including requiring that written rental contracts are signed with specified rules regarding lease terms, rents and the rights of tenants.
SHANGHAI has published a guideline outlining plans for a lottery-like registration system for buyers of new homes.
According to the guideline, purchasing orders must be generated by lottery software provided by authorized notaries in the city, with results published immediately after the draw.
Real estate developers are prohibited from setting up preferential lottery conditions for their staff or contacts, and sales agents of developers are not eligible for the lottery.
Real estate developers must examine the eligibility of home buyers and submit applications to notary organs for inclusion in the lottery at least 10 days ahead of the new program.
The list of all eligible buyers and houses as well as the lottery results must be published and notarized.
Fraudulent activity and cheating will be prohibited. Any developer implicated in unauthorized activity will be blacklisted and may face criminal charges.
“With the involvement of notary offices, the lottery system can help protect the rights and interests of home buyers who meet the requirements,” said Yan Yuejin of real estate service provider E-House China. “It can also help crack down on illegal sales in the real estate market to further regulate market transactions.”
Prior to the guideline, some buyers used their connections to guarantee eligibility when purchasing houses, Yan said.
He said the guideline is part of Shanghai’s efforts to implement property market rules and regulations, adding that stricter regulations are expected to follow to maintain stability and sound development of the market.
CHINA’S forex regulator said yesterday the country was seeing its most balanced forex market supply and demand in three years due to improving economies at home and abroad as well as an intensified crackdown on irregularities.
The improvement in the domestic economy and business expectations helped stabilize China’s cross-border capital flows in the first half of 2017, Wang Chunying, a spokesperson for the State Administration of Foreign Exchange, told a press conference.
Commercial banks bought 999.5 billion yuan (US$148.1 billion) worth of foreign currency in June, and sold 1.14 trillion yuan, resulting in a net forex settlement deficit of 142.5 billion yuan, according to SAFE. The deficit for the first half of the year fell 46 percent year on year to US$93.8 billion.
Wang expects the cross-border capital flows to stay stable in the future.
She said the impact of the US Federal Reserve’s interest rate hikes on China’s cross-border capital flows had diminished, expecting the risks of large-scale capital outflows from China to notably ease.
The government will continue to support authentic and rational outbound investment by Chinese businesses but will keep a close eye on overseas investment in sectors such as real estate, entertainment and athletic clubs, Wang said.
China will further improve its management system to facilitate cross-border investment and fund-raising, while guarding against risks, she said.
With China’s outstanding external debt-to-GDP ratio of 13 percent at the end of 2016, well below the international warning line of 20 percent, the risks of China’s external debts remained controllable, Wang said.
China has seen steady increases in the volume of its external debts for four consecutive quarters, with the total reaching US$1.44 trillion at the end of March, up 1.2 percent from the end of 2016.
Wang said that China’s foreign exchange reserves were expected to remain stable as cross-border capital flows as well as the forex market supply and demand would become more balanced, following the country’s improving economic development and financial market opening-up.
China’s economy grew 6.9 percent in the first half year.
“There is no doubt that the economy will reach the full-year growth target and continue to run within a reasonable range,” Wang said.
A woman walks past the logo of the Tokyo 2020 Olympic and Paralympic Games in Tokyo yesterday. The Bank of Japan yesterday slashed its annual inflation forecast and once again delayed its timetable for hitting a 2 percent target as the economy struggles to gain traction despite years of stimulus. The BOJ said in a statement that it forecasts inflation at 1.1 percent in 2017, below its 2 percent target and also its earlier outlook for a 1.4 percent rise in the consumer price index. The central bank opted yesterday to keep its lavish monetary stimulus intact.
LENOVO Group Ltd yesterday tied up with JD.com and smart carmaker Nio to tap intelligent devices on fitness and lifestyle as it aims to make artificial intelligence as a major growth engine.
“Lenovo is no longer a computer firm but a computing firm,” Yang Yuanqing, Lenovo’s chairman, said during the Lenovo Tech World 2017 conference held in Shanghai yesterday.
Lenovo, China’s biggest personal computer vendor, is set to transform itself into a business covering devices and cloud, fueled by new technologies including AI.
Lenovo and JD.com, China’s top online retailer, said they are partnering on AI, covering data analysis and smart manufacturing. JD.com has used AI technologies on smart logistics covering driverless trucks and warehouse robots, said its chairman Liu Qiangdong, who expects the fourth retail revolution to be driven by AI.
Lenovo will also establish a joint smart car computing platform with Nio, a Shanghai-based smart car startup.
Lenovo’s consumer business includes Echo-like smart speaker, clothes with sensors that track a wearer’s fitness performance and headset with AR (argument reality) technology. Lenovo’s Thinkpad products will also feature a smart robot assistant system, according to Yang.
Lenovo will adopt its AI strategy for business in all industries, especially smart manufacturing industry, Yang added.
SHANGHAI’S foreign trade is set to remain strong in the second half of the year but the pace of growth may slow amid global economic uncertainty and slower gains of commodity prices, local customs said yesterday.
The recovery of global demand as well as demand by Shanghai consumers and higher commodity prices have boosted the city’s foreign trade to double digit in the first six months, the first since 2012, said Zheng Jugang, vice director and spokesman of Shanghai customs.
Shanghai’s foreign trade in the first six months jumped 18.7 percent from a year earlier to 1.55 trillion yuan (US$228 billion), reversing a 0.4 percent drop in the same period last year, according to official data.
The growth accounted for 11.7 percent of China’s total foreign trade in the first half year.
Imports surged 23.7 percent to 926.71 billion yuan while exports rose 12 percent to 626.59 billion yuan.
Imports and exports through the city’s free trade zone took up over 40 percent of Shanghai’s total foreign trade.
Exports of machinery and electronics accounted for 70.6 percent of Shanghai’s total exports in the first half, up 1.2 percentage points from the same period last year.
Integrated circuits, automobiles, and pharmaceuticals are the three largest categories of imported products.
Zheng said the strong trend in the first half is set to continue in the second half, but Brexit, US interest hikes, and elections in European countries add to economic uncertainties globally.
SAN’AN Optoelectronics Co, China’s biggest LED chip vendor, posted a 57 percent jump in net profit in the first six months year on year as its sales boomed, the Shanghai-listed firm said yesterday.
In the first half, San’an earned a net profit of 1.5 billion yuan (US$221 million). Its revenue surged 46 percent to 4.07 billion yuan from a year ago amid increasing sales and a full swing in production capacity.
The LED (light emitting diode) is a key component in several devices covering street lamps, automotive lights and advertising boards. LED also embraces environment friendly energy efficient features. LED component is also set to be used in smart devices like handsets and connected cars with the coming 5G and the Internet of Things era.
New energy lighting is expected to have strong market demand over the long term in China, said China Merchants Securities in a report, which rated San’an a “Buy.”
San’an has also invested in upstream semiconductor materials manufacturing, which will start production and generate income by the end of this year.
SHANGHAI shares rose for the third straight day yesterday boosted by graphene and battery producers and also by the Chinese central bank’s injection of funds into the banking system.
The Shanghai Composite Index added 0.43 percent to end at 3,244.86 points.
The People’s Bank of China injected 60 billion yuan via repurchase agreements, or repos, yesterday.
High-tech startups, especially new materials producers, remained a highlight as they attracted funds from mainland investors, said Chen Jian, consultant at Datong Securities.
Graphene firm Baotailong New Materials Co jumped 9.96 percent to 8.28 yuan (US$1.22), while Longi Green Energy Technology Co gained 4.6 percent to 19.78 yuan.
LENOVO Group Ltd, taking artificial intelligence as a major growth engine, today partnered with JD.com and a smart car company to kick off smart devices on fitness and lifestyle.
“Lenovo is no longer a computer firm but a computing firm,” Yang Yuanqing, Lenovo’s chairman, said during the Lenovo Tech World 2017 conference held in Shanghai today.
Lenovo, China’s biggest personal computer vendor, is targeting business transformation on a company with business covering device and cloud, fueled by new technologies including AI.
Lenovo and JD.com, China’s top online retailer, announced today the partnership on AI, covering data analysis and smart manufacturing. JD.com has used AI technologies on smart logistics covering driverless trucks and warehouse robot, said chairman of JD Liu Qiangdong, who expected the fourth retail revolution is driven by AI.
Lenovo also announced to establish a joint smart car computing platform with Nio, a Shanghai-based smart car startup.
On consumer business, Lenovo displayed Echo-like smart speaker, clothes with sensors tracking for fitness performance and headset with AR (argument reality) technology. Lenovo’s Thinkpad products will also feature smart robot assistant systems.
On business sector, Lenovo’s AI strategy will influence all industries, especially smart manufacture industry, said Yang.
SHANGHAI has published a new property market guideline, outlining plans for all buyers of commercial houses to apply to a lottery-like registration system to purchase new homes.
According to the guideline, purchasing orders must be generated by lottery software provided by authorized notary organs in Shanghai. The results should be publicized immediately after the draw.
Real estate developers are prohibited from setting up beneficial lottery conditions for their staff or those connected to them, and sales agents of the developers are not eligible for the lottery.
Real estate developers must examine the eligibility of home buyers and submit applications to Shanghai's notary organs for inclusion in the lottery at least ten days ahead of a new program.
The list of all eligible buyers and houses as well as the lottery results must be published and notarized.
Any fraudulent activity or cheating will be strictly prohibited. Any developers implicated in underhand activity will be blacklisted and may face criminal charges.
CHINA’S booming digital economy had been serving as a major engine for economic growth.
China’s digital economy surged 18.9 percent in 2016 to 22.6 trillion yuan (US$3.35 trillion), according to a white paper issued by China Academy of Information and Communications Technology which is under the Ministry of Industry and Information Technology.
The expansion was much faster than that of China’s overall economy, which grew 6.7 percent in 2016.
The digital economy accounted for 30.3 percent of China’s gross domestic product over the year, said the white paper. Taking its spillover effect into account, digital economy contributed 69.9 percent to the GDP in 2016, it added.
Digital economy, also known as the Internet economy, is based on digital computing technologies, comprising new business models such as e-commerce, cloud computing and payment services.
Technology is functioning as a driver of revenue and enabler of new business models for many Chinese firms, including e-commerce giants Alibaba and JD.com.
China’s digital economy grew significantly higher than the overall economy, becoming a major engine of growth, said the paper.
CAICT expects China’s digital economy to be valued at 32 trillion yuan and account for 35 percent of the GDP by 2020, before taking up over half of the country’s GDP by 2030, according to the white paper.
SHANGHAI stocks rebounded to a three-month high yesterday amid gains made by coal mining and nonferrous metal companies following their “better-than-expected” mid-year performance, analysts said.
The Shanghai Composite Index gained 1.36 percent to end at 3,230.98 points.
Out of the 18 listed coal companies, 14 of them reported profit growth as of Wednesday, while 58 of the 67 nonferrous metal companies, which have released mid-year earnings reports, predicted growth or reversed losses.
“That bolstered the stock market momentum,” said Gu Yongtao, analyst at Cinda Securities.
Yunnan Coal & Energy Co jumped by the daily limit of 10 percent to close 5.47 yuan (81 US cents), as did Henan Yuguang Gold & Lead Co to 8.31 yuan yesterday.
SUNAC Real Estate, an indirectly wholly-owned subsidiary of Sunac China Holdings Ltd, will pay 43.8 billion yuan (US$6.47 billion) for a 91-percent stake in 13 cultural and tourism projects from Dalian Wanda Commercial Properties while R&F Properties will buy 77 hotels from Wanda for 19.9 billion yuan, the three real estate developers said yesterday in Beijing.
This was an abrupt and significant change from the previous July 10 announcement made by Sunac and Wanda, which said the two parties had entered into a framework agreement that Sunac would pay 63.2 billion yuan for a 91 percent stake in the projects as well as 76 city hotels. It was believed to be the largest-ever real estate acquisition in the country if completed.
Under the earlier agreement, the 91-percent stake in the 13 cultural and tourism projects would cost Sunac 29.575 billion yuan while the 76 hotels would cost 33.595 billion yuan. Wanda had also agreed to procure a three-year 29.6 billion yuan loan to be advanced to Sunac through a designated bank at the bank’s three-year benchmark interest rate.
Sunac will pay using its own capital within 90 days of the agreement signing and R&F will complete its payment to Wanda by January 2018, according to a joint statement released yesterday.
The 13 cultural and tourism projects will retain the Wanda brand and Wanda will control the construction and operation of the 13 projects, the companies said.
The management contracts of the 77 hotels will also be unchanged after R&F’s acquisition, the companies said.
Sunac and R&F will also consider appointing Wanda Commercial Properties and Wanda Cinemas to operate commercial projects and cinemas developed in the future by Sunac and R&F, according to the statement.
The latest disposal of the hotel and cultural and tourism projects will enable Wanda Commercial Properties, the real estate arm of Wanda Group, to cut its debt under an asset-light strategy. The deal, meanwhile, will enable Sunac to expand its portfilo of owned properties and allow R&F to further cement its strength in the hotel business.
CHINA’S installed solar power capacity surged over the first half year amid shrinking costs and government policies.
Over the first six months, 23.6 gigawatts of solar power were installed, 34.2 percent higher from a year ago, UBS said yesterday, adding that it was “far more than expected as most domestic analysts predicted at the beginning of the year that only 20-25 gigawatts would be added for the whole year.”
Of the installed solar capacity over the first half year, 7 gigawatts was by rooftop panels at consumers’ homes, up from below 2 gigawatts a year ago, according to the China Electricity Council.
Alex Liu, UBS analyst, predicted that up to 40 gigawatts of solar power are expected to be installed across China this year, said Alex Liu, analyst at UBS.
Shrinking costs have powered the growth of solar power. Five years ago it cost around 1.5 yuan (22 US cents) to generate a kilowatt-hour of solar power. By the end of last year it cost under 0.6 yuan per kwh, Liu said.
China is also spurring solar power development by giving grants for solar projects and promoting installations in remote and undeveloped regions.
MICROSOFT is now one of Baidu’s many partners to collaborate on technical development and adoption of autonomous driving worldwide to drive the ambitions of the Chinese company’s artificial intelligence project to overseas markets.
Microsoft will provide cloud services to companies using Baidu’s self-driving platform under the Apollo project outside China, according to a joint statement.
The Apollo project is an open platform that provides a technical solution to support all major features and functions of an autonomous vehicle.
Under the partnership, Nasdaq-listed Baidu and Microsoft plan to explore opportunities to deliver connected vehicle solutions and unique customer experiences to digitally transform the autonomous driving industry.
“By using Azure, our partners outside of China will have access to a trustworthy and secure public cloud, enabling them to focus on innovation instead of building their own cloud-based infrastructure,” said Baidu president Zhang Yaqin in a statement, referring to Microsoft’s cloud computing platform.
Microsoft Corporate Vice President Kevin Dalla said that by using its Azure platform “we can accelerate the work already being done to make autonomous vehicles safer.”
Research firm McKinsey estimated that up to 15 percent of new cars sold in 2030 will be fully autonomous.
Earlier this month at the AI Developer Conference, Baidu unveiled tie-ups with global automakers as well as 13 domestic carmakers and research institutes and mapping firms for its autonomous driving initiative.
CHINA scored highly in an ImageNet competition, one of the top Artificial Intelligence contests, for object detection and visual recognition, Shanghai Daily learned yesterday.
During the ImageNet Large Scale Visual Recognition Challenge, a team from online security firm 360 and the National University of Singapore won for object location. Another team comprising Nanjing University of Information Science & Technology and Imperial College London won the object detection contest. ImageNet attracted 25 organizations from seven countries.
The solar-powered DEMU (diesel electrical multiple unit) train is seen at Sarai Rohilla railway station in New Delhi. India has added solar panels to the roof of a train in a national first as it tries to cut its massive carbon footprint and modernize its colonial-era rail network. The lighting, fans and information displays inside the train will run off the sun’s energy.
MORGAN Stanley beat Wall Street's profit expectations yesterday, reporting gains across most of its businesses and producing more trading revenue than rival Goldman Sachs Group Inc, a rare feat.
The sixth-largest US bank by assets reported an 11 percent rise in second-quarter profit, with higher revenue from giving corporations advice, underwriting securities, trading equities and managing customers’ wealth.
The one dark spot, bond trading, fell 4 percent, much less than at Wall Street rivals that reported earnings in recent days. The US$1.3 billion in revenue from that business topped Chief Executive Officer James Gorman's US$1 billion quarterly target and beat Goldman’s US$1.16 billion.
“We think we've made the right decisions and the results over the last five quarters in a row show we’re credible and critically sized” in bond trading, Chief Financial Officer Jonathan Pruzan said in an interview.
For years, Morgan Stanley struggled to convince Wall Street that its plan to remain a major player in trading while growing wealth management was going to succeed. Its results were choppy following the 2007-2009 financial crisis, and it took time for pieces of Gorman's plan to fall into place.
But lately the bank has been hitting or exceeding the targets Gorman laid out.
It was the fifth quarter in which Morgan Stanley hit Gorman's bond trading revenue target and the second straight quarter that it surpassed Goldman's trading revenue.
Morgan Stanley’s 4 percent revenue dip in that business compares with a 40 percent drop at Goldman and declines of 6 percent to 19 percent at Citigroup Inc, Bank of America Corp and JPMorgan Chase & Co.
Overall, Morgan Stanley’s trading revenue fell a more modest 2 percent, to US$3.2 billion, due to a small gain in equities trading, where it is has a strong franchise. Goldman’s trading revenue was US$3.1 billion.
Morgan Stanley’s wealth management business logged its best quarter on record. Revenue rose to US$4.2 billion, up 9 percent from the year-ago quarter, and its profit margin hit 25 percent, at the high end of Gordman’s targeted range.
Morgan Stanley’s smallest business, investment management, reported a 14 percent rise in revenue, to US$665 million.
The bank’s 9.1 percent return on equity, a measure of profitability, was within the 9 percent to 11 percent target Gorman set out to hit by the end of 2017. It was higher than Goldman's 8.7 percent return during the same period.
The two banks are fierce rivals in many businesses, but it has been rare for Morgan Stanley to beat Goldman in trading or be broadly more profitable.
“Love it when a plan comes together,” Evercore ISI analyst Glenn Schorr wrote in a note to clients, referring to strength across all of Morgan Stanley's businesses.
Overall, Morgan Stanley’s second-quarter profit rose to US$1.6 billion, or 87 cents per share, from US$1.4 billion, or 75 cents per share, in the same period last year.
Analysts had expected earnings of 76 cents per share, on average, according to Thomson Reuters I/B/E/S.
Its revenue rose 7 percent to US$9.5 billion, against an average estimate of US$9.1 billion.
GERMAN luxury carmaker Audi AG has come under fire from consumers in China for an advert that compared buying a second-hand car to checking out a bride-to-be.
Audi, which is attempting to revive its sales in the world’s biggest car market, said yesterday it deeply regretted the advert and that it had been withdrawn.
The video, which has gone viral since being aired online and in cinemas this week, showed a mother-in-law examining her son’s bride as the young couple waited at the altar to be married, an attempted play on a common stereotype of fussy Chinese parents.
Thousands of Chinese consumers went online to mock the advert, saying it was sexist and demeaning to women. On Tencent Holdings’ popular chat app WeChat nearly half a million people mentioned “Audi second hand car” on Tuesday.
Negative social media reaction in China can have an outsized effect on brands, with hundreds of millions of people using WeChat and rival platform Weibo. Audi, owned by Volkswagen, has seen sales stall in China this year, despite a slight bounce back in June.
In the 30-second advert, a serene outdoor wedding is interrupted when the groom’s mother rushes to the podium, checking out the bride’s eyes, before pinching her nose and ears, and pulling open her mouth to check on teeth.
A voice over says: “Important decisions must be made carefully ... Only with an official certification can you relax.” The advert is for an approved retailer of Audi second hand cars.
The video touched a nerve amongst Chinese consumers, with many online saying it objectified women.
“This is really low taste. Isn’t this like what people do when trading cattle?” said one under the handle Yaoxiaozi on microblog Weibo.
Audi said in a statement the perception created by the advert “does not correspond to the values of our company in any way,” adding it was launching an investigation to ensure the mistake didn’t happen again.
Premium carmakers are increasingly looking to the Chinese market for growth.
APPLE Inc yesterday said it has appointed a managing director for China — a newly created role — in its latest move to localize product features.
Isabel Ge Mahe, who worked in wireless technology at Apple for over nine years, will coordinate teams across China, the US company said in a statement.
“Apple is strongly committed to invest and grow in China,” Chief Executive Officer Tim Cook said in the statement. “We look forward to making even greater contributions under her leadership.”
The announcement comes as Apple works to meet compliance measures under a new law requiring foreign firms to store data locally in partnership with Chinese entities.
Apple last week said it will invest in a US$1 billion project in Guizhou Province which will include a data center run with a local partner.
Ge’s previous projects include working with China's state-backed telecom firms to develop country-specific functions including the ability to use local telephone numbers as Apple identification numbers, short message service fraud detection, and support for quick response codes which are widely used in China for payments.
US homebuilders ramped up construction in June to the fastest pace in four months, led by surges in the Northeast and Midwest.
Housing starts climbed 8.3 percent in June to a seasonally adjusted annual rate of 1.22 million, the Commerce Department said yesterday. The gain ended three straight monthly declines and marked the strongest pace of building since February. Home construction has risen 3.9 percent year-to-date, but that slight increase has been unable to make up for the decrease in existing homes being listed for sale.
The June housing figures point to healthy demand that new construction alone has been unable to satisfy. Fewer existing homes are being listed for sale, while purchase prices for newly built homes have surged at pace more than six times wage growth. As a result, more Americans are rushing to buy homes but are struggling to do so because of a lack of supplies and higher costs.
So far this year, builders have turned their attention toward single-family houses and away from rental apartments. Starts of single-family houses have risen 7.9 percent, while construction of multi-family buildings has slipped 4.2 percent.
Housing starts jumped a stunning 83.7 percent in the Northeast and 22 percent in the Midwest.
SHANGHAI-BASED Shinezone is among the first Chinese firms to gain a foothold in the mobile games market in Iran.
“Iran is the last virgin territory to conquer in the international gaming market,” said Wu Jun, chief operating officer of Shinezone.
About a quarter of Iran’s population, or some 25 million people, play mobile games in a country with rising disposable income. Western game publishers aren’t allowed to do business in Iran, creating a prime opportunity for China, analysts said.
Shinezone said it will publish games in Iran in cooperation with local business partners and mobile application distributors. The government in Tehran has approved the setup.
Shinezone, which raised about 400 million yuan (US$58 million) in the latest round of financing earlier this year, has its sights set on overseas markets. It has published 30 games internationally in about 20 countries, covering gaming categories such as simulation, strategy, role-playing and real-time battles.
It plans to expand its range of games to encompass themes like tea culture and legendary Chinese stories, said Wu.
China and Iran share rich cultural histories, which makes business relations easier, said Ali Dehghani, commercial counselor at the Consulate-General of the Islamic Republic of Iran in Shanghai.
POLAND is offering incentives to improve the investment environment for Chinese companies to do business there, Poland officials said recently in Shanghai.
China plans to tap into Poland’s strong technology base for joint projects in health care, the creation of smart cities and advanced agriculture.
Poland was among the first countries to forge new ties with China under the “Belt and Road” initiative. Analysts see great opportunities for expansion of commerce and cultural exchanges.
Poland has numerous industrial zones and public service platforms that can be tapped by Chinese investors. The nation’s membership in the European Union gives it ready access to EU certifications and favorable trade policies, said Jerzy Bujok, deputy general manager of the Polish Chamber of Commerce.
It’s easy for Chinese investors and their families to obtain passports and even residency permits, he added.
With increased aged populations in both countries, digital medical services to improve health care will be one area of mutual interest, said Professor R.Z. Opara, who has experience in the field in both Poland and Australia.
WHERE commerce goes, tourism is sure to follow.
The 8,445-kilometer international expressway connecting Russia and China, scheduled to open by the end of the year, paving the way for tourism companies to tap destinations with untapped potential.
The highway will traverse Jiangsu, Henan and Gansu Provinces and the Xinjiang Uygur Autonomous Region in China, as well as Kazakhstan and Russia.
The latter two countries are places less well traveled by Chinese tourists, according to Tuniu, a major online tourism agency in China.
But things are changing.
The number of Chinese tourists seeking to visit Russia doubled in the first half, thanks to a relaxed visa policy and a decline in the value of the rouble.
Chinese tourists who go to Russia typically spend seven to nine days there, with Moscow and St Petersburg always at the top of the itinerary.
For its part, landlocked Kazakhstan offers visitors stunning scenery, a rich culture of 130 ethnic minorities and the benefit of less frenzied, commercialized tourism.
“Belt and Road” is also increasing the number of Chinese tourists visiting places like Finland and Turkey.
Travel agency Glorious DMC said it is receiving a lot of inquiries about trips to Turkey. Some 12,000 Chinese tourists visited there in the first six months of 2017, and the number is expected to swell to 40,000 by year’s end.
Finland is also seeing more Chinese visitors. In the second quarter, passenger numbers at Helsinki Airport rose 10.8 percent from a year earlier, with many Chinese accounting for the increase.
Europe continues to remain the most popular destination for Chinese. The number of visitors from Asia exceeded 1 million for the first time in the first half of this year.
MORE than two weeks after 1,000 bikes of Chinese bike-sharing company Mobike arrived in Manchester, Britain, there have been complaints that many locals don't know how to share.
"There are Mobikes in the canal, Mobikes in bins and I am fed up with following the app to a residential street where there is clearly a Mobike stashed in someone's garden," Helen Pidd, North of England editor of the Guardian, wrote in an article published Sunday on the newspaper's website.
Steve Pyer, Mobike UK's general manager, said 50 bikes have been trashed so far. He added that many more have indeed ended up on private property, and the bike redistribution team will be knocking on doors themselves to clear up "misunderstanding."
"In Singapore we launched our scheme in March with 5,000 bikes and there have been just two reports of broken locks," he was quoted by the article as saying.
"I would like to live in a city where people know how to share," Pidd wrote. "I hope my pessimism is ill-placed."
On June 29, Mobike, one of China's largest bike-sharing companies, launched its service in the Greater Manchester. For the special month of July, Mobike will offer a discounted 29-pound deposit to users. Usage is charged at 50 pence per 30mins.
Earlier this year, Ofo, a rival company of Mobike in China, launched 20 bikes in the British city of Cambridge.
Using specially designed bikes equipped with GPS and proprietary smart-lock technology, Mobike enables users of its smartphone app to find a bike near them, reserve and unlock it. After reaching their destination, the user parks the bike by the roadside and locks it, automatically making the bike available to the next rider.
The company officially launched its service in Shanghai in April 2016. In just over a year, it has raised more than 600 million U.S. dollars to finance overseas expansion. It now has 6.5 million shared bikes in 150 cities globally.
Britain, Singapore, and the United States are among the markets Chinese bike-sharing firms have entered.
CHINA'S economic powerhouse Guangzhou will give tenants equal rights to education resources as homeowners, quashing a former rule.
The regulation is part of a larger plan to increase the number of renters and curb high-flying property prices.
CHINESE companies accelerated their takeover efforts in the overseas auto industry in the first half of 2017, aiming for a bigger role in international auto markets, Wall Street Journal reported on Tuesday.
Chinese companies made eight overseas deals totaling more than US$5.5 billion in the first half of this year, compared with nine investments for all of last year, said the report.
NEW home prices in 15 Chinese cities continued to post slower year-on-year growth in June as several rein-in measures to quell speculation remained in place, data released yesterday by the National Bureau of Statistics showed.
The 15 cities, including four first-tier and some key second-tier ones, saw year-on-year price growth decelerate by 0.8-5.5 percentage points compared with May, according to the bureau, which monitors prices in new and pre-owned home markets in 70 major cities.
New home prices in six cities posted gains, flat from May and April, on a monthly basis. Guangzhou, capital of Guangdong Province, saw new home prices rise 0.5 percent, the largest monthly hike among all gainers.
“For nine consecutive months, prices of new and pre-occupied homes in first-tier cities recorded slower year-on-year growth,” said Liu Jianwei, a senior statistician at the bureau.
“On a month-over-month basis, prices of new and pre-occupied homes in the four gateway cities fell by 0.1 percent and 0.2 percent, respectively.”
In second-tier cities, year-on-year price growth of new homes dropped for the seventh straight month in June and price growth of pre-owned homes shed for the fifth consecutive month, the bureau’s data showed.
In Shanghai, new home prices shed 0.2 percent from May and gained 10 percent from same period of last year, the bureau said.
Nationwide, new home prices in 60 of the 70 cities saw monthly increases in June, up from 56 cities in May. Six cities saw price drops and the remaining four saw no changes from a month earlier.
“More cities saw price rise though the overall pace of growth moderated following stricter restrictions in many cities,” said James Macdonald, head of China research at Savills, a global property advisor.
“If this trend persists, the likelihood of new highly restrictive policies should decrease though fine tuning of existing policies may continue.”
On average, new home prices in the 70 tracked cities added 0.7 percent in June, the 26th straight month-on-month gain. That compared with a 0.75 percent rise in May, the Savills data showed.
CONSUMER banking giant Bank of America reported a 10 percent rise in second-quarter profits yesterday as gains from higher interest rates were more than enough to offset a drop in trading revenue.
The Charlotte, North Carolina-based bank said it earned US$5.27 billion, or 49 cents per share, compared with US$4.78 billion, or 43 cents per share, in the same period a year earlier. The results beat analysts’ forecasts of 43 cents a share.
Like its competitors, Bank of America benefited from rising interest rates. The Federal Reserve has raised interest rates three times since December, which has allowed banks like BofA to charge higher interest rates to borrowers when they take out loans.
Because of its large consumer banking division, BofA’s fortunes, as the nation’s second-largest bank by assets, are often more directly tied into interest rates than its rivals JPMorgan Chase, Citigroup and Goldman Sachs, who have much larger trading divisions and are less exposed to short-term interest rates. BofA’s net interest income rose 9 percent in the quarter compared to a year ago to US$10.99 billion.
The rate BofA paid on deposits was unchanged from a year earlier at 0.04 percent, which allowed its profit margins to grow. BofA’s efficiency ratio in its consumer banking division, which measures how much money the bank is spending on overhead, fell from 57 percent to 52 percent. A lower efficiency ratio is a positive thing for a bank.
“Against modest economic growth ... we had one of the strongest quarters in our history,” said BofA Chief Executive Brian Moynihan in a statement.
BofA’s trading desks had a tough quarter. That division reported profits of US$830 million, down 25 percent from a year earlier. Other major banks have said that last quarter’s quieter market conditions kept traders on the sidelines, which in turn kept a lid on trading revenue. The pain was particularly felt in BofA’s fixed-income trading division, where revenue fall 14 percent.
BofA’s balance sheet also improved in the quarter. The bank set aside less money to cover potentially bad loans and the percent of consumer loans it charged off in the quarter fell to its lowest level in more than 10 years.
US-BASED lifestyle brand Razer intends to launch an initial public offering in Hong Kong with eyes on the Chinese market, the company said yesterday.
Razer also aims to go beyond just selling gaming gadgets by creating an “eco-system” strategy to embrace software and services, the company added.
Razer has filed an IPO application to the Hong Kong stock exchange, and boasts investors such as Intel, Hong Kong billionaire Li Ka-shing, and IDG-Accel. Media reports said the company may be valued at US$5 billion.
The Hong Kong IPO serves as a platform for Razer to venture into the mainland market which offers opportunities for “disrupter” companies like Razer, Chief Executive Tan Min Liang said in its office in Zhangjiang in Pudong New Area.
Presently, China makes up 13 per cent of Razer’s business. Currently, 50 per cent of its business is in the US market, 27 per cent in Europe and 23 percent in Asia.
CHINA has relaxed curbs on property firms seeking funds in offshore and onshore bond markets, people familiar with the matter say, a move that could allow fresh capital into a sector that has struggled to refinance after a slew of tightening measures.
Since late last year, regulators have made it harder for developers to sell onshore corporate bonds in a bid to help cool an overheating property market. Separately, the National Development and Reform Commission stopped granting new quotas for offshore dollar bond issuance in the second quarter of this year.
However, a bond underwriter told Reuters that the NDRC, the regulatory body that approves offshore corporate debt sales, in June lifted the curbs on offshore bond issuance by developers. A number of developers have already issued into the offshore market in recent weeks.
“There are no written words, but the message was communicated in meetings with officials. This way, policies can be flexible,” the underwriter said, declining to be named as he was not authorised to talk to the media.
Three developers told Reuters they can once again apply for onshore issuance with the China Securities Regulatory Commission, the agency responsible for onshore bond oversight.
New regulations governing many land auctions and setting limits on home prices in some mainland cities are threatening many developers' business models, which in turn is hurting their cashflow.
If liquidity stays tight, firms and analysts said the market might start to see bond defaults next year when many bonds reach maturity.
SAMSUNG Electronics plans to recover gold and other metals and components from recalled Galaxy Note 7 smartphones to reduce waste.
The South Korean company said yesterday that it expects to retrieve 157 tons of gold, silver, cobalt, copper and other metals from millions of smartphones that were recalled and discontinued last year after their batteries were found to be prone to catching fire.
It didn’t say how it would use the retrieved metals.
The phones’ display modules, memory chips, camera models and other components will be separated from the Note 7 for sale or recycling, Samsung said in a statement.
In another effort to reduce waste, Samsung has begun selling 400,000 units of Galaxy Note FE phones in South Korea made from unused parts of recalled Note 7 smartphones.
The Note 7 crisis was one of the biggest black eyes in Samsung’s recent history, costing the company over US$5 billion. Airlines banned passengers from carrying Note 7s on flights due to safety concerns and millions of smartphones were shipped back to Samsung.
Russian police march past airplanes yesterday during the opening day of the annual air show MAKS 2017 in Zhukovsky, some 40 kilometers outside Moscow. About 700 Russian and 180 corporations from 36 countries are expected to participate in the six-day air show.
SHANGHAI’S economy grew by a better-than-expected 6.9 percent annually to 1.39 trillion yuan (US$205.6 billion) in the first half as the industrial sector expanded to offset weaker real estate activities, Shanghai Statistics Bureau said yesterday.
The pace was 0.2 percentage point faster than the same period of last year and the same as the national average.
“Shanghai’s economic conditions in the first half were generally stable and better than expected,” said Tang Huihao, deputy director of the bureau, at a briefing. “The stable trend is lasting (and) the progress is deepening.”
Value-added industrial output, a vital contribution to gross domestic product, rose 7.3 percent to 375.32 billion yuan in the first half, reversing a 4.4 percent fall in the same period last year.
The city’s industrial production totaled 1.6 trillion yuan during the six-month period, up 8.2 percent annually which is the highest gain since 2012, the bureau’s data showed.
Services output in the city rose 7 percent to 971.38 billion yuan in the first six months, contributing to 69.9 percent of the local GDP.
That’s a slight drop from 70.7 percent in the first quarter.
Tang attributed the lower contribution to a weaker real estate market.
The bureau’s data also showed that value-added output of information technology, logistics, and financial services grew by double digits while output from the real estate industry shed 17.5 percent year on year.
The area of new homes sold, excluding government-funded affordable housing, dived 41 percent in the first half of this year while the sales of pre-owned homes plunged 56.8 percent year on year to the lowest during the same period in the past five years, the bureau said.
Shanghai’s foreign trade in the first half of the year jumped 18.7 percent from a year earlier to 1.55 trillion yuan amid improving external and domestic demand, reversing a 0.4 percent drop in the same period last year, the data showed.
The city’s consumer inflation was 1.9 percent, 0.4 percentage point warmer than the national level, mainly driven by higher costs of medical treatment.
Tang said prices of services rose faster than consumer goods in the first half, and predicted inflation for 2017 is set to be cooler than last year’s 3.2 percent.
CHINA’S newly announced Cabinet committee on financial stability and development will mainly be responsible for the coordination of the country’s financial reform, development and regulation, according to a senior central bank official.
To make regulation more effective, the new regulatory body will work to ensure coherence between China’s monetary, fiscal and industrial policies, Lu Lei, head of the financial stability bureau of the People’s Bank of China told the People’s Daily newspaper in China.
China announced that it will set up a committee under the State Council to oversee financial stability and development during a two-day National Financial Work Conference that ended Saturday.
China’s systemic financial risks are generally under control, but risks such as bad assets and liquidity issues are still alarming, and regulation has become uncoordinated, inadequate and outdated in the face of innovation and development of cross-market financial products, Lu said.
The new committee will target weak links in supervision and guard against systemic risks to ensure the sound development of China’s financial system and help it better serve the real economy, he said.
Specifically, the committee will improve regulatory methods such as risk monitoring and early warning mechanisms, coordinate risk prevention work, deepen financial reform and opening-up, and correct the structural and systemic issues in the sector, he said.
The weekend’s conference highlighted three tasks in the financial field, including making the financial sector better serve the real economy, containing financial risks and deepening financial reforms.
The conference, which has been held every five years since 1997 and is widely considered to set the tone for financial reforms, also stressed that the PBOC will play a stronger role in macro prudential management and guard against systemic risks.
Echoing the message from the conference, Lu said the central bank will keep a prudent monetary policy and shore up weak links in supervision to eliminate financial risk at an early stage.
The PBOC will also promote the opening-up of the financial sector, he said.
SHANGHAI stocks rebounded yesterday as coal and steel companies rose amid a recovery in China’s “real economy,” analysts said.
The Shanghai Composite Index gained 0.35 percent to close at 3,187.57 points.
The index’s gain reversed the slump on Monday as investor sentiment recovered, helped by China’s industrial expansion and efforts to develop the “real economy,” said Yang Delong, chief economist of First Seafront Fund, a Shenzhen-based investment firm.
China’s industrial output grew 7.6 percent year on year in June, 1.1 percentage points higher than May, according to the National Bureau of Statistics.
Coal mining and thermal power company Beijing Haohua Energy Resource Co jumped by the daily limit of 10 percent to 9.96 yuan (US$1.48), as did Fangda Special Steel Technology Co to 10.02 yuan.
China would rely more on the “real economy” to boost economic growth amid efforts to dampen possible financial bubbles in the property sector, according to the National Development and Reform Commission yesterday.
CHINA’S coal prices have surged since June amid a short-term supply shortage, economic recovery, a hydropower shortage and a cut in oversupply, the nation’s top economic planner said yesterday.
The benchmark Bohai-Rim Steam-Coal Price Index ended at 581 yuan (US$86) per ton last week, up 19 yuan per ton from the beginning of June after a five-week growth. Meanwhile the most traded coking coal contract for September delivery surged 32 percent from June 1 to close at 1,244 yuan per ton yesterday.
Steam coal is used for power generation while coking coal is to refine steel.
China’s economic recovery has sparked growth among power, steel, and chemical industries which rely on coal as feedstock, Yan Pengcheng, spokesman at the National Development and Reform Commission, said.
China’s hydropower generation slumped 27.2 percent from January to the beginning of June compared with a year ago, Yan said.
Meanwhile, 111 million tons of coal capacity had been trimmed over the first half of the year, worsening the supply shortage to drive up the coal price sharply.
EQUITY markets in Asia (ex-Japan) have had their best start to the year since 2009, rising almost 20 percent in US dollar terms. China and South Korea have led the pack, posting gains of 25 percent and 21 percent respectively — a key question for investors is whether this pace of gains can be maintained.
To answer this, we need to identify what has driven the gains so far this year, assess the sustainability of these drivers and the potential for new catalysts.
The drivers of Asian market trends in the first half include US dollar weakness, a solid earnings recovery and diminishing chances of implementation of a punitive US import tariff considered by the new administration. The US dollar has declined almost 6 percent against its main trading partners from its peak in late 2016. A weaker dollar, besides allowing Asian central banks full control of their monetary policy, is generally supportive for regional asset markets as it results in an increase in capital inflows, boosting demand for stocks and bonds.
The flows have been supported by a strong earnings recovery. Consensus forecasts suggest earnings growth in Asia (ex-Japan) is likely to increase by 18 percent this year, following a 1 percent decline in 2016. China is leading the earnings recovery. Meanwhile, South Korean equities, for which exports are an important growth driver, have been re-rated by investors amid easing of political risks and reduced likelihood of the implementation of a new system of US import tariff.
Looking ahead, the factors behind the Asian equity rally in the first half are likely to remain in place for the rest of the year — the US dollar may weaken modestly, lead indicators of earnings remain positive and the likelihood of implementation of US import tariff still appears low.
Moreover, there are some new catalysts which could help sustain the rally. These include: Firstly, a focus on stability in China and the need to engineer a positive wealth effect ahead of the National Congress of the Communist Party of China (known as NCCPC) in the autumn. Secondly, policy paralysis in Washington, which is actually good news for Asian and global asset markets as it reduces the risk of additional US stimulus at time when there is little spare capacity in the US economy. A fiscal stimulus in this environment is likely to hasten monetary policy tightening in the US, likely boosting the dollar — which is negative for capital flows into emerging markets.
Focusing on China, which is one of our two preferred markets in the region, the recent decision by MSCI, a provider of index data, to include the locally-listed, so-called ‘A shares’ in its global list of equity market indices is a significant development. Although the short-term impact is likely to be modest, given the weight of the included shares in the MSCI Emerging Market index is a mere 0.7 percent, looking ahead to 2025, the weight of the A shares could increase to 12 percent.
We also believe the Chinese government is keen to support a positive wealth effect from rising real estate prices ahead of the NCCPC in autumn. Although efforts to cool real estate markets in tier 1 and 2 cities may continue, capital appreciation outside these cities is likely to be welcomed by authorities as it helps reduce excess supply of houses and encourages development outside the major cities which are overwhelmed by congestion and pollution and where social services have come under pressure.
‘Trapped liquidity’ is the other likely driver of equity markets in China for the rest of the year. Chinese companies have been on an acquisition spree until recently, having spent US$246 billion in overseas acquisitions alone in 2016. This is reminiscent of the acquisitions undertaken by Japanese companies prior to the bursting of Japan’s bubble in the late eighties.
Keen not to repeat the same mistakes, policymakers have withheld approvals for overseas acquisitions this year and pressured banks to reduce the supply of credit granted by their overseas branches to these acquisitive companies.
As a result, acquisitions have plummeted 67 percent in the first four months of this year. We view the tightening of rules on overseas acquisitions as a positive development as it traps liquidity within the domestic economy. In addition, it will help reduce the growth in corporate debt in China, given that most of these acquisitions are debt-financed.
South Korea is another of our preferred markets in Asia where we believe there are a number of positive developments that will support equities in the second half. The most significant of these is the decline in political risk following the change in government which has led to an easing of tensions with China. Other supporting factors include reforms aimed at improving shareholder returns and accelerating corporate restructuring.
The decision by the prior South Korean government to allow the US to set up the Terminal High Altitude Area Defence (THAAD) missile system to defend it in the event of an attack from its northern neighbour resulted in a boycott of South Korean goods and department stores in China.
Newly-elected President Moon has suspended further deployment of THAAD, which is likely to ease tensions with China and help revive the sale of Korean products there.
Corporate reform is an ongoing theme in South Korea and one which is likely to continue under President Moon. Over the past three years, South Korean dividend yields have doubled, from an admittedly low 1 percent, while return on equity has risen from 8 percent to 11 percent. Companies are cancelling treasury shares, increasing capital available for distribution to shareholders.
There are similar positive developments around the region, with a growing number of companies focused on increasing shareholder returns through higher dividends, raising return on equity and increasing emphasis on corporate restructuring.
Taken together, we believe there are clear catalysts that may enable markets in Asia (ex-Japan), and China and South Korea in particular, to post solid returns in the second half, and outperform global equity markets. On the three occasions since 1995 when Asia (ex–Japan) posted positive double-digit gains in the first-half period, markets generated an average return of 19 percent in the second half.
US-BASED gaming firm Razor plans an initial public offering in Hong Kong with an aim to better target the Chinese market, said its Chief Executive Min-Liang Tan in Shanghai today.
Razor has filed an IPO application to the Hong Kong Stock Exchange with investors including Intel, billionaire Li Ka-shing and Temasek.
The firm is expected to raise more than US$5 billion through the IPO.
Its choice of Hong Kong as the venue for the planned IPO is to better venture into China, a place offering opportunities for “disrupter” companies like Razor, Tan said in Razor’s office in Zhangjiang of the Pudong New Area.
Sales in the Chinese market made up 13 percent of Razor’s business at present, while Asia accounted for 23 percent. The US remained the biggest with contribution of half of Razor’s sales, and the Europe took the rest 27 percent.
The firm plans to build up an “eco-system” covering software and services to grow beyond the sales of gaming gadgets.
STABILITY continued to be the key word for housing markets in 15 Chinese cities where varied rein-in measures to quell speculation remained unchanged with slower year-on-year growth in new home prices recorded again in June, data released today by the National Bureau of Statistics showed.
The 15 cities, including four first-tier and some key second-tier ones, registered year-on-year price growth decelerating 0.8 to 5.5 percentage points compared with May, according to the bureau, which monitors prices in new and pre-owned home markets in 70 major cities.
On a month-on-month basis, six cities recorded new home price gains, unchanged from May and April. Guangzhou in southern Guangdong Province saw a rise of 0.5 percent, the largest monthly increase among all gainers.
"For nine consecutive months, prices of new and pre-occupied homes in first-tier cities recorded slower year-on-year growth," said Liu Jianwei, a senior statistician at the bureau. "On a month-over-month basis, prices of new and pre-occupied homes in the four cities retreated by 0.1 percent and 0.2 percent, respectively."
In second-tier cities, year-on-year price growth of new homes dropped for the seventh straight month in June and price growth of existing homes declined for the fifth consecutive month, the bureau's data showed.
In Shanghai, new home prices shed 0.2 percent from May and gained 10 percent from same period of last year, the bureau said.
SHANGHAI’S economy expanded 6.9 percent year-on-year in the first half of this year to 1.39 trillion yuan (US$205.6 billion), the Shanghai Statistics Bureau said today.
The pace was 0.2 percentage points faster than the same period of last year and the same as the national average.
“Shanghai’s economic conditions in the first half were generally stable and better than expected,” said Tang Huihao, deputy director of the bureau said during a briefing. “The recovery is stable, the progresses are deepened, and the good effects are taking shape.”
The value-added industrial output, an important contribution to GDP, rose 7.3 percent to 375.32 billion yuan in the first half, reversing a 4.4 percent decrease in the same period last year.
Industrial production, meanwhile, climbed to 1.6 trillion yuan during the six-month period, a year-on-year rise of 8.2 percent which is the highest gain since 2012, the bureau's data showed.
The city's services output rose 7 percent to 971.38 billion yuan in the first half, contributing to 69.9 percent of the local GDP. That compared with 70.7 percent in the first quarter.
Information technology, logistics, financial services recorded double-digit growth while output from real estate industry dropped 17.5 percent year-on-year.
Foreign trade in the first quarter jumped 18.7 percent from a year earlier to 1.55 trillion yuan amid improving external and domestic demand, reversing a 0.4 percent drop in the same period last year. In particular, export increased 12 percent and import surged 23.7 percent, the bureau said.
CHINA'S once red-hot property market continued to show signs of cooling as home prices were faltering or posting slower growth in major cities amid the government's tough purchase curbs, data showed Tuesday.
On a yearly basis, new home prices continued to climb in the 70 cities surveyed in June, but the pace of growth slowed in 15 major cities compared with the previous month, the National Bureau of Statistics (NBS) said.
On a month-on-month basis, new home prices fell or remained flat in nine cities, according to the NBS data.
THE acceleration of China’s economic growth in the second quarter of the year exceeded market expectations, with a series of data indicating lasting recovery in the world’s second-largest economy.
China’s second-quarter GDP rose 6.9 percent year on year, unchanged from the first quarter, National Bureau of Statistics data released yesterday showed.
That compared with an expected 6.8 percent increase and last year’s 6.7 percent annual increase.
“The economic growth in the first half can be concluded into two sentences — the stable conditions are more consolidated, and the good trend is more obvious,” said the bureau’s Xing Zhihong. “The pace of growth was stable, employment continued to improve, prices were generally stable, and international payment continued to improve.”
He said the consumer and manufacturing sectors continued to strengthen and the quality of economic growth was improving.
Sales of consumer goods rose 10.4 percent year on year in the first half, 0.4 percentage points faster than in the first quarter.
China’s industrial output expanded 6.9 percent year on year in the first half, compared with the first quarter’s 6.8 percent.
Fixed-asset investment growth slowed to 8.6 percent in the first half from the first quarter’s 9.2 percent.
Sales of residential property in terms of area rose 13.5 percent in the first half, compared with the first quarter’s 16.9 percent increase.
“China’s second-quarter GDP report beat expectations again, as details of the June activity data pointed at broad-based strength, with June industrial production, retail sales and FAI all coming in above expectations,” said Zhu Haibin, JPMorgan China’s chief economist. “The stronger-than-expected June activity reversed the softening momentum in April-May and suggested that China’s growth momentum remained solid and stable in the near term.”
The bank raised China’s full-year growth forecast from 6.7 percent to 6.8 percent.
Third-quarter growth forecast was revised up to 6.6 percent from 6.4 percent, while the fourth-quarter prediction was revised down to 6.2 percent from 6.4 percent, dragged by weaker real estate investment and tighter regulation on financing activities.
The National Financial Work Conference at the weekend confirmed a hawkish stance over reining in leverage and financial risks. The conference outlined tasks to make the financial sector serve the real economy better, contain financial risks, and deepen financial reforms.
Economists interpreted its tone as to tighten risk management in the financial sector.
Other major indicators also revealed a resilient economy.
China’s disposable income per capita stood at 12,932 yuan (US$1,910) in the first half, an increase of 7.3 percent if taking account of inflation.
In the job market, 7.35 million new jobs were created and the surveyed unemployment rate was under 5 percent in June for the second consecutive month, NBS data showed.
David Preston (left), president and CEO for China at Boehringer Ingelheim, introduces the German drugmaker’s operations to Shanghai’s Party Secretary Han Zheng yesterday when Han inspected the city’s free trade zone. Han called for unremitting efforts to stick to a central government plan to build the FTZ into one in line with the highest international standards. He said the zone should become a pioneer to deepen the new-round development of reform and opening-up. He urged the zone to make further progress in innovation, and to better serve the national strategies such as the Belt and Road initiative and the development of the Yangtze River economic belt. He asked the FTZ to continue to simplify the process of opening businesses in the zone.
CHINA should improve its investment and market environment, accelerate opening up to the outside world and lower operating costs, President Xi Jinping said yesterday.
The country should “create a stable, fair, transparent and predictable business environment, and speed up efforts to build an open economy in a bid to promote the sustainable and healthy development of the Chinese economy,” Xi said at a meeting of the Central Leading Group on Finance and Economic Affairs.
An important goal of building an open economy is to stimulate improvement of domestic institutions and laws for higher efficiency and greater competitive strength in the global market, he said.
Foreign investment has played a significant role in China’s economic development, promoting reasonable allocation of resources and driving market-oriented reforms, he said. China should continue to make good use of foreign investment to advance supply-side structural reforms, upgrade the economy, and catch up with global technology development.
He urged faster efforts to lift restrictions on foreign access and ownership in sectors such as child care, elderly care, architectural design, accounting, auditing, commerce, logistics, e-commerce, general manufacturing and services.
The “negative list” approach to foreign investment management, which has been adopted in the country’s pilot free trade zones, should be expanded to the whole nation as soon as possible, he said.
A negative list identifies sectors and businesses that are off limits or restricted.
Xi also called for faster work to unify laws and regulations on domestic and foreign businesses and make new fundamental laws on foreign investment.
Laws, rules and policies out of tune with the overall direction and principle of opening-up should be abolished or revised within a time limit, and national treatment in laws and policies should be granted to foreign-funded companies after they enter the market, Xi said.
He urged megacities such as Shanghai, Beijing, Guangzhou and Shenzhen to take the lead in improving the business environment, demanding moves to reduce inspections and fines on companies and ban illegal fees.
He stressed the importance of protecting intellectual property rights, calling for better laws and regulations, an improvement in the quality and efficiency of intellectual property examinations, and speedier institutional improvement for IPR protection related to emerging sectors and new business types. Wrongdoing should be punished more severely, he said.
A major, global cyber attack could trigger an average of US$53 billion of economic losses, a figure on par with a catastrophic natural disaster such as US Superstorm Sandy in 2012, Lloyd’s of London said in a report yesterday.
The report, co-written with risk-modeling firm Cyence, examined potential economic losses from the hypothetical hacking of a cloud service provider and cyber attacks on computer operating systems run by businesses worldwide.
Insurers are struggling to estimate their potential exposure to cyber-related losses amid mounting cyber risks and interest in cyber insurance. A lack of historical data on which insurers can base assumptions is a key challenge.
“Because cyber is virtual, it is such a difficult task to understand how it will accumulate in a big event,” Lloyd’s of London CEO Inga Beale said.
Economic costs in the hypothetical cloud provider attack dwarf the US$8 billion global cost of the “WannaCry” ransomware attack in May, which spread to more than 100 countries, according to Cyence.
Economic costs typically include business interruptions and computer repairs.
The Lloyd’s report follows a US government warning to industrial firms about a hacking campaign targeting the nuclear and energy sectors.
In June, an attack of a virus dubbed “NotPetya” spread from infections in Ukraine to businesses around the globe. It encrypted data on infected machines, rendering them inoperable and disrupted activity at ports, law firms and factories.
“NotPetya” caused US$850 million in economic costs, Cyence said.
In the hypothetical cloud service attack in the Lloyd’s-Cyence scenario, hackers inserted malicious code into a cloud provider’s software that was designed to trigger system crashes among users a year later.
By then, the malware would have spread among the provider's customers, from financial services companies to hotels, causing all to lose income and incur other expenses.
Average economic losses caused by such a disruption could range from US$4.6 billion to US$53 billion for large to extreme events. But actual losses could be as high as US$121 billion, the report said.
As much as US$45 billion of that sum may not be covered by cyber policies due to firms underinsuring, the report said.
A group representing major technology firms including Alphabet Inc and Facebook Inc yesterday urged the US Federal Communications Commission to abandon plans to reverse the landmark 2015 rules barring Internet service providers from blocking or slowing consumer access to web content.
The Internet Association said in its filing with the FCC that dismantling the net neutrality rules “will create significant uncertainty in the market and upset the careful balance that has led to the current virtuous circle of innovation in the broadband ecosystem.”
The rollback will harm consumers, said the group, which also represents Amazon.com Inc, Microsoft Inc, Netflix Inc, Twitter Inc and Snap Inc.
In May, the FCC voted 2-1 to advance Republican FCC Chairman Ajit Pai’s plan to reverse the former Obama administration’s order reclassifying Internet service providers as if they were utilities.
Pai has asked if the FCC has authority or should keep its rules barring Internet companies from blocking, throttling or giving “fast lanes” to some websites, known as “paid prioritization.”
Pai, who argues the Obama order was unnecessary and harms jobs and investment, has not committed to retaining any rules, but said he favors an “open Internet.”
The association said there was “no reliable evidence” provider investment had fallen.
More than 8.3 million public comments have been filed on the proposal. Pai will face questions tomorrow on the issue at a US Senate hearing.
Broadband providers AT&T Inc, Verizon Communications Inc and Comcast Corp opposed the 2015 order, saying it discouraged investment and innovation. They say they strongly support open Internet rules.
PING An Insurance Group yesterday launched an online investment platform in Singapore to offer products to ordinary investors.
The platform, Lu International Financial Asset Exchange (Singapore), is a unit of Lufax Holding and has acquired a Capital Market Services licence from the Monetary Authority of Singapore, the Chinese financial conglomerate said in a statement.
Lu International will use the licence to provide securities trading, asset management and custody services for investors.
The platform, to start operation in the third quarter, will let investors open accounts and invest on a mobile device.
Facial recognition, remote ID verification and address verification technologies will be adopted to comply to Singapore regulations.
“The establishment of Lu International in Singapore means that Ping An’s successful and unique business model in China will be operating within Singapore’s well-developed financial system and regulatory framework,” said Peter Ma, chairman and CEO of Ping An Group.
CHINA stocks plunged yesterday with nearly 500 dropping by their daily limit of 10 percent amid officials’ call to dampen speculation and curb financial risks.
The benchmark Shanghai Composite Index shrank 1.43 percent to end at 3,176.5 points, a two-week low.
Shenzhen listed stocks, which feature smaller-cap companies from the technology and consumption sectors, suffered most.
The startup board ChiNext tumbled 5.1 percent to 1,656.43, the lowest since January 2015 and the Shenzhen Composite Index droped 4.3 percent to 1,800.54.
Over 100 startups in the Shenzhen board tumbled by the daily limit of 10 percent following their first-half financial losses that were reported in the past two weeks. This jeopardized the Shanghai market, said Chen Guo, chief strategic analyst at Essence Securities.
Meanwhile investors rushed to drain their capital from the highly-speculative startup sector “after officials reiterated tightening financial regulations” at a national financial conference over the weekend, said Deng Haiqing, chief economist at JZ Securities.
More than 2,800 stocks fell across Chinese markets. Over 1,200 stocks declined by more than 7 percent.
Glarun Technology Co tumbled by the daily limit of 10 percent to 25.38 yuan (US$3.75), as did Zhejiang Shengyang Science and Technology Co to 15.73 yuan.
FEDEX Corp said its fiscal 2018 results would be hurt in part due to disruption of operations in its TNT Express unit following a cyber attack last month.
The Netherlands-based TNT Express is still experiencing widespread service delays following the attack, FedEx said in a regulatory filing yesterday.
FedEx said it was unable to estimate when services at the unit would be fully restored.
FedEx added that no data breach or data loss to third parties is known to have occurred as of yesterday.
Pilots train in China’s first top-level full flight simulator yesterday in Tianjin. The simulator was delivered by ACCEL (Tianjin) Flight Simulation, a joint Sino-US venture between Haite High-Tech and Rockwell Collins, formed last year. The simulator is level D, meaning it can act as a perfect substitute for real planes in training pilots. Previously, all simulators at this level in China were imported at over US$10 million per unit.
THE value and area of new home sales expanded across the country in the first six months of this year as real estate developers geared up for better half-year results.
About 4.93 trillion yuan (US$726 billion) of new homes, excluding government-subsidized affordable housing, were sold between January and June, a year-on-year hike of 17.9 percent, the National Bureau of Statistics said in a statement yesterday. The pace accelerated from a rise of 15.3 percent in the first five months.
The area of new homes sold in the six-month period climbed 13.5 percent from a year earlier to 647.9 million square meters, up from a 11.9 percent growth in the first five months, the bureau’s data showed.
“Half-year results of property sales are always very important for real estate developers so that many companies would choose to boost sales in June as much as they could to get a better ranking,” said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co. “However, this rebound would most likely be temporary as the arrival of the traditional low season of July and August will definitely damp buying sentiment again.”
Strictly enforced curbs to quell housing speculation, including stricter home purchase limits, higher downpayment requirement, mortgage rate and a lockup period for home sales, had caused new property sales to slow across the country over the past months.
Investment in residential development, which took up 67.8 percent of total real estate projects in the first half, rose 10.2 percent year on year to 3.43 trillion yuan, up 0.2 percentage point from the first five months.
THE founder of debt-laden LeEco, Jia Yueting, didn’t attend a shareholders’ meeting of its listed subsidiary, Leshi Internet Information & Technology Corp, held yesterday in Beijing.
The 15-minute meeting was held without any interactive communications with Leshi’s shareholders on site. Leshi has been suspended from trading with unresolved debts and other problems.
Leshi posted a loss of about 640 million yuan (US$92.8 million) in the first half, a reversal from a profit of 280 million a year ago, the Shenzhen-listed firm said during the weekend.
Leshi and its new investor pleaded with suppliers and investors for “more time to repay debts and a rebound in business,” which needs capital and patience.
In January, cash-strapped LeEco secured a US$2.2 billion investment from a group led by property developer Sunac China Holdings.
“It’s good business. We need more time and maybe some finance,” Sunac Chairman Sun Hongbing said at the meeting, as quoted by media.
Sun was referring to listed Leshi’s business in online video, film production and smart TV. It doesn’t include LeEco’s ambitious electric car business.
Jia, who is now in the US, quit as chairman of Leshi Internet to become chairman at LeEco’s car unit. He’s still the controlling shareholder of LeEco.
His resignation came after asset managers sought to pull investment after a Shanghai court granted China Merchant Bank Co’s request to freeze US$182 million in assets due to late interest payments.
A total of eight students were approved by the President of Bayer Group Greater China and senior management last week to become 2017 Bayer Super Interns after a two-month process of selection and competition.
Bayer always wants to reiterate its employer brand “Passion to Innovate, Power to Change,” and has leveraged the latest digital technologies to not only help recruit summer interns but also to spread the word about the company’s culture and working environment.
“Bayer Super Intern is a wonderful program for Bayer to select our summer interns in a creative, fun and digital way and to communicate Bayer’s mission — “Science for a Better Life” — which means that we focus on scientific innovation to find solutions that bring a better life to people and society”, said Celina Chew, President of Bayer Group China.
“Even if these participants don’t go on to work for Bayer, we hope this could be a chance for them to get to know our corporate culture and values.”
After last two years’ successful Super Intern program, Bayer has again invited Chinese university students to speak up for change and witness the power of it by formulating change plans. This year’s program has attracted participation with 1,065 students from 352 universities.
The viewership of the mobile page for the first round hit 290,002. In the second round, a total of 64 students uploaded their videos on Meipai, which had combined hits of over 465,388 times within two weeks.
The whole recruitment process also helped Bayer’s core values be conveyed to all participants.
Since college students born after the 90s are more active on social media, and are more willing to try new things, the “Super Intern” program has used new digital approaches from the very beginning to create fresh topics and continuously attract attention on social platforms such as WeChat and Meipai.
Bayer wants to encourage employees as well as interns to take the first step in bringing the change no matter what action plan they have in mind. Therefore in this year’s selection process, Bayer invited students to present their plans of making positive changes in their daily life, or to identify a social problem and contribute their ideas to change it for the better.
“As you can see from our employer brand, ‘Passion to Innovate, Power to Change’, we are looking for talented people who are passionate about innovation and want to make a positive change in the world,” said Chew.
Leveraging digital capabilities is also another important step for Bayer to fully embrace innovation in various parts of its business.
During this year’s final competition, a total of 20 finalists were divided into four groups and were asked to complete a mini sound band within 30 minutes which could test their ability to innovate and work in teams.
There was also an outdoor orienteering section which divided the students into two groups to complete various tasks so that the management team could have observe each student’s flexibility, communication skills, team building and strategic thinking.
“All the finalists showed great spirit and courage to challenge the status quo and challenge themselves. I believe that the 2017 Bayer Super Interns will bring new perspectives and vitality to Bayer and we look forward to welcoming them to work with us this summer,” Chew added.
During their one-month internship, they will work closely with the management team and get to know how the business works by emerging themselves in Bayer’s working environment and participating in different business functions.
They will also have chances to participate employee “lunch and learn” event to share their expertise.
SHANGHAI’S new housing market continued to be weak despite a mild recovery in sales of medium- to low-end homes.
The area of new homes sold, excluding government-subsidized affordable housing, rose 9.1 percent to 150,000 square meters last week, Shanghai Centaline Property Consultants Co said in a report released yesterday.
They sold at an average 43,150 yuan (US$6,359) per square meter, a weekly drop of 4.5 percent.
“The rather active transactions recorded in the medium- to low-end segments were mainly buoyed by abundant supply of such homes that were launched during the previous few weeks,” said Lu Wenxi, senior manager of research at Centaline.
The local market saw a 78-percent plunge in supply of new houses to below 70,000 square meters last week from the previous seven-day period, Centaline data showed.
GROWTH of new home sales by both value and area picked up some pace across the country in the first six months of this year as real estate developers geared up for a better half-year result.
About 4.93 trillion yuan (US$726 billion) of new homes, excluding government-subsidized affordable housing, were sold between January and June, a year-on-year increase of 17.9 percent, the National Bureau of Statistics said in a statement today. That accelerated from a rise of 15.3 percent in the first five months.
The area of new homes sold during the six-month period climbed 13.5 percent from a year earlier to 647.9 million square meters, up from a 11.9 percent growth in the first five months, the bureau's data showed.
"Half-year results of property sales are always very important for real estate developers so that many companies would choose to boost sales in June as much as they could so as to get a better ranking among the counterparts," said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co. "However, this rebound would most likely be a temporary one as the arrival of traditional low season of July and August will definitely damp buying sentiment again."
Strictly enforced restrictions to quell housing speculation including stricter home purchase curbs, higher down-payment requirement and mortgage rate as well as a lockup period for home sales, had led to slowing new property sales across the country over the past months.
Investment in residential development, which accounted for 67.8 percent of total real estate development in the first half, increased 10.2 percent year on year to 3.43 trillion yuan, up 0.2 percentage point from the first five months, according to the bureau.
SHANGHAI'S new housing market continued to suffer weakness despite a mild recovery in sales with medium- to low-end products attracting the majority of buyers.
The area of new residential properties sold, excluding government-subsidized affordable housing, rose 9.1 percent to 150,000 square meters last week, Shanghai Centaline Property Consultants Co said in a report released today.
These new homes sold for an average 43,150 yuan (US$6,359) per square meter, a week-over-week decline of 4.5 percent.
"The rather active transaction recorded in the medium- to low-end segments was mainly buoyed by abundant supply of such products launched during the previous few weeks," said Lu Wenxi, senior manager of research at Centaline. "Only two high-end developments made themselves into the Top 10 list with each of them recording just a few dozens of sales."
On the supply side, only less than 70,000 square meters of new houses were released to the local market last week, a plunge of 78 percent from the previous seven-day period, Centaline data showed. All of them were located beyond the city's Outer Ring Road, with majority of them in Fengxian District and Nanhui of Pudong New Area.
Across the city, a total of 317,200 square meters of new residential properties were sold this month as of July 15, a drop of 23 percent from the second half of June, according to a separate report released today by Shanghai Homelink Real Estate Agency Co.
As the hottest season in a year finally kicked off, the local housing market will probably continue to register very subdued sentiment over the next couple of weeks with no significant rebound expected any time soon, Homelink said.
Sales of new houses won't exceed 700,000 square meters this month, Lu predicted.
PING An Group today launched an online investment platform in Singapore to offer products for ordinary investors with the support of the group’s financial technology.
The platform, Lu International Financial Asset Exchange (Singapore), is a unit of Lufax Holding and has acquired Capital Market Services license from the Monetary Authority of Singapore, Ping An said in a statement.
With the license, Lu International will be able to provide securities trading, asset management services, and custody services for investors that hold overseas bank accounts and assets.
The platform will start operation in the third quarter and use Ping An’s homegrown technology to allow investors to open accounts and make investment on a mobile device.
Facial recognition, remote ID verification and address verification technologies will be adopted to ensure compliance to Singapore regulations.
All investment products on the Lu International platform will be provided by regional or global institutions with formal financial licenses, Ping An said.
“The establishment of Lu International in Singapore means that Ping An’s successful and unique business model in China will be operating within Singapore’s well-developed financial system and regulatory framework and tested by global investors,” said Peter Ma, Chairman & CEO of Ping An Group.
He added that the new establishment marks Ping An’s attempts to explore fintech-based overseas expansion and serve China’s One Belt One Road initiative.
Lufax, established by Ping An Group in Shanghai in 2011, is the largest online wealth management platform in China.
It has over 31 million registered users since its establishment.
JIA Yueting, founder of the debt-laden LeEco, didn't show up in the shareholder meeting of its listed subsidiary held today in Beijing.
Leshi Internet Information & Technology Corp posted to lose about 640 million yuan (US$92.8 million) in the first half, compared with a profit of 280 million a year ago, the Shenzhen-listed firm said during the weekend.
CHINA'S value-added industrial output expanded at a more rapid pace in the first half (H1) of this year, adding to signs of continued stabilization in the wider economy.
The indicator grew 6.9 percent year on year in the January-June period, an improvement on the 6.8 percent for the first quarter, and the 6 percent registered for the same period of 2016, data of the National Bureau of Statistics (NBS) showed on Monday.
In June, industrial-production growth increased to 7.6 percent, after staying at 6.5 percent in April and May.
Industrial output is an important economic index that measures the activity of designated large enterprises with annual turnover of at least 20 million yuan (US$3 million).
"China's industrial production growth has remained above 6 percent since March 2016 and picked up further this year," NBS spokesperson Xing Zhihong said at a press conference, adding that improving profits and higher expectations had stimulated investment.
Industrial enterprises above the designated size reaped profits of 2.9 trillion yuan in the first five months, representing an increase of 22.7 percent from a year ago.
The producer price index showed factory activity had moved out of deflation territory in September after dropping for 54-consecutive months.
The high-tech and equipment manufacturing sectors led industrial output growth, with year-on-year increases of 13.1 percent and 11.5 percent in H1, respectively.
The manufacturing output increased by 7.4 percent, while output from suppliers of power, heating, fuel gas and water gained 8.1 percent. The mining sector, however, slipped 1 percent.
In terms of products, steel output increased by 1.1 percent, automobiles by 6.3 percent, electricity by 6.3 percent, and crude runs by 3 percent.
Ownership analysis showed that industrial output of state-holding enterprises was up 6.2 percent in the January-June period, while output of share-holding enterprises grew 7.1 percent. Meanwhile, the industrial output of foreign-funded enterprises increased 6.7 percent.
The industrial output figures were released by the NBS along with a slew of other major economic indicators.
China's economy posted a forecast-beating growth rate in H1, with GDP up 6.9 percent from a year ago. The increase for the second quarter was also 6.9 percent.
The growth was well above the full-year target of 6.5 percent and the 6.7-percent increase registered in 2016.
GROWTH in property development investment continued to decelerate in the first half of the year as the market showed signs of cooling, data showed Monday.
Investment in property development expanded 8.5 percent year on year for January-June, down from 8.8 percent during the first five months, according to the National Bureau of Statistics (NBS).
Housing sales measured by floor area rose 16.1 percent for the first half, with growth up from 14.3 percent for January-May.
Growth of housing sales value also accelerated to 21.5 percent in the first six months from 18.6 percent in the first five months.
There has been continued progress of destocking in the property market, with areas of the unsold homes down 9.6 percent at the end of June compared with one year earlier, NBS spokesperson Xing Zhihong told a press conference.
The data adds to evidence that China's property market boom is running out of steam as the government continues cooling measures to quash potential asset bubbles.
Rocketing housing prices, especially in major cities, had fueled concerns about asset bubbles. Since the end of 2016, dozens of local governments have passed or expanded their restrictions on house purchases and increased the minimum down payment required for a mortgage.
The data sets were released as part of a series of economic figures unveiled by the NBS, including GDP, retail sales, industrial production and fixed asset investment, which showed the world's second-largest economy continued to maintain stable growth.
CHINA’S economy expanded 6.9 percent from a year earlier in the second quarter of this year, flat with the growth rate in the first three months, the National Bureau of Statistics said this morning.
The gross domestic product grew to 38.15 trillion yuan (US$5.62 trillion) in the first half, up 6.9 percent year on year.
CHINA has unveiled plans to reform the financial sector to serve the real economy while guarding against systemic risks.
President Xi Jinping, at a two-day National Financial Work Conference that ended on Saturday, said China must strengthen the Party’s leadership over financial work, stick to seeking progress while maintaining stability, and respect the rules of financial development.
The conference, which has been held every five years since 1997, is widely considered to set the tone for financial reforms.
Three tasks were highlighted at the meeting — making the financial sector better serve the real economy, containing risks and deepening reforms.
Serving the real economy is the duty and purpose of the sector and the fundamental way to guard against risks, Xi said.
The sector should improve service efficiency and quality and channel more resources into major and weak areas of economic and social development, he added.
Developing direct financing will be prioritized while indirect financing structure should be optimized by accelerating strategic transformation of state-owned major banks and developing small and medium-sized banks and private financial institutions, he said.
Li Huiyong, a senior analyst with Shenwan Hongyuan Securities, said the reiteration of the role of the financial sector points out the direction of its development and the emphasis on direct financing is also reassuring for the stocks and bond markets.
Xi also said guarding against systemic financial risks is the ongoing theme of financial work and the government should take stronger initiatives to monitor, warn against and deal with risks in a timely manner.
China will accelerate developing laws and regulations governing the financial sector, improve macroprudential management and emphasize functional as well as behavioral regulation, he said.
The government will continue to deleverage the nation’s economy by taking a prudent monetary policy and prioritizing reducing leverage in state-owned enterprises.
The country will also deepen financial reforms by improving financial regulation coordination and shoring up weak links in supervision.
China is to set up a committee under the State Council to oversee financial stability and development and the central bank will play a stronger role in macroprudential management and guarding against systemic risks, Xi told the conference.
Lian Ping, chief economist at Bank of Communications, said such a committee will help improve the effectiveness of regulation and address challenges brought by increasingly mixed financial services.
Premier Li Keqiang said reform of the financial regulation framework should be based on domestic conditions and all financial businesses will be supervised.
Li said China will also increase efforts to improve the legal framework, credit mechanism and talent development for the financial sector to help the economy expand steadily.
Xi said the country would further open up its financial market to promote the internationalization of the yuan and capital account convertibility at a steady pace.
A worker is seen in Qingyang Tunnel, a rail tunnel on the new high-speed railway to link Jinan and Qingdao in Shandong Province. The railway, when completed by next year, will cut travel time between the two cities to 1 hour from 2.5 hours now.
CHINA’S financial regulators need to cooperate with financial technology companies to solve the imbalance in the industry and trim regulatory costs, the People’s Bank of China said over the weekend.
Regulations should ensure fair competition among fintech companies which need to help build a system to improve the efficiency of regulatory costs, Sun Guofeng, director of the PBOC’s research institute, said at the Lang Di Fintech Conference organized by US-based LendIt Conference LLC.
The imbalance is rooted in four areas — the development of various fintech companies, the allocation of data, market competition between financial institutions and fintech companies, and the capability between fintech and regulatory technology, Sun said.
“Facing the huge amount of new businesses in fintech sectors, the investment in regulations rose continuously,” Sun said.
“Imbalanced development will be apparant if regtech failed to follow the development of fintech.”
He said regulators should ensure fair competition among fintech firms and also to protect consumers.
THE internationalization of the yuan, or the renminbi, remains steady in the long run, despite a temporary setback last year due to a volatile exchange rate and capital outflow, said a report published on Saturday.
The RMB International Index came in at 2.26 in the last quarter of 2016, down 29.8 percent year on year, said the report from the International Monetary Institute of Renmin University of China.
The index was 2.65, 3.03 and 2.78 in the first three quarters of 2016.
“The retreat will not change the long-term upward trend,” Xiang Songzuo, deputy director of the institute, said at a press conference.
The RII, only 0.02 at the beginning of 2010, had been rising constantly until it hit a peak of 3.91 in the third quarter of 2015.
The report attributed the temporary setback mainly to the yuan’s weakening role in cross-border settlement amid flagging global trade and investment.
The yuan fell to sixth place among the most-used world payment currencies at the end of 2016 with a market share of 1.67 percent, down from 2.31 percent at the end of 2015, according to the Belgium-based Society for Worldwide Interbank Financial Telecommunication.
Xiang said his long-term bullish stance on the yuan’s internationalization was based on China’s financial reforms and opening up, a solid national economy, and outward-looking strategies including the Belt and Road Initiative.
“The financial markets, which have opened wider to the rest of the world, have become the core driving force of the yuan’s global journey,” Xiang said.
A bond connect between the Chinese mainland and Hong Kong started operation early this month, granting easier access to the world’s third largest bond market. Similar stock links that opened in 2014 and 2016 prompted the MSCI’s planned inclusion of 222 Chinese large cap stocks into its emerging markets index in June.
The International Monetary Fund in October officially added the yuan to its Special Drawing Rights, a recognition of the currency’s global position.
To further step up the yuan’s global drive, Xiang advised measures including continued financial opening up, support for outbound direct investment and improved financial infrastructure.
“There will be risks accompanying the internationalization process, so that is why I propose setting up more diverse derivatives and tools to mitigate the risks,” he said.
Yaseen Anwar, former governor of Pakistan State Bank, highlighted the need for the yuan to join the world’s dominant currencies.
“Many banks in the world were affected in the last financial crisis because of one currency, so there needs to be a multi-polar multi-currency world to allow the volatility to be managed by central banks around the world,” he said.
“RMB, which has the backing of the world’s second largest economy, will become a dominant currency, but it takes time, because its usability and concept have not been accepted by many people,” he said.
With the currency-swap agreement, the Belt and Road Initiative, and infrastructure financing in the next 20 or 30 years, the yuan will become more freely usable and more acceptable to people, particularly in emerging markets, he added.
CHINESE real estate firms have turned to the overseas market to seek financing as tougher regulations have made it more difficult for them to raise funds at home.
At least five property companies have announced moves to issue notes or bonds, worth more than US$2 billion in total, in the overseas market since the beginning of July, according to latest statistics from Centaline Property Research Center.
They include Greentown China and Longfor Properties, both major property developers in the country.
Greentown China said earlier this week it would issue US$450 million of senior perpetual capital securities, with the net proceeds to be used to refinance existing debt and for general working capital purposes.
Longfor Properties said early this month it would issue US$450 million of senior notes due in 2020 and use the proceeds for refinancing only.
The moves came as domestic financing by real estate developers shrank, following tightened market regulation aimed at curbing asset bubbles and preventing financial risks.
Property firms raised 177.2 billion yuan (US$26.1 billion) through bond and note issuance in the first half of 2017, a 74-percent plunge year on year, Centaline Property said.
“Authorities have strengthened control over various sources of funding for developers,” said Le Jiadong, analyst at GF Securities. “Major financing channels have been narrowed across the board.”
Meanwhile, the cooling housing market means less contribution from home sales to the companies’ cash flow.
Property sales had surged over two years of pro-growth policies before authorities moved to rein in speculation in the second half of last year.
Of 70 large- and medium-sized cities surveyed in May, new home prices fell or rose more slowly month on month in 35 of them, up from 31 in April, the National Bureau of Statistics said.
An indication of weaker sales, real estate loans took up 35 percent of all new loans extended by Chinese banks in the first half, down from 44.9 percent in 2016, central bank data showed.
BOEING has received more than 60 orders and commitments from China for its newly launched 737 MAX 10, a member of the 737 MAX single-aisle aircraft family, according to Boeing China on Saturday.
The orders come from emerging airlines such as Ruili Airlines, as well as all-Boeing-fleet airlines such as Xiamen Airlines, OK Airlines and Donghai Airlines and some Chinese leasing companies, said Boeing China.
It is quite noteworthy to see Chinese clients become launch customers of Boeing's new aircraft model, said Darren Hulst, managing director of marketing for northeast Asia at Boeing Commercial Airplanes.
Boeing launched the 737 MAX 10, the largest member of the 737 MAX aircraft family, at the 2017 Paris Airshow in June.
It is capable of carrying up to 230 passengers in an all economy-seat version. The aircraft will help Chinese airlines meet surging demand on high-density air routes, said Hulst.
A BANK went into operation Sunday in Beijing's Zhongguancun area, which boasts active entrepreneurial activities, to support start-ups and innovation.
The Zhongguancun Bank, which gained approval from China's banking regulator in December 2016, is co-sponsored by 11 listed companies in this area. It has a registered capital of 4 billion yuan (about 590 million U.S. dollars).
SHANGHAI stocks edged up today to mark the fourth consecutive week with a gain, and they were bolstered by blue-chip stocks which offset a slump among start-ups.
The Shanghai Composite Index ended at 3,222.42 points after a 0.13 percent daily rebound. For the whole week it gained 0.14 percent following the growth over past three weeks.
Blue-chip companies pushed the index higher, with the Shanghai Stock Exchange 50 Index, which selects blue-chip stocks from the Shanghai-listed market, notching a 19-month high at 2,622.98 points to offset the largest week-loss at the start-up sector since the year beginning.
“Investors favor companies posting predicable incomes when risks remain high amid tightening financial regulations,” said Zhao Huan, chief analyst at Fortune Securities.
Meanwhile the mainland companies posted worse-than-expected mid-year profits over recent weeks, which pushed investors to get rid of growth stocks with higher uncertainties, said Chen Jian, consultant at Datong Securities.
Investors thus would rather put money among industries such as manufacturing, which are expected to present stable growth, instead of those under tightening regulations such as property, Chen said.
Advanced manufacturing and high-tech service industries are attracting more funds both overseas and domestically, while capital outflows among property and entertainment industries, according to a recent report from the Ministry of Commerce.
SAIC Motor Corp gained 2.02 percent to 31.83 yuan (US$4.69), while China Petroleum & Chemical Corp rose 0.65 percent to 6.22 yuan.
CHINA posted faster growth in fiscal revenue in June as it saw signs of improvement in the economy, official data showed Friday.
Fiscal revenue rose 8.9 percent year on year to 1.7 trillion yuan (251.8 billion U.S. dollars) last month, accelerating from the 3.7 percent growth in May, according to the Ministry of Finance (MOF).
In the first six months of 2017, fiscal revenue climbed 9.8 percent year on year, relatively fast growth, the MOF said in a statement.
"It reflected the overall stability and positive outlook of the economy," the statement said.
Income from VAT, which accounted for over 30 percent of fiscal revenue in the first six months, rose 2.2 percent year on year, helped by higher industrial product prices and faster sales growth in certain industries, the ministry said.
Revenue from corporate income tax went up 15.6 percent year on year due to increasing company profits, while that from VAT and consumption tax on imported goods soared 34 percent on strong import growth.
Recent indicators have shown improved factory activity, strong consumption and brisk foreign trade growth.
China will release a series of economic data Monday, including GDP, fixed asset investment, industrial production and retail sales, for the second quarter and the first half.
The country's GDP grew 6.9 percent in the first quarter of the year, up from 6.8 percent the previous quarter and above the government's annual growth target of around 6.5 percent.
In June, China's fiscal expenditure surged 19.1 percent year on year to 2.7 trillion yuan, picking up speed from a 9.2-percent increase in May, the MOF data showed.
In the first six months, fiscal expenditure grew 15.8 percent year on year, with spending on education rising 17.2 percent and that on social security and employment up 24.6 percent.
China has pledged a more proactive and effective fiscal policy in 2017 to support economic growth, with the government fiscal deficit set at 3 percent of GDP, or 2.38 trillion yuan for the year, an increase of 200 billion yuan year on year.
CHINA'S fiscal revenue and expenditure recorded faster growth in June, the Ministry of Finance (MOF) said Friday.
Fiscal revenue rose 8.9 percent year on year to 1.7 trillion yuan (251.8 billion U.S. dollars) last month, accelerating from the 3.7-percent growth in May, according to the MOF.
Fiscal expenditure surged 19.1 percent year on year to 2.7 trillion yuan, picking up speed from a 9.2-percent increase in May, the MOF data showed.
GERMAN luxury automaker Daimler manipulated the engines of around 1 million diesel vehicles to make them appear less polluting, local media reported yesterday, raising echoes of competitor Volkswagen’s ‘dieselgate’ scandal.
“The Stuttgart-based firm sold vehicles with higher levels of damaging emissions than allowed for almost a whole decade between 2008 and 2016, in Europe and the United States,” daily Sueddeutsche Zeitung said.
Along with regional broadcasters NDR and WDR, the newspaper had access to a search warrant from a Stuttgart court allowing prosecutors to raid 11 sites belonging to the Mercedes-Benz and Smart maker in late May.
Investigators suspect that the world’s largest luxury carmaker used a similar so-called “defeat device” to Volkswagen, which in 2015 admitted to manipulating emissions readings on some 11 million diesel vehicles worldwide.
Software in the motor runs the emissions treatment system at a higher setting when it detects the vehicle is undergoing regulatory testing.
Investigators believe cars fitted with the OM 642 and OM 651 engines filter out 95-99 percent of harmful nitrogen oxides under test conditions, but only between 35-85 percent in real on-road driving.
The motors were built into more than one million cars and vans by Daimler, including C, E and R class Mercedes.
A Daimler spokeswoman declined to comment on an ongoing investigation, but said the carmaker was cooperating with the authorities.
Prosecutors reiterated that two employees from the team that created the software are under formal investigation on suspicion of fraud and false advertising, neither of them senior executives.
- ‘Initial suspicion’ -”We have always said that there is an initial suspicion of manipulation in emissions treatment of diesel engines from Daimler,” a spokesman for the Stuttgart prosecutors’ office said.
According to the warrant, prosecutors sought to recover emails between 99 Daimler employees during the raids in May, one of them a member of the group’s executive board.
The document suggests officials believe more people were involved than the two presently targeted.
Daimler also faces an investigation by the US Department of Justice, as well as a number of class-action lawsuits in the US accusing it of false advertising
After the Volkswagen scandal broke, a German investigation revealed emissions irregularities in vehicles from 16 different manufacturers.
PILOTLESS aircraft, flying electric vehicles and bespoke air cabins are the future of flight, Airbus said yesterday.
Paul Eremenko, the European plane-maker’s chief technological officer, painted a picture of skies buzzing with new flight forms at the RISE tech conference in Hong Kong.
Airbus is already testing out what it calls a “module” cabin concept — passenger planes being tailored to different demands.
“You can imagine on a flight to Vegas, you might have a casino module,” said Eremenko. “Or in a more general sense, you may have a sleeping module and you go and pay 50 bucks an hour to have the ability to sleep in a sound-proof, climate-controlled area.”
Eremenko said Airbus had been working on the project for a year already, including user trials. Airbus has also been working on a self-piloted flying car, the Vahana, with testing on a full-size prototype to be done by the end of the year.
“Our goal really is to open up the third dimension in cities and we believe that the time is right,” said Eremenko, describing the growth of mega-cities, increasing congestion and technological developments as factors fuelling the development of electric short-hop flight travel.
Pilotless flight was also on the cards, he said.
“We believe the first autonomy will come in the domain of urban air mobility where the vehicles are smaller and there are fewer occupants,” he said.
“That, I have fairly high confidence that we will get to in single-digit years,” he said, adding the problem was not a technical one but of social acceptance.
Artificial intelligence was the main focus of the sprawling RISE conference, which Wednesday included a debate between two lifelike disembodied robot torsos on the future of humanity.
GIFTING by China’s high net-worth individuals is forecast to hit 390 billion yuan (US$57 billion) within three years, from 300 billion last year as the practice becomes more important.
Average annual gifting is worth 260,000 yuan, a survey of 507 respondents with an average wealth of 22 million yuan each conducted in the first half of the year by Hurun Research Institute and MEC, a part of the media investment network GroupM found.
The results were released yesterday.
Cash or shopping coupons, wine, tobacco and tea, as well as nutritional supplements and healthcare products, were the most popular gifts.
Gift-giving occasions have also extended beyond special occasions and holidays to include more casual moments and situations.
China’s has 1.34 million high net worth individuals — those with 10 million yuan or more in household assets. Their spending accounts for about 10 percent of China’s overall gifting market.
VENTURE capital investment in Chinese startups tripled in the second quarter, driven by an uptick in mega-deals and is expected to maintain that momentum in Q3, KPMG said in a report released yesterday.
The number of deals was relatively stable from the previous quarter at 79, but the amount tripled to US$10.7 billion.
This sharp rise was bolstered by two mega deals: ride-hailing platform Didi Chuxing raised US$5.5 billion and news aggregator Toutiao raised US$1 billion.
Companies offering both high-tech and simple-tech solutions drew increasing attention — a trend expected to continue through this quarter.
The hottest sectors are artificial intelligence, robotics, fintech, edtech and healthtech. Companies with simple business models also attracted significant investment.
UBER is ceding control of the Russian market by agreeing to merge its ride-hailing business in the country with Yandex, the Russian search-engine leader that also runs a popular taxi-booking app.
For Uber, the deal marks the exit from another big market after it sold its operations in China last year to local rival Didi Chuxing.
Yandex said in a statement yesterday that Uber and Yandex Taxi would combine into a new company in Russia as well as in Azerbaijan, Armenia, Belarus and Kazakhstan.
Yandex will own 59 percent, Uber roughly 37 percent, and employees the rest. The CEO of Yandex Taxi, Tigran Khudaverdyan, will become the chief executive of the new combined company.
Uber will invest US$225 million in the new company and Yandex US$100 million, putting its value at over US$3.7 billion. The companies said that together they deliver over 35 million rides a month, with US$130 million in gross bookings in June. Yandex is the bigger company, with roughly the twice the business Uber currently has in the region.
Shares in Yandex jumped 15 percent on the Moscow stock exchange on news of the deal. The company is one of Russia’s most successful Internet enterprises, accounting for some 65 percent of all searches and operating popular maps and public transit apps.
Once the deal is closed toward the end of this year, consumers will be able to use both Yandex and Uber apps to hail rides while for drivers, the apps will be integrated.
An aerial photo shows the container pier of Zhoushan Port in Ningbo City, in Zhejiang Province. In the first half of 2017, the port handled 515 million tons of cargo, up 11.3 percent year on year, and 12.39 million TEU (20-foot equivalent unit) of containers, up 14.6 percent year on year.
CHINA attracted 100.45 billion yuan (US$14.81 billion) in foreign direct investment in June, posting 2.3 percent annual growth to end a two-month decline, the Commerce Ministry said yesterday.
The turnaround was bolstered by the country’s efforts to improve its industrial sector and followed a 3.7 percent fall in May and a 4.3 percent drop in April, year on year.
In the first half, FDI inflow stood at 441.54 billion yuan, down 0.1 percent year on year.
The economy has been stable amid constant growth over the first half this year, attracting overseas funds and shored up by the recovery of the “real economy” — particularly advanced manufacturing and high-tech industries, said ministry spokesman Gao Feng.
The manufacturing sector attracted 128.6 billion yuan of foreign investment in the first half, up 3 percent year on year and accounting for 29.1 percent of total FDI.
Advanced industries covering information technology, research and design services led the growth by attracting 64.72 billion yuan, 20.4 percent higher from a year ago, followed by high-tech manufacturing such as computer making, aviation and pharmaceuticals which absorbed 34.97 billion yuan, 11.1 percent higher compared with the same month last year.
Foreign investment in the service sector reached 309.99 billion yuan, accounting for 70.2 percent of the total.
A total 2,894 foreign-funded enterprises settled in China last month.
That was 14.3 percent higher than a year ago.
CHINA’S central bank yesterday announced lending worth 360 billion yuan (US53 billion) via the medium-term lending facility to keep liquidity stable.
The loans will mature in one year with an interest rate of 3.2 percent, according to the People’s Bank of China ,
The MLF was first introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank by using securities as collateral.
The central bank suspended operations via reverse repos yesterday, after pumping 70 billion yuan into the banking system through reverse repos the previous day.
It was the first net injection since June 19, which sent a clear signal on maintaining stable liquidity and dispelled concerns about monetary tightening.
The central bank has increasingly relied on open-market operations for liquidity, rather than cuts in interest rates or reserve requirement ratios to maintain prudent monetary policy.
In addition to the MLF, standing lending facilities and pledged supplementary lending were also used in previous months.
Altogether 280 billion yuan of reverse repos and 179.5 billion yuan of medium-term lending facility loans are due to mature this week.
The PBOC’s open market operations are closely watched by the market, as they have become major tools for the central bank in pursuing prudent and neutral monetary policy.
Such a policy stance is crucial for China as it has to juggle the task of financial deleveraging, aimed at defusing risk and curbing asset bubbles, while shoring up a slowing economy.
As a result of deleveraging policies, growth of China’s broad measure of money supply M2 slowed down in June from 9.6 percent growth recorded a month ago.
The M2 growth target this year is about 12 percent, one point lower than the 2016 target. Authorities have been careful not to hurt liquidity, to avoid turbulence and pressure on the real economy.
ZHAOGANG, China’s biggest B2B platform for steel trading, said yesterday it had raised 500 million yuan (US$72.5 million), with the Russia-China Investment Fund as one of the major investors.
RCIF is the first sovereign wealth fund to invest in China’s booming B2B sector. Shanghai-based Zhaogang uses an Internet-based business model for steel trading to enhance distribution efficiency and transparency.
With the injection from RCIF, founded by the two governments with a total investment of US$10 billion, Zhaogang can “pursue global expansion in Russia and other regions in the One Belt One Road,” said RCIF CEO and president Hu Bing.
Other investors include Huaxing Capital Partners and Beijing-based West Fund, a state-owned fund under steel giant the Shougang Group.
In 2015, the most recent data, Zhaogang’s online steel trade volume hit 32 million tons, accounting for 8 percent of its total domestic trade.
China’s move from investment-led growth to a consumption-driven model has hit steelmakers. Since 2015, Zhaogang has expanded globally, including into South Korea, Vietnam, Thailand and Singapore.
SHANGHAI stocks gained yesterday for the first time this week after better-than expected foreign trade data for the first half.
The Shanghai Composite Index rose 0.64 percent to 3,218.16 points with turnover almost unchanged at 211 billion yuan (US$31 billion).
Overseas markets were also boosted by the US Federal Reserve’s signal to adopt a patient approach to rate tightening.
Blue chips continued their gains after data showed exports rose 11.3 percent last month from a year earlier, while imports expanded 17.2 percent, suggesting economic recovery is on a solid track.
Shanghai Pudong Development Bank gained 3.19 percent and China Merchants Bank rose 2.30 percent. Steelmakers, including Baogang Iron & Steel and well as Nanjing Iron & Steel, gained more than 1.8 percent.
“The market in the near future is still uncertain with new shares set to put new pressure on liquidity and how the blue chips will perform also remains unknown,” Shenwan Hongyuan Securities said in a research note.
CHINA’S foreign trade was better than expected last month, with firm global demand and domestic recovery leading to the best first six months in more than five years.
However, the customs said headwinds remain in the second half amid an uncertain outlook for commodity prices and international trade protectionism.
Exports in yuan terms rose 17.3 percent year on year to 1.35 trillion yuan (US$199 billion) in June, compared with May’s 15.1 percent increase, data from the General Administration of Customs revealed.
Imports surged 23.1 percent to 1.05 trillion yuan last month.
The volume of foreign trade in the first six months grew 19.6 percent from a year earlier — the quickest growth since the second half of 2011 — to 13.14 trillion yuan.
Exports rose 15 percent while imports increased 25.7 percent. That led to a trade surplus of 1.28 trillion yuan in the first half, down 17.7 percent year on year.
In a note, Morgan Stanley said both exports and imports grew faster than the market expected, suggesting a continued exports recovery and resilient domestic demand.
“While stronger external demand has boosted processing imports, domestic demand has likely held steady, reflected by stronger ordinary goods import growth,” it said. “The stronger external demand could boost domestic private manufacturing capital expenditure and cushion the impact of a declining credit impulse.”
Australia and New Zealand Banking Group said the export figures bode well for manufacturing, while the persistent trade surplus, together with investment inflow, could help relieve the pressure from capital outflow.
The customs’ data showed that during the first six months, trade with the European Union jumped 17.4 percent year on year. The EU is China’s biggest trade partner, accounting for 14.8 percent of the country’s foreign trade.
Trade with the United States and ASEAN went up by 21.3 percent and 21.9 percent, respectively.
Private business played an outstanding role in foreign trade, with export and import value up 20.6 percent to 5.02 trillion yuan in the first half.
Most of China’s exports were machinery, electronics and labor-intensive products, with their export value accounting for 57.2 percent of the total.
Huang Songping, a customs spokesman, attributed the trade growth to a lower comparative basis, government support and improving global demand.
But he said foreign trade could face tough conditions in the second half due to a higher comparative basis, stronger international competition, uncertainties in the global environment and deep-seated problems in the domestic economy.
Uncertainties weigh on the global market as major economies practice divergent monetary policies. Commodity prices and trade protectionism also add unpredictability.
As developed economies shore up advanced manufacturing and emerging economies strengthened on low production costs, China’s exports should face more fierce competition in the global market.
Import growth is also likely to moderate along with export growth. The cooling property market is likely to lead to slower domestic investment growth, which may also weigh on import growth, Huang added.
But he reaffirmed the view that the strong fundamentals of China’s foreign trade have not changed, and will continue to have good momentum.
China’s economy grew 6.9 percent in the first quarter of the year, up from 6.8 percent in the previous quarter.
On trade with North Korea, Huang said growth in the first half was driven by exports of labor-intensive products not on the United Nations’ embargo list.
He said China’s imports from North Korea had fallen substantially for four straight months since March.
CHINA Pacific Insurance (Group) Co yesterday teamed up with Shanghai Pudong Development Bank in fields across personal finance to infrastructure construction, CPIC said in a statement.
The two companies seek to explore new ways of cooperation between large scale insurance company and bank, and will start comprehensive cooperation in insurance, personal and corporate financial services, construction of large infrastructure projects, and financial market operations, the statement said.
The two parties have agreed on sharing resources of customers and channels, innovating insurance and bank's wealth management products, managing corporate financing risks, funding on infrastructure projects, and delivering support to technology and innovative companies.
The deal was made after Gao Guofu, former chairman of CPIC, took over the chair of SPDB in May this year.
Kong Qingwei, former chairman of Guosheng Group, is now chairman of CPIC.
CHINA Merchants Bank yesterday issued a credit card together with shared bike provider Mobike as part of the bank's efforts to merge into life of young consumers.
Under the cooperation, applicants of the card will be offered a cycling kit and will be able to convert calories consumed through cycling with Mobike into credit card points.
Cyclers will be able to unlock Mobikes with CMB's mobile application, and the duet will also offer discounts for bike users between 9PM to 6AM.
Wang Yu, assistant general manager at credit card center of CMB, said the team-up marked an attempt for CMB to cover every aspects of life of the young people.
Previously, the bank has teamed up with instant messaging software QQ, online travel agency Ctrip, video game League of Legends, and online music portal music.163, and e-commerce platform JD.com to appeal young consumers.
The cooperation with Mobike supplement CMB's coverage in transportation as the bank has offered car mortgage for millions of clients and issued a credit card with ride-hailing application Didi last year.
CMB data showed that young people between 18 to 30 years old amount to 70 percent of the bank's total 40 million credit card users.
The proportion is expected to grow as 80 percent of new credit card holders the bank acquired each year are below 30 years old.
FOREIGN direct investment (FDI) into the Chinese mainland rose 2.3 percent year on year in June to 100.45 billion yuan (14.82 billion U.S. dollars), data from the Ministry of Commerce showed Thursday.
CHINA'S foreign trade expanded at the fastest pace since the second half of 2011, buffering the economy from a slowdown amid headwinds at home and abroad.
Exports in yuan-denominated terms rose 15 percent year on year in the first half of this year while imports increased 25.7 percent, customs data showed Thursday.
That led to a trade surplus of 1.28 trillion yuan (188 billion U.S. dollars) in the same period, down 17.7 percent year on year, according to the General Administration of Customs.
Total foreign trade volume reached 13.14 trillion yuan H1, up 19.6 percent year on year, the quickest pace since the second half of 2011.
The brisk growth was bolstered by a lower comparison basis, government support and healing global demand, Huang Songping, a spokesperson with the customs authority, told a press briefing.
During the first six months, trade with the EU jumped 17.4 percent from the same period last year.
Meanwhile, trade with the United States and ASEAN went up by 21.3 percent and 21.9 percent, respectively.
Private businesses played an important role in foreign trade with exports and imports value up 20.6 percent to 5.02 trillion yuan in the first half, or 38.2 percent of the nation's total.
Most of China's exports were mechanical and electrical products and labor-intensive products.
Huang brought attention to a tough stance on foreign trade in the second half of this year due to a higher comparison basis, uncertainties in the global environment and deep-seated problems in the domestic economy.
Uncertainties weigh on the global market as major economies practice divergent monetary policy. Commodity prices and trade protectionism also add unpredictability.
As developed economies shore up advanced manufacturing and emerging economies strengthened on low-end manufacturing, China's exports are due to face more fierce competition in the global market.
But the strong fundamentals of China's foreign trade has not changed. They will continue with such good momentum, and the trade structure will be improved if no major risks are brought about, Huang said.
Regarding China's trade with Democratic People's Republic of Korea (DPRK), Huang highlighted the fact that China's imports from the DPRK had fallen substantially for four straight months.
"China has always abided by the rules of the United Nations resolution on a trade embargo with the DPRK ... It is a common responsibility of all UN members. China will carry out the practice in a consistent, accurate and stringent way." he said.
CHINA'S exports in yuan-denominated terms rose 15 percent year on year in the first half of this year while imports increased 25.7 percent, customs data showed Thursday.
That led to a trade surplus of 1.28 trillion yuan (188 billion U.S. dollars) in the same period, down 17.7 percent year on year, according to the General Administration of Customs.
CHINA will accelerate expanding oil and gas distribution in the next decade to ensure energy security and help boost industry, its top economic and energy planners said yesterday.
The nation will have an oil and gas distribution network as long as 240,000 kilometers by 2025, up from 112,000 km at the end of 2015, according to a plan by the National Development and Reform Commission and the National Energy Administration.
Despite great achievements over recent years, China needs to accelerate increasing its energy distribution to support surging demand.
Focus will be on the northeast, northwest and southwest regions, which lack tunnels to export oil and gas.
The nation will also speed up digitizing the networks to ensure maintenance of the tunnels, helped by more advanced information technology.
China expects to improve energy supply and transport self-sufficiency in the next decade and will upgrade equipment to help it better deal with natural disasters.
Upgrading the energy transport system will also boost the heavy machinery industry and engineering industries.
The developing energy network will cover the country. Oil channels will reach cities with more than 1 million residents and the gas network will cover those with at least 500,000 by 2025. Officials also set a mid-term target for the network to reach 169,000 km by 2020. Natural gas will be given higher priority for development,.
Workers pull a submarine power cable on Meizhou Island in Fujian Province. The 3.43 kilometer long underwater cable is the first 110,000-volt power cable, the highest voltage so far, to connect the island with mainland.
VANGUARD, China’s top supermarket chain, and Tesco’s data analysis firm, Dunnhumby, yesterday announced a 50-50 joint venture on data science.
Vanguard, a unit of Fortune 500 firm China Resources, is the first offline retailer in the country to establish a professional data firm.
It comes as China’s retail landscape embraces the Internet and technologies such as big data, artificial intelligence and Online-2-Offline services.
The joint venture, China Wisdom Dunnhumby, will help analyze data on shopping experience, consumer habits, multi-channel distribution networks and supply chains.
Initially, it will cater to more than 3,000 Vanguard outlets and later expand into telecommunications, banking and other industries.
“We have to embrace new trends and technologies in the new retail landscape in China,” said Xu Hui, general manager of Vanguard.
Retailers are facing challenges from online giants such as Alibaba and JD.com, which have already changed the shopping experience for consumers, analysts say.
Data-driven service will help firms find new opportunities and growth engines and Dunnhumby has 27 years’ experience in the retail industry, serving 800 million consumers globally, said Guillaume Bacuvier, the firm’s CEO.
China aims to more than triple the scale of the big data industry by 2020 in a bid to foster new economic drivers, which will increase annual sales to 1 trillion yuan (US$146 billion) by 2020, the Ministry of Industry and Information Technology says.
Stores with artificial intelligence machines instead of human cashiers and checkout lines are already being trialed in Shanghai, similar to Amazon Go in the United States.
APPLE plans a US$1 billion data center in Guizhou Province for iCloud — its first such center on the Chinese mainland.
As customers increasingly store data on iCloud, the project will increase security and speeds, Apple said yesterday. The company has signed a cooperation agreement with the Guizhou government.
The center will improve iCloud user experience by “faster and more stable access to the data service,” said Lisa Jackson, Apple’s vice president of environment, policy and social initiatives.
Analysts say the center meets demand to store data locally and improve the experience for users of iPhone and other Apple products in the face of increasing competition.
Jia Mo, an analyst at Canalys says Apple’s huge user base forces the company to offer better service to improve its “unsatisfying” market share and prepare for the next-generation iPhone. Apple is investmeing in new research and data centers to woo consumers, Jia said.