Ford revealed details of its long-awaited restructuring plan yesterday as it prepared for a future of electric and autonomous vehicles by parting ways with 7,000 white-collar workers worldwide, about 10 percent of its global salaried workforce.The major revamp, which had been underway since last year, will save about US$600 million per year by eliminating bureaucracy and increasing the number of workers reporting to each manager.In the US about 2,300 jobs will be cut through buyouts and layoffs, Ford said. About 1,500 have left voluntarily or with buyouts, while another 300 have already been laid off. About 500 workers will be let go starting this week, largely in and around the company’s headquarters in Dearborn, Michigan, just outside Detroit. All will get severance packages.The layoffs are coming across a broad swath of the company including engineering, product development, marketing, information technology, logistics, finance and other areas. But the company also said it is hiring in some critical areas including those developing software and dealing with self-driving and electric vehicles.In a memo to employees yesterday, CEO Jim Hackett said the fourth and final wave of the restructuring was to start yesterday, with the majority of US cuts being finished by May 24.“To succeed in our competitive industry and position Ford to win in a fast-charging future, we must reduce bureaucracy, empower managers, speed decision making and focus on the most valuable work, and cost cuts,” Hackett wrote.A shift to electricIt’s the second set of layoffs recently for Detroit-area automakers, even though the companies are making healthy profits. Sales in the US, where the automakers get most of their revenue, have fallen slightly but still are strong.In November, General Motors announced it would shed up to 14,000 workers as it cut expenses to prepare for a shift to electric and autonomous vehicles. The layoffs included the closure of five factories in the US and Canada and cuts of another 8,000 white-collar workers worldwide. About 6,000 blue-collar positions were cut, but most of the laid-off factory workers in the US will be placed at other plants mainly that build trucks and SUVs.Both companies have said the cuts are needed because they face huge capital expenditures to update current vehicles and develop them for the future.At GM, the cuts brought withering criticism from US President Donald Trump and Congress, especially the closing of a small-car factory in Lordstown, Ohio. Trump campaigned on bringing factory jobs back to the industrial Midwest. GM has since announced a possible deal to sell the Lordstown plant to a startup electric vehicle maker but it hasn’t been finalized.Ford’s white-collar employees had been fearful since last July when the company said the restructuring would cost US$7 billion in cash and hit pretax earnings by US$11 billion over the next three to five years.
China stocks rebounded strongly yesterday with robust gains in the rare-earth sector.The benchmark Shanghai Composite Index surged 1.23 percent to close at 2,905.97 points. The smaller Shenzhen Component Index soared 1.92 percent to 9,087.52 points while the blue-chip CSI300 index ended 1.35 percent higher at 3,666.78 points.Turnover on the two major bourses expanded from the previous session to add up to 462.73 billion yuan (US$66.98 billion).Wind Information’s sub-indexes for all industry sectors posted rises.Stock prices of rare-earth-related firms listed on the A-share market skyrocketed after reports that China has extended the ban on imports of medium-to-heavy rare earth materials from Myanmar, which may lead to a sharp increase in the price of rare earth. Trade tension between China and the US was also a factor that lifted prices.Shenghe Resources Holding Co, China Minmetals Rare Earth Co, Rising Nonferrous Metals Share Co and China Northern Rare Earth (Group) High-Tech Co all surged by the daily limit of 10 percent.Rare earth materials are used in many industries including the glass industry and electronics and can be found in a variety of devices such as mobile phones, windmills and hybrid vehicles.
Hang Seng China has just issued negotiable certificates of deposit (NCD) with a total value of 1.83 billion yuan (US$265 million), allowing foreign institutional investors to invest directly in the primary NCD market through Bond Connect.The bank is the first overseas bank in China to issue such an instrument and it offered the one-year NCD at interest rate of 3.37 percent to both domestic and overseas institutional investors.Negotiable certificates of deposit are fixed deposit receipts that can be sold in a secondary market and large institutions are the most common buyers.To date, eight institutions have made the subscription, including commercial banks, overseas branches of domestic commercial lenders, major state-owned banks and domestic commercial banks, as well as foreign banks and securities companies in China.Ryan Song, vice chairman and chief executive of Hang Seng’s China business, said that direct NCD issuance to foreign institutional investors through Bond Connect reflects further opening up the financial sector.
An official Internet radio and streaming platform went on air yesterday, covering the latest developments in Yangtze River Delta integration.Head of Shanghai Development and Reform Commission Ma Chunlei, who is also director of the work office for regional collaboration of the Yangtze River Delta region, called for the leverage of technological progress and achievements of the 5G era for the convergence of multiple media formats.An integrated media platform which was also set up today will pull relevant news stories from official publications in the region, which includes Shanghai and neighboring Anhui, Jiangsu and Zhejiang provinces.The integrated development of the delta region was declared a national strategy by President Xi Jinping in November.Zhang Haitao, director of the China Alliance of Radio, Film and Television, said the closer collaboration of media in the region would support the national strategy and help businesses and academics to find the latest policy and guidelines.A forum at the 5th Shanghai Radio Festival discussed how the media could better collaborate under the regional blueprint.Wang Haibin, general manager of Radio Shanghai’s new media affiliate Ajmide, said the new platform would serve both traditional and new media in the region and set up a new mechanism for future media partnerships.
China’s en-bloc real estate investment market was off to a great start in 2019 with an extremely robust appetite for office buildings, global property consultancy CBRE said in a report yesterday.Nationwide, more than 53 billion yuan (US$7.67 billion) of major property deals were concluded between January and March, the highest Q1 figure since 2005.The transaction value of offices accounted for 47 percent of the total, an increase of 21 percentage points from the same period a year earlier. That translated to over 25 billion yuan, also the best Q1 performance since 2005.“This was a clear demonstration of the long-term optimism held by investors toward China’s resilient economic growth,” said Sam Xie, head of research at CBRE China. “At the same time, it reflected investors’ more balanced appetite for risks.”According to the latest investment sentiment survey conducted by CBRE, the Chinese mainland has replaced Australia and Japan for the first time in 2019 as the No. 1 destination for cross border commercial real estate investment in the Asia-Pacific, with Shanghai ranking top on investors’ radar.As for offices, CBRE suggests that attention should be paid mainly to those in core locations in first-tier cities particularly Guangzhou, some selected second-tier cities such as Nanjing and Hangzhou, as well as buildings in emerging areas and business parks in gateway cities primarily due to the ongoing trend of decentralization among corporate tenants for cost reduction purposes.
THE United States has temporarily eased trade restrictions on Huawei to minimize disruption for its customers, a move the founder of the world’s largest telecoms equipment maker said meant little because it had already prepared for US action.
The US commerce department blocked Huawei Technologies from buying US goods last week, a major escalation in the trade war between the world’s two top economies.
On Monday it issued a 90-day temporary license loosening restrictions on business deals with the Chinese telecommunications giant, a move intended to give telecom operators that rely on Huawei time to make other arrangements.
Huawei is still prohibited from buying American-made hardware and software to make new products without further, hard-to-obtain licenses.
Huawei founder Ren Zhengfei told Chinese media yesterday that the reprieve bore little meaning for the company as it had been making preparations for such a scenario.
“The US government’s actions at the moment underestimate our capabilities,” Ren said in an interview with China Central Television.
Ren said what is most important for Huawei to do is to do its own thing well. “We cannot control what the US government will do.”
Huawei maintains mass production capacities for specific key components, including chips, and the US ban will not result in negative business growth, Ren said.
Huawei posted 39 percent year-on-year revenue growth in the first quarter of the year. Entering the second quarter, the growth has slowed to 25 percent in April alone.
Ren said Huawei had recently received widespread global support. Huawei never wants to “walk alone” in the global markets, but has made good preparations for any extreme circumstances, he said.
Ren reiterating that the restrictions will not hurt Huawei’s prospects and that no other company will be able to catch up with Huawei in 5G technology in the next two to three years.
Huawei should not be restricted just because of its leading technology position, said Ren.
“Our work is to benefit the whole of humankind,” he said, adding that Huawei’s 5G equipment would greatly reduce the cost of global telecom networks construction.
He noted, however, that it would not reject the US supply chain, citing Huawei’s announced purchase of 50 million chips from Qualcomm in 2018.
“As long as the US government allows US companies to export the components, Huawei will continue to buy while sticking to its own research and development,” he said.
Ren said he appreciated the support of a large number of US components suppliers over the years, and they were also lobbying for the easing of US government-imposed restrictions.
He said Huawei was also in talks with companies like Google for potential remedy solutions, he said.
Ren said Huawei was at odds with the US government, not US firms, and in a comment that trended on Chinese social media, he praised Apple Inc’s iPhones, saying he gifted the American firm’s devices to family members.
“Apple has a good business ecosystem ... We cannot think narrow-mindedly that loving Huawei equals loving its phones.”
US firms could lose up to US$56.3 billion in export sales over 5 years from stringent export controls on technologies involving Huawei or otherwise, the Information Technology & Innovation Foundation said in a report. Missed opportunities threatened as many as 74,000 jobs, the foundation said.
THE tough sanctions imposed on Huawei last week by US President Donald Trump could deal a blow to many US firms that make up the Chinese tech giant’s supply chain.
American firms last year sold an estimated US$11 billion worth of components to Huawei.
Roger Kay, founder and analyst at Endpoint Technologies Associates, said the ban is likely to accelerate efforts by Huawei and other Chinese firms to develop their own sources of microprocessors and other components.
“The longer-term effect is that Huawei and other Chinese companies turn away more sharply from American suppliers,” Kay said.
Avi Greengart, founder of the research firm Techsponential, said a ban on sales to Huawei could hit a wide range of large and small US firms including Corning, which makes the popular Gorilla Glass for smartphones, and Dolby, a producer of video and audio software for handsets.
“When you think about all the software and hardware components you get a pretty big list,” Greengart said.
THE OECD yesterday cut its forecast for the world economy, urging governments to resolve their trade disputes as the latest flare-up in the US-China trade war threatens to crimp global growth.
“Governments must act urgently to reinvigorate growth that benefits all,” the Organization for Economic Cooperation and Development said as it pared back its forecast for global growth to 3.2 percent this year from 3.3 percent earlier.
“Resolve trade disputes through increased international cooperation while fixing the international rules-based system,” said the OECD, a Paris-based forum that advises the world’s advanced economy.
“Invest in infrastructure, digital transformation and skills to meet tomorrow’s challenges. In the euro area, combine structural with fiscal policies to stimulate activity.”
The OECD’s updated forecasts did not take directly into account the latest flare-up in the long-running trade war between the United States and China, “insofar that there is still a great deal of uncertainty about the length of time (tariffs) will remain in place and the future evolution of the trade relationship between the two countries,” an OECD source said.
Nevertheless, the projections did “incorporate” the increased uncertainty generated by the trade tensions, the source said.
As both Washington and Beijing slap trade tariffs on each other’s goods, President Donald Trump has barred US companies from engaging in telecommunications trade with foreign companies said to threaten American national security.
US Internet giant Google, whose Android mobile operating system powers most of the world’s smartphones, then announced that it was beginning to cut ties with China’s Huawei, which Washington considers a national security threat.
OECD Secretary General Angel Gurria told a news conference it was imperative that Washington and Beijing bury their differences.
“There is an urgent need that we sit around a multilateral table and that we create the conditions that will allow trade to continue to underpin global growth and global well-being,” he said. “We have a lot of work to do, but if we do it together we will have a much better chance to succeed.”
The organization’s chief economist Laurence Boone said the “worst scenario possible” was that trade tensions would continue and snowball.
“A climate of uncertainty (was) detrimental to investment and for confidence” and could erode purchasing power, she argued.
While the OECD pared back its global growth forecast for the current year, it predicted a pick-up in activity to 3.4 percent in 2020. It notched up its forecast for US growth this year by 0.2 percentage points to 2.8 percent, but predicted a slowdown to 2.3 percent next year. Chinese growth was projected to slow to 6.2 percent this year and 6.0 percent next year.
CHINESE giant Huawei denounced what it called “US bullying” yesterday and warned Europeans against “complacent appeasement” of Washington’s move to block its access to markets and technology.
Abraham Liu, Huawei’s envoy in Brussels, played up what he said were his firm’s common interests with Europe and pledged to go the “extra mile” to ease EU security concerns over rolling out 5G technology.
“Now Huawei is becoming the victim of the bullying by the US administration,” Liu told the media. “This is not just an attack against Huawei. It is an attack on the liberal, rules-based order. This is dangerous.
“If we shut our eyes, what will be the likely consequences of such a complacent appeasement in the future?”
Liu stressed his company’s nearly 20-year presence in Europe, its employment of 12,200 people, most of them hired locally, and its key role in advancing European economic interests.
In the face of complex domestic and international situations, China has been deepening supply-side structural reform resolutely this year.The country’s progress in reform and opening-up and structural adjustment is further consolidating its economic and social stability, and promoting the ongoing shift of China’s economy toward high-quality development. To crack the problems of unbalanced and insufficient development, China has increased investment in the supply end to leverage the strong domestic market as a reform approach to stabilize demand.China in February launched a project to offer inclusive elderly care, with the central budget allocating 1.4 billion yuan (US$200 million) to boost the number of nursing beds for the elderly by 70,000, which stimulates both investment and consumption.“Strengthening areas of weakness both increases high-end supply and meets demands for consumption upgrade, so as to form a virtuous circle of the economy,” said Cong Liang, secretary general of the National Development and Reform Commission.Precise measuresIn the financial sector, reform measures are taken to lower risks and enhance the ability to better serve the real economy, with the central bank announcing a targeted cut in reserve requirement ratio (RRR) in its latest attempt of using structural tools to help cash-strained private and small businesses.About 1,000 county-level rural commercial banks will enjoy a favorable RRR, unleashing long-term capital of about 280 billion yuan, which will be used as loans to private, micro and small enterprises.A series of precise measures has created a better environment and channeled energies into stable economic performance. And the effect of supply-side structural reform continues to show.Corporate leverage continued to fall, as the asset-liability ratio of major industrial firms dropped to 57 percent at the end of March, down 0.2 percentage points from a year earlier.Meanwhile, enterprises are seeing reduced cost and improved profit. In March, industrial firms above the designated size reported an average cost of operating income per hundred yuan at 92.9 yuan, a 0.07-yuan decrease from a year ago, yet with year-on-year profit growth of 13.9 percent.It is clear that China’s economy is already shifting to high-quality development, said Christine Lagarde, head of the International Monetary Fund.As China has made headway in reducing overcapacity in the past few years, the steel sector now reports improved efficiency, creating valuable opportunities for enterprises to make great efforts in R&D, innovation and product upgrade.In the first quarter, China’s steel exports registered growth after falling for three consecutive years. “The mix of export products has shifted significantly toward high-end, as about 60 percent of steel exports are high-value plates and strips,” said Qu Xiuli, vice president of China Iron and Steel Industry Association.While the profound evolution of an industry reflects the far-reaching impact of supply-side structural reform, more inclusive tax cuts are offering more space to enterprises. After several years of implementation, China’s supply-side structural reform has ushered in an “upgraded version,” which is more accurate, effective and flexible.
Sentiment among new home buyers eased in Shanghai last week despite a jump in new supply.The area of new residential properties sold, excluding government-subsidized affordable housing, fell 13.1 percent to around 145,000 square meters in the seven days to Sunday, Shanghai Centaline Property Consultants Co said in its regular Monday report.Across the city, six districts managed to register more than 10,000 square meters in weekly transaction volume, providing support for the overall stability of the market. Outlying Qingpu, which had been the most sought-after area in the past few weeks, saw its sales plunge 34.1 percent to around 26,000 square meters. In the Pudong New Area, new housing sales dived 38.1 percent to some 13,000 square meters whilst in Fengxian and Songjiang, they both stayed above the 15,000-square-meter mark.Citywide, new homes sold for an average of 54,463 yuan (US$7,880) per square meter, a week-on-week decrease of 6.3 percent. “Eight of the top 10 projects in terms of transaction area cost more than 50,000 yuan per square meter with one of them selling for above 110,000 yuan per square meter,” said Lu Wenxi, Centaline’s senior research manager. “However, none managed to register seven-day sales of more than 100 units, evidence for a retreat in momentum.”A residential project in western Qingpu District with a price tag of 56,361 yuan per square meter sold 9,721 square meters or 85 units, for an average 56,361 yuan per square meter, outperforming all counterparts. It was immediately trailed by a development in Fengxian, which unloaded 8,046 square meters or 97 apartments, for an average price of 22,884 yuan per square meter, according to Centaline’s data.Meanwhile, on the supply side, about 194,000 square meters of new housing in five projects were released into the market, 65.7 percent more than last week, Centaline said.
China stocks edged down yesterday, dragged by the slump in the agricultural sectors.The benchmark Shanghai Composite Index dipped 0.41 percent to close at 2,870.6 points. The smaller Shenzhen Component Index also dropped 0.93 percent to 8,916.11 points and the blue-chip CSI300 index ended 0.85 percent lower at 3,617.79 points.The turnover on the two major bourses totaled 462.74 billion yuan (US$66.92 billion), shrinking sharply compared with the 573.72 billion yuan in the previous session.Stocks related to the anti-tariff concept led the decline, according to the Wind Information, among which shares of five relevant companies tumbled by the daily limit of 10 percent.Agricultural shares such as Southwest Securities Co, Yuan Longping High-tech Agriculture Co and Shandong Denghai Seeds Co all nosedived by the maximum 10 percent. Companies related to the pig industry posted sharp losses, with Dymatic Chemicals and Hunan New Wellfull Co both slumping by the 10 percent daily cap.
Chinese firms have a growing presence in Dubai’s free trade zone, up 31 percent by last year, making China a central part of the zone’s growth strategy, a senior FTZ executive said in Shanghai yesterday.“We are particularly pleased with the growing number of Chinese businesses deciding to set up with us in Dubai,” said Feryal Ahmadi, chief operating officer at DMCC, the company which manages the FTZ.Ahmadi said DMCC had made a special effort to engage with the Chinese business community last year, a strategically important growth market, including hosting a series of live seminars on WeChat to explain how to set up a company in the FTZ. The company has also opened a Mandarin website.“We expect to attract even more companies from China in 2019,” Ahmadi said, adding that Belt and Road Initiative had played an important role in its connection with Chinese firms.Altogether 1,868 new companies joined DMCC in 2018, a 12 percent increase, making it the world’s largest free trade zone for the fourth year.
CHINA’S commercial banks saw a net forex settlement deficit of 73.7 billion yuan (US$11 billion) in April, the country’s forex regulator said yesterday.
This widened from a deficit of 41.2 billion yuan reported in March, but was smaller than a deficit of 101.3 billion yuan in February, according to the State Administration of Foreign Exchange.
China’s commercial banks saw a net forex settlement surplus of 81.8 billion yuan in January. Forex purchases by banks stood at 1.02 trillion yuan last month, while sales reached 1.09 trillion yuan.
China reported a forex settlement deficit of 134.4 billion yuan during the first four months, widening from a deficit of 60.7 billion yuan during the first quarter.
SAFE spokesperson Wang Chunying said last month that she saw increased stability in the country’s forex market. The foundation for a stable forex market remains sound, because of factors such as stable market sentiment, great resilience and potential of the economy, Wang said.
Snack foods. We love ‘em! They are food for comfort, for parties or for staving off hunger pangs at work.But the tastes we love aren’t always shared by snack foodies in other countries, so food and drink producers are striving to adapt to local tastes in the battle for survival in the China market. Take Oreo. It’s the best-selling US cookie, with the traditional two chocolate wafers sandwiching a wide array of sweet cream fillings. But in China, sweet isn’t always sweet with consumers. After consumer polling and internal tests, the Oreo producer Mondelez last year broke the cookie’s stereotype of sweet fillings by introducing wasabi and hot chicken wing flavors. Many Chinese, particularly the young, prefer spicy, salty flavors. Too much sugar nowadays is being vilified as a health risk. Shanghai office worker Aurora Ren said she has tasted one of the new Oreo versions and was surprised at how well such an unconventional taste seem to work.“I only bought it out of curiosity,” she said. “After all, it’s really not an everyday food.”Food producers are keen to keep up with changing consumer tastes because China is such a large, lucrative market. Euromonitor predicts overall sales of packaged food in China will grow 4-5 percent annually in the next four years, reaching US$342 billion by 2023, but confectionery will see only 2 percent increases because of rising health concerns. Oreo’s new flavors and packaging have proven popular among fickle millennial consumers and also created social media buzz. Another brand leveraging flavors to consumer tastes is Lay’s potato chips. In China, its versions include lemon tea, hot and sour fish soup, and spicy hotpot flavorings. Nestle’s Kit-Kat, a wildly popular candy in Japan, has a whole range of flavors catering to the Japanese and perhaps wider Asian tastes, including adzuki bean, wasabi, green tea and grilled corn. Flavors that break the norm add playfulness to the consumer market, inviting not only tasting but also conversation that helps produce profile spread. “Many multinational companies are offering local flavors to target specific consumer groups and gain market share,” said Li Meng, deputy research director at research firm Mintel. “Chinese consumers, for example, have a special preference for matcha-flavored snacks because of their long heritage of tea drinking.” Online buzz is important in how well foods fare in the market space. The more unusual, the more the buzz. Salty flavors are a special preference of Asian consumers. According to Mintel data, salty snacks in the past year account for 11 percent of total new food snacks. Innovations, like mixing chocolate with saltier flavors are increasing. Sometimes new creations go beyond just concocting new flavors. They sometimes cross the boundary of a product category. Witness Shanghai-based Rio, which sells pre-mixed alcopop drinks. The company teamed up Shanghai-based pen and ink producer Hero to introduce an ink-themed cocktail. Hero helped Rio in a new package design, using elements of its iconic black-blue ink. There’s a saying in Chinese that someone who has “drunk some ink” is knowledgeable and talented. Tang Minhui, digital retail business director at Rio, said it’s also offering seasonal products, such as gift boxes of sakura-flavored drinks and snacks. Last year, Rio introduced alcopops with a floral-fragrance flavor, an idea borrowed from the Liushen floral water sold by Shanghai personal care giant Jahwa Group. Liushen contains several kinds of traditional herbal ingredients that are said to soothe insect bites. Some 5,000 packages of the fragrance water-flavored cocktail sold out on Tmall within just 15 minutes last June. Through the Liushen tie-up, Rio has successfully attracted new customers. As many as 92 percent of shoppers for the limited edition were first-time purchaser of Rio products, and the majority were aged between 18 and 25 years. Some analysts question whether such product gimmickry really benefits long-term branding strategy. “It’s increasingly difficult for consumer brands to grab shoppers’ attention because so many media channels are available, so they seek to appeal to social media users with weird and even bizarre tastes to create online buzz,” Coolio Yang, chief executive officer of Kantar’s Media Division in China, told Shanghai Daily. New offerings become hot topics and appeal to shoppers craving something new and unusual. But the fascination can wear off quickly as consumers move on to the next innovation.“Despite spectacular sales results in the short term, most hypes regarding cross-segment collaboration don’t really reflect the core spirit of the brand, nor give consumers a clear understanding of the brand’s positioning and how it relates to everyday life,” Yang explained. For the long term, he says brands need to dig deeper to discover how they can continue to resonate with contemporary lifestyles. Straying too far from core product lines can be a pitfall.So, it’s best to “stick to one’s knitting?” Perhaps. Local beverage brands, for example, might be best positioned to keep a loyal consumer base if they tie themselves to China’s long-time penchant for the culture of tea and traditional alcoholic drinks.
China has made remarkable progress in opening up its financial sector and will continue to expand opening-up of the sector, the central bank said.The country will adopt an approach of pre-establishment national treatment with a negative list and pursue coordinated progress in financial opening-up, the reform in exchange rate formation mechanism and the process of advancing capital account convertibility, the People’s Bank of China said in an article posted on its website.The country will also pay close attention to financial risk control and make sure that the country’s financial oversight and regulatory capabilities are in line with the level of opening-up, according to the statement.As the country enters a new era of development, further opening up its financial sector is a path the country must follow to integrate into the global economy, the central bank said. From a domestic perspective, as the development of the economy is transitioning from high-speed to high-quality, expanding financial opening-up will help build a diversified financial system, promote financial reform and better serve the real economy, it said.It noted the country’s opening-up of its financial sector had drawn a positive market response.As of the end of March, overseas investors bought a net of 1.77 trillion yuan (US$260.3 billion) of bonds at the country’s interbank bond market, up 31 percent from a year earlier, and held 5.4 trillion yuan of yuan-denominated financial assets, up 19 percent year on year, according to the central bank.
China’s housing regulator has alerted four Chinese cities over marked housing price rises in the past three months.Local governments of Foshan, Suzhou, Dalian and Nanning were urged by the Ministry of Housing and Urban-Rural Development to stabilize land and housing prices as well as market expectations. The ministry reiterated that “houses are for living in, not for speculation,” and called on the four cities to enhance market monitoring and analysis and address rising problems in a timely manner. New home prices rose 0.8 percent month on month in April in 31 second-tier cities and 0.5 percent in 35 third-tier cities.
China’s container transport for export purposes edged up for the week ending on Friday, according to the Shanghai Shipping Exchange. The average China Containerized Freight Index stood at 804.46, up 1.6 percent from a week earlier, the exchange said. The sub-index for the US East Coast route led the increase by a week-on-week growth of 6.3 percent, while that for the South America route led the fall by dropping 3.6 percent.
Ferrari will recall 2,071 imported vehicles in China due to faulty airbags, according to the country’s top quality watchdog. The recall, set on July 1, will involve a number of imported Ferraris manufactured between April 8, 2013 and November 28, 2017, the State Administration for Market Regulation said.
Shares of Chinese coffee startup Luckin Coffee surged about 20 percent in its US stock market debut on Friday.Listed on the Nasdaq Global Select Market, the Chinese coffee retailer commenced trading at US$25 per share after its initial public offering was priced at US$17 apiece.During the initial trading sessions, Luckin shares once surged over 47 percent at their high. Later, the whirlwind upswings gradually narrowed down to over 20 percent until the closing bell.Before the listing, the company upsized the IPO deal by increasing its American Depositary Shares, which brought it US$561 million before fees.Together with concurrent private placement to Louis Dreyfus Company BV, Luckin has raised approximately US$571 million in aggregate after fees to fuel its growth.Reinout Schakel, chief financial officer of the company, said that they decided to enlarge the IPO deal based on broad support across several wealth funds, long-only funds and hedge funds. As of March 31, Luckin, founded in 2017, has set up 2,370 stores in 28 cities in China within 18 months.Luckin’s rapid expansion is achieved thanks to a technology-driven, differentiated retail model built upon apps. “We’ve got very small stores. We can actually bring down the cost significantly compared to some of our competitors,” said Schakel. “What that then allows us to do is really provide a high-quality product for a very affordable price at a very convenient location,” he said.The company has placed its center of gravity on pick-up stores and with limited seating, the pick-up stores are located in areas with high demand for coffee, such as office buildings, commercial areas and university campuses.“We’re slightly different from traditional retailers. We first look at what is the demand. And then we supplement that with our store footprint by finding the right locations by using data,” said Schakel.Schakel said the company has been “very focused on” bringing down the cost of perks and would continue to capture the huge demand in the Chinese market by expanding its business going forward.
China’s central bank will maintain the basic stability of the yuan exchange rate within a reasonable and balanced range, according to comments posted on its website yesterday. Pan Gongsheng, deputy governor of the People’s Bank of China, told the PBOC-run Financial News in an interview that the central bank was confident in its ability to maintain stable operation of China’s foreign exchange market. The PBOC will also make the necessary counter-cyclical adjustments and strengthen macro-prudential management according to changes in the situation, as well as combating illegal and irregular behavior and safeguarding good order on the foreign exchange market, said Pan, who is also director of the State Administration of Foreign Exchange.
China’s import enterprises saw their tax burden significantly reduced last month as the country lowered value-added tax rates to further lighten the financial pressure of enterprises.BP Zhuhai Chemical company in south China’s Guangdong Province saw its VAT reduced by 14.02 million yuan (US$2.04 million) in April thanks to the tax reduction.After reducing VAT rates, the financial burden of the company was reduced and more funds can be invested in research and development, said Yu Guoding, a manager responsible for the company’s import and export businesses.Starting from April 1, taxpayers previously subject to the 16-percent VAT rate on their imported goods would enjoy a 13-percent VAT rate, while those who were subject to the 10-percent VAT rate would only need to pay 9 percent, according to the General Administration of Customs.Customs data showed more than 1,500 import enterprises in Zhuhai and Zhongshan, Guangdong Province, enjoyed lower VAT rates in April with their VAT reduction totaling 190 million yuan.In northeast China’s Liaoning Province, more than 4,000 enterprises benefited from lower VAT rates, with VAT reduction amounting to 958 million yuan last month.According to customs’ earlier estimates, the total VAT reduction in imports is expected to reach around 225 billion yuan (US$33.5 billion) this year, after the implementation of lower VAT rates on April 1.
Prices of both new and pre-occupied homes in cities across China continued to rise in April at a moderate pace.Average new home prices in China’s 70 major cities rose 0.6 percent in April, unchanged from the pace of growth in March, according to Reuters calculation of data released by the National Bureau of Statistics yesterday.On the whole, it logged the 48th straight month of price increases. Most of the 70 cities surveyed by the NBS still reported monthly price increases for new homes and the number was up to 67 from 65 in March, signalling to broaden strength in the market.On an annual basis, home prices rose 10.7 percent in April, picking up from a 10.6 percent gain in March.In the four first-tier cities on a month-over-month basis, new home prices climbed an average 0.6 percent last month, accelerating from 0.2 percent growth in March. Prices gained 0.5 percent, 0.3 percent, 1.1 percent and 0.4 percent, respectively, in Beijing, Shanghai, Guangzhou and Shenzhen.In the existing housing market, prices in the four cities advanced an average 0.4 percent, up 0.1 percentage point from March.Prices rose 0.6 percent, 0.5 percent and 1.1 percent in Beijing, Shanghai and Shenzhen, respectively, and shed 0.4 percent in Guangzhou, according to the bureau.In 31 second-tier cities, new home prices rose an average 0.8 percent last month, compared with 0.6 percent in March. Prices of preoccupied homes jumped 0.6 percent, easing from 1.2 percent growth in March.In even smaller third-tier cities, new home prices edged up to an average 0.5 percent from a month ago, easing by 0.2 percentage point from March. Prices of existing homes in the 35 cities increased 0.6 percent, compared with a 0.5 percent rise in March.Big gains in QinhuangdaoCountrywide, new home prices in Qinhuangdao, in northern Hebei Province, recorded the biggest month-over-month increase of 1.8 percent.On a year-on-year basis, prices of new homes in first- and second-tier cities both rose at a faster pace in April. They climbed 4.7 percent and 12.3 percent, respectively, up 0.5 percentage point and 0.1 percentage point from March. In third-tier cities, they gained 11.3 percent, compared with 11.2 percent growth in March.In the preoccupied residential market, prices climbed 0.8 percent, 8.3 percent and 8.4 percent in first-, second- and third-tier cities, respectively, compared with 0.5 percent, 8.2 percent and 8.4 percent growth registered a month earlier, the bureau said.Beijing has repeatedly called on local governments to take more responsibility in keeping the frothy market under control. Zhang Dawei, an analyst with property consultancy Centaline said the government is unlikely to allow unfettered gains in the property market.
Foreign direct investment into the Chinese mainland expanded 6.4 percent year on year to reach 305.24 billion yuan during January-April period, the Ministry of Commerce announced yesterday.In US dollar terms, FDI inflow grew 3.5 percent year on year to US$45.14 billion during the period, the MOC said.FDI in April alone reached 62.95 billion yuan (US$9 billion), up 6.3 percent year on year.Investment in high-tech industries rose 43.1 percent year on year and accounted for 28.1 percent of the total FDI, with the high-tech service sector attracting 52.48 billion yuan in overseas investment, up 73.4 percent.FDI into western China reached 21.16 billion yuan, rising 9.6 percent year on year.China’s pilot free trade zones saw FDI inflow up 11.8 percent year on year during January-April period, accounting for 11.9 percent of the total FDI.MOC data showed that FDI from the Republic of Korea and Germany both more than doubled from one year earlier.
Shanghai Mobile has started selecting people to participate in 5G trials, offering Internet connection up to 50 times faster than current mobile Internet access.The participants, the first in the country, will get a free 5G phone, SIM card and mobile data allowance and will give feedback on their experiences, according to China Mobile, the leading mobile carrier in the city with more than 25 million subscribers. China has not yet issued 5G licenses but 5G networks already cover major cities, including Shanghai.
Didi Chuxing has entered into the partnership with an electric vehicle subsidiary of the State Grid Corporation of China to expand the service network for new-energy vehicles. State Grid charging stations will be connected to Didi’s auto solutions platform and the two parties will explore ways to offer a better purchasing and after-sales experience for electric vehicle buyers. The deal was signed by Didi Chairman and CEO Cheng Wei and general manager of State Grid EV services Shen Jianxin on Wednesday.
Realme, a Chinese smartphone brand that targets overseas markets, is now introducing models at home. The company’s domestic debut will trigger a new battle in a fiercely competitive market, especially in the 1,000-to-2,000-yuan (US$145-290) price range, with Xiaomi and Huawei, according to industry insiders.
China stocks edged up as supportive policies were expected to prop up the country’s economy amid external uncertainties.The benchmark Shanghai Composite Index was up 0.58 percent to end at 2,955.71 points. The Shenzhen Component Index added 0.37 percent to close at 9,293.32 points, while the CSI300 index rose 0.45 percent to 3,743.96 points.Turnover on the two major bourses totaled 512.8 billion yuan (US$74.5 billion), compared with the 512.7 billion yuan in the previous trading session.Shares in industrial sectors posted more gains than declines while shares in the agriculture industry continued their strong performance.Shares in Beijing Jingyuntong Technology Co Ltd and Ningbo Yunsheng Co Ltd jumped by the daily cap of 10 percent. Meanwhile, shares of Huawei suppliers took a nosedive after the Trump administration hit the telecom giant with sanctions on Wednesday.
The EU’s powerful anti-trust authority yesterday fined five major banks, including Barclays and Citigroup, more than a billion euros for collusion in the massive foreign exchange currency market.The European Commission sanctioned Barclays, the Royal Bank of Scotland, Citigroup, JPMorgan and Japan’s MUFG Bank a total of 1.07 billion euros (US$1.2 billion) after finding that traders colluded to fix exchange rates using electronic chat rooms, a statement said.The commission said Swiss giant UBS received no fine as it revealed the collusion to the authorities.“These cartel decisions send a clear message that the commission will not tolerate collusive behavior in any sector of the financial markets,” said EU Competition Commissioner Margrethe Vestager.“The behavior of these banks undermined the integrity of the sector at the expense of the European economy and consumers,” she added.The decision involves two cases of forex manipulation, with the first known as “Essex Express ‘n the Jimmy” because all the traders (except Jimmy) lived in the county to the east of London, the commission said. The other one was called “Three-way Banana Split,” though the EU’s executive arm did not explain why.“Some of the traders created the chat rooms and then invited one another to join based on their trading activities and personal affinities, creating closed circles of trust,” the commission explained.The collusion took place between 2007 and 2013, the years of the financial crisis.
Europe’s listed companies are expected to generate 1.2 trillion euros (US1.35 trillion) in revenue from the United States this year, highlighting what’s at stake as global trade tensions grow and earnings and economic growth stall.Analysts and investors say that based on revenues, European companies are more vulnerable to a dispute than their competitors in the United States.US President Donald Trump is due to decide by Saturday whether to impose duties on car imports, potentially posing another significant threat to global growth and denting Europe’s prized auto sector.Washington’s renewed tensions with Beijing may distract Trump and delay a decision beyond the May 18 deadline, or he may crank up his protectionist push with a global trade war on two fronts.Last month, he also threatened to impose tariffs on hundreds of European goods, from cheese to ski suits, worth US$11 billion.The impact on Europe’s top firms could be profound — with slowing economic growth and some countries like Italy struggling with bulging budget deficits, the region may not be as resilient to a prolonged dispute as China has so far proven.In the past six months, the Chinese government has launched stimulus measures from tax cuts to boosting lending to shore up the world’s No. 2 economy as the trade spat rumbles on.“I’m much more concerned about trade for Europe than I am for China,” said Christophe Donay, head of asset allocation at Pictet Wealth Management.According to Europe’s top asset manager Amundi Asset Management, US sales average about 20 percent of MSCI Europe companies’ aggregate turnover, while European sales average about 14 percent of turnover for companies in MSCI’s US share index.Typically, Europe’s carmakers are considered particularly vulnerable to Trump’s protectionism.A 25 percent tariff could result in a 0.2-0.3 percentage points loss of export revenue and GDP for Germany, according to an analysis by Moody’s. The United States accounts for 13 percent of Germany’s car exports, the ratings agency has said.Measured by revenue, there’s a lot at stake for companies like Fiat Chrysler with US$45.3 billion in US revenues. But many, like Fiat, have their own US production plants, sheltering them slightly from any outright tariffs.Caroline Simmons, deputy head of the UK investment office of UBS Global Wealth Management, said she would expect the technology, energy and industrial sectors to be worst-hit by any further antagonism.Average European company exposure to the United States in those sectors ranges from 10 to 20 percent in terms of sales, compared with 33 percent for health care.UBS is underweight consumer discretionary in the euro zone, which includes autos, partly because of the trade tariffs.“The market is nervous about it and last year (the US-China spat) escalated more than people expected and the effect on the market was bigger than people had anticipated,” she said.Of pan-European STOXX 600 index companies, those in health care have the highest revenue exposure on average.An analysis by Refinitiv based on companies’ estimates of 2019 revenue shows they draw some 133.3 billion euros in revenue from the world’s No. 1 economy and top drug market.While health care has not been implicated in the tit-for-tat between Washington and Brussels so far, some investors worry about the potential fall-out from souring relations between the two economic powerhouses.“As these sectors are in normal times regarded as defensive, they may doubly disappoint if the US and Europe also engage in a tariff war,” said Ibra Wane, equity strategist at Amundi, in a note this week.The European health care index has risen 8 percent since the late December low, underperforming most other industries and lagging behind an 11 percent rise in the benchmark STOXX 600.Pharma and medical equipment companies from BTG to BB Biotech and Fresenius Medical Care are among the most exposed individual companies, with 67-90 percent of total sales derived from the US.Capital goods companies Ashtead and Ferguson are also high up on the list, with more than 80 percent of their sales made to the United States.
CHINA’S economic growth moderated in April but was stable over the first four months with steady production growth in the service sector, according to the National Bureau of Statistics.
The service production index grew 7.4 percent year on year in April, 0.2 percentage points slower than the previous month but 0.1 percentage point faster than the first two months. For the January-April period, the index rose 7.4 percent from the same period last year, unchanged from the figure in the first quarter.
In April, the information transmission, software and information technology services sector, and the leasing and business services industry grew by 25 percent and 8.1 percent, respectively, outpacing the national services production index by 17.6 and 0.7 percentage points.
Industrial production growth fell to 5.4 percent year on year in April compared with 8.5 percent in March, weaker than the market expectation of 6.5 percent, but up 0.1 percentage point from the January-February period.
“The fluctuation in the month-on-month growth rate of industrial production was mainly due to the Spring Festival holiday, the adjustment of value-added tax rate and the change of base figure in the same period,” said Jiang Yuan, a senior statistician at the bureau.
“However, from the point of view of the cumulative growth rate, the industrial production still ran steadily,” Jiang added.
For the first four months, the value-added industrial output of major enterprises rose by 6.2 percent from a year earlier, flat from the pace for the whole of 2018.
Nomura said the year-on-year fall in April was mainly driven by mining and manufacturing sectors, where industrial output growth dropped to 2.9 percent and 5.3 percent, respectively, from 4.6 percent and 9 percent in March. The figure in the utilities sector rose to 9.5 percent year on year in April from 7.7 percent in the previous month.
The high-tech manufacturing sectors jumped 11.2 percent last month from the same period last year, 5.8 percentage points faster than the overall figure for the industrial production of major enterprises.
Retail sales of consumer goods in April totaled 3,058.6 billion yuan (US$436.9 billion), up 7.2 percent year on year to post a 1.5 percentage points drop from the previous month.
“The decline was mainly affected by the Labor Day holiday. Excluding this factor, the consumer goods market will maintain steady growth in general,” said bureau statistician Zhang Min.
By major product, growth of auto sales remained sluggish with a 2.1 percent drop year on year in April, despite a rise from the 4.4 percent decline in March.
Sales of oil and oil products slumped to 0.1 percent from 7.1 percent, partly due to a recent moderation in year-on-year oil price inflation (Brent oil price inflation fell to negative 0.4 percent year on year in April from 0.4 percent in March), Nomura said.
Fixed asset investment growth slowed on weak manufacturing and infrastructure investment to 5.7 percent year on year last month, down from 6.4 percent in March, taking year-to-date growth down by 0.2 percentage points to 6.1 percent, unchanged from the January-February period but 0.2 percentage points faster than last year.
Investment in high-tech manufacturing and services increased 11.4 percent and 15.5 percent respectively, outpacing the headline FAI by 5.3 percentage points and 9.4 percentage points.
CHINA has the confidence and capacity to fend off any external risks and shocks, foreign ministry spokesperson Geng Shuang said at a press briefing yesterday, amid escalating China-US trade tensions.
The US trade protectionist measures may affect the Chinese economy to a certain extent, but it can totally be overcome, he said.
According to media reports, the US side has painted a gloomy picture regarding China’s economy, claiming China is “very eager” to strike a trade deal with the United States.
Rebutting US remarks as “groundless,” Geng said China’s economy has maintained steady growth with positive momentum, citing a 6.4 percent economic growth for the first quarter, which is faster than expected.
“It is worth mentioning that domestic demand has become the major engine driving China’s growth, with consumption accounting for 76.2 percent of the economic growth last year,” Geng added.
In a recent report on global economic prospects, the International Monetary Fund has upgraded its growth forecast for China, the only such one among major economies, according to the spokesperson.
Noting China is blessed with a complete system of industries, a rising capability in scientific and technological innovation, the largest middle-income group in the world, and a huge domestic market for consumption and investment, Geng said China is fully confident of its economy and will be resolutely promoting reform and opening up as well as high-quality development in accordance with its own timetable and road map.
In response to worries about global economic uncertainties incurred by a new round of tariff hikes, Geng said escalating trade tensions “serve no one’s interests,” and will “tie down the world economy as well.”
Geng pointed out that it is the United States which started the trade disputes, and also the first to impose additional tariffs on Chinese products. The US repeatedly applied maximum pressure on China, Geng said, noting that what China has done so far was a purely self-defense to safeguard its legitimate rights and interests as well as to uphold multilateralism and the free trade system.
On the US claim that its consumers will not pay for tariff hikes on Chinese products, the spokesperson said this is against common sense.
US soybean, corn, wheat and other agricultural organizations have voiced opposition to tariff hikes against imports from China in a joint statement, Geng said. He also cited a study by US economists, which indicates a loss of US$4.4 billion per month last year for US consumers and importers as a result of tariff increases against China.
Geng again urged the US to meet China halfway in achieving a mutually beneficial deal.
A LAB covering both artificial intelligence and the Internet of Things and founded by Microsoft Corp and Zhangjiang Group, opened in the Pudong New Area yesterday. The AI & IoT Insider Lab offers deep integration and innovative development of artificial intelligence and Internet of Things technology with manufacturing, retail, medical, financial, urban construction and other applications. It provides resources in technology support, innovation, training and market expansion. Global IoT business will exceed US$255 billion in 2022 and China will be responsible for nearly a quarter of it.
MERGERS and acquisitions in the health-care sector might not be as active as in previous years but smaller size consolidation might be the target for pharma and investment firms, according to a new report by Ernst & Young.
Life sciences mergers and acquisitions deals totaled US$198 billion in 2018, down about US$90 billion from the average level between 2014 and 2016.
Further consolidation in four areas — oncology, immunology and inflammation, cardiovascular disease, infectious disease — could mean more than US$200 billion worth of opportunities in future M&A deals.
Peter Behner, EY global life sciences transactions leader, estimates that consolidation of smaller and medium Chinese firms in the coming years, especially in novel treatment methods such as cell therapy, will allow them to compete with their global counterparts.
“Chinese startups’ innovative therapy and tailor-made treatment would be an attractive target for European and US companies to acquire in order to leverage local tech for global treatment,” Behner said in an interview.
Advances in gene technology may mean R&D will shift focus from mass-market products to tailor-made medicine, which requires better use of data, commented Pamela Spence, EY global health sciences and wellness industry leader.
The number of deals involving digital technologies made by major life sciences firms has been on a steady rise since 2014 as companies race to access the latest breakthroughs.
New home sales continued to pick up in China amid improving sentiment among buyers, according to figures released by the National Bureau of Statistics yesterday.Between January and April, about 3.4 trillion yuan (US$490 billion) worth of new homes, excluding government-subsidized affordable housing, were sold across the country, an increase of 10.6 percent from the same period a year ago.The area of new homes sold in the first four months totaled 368 million square meters, a growth of 0.4 percent from a year earlier. That, however, compares with an annual slip of 0.6 percent registered in the first quarter.New construction starts measured by floor area rose 15.5 percent in April from a year earlier, compared with an 18.1 percent gain in the preceding month, Reuters calculated based on NBS data.“With recovering momentum among real estate developers as well as generally improved liquidity in the market, more home seekers around the country decided not to sit on the sidelines any more amid an increase in new supply,” said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co.Property investment in China was resilient in April. Real estate investment is a key driver of growth in the world’s second-largest economy. China’s real estate investment, which mainly focuses on the residential sector but also includes commercial and office space, rose 12 percent in April from a year earlier, unchanged from the growth in March, according to Reuters calculation.For the first four months, property investment grew 11.9 percent on year, compared with a 10.3 percent gain in the same period a year earlier.Investment in residential property development, which represented 72.8 percent of total real estate investment, rose 16.8 percent year on year to 2.5 trillion yuan between January and April.Funds raised by China’s real estate developers in the first four months grew 8.9 percent from the same period a year earlier, a notable improvement from a 5.9 percent increase in the first three months.On the inventory side, newly built homes available for sale as of the end of April stood at 243 million square meters, down 14.7 percent from a year earlier. That compares with 247 million square meters recorded as of the end of March.China’s land market has recovered under looser credit conditions this year and the premiums developers pay for land rebounded sharply in the first quarter of 2019. That contrasts with a slew of failed land auctions in the second half of last year, which followed a government campaign to rein-in hot property prices.
Huawei Technologies yesterday launched AI database and storage products intended to “redefine” the future information infrastructure.Huawei’s new releases are noteworthy at a time when database giant Oracle began to cut over 900 jobs in China. Huawei’s new AI-Native GaussDB database features heterogeneous support including ARM architecture. It offers performance 50 percent higher than the industry norm. A new storage product was also released yesterday.
Shanghai’s video and gaming site Bilibili has announced losses in the first quarter but its sales increased, boosted by advertising and gaming income. The adjusted net loss was 145 million yuan (US$21 million) compared with 3.2 million yuan the same period a year ago. That was due to increasing expenditure on sales, marketing and content production. The user-generated video site reported a 58 percent increase in first-quarter revenue to 1.4 billion yuan.
Chinese shares surged yesterday as China’s weak April industrial output and retail sales data increase the likelihood of further stimulus.Worries over further escalation in trade friction were also eased after US President Donald Trump cited the trade war with China as “a little squabble” and insisted talks between the world’s two largest economies had not broken down.At close, the benchmark Shanghai Composite Index finished 1.91 percent higher to end at 2,938.68 points. The Shenzhen Component Index added 2.44 percent to close at 9,259.03 points, while the CSI300 index rose 2.25 percent to 3,727.09 points.Turnover on the two major bourses totaled 512.7 billion yuan (US$74.55 billion), compared with 455.5 billion yuan in the previous trading session.All industry sectors posted gains.Shares of liquor, substitute meat and fuel cell led the gains. Shares of Luzhou Laojiao and Yan Tai Shuang Ta Food Co all jumped by the daily cap of 10 percent.
Global index compiler MSCI Inc yesterday announced the list of stocks to be included in the MSCI Emerging Markets Indexes. It released the results of the May 2019 Semi-Annual Index Review for the MSCI Equity Indexes with the batch of changes in the indexes to be implemented on May 28.Twenty-six China A-shares will be added to the MSCI China Index — 18 of which are ChiNext stocks — and the inclusion factor for 238 existing constituents will be increased from 5 percent to 10 percent. The 18 ChiNext stocks are: Guangdong Wens Foodstuff Group, Contemporary Amperex Technology, Shenzhen Mindray Bio-Medical Electronics, East Money Information, Aier Eye Hospital Group, Chongqing Zhifei Biological Products, Hithink RoyalFlush Information Network, Lepu Medical Technology, Shenzhen Inovance Technology, Walvax Biotechnology, Mango Excellent Media, Chaozhou Three-Circle Group, Lens Technology, Shenzhen Kangtai Biological Products, Wangsu Science & Technology, Songcheng Performance Development, Wuxi Lead Intelligent Equipment and Hangzhou Tigermed Consulting.Meanwhile, China A-shares will have an aggregate weight of 5.25 percent and 1.76 percent in the MSCI China and MSCI Emerging Markets Indexes, respectively.There will be 26 additions to and no deletions from the MSCI China A Large Cap Index resulting in 264 index constituents.There will also be 29 additions to and five deletions from the MSCI China A Mid Cap Index resulting in 173 index constituents.The MSCI China A Onshore Index will add 109 companies and cut three, of which the largest additions will be Guangdong Wens Foodstuff Group A, Contemporary A and Shenzhen Mindray A. Meanwhile, 503 shares will be added to and 49 deleted from the MSCI China A Onshore Small Cap Index, most of which are newly eligible ChiNext stocks.The MSCI China All Shares Index will see 66 additions and 10 deletions, of which the largest additions are also Guangdong Wens Foodstuff Group A, Contemporary A and Shenzhen Mindray A. The MSCI China All Shares Small Cap Index will have 522 additions and 46 deletions. In February, MSCI announced that it plans to increase the weight of China A-shares in the MSCI EM Indexes, to be implemented through a three-step process. The Foreign Inclusion Factor-adjusted market capitalization of China A-shares will be further increased to 15 percent as part of the August 2019 Quarterly Index Review and then to 20 percent, together with the inclusion of Mid Cap China A-shares, in the final step as part of the November 2019 Semi-Annual Index Review.
China’s main equity indexes finished lower yesterday as the tariff tussle between China and the United States escalated. The benchmark Shanghai Composite Index lost 0.69 percent to end at 2,883.61 points. The Shenzhen Component Index shed 0.71 percent to close at 9,038.36 points, while the blue-chip CSI300 index lost 0.64 percent to end at 3,645.15 points.Turnover on the two major bourses was 455.5 billion yuan (US$66.21 billion) compared with the 466.2-billion-yuan volume in the previous trading session.The 5G sector was among the largest percentage gainers. Shares in Allwin Telecommunication Co Ltd and Wutong Group surged by the daily cap. The blockchain sector also led the gains. Shares in Homa hit the daily limit. The nonferrous metals sector also performed strongly. Shares in the agriculture, forestry, animal husbandry and fishery industries continued on an upward trend.Both the Shanghai Composite and the blue-chip CSI300 opened down 1 percent, but losses were contained at the close.After China announced tariffs on US$60 billion of goods on Monday, US President Donald Trump said he was holding fire on taxing the remaining US$325 billion of Chinese goods and he was going to meet Chinese President Xi Jinping in June, reigniting hopes of an end to the trade friction.
Exporters and trade bodies are looking to introduce more food and beverages to China to satisfy the growing demand for high-quality products. “The Chinese food import market is highly competitive and we are also working with government bodies and hope to get more countries to gain export approval of meat products to China,” Nicolas Dandois, counsellor for Agriculture Delegation of the EU to China, told Shanghai Daily.Europe’s major food exports to China include meat, dairy products, wine and spirits. A campaign launched earlier this month specifically targets the Chinese market and will last two years to focus on promoting European food’s quality, safety and authenticity. The 20th SIAL China, which runs until tomorrow at the Shanghai New International Expo Center, is hosting 4,300 exhibitors. The Novosibirsk delegation from eastern Russia said it sees a great opportunity to expand in China due to its proximity to China and the rich market China offers. Some 20 types of products at the fair are under the “Made in Moscow” brand. An official told Shanghai Daily it is “looking for distributors and we see opportunity in China for our health supplements and have had excellent feedback here at the exhibition.” Germany’s Aldape Healthcare UG is at SIAL for the first time. “Our workout products are new here but we are offering customizable products for our customers and the response has been good,” a company official said. Currently, about 20 percent of food and beverage imports are from Europe. This year marks Belgian pork’s fourth appearance at SIAL China. Exports to China have grown from about 5,200 tons in 2013 to more than 17,605 tons last year, accounting for 2.2 percent of its total pork exports.Spain has been exporting pork to China for 12 years and its meat industry has been trying to bring in more value-added products such as ham and sausages, said Daniel de Miguel, international manager of Interporc. Irish beef, which gained access to the Chinese market last year, has performed well in the first four months of 2019. Exports were 2,400 tons against 1,400 tons for the whole of 2018.
AT&S will increase capital spending by up to 300 million euros (US$337 million) in the next financial year, including a major investment in its Chongqing plant.
The Austria-based firm, which produces components used in computers, smartphones and the automotive industry, aims to increase its investment in China despite the weak smartphone market.
It will invest in maintenance, expanding capacity and technology upgrades. About 80 million euros will be used to expand its Chongqing plant. Additional investment in technology and capacity will also be used in plants in Shanghai and Chongqing, depending on market development, AT&S said.
In a highly challenging market environment, AT&S is optimistic that new growth engines such as 5G and AI will boost its income. In its previous fiscal year, which ended in March, AT&S posted revenue of 1.03 billion euros, a 3.6 percent growth year on year. Chinese plants are its major manufacturing base.
CHINA and the United States should carry out their trade talks on the basis of equality instead of blaming and pressuring the other during the negotiations, Chinese State Councilor and Foreign Minister Wang Yi said.
He made the remarks at a press conference following a meeting with his Russian counterpart Sergei Lavrov.
When asked about the prospects for China-US trade talks, Wang said Beijing and Washington have made significant and substantial progress with their joint efforts, but certain difficulties remain that has to be carefully handled and resolved.
Under such circumstances, unilateral accusation is meaningless while shifting responsibility is unacceptable, he said.
Wang warned that exerting maximum pressure will only trigger legitimate countermeasures.
China’s move is meant to not only protect its due rights and interests, but also safeguard the basic rules of multilateral trade mechanism, Wang added.
Wang underlined that the negotiation is not a one-way lane but should be carried out on the basis of equality, saying it is impossible to expect one side to readily accept the other’s request.
China will always safeguard its sovereignty, Chinese people’s interests and national dignity when negotiating with any country, he said.
The outlook for trade links between China and the United States — the world’s two largest economies — not only matters to their own development, but also bears on the prospect of the world economy.
Therefore, as long as the negotiation is in line with China’s reform and opening-up policy, its pursuit of high-quality development, and the common and long-term interests of the two peoples, the negotiators of both sides will have the ability and wisdom to properly address their reasonable demand and reach a mutually beneficial agreement, he said.
THE average salary of China’s urban employees grew faster in 2018 due to better corporate profitability and solid performance of the Chinese economy, official data showed yesterday.
In non-private sectors, the average salary of urban employees rose by 11 percent to 82,461 yuan (US$12,061). The growth rate was 1 percentage point faster than a year earlier, according to data from the National Bureau of Statistics.
In private sectors, the annual average salary stood at 49,575 yuan, up 8.3 percent year on year, 1.5 percentage points faster than a year earlier. The inflation-adjusted real growth rates for non-private and private sectors were 8.7 percent and 6.1 percent, respectively.
Meng Canwen, deputy chief of the population and employment statistics department of the bureau, attributed the faster pay rises to a series of measures the country had taken the previous year amid complex situations at home and abroad to stabilize growth, advance reform, adjust structure, benefit the people and ward off economic risks.
The effect of these measures has been unfolding, as the national economy steadily expanded with an overall stable employment situation and rising corporate profitability, which laid a solid foundation for the pay rises, Meng said. Employees in traditional manufacturing have earned more as the profits of relevant industries improved significantly.
The profit of petroleum and gas extraction more than quadrupled, for instance, while that of nonmetal mineral product manufacturing surged by 43 percent. Correspondingly, the average salaries of the two sectors rose by 18.6 percent and 13.6 percent, respectively.
Equipment manufacturing also reported drastic rises ranging from 9.3 percent to 14 percent in the average salaries of urban employees.
Thanks to accelerated infrastructure construction, the average salaries of loading and moving as well as warehousing sectors increased by 20.9 percent and 21.9 percent, respectively, 11.6 percentage points and 11.9 percentage points faster than a year earlier.
Nearly half of the country’s 31 provinces, municipalities and autonomous regions elevated their minimum wage standards last year.
CHINA is willing to work with all parties to advance reform of the World Trade Organization so that the organization can play a bigger role in global economic governance, the Ministry of Commerce said yesterday.
Sources with the Department of WTO Affairs said China formally submitted a WTO reform proposal to the organization on Monday. China identified four aspects that deserve major action: tackling the essential and pressing issues threatening the existence of the organization, increasing WTO relevance on global economic governance, improving the organization’s operating efficiency and increasing the inclusiveness of the multilateral trade mechanism.
The world economic landscape is undergoing profound adjustments, while economic globalization is encountering setbacks with the rise of unilateralism and protectionism. The authority and effectiveness of multilateral trade mechanism are under severe challenge, noted the sources.
New home sales showed a moderate recovery in Shanghai last week with outlying Qingpu District remaining the most sought-after area for another week.The area of new residential properties sold, excluding government-subsidized affordable housing, climbed 25 percent to around 167,000 square meters in the seven days to Sunday, Shanghai Centaline Property Consultants Co reported.Qingpu outperformed all of its counterparts with weekly sales hitting some 41,000 square meters. It was followed by the Pudong New Area, with about 22,000 square meters of new homes sold, and then Songjiang and Jiading districts, which each registered seven-day sales of over 15,000 square meters, according to Centaline.Citywide, new homes sold for an average of 58,104 yuan (US$8,470) per square meter, a week-on-week dip of 1.7 percent.“In general, those costing between 30,000 yuan and 60,000 yuan per square meter remained the most popular among local home buyers,” said Lu Wenxi, Centaline’s senior research manager. “In addition, the best-selling project recorded weekly sales of more than 200 units, indicating rather robust sentiment in the market.”A residential project in Qingpu asking for 55,865 yuan per square meter on average unloaded 24,643 square meters, or 230 units. Two luxury developments, both priced at more than 100,000 yuan per square meter, also managed to squeeze into the top 10 list after selling 20 and 16 units, respectively, according to Centaline.On the supply side, about 117,000 square meters of new housing over four projects were released into the market, a decrease of 68 percent from a week earlier, Centaline said.
China’s bakery market is expected to enjoy exponential growth and overseas dairy makers are hoping to grab a piece of the cake, serving both Chinese and Western-style deserts and beverages.The world’s largest dairy exporter Fonterra is no longer satisfied with just selling dairy and baking material to local vendors and consumers, but also hopes to deliver a whole range of products.Fonterra China President Christina Zhu said its food professionals sector is the fastest-growing business in China and it is working closely with local caterers to offer innovative dishes and tastes.“The competitive market requires a forward-looking attitude when we work on innovative products and industry solution for the food businesses here,” she said.The value of China’s bakery industry is expected to be 362 billion yuan (US$52.78 billion) by 2022 with room for growth in terms of average consumption volume, according to consultancy Strategy&. Ireland’s largest dairy producer Glanbia is expecting a growing contribution from its bakery raw material Avonmore in China. “We see a competitive dairy market in China but also unmet demand, especially for baking material such as whipping cream, said Stephen Browne, director of exports at Glanbia Consumer Food. Marketing director for Avonmore Niamh Parlon said it is introducing butter and cheese to China this year after exploring preliminary opportunities in the past two years and seeks better recognition among the mass consumer.
The new-energy vehicle market in China posted vigorous growth in the January-April period amid a sluggish broader automobile sector.About 360,000 NEV cars were sold in the first four months of 2019, surging by 59.8 percent from the same period a year earlier, data from the China Association of Automobile Manufacturers showed yesterday. The production also rose 58.5 percent year on year.Sales of electric vehicles rose 65.2 percent during the period to 277,600 units and sales of plug-in hybrid vehicles jumped 43.66 percent to 82,200 in the same period, the data showed.China sold 96,800 NEVs in April, up 18.15 percent year on year, while the output reached 101,600, an increase of 25.03 percent from a year earlier.The strong performance of NEVs came after the persistent efforts of the government to boost the NEV market by offering tax exemptions and discounts on car purchases to reduce pollution and foster green transportation.Yesterday’s data also showed the broader automobile sector remained sluggish as the total auto sales and output for the first four months fell by 12.12 percent and 10.98 percent year on year, respectively.
China’s stock markets slumped yesterday with the benchmark Shanghai Composite Index losing 1.21 percent to end the day at 2,903.71 points.The Shenzhen Component Index shed 1.43 percent to close at 9,103.36 points, while the blue-chip CSI300 index lost 1.65 percent to end at 3,668.73 points. Turnover on the two major bourses was 466.2 billion yuan (US$67.98 billion). The volume in the previous trading session was 610.1 billion yuan.Shares in the agriculture, forestry, animal husbandry and fishery industries were among the biggest gainers.Shares in Yuan Long Ping High-Tech Agriculture Co Ltd and Hefei Fengle Seed Co Ltd climbed by the daily limit of 10 percent. Shares in Harbin Investment Co Ltd lost over 4 percent.
SHANGHAI has been ranked as the city with the best business environment on the Chinese mainland, according to Xinmin Evening News, citing a report released yesterday.
The 2019 Evaluation Report on Chinese City Business Environment Index, which tracks 100 of the richest cities in the country, has Shanghai on top of its list with an overall score of 86.73.
It is followed by Beijing, Shenzhen and Guangzhou.
The index, produced by the China Strategy Culture Promotion Association, China Association of Business Media, Wanbo New Economy Research Institute and Yicai Research Institute, is compiled based on a city’s software (regulations, policies) and hardware (infrastructure, etc).
Shanghai topped the list overall but was ranked second in both software, with a score of 92.94, and hardware with 77.42. Beijing was best in terms of software at 94.57, while Shenzhen was top for hardware with 77.67.
The list took seven sub-indexes into consideration — the natural environment, infrastructure construction, innovation, the environment for professionals, the financial environment, culture and living. Shanghai took the lead in infrastructure construction and culture, and was among the top three for its professionals, innovation and financial environment.
The report said cities used to pay a lot of attention to traditional factors such as the financial environment and the environment for professionals, but culture stood out as another core factor that plays an important role in a city’s attractiveness for businesses.
“Shanghai exceeds others in terms of the cultural environment as the city has a spirit of openness and is friendly to new things,” the report said.
Improving the business environment is one of the city’s top priorities this year.
“For a city like Shanghai, urban development cannot rely solely on preferential policies or low-factor costs,” Li Qiang, Shanghai’s Party secretary, said in February. “Only by optimizing the business environment can the city gain the upper hand and further sustainable development.”
The World Bank’s 2019 Doing Business report showed China’s business environment rising 32 places to rank 46th in the world. Shanghai was one of the sample cities in the report.
As symbolic of the city’s all-round development, the success of last year’s China International Import Expo sent a clear signal of Shanghai’s ability and intention to become an aspirational destination for overseas enterprises and capital across all industries.
Shanghai Mayor Ying Yong has pledged that the city will embrace all challenges, take active measures to counter risks and grasp all opportunities to pave the way for high-quality growth.
THIS year’s Pujiang Innovation Forum will highlight innovation by listening to the needs of enterprises and provide entrepreneurs and policymakers with more communication channels.
The three-day event from next Friday will be themed “New Vision and New Future of Science and Technology Innovation.”
It will focus on development over the next 10 to 15 years at home and abroad with in-depth discussions with domestic and foreign guests on future trends in science and technology and their influence on economic, social and urban development and corresponding countermeasures.
There will be around 150 keynote speakers from 21 countries and regions this year. Among them, scientists and scholars account for about 46 percent and entrepreneurs 39 percent.
CHINA yesterday announced that it will raise the rate of additional tariffs imposed on some of the imported US products from June 1.
China had earlier imposed additional tariffs on US$60 billion worth of US imports, the rates of additional tariffs on some of the products will now be increased to 25 percent, 20 percent and 10 percent, according to a statement by the Customs Tariff Commission of the State Council.
A total of 5,140 US products will be subject to additional tariffs of 5 percent, 10 percent, 20 percent and 25 percent starting on June 1, the finance ministry said in a statement yesterday.
The decision follows the US move to increase tariffs on US$200 billion worth of Chinese goods from 10 percent to 25 percent as of May 10.
The measure taken by the United States escalated trade frictions and violated the consensuses reached by both sides to tackle trade disputes through consultations, the statement said.
The US move damaged the interests of the two sides and did not meet universal expectation of the international community, it said.
To defend multilateral trade mechanisms and safeguard its own rights and interests, China had to adjust its additional tariffs on some of the goods imported from the United States in response to the US act of unilateralism and trade protectionism, the statement noted.
China hopes that the United States would return to the right track of bilateral economic and trade consultations, make joint efforts with China to meet each other halfway and strive to reach a mutually beneficial and win-win agreement on the basis of mutual respect.
Shortly after the new tariffs were announced, China Central Television issued a firm commentary to the Chinese people.
“If we discuss, our door is always wide open; if we fight, we’ll fight to the last,” the CCTV comment said. “The US-initiated trade war with China is just a hurdle in China’s development process. It is no big deal. China must strengthen its confidence, overcome difficulties, turn crisis into opportunity, and fight to create a new world.”
WALL Street stocks plunged yesterday with losses on Nasdaq exceeding 3 percent after China announced it was ramping up tariffs on US goods.
About three hours into the trading session, the Dow Jones Industrial Average was down over 650 points, or 2.5 percent. The broad-based S&P 500 dropped 2.5 percent, while the tech-rich Nasdaq Composite Index tumbled 3.2 percent.
Beijing yesterday announced it will increase tariffs on US$60 billion worth of US goods from June 1, striking back after Washington more than doubled tariffs on US$200 billion on Chinese goods. US has also started the process of imposing punitive duties on the nearly all Chinese imports.
Boeing fell 3.4 percent. A spokesman for the company said Boeing was “confident the US and China will continue trade discussions and come to an agreement that benefits both US and Chinese manufacturers and consumers.”
Other US companies with large China operations suffered big declines, including Apple, down 5.3 percent, Caterpillar, down 4.3 percent and General Motors, down 3.2 percent.
Mobile payment, online shopping, entertainment, dining and beyond — Chinese apps have been catching on with consumers across Asia.
App Annie, an analyst firm, said Chinese apps for e-commerce, social media and leisure have gained strong growth in Asian countries and their users have been expanding.
In 2018, the number of downloads of shopping apps grew 54 percent compared with the figure in 2017, the firm said.
These technologies have facilitated exchange and dialogue between nations in Asia. Beijing will host the Conference on Dialogue of Asian Civilizations from tomorrow to May 22.
In August 2018 during the Asian Games, Beijing-based ByteDance, known for its short video-sharing app TikTok, called on its users to publish videos to pass on the spirit of the Asian Games.
Since TikTok was launched in 2017, its users have grown exponentially in countries such as Japan, Thailand and Indonesia, the company said.
In the field of mobile payment, Ant Financial has cooperated with Paytm in India, Kakao Pay in South Korea, DANA in Indonesia and Easypaisa in Pakistan to serve users in these Asian countries.
Ant Financial Executive Chairman Jing Xiandong said China’s experiences in e-commerce and digital economy can be replicated in many countries along the Belt and Road.
The number of Asian users on Aliexpress, the global retail platform, has also expanded rapidly.
Company data shows that over 20 million buyers in Central and South Asia make purchases on the platform. Buyers in Kyrgyzstan grew fourfold in three years. They mainly buy clothing, consumer electronics and cosmetics, Aliexpress said.
Another Chinese firm Meituan-Dianping, which specializes in group buying of consumer products and food-delivery services, covered 4.23 million businesses in 380 cities along the Belt and Road, according to figures by April 11, 2019.
The company has helped restaurant owners in popular tourist destinations in Asia to renovate and attract customers.
China’s BAIC Group is seeking to buy a stake of up to 5 percent in Daimler as a way to secure its investment in Chinese Mercedes-Benz manufacturing company Beijing Benz Automotive, three sources familiar with the matter said.BAIC informed Daimler of its intention to buy a 4-5 percent stake in the German maker of Mercedes-Benz cars earlier this year, two of the three sources said. BAIC has asked local authorities in Beijing to support a 4-5 percent stake purchase.BAIC has started acquiring Daimler shares on the open market, one source said.Daimler’s share price is currently being underpinned by a buyer who appears to be building a stake, a person familiar with the matter said.BAIC did not respond to repeated phone calls and text messages seeking comment outside regular business hours. Daimler declined to comment.It remains unclear whether BAIC Group can raise the nearly 3 billion euros (US$3.37 billion) that a 5 percent stake in Daimler would cost, based on the German carmaker’s closing market value on Friday of 57.6 billion euros, two of these sources said.German regulatory filings do not show BAIC as a significant shareholder of Daimler. German takeover rules allow a buyer to acquire a stake of up to 3 percent before a regulatory disclosure is required.Daimler has ruled out issuing new stock to help an outside party build a stake, forcing potential buyers to acquire shares on the market.BAIC signaled its interest in buying a Daimler stake as far back as 2015 and has redoubled its effort after Li Shufu, chairman of rival Chinese carmaker Zhejiang Geely Holding Group built a 9.69 percent stake in Daimler in 2018. By using Hong Kong shell companies, derivatives, bank financing and structured share options, Li kept the plan under wraps until he was able to become Daimler’s single largest shareholder.
Although the gap between rich and poor has widened in the European Union over the past decades, the bloc is a world leader in fighting inequality, experts say.The internationally accepted Gini coefficient formula that measures income disparities gives the 28-nation EU, as a whole, one of the best rankings in the world for equality, alongside that of Canada.Both are rated at a rounded-off 31 out of 100 in the ranking (2017), in which higher indexes indicate greater levels of inequality. But the scores of various countries within the European Union differ markedly, with some of those of the former communist states in Eastern Europe bringing down the average.Bulgaria has the highest level of inequality with a Gini index of 40, according to EU’s statistics office Eurostat.It is followed by the former Soviet states of Lithuania and Latvia, and then Spain, Portugal and Greece. Britain and Romania are next, both measuring 33. Germany, France and Poland do slightly better, averaging around 29.Egalitarian statesTopping the list as the most egalitarian are the three former communist countries of Slovakia (23), Slovenia and the Czech Republic, both around 24. They are followed by Nordic countries Sweden, Denmark and Finland, along with Belgium, the Netherlands and Austria, all scoring between 26 and 28.While Europe has been more successful than most regions in containing income inequality rises seen around the world, inequalities increased in most of its countries over 1980-2017, according to the World Inequality Lab (WIL).“The European top one percent grew more than two times faster than the bottom 50 percent,” the Paris-based group of experts said in an report in April.It pointed to a focus on reducing inequalities between EU member states rather than within the countries themselves.The largest rise was in formerly communist Eastern European countries that were the most egalitarian during the 1980s and moved toward capitalism in the 1990s.Here “privatizations associated with the transition from socialism to capitalism have benefited a small elite,” the report said.In Western Europe, the richest 10 percent earn, on average, seven times more than the poorest 50 percent before taxes, WIL said. However, after tax, this is only five times more — a drop of 29 percent.The post-tax adjustment is 23 percent in Southern and Northern Europe and 15 percent in the east.While Western European countries tend to impose higher taxes on higher incomes, many eastern countries such as the Baltic states Bulgaria and Romania have a flat tax rate, meaning poor and rich pay the same percentage.The lack of progressive taxation in some countries, in a context of economic competition, contributes to inequalities, including by undermining financing for public services, WIL said.Despite a rise in inequality, the EU fares better than the United States, it said. The bloc’s education and health systems are more egalitarian and social benefits play a major role.Since 1980 the revenues of the poorest half of the European population increased by 37 percent while they stagnated in the United States.Meanwhile, the income of 0.01 percent of the most well-off increased more than 300 percent in the United States, twice as much as Europe.The Gini index put the United States at 39, eight points higher than the EU.
Slicing through juicy cuts of pork belly alongside rarer delicacies of ox brain and sheep intestine, young butchers at a Frankfurt trade hall cast a suspicious eye toward the so-called fake meat products on display.Puzzlingly, for the butchers, the fake meat seems to be popular. “It just can’t be that we have to get into plastic!” said Paolo Desbois, an 18-year-old French butcher, referring disparagingly to the synthetic burgers, sausages and nuggets at the IFFA meat industry convention.The concept that animals are meat — and plants are not — never used to be challenged.But increasingly plant-based protein products are trying to muscle in on the meat market.Derived from sources like soy, peas or beans, synthetic products are being manufactured without using animals.Desbois, who placed second in a young butchers competition at the convention, feels they undermine “the essence of the profession.”“It’s just not possible to work with synthetic meat,” he said.Another budding elite butcher from Switzerland, 20-year-old Selina Niederberger, agreed. “I’m for real meat. I think a lot of people would see it the same way,” she declared.Non-“real” meat products have been making headlines lately, backed by investors with an appetite for supplying plant-based burgers and sausages to the trendy diet-conscious masses.The vegan burger start-up Beyond Meat made a sizzling Wall Street debut on May 3 when it more than doubled its share price. Backed by Hollywood star Leonardo DiCaprio and Microsoft founder Bill Gates, the firm and its competitors aim to turn plant-based foods mainstream and capture a huge potential market.
Dongfeng Motor Co Ltd and Nissan (China) Investment Co Ltd will recall 2,467 defective automobiles, China’s market regulator said.Starting from October 9, Dongfeng Motor will recall 314 imported Nissan Civilian buses manufactured between October 1, 2012 and November 2, 2013. Nissan China will recall 2,153 automobiles of the same model manufactured between December 8, 1998 and August 28, 2012, according to the State Administration for Market Regulation.The auxiliary door handles on the buses may loosen or detach from the A-pillars as a result of possible A-pillar cracking, posing safety risks to drivers. Zhengzhou Nissan will fix the problems free of charge.
Domestic and foreign dairy companies are trying to milk consumer interest in China by diversifying products and adapting to changing public tastes.Shanghai-based Bright Dairy Food Co redefined its ice cream segment in April after acquiring Shanghai Yimin No. 1 Food Factory last year. Yimin, now a subsidiary, specializes in ice cream, confectionery products and cold drinks. It has been selling popsicles and ice cream under the Bright brand for more than six decades, but the flavors that once defined the taste of summer from the 1950s through to the 1990s eventually fell victim to a perception of being old and stodgy. Despite some nostalgia feelings for the unpretentious flavors and packaging of the past, Shanghai consumers over the years have clamored for the ice cream maker to get in tune with a younger generation more adventurous in its tastes. Bright is combining its Momchilovtsi yoghurt, a brand first introduced from a village in Bulgaria in 2010, with Yimin’s ice cream lines as part of efforts to resuscitate the time-honored old brand. “We welcome consumers’ contributions to new product ideas, and we are keeping our options open with regard to new industry partnerships and new product lines,” Bright Dairy Chairman Pu Shaohua said when the revitalized ice cream product was launched. Adding yogurt flavor to sugary ice cream is just one example of domestic brands adapting to new market realities, including the popularity of delivery services.Bright Dairy’s on-demand fresh milk delivery platform, which currently covers 17 cities in China, will be expanded to fill orders for ice cream and yogurt drinks. Yili, Mengniu and Unilever are the three major players in the ice cream market, according to market research firm Euromonitor International. Bright Dairy claims it has an edge over its rivals with higher quality milk. The fresh milk sector is an area of increasing industry focus and competition. Fresh low-fat and skim milk, marketed under Bright’s UBest brand, has been on the shelf for a few weeks now, and yogurt with new types of probiotics and flavors will also hit the market in the near future.Euromonitor said it expects the fresh milk market in China to be valued at about 39.1 billion yuan (US$.5.75 billion) by 2022, compared with the 95-billion-yuan value of UHT, or stable shelf-life, milk. Fresh milk is estimated to grow at an average of 6 percent in the next four years, while UHT milk market is forecast at more modest 1 percent growth annually. One of Bright’s stronger rivals is New Zealand’s Fonterra, which is making inroads in the fresh milk market. Its Anchor brand butter and cheese were introduced into China about five years ago, and now its fresh milk is set to expand, with claims of high-quality and pure taste. Shanghai resident Agnes Huang, who has bought Anchor butter and UHT milk in the past, said she’s game to try new dairy products, but most consumers like her certainly won’t be sticking to only one brand.“Dairy products have been offering new tastes much faster than I expected, especially ahead of the summertime, and that gives me more reason to try new flavors and new brands,” she explained. Anchor’s fresh milk comes from its dairy farm in Tangshan, Hebei province. National expansion is anticipated after Fonterra successfully sold small batches through Alibaba’s fresh food and grocery market Freshippo for a year.Chester Cao, vice president of consumer brands for Fonterra China, said the company is also testing market response before launching more dairy products under the Anchor brand. Refrigerated fresh pasteurized milk will be an even more active category in the coming years, according to Loris Li, consumer research director at Mintel China. Consumption of dairy products will increase, both from the standpoint of daily nutrition and as a snack, she added. Up to 83 percent of new products launched in China in the past three years have been UHT-processed milk, highlighting the huge potential of the fresh milk segment.
China’s credit growth took a breather in April after a strong March as new yuan loans and aggregate financing fell below expectations, the central bank data showed yesterday.April’s new bank loans were 1.02 trillion yuan (US$150 billion), 161.5 billion yuan less than the same period last year. The loan also eased compared with a recent high of 1.69 trillion yuan in March, according to data from the People’s Bank of China.The main issue was softer corporate borrowing, said UBS China’s research team. Data showed new yuan-denominated loans to the corporate sector was only 347.1 billion yuan, dragged by both a decline in short-term loans and weaker medium- and long-term loans. Bank lending to non-banking financial institutions, however, increased about 142 billion yuan.New household loans stayed steady at 526 billion yuan last month, with over three quarters of the growth from demand for medium- and long-term loans (mainly mortgages), as China’s property sales stabilized in recent months.The slower pace of credit expansion also weighed on the growth of total social financing in the month. In April, aggregate financing slumped to a weaker-than-expected 1.36 trillion yuan from 2.86 trillion yuan in March.Part of the slowdown is “seasonable,” said Julia Wang, an economist at HSBC China, as April is traditionally a weaker month for lending. And there has been some tightening of liquidity in the interbank market over the month.HSBC predicted that broad credit growth will likely continue to recover at a modest pace in the coming months and borrowing costs for corporations will likely continue to ease.
China’s consumer inflation continued to quicken last month to hit a six-month high, while factory-gate inflation also increased at a faster pace.The Consumer Price Index, a main gauge of inflation, grew 2.5 percent in April from a year earlier, 0.2 percentage points faster than the previous month, to be the highest since October, the National Bureau of Statistics said yesterday. On a month-on-month basis, the headline CPI rose 0.1 percent last month, compared with a 0.4 percent decline in March. Among them, pork price extended the rebound by 1.6 percent mainly due to African swine fever, according to the statistics bureau. Food prices jumped 6.1 percent year on year in April, contributing to a 1.19-percentage-point rise in the overall CPI growth. The pace of increase was also faster than the 4.1 percent recorded in March. The price of vegetables and fruits remained high, surging by 17.4 percent and 11.9 percent year on year, respectively, contributing to the growth of 0.43 percentage points and 0.22 percentage points in the headline CPI.The higher fruit prices were mainly due to the poor harvest in the northern area last autumn and the shortage of inventories this year, according to the bureau’s Dong Yaxiu.Pork prices soared by 14.4 percent year on year in April, 9.3 percentage points faster than the March figure and reversing the 4.8 percent decline in February, leading to a 0.31-percentage-point increase in overall CPI growth. “We believe the rapid spread of African swine fever since August 2018 could help push up pork prices by another 40 percent over the next six months,” said Lu Ting, chief China economist of Nomura.Non-food prices, meanwhile, also rose by 1.7 percent year on year, slightly slower than the 1.8 percent growth in March.The price of health care, education, culture and recreation, and residence advanced 2.6 percent, 2.5 percent and 2 percent, respectively.Together they contributed to a 0.22-percentage-point increase in overall CPI growth.The Producer Price Index, which measures costs of goods at the factory gate, rose by a stronger-than-expected 0.3 percent year on year in April, 0.2 percentage points faster than the previous month, mainly due to a low base and more expensive oil prices, according to Nomura.In month-on-month terms, PPI inflation also went up to 0.3 percent from 0.1 percent in March, much higher than the 0.2 percent decline in April last year.Among upstream sectors, PPI inflation in the mining sector increased to 5.3 percent year on year in April from 4.2 percent in March, while in the processing sector, it rose to 0.9 percent from 0.4 percent.
They are laozihao, or time-honored brands, some of which are centuries old and are now riding the Internet wave.They will have their presence at the second Exposition on China Indigenous Brands to be held from today until Sunday at the Shanghai Exhibition Center. One of the products is zongzi, with some laozihao teaming up with new platforms to find new selling points as China heads into the Dragon Boat Festival on June 7.Alibaba’s fresh food and grocery market Freshippo is exploring the changing tastes of consumers, working with three local manufacturers of zongzi, the traditional sticky rice dumpling, to sell nationwide. Shanghai Old-Town Temple Restaurant, a time-honored brand, has launched an innovative pear syrup herbal drink which is also available on its Tmall flagship store. The herbal medicine Li Gao Lu, which can treat cough effectively, is now available as a canned ready-to-drink beverage, so people can conveniently take it on the go. Previously, it was only available in thick syrup form so hot water had to be added before drinking. It was released in its original flavor in April and a new flavor will be released this month.Alibaba is also banking on its digital power to help more than 200 local indigenous brands achieve more than 1 billion yuan (US$150 million) in sales, as well as helping smaller firms. And the e-commerce giant is helping them go global.
China’s A-share markets continued on a downward trajectory yesterday as investors took a “wait-and-see” approach amid uncertainties around trade with the United States.The benchmark Shanghai Composite Index shed 1.48 percent, or 42.81 points, to finish at 2,850.95.The smaller Shenzhen Component Index slumped by 1.39 percent to end at around 8,877.31 points, while the ChiNext Index was down by 0.84 percent to finish at 1,469.48 points.The turnover of the two bourses came to 434 billion yuan (US$63.6 billion), shrinking from the volume of 488.8 billion yuan during the previous trading day.Losses were seen across the board, with food and beverage companies and medical firms among the biggest losers. Shares in Shanghai Laiyifen Co Ltd, a leading domestic company which operates a chain of snack stores in the country, declined by 10 percent to stand at 16.16 yuan a share.Market sentiment was primarily dampened by deteriorating trade relations between the world’s two largest economies.
A US extradition warrant for Huawei’s Chief Financial Officer Meng Wanzhou is guided by “political considerations and tactics” and is an “unlawful abuse of process,” Huawei Technologies said in a statement yesterday.
Meng, the daughter of Huawei founder Ren Zhengfei, was back in a Canadian court on Wednesday.
Her lawyers presented updated disclosures to the court, including claims that the allegations against her were untrue, that her rights under Canadian law were being seriously and repeatedly violated, and that the US extradition request lacked legal grounds.
Meng was detained in December by Canadian authorities and faces extradition to the US, where she is charged with bank fraud and evasion of US sanctions on Iran.
“Political factors at play during the extradition process may lead to a serious violation of justice and Meng’s legitimate rights may also be harmed,” Huawei said in its statement.
Meng’s luggage was searched, her cellphone and other electronic devices seized, and she was compelled to reveal her passwords, according to Huawei.
“The criminal case against Ms Meng is based on allegations that are simply not true. To the contrary, it was made clear in court today that business activities by Ms Meng were conducted openly and transparently with full knowledge of banking officials,” Xinhua news agency reported, citing Benjamin Howes, vice president of Canadian media affairs at Huawei, who was speaking outside the British Columbia Supreme Court.
Huawei is the world’s largest telecommunications equipment maker and one of the biggest smartphone brands. In the first quarter, its revenue rose 39 percent year on year, thanks to booming 5G and smartphone sales.
It is the first time Huawei, a private firm, has posted quarterly figures. Previously, the company reported annually.
As of the end of March, Huawei had signed 40 commercial contracts for 5G services and equipment and had shipped more than 70,000 5G base stations.
The US is attempting to block the use of Huawei equipment globally, citing security concerns.
Both Meng and Huawei have repeatedly denied any wrongdoing.
Meng’s next court appearance is set for September, but it’s still unclear when extradition proceedings will begin.
“We have trust in the Canadian judicial process — and we look forward to seeing Ms Meng’s freedom restored,” Huawei added.
TRADE tensions and the exchange of tariffs between the United States and China pose a “threat to the global economy,” the International Monetary Fund warned yesterday.
Renewed tensions between the two economic superpowers were hanging over the negotiations that were set to resume later yesterday and IMF spokesman Gerry Rice renewed the call for a “speedy resolution.”
“Clearly tensions between the United States and China in the trade sphere are a threat to the global economy,” Rice told reporters. “As we have said before, everybody loses in a protracted trade conflict.” Rice called on “all parties to seek a resolution ... that strengthens the international trading system.”
The IMF once again downgraded global growth to 3.3 percent for 2019, two tenths lower than the January forecast.
After a brief rebound, China’s markets fell yesterday again. The benchmark Shanghai Composite Index lost 1.12 percent to end at 2,893.76 points. The Shenzhen Component Index shed 0.96 percent to close at 9,002.53, while the blue-chip CSI300 index lost 1.4 percent to end at 3,667.46 points.Turnover on the two major bourses was 488.8 billion yuan (US$72.14 billion). The volume in the previous trading session was 538 billion yuan.
Rideshare drivers in major US cities were set to stage a series of strikes and protests yesterday, casting a shadow over the keenly anticipated Wall Street debut of sector leader Uber.Organizers in some cities were calling for a 24-hour stoppage while the New York Taxi Workers Alliance, which represents both app and traditional taxi drivers, called on drivers to shut down all apps between 7am and 9am.It was unclear how many drivers would take part in the work stoppage amid strike calls in Los Angeles, Philadelphia, Boston and elsewhere. A similar action was expected in London.The app drivers for Uber, Lyft, Via and other platforms are seeking improved job security, including an end to arbitrary “deactivations,” and a better revenue split between drivers and platforms. In New York, the alliance was expecting most of its 10,000 app drivers to participate in the stoppage as well as some non-members.“Wall Street investors are telling Uber and Lyft to cut down on driver income, stop incentives, and go faster to driverless cars,” Bhairavi Desai, executive director of the New York association, said in a statement.“Uber and Lyft wrote in their (regulatory) filings that they think they pay drivers too much already. With the IPO, Uber’s corporate owners are set to make billions, all while drivers are left in poverty and go bankrupt.”In Washington, the Drive United association of drivers called for a protest at Reagan National Airport to support the actions in other locations. “We are asking riders not to cross the picket lines and to respect the strike,” said Drive United organizer Jeffrey Dugas.Drive United said the action was in solidarity with protests in the US and elsewhere where drivers struggle with the independent contractor model.“We’ve spoken with hundreds of drivers and they know that it’s wrong for Lyft and Uber executives to make millions while drivers can’t afford healthcare,” said Stan De La Cruz, a member of the Washington group.In Los Angeles, organizers called for “apps off” for 24 hours starting at midnight and a series of protests at Los Angeles International Airport.Uber is set to launch its initial public offering this week at an estimated valuation of some US$90 billion, including its options and restricted stock unit. The launch will be a major milestone for the company, which has raised billions and disrupted the taxi industry in hundreds of cities.The move follows a troubled market debut for Uber’s largest US rival Lyft, which has lost more than 15 percent of its value since its March IPO.The strikes highlight the dilemma for rideshare firms, which have faced challenges from regulators and traditional taxi operators for using a business model relying on independent contractors.Daniel Ives, an analyst at Wedbush Securities, said Uber’s rideshare “take rate” increased slightly to 21.7 percent in 2018 but that this will remain a hot point of contention for Uber.“We do see added risk from Uber aiming to take greater share of the fare from drivers and expect that the more Uber pushes here, the more drivers will fight back and protest, increasing the likelihood of regulations (particularly at the state level in the US and in Europe) of minimum wage guarantees,” Ives said.
Qiaojiashan, a traditional Chinese dim sum maker and a time-honored brand in Shanghai, is aiming to triple revenue in the next three years.The wholly owned subsidiary of Xuhui District’s state-backed conglomerate New Road Group said it will have 40 stores in the city by the end of this year after teaming up with other home-grown brands to bring in more shoppers and boost sales, as well as bring back fond memories for local residents. Last year it was close to breaking even with revenue of 60 million yuan (US$8.7 million) and this year, with new store openings, it is estimating about 100 million yuan in sales. The company is targeting 100 outlets in the Yangtze River Delta region by 2022 with the majority of new openings still in Shanghai.Cao Qunyi, general manager of Qiaojiashan Food Development Co, said time-honored brands should embrace market trends and ensure profitability to serve long-term development, otherwise preserving the old traditions will only become empty talk. “Sticking to the old traditions and the craftsmanship is our core value and by offering quality products we’re more likely to seek potential collaboration with retailers and other manufacturers,” he added. One of its stuffed dumplings, which started to sell in Lawson convenience stores in April, is one way of catering to younger consumers when they want to grab a quick breakfast on their everyday commute. Apart from sticking to community stores to cater to demand from local shoppers, it will also extend its sales channels. As many as 70 percent of sales are coming from its self-operated retail outlets and others were contributed to by distributors. By teaming up with other time-honored brands such as Shaowansheng and Sanlin, both known for pre-cooked cold dishes, it’s offering a wider choice of products for local residents which can also help lift sales. A prototype of a Qiaojiashan community store in the Meilong neighborhood in Xuhui District records sales of around 50,000 to 60,000 yuan during peak seasons such as Spring Festival or Mid-Autumn Festival. A new type of store by Qiaojiashan which will be a combination of a brand-experience center and an exhibition space will open on Huaihai Road early next month to show how stuffed dumplings are made by hand, a type of intangible cultural heritage. It will also exhibit flagship products at the second Exposition on China Indigenous Brands to be held from Friday to Sunday at Shanghai Exhibition Center.
More than 100 companies had applied to be listed on China’s new science and technology innovation board by yesterday.The board, announced in November by President Xi Jinping, is expected to start trading by the middle of the year.The companies, ranging from software and information services to computers, communications and biomedicine industries, plan to raise a total of 98.4 billion yuan (US$14.5 billion). The top three regions for applicants are Beijing with 22 firms, Shanghai with 18 and Guangdong Province with 15, according to the Shanghai Stock Exchange website.The companies have to go through audit and inquiry stages before they can be listed.The board represents a new era of the Chinese capital market as it is a registration-based IPO system. It welcomes unprofitable and startup firms to the domestic capital market, analysts said.Chinese investors are racing to buy mutual funds linked to the new science and technology board in the expectation that these funds will have privileged access to upcoming initial public offerings, potentially enjoying handsome returns upon public trading, according to media reports.
CHINA’S exports growth retreated in April, while growth in imports rose to a six-month high, according to China Customs yesterday.
The nation’s total foreign trade rose 4.3 percent from a year earlier to 9.51 trillion yuan (US$1.41 trillion) in the first four months, the General Administration of Customs said yesterday.
Exports increased by 5.7 percent year on year to 5.06 trillion yuan during this period, while imports rose by 2.9 percent to 4.45 trillion yuan, expanding the trade surplus by 31.8 percent to 618.17 billion yuan.
As for the April figure, China’s import and export value totaled 2.51 trillion yuan, up by 6.5 percent year on year. Exports rose 3.1 percent to 1.3 trillion yuan from a year earlier, lower than the expected 8 percent growth and the 21.3 percent jump in the previous month.
Imports, however, increased by 10.3 percent to 1.21 trillion yuan in April from the same period last year, faster than the expected 3 percent, reversing the 1.8 percent decline in March.
In dollar terms, export growth fell to a worse-than-expected level, falling 2.7 percent year on year in April, compared with the 14.2 percent rise in March, while import growth rose to a higher-than-expected 4 percent, reversing the precious 7.6 percent drop.
The trade surplus shrank to US$13.8 billion last month from US$32.6 billion in March.
“We believe the slowdown in export growth was mainly due to calendar-related effects from the Lantern Festival, which was on March 2 last year but on February 19 this year, and payback effects after March’s front-loading of exports to avoid a reduction in value-added tax rebates,” said Lu Ting, chief China economist at Nomura.
In mid-March, China announced a cut in VAT on manufactured goods to 13 percent from 16 percent which became effective on April 1.
“In the same vein, the VAT cuts may have lowered import growth in March and led to the rise in April, as importers were inclined to postpone customs clearing of imports from March to April to pay the lower VAT rate on imported goods,” Lu said yesterday.
By region, China’s foreign trade with the US retreated in the first four months from the same period last year, and the trade surplus expanded.
China’s exports to the US contracted 4.8 percent in January-April year on year, while imports from the US declined 26.8 percent, leading to a trade surplus reaching 570.19 billion yuan, up 10.5 percent
China’s imports and exports to major markets such as the European Union, ASEAN and Japan all posted rises, and those to countries along the Belt and Road grew at a faster pace than the overall rate.
In terms of commodities, crude oil and natural gas imports increased in the January-April period, while imports of soybean declined.
In April alone, Chinese crude oil imports hit an all-time high, and soybean imports posted the biggest month-on-month rise of 55 percent. Iron ore imports, however, tumbled to an 18-month low due to reduced shipments from Brazil.
Also of note, imports and exports from private enterprises increased rapidly, accounting for a higher proportion of the overall figure.
In the first four months, private enterprises’ imports and exports totaled 3.9 trillion yuan, up 11 percent, accounting for 41 percent of China’s total foreign trade, up 2.5 percent from the same period last year.
Exports increased by 13.1 percent to 2.53 trillion yuan, making up 49.9 percent of the total, while imports rose 7.3 percent to 1.37 trillion yuan, accounting for 30.7 percent of overall imports.