Category Archives: World News

China Focus: Chinese capital market accelerates deploying offshore RMB business

China Focus: Chinese capital market accelerates deploying offshore RMB business

 

BEIJING, May 27 (Greenpost) — Shanghai Stock Exchange (SSE), China Financial Futures Exchange (CFFEX) and Deutsche Bourse Group signed a strategic agreement on Wednesday to jointly initiate an offshore RMB financial instrument trading platform in Frankfurt, Germany, SSE said in a statement Wednesday.

Prior to this, the People’s Bank of China (PBOC), the central bank, just expanded its pilot of RMB qualified foreign institutional investors (RQFII) to Chile on Monday, granting it a quota of 50 billion yuan (8 billion U.S. dollars).

Further more, officials from China’s securities regulator also disclosed that China will officially launch the Shenzhen-Hong Kong stock connect program in the second half of this year.

All signs show that China’s domestic capital market is speeding up deploying the offshore RMB business.

According to the strategic cooperation agreement of the three parties, they will incorporate a joint venture in Germany as the operator for the platform, said the statement.

The SSE, CFFEX and Deutsche Bourse will hold a stake of 40 percent, 20 percent and 40 percent in the new company, respectively.

The main functions of the company are to make R&D for offshore RMB-denominated securities and derivatives products and provide trading spot for these products, it said.

The new company is expected to start operation in the fourth quarter of 2015.

Dr. Gui Minjie, president of the SSE, expressed that the establishment of the platform will help promote the two-way opening up of China’s capital market, enrich investment tools for offshore RMB markets, and promote the RMB internationalization.

As a matter of fact, this is not the first time for China’s domestic capital market to cast its eye on massive offshore RMB markets.

In early 2012, a number of RQFII funds made their debut in Hong Kong and offered a back-flow channel for offshore RMB there, which marked the start of RQFII program.

The RQFII program keeps expanding, having lured 13 countries and regions to pilot the business after Chile’s entrance, with investment quota topping one trillion yuan.

On November 17, the Shanghai-Hong Kong stock connect program was officially kicked off, and over half of the 300-billion-yuan quota for the program has been used.

The launch of similar program in Shenzhen means the RMB will have a smoother investment and backflow channel.

Notably, the size of offshore RMB posted about a ten percent drop from a year earlier in the first quarter of this year due to the strong performance of the US dollar, which will not last long in the view of experts.

A report by the Deutsche Bank predicts the size of offshore RMB deposits will rebound as from April, will reach 3.25 trillion yuan by the end of this year, up 30 percent year on year.

Some scholars hold that RMB internationalization has become a key strategy for the opening up of China’s economy and financial industry.

Besides accumulating offshore RMB pool via trade and investment, desirable investment products and places are also needed for offshore RMB.

Therefore, China domestic capital’s deployment of offshore RMB markets will help further improve RMB’s international position. Enditem

Source Xinhua

Editor   Xuefei Chen Axelsson

China Focus: China makes challenging transition, RMB not undervalued: IMF

   China Focus: China makes challenging transition, RMB not undervalued: IMF

 

By Xinhua Writers Jiang Xufeng, Han Jie

Beijing, May 27 (Greenpost) — The International Monetary Fund (IMF) is closely following steps taken by China to promote the free use of its currency as the country undergoes a “challenging and necessary” economic transformation, a senior IMF official has said.

 

QUALITY GROWTH

Commenting on the country’s economic development over the past year, IMF first deputy managing director David Lipton said Chinese policymakers are pursuing a “quality-growth” strategy.

“They are not trying to achieve the fastest possible growth, but rather the fastest sustainable growth,” he said in an exclusive interview with Xinhua during a visit to Beijing.

“That means allowing the economy to slow, if that’s necessary, to work through some financial vulnerabilities that have built in areas like the property sector and excessive lending to state-owned enterprises.”

“Growth in China is moderating — a slowdown that is not a goal unto itself but a by-product of moving the economy away from the unsustainable growth pattern of the past decade.”

The Chinese economy grew 7.4 percent in 2014, the weakest annual expansion in 24 years. The government further lowered this year’s growth target to approximately 7 percent, stressing quality and innovation-driven growth.

On Tuesday, the IMF projected the Chinese economy would grow 6.8 percent this year, consistent with its April prediction in the flagship World Economic Outlook (WEO) report.

The world’s second largest economy is transitioning to a new normal, aimed at “safer and higher-quality” growth, and other economic reforms are underway including a new budget law, deposit interest rate liberalization, the creation of a deposit insurance scheme and a whole agenda for capital account liberalization, Lipton said.

“These are all items put in the ‘Third Plenum Blueprint’ and they are all being put into motion. Those measures will further help promote high-quality growth,” he said.

The Chinese labor market has remained resilient despite slower growth, which, in turn, has supported household consumption. Inflation is expected to end the year at around 1.5 percent, according to a statement issued after the IMF’s 2015 Article IV Consultation with China.

The Article IV Consultation is an annual economic and financial check-up between the IMF and its member countries. A mission from the IMF visited China from May 14 to 27 to conduct discussions on the annual review of the Chinese economy, and Lipton joined the mission’s final policy discussions.

If the Chinese economy slows a lot more,   fiscal policy should be used to bolster growth and boost household income and spending, so China can simultaneously reduce financial vulnerabilities and tap the potential of the “untapped growth engine”– household consumption, said Lipton, adding that rebalancing is the biggest challenge facing the Chinese economy.

The global economic recovery is “weak and uneven” and the economic slowdown is affecting developing countries in general as countries like China, to some extent, depend on advanced economies for exports, said Lipton, a former senior official at the White House.

 

RMB NOT UNDERVALUED

“While undervaluation of the renminbi (RMB) was a major factor causing the large imbalances in the past, our assessment now is that the substantial real effective appreciation over the past year has brought the exchange rate to a level that is no longer undervalued,” Lipton said after meeting with high-ranking Chinese officials.

This signaled a change of tone in the IMF’s judgment on

this issue after maintaining for a long time that RMB was “moderately undervalued”. Many experts believed that the value of RMB has reached equilibrium.

The value of RMB has been a source of tension between China and some trading partners, as they accuse China of keeping it artificially low to gain an unfair competitive advantage, which Beijing refuted.

Lipton stressed that it is a judgment “about this moment” and may change in the future.

“However, the still-too-strong external position highlights the need for other policy reforms–which are indeed part of the authorities’ agenda–to reduce excess savings and achieve sustained external balance,” Lipton said at a Tuesday press conference.

“We believe that China should aim to achieve an effectively floating exchange rate within 2-3 years,” he added.

China has adopted a steady pace in raising the yuan’s daily trading limit against the U.S. dollar, from 0.3 percent in 1994 to 0.5 percent in 2007 and 1 percent in 2012 to the latest 2 percent, in an effort to enhance the floating flexibility of the RMB exchange rate.

 

RMB’S SDR INCLUSION

Lipton said Chinese authorities have stated publicly their interest in including the renminbi in the IMF’s Special Drawing Rights (SDR) basket, a move that has been highly anticipated.

“We welcome and share this objective and will work closely with the Chinese authorities in this regard,” he said.

The IMF has launched its five-year review of the SDR basket, an international reserve asset that currently includes the U.S. dollar, Japanese yen, British pound and the euro. Whether to add the yuan to the basket is a major issue for this year’s assessment.

The review process will take a majority of this year, and “we are looking at the progress that’s been made in internationalization of renminbi and we are following very closely the steps that the People’s Bank of China (PBOC) is making and plans to make in order to promote the free use of renminbi internationally,” he told Xinhua.

“We hope that when we have done all that analysis and when the PBOC has undertaken these reforms, we will get to a proper conclusion,” Lipton added.

RMB has overtaken the Canadian and Australian dollars since November 2014 to enter the top five world payment currencies, trailing only the Japanese yen, British pound, euro and U.S. dollar, according to the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

“As the Managing Director of the IMF has said, RMB inclusion is not a matter of ‘if’ but ‘when’,” Lipton stressed. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

China adjusts personal imports tariffs to spur consumption

China adjusts personal imports tariffs to spur consumption

BEIJING, May 25 (Xinhua) — The Ministry of Finance on Monday announced adjustments on the tariffs levied on the import of personal items to stimulate domestic consumption.

Starting from June 1, import tariffs on suits and sneakers will be trimmed from 14-23 percent to 7-10 percent, and 22-24 percent to 12 percent, respectively, the ministry said in a statement.

According to the adjusted policy, import tariffs on cosmetics and diapers will be cut from 5 percent to 2 percent, and 7.5 percent to 2 percent, respectively.

The adjustments are an important step to stabilize economic growth through benefiting imports, promoting domestic consumption and spurring industrial upgrade, said the ministry.

Economic growth slowed to 7 percent in the first quarter this year, down from 7.3 percent the previous quarter, and retail sales in April grew 10 percent from a year ago, slightly lower than the 10.2 percent posted in March, indicating more easing measures may be needed to prop up growth. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

Robot pushes productivity gains at China’s manufacturing hub by 17 pct

   Robot pushes productivity gains at China’s manufacturing hub by 17 pct

 

Stockholm, June 4 (Greenpost) — Productivity in a Southern China manufacturing hub rose 17 percent last year while shedding 6.8 of their labor thanks to the adoption of automation and robots, the municipal government said Sunday.

Companies in Dongguan, Guangdong Province, began modifying their manufacturing processes late last year as labor supply in one of the world’s largest manufacturing country began to shrink.

Rising labor cost resulting from a dwindling labor pool in China have hurt the competitiveness of products made by Chinese manufacturers. Multinational firms such as Nike are transferring their manufacturing base away from China to southeast Asia in search of cheaper labor.

A Standard Chartered survey conducted among nearly 300 manufacturers during the first quarter this year in the Pearl Delta Region in south China, including those in Dongguan, found that employers have expected wages to rise more than 8 percent this year.

Investment into manufacturing upgrades and growing use of automated production system also drove down the average production cost by 12.5 percent last year, the municipal government said.

In March, South China’s Guangdong Province pledged to push nearly 2,000 companies in the region to replace human labor with robots as part of its three-year, 943 billion yuan industrial overhaul in the delta.

China is expected to have more robots operating in production plants than any other country by 2017, according to the International Federation of Robotics. Enditem

Source  Xinhua

Editor   Xuefei Chen Axelsson

 

China, Germany exchanges to co-launch offshore yuan platform before year-end

China, Germany exchanges to co-launch offshore yuan platform before year-end

 

Stockholm, June 4 (Greenpost) — Chinese and German exchanges are to jointly launch an offshore yuan platform to trade financial instruments in Frankfurt before the end of this year, a source told Xinhua on Monday.

The Shanghai Stock Exchange and the China Financial Futures Exchange had conducted intensive talks with the Deutsche Boerse Group on plans for cooperation over the last week.

According to a source attended the meetings, the three exchanges had reached a consensus to jointly establish a trading platform that offers Chinese investors direct access to German financial markets.

Media reports said last Friday that the Shanghai Stock Exchange and the Deutsche Boerse had agreed to build cross-listing arrangements for companies from both countries. The source denied these reports, saying they were highly exaggerated.

The source added that the cooperation deal among the three exchanges was a detailed follow up to the decisions that top leaders from the two countries had reached during the first China-Germany high-level financial dialogue held in Berlin in mid-March. Enditem

Source Xinhua

Editor  chenxuefei7@hotmail.com

China to become world’s largest 4G market in 2015: ABI Research

   China to become world’s largest 4G market in 2015: ABI Research

Stockholm, June 4  (Greenpost) — China will outpace the United States to become the world’s largest 4G market this year, the People’s Posts and Telecommunications News reported on Tuesday, quoting a report by market researcher ABI Research.

ABI Research said China’s three basic telecom operators, all having got 4G LTE licenses, would see their 4G customer number reach 500 million by the end of 2015, accounting for 36.5 percent of the country’s total mobile customers.

China’s basic telecom operators started 4G business in 2013. Last year, they developed around 100 million 4G customers. China Mobile (CHL.NYSE; 00941.HK), as China’s first 4G business operator and the world’s largest telecom operator by customer number, used its first-mover advantage to win roughly a 90 percent share on China’s 4G market in the year. Enditem

Source   Xinhua

editor  Xuefei Chen Axelsson

 

German rail giant mulls buying trains from China: report

German rail giant mulls buying trains from China: report

 

Stockholm, June 4 (Greenpost) — Germany’s national railway operator, Deutsche Bahn, said Tuesday that it was considering buying trains and spare parts from China in the future.

“In three to five years from now, Asia and China in particular can assume a key role in supplying Deutsche Bahn with trains and spare parts,” board member Heike Hanagarth told German newspaper Frankfurter Allgemeine Zeitung on Tuesday.

According to Hanagarth, Deutsche Bahn’s objective is to cooperate with Chinese train makers CSR and CNR, and the company plans to open a purchasing office in Beijing as early as this coming fall.

As a first step, Deutsche Bahn would reportedly start to buy part of its annually required 35,000 wheel sets in China from 2017. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

 

 

Sino-British entrepreneurs bullish on bilateral ties amid China’s “new normal”

   Sino-British entrepreneurs bullish on bilateral ties amid China’s “new normal”

Stockholm, June 4(Greenpost) — Both Chinese and British entrepreneurs are bullish on the Chinese market and bilateral collaboration in industries such as retail, healthcare and care-giving to senior citizens.

Addressing the 4th UK-China CEO dialogue on Tuesday, Zhu Xinli, chairman of China’s juice producer Huiyuan Group, said entrepreneurs both from China and Britain should regard China’s economic restructuring and growth slowdown as an opportunity, rather than merely an arduous process.

In the context of so-called “new normal” in China, entrepreneurs’ status is set to rise, as well as the expectations and encouragement from the society. Besides, more opportunities will emerge during and after the restructuring, he added.

Tom Troubridge, chairman of the China Business Group of PwC UK, said although the Chinese economic growth has slowed down, it is still much higher than all major advanced economies. In history, no country could keep growing at a high rate forever.

“If we take the economic scale of China into consideration, in a longer term, a 3 percent growth also indicates a large GDP increment,” he added.

He noted that currently there are 725 million urban residents in China, with an urbanization rate passing 50 percent. With urban residents looking set to number over 1 billion, the process of China’s urbanization not only benefits the country’s real estate industry, but also boosts the market of retail, education, healthcare and environmental protection.

Troubridge said he expected that there will be more acquisition activities of British brands by Chinese companies in the future, boosted by the growing demand of increased consumption of China’s expanding middle class.

Gordon Johncox, managing director of British cider producer Aston Manor, said he was optimistic on China’s cider market, as China is the largest beer consumption market and the largest apple juice consumer. Enditem

Source  Xinhua

Editor  Xuefei Chen Axelsson

China makes breakthroughs in fourth-generation nuclear technology

China makes breakthroughs in fourth-generation nuclear technology

 

Stockholm, June 4 (Greenpost) — China has made breakthroughs in the fourth-generation advanced nuclear technology featuring secure high temperature reactors.

The preliminary feasibility study report of the 600,000 KW high temperature reactor of the Jiangxi Ruijin nuclear project for commercial use was approved by the authorities, marking a big step forward for China’s first high temperature reactor power station for commercial use, according to the China Nuclear Engineering Group Co., on Wednesday.

Construction is expected to start on the first phase of the Jiangxi Ruijin project’s two units in 2017.

Nowadays, China has already mastered all technologies of high temperature reactors with proprietary intellectual property rights.

The high temperature reactors are suitable for construction in load-center areas and countries or regions with small- and medium-sized power grids, said analysts.

On China’s A-share market, investors can focus on companies as Sichuan Danfu Compressor (002366.SZ), SUFA Technology Industry (000777.SZ) and Jiangsu Shentong Valve (002438.SZ). Enditem

 

China to formulate 5-year development plan for software, big data industry

 

   China to formulate 5-year development plan for software, big data industry

 

Stockholm, June 3 (Greenpost) — China will map out and carry out a 5-year development plan (2016-2020) for software and big data industry to incubate a group of highly competitive businesses, reported the Xinhua-run cnstock.com.cn Wednesday.

As the report told, the remarks were made by Miao Wei, minister of China’s Ministry of Industry and Information Technology (MIIT) on the Int’l Soft China 2015 open in Wednesday.

Besides, Miao said China would take measures to speed development of software industry, which is at the core of ICT, short for information, communication and technology, according to www.Chinanews.com.

As Miao spoke, the measures include those to encourage integration of software firms and industrial companies, quicken construction of safe and reliable information systems as well as R&D and industrialization of key technologies including industrial software, industrial operating systems, industrial Internet, intelligent autos, and industrial robotics, build industrial cloud platforms and big data centers, accelerate data share standards and establish a batch of crowd-creating space to activate innovation of small businesses. Enditem

Source Xinhua

Editor   Xuefei Chen Axelsson

China Focus: Belt and Road initiatives to spur infrastructure investment

China Focus: Belt and Road initiatives to spur infrastructure investment

Stockholm, May 8 (Greenpost) — The “One Belt and One Road” initiatives, also known as the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives, are very likely to boost physical infrastructure investment and facilitate the growth in the construction sector in China, according to market observers.
The Belt and Road initiatives are a Chinese framework for connecting economies in Asia Pacific and Europe.
Qiu Bo, an analyst at Guosen Securities Co., Ltd., said 2015 will be a year of infrastructure as Chinese government is now actively pushing ahead with its Belt and Road initiatives. The analyst added that the investment in infrastructure has become an important driving force behind domestic economic growth amid the domestic downturn.
According to market analysts, China’s infrastructure projects mainly include housing renovation projects in shanty towns, urban underground pipeline network construction, railways and roads construction in central and western regions, waterway projects in the inland areas, oil-and-gas pipelines construction, electric power equipment, and environmental protection projects.
China Galaxy Securities’ researcher Bao Furong said there is a great opportunity for infrastructure-related companies to grow in the year. He also believed the central bank’s latest interest rate cuts could help reduce financing costs for construction enterprises as they are highly indebted at the moment, adding that steel-and-rail-related companies listed in China will benefit most from the lower rates.
The People’s Bank of China, the central bank, has cut the benchmark interest rates twice since November 2014, and lowered the reserve requirement ratio twice in less than three months since the start of this year.
According to calculations by Shenwan Hongyuan Securities Co., Ltd., construction companies listed on the Shanghai and Shenzhen bourses reported an 11.3 percent growth in net profits in the first quarter of the year, quicker than a 1.4 percent growth pace for the fourth quarter of 2014.
As it appears from publicly disclosed financial reports, construction sector is rebounding from recession. Sun Peng, a researcher at Sinolink Securities Co., Ltd, predicted construction companies will see a further pickup in the year with massive new orders flooding into them.
Under such circumstances, market observers also said that belt and road initiatives may bring big profit opportunity for private investors who participate in the public-private partnership (PPP), a new model of developing public service projects that is funded and operated through cooperation between government and private sector companies. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

China prompts int’l energy cooperation eyeing Belt and Road initiatives

China prompts int’l energy cooperation eyeing Belt and Road initiatives

BEIJING, May 14 (Xinhua) – China’s National Energy Administration (NEA) recently held a meeting to implement the Belt and Road initiatives and advance international energy cooperation, said a release by the NEA on Thursday.
The energy sector would focus on international cooperation to link up energy infrastructure, safeguarding safety of oil and gas pipelines, prompting building of transnational power transmission corridors and upgrading of regional power grids, said Nur Bekri, director of the NEA and deputy director of the National Development and Reform Commission (NDRC).
The implementation of the Belt and Road initiatives has far-reaching implications on advancing international energy cooperation between China and relevant countries, Bekri said.
He suggested continuous guidance from relevant departments and greater financial and insurance support to energy cooperation from relevant institutions.
The main role of enterprises would be reinforced and the strength of different areas would be tapped, according to the release.
The meeting had participants from the NDRC, the NEA, the Ministry of Foreign Affairs, the Ministry of Commerce, local governments, relevant enterprises, industry associations and research institutions. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

China to unveil top-level design on rural land, property mortgage loans

China to unveil top-level design on rural land, property mortgage loans

BEIJING, May 14 (Xinhua) — China is likely to unveil a scheme for the trial program of mortgaging rural contracted land use right and rural house property right for loans, the Economic Information Daily reported on Thursday.
The drafting of the scheme, led by the central bank of China, has been handed to the State Council for approval, the Economic Information Daily quoted insider as saying.
The scheme does not limit numbers of trial counties and encourages grain-growing counties to apply first.
Some existing laws concerning the mortgage of rural contracted land use right can be put aside in those counties undertaking the trial program. The trial program will provide significant grounds for amending laws in the future, experts say. Enditem

 

Source Xinhua

Editor  Xuefei chen Axelsson

China to conduct 1st nationwide ocean economy survey this year

Developed countries dominate in 2015 Human Capital Index, China ranks 64th: WEF

Developed countries dominate in 2015 Human Capital Index, China ranks 64th: WEF
Stockholm, June 3(Greenpost) — Developed countries have dominated the rankings of the Human Capital Index in 2015, with China ranked 64th out of 124 economies, according to the World Economic Forum’s (WEF) Human Capital Report released Wednesday.
The index aims at assessing the outcome of past and present investments in human capital and offering insights into what a country’s talent base will look like in the future.
It evaluated the levels of education, skills and employment available to people in five distinct age groups, starting from under 15 years to over 65 years.
Globally, Finland topped the rankings of the Human Capital Index in 2015, scoring 86 percent of its human capital, followed by Norway, Switzerland, Canada and Japan.
Sweden, Denmark, the Netherlands, New Zealand and Belgium also seized the places in the top 10 list.
Among other large advanced economies, France is in 14th position, while the United States is in 17th position, scoring just under 80. Britain holds the 19th spot and Germany 22nd.
China ranked 64th out of a total of 124 economies, optimizing 67 percent of its human capital.
According to the index, China’s under-15 group and 15-24 group maintained their competitiveness over the human capital, ranked 55th and 58th respectively. However, China’s 25-54 group and 55-64 group are in 61th and 83th position.
Among other BRICS nations, Russia ranked 26th and Brazil is in 78th place, followed by South Africa (92) and India (100).
“Talent, not capital, will be the key factor linking innovation, competitiveness and growth in the 21st century. To make any of the changes necessary to unlock the world’s latent talent we must look beyond campaign cycles and quarterly reports,” said Klaus Schwab, founder and executive chairman of the WEF. Enditem

source Xinhua

Editor  Xuefei Chen Axelsson

China Focus: Online money market funds lose luster

China Focus: Online money market funds lose luster

 

Stockholm, June2 (Greenpost) — Online money market funds (MMFs) are losing their appeal to Chinese investors who crave higher yields in the stock market.

Combined assets of online MMFs totaled 1.36 trillion yuan (222 billion U.S. dollars) at the end of the first quarter, down 9.8 percent from the previous quarter, according to data from Beijing-based lending information provider Rong360.com.

The figure was a sizable reduction compared to a peak of 1.56 trillion yuan at the end of September 2014.

Analysts said a bullish stock market has drawn money away from online MMFs.

The benchmark Shanghai Composite Index has gained more than 30 percent since the start of this year, accompanied by a frenzy of new accounts and record turnover.

Rong360.com analyst Xu Jin said that a huge amount of capital has flowed out of bank deposits and online MMFs into the stock market, feeding the market’s steady climb.

Online MMFs offered annualized interest rates of nearly 7 percent when they first became popular in 2013, but the current rate has fallen to around 4 percent, another reason they have lost their allure, according to Xu.

The falling yields accompanied two interest rate cuts and two drops in banks’ reserve requirement ratio by the central bank since November of last year.

Despite the general decline, Alibaba’s Yu’e Bao, the most popular and largest online MMF, was an exception. Its first quarter report showed assets had reached 712 billion yuan as of the end of March, up 23 percent from three months ago.

Alastair Sewell, Senior Director of Fund & Asset Manager Ratings at Fitch Ratings, said the relative ease and convenience of online MMFs have made them wildly popular and a key wealth management tool for average investors.

Yu’e Bao can be used for online purchases, taxis, credit card payments, mortgage payments, and even utilities such as water and electricity. It also offers instant redemption and no-fee money transfers between bank accounts.

However, Sewell warned that online MMFs have a less stable investor base with yield-hungry retail investors susceptible to herd behavior, which could result in a mass outflow of funds. Enditem

Source  Xinhua

Editor Xuefei Chen Axelsson