About 150 firms will be listed on China’s new science and technology innovation board this year, analysts with China International Capital Corporation Limited said yesterday.
Shanghai yesterday opened two comprehensive bonded zones to help boost international trade.This upgrades the Caohejing Comprehensive Bonded Zone, formerly the Caohejing Export Processing Zone in Minhang District, and the Fengxian Comprehensive Bonded Zone, previously known as the Minhang Export Processing Zone, to a higher free-trade level.The upgraded zones received their certificates yesterday, which were handed over by Shanghai Vice Mayor Chen Yin.The Caohejing Comprehensive Bonded Zone has attracted many leading companies in various industries, including logistics, high-end manufacturing and technology innovation.Several Fortune Global 500 companies such as Inventec Corporation and Medtronic Plc have settled in the Caohejing zone.The Fengxian Comprehensive Bonded Zone has focused more on new energy, IT, equipment manufacturing and logistics. For the next step, the Fengxian bonded zone plans to attract more companies in cosmetics, health care and medical equipment, aiming to first build a business cluster for the beauty and health care sector.The special customs supervision zones were established to connect domestic and foreign markets and support the transfer of international skills and technology. By the end of 2018, China had set up 140 special customs supervision zones, including 10 special zones in Shanghai covering 38.786 square kilometers. The 10 zones are the Shanghai Waigaoqiao Free Trade Zone, four export processing zones in Songjiang, Jinqiao, Qingpu and Jiading, a bonded logistics park — the Waigaoqiao Bonded Logistics Zone, a bonded port — Yangshan Bonded Port, and three comprehensive bonded zones in Shanghai Pudong International Airport, Caohejing area and Fengxian District.In 2018, the special customs supervision zones in Shanghai posted total import and export value of US$187.45 billion, up 6 percent from a year earlier, accounting for 28 percent of the city’s total foreign trade.
The EU’s powerful anti-trust regulator slapped Google with a new fine yesterday over unfair competition, in Europe’s latest salvo against Silicon Valley.
In its third major decision against the search engine behemoth, Brussels sanctioned Google’s once popular AdSense advertising service, saying it illegally restricted client websites from displaying ads from ad service rivals.
Google and the EU have been at loggerheads about the monopoly of Google over Internet search in Europe since 2009 and the AdSense case was the only complaint still open.
The original complainant in the decade-long case was Microsoft, but the US software giant later pulled out of the case in a truce with its US arch-rival.
“Today the commission has fined Google 1.49 billion euros (US$1.69 billion) for illegal misuse of its dominant position in the market for the brokering of online search adverts,” EU Competition Commissioner Margrethe Vestager said.
“The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate — and consumers the benefits of competition.”
The fine brings Google’s total tab with the EU to 8.2 billion euros in less than two years.
That amounts to far less than the maximum fine of 10 percent of Google’s annual turnover, Vestager said.
In July 2018, the US giant was ordered to pay a record 4.34 billion euros for abusing the dominant position of Android, its smartphone operating system, to help assure the supremacy of its search engine.
A year earlier it slapped Google with a fine of 2.42 billion euros for abusing its dominant position by favoring its “Google Shopping” price comparison service in search results.
Google has appealed both decisions to the European Court of Justice in Luxembourg.
Responding to this latest ruling, Google public affairs chief Kent Walker said the company had “already made a wide range of changes to our products to address the commission’s concerns.”
“Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe,” he said.
Hoping to end the decade-long dispute, Google on Tuesday unveiled a series of tweaks to its European search engine results that would allow certain rivals a more prominent position on results pages.
The change would apply to shopping aggregators, as well as tourist and travel advice sites such as TripAdvisor and Yelp.
The cases against Google, as well as a landmark 14.3-billion-euro tax decision against Apple, thrust the former Danish minister, Vestager, into the spotlight as a champion of fighting US dominance.
Commissioner Vestager landed her latest verdict down on the eve of her announcement to be part of a team of candidates that will lead the European election campaign for the liberal ALDE movement.
Nicknamed “the tax lady” by US President Donald Trump, Vestager is the most prominent member of the team that will be appointed tomorrow by the heads of state and government linked to ALDE.
“I will be active in the coming months to see if I can enable more voters to go and vote,” Vestager told a press briefing.
But she avoided saying more on her ambitions for higher office.
STARTUPS specializing in alternative protein, from eggless eggs to pea-stuffed burgers and cell-grown fish products, are piling into Hong Kong to tap the Chinese mainland’s booming multibillion-dollar food market.
At a time when traditional meat farmers have seen profits hurt by the US-China trade tensions and the spread of swine fever, companies such as Impossible Foods, JUST and Beyond Meat are luring affluent Asian consumers with products they say are more sustainable and environmentally friendly than conventional meat.
The global meat substitutes market was estimated at US$4.6 billion last year and is predicted to reach US$6.4 billion by 2023, according to research firm Markets and Markets. Asia is the fastest-growing region.
Backed by some of the world’s top billionaires, including Hong Kong businessman Li Ka-shing, philanthropist Bill Gates and actor Leonardo DiCaprio, plant protein firms are expanding into the Chinese mainland for the first time this year.
San Francisco-based JUST, valued at US$1 billion, is planning to launch its mung bean faux egg product in six Chinese cities starting next month. “China is the most important market to JUST globally,” said Cyrus Pan, JUST’s China general manager.
JUST has inked deals with Alibaba’s Tmall and JD.com to distribute its egg product in Shanghai, Beijing, Tianjin, Guangzhou, Chengdu and Shenzhen before expanding elsewhere.
The company says the use of mung bean as its key ingredient is important for food security and appeals to the Chinese given its tradition as a dietary staple.
Nick Cooney, managing partner of Lever VC, a US-Asian venture capital fund focused on alternative protein startups, said firms like his are eyeing joint ventures, exports and product technology licensing opportunities in China. “Chinese consumers seem to be more open to novel foods than those in nearly any other country,” he said.
Beyond Meat, which makes burgers and sausages from pea protein, has seen sales in Hong Kong increase 300 percent last year, said David Yeung, Beyond Meat’s distributor in the city.
Backed by Tyson, the world’s largest meat processor, Beyond Meat filed for an initial public offering on the Nasdaq in November and plans to start distributing on the mainland in the second half of this year.
Rival Impossible Foods, which makes burgers out of soy, has said plant-based meat will eliminate the need for animals in the food chain and make the global food system sustainable.
The group has received around US$450 million in funding since 2011 with investments from Li Ka-shing’s Horizons Ventures and Google Ventures.
Since launching in five restaurants in Hong Kong last April, the group’s products are now in more than 100 restaurants in Hong Kong and Macau. Impossible Foods plans to open on China’s mainland in the next two years.
Hong Kong-based Avant Meats, which uses cell technology to replicate fish and seafood products, is developing a cell-based fish maw prototype due for launch in the third quarter of this year, its Chief Executive Carrie Chan said. Fish maw, or swim bladders, are popular in Asian soups and stews, and are used to add collagen to food.
Asia’s favorite meat
Right Treat, another Hong Kong company headed by Yeung, is replicating Asia’s favorite meat — pork — using mushrooms, peas and rice for use in dumplings and meatballs. The company has seen its sales of its Omnipork triple since launching in Hong Kong in April 2018. It has since expanded to Singapore, Macau and Taiwan, and plans to sell on the Chinese mainland this year.
“If we want to change the world, we must find ways to shift Asian diet and consumption, which means we must find ways to reduce Asia’s dependence on pork and other meat products,” said Yeung, who also runs Green Monday, a startup tackling global food insecurity and climate change.
Omnipork is available at more than 40 stores and will be stocked in major Hong Kong supermarket chains by the end of March, Yeung said.
Advocates say meat substitutes are healthier and also use less water, produce fewer greenhouse gas emissions and use less land than producing the same amount of meat but come at a price.
Omnipork retails for HK$43 (US$5.48) for 230 grams versus HK$37 for the same amount of minced pork. Impossible Foods’ burger at HK$88 is more than double the price of a Shake Shack burger in Hong Kong.
Yet the explosion of alternative protein products across Hong Kong has given consumers such as executive recruiter Shazz Sabnani greater variety. “Before I had to rely more on vegetables and tofu-based products, whereas now I’ve introduced more of these fake meats to my diet.”
Still, not everyone is convinced about the “fake meat” trend.
Tseung So, a retired 70-year-old, said the spaghetti bolognaise made with Omnipork at Green Monday’s Kind Kitchen in Hong Kong, was not as tasty as real meat. “Why would we eat this when we can eat the same dish but with normal pork? I don’t think this will make meat eaters eat less meat but they will probably become more popular with real vegetarians.”
CHINA will implement a slew of measures to cut the value-added tax rates, making sure that tax burdens on all industries will only go down, not up, the State Council’s executive meeting presided over by Premier Li Keqiang decided yesterday.
This year’s government work report set out the plan for larger-scale tax cuts, including lowering the VAT rate in manufacturing and other industries from 16 percent to 13 percent, and the VAT rate in transportation, construction and other industries from 10 percent to 9 percent.
A host of concrete measures were decided upon at the meeting yesterday to achieve such targets, which will be enacted since April 1.
Input VAT eligible for deduction will be expanded and will cover passenger transportation services. Taxpayers will be able to get their input tax on real estate payments deducted in full on a one-time basis, instead of on two occasions in two years.
Taxpayers whose main businesses are postal services, telecommunications, modern services and consumer services shall enjoy 10 percent additional input VAT deduction before the end of 2021. Increase in the overpaid VAT following this round of tax cuts will be refunded through due procedures.
“The planned VAT cuts must be delivered in no time. Its implementation must be closely monitored to ensure that tax burdens are meaningfully reduced in the major industries and lowered to various extents in some industries. All industries will see their taxes go down, not up,” Li said.
“In case of increased tax burden due to inadequate deductions in certain individual industries, the government will work out targeted solutions,” he added.
In the government work report, Li said the government’s moves to cut tax on this occasion aim at an accommodative effect to strengthen the basis for sustained growth while also considering the need to ensure fiscal sustainability.
It is also a major measure to lighten the burden on businesses and boost market dynamism, and is also the result of a major decision taken at the macro policy level in support of the efforts to ensure stable economic growth, employment and structural adjustments.
In 2018, taxes and fees levied on enterprises and individuals were reduced by around 1.3 trillion yuan (US$194 billion), as a result of multiple preferential tax policies introduced by the government.
The meeting also decided on adjustments to the export tax rebate rates of certain goods and services and to the tax deduction rate of purchases of farm produce. It was also decided at the meeting to increase transfer payments to local governments, focusing on supporting the central and western regions and counties and prefectures in difficulty.
“The share that goes to enterprises in the national income distribution needs to be increased to boost market vitality. This will help keep employment stable, expand tax sources and make public finance sustainable,” Li said.
SHANGHAI stocks closed flat yesterday, with the downside moderated by a strong rise in hemp shares — covering everything from textiles to medicine.
The rise was helped by hemp company Shanghai Shunho New Materials Technology Co’s announcement that it would set up a US subsidiary.
The Shanghai Composite Index edged down 0.01 percent to close at 3,090.64 points. The Shenzhen Component Index fell 0.4 percent to 9,800.6 points, but the blue chip CSI300 index closed 0.04 percent higher at 3,835.44 points.
Turnover in the two major bourses totaled 779.9 billion yuan (US$116.4 billion), up 0.55 percent from the previous session. Hemp shares posted the biggest gains.
Pacific Securities says China’s industrial hemp industry is in the early stages of a potentially lucrative market.
Several domestic-listed companies have recently moved into the market, drawing the attention of investors. Tian Jin Global Magnetic Card Co, Shanghai Shunho New Materials Technology Co and three other companies listed on the A-share markets all posted rises hitting the 10 percent daily cap of 10 percent.
Shanghai’s new housing sales continued to lose momentum last week despite increased supply, the latest market data showed yesterday.The area of new residential properties sold, excluding government-subsidized affordable housing, plunged 40 percent to around 59,000 square meters during the seven days to Sunday, Shanghai Centaline Property Consultants Co said in its latest report.“This was an even larger fall than the week before, although March is traditionally a season of major rebounds in sales,” Lu Wenxi, Centaline’s senior research manager said. “Only one district posted sales exceeding 10,000 square meters while not a single project managed to sell more than 100 units during the period.”Baoshan District stayed above the 10,000-square-meter threshold, followed by Jiading District where seven-day sales fell nearly 10 percent to around 8,200 square meters. Citywide, new homes sold for an average 53,483 yuan (US$7,960) per square meter, a week-on-week decrease of 8 percent.In the top 10 list, six projects cost between 30,000 yuan per square meter and 60,000 yuan per square meter.
Shanghai stocks yesterday passed the 3,100-point mark in an intra-day high before closing down 0.18 percent at 3,090.98 points, dragged by consumer and financial stocks.The Shenzhen Component Index edged down 0.04 percent to 9,839.74 points and the blue chip CSI300 index closed 0.46 percent lower at 3,833.96 points.Total turnover on the two major bourses shrank sharply to 775.62 billion yuan (US$115.54 billion) from 832.65 billion yuan in the previous session.Food and beverage stocks led the drop. Liquor reversed its sharp gains of Monday. But technology shares, including computers, electronics and software, posted gains after the Shanghai bourse on Monday started accepting listing applications for the new science and technology innovation board.
Luxury spending in China will maintain strong growth this year, although dipping to the mid-teens from last year’s 20 percent, the latest China Luxury Report from Bain & Company released yesterday shows.This comes against the backdrop of an expected fall in economic growth to 6.2 percent from 6.6 percent last year.The strongest growth in luxury sales is online — up 27 percent last year from 2017.Sales of luxury goods hit 170 billion yuan (US$25 billion) last year, following the rebound in 2017 from the downturn that had lasted since 2011.Chinese shoppers’ spending now contributes to one third of the 260-billion-euro (US$295.3 billion) global luxury market, picking up from around 19 percent seen in 2010.Purchases of luxury items on China’s mainland will account for half of Chinese shoppers’ total luxury spending by 2025, compared to about 27 percent last year, Bain says. The increase is being fueled by a near-doubling of mainland spending helped by lower import duties, stricter controls on the gray market and shrinking price gaps between the domestic and foreign markets.Millennials are boosting the luxury market, buying up heavily on sportswear and accessories.“They are embracing the latest fashion trends and they value the trendy street style, which has been a big boost to the overall luxury market,” said Bain & Company partner Bruno Lannes.
Shanghai Customs is striving for a better free trade zone with measures like unifying entry-exit and quarantine measures to provide one-stop services for companies and simplifying procedures.Integration of inspection and quarantine has cut the time companies spend on customs clearance from two to three days to only six to 10 hours.MicroPort Scientific Corporation, a local medical device developer and manufacturer, is among the beneficiaries. MicroPort concentrates on research and development of cardiac valves. The major material — bovine pericardium — is transported to Shanghai from Australia by air.Bovine pericardium has to be delivered within 72 hours, or function and quality are impaired.After local customs was informed, officers made early preparations, set plans and gave quick checks to allow the tissue to go through customs faster. Now the whole process from Australia to MicroPort’s warehouse takes less than 60 hours.Wang Yaomin with the company said the improved service for MicroPort reduced losses during customs clearance. The quality of its products have risen while costs have fallen. “We used to spend three to four days on customs declarations,” Wang said.MicroPort’s cardiac valves are now in the clinical stage and may be available to patients next year.Zhangjiang Cross-border Science Innovation Supervision Service Center has a direct path for cargo arriving by air. Air cargo can be taken directly to Zhangjiang for one-stop clearance. The special materials for lab use often require quick processing and no longer need to wait at the airport for checks.Yu Xiang, a customs officer at the center, said the process can be very fast when the quarantine risk is controllable. He and his colleagues also provide consulting services for Zhangjiang companies.Another measure is classified supervision in one place. Previously, bonded and non-bonded goods were stored in separate warehouses, which raised storage costs. Now, companies’ bonded and non-bonded goods can be stored in one warehouse in the zone.
As Shanghai works on all fronts to become a global innovation center, Zhangjiang, the sci-tech arm of the free trade zone, is leveraging the market authorization holder program, which allows startups to file for new drug launches without their own manufacturing facilities.The program enables pharma research and development groups from home and abroad to use local contract manufacturers instead of building their own production lines.Last September, Hutchison MediPharma received approval from the National Medical Products Administration of China for Fruquintinib capsules, a treatment for colorectal cancer, the first for Shanghai under the MAH scheme.“The new system speeds up the drug registration process and lowers manufacturing costs,” Wu Zhenping, senior vice president of Hutchison MediPharma, told Shanghai Daily in a recent interview. “More importantly, we can dedicate ourselves to our core business of identifying new compounds and drug candidates without having to build a complete in-house manufacturing team.”Lower research and manufacturing costs ultimately lower the cost to the patient and shorten the launch time. Eight new drugs are in the research stage and are undergoing clinical trials at Hutchison. Factories that meet Good Manufacturing Practice standards cost at tens of millions of yuan to set up, to say nothing of the cost of acquiring competent talent. Before the MAH scheme, pure research organizations were not allowed to file for drug registration, only companies with production licenses. Many promising projects had to be sold at an early stage.Last year, 68 drug registrations were filed by 43 applicants in Shanghai under MAH. Of those, 31 research organizations were based in Zhangjiang. The park administration committee has set up a 50-million-yuan (US$7.44 million) “risk relief fund” to provide a cushion of liability protection. Drug manufacturing now requires advanced production sites and organizations dedicated to specific aspects of the process from the test tube to the factory. Zhangjiang High-Tech Park in the Pudong New Area was upgraded into a world-class “science city” covering about 95 square kilometers, according to a blueprint by the city government, and the management authorities also oversee the construction and development of the free trade zone since the FTZ areas were expanded at the end of 2014. Since 2016, the Shanghai Food and Drug Administration has been pushing the implementation of the trial program and has helped pharma companies gain an idea about how the new scheme works. The Zhangjiang High-Tech Park has been looking at how new systematic improvements could help R&D companies for a decade and how land can be better managed and planned. Germany’s Boehringer Ingelheim was the first pharmaceutical company to set up a contract manufacturing facility for biomedicine in China, in a joint venture with Shanghai Zhangjiang Biotech and Pharmaceutical Base Development Co Ltd, long before the official launch of MAH.The company adopted advanced technology, such as single-use technology and continuous manufacturing, in its Shanghai site ahead of three other sites in the United States and Europe. The first phase of Boehringer Ingelheim’s 70-million-euro (US$79.50) manufacturing facility was officially launched in 2017.Biomedicine companies registered in Zhangjiang recorded 59.3 billion yuan of revenue lasy year, up 7.9 percent. Gross industrial output rose 10 percent to 29 billion yuan, nearly a third of the city’s total 2018 output. China aims to be an “innovation nation” by 2020, an international leader in innovation by 2030 and a world powerhouse in scientific and technological innovation by 2050.
When Xu Jie, director of Shanghai Towako Hospital, stood inside a spacious factory at the free trade zone in the Pudong New Area three years ago, he was full of uncertainty about future.Now, however, the hospital has started making a profit as the sole foreign-owned medical treatment institution in the zone and made major advances thanks to the preferential policies offered to enterprises in the FTZ.Its story reflects the development and growth of the zone.In recent years, cross-border medical care has become a booming industry, and it is estimated the market will reach 58.1 billion yuan (US$3.9 billion) by 2020 in China.In Japan, the hospital’s parent company is known for its assisted reproduction. In 2005, the company’s Japanese hospitals received about 400 to 500 Chinese couples for assisted reproduction.“It wastes time and money for patients to make round trips, and the treatment effect is also affected,” said Fan Yu, the hospital’s CEO. “Why not let these patients enjoy the treatment in Shanghai?”A specialist clinic was established in 2005, but its business was hindered due to restrictions on foreign medical institutions.In late 2013, the FTZ was established, allowing the establishment of wholly foreign-owned medical treatment institutions. A year later, restrictions on the minimum investment and operating period of foreign-funded medical treatment institutions were lifted.“The policy gave us confidence to introduce the medical treatment technologies and service system of Japan to China,” said Fan.In late 2014, the hospital applied, and quickly obtained, operating licenses. It opened in 2016.Confidence also came from the efficient services of the government.“We need to purchase a batch of noble gases from outside the zone in our daily operation, and we need to declare at customs for transporting steel cylinders into the zone,” said director Xu Jie, who added that the process will increase the cost of the hospital as the purchase volume was not big.“The management authorities of the zone and the customs cut the red tape for us and use a recording system to handle the headache instead,” he said.The number of patients grew 50 percent in 2018 from a year earlier. Xu originally estimated it would take five years to make a profit, but the hospital achieved this in just three.
Starting a new business in Pudong no longer requires budding entrepreneurs to make multiple trips to myriad government offices, with the new area government moving to a WeChat mini program for permits required by different industries from government departments.The new system for registering and seeking clearances allows entrepreneurs to upload their personal ID, business license and use facial recognition and online signature technologies to apply for and track the status of permits and licenses on their mobile phones, in line with Pudong’s vision of bringing governance to people’s fingertips.Xu Jing, who launched her trading firm in the China (Shanghai) Pilot Free Trade Zone, told Shanghai Daily the process to register on the mini program was so easy.Xu, the first applicant through the service, uploaded her ID and necessary information of her company. She was told the right thing to do through every step when she logged on to the mini program.She can now apply for more services or government grants online whether she is at home or staying abroad.“Having submitted online, I now just deliver the paperwork necessary to the Pudong New Area Enterprise Service Center without having to visit the counter personally,” Xu said.The one-stop service platform at the center now covers all 382 government approvals required by businesses.All items can be submitted and processed online. A total of 51 physical counters at the center deal with the items, compared with 120 counters previously.The offline counters are also required to give clear feedback and instructions, freeing entrepreneurs from the guesswork associated that used to be associated with seeking clearances.There are also aides at the center to tell applicants what to do for each step.The internal information sharing among different government agencies has largely reduced red tape. Altogether 56 certificates issued by 12 government agencies are available online.Enterprises no longer need to submit personal ID of their shareholders and business licenses, as of the end of last year.Real estate titles can also be uploaded to the data bank of the new area government.Jiang Hongjun, director of the Pudong enterprise service center, said the latest reforms are based on advice from businesses and trade associations.The Pudong government is seeking advice from a panel of 19 — mainly entrepreneurs and heads of trade associations.
High-quality medical institutions have been benefiting from the FTZ’s policy of simplifying procedures for the establishment of new businesses. Shanghai-based SinoUnited Health Clinic, a Shanghai-based private medical institution, is one of the beneficiaries of the new policy which has been applied in the Pudong New Area since last year.Before the new policy, it could take at least nine months before a clinic could acquire a license, said SinoUnited’s Operations Director Zhou Ying.Zhou said two licenses were required before a new clinic could be set up — a “medical institution set-up approval” issued by the health and family planning commission and a business license issued by the industrial and commercial bureau.To issue a “medical institution set-up approval,” the commission required a series of evaluations including where the institute was located. If there was a medical institution within 500 meters, the application would likely be refused.“The set-up approval served as a threshold for newcomers,” said Zhou. “But starting from last year, Pudong and the FTZ have been encouraging the introduction of high-quality medical services and the threshold has been removed.”The set-up approval has been canceled. Documents needed for applications have been simplified, and once the application passes the public notice procedure, the company or institute can go ahead with an environmental evaluation and fire protection checks to get their license.“The authority was still careful when checking our qualifications, but the simplified procedure really saved us time and money when we decided to open our fourth branch in Pudong last year,” said Zhou.The branch in Zhangjiang will open next month.“We handed in the application last September and passed the public notice procedure in October. The following works, including environment evaluation, design, construction and decoration, started immediately.“If it was not for the Spring Festival break, the new clinic could have started operations last month, which would be six months after the application. Before the new policy, it would take at least nine months or even a year to let a new clinic run,” Zhou added. “Apart from saving rent, being able to start business early also means an early occupation of the market.”Simplified application procedures don’t mean slack management or supervision by government departments.According to Zhou, Pudong’s administrative authorities and market watchdog are conducting more frequent checks of medical institutions covering waste water discharges, personnel management, vaccine price setting and other matters.“The simplified procedure for setting up a new clinic has saved trouble for us, and it actually added more follow-up supervision tasks for the authorities,” said Zhou.
US fintech Fidelity National Information Services Inc has agreed to buy payment processor Worldpay for about US$35 billion, the biggest deal to date in the fast-growing electronic payments industry.The deal is part of a wave of consolidation in the financial technology sector as firms seek to bulk up on payment systems that are increasingly used for online and high street sales.“Scale matters in our rapidly changing industry,” said FIS CEO Gary Norcross, who will lead the combined group that will be a global powerhouse in providing the infrastructure for banking and payment systems.Global payments are set to reach US$3 trillion a year in revenue by 2023, according to consulting firm McKinsey, as more people switch from cash to digital payments.“This was an opportunistic move by FIS and was primarily triggered by the need to stay ahead of competitors,” said a source close to the deal.The industry’s growth has kept deals for payment systems rolling even as merger moves in other sectors have stalled on concerns about trade tensions and a global slowdown.US-based Fiserv Inc bought payment processor First Data Corp in January for US$22 billion, while Italy’s Nexi plans to list in what could be one of Europe’s biggest initial public offering this year. The FIS deal, valuing Worldpay about US$43 billion including debt, comes a little more than a year after US firm Vantiv paid US$10.63 billion for the payments firm, which was set up in Britain and spun off from Royal Bank of Scotland in 2010.“Vantiv had yet to realize all the synergies from the Worldpay merger but FIS’ offer was too good to be refused,” the source close to the deal said. FIS and Worldpay combined will have annual revenue of about US$12 billion and adjusted core earnings of about US$5 billion.“By acquiring Worldpay, FIS should accelerate its revenue growth, significantly expand its position in the merchant-acquiring space and generate many synergies,” said Michael Schaefer, portfolio manager at Union Investment, a Worldpay shareholder.Worldpay is a major player in card payments. FIS focuses on retail and institutional banking and payments.“You need scale to win at payments processing and this deal certainly gives the two companies incredible breadth of coverage,” said Russ Mould, investment director at AJ Bell.The companies said the deal would result in an organic revenue growth outlook of 6 to 9 percent through 2021.
US stock regulators are suing Volkswagen over the emissions cheating scandal, alleging the German automaker committed fraud by raising billions in corporate bonds while lying to investors about the environmental impact of its cars.In a filing in California, the Securities and Exchange Commission said that from April 2014 to May 2015, Volkswagen issued more than US$13 billion in bonds and asset-backed securities in US markets while senior executives knew that more than 500,000 vehicles in the US grossly exceeded legal emissions limits.By hiding the emissions scheme, Volkswagen reaped hundreds of millions of dollars by issuing securities at more attractive rates, the SEC complaint alleges.“Issuers availing themselves of American capital markets must provide investors with accurate and complete information,” said Stephanie Avakian, co-director of the SEC’s enforcement division.“As we allege, Volkswagen hid its decadelong emissions scheme while it was selling billions of dollars of its bonds to investors at inflated prices,” the complaint said. The SEC seeks “disgorgement of ill-gotten gains” with prejudgment interest and civil penalties.
China’s fiscal revenue rose about 7 percent year on year to 3.91 trillion yuan (US$582.6 billion) in the first two months of 2019, official data showed yesterday.The central government collected about 1.94 trillion yuan in fiscal revenue during the period, up 6.6 percent year on year.Local governments saw fiscal revenue rise 7.4 percent to around 1.97 trillion yuan, according to the Ministry of Finance.Tax revenue went up 6.6 percent to 3.5 trillion yuan.With the newly revised tax exemption and deduction, revenue from individual income tax plunged 18.1 percent year on year to 232.6 billion yuan.Revenue from stock trading stamp tax plummeted 41.1 percent over the same period last year to 19.7 billion yuan while that from tariffs dropped by 3.9 percent, MOF data showed.Yesterday’s data also showed China’s fiscal spending expanded 14.6 percent year on year to 3.33 trillion yuan in the January-February period.Social security, employment and education took the lion’s share of fiscal spending.Expenditure on transport and energy conservation and environmental protection grew fastest.China will implement an employment-first policy this year, aiming to create more than 11 million new urban jobs, according to the government work report delivered to the annual session of China’s top legislature on March 5.The country will maintain a proactive fiscal policy stance in 2019, with a higher deficit-to-GDP ratio to leave policy space to address potential risks.The government will boost consumption via means such as tax and fee cuts, and expanding investment with increased spending on infrastructure.
China’s commercial banks saw a net forex settlement deficit of 101.3 billion yuan (US$15 billion) in February, the country’s forex regulator said yesterday.This reversed a surplus of 81.8 billion yuan reported in January, the first surplus in seven months, according to the State Administration of Foreign Exchange.Forex purchases by banks stood at 699.7 billion yuan last month, while sales were 801.1 billion yuan.The data led to a forex settlement deficit of 19.5 billion yuan for the first two months of the year, according to the SAFE.Although the monthly data, affected by seasonable factors such as the Spring Festival holiday, showed volatility, SAFE spokesperson Wang Chunying saw increased stability in the country’s forex market based on data for the first two months.The country’s monthly forex settlement deficit averaged US$1.5 billion for the January-February period, narrowing 87 percent from the monthly average in the second half of 2018, Wang said.Wang said the foundation for a stable forex market remains sound, because of factors such as great resilience and potential of the economy, increased counter-cyclical adjustment, a proactive fiscal policy and prudent monetary policy, a stable macro leverage ratio, financial risks being controllable and ample forex reserves.
Shanghai’s stock market neared the 3,100-point level yesterday, boosted by consumer and liquor shares.The Shanghai Composite Index soared 2.47 percent to 3,096.42 points. The smaller Shenzhen Component Index skyrocketed 3.07 percent to close at 9,843.43 points and the blue chip CSI300 index surged 2.85 percent to 3,851.75 points.Shares of about 120 companies listed on the A-share markets hit the daily cap of a 10 percent rise.Total turnover on the two major bourses was 832.65 billion yuan (US$124.02 billion), up from 750.67 billion yuan on Friday.Liquor shares led the rise. Kweichow Moutai Co jumped 4.22 percent to 810.09 yuan, increasing its market capitalization to over 1 trillion yuan. Anhui Kouzi Distillery Co, Hebei Hengshui Laobaigan Liquor Co and Wuliangye Yibin Co all surged by the daily cap.The petrochemical sector was also among the biggest gainers, with Sichuan Tianyi Science & Technology Co and Tongkun Group Co hitting the daily cap.
The Shanghai Stock Exchange started accepting listing applications for its new science and technology innovation board yesterday.Yantai Raytron Technology Co, a Chinese developer of imaging and sensor technology, has already completed pre-listing tutoring from CITIC Securities, while several other technology companies, including Venus Medtech (Hangzhou) Inc and Xinguang Photoelectric Technology Co, are receiving tutoring from underwriters, according to regulatory filings.The exchange’s review process takes three to six months, which means the first batch of applicants could debut on the board as early as June.The entire application process can be done online on the Shanghai Stock Exchange’s official website, which also has information about regulations and requirements.The exchange will decide on applications within five working days. Upon approval, companies can then post a prospectus on the site.
China’s sustained efforts to lower the corporate burden will help stabilize employment, investment and growth expectations, said Bai Jingming, vice president of the Chinese Academy of Fiscal Sciences. Following colossal tax and fee cuts of around 1.3 trillion yuan (US$194 billion) in 2018, China will reduce the tax burdens and social insurance contributions of enterprises by nearly 2 trillion yuan this year. Small and micro companies, which provide the majority of jobs, would be the major target of such cuts in 2019, showing a clear pro-employment policy tendency, said Bai. This year, China will reduce the current value-added tax of 16 percent for manufacturing and other industries to 13 percent, and lower the rate for such industries as transport and construction from 10 to 9 percent. A universal cut will greatly ease the tax burden of companies in purchasing fixed assets like machinery equipment and save costs for equipment manufacturers, resulting in more room for investment, Bai said. Massive corporate tax cuts this year showcased the central government’s efforts to inject more energy into economic development and ensure market entities receive benefits.
China’s wearable device sales grew 30 percent year on year in the fourth quarter, with booming demand for products targeting the youth market and wireless headphones, US analyst International Data Corp said yesterday.
Sales grew to 22.7 million units, up 30.4 percent year on year with Xiaomi, Huawei and Apple leading the market, offering products ranging from fitness-tracking wristbands to wireless headphones, smart watches and beyond.
In China, sales of smart wristbands and watches designed for the youth market grew rapidly in 2018.
They often feature functions covering education and security.
Headphones with wireless and smart functions are also in strong demand. In 2018, headphone sales reached 16.1 million units, 146.3 percent growth year on year.
Popular products include Apple headsets and Xiaomi wristbands.
By 2023, China’s wearable market sales are expected to reach 120 million units, 70 percent higher than 2018.
Apple Inc, in a surprise move yesterday, launched a new 10.5-inch iPad Air and updated its iPad Mini ahead of a March 25 event where it is expected to launch a television and video service.
So far in its annual March event, Apple has been making announcements related upgrades for its product lines, but this year the focus is likely to shift to services, especially after it reported its first ever drop in iPhone sales in January.
The new iPad models, geared with Apple’s latest A12 Bionic chip and support for Apple Pencil and Smart Keyboard, are already available for order at apple.com and in the Apple Store app in the United States and the United Kingdom, along with a few other countries.
“That it announced the new lineup in advance of next week’s event suggests it wants to focus on the content next week over hardware,” DA Davidson analyst Tom Forte said.
“Refreshing its lower-end lineup in advance of its streaming video content announcement next week speaks to the potential for Apple in streaming video content, with a strong installed hardware base, iPhones, iPads and Macs.”
The 10.5-inch iPad Air, starts at US$499 for the 64GB Wi-Fi model and US$629 for the Wi-Fi plus cellular model.
The new iPad mini starts at US$399 for the Wi-Fi model and US$529 for the Wi-Fi plus cellular model.
With the new launch, the iPad will come in four different screen sizes, ranging from 7.9 inch to 12.9 inch.
“More iPad sales won’t make a big impact on the company’s enormous bottom line,” said Clement Thibault, a senior analyst at Investing.com.
“But it can help to show consumers and investors that Apple still has the ability to create popular devices and features.”
The imperial Forbidden City in Beijing. The imposing folk residence Qiao Family Compound in Shanxi Province. The exquisite private gardens most unique to areas south of the Yangtze River. Each of the above epitomizes a very distinguished and well known architectural style in China but mixing the three of them together? That could be something only a few would ever give a serious thought to.
While adopting their own outstanding features, the three different architectural forms, namely the palace, the courtyard and the garden, perfectly depict some of the highly appreciated aesthetic elements commonly found in traditional Oriental culture: nobility, grandeur and elegance.
And that’s exactly what Supremacy, a ready-to-unveil residential complex in Shanghai’s Pudong New Area is designed to achieve.
Located at the intersection of Nianjiabang Road and Linhai Highway in Zhoupu Town, the joint venture project between Poly Developments and Holdings Group Co Ltd and Beijing Capital Land, will immediately catch the attention of passers-by with its palace-like grand facade. Two giant bronze doors welcome visitors into a four-floor clubhouse. Featuring a highrise lobby that combines magnificence and sophistication, the clubhouse will later house an indoor heated swimming pool as well as a fully equipped gym to ensure residents can maintain a healthy lifestyle.
Walking around the development, which is designed to accommodate around 1,000 households in phases, visitors will most likely be impressed by a central axis concept adopted by the designer of the project for a symmetric layout that often evokes an ambience of splendor and solemnity. However, a relaxing atmosphere is not missed while wandering through the project where buildings are surrounded by a green landscape that features garden and water elements. Notably, a 630-meter-long, 1.2-meter-wide walking and jogging path, equipped with a state-of-the-art, self-adjusting lighting system, will be built, a recreational highlight of the project that is sure to satisfy the demand of evening strollers and twilight joggers.
To cater to the needs of young families with one or two children, Supremacy is planning to launch a total of 409 compactly designed apartments spanning seven highrise buildings in one single batch over the coming months with the following two layouts: the dominant 91 to 93-square-meter, three-bedroom, two-bathroom units as well as the more spacious 114-square-meter, three-bedroom, two-bathroom duplex apartments.
Aiming to offer residents a decent roof over their heads and ensure health and comfort, the developers have introduced a series of world renowned brands to the project, including Grohe, Villeroy & Boch, EcoWater, Honeywell, Bosch and Viesmann, among others, some of which are the best-in-class within their own category.
Located between Qiantan, an upmarket business and residential site on the east bank of the Huangpu River, and the Shanghai Disney Resort, Supremacy is one of the newest medium-end developments in the fast-developing Zhoupu-Kangqiao residential area. The Wanda Mall in Zhoupu Town, the largest and most popular in the vicinity, which easily draws 100,000 visitors on a regular weekend, is just a 5-minute drive from the project. Besides, a brand-new plaza, which will house Alibaba’s extremely popular FreshHippo food market, will also be opened later this year. Located on Shangnan Road and within 3 kilometers of the project, the upcoming retail facility is set to provide residents nearby with extra dining, shopping and entertaining options, particularly during weekends.
Boasting easy access to the Middle-Ring Elevated Road, Supremacy is smoothly connected to the city’s major traffic arteries which include the Outer-Ring Elevated Road, the Shanghai-Jiaxing-Huzhou, or S32 Expressway, the Puxing Highway and the Hunan Highway. Major residential communities in Pudong such as Huamu, Beicai and Qiantan, as well as some esteemed education facilities including the China Welfare Institute Kindergarten, Zhoupu Senior High School attached to East China Normal University, Shanghai Shangde Experimental School and Huili School Shanghai, among others, are all within convenient driving distances to the project.
The first joint venture residential development in Shanghai between the two developers, Supremacy is 49 percent owned by Poly Developments and Holdings Group Co Ltd and 51 percent by Beijing Capital Land.
Established in 1992 and listed in the Shanghai Stock Exchange since 2006, Poly Developments and Holdings Group Co Ltd has gained extensive real estate developing and property managing experience with its footprint spreading across more than 100 major Chinese cities. Sticking to a business concept of “practicality, innovation, standardization and excellence,” the developer has been dedicated to creating a harmonious life integrating nature, architecture and humanity. Its parent China Poly Group Corporation Limited, a conglomerate under the administration of the State-owned Assets Supervision and Administration Commission of the State Council, is a Forbes 500 company whose business operations have covered over 100 countries and regions around the world.
With a corporate mission to “create new urban life,” Beijing Capital Land, a developer listed in Hong Kong since 2003, is under the administration of the State-owned Assets Supervision and Administration of Beijing. Focusing its business on five major cities, namely Beijing, Shanghai, Tianjin, Chongqing and Chengdu, BCL is now present in around 20 cities across China and has developments in the pipeline in overseas markets including Australia and France.
CHINA’S newly passed foreign investment law will benefit foreign investors and companies, and will help improve the country’s business environment, experts said.
China’s national legislature on Friday passed the foreign investment law at the closing meeting of its annual session. The law will become effective on January 1, 2020.
Beijing will introduce a series of regulations and documents in accordance with the law to better protect the legitimate rights and interests of foreign investors, Chinese Premier Li Keqiang said.
The new law clearly bodes well for foreign investors, especially in terms of market access and equal treatment, said Mario Ohoven, president of the German Association for Small and Medium-sized Businesses.
It will help create much better conditions for foreign investors and help them plan long-term returns on investments in China, Ohoven said.
“The new law promises more security for foreign companies investing in China,” Ohoven said, while urging German companies to take advantage of the new opportunities.
Sudheendra Kulkarni, an Indian expert on China, said the law should be welcomed by all since it shows China’s commitment to reform and opening-up.
At a time when protectionist sentiments are increasing, China’s new law will reassure foreign investors, foster fair competition and create a transparent business environment for foreign firms, said Kulkarni, former chairman of Observer Research Foundation Mumbai, an Indian think tank.
China is making changes to strengthen foreign investment regulations, said Hans Hendrischke, a professor of Chinese business and management at the University of Sydney Business School.
Hendrischke said the Chinese government’s approach shows that it has been listening to the concerns raised by business sector representatives, and is willing to introduce regulatory changes to improve the country’s business environment.
“It’s a very important piece of legislation that people have been waiting for a long time because it will change the working environment for foreign investors in China — and it will most likely have an impact on the way in which Chinese investors can work overseas,” Hendrischke said.
“So economically speaking, business-wise, it’s of global importance,” Hendrischke added.
China announced specific rules concerning tax exemption to reduce the amount of individual income tax paid on incomes earned overseas.According to the rules jointly unveiled by the Ministry of Finance and the State Taxation Administration on Saturday, individuals who have lived on the Chinese mainland for six consecutive years and have stayed there for 183 days or more each year will need to pay individual income tax on their overseas-sourced incomes. Otherwise, their incomes earned overseas will be tax exempt.The clock for the six-year period will be reset if the individual leaves the mainland for more than 30 consecutive days in a year, according to the rules.The rules, coming into effect on January 1, 2019, also stipulated that a stay of less than 24 hours on the mainland will not be counted as a day, and the count started from January 1.The adjustment marked more generous tax exemptions on overseas-sourced incomes of foreigners and non-mainland citizens working on the mainland. The move will attract more foreign investment and overseas talent to work on the mainland, the taxation administration said on its website.
China’s smartphone shipments fell 20.1 percent year on year in February to 13.99 million units, data from the China Academy of Information and Communications Technology showed.
Last month, smartphones accounted for 96.4 percent of all mobile phone shipments in the country, according to a report from the CAICT, a research institute under the Ministry of Industry and Information Technology.
Overall mobile phone shipments dropped 19.9 percent in February to 14.51 million units, among which 96.4 percent were 4G phones.
Chinese-brand mobile phones accounted for 90.3 percent of total shipments last month, according to the report.
In the first two months, the country’s mobile phone shipments dropped 15.1 percent to 48.56 million units.
US smartphone chip titan Qualcomm has won a US$31 million verdict in its multi-front war with Apple over patented technology used in iPhones.
A jury in a federal court in Southern California ordered Apple pay Qualcomm for patent infringement for chips used on iPhone 7, 8 and X models.
The damages were tabulated from July 6, 2017 through the end of the trial, according to a Qualcomm statement on Friday.
“Today’s unanimous jury verdict is the latest victory in our worldwide patent litigation directed at holding Apple accountable for using our valuable technologies without paying for them,” Qualcomm general counsel Don Rosenberg said in a release announcing the verdict.
Patents at issue in the case involved “flashless booting” that allows devices to connect quickly to the Internet after being turned on and technology that lets smartphone apps move online data efficiently.
A third patent related to promoting rich graphics in games while protecting battery life, according to Qualcomm.
On another front in the complex legal battle between two US companies, a federal judge in Southern California on Thursday issued a preliminary ruling that Qualcomm owes Apple nearly a billion dollars in patent royalty rebate payments the chip maker is withholding, according to US media reports.
Apple sued Qualcomm two years ago over the payments. The judge’s decision will be on pause until after a trial.
Brexit and France’s “yellow vest” protest movement pushed the number of bottles of French champagne sold last year to its lowest since 2004, trade group data showed yesterday.
The Comite Interprofessionnel du Vin de Champagne said the number of bottles sold fell 1.8 percent to 302 million in 2018.
But total revenue edged up 0.3 percent to a record 4.9 billion euros (US$5.6 billion).
“The fall in volume is becoming a bit worrying, with the slowdown in France and Britain not compensated by higher sales outside the European Union,” said CIVC co-president Jean-Marie Barillere.
French and UK sales together account for about 60 percent of total volume. French sales fell 4.2 percent to 147 million bottles, with more bottles sold abroad than in France for the first time in 100 years, as a slow economy and the “yellow vest” anti-government protest movement weighed on sales.
Barillere said the protests had hit Paris tourist arrivals and French household confidence, hurting demand.
Total export sales edged up 0.6 percent to nearly 155 million bottles, but total export revenue rose 1.8 percent to 2.9 billion euros as the focus on value of big houses, such as LVMH’s Moet & Chandon and Pernod Ricard’s Mumm, the world’s best-selling champagne, paid off.
In Britain, sales fell for the third year in a row.
That was due in part to uncertainty sparked by the country’s planned departure from the European Union.
Volume dropped 3.6 percent to 26.8 million bottles for total revenue of 406 million euros. Volume had already fallen 11 percent in 2017 and 9 percent in 2016.
Germany’s two biggest lenders, the ailing Deutsche Bank and Commerzbank, said yesterday they would launch formal talks toward a possible merger that could create a “national champion” in financial services.
Chancellor Angel Merkel’s government has been urging the two Frankfurt firms to explore a cross-town merger to avoid either one being swallowed up by a foreign competitor and to create a muscular player that can finance Germany’s export-driven companies.
The lenders, both grappling with painful restructurings after years of falling profits, have long been the subject of merger rumors.
Deutsche Bank said yesterday it was “reviewing strategic options and confirms discussions with Commerzbank.”
“There is no certainty that any transaction will occur,” the bank added.
Commerzbank said both banks had “agreed today to start discussions with an open outcome on a potential merger.”
If they did tie the knot, they would create a European banking behemoth with some 1.8 trillion euros (US$2 trillion) in assets, close to France’s largest bank, BNP Paribas.
Deutsche Bank’s market capitalization is 16.1 billion euros while Commerzbank’s is 8.9 billion.
Their joint customer base could allow the combined group to become a significant retail banking player in Germany.
It would also give the entity a springboard internationally, building on Deutsche’s corporate and asset management units.
A week ago, Finance Minister Olaf Scholz sent shares in both banks up by confirming that “there are talks about the situation as it is” between the lenders, with the government a “fair companion” to the discussions.
Critics of a potential deal have pointed to the weakened state of both Deutsche and Commerzbank in the wake of the financial crisis.
They say combining two ailing firms would not produce a healthy one.
“Putting two guys on crutches together doesn’t make a sprinter,” Markus Kienle of SdK, an association representing small retail shareholders, quipped earlier this year.
Commerzbank is still partly owned by the German state, after Berlin had to step in following its 2009 acquisition of troubled Dresdner Bank.
It is still partway through a tough restructuring.
Deutsche is also reorganizing.
It only returned to the black last year after many years spent fighting the financial and legal fallout of its breakneck pre-crisis expansion.
One reason for the two lenders’ long fight back to profitability is the tough environment in Germany, where intense competition including from public savings banks squeezes margins on retail banking.
Any potential tie-up would have to overcome a slew of hurdles — from the headache of marrying the two firms’ IT systems to dealing with unions and cultural differences between the lenders, and the potential market challenges of recapitalizing a giant with feet of clay.
Two German unions last Wednesday firmly rejected the idea of a merger between the top lenders.
“The merger would not create a ‘national champion’” as hoped for in the finance and economy ministries, said service workers’ union Verdi.
Instead, the combined banks “would become much more attractive for a ‘hostile’ takeover, for example from France,” the workers’ organization added.
On the jobs front, “at least 10,000 further jobs would be in grave danger” on top of thousands already slated to go as both lenders press through far-reaching restructuring projects, Verdi estimated.
Nonetheless, marrying off Germany’s two biggest private banks would fit with Berlin’s new-found fervor to build up such titans.
Economy Minister Peter Altmaier has joined his French counterpart Bruno Le Maire in calling on the EU to relax merger rules and allow the creation of world-spanning businesses, after Brussels rejected a tie-up between Siemens’ rail division and French train-maker Alstom.
European banking supervisors have long urged mergers between lenders to create a more resilient financial sector — but prefer cross-border marriages to avoid bundling together national problems.
Amazon.com Inc’s planned second headquarters in northern Virginia has cleared a key test after local officials approved a proposed financial package worth an estimated US$51 million amid a small but vocal opposition.
Amazon in November picked National Landing, a site jointly owned by Arlington County and the city of Alexandria, just outside Washington, along with New York City for its so-called HQ2 or second headquarters. That followed a yearlong search in which hundreds of municipalities, ranging from Newark, New Jersey to Indianapolis, competed for the coveted tax-dollars and high-wage jobs the project promises.
Amazon in February abruptly scrapped plans to build part of its second headquarters in the New York borough of Queens after opposition from local leaders angered by incentives promised by state and city politicians.
The five-member Arlington County Board voted 5-0 on Saturday in favor of Amazon receiving the financial package after a seven-hour meeting held in a room filled with up to about 150 citizens and representatives from local unions and minority advocacy groups.
There was strong opposition from some residents and labor groups, many of whom chanted “shame” and waved signs with slogans including “Don’t be the opposite of Robin Hood,” “Amazon overworks and underpays,” and “Advocate for us and not Amazon.” One protester was escorted out of the meeting by police.
A few dozen protesters outside the county office chanted “The people united will never be defeated.”
Danny Candejas, an organizer for the coalition “For Us, Not Amazon,” which opposes the company’s move into the area, said: “We are fighting to make sure people who live here are not priced out by wealthy people.”
Some supporters in the meeting held up signs saying “vote yes” and “Amazon is prime for Arlington.”
A total of 112 people were registered to speak, an unusually high number for a local county meeting, forcing board chair Christian Dorsey to cut talking time to two minutes, from three for regular speakers and to four minutes, from five for representatives of organizations.
Many speakers fighting the headquarters opposed direct incentives, citing rising housing costs, the likely displacement of low-income families and lack of investment guarantees for affordable housing.
Google is looking to transform Internet-age game play, with an expected launch of a streaming service which uses the tech giant’s power in the Internet cloud.Tomorrow is expected to see the debut of a ramped-up version of a cloud gaming platform Google tested recently in partnership with Ubisoft.A video clip teasing a keynote presentation at the annual Game Developers Conference in San Francisco invites people to “Gather around as we unveil Google’s vision for the future of gaming.”The clip cycles through an accelerating collage of scenes one might find in video games, but says nothing about what Google will announce at the event, which will be live-streamed on YouTube.Google collaborated with French video game colossus Ubisoft to use the hit “Assassin’s Creed” franchise to test “Project Stream” technology for hosting the kind of quick, seamless play powered by in-home consoles as an online service.A select number of people in the US were able to play “Assassin’s Creed Odyssey” streamed to Chrome browsers on desktop or laptop computers.A recently uncovered patent that Google filed for a video game controller hinted that the tech firm might be planning to release its own console and controller to go along with a streaming service.Video games are following television and music into the cloud, with console-quality play on its way to being a streaming service as easy to access as Netflix or Spotify.Computing power in data centers and devices from televisions to smartphones has surged and streaming technology has advanced, providing tools to break blockbuster titles from confines of consoles or personal computers.Google, whose YouTube video service operates an eSports platform for viewing game competitions, will be entering a sector with other powerful competitors including Sony and Microsoft.Microsoft chief executive Satya Nadella said late last year that an “xCloud” streaming service was in “early days.”Microsoft’s Xbox consoles and games unit are big business for the Redmond, Washington-based technology titan, which has been adapting to modern lifestyles in which software is hosted as a service online and tapped into using whichever gadgets people prefer. Video game titan Electronic Arts also has laid out its vision of streaming video games.
Some of the biggest names in media and tech are gearing up to move into streaming, in what could be a major challenge to market leader Netflix.
Apple is expected to make its move with an announcement on March 25 about its media plans, with a war chest estimated about US$1 billion and partners including stars such as Jennifer Aniston and director J.J. Abrams involved in content.
Walt Disney Co has announced its new streaming service, Disney+, will launch this year, as will another from WarnerMedia, the newly acquired media-entertainment division of AT&T.
The new entrants, with more expected, could launch a formidable challenge to Netflix, which has about 140 million paid subscribers in 190 markets, and to other services such as Amazon and Hulu.
“It’s really going to change the industry,” said Alan Wolk, co-founder of the consulting firm TVREV who follows the sector.
Wolk said he sees seven or eight powerful players in streaming which will lead to “huge competition for new shows and hit shows.”
These rivals are coming into the segment which has been transformed by the spectacular growth of Netflix and a growing movement by consumers to on-demand television delivered over Internet platforms.
In the US alone, an estimated 6 million consumers have dropped pay TV bundles since 2012, while on-demand services such as Netflix, Hulu and Amazon have been surging, according to Leichtman Research.
But just as Netflix has disrupted traditional “linear” television, rivals are now moving to disrupt Netflix.
Netflix is likely to feel the pain, not only from the new rivals, but also from the loss of content from the big libraries of Disney and Time Warner.
These Hollywood firms “have big libraries, so the cost of their content is much lower than it will be for Netflix, which has to pay for all its content,” said Laura Martin, analyst with the research firm Needham & Co.
“Netflix will lose subscribers to these new entrants,” Martin said.
AT&T’s WarnerMedia will launch its service later this year that combines the content from its premium HBO channel (known for “Game of Thrones”) and the vast Time Warner library or films and shows.
Disney’s service will have its films and TV shows, along with the library it is acquiring from Rupert Murdoch’s 21st Century Fox, a deal closing in the coming days. That includes the “Star Wars” and Marvel superhero franchises and ABC television content.
JP Morgan analyst Alexia Quadrani predicts Disney will eventually scale up to become as big as Netflix, or even bigger by signing up 45 million US subscribers and 115 million internationally.
Quadrani cited Disney’s “unmatched brand recognition, extensive premium content, and unparalleled ecosystem to market the service,” adding Disney benefits from its global ecosystem that develops good customer relationships from its theme parks, hotels, cruises, and consumer products.
A CBRE report has forecast that new office demand in the Chinese mainland is expected to decrease in 2019 amid continuous expansion by technology, media and telecom (TMT) and co-working tenants, further economic opening-up policies and the US-China trade conflict and supply peak.The world’s leading real estate consultancy says slower economic growth and the US-China trade friction continues to cloud corporate decision-making across the country, and new office leasing demand in the 17 major cities monitored by CBRE will likely slip to 5.3 million square meters this year from 5.4 million square meters in 2018 — a 12 percent decrease from 2017 mainly due to moderating economic growth as well as the collapse of the peer-to-peer lending industry.While the TMT sector continued to expand rapidly in 2018, stagnant financial, hiring and industrial statistics are suggesting slower growth this year.Venture capital investment in the TMT sector fell in the first half of 2018, the first decline on record. It was affected by factors including financial deleveraging and tightened regulation of the digital gaming industry. Although China’s active mobile Internet users have exceeded 1.1 billion, growth in the user base is weakening, with just 20 million new users added last year. As Zhaopin.com data showed, TMT sector hiring started to decline from the second quarter of 2018.Yet the deployment of new technologies, such as artificial intelligence, cloud computing and Internet of Things, into the financial services, manufacturing, retail, health care, education and transport sectors, particularly in the business-to-business industry, may stimulate new demand.The commercialization of 5G technology is set to draw massive investment from the telecommunication industry and provide new infrastructure to expedite the development of the aforementioned subsectors.Other demand will originate from fragmented subsectors such as mobile video and online reading, while the recent approval of Internet gaming and the forthcoming debut of a sci-tech board at the Shanghai Stock Exchange will also stimulate leasing activity.The nine leading co-working players added more than 100,000 desks in 125 new locations in seven major cities in 2018, a notable growth from 2017.The rapid pace of expansion has resulted in some consolidation within the industry, with six mergers and acquisitions announced last year compared to just two in 2017. Capital continues to pour into the leading providers, with the top five brands receiving a total of 9.5 billion yuan (US$1.42 billion) of funding in 2018, accounting for more than 90 percent of total investment in the sector.Expansion by co-working operators is expected to slow in 2019. A recent survey by CBRE found that although leading platforms plan to add new centers in first and second-tier cities, 40 percent of respondents intend to moderate their expansion in Beijing and Shanghai. Moreover, landlords become more willing to engage in profit-sharing deals and offer operators CAPEX (capital expenditures) subsidies. Nevertheless, co-working operators retain strong demand for prime offices, ensuring they will remain a key driver of office leasing activity.CBRE data show that co-working space operators prefer core areas (81 percent) and office buildings (76 percent) to facilitate their strategy of attracting large and middle-sized corporate occupiers.New measures to raise FDI limitsIn July 2018, authorities promulgated new special administrative measures to improve access to foreign investment. The measures raised the foreign investment limit for securities brokerages, futures companies and life insurers to 51 percent.CBRE expects the reforms to support the growth of office leasing demand from overseas companies. The cancellation of foreign ownership caps in new-energy vehicle manufacturers has already seen Tesla announce plans to construct its first plant outside the US, while BMW intends to step up its investment in China.The reforms are also set to stimulate new demand from domestic companies, with the Bank of Communications and Bank of China both recently obtaining approval to launch new wealth management units, and a further 24 banks reportedly planning to open similar functions. The expansion of wealth management businesses will drive new leasing demand in leading financial cities such as Beijing, Shanghai and Shenzhen.Apart from a few trading companies scaling back their office footprint in Guangzhou and Ningbo, the effects of the US-China trade dispute were not discernable for the bulk of 2018. However, market sentiment began to deteriorate toward the end of the year, with net absorption data indicating that new office demand fell substantially in coastal cities, which are reliant on trade. However, demand in inner cities remained stable. CBRE expects the trade dispute to exert a stronger impact on office leasing demand in 2019 as affected corporate decisions gradually filter through to the market, with an estimated 10 percent of the existing occupied space directly affected.New office supply in the 17 monitored cities is forecast to increase 30 percent year on year to 10 million square meters in 2019. New stock in Shanghai will again exceed 1 million square meters, while project delivery will pick up significantly in Beijing, Guangzhou, Tianjin, Chengdu and Chongqing. However, after considering the supply slippage ratio, which stood above 30 percent in 2018, actual new office supply in 2019 will be around 7.5 million square meters.New stock in core areas will account for around 55 percent of total supply, a significant increase from 2018. This year will see the completion of projects in prime submarkets including the Beijing CBD, Zhujiang New City in Guangzhou, and Futian in Shenzhen, and will provide ample opportunities for occupiers to expand in core areas. However, emerging areas, especially those with poor transportation and business infrastructure, may come under pressure.Vacancy rate to increaseSlower economic growth and ample new supply will ensure the average vacancy rate in the 17 cities exceed 20 percent in 2019. Vacancies will rise in 15 of these cities on a year-on-year basis, led by Tianjin, where vacancies are expected to approach 50 percent on the back of new supply in the Binhai New Area. Wuhan, Changsha and Qingdao will also see record high vacancy rates. Guangzhou and Nanjing will be the only two markets where vacancy will remain in the single digits.Rental performance in the 17 cities will diverge in 2019. In Beijing, new supply in core areas will provide new options for tenants, boost vacancies and compress rents for older properties. Shanghai is expected to see intense competition for high profile tenants, which will exert downward pressure on rental growth in emerging areas.In Shenzhen, strong upgrading demand from financial services companies will push up rents for space in prime areas, while rent in emerging locations may struggle under the impact of new supply. Although Guangzhou, which remains a landlord’s market with rental growing 10.7 percent last year from 2017, gains in 2019 will be weaker due to new supply and occupier movement to emerging areas.Average rents in second-tier cities are forecast to decline 1.1 percent amid continued high vacancies, which will edge up further towards 30 percent this year. Rents in second-tier cities in northern and central parts of China are expected to fall at a faster rate, while the recovery in Chengdu will slow significantly as new stock comes on stream. Second-tier markets in east China will remain stable, with Nanjing leading rental growth amongst all second-tier cities. Hangzhou and Suzhou might register slight rental growth.
As property prices rocketed toward the heady peak of Sydney’s real-estate boom in 2017, the bulldozers came to Epping.Eucalyptus-lined streets of red-brick bungalows in the middle-class suburb were snapped up at hefty premiums by developers, razed, and quickly remade as apartment blocks.Many units were sold off-plan to Chinese investors drawn by the location’s reputation as a Chinese community hub and its highly -regarded schools.But prices are now in freefall, and the suburb is being refashioned once more, this time into the epicenter of a bust.As buyers disappear, some projects are sinking under debt.“Once the sales rates and pricing dropped, it just couldn’t service all of its commitments,” said Philip Campbell-Wilson, who is liquidating one such new development, Gondon’s Elysee Epping.Now 61 of Gondon’s 130 apartments are for sale all bundled together to recoup creditors’ funds, pushing prices in the area lower still. Prices in the Epping area have already fallen more than a fifth from their peak, according to data from property consultant Corelogic, the steepest falls in Sydney.“Up until December there’s actually been an acceleration of the decrease in pricing,” said Jay Carter, sales director at the Australian arm of Chinese developer Poly Real Estate Group Co, which recently built a 516-unit complex in Epping.Poly plans to hang on to most of around 30 unsold apartments in its development in the hope the rate of Sydney price falls slowing slightly in January signals the bottom of the market approaching, he added.As monthly insolvencies in the construction industry hit their highest in almost three years in November, consequences have begun to ripple outwards through Australia’s economy.A slew of profit downgrades and weak results at businesses from banks to advertisers and retailers has followed and the central bank has now opened the door to a cut in interest rates.Curbs on lending to foreigners hurt demand from Chinese investors, Australia’s largest source of international property investment.In the last financial year, foreign investment in residential property dropped 58 percent to A$12.5 billion (US$8.86 billion), government figures show.Local investors are also finding it tougher to borrow as banks tighten loan conditions under pressure from regulators.The impact has been underestimated according to Peter Summers, chief executive of AVJennings, a developer now looking to slow supply as the market turns sour.The company announced a 91 percent drop in half-year profits as a combination of delays and buyers’ reticence sapped sales.But while the heaviest wipeouts have been reserved for the frothiest sections of the market, like apartments built for foreign buyers, developers such as Mirvac Group say they are so far unscathed and even on the lookout for sites.Price falls are also giving first-time buyers a chance to get into a market previously ranked as among the least affordable.But the sentiment has still brought forward-looking construction indicators to a screeching halt. Monthly building approvals are down by 40 percent from their peak and construction loans hit a three-year low in December.Profits are falling, or forecast to drop at building suppliers CSR Ltd and Boral Ltd, and ancillary companies are also suffering.“It flows through everything,” said Jason Teh, chief investment officer at Vertium Asset Management.Housing price falls tend to discourage spending because home owners feel less wealthy, save more, and cut back on purchases.Property classifieds sites Domain Australia Holdings Ltd and News Corp-owned rival REA Group as well as furniture seller Nick Scali are also feeling negative effects.Grocers Coles Group Ltd and Woolworths Group Ltd have also reported slowdowns.
Hong Kong’s securities regulator banned Swiss giant UBS from leading initial public offerings in the city for a year and fined it and rivals including Morgan Stanley a combined US$100 million for due diligence failures on a series of IPOs.UBS is the first major bank involved in stock listings to face such a suspension in the city. The US$100.2 million in fines are the toughest actions yet taken by the regulator as part of its campaign against what it sees as shoddy listing standards.The Securities and Futures Commission yesterday fined UBS HK$375 million (US$48 million). It fined Morgan Stanley HK$224 million, Merrill Lynch HK$128 million and Standard Chartered HK$59.7, all for failures when sponsoring, or leading, IPOs.Helping firms to list is big business in Hong Kong, which was last year’s top IPO destination worldwide with US$36.3 billion raised, according to Refinitiv data.But, in the wake of a slew of scandals among newly traded firms earlier this decade, the SFC has been cracking down on banks not properly carrying out their duties as sponsor.Hong Kong IPOs need at least one sponsoring bank, which typically takes the lead in running the IPO and collects a larger proportion of fees than banks listed only as bookrunners.Sponsors must conduct due diligence to assess the company being listed, and are responsible for assuring potential investors that its IPO prospectus is accurate.The IPOs in question were those of China Forestry, sponsored by UBS and Standard Chartered, and Tianhe Chemicals, sponsored by UBS, Merrill Lynch and Morgan Stanley.UBS was also fined for failing to discharge its duties in a third IPO which the regulator did not name, but which sources have identified as China Metal Recycling, a now-defunct scrap merchant.“The outcome of these enforcement actions for sponsor failures ... signifies the crucial importance that the SFC places on the high standards of sponsors’ conduct to protect the investing public and maintain the integrity and reputation of Hong Kong’s financial markets,” said Ashley Alder, chief executive of the SFC, in a statement.Fines in Hong Kong are based on up to three times the fees or profits made by the regulated group or person, less a discount for cooperation with the investigation.China Forestry raised US$216 million in its 2009 IPO. Just 14 months after listing, trading of its shares was suspended when its auditor discovered irregularities. The company was subsequently liquidated.Tianhe, engaged in the manufacture and sale of chemical products, listed in 2014 but was soon after targeted by a short seller, who claimed it had inflated profits and presented related groups as customers. The company denied the allegations.Trading in its shares has been suspended since 2015.Among the failings described by the regulator was one instance where none of the three banks sponsoring Tianhe Chemical’s IPO followed up after interviewing the company’s largest customer as part of their sponsor due diligence.The meeting was arranged by Tianhe at its offices and the customer, named only as X, refused to give a business card or provide other identification to the banks’ representatives before storming out of the meeting.
Chinese stocks retreated for a second day, with the benchmark Shanghai Composite Index closing below the key 3,000-point level.Shanghai fell 1.2 percent to 2,990.69 points after hitting an intra-day low of 2,968.82 points, and the smaller Shenzhen Component Index dropped 1.82 percent to 9,417.93 points.Turnover for Shanghai and Shenzhen bourses totaled 812.52 billion yuan (US$121 billion), compared with 1.05 trillion yuan the previous day.The ChiNext, China’s Nasdaq that has outperformed other domestic benchmarks this year, fell a further 2.58 percent to close at 1,650.19 points, with turnover shrinking to 139.36 billion yuan from Wednesday’s 184 billion yuan.Aviation carriers, liquor firms and cement manufacturers were among the few sectors that registered increases. The country’s three largest carriers led the rises, with China Eastern Airlines soaring 6.7 percent to 6.21 yuan, and China Southern Airlines and national flag-carrier Air China both gaining more than 4 percent.Kweichow Moutai Co Ltd rose 3.18 percent to finish at 778 yuan. Anhui Gujing Distillery Co and Jinhui Liquor Co gained 4.38 percent to 87 yuan and 14.06 yuan.Gansu Qilianshan Cement Group Co and Jiangxi Wannianqing Cement Co both surged by the 10 percent daily cap.More than 100 companies on the two bourses fell by the daily 10 percent limit. Notably, major gainers on previous trading days, including livestock- and poultry-raising firms, telecoms service providers, high-tech park developers and media companies, led yesterday’s declines, shedding 6.26 percent, 5.02 percent, 4.96 percent and 4.63 percent.China’s industrial output growth narrowed to 5.3 percent year on year in the first two months of 2019 from a 5.7 percent rise in December, while retail sales of consumer goods jumped 8.2 percent between January and February from the same period a year ago, unchanged from last December, data released earlier yesterday by the National Bureau of Statistics showed.
CHINA’S economy remained stable in the first two months of the year, with economic data showing resilience and progress.
The National Bureau of Statistics yesterday unveiled a string of economic indicators for the January-February period, showing a pickup in investment, stable consumer spending and optimized industrial structure.
Industrial output grew 5.3 percent year on year in the first two months, with fast growth in emerging industries and new products. The growth narrowed from a 5.7 percent expansion in December, the bureau said, citing the Spring Festival as a major factor for the slowdown.
In February alone, industrial output was 0.43 percent higher than January’s.
It is estimated that the industrial production would have grown 6.1 percent year on year in the first two months if distortions from the Spring Festival were excluded.
Fixed-asset investment, a major growth driver, grew 6.1 percent year on year in the first two months of 2019, 0.2 percentage points higher than that recorded in 2018.
Domestic demand maintained steady growth, given stable FAI and consumption expansion, said Mao Shengyong, a spokesman for the statistics bureau.
The 6.1 percent growth was also in line with market expectations, Japanese securities brokerage Nomura said in a report.
The Australia and New Zealand Banking Group noted: “Although the pace of recovery is slightly slower than we expected, the uptrend is well in place and likely to continue on the back of special local government bond issuance and approval of FAI projects in the coming months.”
Retail sales of consumer goods, an indicator of consumption, rose 8.2 percent, flat with that in December.
“The national economy in the first two months of this year continued to remain stable while making progress,” Mao said, noting the economy performed within a reasonable range.
He said yesterday’s data showed some bright spots in the Chinese economy, including rising domestic demand, optimized industrial structure, stable employment and consumer prices, and positive market expectation.
The investment in the tertiary industry expanded 6.5 percent, picking up pace from the 5.5 percent increase in 2018.
After deducting price factors, retail sales of consumer goods grew 7.1 percent in real terms, accelerating from December’s 6.6 percent rise, a sign of rising domestic demand, according to the statistics bureau.
Consumption in rural areas climbed 9.1 percent, outpacing a rise of 8 percent in urban regions. The catering industry reported a 9.7 percent increase in revenue.
Online retail sales maintained robust growth, up 13.6 percent, with physical commodity sales surging 19.5 percent from one year earlier.
China’s consumer confidence index rose 2.3 points to 126 in February from January, pointing to a positive outlook of market expectation.
With a market of nearly 1.4 billion increasingly prosperous population, China strives to make consumption a major driver of its economic growth. Consumption contributed to 76.2 percent of last year’s GDP growth. Retail sales rose 9 percent to 38.1 trillion yuan (US$5.7 trillion) in 2018.
Meanwhile, the industrial structure continued to improve. Production in strategic emerging industries maintained fast expansion, with its output increasing by 10.1 percent.
The output of new-energy vehicles saw a surge of 53.3 percent year on year during the period, while solar cell production rose by 13.5 percent.
Investment in high-tech industries and industrial technology improvement jumped 8.6 percent and 19.5 percent year on year, both faster than the overall growth of fixed-asset investment.
The service output index rose 7.3 percent year on year, flat from December, the bureau said. The information transmission, software and information technology service industry jumped 26.5 percent, and the leasing and business service sector increased by 7.9 percent year on year.
Property investment jumped 11.6 percent in the first two months, lifted by investment growth in east and west China. The growth was faster than the 9.5 percent expansion recorded in 2018.
The total property investment amounted to 1.2 trillion yuan, with 72.1 percent used in residential buildings, the bureau said.
Despite mounting external uncertainties, yesterday’s data was the latest in a slew of economic barometers that showed resilience and progress in the Chinese economy. The growth in China’s foreign trade of goods rebounded strongly after the weeklong Spring Festival holiday. In the first eight days of March, the country’s foreign trade soared 24.7 percent, with exports rising nearly 40 percent.
THE construction of Tesla’s new factory in Shanghai is going smoothly, according to the city’s officials with direct knowledge of the project.
“The assembly workshop is expected to be completed in May,” Chen Mingbo, a national lawmaker and director of Shanghai Commission of Economy and Informatization, said on the sidelines of the second session of the 13th National People’s Congress in Beijing.
Wu Xiaohua, an official of the Shanghai Lingang Area Development Administration, where Tesla’s plant is located, described the progress of the project as “better than expected.”
Tesla’s team in Shanghai has also confirmed the smooth progress of the project, which, with an investment of over 50 billion yuan (US$7.4 billion), is the largest foreign-invested manufacturing project in Shanghai’s history, and the electric car manufacturer’s first outside the United States.
At the groundbreaking ceremony in January, CEO Elon Musk said Tesla was “hoping to have initial production of the Tesla Model 3 toward the end of the year and volume production next year.”
Tesla signed the agreement with Shanghai’s city government in July to build the factory. In October, the company was approved to use an 864,885-square-meter tract of land in Lingang for the plant, which has an annual producing capacity of 500,000 electric cars.
SHANGHAI has been ranked as one of the top five financial centers in the world again after it overtook Tokyo to move into fifth place of global financial centers in September.
Shanghai remained ahead of Tokyo in fifth place, according to the latest edition of the Global Financial Centers Index, which was co-published by the China Development Institute in Shenzhen and Z/Yen Partners, a London-based market research company.
Not for the first time, New York took first place in the index, 7 points ahead of London.
Hong Kong was only 4 points behind London in third, and Singapore remained in fourth place.
Toronto rose 27 points and gained four places to seventh. Zurich, Beijing and Frankfurt remained in the top 10, the findings showed.
Among the top five centers, gaps are now being narrowed between the catchers and the leaders.
For example, Shanghai was 193 points behind the leader when the index was produced for the first time in 2007, but now it is just 17 points behind.
A total of nine Chinese cities were on the list this time, as a number of second-tier cities such as Chengdu in Sichuan Province and Dalian in Liaoning Province are rising in importance.
The financial center list has grown from 100 to 102 this year and the latest result showed a continued shift to the Asia-Pacific, as the top eight places in the region are now in the top 15 in the whole index.
Shanghai’s continuously strong position in this index reflects the stability of the city’s financial policies and its continued growth. Committed to becoming an international financial center by 2020, the city has always stayed at the forefront of the reform and opening-up of China’s financial services and vows to keep playing a pioneering role in this regard in the future.
Local government officials said Shanghai has made great headway in serving the country’s financial reforms, and the city has further consolidated its position as a financial center with a relatively complete financial market system.
For instance, nine of the world’s 10 biggest asset managers opened offices in the city’s Lujiazui financial area, and 51 internationally renowned asset management companies set up 69 wholly foreign-owned firms in Shanghai in 2018.
Next, the city will strive to enhance the degree of its financial internalization and its global influence, attract more overseas investors to participate in its financial market, further optimize its business climate for the financial sector, and improve its capabilities for financial supervision and risk prevention.
The GFCI index was compiled using 133 instrumental factors in five broad areas of competitiveness: business environment, human capital, infrastructure, financial sector development and reputation. The research has been published by Z/Yen since March 2007, and it is now updated twice every year in March and September.
Chinese stocks fell yesterday, ending a two-day rally, with the top-performing ChiNext Index plunging 4.49 percent.The Shanghai Composite Index lost 1.09 percent to close at 3,026.95 points after hitting an intra-day low of 3,013.93 points and the smaller Shenzhen Component Index fell 2.53 percent to 9,592.06 points.Total turnover for Shanghai and Shenzhen bourses hit 1.05 trillion yuan (US$156.4 billion), compared with 1.13 trillion yuan the previous day.The ChiNext, China’s Nasdaq-style board of growth enterprises that has outperformed other domestic benchmarks this year, suffered a major retreat to close at 1,693.86 points, a dive of 79.57 points from the day before. Turnover on the board dropped to 184 billion yuan from Tuesday’s 212.6 billion yuan, which was the highest single-day trade volume in its history.Livestock and poultry-raising firms, telecoms services providers and media companies, which were among the strongest gainers over the past two days, all closed notably lower yesterday, losing 4.34 percent, 4.1 percent and 2.32 percent, respectively.High-tech park development companies led the rises with an average rise of 6.88 percent across the sector. Major gainers included Beijing Electronic Zone Investment and Development Group, Shanghai Zhangjiang High-Tech Park Development Co and Nanjing Gaoke Co, which all rose by the 10 percent daily cap, as well as Shanghai Shibei High-Tech Co, which jumped 9.93 percent.
Volkswagen will cut up to 7,000 positions, aim to boost productivity and deliver 5.9 billion euros (US$6.7 billion) of annual savings at its core VW brand by 2023, in its latest attempt to raise profitability at its top-selling division.The plan, announced yesterday, comes a day after the German automaker warned it would cut jobs as it speeds up the rollout of electric cars, which are less complex to build and require fewer workers.Volkswagen has struggled to raise profitability for the VW brand for years. Last year, the brand’s operating margin fell to 3.8 percent, lagging peers such as Peugeot which delivered a margin of 8.4 percent.The VW brand is targeting a 6 percent margin in 2022.Volkswagen has ruled out compulsory layoffs until 2025, but early retirement of staff working in administrative positions at the company’s headquarters in Wolfsburg, Germany, will help reduce the workforce by 5,000 to 7,000, it said.The new cost-cutting drive is a continuation of Volkswagen’s 3-billion-euro Zukunftspakt savings plan. So far, VW has realized around 2.4 billion euros of the planned 3-billion annual cost savings by 2020.The 5.9-billion-euro target for 2023 comes on top of the 2020 target. At the same time, VW will create 2,000 new software and electronics technical development jobs.
The Shanghai International IT & Electronics Fair, Asia’s biggest information technology fair by space and visitor numbers, will showcase the latest technologies covering chips, artificial intelligence and the Internet of Things from Tuesday. The fair, supported by the Shanghai government, features six sub-theme exhibitions, including Semicon China and Electronica China. It covers 289,000 square meters and has attracted 4,500 exhibitors and about 300,000 professional visitors.The SIIEF has become “a world-class IT and communications platform,” Zhang Li, a senior official with the Shanghai Municipal Commission of Economy and Informatization, said yesterday.Last year, Shanghai’s next-generation IT industry output was 365.1 billion yuan (US$54.5 billion), a 5.8 percent rise year on year.
Down apparel is traditionally bulky. Warm in winter, yes, but not fashionably chic in the eyes of consumers who aren’t winter sports enthusiasts. Shanghai-based Bosideng, China’s largest down-clothing maker, is out to show that down garments can make a fashion statement beyond just on the ski slopes. Bosideng International Holdings Ltd, the listed arm of the company, was a star performer on the Hong Kong stock exchange last year. The company has more than 7,000 retail outlets. After several years of expansion in non-core businesses such as casual wear and the acquisition of overseas garment brands, Bosideng has started to divest businesses that are under-performing or lack market profile. Instead, the company is focusing on its namesake Bosideng instead of others with smaller sales volume such as Snow Flying, Kangbo and Bengen. “People seek to show their personality, taste and status through fashion items they wear,” said Alina Ma, director of research at Mintel China. “They also care about how they purchase fashion because they want the experience to be fun and relaxed.” Bosideng said it plans to double its research and development spending in the coming year after its down apparel business of the Bosideng brand recorded more than a 35 percent sales increase last year. As of late February, accumulated retail sales of down apparel under the Bosideng brand in the fiscal year ending March 30 exceeded 10 billion yuan (US$1.47 billion). The company also said it will increase spending on marketing by 50 percent and continue to upgrade its retail outlets.Fashion weeks have been staged to stress the point that the warm-weather apparel is fashionable beyond the world of fashionistas on the ski slopes. The company is also embracing modern retail strategies such as online sales, celebrity endorsements and pop-up stores at popular shopping areas during autumn and winter. “Global brands such as Canada Goose and Moncler have posed strong competition, and sportswear, fast fashion and luxury brands are also moving to offer down jackets,” said Rui Jinsong, executive director and senior vice president of the company. “We’ve been enhancing consumers’ perceptions of Bosideng as a leading brand for down jackets, despite strong competition from rivals at home and abroad,” he added. “Our designer collections have proven popular with consumers.”Tailor-madeThe company was founded by Gao Dekang, a former tailor.Mintel said fashion-consciousness in China is moving the apparel market toward more diversified, affordable and innovative items.For success in global expansion, factory lines must be adapted to new formats and design elements, and companies need to merge international trends with domestic preferences. “Opening up flagship stores in key business districts in major international cities has reaffirmed our brand image and contributed to booming sales,” Rui noted.Restructuring brick-and-mortar outlets has helped average store sales rise as much as 20 percent. So far, the company’s efforts have paid off well. In the nine months ended December, retail sales of its core Bosideng brand jumped more than 30 percent from a year earlier. As many as 2,600 stores have been remodeled in the past year, and nearly 700 non-performing sites were closed. Shanghai resident Silky Xie said she bought a 1,500-yuan Bosideng down coat before her trip to the northeastern province of Jilin in December.“Although it’s obviously not for everyday use during winter days in Shanghai, it does provide protection against extreme cold, and the styling looks way better than the down jackets of other brands,” she said. China’s retail sales of textiles and garments rose 8 percent in the past year, with total sales volume at 1.37 trillion yuan. Euromonitor said it expected the apparel market to hit 1.59 trillion yuan this year, with the women’s-wear segment growing faster than the market as a whole. One major competitor for Bosideng is Japan-based Uniqlo. One of its signature products is a lightweight down jacket that has been on the market for at least seven years. Uniqlo has said it hopes to target consumers who want winter apparel to fit more than one occasion, and that looks chic and light. Many consumers still regard down as a must-have during cold seasons, and they want an affordable average price of about 500 yuan. “It’s my go-to spot when I need new down coats or vests, and its style stays consistent,” said Beijing resident Sammy Chen of Uniqlo apparel. “I want to make sure there’s no mistake when I wear this apparel to work or on business trips.” The company’s light down jacket comes in a dozen colors and fits with almost all kinds of casual wear. Some of the lines have adopted new materials and coating to make the jackets even lighter and easier to be folded up and put away. Last year, Uniqlo’s parent Fast Retailing reported a double-digit gain in profit on China’s mainland. Bosideng, on the other hand, is more focused on the high end of the market. Only about 12 percent of its down jackets now cost less than 1,000 yuan. A winter parka that costs more than 1,800 yuan accounts for nearly a fifth of its merchandise. Both Uniqlo and Bosideng were among the top-selling brands for both men’s and women’s apparel during last November’s Singles Day Tmall shopping festival.
Japan’s Nissan Motor and France’s Renault have vowed to retool the world’s top car-making alliance to put themselves on more equal footing, breaking up the all-powerful chairmanship previously wielded by ousted boss Carlos Ghosn.The removal of Ghosn, credited for rescuing Nissan from near-bankruptcy in 1999, had caused much uncertainty about the future of the alliance and some speculation the partnership could even unravel.The companies, together with junior ally Mitsubishi Motors, yesterday said the chairman of Renault would serve as the head of the alliance but — in a critical sign of the rebalancing — not as chairman of Nissan.Too much powerNissan has said that Ghosn wielded too much power, creating a lack of oversight and corporate governance.It was not clear who would become Nissan’s chairman, vacant since Ghosn was arrested in Japan in November.But the automakers gave no indication of any immediate change in their cross-shareholding agreement, one which has given smaller Renault SA more sway over Nissan.The so-called Restated Alliance Master Agreement that has bound them together so far remains intact, they said.“We are fostering a new start of the alliance. There is nothing to do with the shareholdings and the cross-shareholdings that are still there and still in place,” Renault Chairman Jean-Dominique Senard said at a news conference.“Our future lies in the efficiency of this alliance,” he told reporters at Nissan’s headquarters in Yokohama.Senard also said he would not seek to be chairman of Nissan, but instead was a “natural candidate” to be vice chairman.This is a “new start” for the alliance, insisted the Frenchman.For his part, current Nissan boss Hiroto Saikawa said the new board represented “a true partnership on equal footing.”Both executives sidestepped questions about Ghosn, recently released on bail in Japan ahead of a trial over alleged financial misconduct.Former Nissan chairman Ghosn was released on a US$9 million bail last week after spending more than 100 days in a Tokyo detention center. He faces charges of under-reporting his salary at the Japanese automaker by about US$82 million over nearly a decade — charges he has called “meritless.”Ghosn, who has not spoken to media since his release, put in a request with a Tokyo court on Monday to attend Nissan’s board meeting the next day, but he was not given permission.Under the terms of his bail, he would have needed the court’s nod to attend.Ghosn will not hold a highly anticipated news conference until next week at the earliest and is not planning to attend Nissan’s shareholder meeting next month, his lawyer said.“Mr Ghosn wants to have some time to mull over what he’s going to say,” Junichiro Hironaka told reporters outside his Tokyo office after meeting with Ghosn throughout the day.Ghosn left his lawyer’s office in the evening without taking questions from reporters.In the wake of the scandal, Renault has started its own review of payments to Ghosn. French prosecutors have opened a preliminary inquiry into how he financed his 2016 wedding at the Chateau de Versailles, French media have reported.His dramatic arrest and the detention exposed tensions between Nissan and top shareholder Renault, complicating the outlook for a partnership that is the world’s largest maker of automobiles, excluding heavy trucks.Some at Nissan had been unhappy with Ghosn’s push for a deeper tie-up with Renault, which was seen as possibly including a full merger. Smaller Renault bought 43 percent of Nissan ahead of the 1999 rescue.Nissan holds a 15 percent, non-voting stake in Renault, whose top shareholder is the French government.
Signify — formerly Philips Lighting — views China as a key market for its production and R&D and believes its investment in the world’s second-largest economy will drive innovation in the local market.“This is a market in which we will continue to invest, because we believe in the potential of China at many different levels, and we’ll continue our dedication to the market,” CEO Eric Rondolat told Shanghai Daily.“We’ve seen China as a very progressive market when it comes to the Internet of Things and connected technologies.“And we view it as base for developing new technologies for the global market.”In the past few years, he said, the company has been shifting from conventional lighting to LEDs and creating new growing profit engines in order to embrace the next wave of revolution. The company has successfully maintained its market lead in conventional lighting, LED-related products and connected lighting services, he added. “We are not deterred, despite challenging macroeconomic situation in the past year, especially in the second half,” Rondolat said.“And we will continue to leverage the Chinese market for the global market and local businesses.” He also called for the protection and encouragement of innovative efforts and intellectual property rights and more spending from local companies to develop the market. Signify’s Shanghai R&D facility, with more than 1,000 staff, is the second largest for the Netherlands-headquartered company.The company also operates four manufacturing sites in China.
Chinese stocks rallied again yesterday after a major rebound on Monday, with gains across most sectors.And total turnover for Shanghai and Shenzhen hit 1.13 trillion yuan (US$168.20 billion), up from 944 billion yuan on Monday.The Shanghai Composite Index rose 1.1 percent to close at 3,060.31 points after reaching an intra-day high of 3,093.39 points, extending its strength for the second consecutive day following a collapse on Friday.The smaller Shenzhen Component Index gained 1.41 percent to 9,841.24 points, while the ChiNext jumped 2.64 percent to a year high of 1,773.43 points on turnover of an all-time high of 212.6 billion yuan.Agriculture-related companies were among the top gainers, rising an average 7.16 percent — with several livestock and poultry-raising firms, including Chuying Agro-Pastoral Group and Dahu Aquaculture Co, surging the 10-percent daily cap.Telecoms services providers and media firms also saw strong gains. China Unicom, the country’s second-biggest mobile carrier, jumped 9.01 percent to 7.5 yuan.Shanghai Oriental Pearl Media Co surged 10.03 percent to 12.94 yuan and Hunan Tianrun Digital Entertainment & Cultural Media Co advanced 10.12 percent to 4.68 yuan.
US consumer prices rose for the first time in four months in February, but the pace of the increase was modest, resulting in the smallest annual gain in nearly two and a half years.The report from the Labor Department yesterday also showed benign underlying inflation last month, which together with slowing economic growth, supports the Federal Reserve’s “patient” approach toward further interest rate increases this year.The Consumer Price Index increased 0.2 percent, lifted by gains in the costs of food, gasoline and rents. The CPI had been unchanged for three straight months.In the 12 months through February, the CPI rose 1.5 percent, the smallest gain since September 2016. The CPI increased 1.6 percent on a year-on-year basis in January.Excluding the volatile food and energy components, the CPI edged up 0.1 percent, the smallest increase since August 2018. The so-called core CPI had increased by 0.2 percent for five straight months.In the 12 months through February, the core CPI rose 2.1 percent. The core CPI had increased by 2.2 percent for three consecutive months on an annual basis. Economists had forecast the CPI and the core CPI edging up 0.2 percent in February.The Fed, which has a 2 percent inflation target, tracks a different measure, the core personal consumption expenditures price index, for monetary policy.The core PCE price index increased 1.9 percent on a year-on-year basis in December after a similar gain in November. It hit the US central bank’s 2 percent inflation target in March last year for the first time since April 2012.Slowing domestic and global growth are keeping inflation in check even as a tight labor market is driving up wages. Annual wage growth jumped 3.4 percent in February, the biggest increase since April 2009, from 3.1 percent in January.US stock index futures rose while US Treasury yields edged lower after the release of yesterday’s data. The dollar pared gains against the yen and extended losses against the euro.A New York Fed survey of consumer expectations published on Monday showed a drop in inflation expectations in February.In a wide-ranging interview with CBS’s 60 Minutes television news program, Fed Chairman Jerome Powell on Sunday reiterated the central bank’s wait-and-see approach to further monetary policy tightening this year. Powell said the Fed did “not feel any hurry” to change the level of interest rates again.The Fed hiked rates four times in 2018.The January PCE price data will be released on March 19. It was delayed by a 35-day partial shutdown of the federal government that ended late January.In February, gasoline prices rose 1.5 percent after falling 5.5 percent in January. Food increased 0.4 percent, the biggest rise since May 2014, after gaining 0.2 percent in January. Food consumed at home rose 0.4 percent last month, boosted by more expensive dairy products, fresh vegetables, cereals and meat.Health care costs fell 0.2 percent after five straight monthly increases. They were held down by a 1.0 percent decline in the price of prescription medication and.
Honda Motor Co said yesterday it would recall about 1.1 million Honda and Acura vehicles in the United States to replace defective Takata airbags on the driver’s side.The company said here it was aware of one injury linked to the defect that may have caused the airbag to rupture when it was deployed in a crash.The vehicles involved in the recall were previously repaired using specific Takata desiccated replacement inflators or entire replacement airbag modules containing these inflators.Free repairs of the recalled cars would begin immediately in the United State.Replacement parts will come from alternative suppliers, Honda said.Honda became aware of the issue after a Honda Odyssey crash, where the front airbag deployed and injured the driver’s arm.An investigation later showed that manufacturing issues at Takata’s Mexico facility introduced excessive moisture into the inflator during assembly, leading to the problem.The total number of recalled inflators is now about 21 million in about 12.9 million Honda and Acura vehicles that have been subject to recall for replacing Takata front airbag inflators in the United States, the company said.Automakers in the United States repaired more than 7.2 million defective Takata air bag inflators in 2018, as companies have ramped up efforts to track down parts in need of replacement.
German chemical firm BASF yesterday unveiled its new research and development facility in Shanghai to enhance its regional innovation capabilities.The 5,000-square-meter facility at BASF’s Innovation Campus Shanghai in the Pudong New Area includes its Automotive Application Center and Process Catalysis R&D Center, with a combined investment of up to 34 million euro (US$38.3 million).“Thanks to our continuous investment in R&D, we are able to support our customers in China and the entire Asia-Pacific region,” said Stephan Kothrade, chairman of BASF China.The company has invested nearly 180 million euro in China since 2012.Also at the inauguration, BASF presented a range of innovations to support customers in industries such as automotive, construction and consumer goods, in particular a waterborne coating system that was newly introduced on the Chinese mainland.
AFTER a visit to China last November, the first thing Moroccan wine merchant Mamoun Sayah did back home was to make plans to expand his vineyard.
He was thrilled by the number of dealers who visited his booth during the first China International Import Expo, the world’s first import-themed national-level expo held in Shanghai.
“I’ve always dreamed about bringing Moroccan wine to other countries,” Sayah said. “The potential for the Chinese market is enormous.”
China’s ongoing structural reforms are not only leading its economy onto a sustainable development path, but also underpinning the growth of the world economy.
“As China is transitioning from the ‘world factory’ to the ‘world market,’ it will offer abundant opportunities for global firms,” Wang Yiming, deputy director of the Development Research Center of the State Council, said.
He was speaking on the sidelines of the annual sessions of the national legislative and political advisory bodies.
According to a report by research firm eMarketer, China will replace the United States as the world’s largest retail market this year.
“China has been the main engine for global economic growth, its transition will inject new impetus to the world economy,” said Wang, a member of the 13th National Committee of the Chinese People’s Political Consultative Conference.
China is also upgrading what it brings to the world. In 2018, China’s outbound direct investment totaled about US$130 billion, with most funds flowing into the leasing and business services, manufacturing, and wholesale and retail industries.
The fact that the manufacturing industry is taking a larger share of outbound investment shows that China is shifting from an old resource-oriented investment model to one that is more integrated into the global value chain, Wang said.
Wu Gang, chairman of Xinjiang Goldwind Science and Technology, China’s largest wind turbine manufacturer by new installed capacity last year, said Chinese firms have helped cut the costs of wind power equipment manufacturing by half.
The company built its first wind farm in Panama in 2013, which produced green energy that accounted for about 8 percent of the country’s power consumption just a year after its operation.
Li Daokui, an economist at Tsinghua University and a national political advisor, said Chinese innovation has offered affordable technologies to other developing economies, helping with their own economic transformation.
According to Li, an economic transition is a lesson that must be learned in the course of development by all countries, and China can offer the world its expertise.
“Developed countries could learn from China’s management in macroeconomic control and its practices in supply-side structural reform,” Li said.
THE market share of new-energy cars in China could go into “free fall” after 2020 if the government cancels all subsidies, Chen Hong, SAIC Motor’s chairman and a deputy to the National People’s Congress from Shanghai said in a suggestion to the government.
In 2018, the number of new-energy cars sold in China surpassed 1.2 million. However, Chen said, the sales are still largely policy-driven.
The Chinese government has been reducing its subsidies to consumers of new-energy cars, and plans to cancel all subsidies after 2020.
“The cost of batteries and the manufacturing of new-energy cars will go down with technical progress, but we estimate that by 2020 the cost of those cars will still be higher than traditional cars,” Chen said.
“The cancellation of subsidies could reduce the market share of new-energy cars in China by about 40 percent.”
Chen suggested that the government keep incentives for both manufacturers and consumers, especially tax cuts for consumers.
Chen cited OECD statistics from 2014 which showed that taxes for buying and keeping cars in China accounted for 40.5 percent of all taxes related to vehicles in China, while the percentage in the US, Japan, the UK and Germany was 35.3, 33.9, 25.2 and 16.7, respectively.
“The high tax burden in buying and keeping cars suppresses consumption, and in most developed countries, fuel consumption takes up a greater portion of taxes,” Chen said.
Also, in China, excise, vehicle and vessel taxes are classified solely on engine displacement and do not take emissions into account. Chen suggested that those taxes should be counted on the basis of emissions so as to encourage the use of more environment-friendly cars.
The government could also consider cutting income taxes for people who purchase new-energy cars as such a measure has yielded positive results in the US, he said.
For manufacturers, Chen suggested that the government cut value-added taxes on the new-energy car industry from 16 to under 10 percent, following the leads of Norway, Iceland and Austria.
Asian outbound real estate investment plunged last year, mainly due to a sell-off by Chinese mainland investors, international property consultancy CBRE said yesterday.A total US$53.8 billion from Asia was invested in offshore real estate, a drop of 36 percent from 2017, according to CBRE’s 2018 Outbound Investment Survey.Chinese investment dived to US$7.5 billion from US$35.4 billion in 2017.“On one hand, the Asian outbound investment story in 2018 was characterized by clear moderation from China’s mainland,” Leo Chung, associate director of research at Asia Pacific CBRE said. “On the other hand, it represented cyclical portfolio rebalancing and strategic preparation for future activity.”Chinese mainland investors transitioned to net sellers in the second half of the year to strengthen balance sheets and recycle capital for deployment into future outbound investments.The pullback from Chinese mainland investors was not entirely unexpected, but created opportunities for new strategic investors to boost offshore investment, Chung said.Singaporean and South Korean investors strengthened their positions last year as more visible offshore real estate investors — at US$21.6 billion and US$7.3 billion, respectively.That compared with US$20.9 billion and US$6.3 billion in 2017.Investors from Malaysia and India also became more prominent by more than doubling and tripling offshore real estate investment.The EMEA (Europe, Middle East and Africa) region remained the leading destination for Asian outbound capital in 2018, attracting US$21.5 billion.
Alibaba Group Holding said yesterday it would buy 14 percent of STO Express Co Ltd for 4.66 billion yuan (US$693 million) as it reinforces expansion in the delivery sector.Shenzhen-listed STO Express shot up by the daily limit of 10 percent on the news to close at 22.48 yuan (US$3.34).Alibaba said the two parties would deepen existing collaboration in technology, last-mile delivery across China and new retail logistics.“We hope to join hands with industry partners to further lower logistics costs and to enhance efficiency for the manufacturing industry,” Alibaba said in a statement.“And we’ll continue to enrich the ecosystem within the logistics industry to meet evolving market demands.”It is Alibaba’s fourth investment in the courier sector after it bought minority stakes in YTO Express Group Co Ltd, Best Inc and ZTO Express Inc.STO Express is among a dozen courier delivery firms that work with Alibaba’s logistics unicorn, Cainiao Smart Logistics Network.
Chinese logistics giant SF Holding and Deutsche Post DHL Group launched a co-branded business — the SF DHL Supply Chain China — in Shanghai yesterday in a bid to reshape the supply chain market in China.The new company will focus on industries from technology to life science and health care, retail, consumer products, automotive, chemicals to e-commerce.It will utilize DHL’s global network and SF’s market position in China, according to the new company.“Leveraging on digitalization and a lean management model, we strive to build a more efficient, transparent and intelligent logistics supply chain,” said Zou Yin, CEO of the new company.DHL sold its supply chain and logistics business in China to SF Holding in October 2018 as the two companies entered a 10-year strategic partnership.
Electric carmaker Tesla Inc has backed off its plan to close all of its US stores and instead will raise prices of its high-end vehicles by an average 3 percent as it strives for profitability.The company said late Sunday that it would now close only about half as many stores than initially planned in a widely criticized move this month to cut overheads and shift its whole distribution network online.“Over the past two weeks we have been closely evaluating every single Tesla retail location, and we have decided to keep significantly more stores open than previously announced,” the company said.“As a result Tesla will need to raise vehicle prices by about 3 percent on average worldwide.”Separately, Chief Executive Officer Elon Musk was yesterday due to explain why he should not be held in contempt for recent tweets that US securities regulators say violated a September fraud settlement.The case is the latest major challenge by authorities to Musk’s leadership as Tesla seeks to make good on his promises to Wall Street that it will soon be consistently profitable and will not need more capital.The 3 percent increase on its top-end cars would be the first hike in prices after a series of cuts over the past year aimed at offsetting a reduction in green tax credits and the impact of rising tariffs overseas.Tesla said the worldwide price increases would apply to the more expensive versions of the Model 3, Model S and Model X, and that there will be no price increase to the US$35,000 Model 3.“The 3 percent price increase announcement still indicates ... strong demand,” said Ivan Feinseth, an analyst with Tigress Financial Partners.Tesla said potential buyers can place orders until next Monday at current prices: US$79,000 for the Model S and US$88,000 for the Model X.Separately, Bloomberg reported Tesla is in talks with Chinese battery maker Contemporary Amperex Technology Co Ltd for the production of rechargeable batteries for the Model 3.
Shanghai’s new housing sales market suffered a major setback last week, dipping below the 100,000-square-meter benchmark for the first time in three weeks. The area of new residential properties sold, excluding government-subsidized affordable housing, fell 21.5 percent to around 99,000 square meters in the seven days to Sunday, Shanghai Centaline Property Consultants Co said in their weekly report yesterday.“For the first time in three weeks, weekly transaction volume fell below the 100,000-square-meter threshold, with several remote districts recording significant drops in sales,” Lu Wenxi, Centaline’s senior research manager said.“Moreover, the local market was plagued again by zero new supply, indicating a temporary retreat in sentiment among real estate developers.”Across the city, the Pudong New Area led with weekly new home transactions of 16,000 square meters, a weekly surge of 54.9 percent. Songjiang saw its seven-day volume narrowly pass 10,000 square meters, a week-over-week drop of nearly 30 percent.Outlying Jiading District, which used to be one of the most popular among home-seekers, failed to reach the 10,000-square-meter threshold, with volume halving from a week earlier.Citywide, new homes sold for an average 58,139 yuan (US$8,642) per square meter, a week-on-week increase of 7.2 percent, Centaline said.Six of the top 10 developments cost more than an average 80,000 yuan per square meter — including one asking more than 100,000 yuan per square meter.Outperforming all was a residential development in Sanlin in Pudong which sold 4,402 square meters, or 50 units, for an average price of 87,362 yuan per square meter.It was most closely trailed by a project in Baoshan District, where 4,113 square meters, or 37 new homes, sold for 55,609 yuan per square meter on average, Centaline said.On the supply side, not a single unit of new home space was released in the city last week, according to the data compiled by Centaline.Developers are holding back for a while after building up momentum over the past few weeks, the company said.
US chipmaker Nvidia Corp said yesterday it would buy Israeli chip designer Mellanox Technologies Ltd for US$6.8 billion, beating rival Intel Corp in a deal that would help the company boost its data center business.
The all-cash offer of US$125 per share represents a premium of 14 percent to Mellanox’s Friday close.
Shares of Mellanox rose 8.7 percent and Nvidia shares rose about 1 percent in premarket trading. The deal follows a competitive bidding process, which according to sources familiar with the matter included rival chipmakers such as Intel. CNBC reported in November that Xilinx Inc was also part of the process.
Intel declined to comment on whether the company had bid for Mellanox, while Xilinx did not immediately respond to a request for comment.
Mellanox, based in Israel and the United States, makes chips and other hardware for data center servers that power cloud computing. The company had a market capitalization of about US$5.9 billion at the end of trading on Friday.
Bernstein analyst Stacy Rasgon said Nvidia has been pushing more into networking and connectivity with its own tailored solutions and Mellanox would bring further expertise along these lines.
“But going out and buying an asset right now, immediately after the recent spate of guide downs may raise a few eyebrows,” said Rasgon.
“It will probably spark questions as to whether Nvidia sees anything changing regarding the growth trajectory of their core data center business.”
Nvidia cut its fourth-quarter revenue estimate by US$500 million in January because of weak demand for its gaming chips in China and lower-than-expected data center sales.
Data center revenue accounts for nearly a third of Nvidia’s sales.
CHINA’S draft foreign investment law has been well received by foreign investors, who believe it will further improve the country’s business environment.
A new draft of the law was submitted to China’s national legislative session for a third reading last week, and has been deliberated by lawmakers and discussed by political advisers over the past few days.
The draft aims to improve the transparency of foreign investment policies and ensures that foreign-invested enterprises participate in market competition on an equal basis.
Stephan Kothrade, Asia-Pacific president of German chemicals giant BASF, said the company welcomes the draft law, with the belief that it will help effectively address issues foreign investors face in China.
Harley Seyedin, president of the American Chamber of Commerce in South China, said: “For foreign companies in China, I think everyone is waiting for the draft law to be passed, as the law will create a level playing field where everyone can participate.”
With unified provisions for the entry, promotion, protection and management of foreign investment, the law is “a new and fundamental law” for China’s foreign investment and an innovative improvement of China’s foreign investment legal system.
The draft stresses more investment promotion and protection than the three existing laws, a positive signal for foreign firms in China, said Ma Zheng, vice president of the China subsidiary of the agricultural commodities trader Cargill.
Ma believes the law would provide stronger legal guarantees for foreign investors and companies to safeguard their interests. “It’s going to make China’s business environment more open, equitable and transparent for foreign firms,” he said.
By the end of 2018, about 960,000 foreign-invested enterprises had been set up in China, with the accumulated foreign direct investment exceeding US$2.1 trillion.
China advanced to a global ranking of 46 in terms of ease of doing business last year, up from 78 in 2017, according to a World Bank Group report released last year.
“This shows the constant improvement in our business environment, and greater progress might be made this year,” said He Lifeng, head of the National Development and Reform Commission.
The new law will boost foreign investors’ confidence in China since their rights and interests will be legally protected, said Cai Hua, a legislator and director of Wisely Law Office in Tianjin.
“A country with a relatively complete legal system will be an ideal destination for foreign investment,” Cai said.
Adam Dunnett, secretary-general of the EU Chamber of Commerce in China, said: “It will give more people confidence in China. If you’re a foreign investor, and you’re going to read a law about China, probably the first one you’re going to read is the foreign investment law.”
Chinese stocks posted a major rebound yesterday, with Shanghai shares climbing above the key 3,000-point level again, retrieving part of Friday’s losses which were the largest setback so far this year.
The Shanghai Composite Index rose 1.92 percent to close at 3,026.99 points amid a rally across various sectors. The smaller Shenzhen Component Index rose 3.64 percent to 9,704.33 points, while the ChiNext Index, China’s Nasdaq-style board of growth enterprises, surged 4.43 percent to 1,727.8 points.
The total turnover on the Shanghai and Shenzhen bourses reached 944.46 billion yuan (US$140.4 billion), compared with some 1.18 trillion yuan on Friday, a day which saw a dive of 4.4 percent in the Shanghai market and a tumble of 3.25 percent in the Shenzhen bourse.
Extra-high voltage power grids and smart grid shares, among others, were the biggest gainers, mainly boosted by a State Grid teleconference held last week that vowed to upgrade the country’s power network in phases. In contrast, financial shares posted rather minor increases.
The year 2018 has proven to be yet another fertile period for GlaxoSmithKline, one of the world’s leading healthcare companies. With its ambition to help people do more, feel better and live longer, GSK saw its revenue shoot to 30.8 billion pounds (US$41 billion) last year. The company also took big steps to significantly strengthen its consumer healthcare business by announcing an agreement with Pfizer Inc to combine their consumer health businesses into a new world-leading joint venture.
Filippo Lanzi, regional head of Asia Pacific, GSK Consumer Healthcare, talks about the company’s regional strategy for consumer healthcare, which has played a vital role in driving the group’s sustainable growth. And for China, Lanzi has strong confidence and defines the market as the top priority for GSK Consumer Healthcare.
Q: Can you give us an update on the business performance of GSK Consumer Healthcare globally and in the Asia Pacific region?
A: Our group made a significant improvement in the top-line operating margin, earnings per share and cash flow last year. The consumer healthcare sector made an important contribution to the overall growth.
Q: How does GSK Consumer Healthcare position China in its global business landscape?
A: China is a top priority for the entire consumer healthcare business. We have defined China as a growth engine for the Asia-Pacific region and beyond. Being a growth engine means higher expectations about our performance in China. It needs the right resource allocations, investment and focus. For China, we have three priorities: portfolio leverage, commercial excellence and digital acceleration.
Q: Can you briefly describe your Chinese portfolio?
A: We have been building trusted brands for Chinese consumers in five categories and regional strengths: oral health, pain relief, respiratory care, skin health and digestive health.
Among the many brands, Sensodyne and Voltaren are of great importance. Oral health brand Sensodyne has seen double-digit sales growth globally for the last decade. In China where more than 60 percent of the population suffer from toothache because of sensitivity, only 20 percent are aware of the problem and even less actually treat it. This shows the opportunities and triggers companies like ours to offer the right solution. So we make Sensodyne a priority in China. Voltaren is in the pain relief category to help people manage pain properly.
So these iconic brands help GSK come up with the right solutions to meet consumer needs and propel our growth in the Chinese market.
Q: What strategies do you have for China?
A: When you look at China, you can find a growing middle class. They are rapidly increasingly aware of healthcare. What’s more special is their interaction with brands. They are very sophisticated in accessing information, giving feedback through digital channels and blog celebrities. So if you really want them to make the purchase, you have to offer meaningful and consistent solutions through trusted brands. This comes to how we interact with consumers in China. We have made strong plans to be relevant and active in the space of digitalization.
I believe one strength of GSK is the fact that we are a science-led company. Our brands and products are supported by science and are distinctive assets that can have a decisive impact in relieving people from the problem of diseases. Second, is our brand portfolio. We have brands that are trusted and have long-lasting presences in China, as we have been working in China for more than 30 years. And thirdly, it is about people. Our people are our priority.
Investing in the right talents, nourishing talents from within and elevating within the organization are definitely something distinctive to being successful.
Q: What’s your opinion about the government’s “Healthy China 2030” blueprint, the national strategy to improve the health of the Chinese people?
A: The blueprint is a milestone and its principle strongly aligns with what we value at GSK. The declaration makes the health of each citizen a precondition for future economic and social development. Our purpose “to help people do more, feel better, live longer” is consistent to the plan.
I really believe that there’s a big opportunity to increase the level of healthcare education of people; raising the level of awareness about what can be done to manage some diseases. I think the expertise of our company and the legacy of our trusted brands can really help people understand how to manage proactively.
It’s also about prevention. The more educated consumers are, the more they know how to take personal initiative to proactively manage their health. This is the field I believe is well-aligned with our strategy and our portfolio.
Ultimately, our goal is to always listen to our consumers’ needs and put them at the center of whatever we do. We are excited to work with the Chinese government to support its blueprint.
New bank loans in China fell sharply in February from a record the previous month, but the drop was likely due to seasonal factors, while policy-makers continue to press lenders to help cash-strapped companies.Analysts say China needs to revive weak credit growth to help head off an economic slowdown this year, but investors are worried about a further jump in corporate debt and the risk to banks as they relax their lending standards.Chinese banks made 885.8 billion yuan (US$131.79 billion) in net new yuan loans in February, according to data released by the People’s Bank of China yesterday.That was down sharply from a record 3.23 trillion yuan in January, when several other key credit gauges also picked up modestly in response to the central bank’s policy easing.But February’s tally was still 5.5 percent higher than the 839.3 billion yuan a year earlier.Analysts had predicted new yuan loans of 975 billion yuan in February.A pull-back in February’s tally had been widely expected as Chinese banks tend to front-load loans at the beginning of the year to get higher-quality customers and win market share.Broad M2 money supply grew 8.0 percent in February from a year earlier, missing forecasts, the central bank data showed. Analysts had expected an 8.4 percent rise in M2 — unchanged from January.Outstanding yuan loans grew 13.4 percent from a year earlier, matching expectations and unchanged from January’s rise.China’s central bank is widely expected to ease policy further this year to spur lending and lower borrowing costs, especially for small and private firms vital for growth and job creation.But policy-makers have repeatedly vowed not to open the credit floodgates in an economy already saddled with piles of debt — a legacy of massive stimulus during the global financial crisis in 2008-09 and subsequent downturns.Corporate bond defaults hit a record last year, while banks’ non-performing loan ratio hit a 10-year high.Premier Li Keqiang said on Tuesday that China will step up targeted cuts in the reserve requirement ratio for smaller and medium-sized banks with an aim to boost lending to small companies by large banks by more than 30 percent.He also said monetary policy would be “neither too tight nor too loose.” Li also pledged to push for market-based reforms to lower real interest rates.The central bank has already cut RRR — the amount that banks need to set aside as reserves — five times over the past year, most recently in January. Further cuts are widely expected.Growth of outstanding total social financing, a broad measure of credit and liquidity in the economy, slowed to 10.1 percent in February from January’s 10.4 percent, versus a record low of 9.8 percent in December.TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.In February, TSF fell to 703 billion yuan from 4.64 trillion yuan in January.Analysts note there is a time lag before a jump in lending will translate into growth, suggesting business conditions may get worse before they get better.
China reported milder inflation for February, with inflation at its lowest since January 2018, leaving ample room for authorities to adjust macroeconomic-control policies.The Consumer Price Index rose 1.5 percent year on year in February, compared with 1.7 percent growth in January, data from the National Bureau of Statistics released on Saturday showed.“The lower year-on-year CPI was largely due to a high comparison base in February last year, when CPI stood at 2.9 percent,” said Deng Haiqing, chief economist at JZ Securities, adding that February’s CPI is likely to be the lowest monthly reading this year.Saturday’s data also shows Chinese consumers are upgrading their consumption habits as the CPI in service sectors such as education, entertainment and health care all rose over 2 percent year on year, said Xu Guoxiang, a professor at Shanghai University of Finance and Economics.On a month-on-month basis, the CPI last month rose 1 percent from January and saw expansion for three months in a row, which exceeded market expectations.Due to strong demand during the Spring Festival holiday as well as rainy and snowy weather in some parts of the country, the prices of fresh vegetables, fruits and aquatic products saw significant growth last month, jumping 15.7 percent, 5.4 percent and 4 percent, respectively, from January. They contributed 0.58 percentage points to the month-on-month CPI growth.Pork, mutton and beef prices also gained, rising 0.3 percent, 1.6 percent and 0.6 percent, respectively, from one month earlier, while egg prices decreased 5.3 percent month on month due to abundant supply.Travel demand during the Spring Festival and the winter vacation also pushed the prices of tour agency services, plane tickets, hotel accommodation and movie tickets higher, according to the NBS.Gasoline and diesel prices rose 3.6 percent and 3.9 percent, respectively, month on month, and costs for vehicle repair and maintenance jumped 5.1 percent.Analysts said the CPI is expected to rebound to above 2 percent in March year on year, due to a relatively high figure last year.China aims to keep CPI around 3 percent in 2019.The Producer Price Index, which measures costs of goods at the factory gate, edged up 0.1 percent year on year in February, unchanged from January.“The PPI reflects that China’s pro-growth measures have taken effect, and the confidence of enterprises is recovering,” said Zhang Liqun, a researcher with the Development Research Center of the State Council, China’s Cabinet.
VICE Minister of Commerce Wang Shouwen said on Saturday that he sees “hope” in the prospect of China-US economic and trade consultations.
“Teams from both countries are trying their best to implement the consensus reached by the two countries’ heads of state,” said Wang, also deputy China international trade representative.
The two teams have had three rounds of consultations over more than three months, he said.
Reaching a mutually beneficial and win-win agreement conforms to the interests of both countries and the world’s expectation, Wang said.
CHINA will take a string of measures to maintain stable trade growth in 2019, the country’s commerce minister said on Saturday.
The Ministry of Commerce will implement a raft of trade facilitation policies and measures in export credit insurance, financing and others to reduce burdens, and improve efficiency for foreign trade companies, Minister of Commerce Zhong Shan told a press conference on the sidelines of the annual legislative session.
Efforts will also be stepped up in improving the business environment to shore up enterprises’ confidence, Zhong added.
China will promote international cooperation via the Belt and Road Initiative and explore emerging trade markets while building on traditional ones, he said.
“China’s trade is huge in scale, but not competitive enough,” Zhong said, adding that the ministry will encourage exports of high-tech, high-quality and high-value-added products.
Imports will be expanded in scale and optimized in structure to meet domestic demands, he said.
The ministry will support enterprises’ innovation in technologies, systems and management to boost market competitiveness, and encourage development of new trade businesses and models, Zhong added.
THE second China International Import Expo will feature larger exhibition area and will be attended by more countries and enterprises, Minister of Commerce Zhong Shan said.
The booth area will cover a planned 330,000 square meters, Zhong said. The first CIIE had an exhibition area of 300,000 square meters.
The event will also showcase more new products, technologies and services, he said, adding that booths in sectors like health care have already been fully booked.
The second CIIE will also offer more business opportunities and see more deals reached, Zhong said.
The second Hongqiao International Economic and Trade Forum will be held during the CIIE, the minister said.
A total of 172 countries, regions and international organizations and more than 3,600 enterprises participated in the first CIIE, which was held from November 5 to 10 in Shanghai. It was the world’s first import-themed national-level expo.
Deals for intended one-year purchases of goods and services worth a total of US$57.83 billion were reached at the first CIIE.
CHINA and the United States discussed exchange rates and reached consensus on many key, important issues in the latest round of economic and trade talks, Yi Gang said yesterday.
The two parties discussed on ways to respect the autonomy of each other’s monetary authorities in determining the monetary policy, said the governor of the People’s Bank of China.
The discussion also involved mutual adherence to the market-decided exchange rate mechanism, honoring the commitments made at previous G20 summits such as choosing not to adopt competitive depreciation, not to use exchange rates for competition purpose, and maintaining close communication on foreign exchange markets, Yi said.
They discussed the issue that both sides should commit to disclosing data in accordance with the statistics transparency standard of the International Monetary Fund, Yi said.
He stressed that China will never use exchange rates for competition purpose, nor apply them to boost exports or use them as tools of trade frictions.
With the continuous improvement of the Chinese socialist market economy, China’s exchange rates are becoming increasingly market-oriented, Yi added.
CHINA will boost the role of financial technology in serving the real economy and forestalling financial risks, deputy governor of the central bank said yesterday.
Fintech is expected to help easing financial difficulties and lowering costs for private enterprises and small and micro-sized businesses, Fan Yifei, deputy governor of the People’s Bank of China, told a news conference on the sidelines of the annual legislative session.
Technologies like neural network can help address issues including information asymmetry and imprecise risk identification, he said, adding that the country will promote the construction of top-level information infrastructure and make financial regulation more technology-intensive.
The country has launched pilot programs for fintech application in 10 provincial-level regions, including Beijing, Shanghai and Guangdong, in late 2018, he said.
CHINA will continue to adopt a prudent monetary policy that will be eased or tightened to the right degree, the country’s central bank governor said yesterday.
“Although we no longer use the term ‘neutral,’ the essence of our prudent monetary policy has not changed,” Yi Gang, head of the People’s Bank of China, told a news conference on the sidelines of the annual legislative session.
The policy will stress countercyclical adjustment, and mean that the increases in M2 money supply and aggregate financing should be in keeping with nominal GDP growth, Yi said.
It will also entail greater support to small and micro-sized enterprises and private businesses, he added.
China’s monetary policy, mainly devised to fit the domestic economic situation, will also take into account global factors and China’s position in the global economic system as well as the export-oriented sectors, Yi said.
He also said there is still some room for lowering the country’s required reserve ratio.
China’s overall reserve ratio, or required reserve ratio plus excess reserve ratio, now stands at roughly 12 percent, “a similar level as some developed countries,” Yi said. In the United States and Europe, the overall level is also around 12 percent, while that in Japan is more than 20 percent, he said.
Since the beginning of 2018, China has lowered the reserve requirement ratio by a total of 3.5 percentage points in five cuts, he said.
For a developing country, it is “suitable and necessary to maintain a certain level of required reserve ratio,” Yi said. “After our cuts, there is still some room for China to lower the ratio, but such room is much smaller than a few years ago.”
The governor added that the country will move toward the goal of a clear three-tiered framework for required reserve ratios, with large banks as the first tier, medium-sized ones as the second and small ones as the third.
China will reform and refine monetary and credit supply mechanisms, and employ as needed a combination of quantitative and pricing approaches, like required reserve ratios and interest rates, to guide financial institutions in increasing credit supply and bringing down the cost of borrowing.
CHINA has implemented most of the financial market reforms that were announced last year, central bank governor Yi Gang said.
“We believe the opening-up of China’s financial market is conducive to both China and the world,” Yi said.
He said the country will firmly advance the opening-up of the financial market in accordance with the schedule set at the annual conference of the Boao Forum for Asia last April.
A total of 11 financial opening-up policies were mentioned in the timetable, covering sectors including banking and insurance.
In November, China approved the application of a joint venture of American Express for setting up a bank card clearing and settlement institution, and allowed S&P Global Inc to enter its credit rating market in January.
Meanwhile, China will also push for wider opening-up of the bond market to overseas investors and create a sound market environment.
Over the past two years, China’s bond market has taken fast steps of opening-up, as the country improved policies to make it easier for overseas investors to issue panda bonds and invest in its bond market, said Pan Gongsheng, vice governor of the People’s Bank of China.
At present, overseas investors hold around 1.8 trillion yuan (US$268 billion) in China’s bond market, and the holdings rose nearly 600 billion yuan in 2018, Pan said.
However, bonds owned by them represent a little more than 2 percent of China’s total. “The ratio is not very high, and there is still huge potential in the future,” Pan said.
Overseas holdings rose significantly in the past two years, thanks partly to the Bond Connect program, a market access scheme launched in July 2017 that allows overseas investors to invest in the Chinese mainland’s interbank bond market using financial institutions on the mainland and in Hong Kong.
China announced in November 2018 that overseas institutions investing in its bond market would be exempted from corporate and value-added taxes on their bond interest earnings for a period of three years.