Category: "News of China"
Wanda to sell 13 tourism programs and 76 hotels to Sunac for $9.3 billion
July 10th, 2017Dalian Wanda Group agreed to sell 13 tourism programs as well as 76 hotels to Tianjin-based property company Sunac China Holding in a deal worth 63.17 billion yuan ($9.3 billion) on Monday, according to a statement Wanda sent to the Global Times the same day.
Sunac will acquire 91 percent of the 13 cultural and tourism programs, including those based in Xishuangbanna, Southwest China's Yunnan Province, Hefei, capital of East China's Anhui Province and Harbin, capital of Northeast China's Heilongjiang Province, after paying 29.58 billion yuan to Wanda, the statement said. The Hong Kong-listed company will then undertake all the loans for developing those programs.
The company also agreed to buy out 76 hotels owned by Wanda, including Wanda Realm Beijing and Wanda Reign Wuhan for 33.6 billion yuan, the statement noted.
The two firms are expected to sign a detailed agreement by July 31 and complete the transfer of payment, assets and shares "as soon as possible", according to the statement.
After the deals are settled, the transferred cultural and tourism programs will still use the Wanda brand. Wanda is also still responsible for their construction, operation and management.
As of 11:20 a.m., the share price of Dalian Wanda Commercial Properties, the Hong Kong-listed arm of Wanda, has surged to HK$ 1.16 (14.85 cents), almost double the number listed from the opening earlier this morning. The Sunac's shares were suspended from trading on Monday ahead of the acquisition announcement.
Catering sector takes a bite out of sharing economy
June 23rd, 2017In the restaurant street outside Beijing's Ritan Park, the day starts slowly, but not for Guo Hongtao, manager of a take-out only restaurant. As online lunch orders begin to pour in, his 20-square-meter kitchen is gearing up for the day. The space is rented from Panda Selected, a start-up that offers co-cooking space to take-out kitchens.
Panda Selected also helps its tenants in a variety of ways, including designing logos, writing menus, planning online operations, connecting them with good suppliers, negotiating with food delivery platforms and applying for business licenses.
As some companies share kitchens with take-out only restaurants, some others share meals. Cengfanqu is one of the apps that bring foodies to household dining tables.
On the other side of the app, home chefs, most of them unemployed housewives living in the countryside, are more than happy to start their own business from home. By benefiting the local rural community, the app has also gained support from the local government.
China's food takeout market totaled 113.3 billion yuan in 2016, according to business think tank Analysys. The massive market means opportunities for kitchen and meal sharing companies.
At the same time, industry insiders say, kitchen and meal sharing remain a fledgling segment of the market. They note that innovation and regulation are the key factors that could help make it a stable part of the sharing economy.
Multinational firms lose luster among Chinese students: survey
June 16th, 2017Multinational companies no longer enjoy recruitment advantages in China as domestic IT and Internet companies increasingly gain favor among Chinese students, according to data released Thursday by international consultancy Universum in Shanghai.
The Stockholm, Sweden-headquartered Universum received assessments of 233 employers from 79,346 students majoring in business, engineering, science, social sciences and humanities, law and medicine.
In the survey, 18 percent of Chinese students said they were willing to work for a multinational, a decrease from 25 percent in 2016 and 28 percent in 2015. The proportions were even lower among science and engineering majors—only 16 percent of engineering students and 14 percent of science students wanted to join a multinational after graduation. The students said multinationals were less stable than their domestic counterparts.
This year, the top five most attractive employers for business majors were Alibaba, Huawei, Bank of China, Ernst & Young, and PricewaterhouseCoopers, while the top five most favored by engineering students were Huawei, Tencent, Alibaba, Baidu and Microsoft.
Alibaba and Huawei were also attractive to other majors. Alibaba was the second most attractive employer among science students and the top among students of social sciences and humanities. Huawei took the first spot among science students, and was the second most popular among business students and majors in social sciences and humanities. Tencent also ranked high among various majors.
Chinese Internet companies were well known for competitive compensations that came with highly stressful workloads. But the survey found Chinese students attributed these companies' attractiveness to their entrepreneurial spirit, creative working environment, team work and corporate social responsibility. The students valued "a sound support for future career development" when it came to choosing an employer.
Wu Gang, the vice-president of Universum's Asia-Pacific region, said that "In recent years, through our surveys and research, we've found an obvious change. That is, China's indigenous IT and Internet companies are becoming increasingly popular, while the competitive advantages multinationals used to enjoy are no longer that noticeable."
Investors will be wary of putting money into independent media
June 13th, 2017Investors will be more cautious in putting money into "content producers" as the industry faces more risks after China's online regulator recently shut dozens of entertainment social media accounts, industry experts told the Global Times on Monday.
About 30 WeChat accounts mainly covering celebrity scandals have been closed, the Guangdong Province office of the Cyberspace Administration of China (CAC), the Internet and mobile app regulator, said in a notice on Saturday.
Some of the accounts won investors' attention because of their popularity, but the closure will definitely hurt their investors, Xiong Gang, chairman and founding partner of China ASB Ventures, an investment management company, told the Global Times on Monday.
The Beijing office of the CAC said in a notice on Wednesday that 60 popular celebrity gossip social media accounts were closed in line with the country's new cybersecurity law, which was effective on June 1.
The closed WeChat accounts include Dushe Movie, a movie criticism app that had more than 2 million followers.
Germany-based Bertelsmann Asia Investments led a series A funding round in Dushe, valuing it at 300 million yuan ($44.13 million), according to a report by financial news portal China Money Network in August 2016.
Xiong warned that investors need to weigh risks before choosing these projects, adding that it's very important for "content producers" to comply with the law in China.
Xiong said that his company will instead invest in sectors based on technology innovation, which offer relative stability.
There is still potential in the media industry, however.
In 2017, the independent media in China will be more regulated and sites producing high-quality content will more easily get investors' attention, said a white paper released in February by Beijing-based topklout.com, a research company focusing on independent media.
"We have invested in some projects in the entertainment industry such as video platforms," Yu Wenhui, founder of the Guangzhou-based investment company Thunderstorm VC, told the Global Times on Monday.
The projects his company invested in are mostly operated on several platforms, not like some accounts that are limited to WeChat, because having only one platform is risky, according to Yu.
Of the accounts that were closed on WeChat, some may seek new channels and opportunities.
"But it costs a lot to regain public attention and attract investors," Yu noted.
Some experts said that the closures' impact will be limited.
"Although some of the social media accounts are quite popular, it's still hard to monetize their estimated value" anyway, said Chang Zongfeng, co-founder of Shanghai-based crowdfunding company baichouhui.com.
Investors will be more cautious as they will need to know whether a site's content is in line with the country's cybersecurity law, Chang told the Global Times on Monday.
Beijing's first private bank set to open
June 8th, 2017
The Beijing office of China's banking regulator on Tuesday approved the opening of Zhongguancun Bank, the capital's first private financial institution. It will be the 13th such bank granted permission to operate in the country.
The registered capital of the bank is four billion yuan (590,000 U.S. dollars). The bank has 11 stakeholders, the majority of them being innovative tech enterprises located in the Zhonguancun area of Haidian district, a hub known for tech start-ups.
Private stakeholders
The biggest stakeholder is Yonyou Network Co., Ltd., an enterprise management software and cloud service provider with 100 offices around the world. Yonyou has been listed on the Shanghai Stock Exchange since 2001. The company holds a 29.8% stake in the bank.
According to the Beijing office of the China Banking Regulatory Commission, the bank will serve the needs of SMEs in the technology sector, providing them with support in funding and other financial services, boosting the innovative development of companies in the Zhongguancun area and other Chinese SMEs using technologies such as Big Data and cloud computing.
China promotes private banks
In 2014, China approved a pilot scheme which set up five private banks to give private capital a bigger role in the country's financial system.
In June last year, the State Council released guidelines aimed at promoting the development of private banks by encouraging and guiding private capital to the banking sector.
The government aims to provide more individualized and convenient financial services to medium-and-small sized companies, rural areas, agriculture and farmers and mass entrepreneurship and innovation.
Sand from Naiman Banner has turned the desert region into an exporting hub with high-tech industrial products
June 7th, 2017
A worker at Naiman Banner Huaxin Silicate Products carries bricks inside the company's factory.
Sand from Naiman Banner has turned the desert region into an exporting hub with high-tech industrial products
You might have just walked on "magic bricks".
If you stroll outside Beijing's National Aquatics Center, also known as the Water Cube, on a rainy day, you will notice something very different.
The water instantly drains through the paving stones, or bricks, before traveling through the drainage system below.
"Our bricks have been used in more than 500 projects in 13 municipalities and provinces," said Ye Haoqian, general manager of the Inner Mongolia Renchuang Ecology Environmental Protection Industry Co Ltd, which makes the paving stones. "They effectively solve the problems of urban flooding and disperse rainwater."
Inner Mongolia Renchuang Sand is based in Naiman Banner of Tongliao city in the Inner Mongolia autonomous region.
The high-tech enterprise turns silica sand into a coated substance, widely used in sectors such as oil exploration, construction and casting as well as paving stones.
Naturally, the price increases from about 300 yuan ($44.1) per metric ton for untreated sand to up to 6,000 yuan per ton for the coated product that has liquid-permeability properties.
This allows water to pass through without destroying the bricks or turning them into mush.
"With patented technologies, we are now planning to export our products to the United States, with annual productivity of 600,000 tons of specially-treated industrial sands," Ren said.
Still, the company is just one of 38 businesses involved in the industry in Naiman Banner.
Around one million tons of sand a year come from the region.
But then, the area is famous for it with the industry employing 2,000 workers, while annually revenue tops 2 billion yuan, according to local government data.
There are numerous grades of products, including building material sand, mechanical precision casting sand and glass making sand.
Since Naiman Banner is located at the heart of the Kolqin "Sand Land" that is hardly surprising. Up to 62 percent of the region is desert and it used to be one of the poorest areas in China.
Every year, villages used to be buried in sand, whipped up by the constant wind forcing residents to move out.
But in the 1980s scientists made an exciting discovery?Naiman Banner was rich in the finest silica sands with reserves of 50 billion tons.
With the building blocks of an industrial-scale production line, the government decided to develop the sector by rolling out the Angnai Sand Mine in 1984.
"Relying on the large reserves of silica sand, local government has developed the industry and turned what many saw as waste into wealth," said Zhu Zhenmin, deputy director of forestry bureau in Naiman Banner.
So far, there are six industrial parks and three of them are built on sand.
"We do not take over arable land when it comes to industrial development," Zhu said. "Sand has become a specific character in attracting investment."
Major Chinese companies, including Renchuang Sand, the largest in the sector, moved there from Beijing.
"By attracting well-known enterprises, we have introduced technologies and solved the problem of financing," Zhu said.
The central government has also helped to cultivate high-tech businesses by setting up research and development organizations.
Naiman Banner Huaxin Silicate Products Co Ltd has developed 21 new products and obtained 12 patents. It manufactures lime-sand bricks.
"Our annual sales revenue hit 30 million yuan last year with total asset exceeding 60 million yuan," said Pan Taiyan, general manager of the company.
Lotte to sell loss-making stores
June 2nd, 2017
A Lotte Mart in Beijing, Feb 28, 2017.
Lotte Mart, the retail arm of South Korea's Lotte Group, is expected to sell some of its loss-making stores in China, a South Korean newspaper reported.
But it is finding it hard to sell the stores at a decent price or even find a proper buyer at a time when the hypermarket format is no longer attractive to local consumers.
The South Korean retailer is in negotiations with potential Chinese buyers to sell 20-30 of its loss-making stores. At present, 90 percent of its 74 hypermarkets are no longer in operation, according to Aju Business Daily.
Jason Yu, general manager of Kantar Worldpanel China, said Lotte is seeking buyers for its struggling stores but will keep its profit-making outlets.
"Lotte doesn't have many advantages. Its best option is to sell its business to local retailers in China, which are likely to be interested in Lotte's regional presence if they want to boost their dominance in specific regions."
"It is hard for Lotte to sell at a good price given that the hypermarket business model is struggling for survival and consumers favor smaller formats such as convenience stores and online shopping," said Yu.
"Lotte's main problem is it failed to keep pace with the profound changes in China's retail environment," said Yu.
According to the Korea Herald, South Korean retail group Shinsegae Group has decided to close its chain of discount supermarkets in China. Shinsegae Vice-Chairman Chung Yong-jin told reporters that the company's E-mart chain will be leaving the Chinese market after 20 years.
According to a Shinsegae spokesman, the E-mart stores will be closed at the earliest possible date, depending on local contract conditions for each store.
Despite aggressive investment, the chain failed to gain traction and underwent massive restructuring. At the end of 2010, the chain had 26 stores, but it now operates just six.
"Failure to adapt to the changing demands of Chinese consumers and retaining the same business model for years were held as the major reasons for the exit of E-mart in China," said Yu.
In the first quarter of this year, hypermarkets, supermarkets and convenience stores grew only 0.3 percent, according to Kantar's report.
Some traditional retailers have met the challenge of change in the nation's consumer market by improving their offerings in fields such as fresh and imported food, and tie-ups with e-commerce.
For example, Wal-mart Stores Inc moved onto the platform of JD.com Inc on May 25, to make the best use of JD's massive logistics system and Wal-mart's global merchandise supply.
China to increase momentum in smart manufacturing
May 18th, 2017China will focus on smart manufacturing by integrating the strategy of "Made in China 2025" with the Internet Plus Initiative as well as entrepreneurship and innovation to upgrade the country's traditional industries and help advance economic restructuring.
The decision was made at a State Council executive meeting presided over by Premier Li Keqiang on Wednesday when a report on the strategy's implementation was delivered to participants.
Since implementing the strategy in 2015, the country has seen a steady progress in industrial capabilities, smart manufacturing, innovation, and product quality and branding. A recent case in point was the passenger jet C919 that took its first test flight earlier this month.
The meeting decided to focus on smart manufacturing and further deploy new technologies such as the industrial internet to make manufacturing a smarter and greener sector that offers better services and products.
Average productivity was up by 38 percent for China's first 109 pilot projects of smart manufacturing, while operating costs dropped by 21 percent, according to the Ministry of Industry and Information Technology.
The premier said "Made in China 2025", as a crucial part of the supply-side structural reform, is vital to moving the country's economy up the value chain. The key is to exploiting advantages of China's domestic market and human resources, as well as further promotion of basic research and innovations, he said.
"Implementation of the strategy has introduced strength to the real economy, especially the equipment manufacturing. However, we should also keep aware of our weak links as much of the industry is at the medium and lower end of global supply," Li said.
"Made in China 2025" was first unveiled in the Government Work Report in March 2015. Two months later, the State Council released a guideline, which focused on five key projects, including smart manufacturing, and 10 key fields such as new materials.
Key technologies will be on top of agenda, including independent research and development. Innovative development in fields such as new materials and robots will be accelerated.
As of Wednesday, the Ministry of Industry and Information Technology has approved pilot regions for the strategy, namely 12 cities such as Ningbo in Zhejiang province and three city clusters in provinces such as Jiangsu. Some of them will be designated as the country's demonstration areas, which will get favorable policies in investment, financing and other fields.
The premier urged to establish demonstration areas, where small and medium-sized enterprises can develop with large companies for collaborated growth and greater global competitiveness.
The meeting also decided to cultivate a new model of incorporating the manufacturing sector with the Internet Plus Initiative. The country will strengthen cooperation with other countries to achieve mutually beneficial outcomes.
The country will introduce advanced management, raise quality standards and guide companies to put quality as their top priorities. More efforts will be made to attract and recruit talents from home and abroad. More items for governmental approvals will be streamlined with lower threshold for market access and improved oversights to nurture an excellent business environment. Greater financing supports will be given to the real economy to increase resources for industrial upgrading. Intellectual property rights will also be given greater emphasis to safeguard legitimate rights of market entities.
China toughens auditing of overseas investment by state-owned companies
May 9th, 2017Chinese authorities will introduce an improved, rigorous system of auditing overseas investment by state-owned companies as the pressure of cross-border capital flow remains.
The auditing system focuses on decision-making by state-owned companies on overseas investment and joint ventures, and their financial management and internal control, in addition to capital security, operating benefits and risk control of overseas state-owned assets.
Major methods of auditing include domestic inspection, auditing and analysis of documents and inquiries into relevant parties.
If necessary, regulators will go overseas for on-site verification and evidence collection in accordance with international practices and laws of the countries in which state-owned companies invest.
Outbound investment has grown rapidly in recent years and played an important role in deepening mutually beneficial cooperation between China and other countries as well as promoting domestic economic restructuring.
However, irrational speculation, illegal transfer of assets, and fake transactions all disrupt China's foreign exchange and financial markets, causing state-owned asset losses and hurting national interests.
A recent report released by China's foreign exchange regulator unveiled some cases in which companies had illegally transferred assets overseas under the guise of outbound investment.
Some newly established firms, which had produced nothing, were providing large sums of outbound investment. Some heavily indebted companies borrowed more to acquire companies overseas. These are just a few of the examples listed by the State Administration of Foreign Exchange.
Risks are inherent in any investment and cannot be avoided. Given growth in overseas state-owned assets, regulation of those assets has been a new challenge facing Chinese authorities.
In support of the country's "going out" strategy for investment, businesses of state-owned companies, especially centrally administered ones, have expanded to more than 150 countries and regions with over five trillion yuan (about 725 billion U.S. dollars) in overseas assets, earning global fame for high-speed train, nuclear power and ultra high voltage projects.
Compared to foreign multinational giants, Chinese state-owned companies lack experience in overseas operations and risk control.
With more companies "going out," China's overseas investment has been exposed to complicated problems in culture, human resources and corporate management. Some enterprises have paid high prices for those problems.
"The first step is to roll out measures to regulate overseas investment, the second is to stipulate company operations strictly, and the third is to develop a system of accountability," said Xiao Yaqing, head of the State-owned Assets Supervision and Administration Commission (SASAC).
Noting an irrational tendency in outbound investment, Chinese authorities have set stricter rules and advised companies to make their investment decisions more carefully.
Since the beginning of 2017, SASAC has introduced negative lists and designated investment redlines for both domestic and overseas investment by state-owned companies.
"There is no doubt that a more comprehensive and stringent auditing system will help standardize China's overseas investment and contribute to maintaining and increasing the value of state-owned assets," said Li Jin, chief researcher with the China Enterprise Research Institute.
China's outbound direct investment fell by 64 percent year on year to reach 20.9 billion U.S. dollars in the first quarter, thanks to increasingly rational market players and guidance by relevant government departments.
Last year, the country's outbound direct investment surged over 40 percent from a year earlier, the result of an increasingly globalized Chinese economy and also stemming from some irrational or illegal acts.
China's trade surplus widens in April
May 8th, 2017China's foreign trade surplus widened in April as import growth decline outpaced that of exports, customs data showed Monday.
Exports in yuan-denominated terms rose 14.3 percent year on year to 1.24 trillion yuan (179.8 billion U.S. dollars), down from the 22.3-percent increase in March.
Imports expanded 18.6 percent to 979.1 billion yuan, compared with a 26.3-percent increase a month ago.
That leaves a trade surplus of 262.3 billion yuan, up 0.6 percent year on year. The surplus widened from 164.3 billion yuan seen in March.
In the first four months, total trade volume added up to 8.42 trillion yuan, up 20.3 percent year on year.
While the April trade growth fell short of expectations, customs data reflected improved trade structure.
In the first four months, general trade expanded 21.6 percent year on year to 4.75 trillion yuan, accounting for 56.5 percent of the total trade volume.
Trade of private enterprises grew 21.7 percent to 3.17 trillion yuan in the first four months, accounting for 37.6 percent of the total, and 0.4 percentage points higher than the same period last year.
Despite rising protectionism and anti-globalization sentiment, China's imports and exports with major trade partners remained strong.
During the first four months, trade with the European Union gained 15.5 percent year on year to 1.24 trillion yuan, accounting for 14.8 percent of the total. Trade with the United States expanded 20.3 percent to 1.18 trillion yuan, making it China's second largest trade partner.
Customs data also showed that a leading indicator for China's exports rebounded from 40.2 to 40.7 month on month in April, signalling positive potential in exports.
WeChat to make payment service available in U.S.
May 5th, 2017WeChat is already one of China's most popular mobile payment methods. Now the social media app, owned by Internet giant Tencent, is teaming up with Silicon mobile payment startup Citcon to take its services to the U.S. market.
Through WeChat accounts, users will be able to pay for whatever they need in Chinese currency RMB without cash, just as they do in China.
For four consecutive years, China has been the world number one outbound tourism country, accounting for over 13 percent of the total tourism revenue globally. The United States has been one of the most popular destinations for Chinese travelers.
"Last year, over 100 million Chinese people traveled outside of China. Once they see this place can accept WeChat Pay, they can use their mobile phones. They certainly receive much warmer welcomes? from foreign countries," according to Chuck Huang, CEO of Citcon.
Mobile payment is the new frontier of commerce, and China is leading this trend. By providing an easy-to-use mobile payment and cross-border marketing solution, WeChat is empowering global merchants to connect with millions of Chinese consumers.
Currently, WeChat Pay is available in 15 countries and regions, for payments in 12 foreign currencies.
Tencent has now joined Apple and Google-parent Alphabet in the ranks of the world's biggest firms by market capitalization, with a value of more than 302 billion U.S. dollars. Shares in the tech company hit a record high on Tuesday.
It's the only firm outside the U.S. among the world's top 10 most valuable companies.?
Alibaba's Yu'ebao becomes world's largest money market fund
May 4th, 2017Alibaba's Yu'ebao is now the world's top money market fund with 1.2 trillion yuan (170 billion U.S. dollars) of assets in the first quarter this year. However, growth in interest rates hasn't been expanding along with the size of the fund.
Data from Alibaba shows registered users of Yu'ebao reached 300 million as of the beginning of this year, and Yu'ebao's total assets now exceed the size of the money market fund run by JP Morgan.
The annual return Yu'ebao is now paying is only around 3.9 percent, however, notably less than it has paid historically.
Still, as the returns are both stable and better than those offered by commercial banks, many investors are sticking with it.
Other factors leading to the popularity of Yu'ebao are that it is easy for users to manage, and that it has a low investment threshold with only one yuan.
An increasingly important point, however, is that the annual interest Yu'ebao pays is nowhere near as high as when it was launched.
The current interest rate on a Yu'ebao investment is down by almost 40 percent from its 2014 peak. Some customers are becoming skeptical.
However, the lower interest rates don't necessarily mean that a Yu'ebao investment has no risks.
The main risks of money market funds come from interest rates and the liquidity risk. Once money market funds go into deficit, investors will want to cash out. Similar cases happened in 2008 financial crisis.
In fact, the overall size of China's money market funds is falling.
Total assets of money market funds in China was 3.9 trillion yuan in the first quarter this year, down by 7 percent quarter-on-quarter.
Robots replace human labor beyond manufacturing bases
May 3rd, 2017
A robot arm writes calligraphy.
The smart technology leading to an explosive growth of robotic replacement for human labor has begun to flourish beyond the traditional manufacturing bases, but also in China's service industry.
According to the Ministry of Industry and Information Technology, robots have replaced humans in manual work in 5,000 industrial programs over the past four years in Zhejiang Province, involving investment totaling 500 billion yuan (US$72.5 billion).
Ling Yun, deputy director of the Zhejiang Provincial Economic and Information Technology Commission, said that, by 2015, the usual manual labor pool has slimmed down by some two million workers.
Moreover, Anhui, Guangdong and Shandong provinces are pressing ahead with robotic substitutes in their cutting-edge industries where manual jobs for both men and women are being substantially reduced.
According to the Beijing Morning Post, jobs better suited to robots comprise the assembly of intelligent vehicles, firefighting and medical care, which all benefit from the employment of industrial data analysis, information technology and 3D auxiliary design.
The workshop of Shenzhen Rapoo Technology, facing a labor shortage of labor from 2005, purchased 75 robots in 2011, with immediate benefits in declining labor costs.
Nowadays, one of its computer keyboard assembly lines needs only five workers responsible for monitoring the automatic processing by the robots that have replaced an estimated 100 workers previously employed there.
The replacement has continued to prevail by moving from assembly lines to banking and logistics.
In 2015, China Construction Bank installed a number of robots to replace staff in its call center. Currently, STO Express, one of China's leading privately- owned logistic companies, has adopted 320 robots to categorize deliveries in Linyi City, Shandong Province.
The robots can deal with 18,000 parcels weighing a maximum of five kilograms each every single hour at a high rate (often 100 percent) of accuracy. As a result, the labor force in the Linyi branch was cut by 80 percent from 150 to 30.
Despite the expansion of robots into the job market, experts have assured human workers not to overact to the smart automatic fashion as the trend can free them from the shackles of mundane toil for more complicated techniques and meaningful endeavor.
Wang Yamin, an employee from Guangdong Changying Precision High-Tech Co Ltd, said, that when the work she was doing was temporarily taken over by robots, she attended a two-month training enabling her to get a promotion to be a technician with increased salary.
"Currently, the robots, whose sensors remain weak, can only run in a certain framework," said Ding Han, dean of the Mechanical Science and Engineering School of Huazhong University of Science and Technology.
"The special robots have to complete their missions with remote controls," he added.
According to NEKKEI's Chinese news web, more and more young people receiving high education in China are not interested in repetitious manual jobs, which, in addition to the rising labor costs, are challenging the manufacturing competence of the country.
The advent of robots, which can be used for at least 10 years, helps the country, an economic locomotive in the world, sustain the momentum of economic growth.
Finance, real estate industries offer highest executive pay
April 25th, 2017Executives in the finance and real estate industries have the highest pay among 1,894 listed companies that announced their annual financial reports in 2016, said China Economic Weekly.
On average, executive pay packets hit 7.09 million yuan ($1.02 million) in 2016, up eight percent year-on-year, higher than the rate of China's GDP and per capita disposable incomes, which were 6.7 percent and 6.3 percent respectively. Yet disparities are clear among sectors and companies.
Among the 18 sectors categorized by the China Securities Regulatory Commission, financial executives ranked the highest with annual pay of 27.36 million yuan, followed by real estate executives at 11.18 million.
The average pay for executives in educational companies was the lowest, just over 2.8 million yuan and about one tenth that of their counterparts in the financial sector.
The quickest growth in executive pay on average came from the hotel and catering sectors, at 47.58 percent. But top managers at companies in the fields of scientific research and technology services saw their pay decrease by 4.2 percent.
Executives at leading Chinese insurer Ping An snatched the highest pay at 108 million yuan, about 158 times higher than executives working for Puyang Huicheng Electronic Material.
Twenty-four companies reported their executive pay as being lower than one million yuan, and 1,033 companies put the figure between one million and five million. Ten companies announced that their executives were paid more than 50 million yuan.
Seven executives received pay above the 10 million yuan threshold. Lin Yong, an executive assistant at Haitong Securities, scored the highest pay packet at 15.49 million yuan. Ping An's Chief Investment Officer Chen Dexian and Yin Ke, the former executive director at CITIC Securities, received pay packets of 12.86 million and 12.08 million respectively.
Wang Jie, the general manager of a Beijing-based investment company, said the higher pay for executives in the financial and real estate industries shows the imbalance in development in China.
Buyers' interest spurs clean energy market innovation
April 24th, 2017As Chinese people are showing a growing interest in new energy vehicles, industry insiders are urging carmakers to make technological progress to remain competitive and calling for change in sales and after-sales policies to boost consumption.
Automakers are presenting 159 new energy cars at the ongoing Shanghai auto show, representing about 11 percent of all exhibits at the event.
According to a recent report from measurement company Nielsen, the popularity of clean energy vehicles is rising among Chinese consumers due to improvements in the cars' performance and mileage.
The report, based on a survey of 2,307 respondents from the country, said 27 percent of car-buyers are considering purchasing purely electric cars and 25 percent are interested in plug-in hybrids.
This is the first time that electric cars have attracted more fans than plug-in hybrids since the annual survey launched in 2012.
Nielsen said electric cars available in the country had an average mileage of 164 kilometers in 2016 and the number has grown to 252 km this year.
However, the survey revealed that people expect on average a range of 374 km from electric cars.
The company said such expectations would push traditional carmakers to improve their research and development.
"It is one of the best times as a new sector develops; it is also one of the worst times as competition is extremely fierce. Carmakers must do their best," said Olive Zhang, vice-president of Nielsen China.
Some traditional carmakers have released concrete plans.
German carmaker Volkswagen said electric models based on its current platform can achieve a range of 300 km and those on its MEB platform will double the figure. "Cars based on the MEB platform are scheduled to be localized in China by 2020," said Jochem Heizmann, president and CEO of Volkswagen Group China.
New players continue to join the race. Within a year the authorities have approved 13 new energy carmakers' plans to build their plants. Their combined investment stands at 26 billion yuan ($3.8 billion) and their combined annual capacity will reach 760,000 vehicles.
Electric car startup NextEV is showcasing 11 models at the Shanghai auto show in the hope of getting a slice of the growing market.
China has been the world's largest new energy car market since 2015. Last year, it sold 507,000 electric cars, plug-in hybrids and fuel cell models, 53 percent growth year-on-year.
The rise in their sales could prompt car dealers to change how they run their business, said Shen Jinjun, president of the China Automobile Dealers Association, at a new energy car meeting in Shanghai.
He said such cars differ from gasoline ones in that they need little daily maintenance, which is now a major source of revenue for gasoline car dealers. Shen suggested that the companies could consider shifting the focus of their business from car sales and maintenance to building experience centers.
Nielsen's report shows that 60 percent of potential buyers would undertake online research, while about a quarter go to brick and mortar stores to see new energy cars and test-drive them.
Shen's organization has been pushing for changes to the current car warranty policy, which was tailor-made for gasoline cars.
The warranty covers major components such as the engine and the gearbox, which electric cars do not have.
Tencent sees huge advances for AI in manufacturing
April 21st, 2017China's manufacturing sector is set to climb the adoption curve of cloud computing and artificial intelligence this year, after the service industry reaped early gains from the internet, said Pony Ma, chairman of Tencent Holdings Ltd.
As new technologies cascade through markets, less productive business models will cede ground to more innovative ones which are streamlining business processes and optimizing supply and demand, he told a packed audience at a digital economy conference on Thursday.
"With initial strides being made in the service sector, manufacturing, which is the backbone of China's economy, has begun heavily investing in the building blocks of the internet economy. Traditional manufacturers, rather than internet firms, are leading this wave of disruptive innovation," Ma said.
Tencent, the gaming-to-cloud computing conglomerate, will play its part as "an infrastructure provider and a connector", he added, by sharing its big data analytics, location-based services, artificial intelligence and payment solutions with industrial players.
As part of that initiative, Tencent is providing its cloud computing might to build an industrial big-data platform for Sany Group Co Ltd, the nation's leading machinery equipment maker.
The virtual platform connects Sany's existing 300,000 devices globally and uses predictive analysis to head off problems before they happen, according to He Dongdong, Sany's senior vice-president. Through remote monitoring, malfunctions can be detected in real time and repaired within 24 hours, he said.
Ma told the conference that digitally-enabled innovation is likely to penetrate into the agricultural sector. Similar improvements are taking shape in the marketing and distribution of Tongwei Group, a feed and aquatic products maker.
Ma said it relied on Tencent's WeChat service to pair supply with demand. The increased digital engagement, including the adoption of location-based services, also expanded the company's reach and enriched customer interactions, he said.
Yang Yuanqing, chief executive officer of Lenovo Group Ltd, said Chinese manufacturers are exploring ways to employ big data on inventories and shipments to improve product planning, and were banking on artificial intelligence to provide predictive analysis and self-servicing capabilities.
"Companies will realize broad productivity gains in their operations by automating processes, streamlining product development and digitally reinforcing their supply chains," said Zhou Qiren, a professor of the National School of Development at Peking University.
Beijing, Tianjin, Hebei pool $15b rail fund to boost integration
April 19th, 2017Beijing, Tianjin and Hebei province have set up a 100 billion yuan ($14.54 billion) joint railway fund to boost regional integration, authorities announced on Tuesday.
About 54 billion yuan, or 90 percent of the initial installment, comes from social capital with a time period of 10 years, according to Tianjin Daily.
The fund plans to invest 70 percent on inter-city railway construction, and the rest on land development along the routes.
Regional projects, including Beijing-Tangshan rail, Shijiazhuang-Hengshui-Cangzhou rail, and a second one connecting Beijing and Tianjin, which stops at Binhai New Area, will start construction this year.
Beijing-Tianjin-Hebei Railway Investment Co, the lead coordinator of the fund, signed agreement with 12 financial institutions, including the country's big five banks, Ping An Asset Management Co, and Capital Development Investment Fund Management Co in Beijing.
The fund is part of year-long effort by local authorities to renovate financing model in railway construction and attract social capital under market mechanism.
In all, Beijing, Tianjin and Hebei will see an addition of nine inter-city rail lines by 2020, with a total estimated investment of 247 billion yuan, according to a notice released by the National Development and Reform Commission (NDRC). Commute time between major cities and their surrounding counties will be significantly reduced.
China rolled out the integration plan for Beijing-Tianjin-Hebei in 2015 to address urban problems such as traffic and air pollution and seek balanced development of the region.
Skoda debuts first electric car in Shanghai
April 18th, 2017
Skoda CEO Bernhard Maier showcases the company's electric car Vision E on April 17.
Czech carmaker Skoda Auto has unveiled its first ever electric concept car in Shanghai, declaring that electric cars will be a pillar of its development strategy.
The Vision E has a maximum output of 225 kilowatts and can run at a top speed of 180 km/h, with a mileage of 500 km.
The concept also features Level 3 autonomous driving, which means it can drive itself on express ways and park itself without human intervention.
The first of these electric cars will hit the market in 2020.
Skoda CEO Bernhard Maier said it will launch five entirely electric cars in various segments of the market before 2025.
In addition to the concept car, Skoda announced it will release an estate car, Octavia Combi, into the Chinese market later this year.
China has been Skoda's largest market worldwide.
It sold 317,000 cars to Chinese customers last year, and Skoda plans to double sales by 2020 with its growing portfolio.
Skoda entered the Chinese market in 2007 and has since localized its models with SAIC Volkswagen. Statistics show that it has sold more than 2 million cars in China in the past 10 years.
Disposable income growth outpaces GDP growth in China
April 17th, 2017Chinese people's disposable income expanded at a faster pace than economic growth in the first quarter of this year, the National Bureau of Statistics (NBS) said Monday.
Per capita nominal disposable income of Chinese nationwide rose 8.5 percent in the first three months from a year ago, and per capita real disposable income after taking into consideration the effects of inflation increased 7 percent, outpacing the gross domestic product (GDP) growth rate of 6.9 percent in the period, NBS figures showed.
Breakdown figures showed that urban residents' per capita real disposable income grew 6.3 percent year on year in the first quarter to 9,986 yuan (about 1,452 U.S. dollars), while per capita disposable income of rural residents rose at a faster pace of 7.2 percent in the period to 3,880 yuan.
Other indicators released by the NBS on Monday, including fixed-asset investment and industrial production, pointed to stabilization in the world's second-largest economy.
NBS spokesperson Mao Shengyong said the economy had achieved a rosy start this year and the income gap between rural and urban residents narrowed, laying a solid foundation to realizing its full-year economic target.
The government trimmed this year's growth goal to around 6.5 percent from a range of 6.5 to 7 percent for 2016.
Integrity of workers, companies crucial in job-hopping era
April 14th, 2017The head of a human resources market research company in China has called for companies, based throughout the nation, to strengthen integrity management processes in China's job market, as well as encouraged government officials to improve relevant laws and regulations.
Tian Yongpo, from the Chinese Academy of Personnel Science, said "integrity at work is even more important in such an era with explosive information about jobs", and added for example the mobility of Chinese labor forces gradually increased from 2010 to 2014.
Tian said, at a forum held by people.com.cn in Beijing on Wednesday, China's floating population grew 12.65 percent, moving from 221 million to 253 million people, from 2010 to 2014.
"Huge information about jobs have accumulated during the process," he said.
"Among explosive information, a problem will certainly arise about information transfer and distortion.
"As a result, our credibility at work is greatly influenced."
His comments came shortly before a survey, published at the forum, which stated more than 80 percent of respondents said the credibility of Chinese workplaces were poor.
The survey collected information from more than 6000 people, as well as 3000 human resources managers, and was carried out by a website that helps companies investigate personal information, 17zhiliao.com, between March 10 and April 10, 2017.
More than half of the respondents to the survey believed dishonest behavior had resulted in a loss to companies and individuals.
Guo Wenlong, the deputy head for Labor Law Studies of Shanghai Law Society, said the "call for a law is natural since one could not get all the information he needs to (determine if a person in focus is credible or not)."
Guo went on to mention authority figures should improve laws and regulations on the non-competition agreement in the labor law, as the occasional employee has operated in a grey area to avoid company requirements and restrictions.
HR managers listed the worst behavior as missing job interviews, slacking off at work and even job-hopping.
Individuals overstating work performance and experience, as well as falsifying their educational background, were recorded as the most common dishonest behaviors to be seen.
To avoid hiring these types of candidates, 97 percent of HR mangers believed it was necessary to investigate the information job seekers' provided during the early stages of recruitment.
More than 90 percent of job seekers agreed to the necessity of a background check; however, most people believed companies should seek the candidate's approval before undertaking their enquiries.
Li Aijun, a law professor with the China University of Political Science and Law, urged companies to follow China's rules, regulations and laws while undertaking investigations into personal information.
She cautioned the act of obtaining sickness records, property information and particular criminal history records, as these acts could become illegal after a certain point.
China FDI growth slows in March
April 13th, 2017Foreign direct investment (FDI) into the Chinese mainland rose 6.7 percent year on year in March, slowing from February, official data showed Thursday.
FDI reached 87.8 billion yuan (12.8 billion U.S. dollars) in March, the Ministry of Commerce (MOC) said in a statement.
The growth rate was lower than the 9.2-percent increase recorded in February.
Total FDI in the first three months of the year edged up 1 percent year on year to 226.5 billion yuan, the MOC said.
During the same period, 6,383 new foreign-funded enterprises were established on the Chinese mainland, up 7.2 percent year on year.
Most investment went to the service sector, which saw FDI expand 7.1 percent year on year in the first quarter to account for 73 percent of the total FDI.
Investment in utility services soared 165.6 percent year on year, while high-tech services attracted 28.7 billion yuan of investment, up 12.4 percent year on year.
Investment from the European Union grew 11.2 percent in the first quarter, the MOC data showed.
Last year, China attracted 126 billion U.S. dollars of foreign direct investment, the largest recipient among developing countries, data showed.
German hardware giant establishes first retail store in China
April 11th, 2017German hardware giant Wurth Group opened its first retail store in northeast China's Liaoning Province on Monday.
The store, located in the China-Germany Equipment Manufacturing Industrial Park in the province's capital Shenyang, displays thousands of products, such as fasteners, tools, chemical products and personal protection equipment.
"The favorable location and preferential policies of Liaoning, one of China's northeastern rust belt provinces, offered many development opportunities for investors," said Larry Stevens, CEO of Wurth China.
"We hope Wurth can introduce more advanced products and technology into this park, have further cooperation with local companies, as well as offer new ideas for the industrial development," said Li Baojun, deputy director of the management committee of the industrial park.
Founded in 2015, the China-Germany Equipment Manufacturing Industrial Park covers 48 square kilometers, attracts intelligent manufacturing, high-end equipment, automobile, industrial service and strategic emerging industries.
Wurth Group, founded in 1945, is a world market leader in the assembly and fastening material trade. It entered the Chinese market in 1994 and has 1,200 employees in more than 100 Chinese cities.
Logistics makes shopping seamless in the new era
April 10th, 2017Logistics will play a critical role in fulfilling a seamless shopping experience in the era of the "New Retail", experts said.
As merchants begin to lean more on omnichannel sales, retailers need to tailor how a product is purchased and delivered to meet customer demands.
A survey of the world's leading retailers last November showed the top reasons for embarking on the omnichannel journey are to preserve a slice of the market share and improve customer loyalty.
The survey was conducted by US-based ARC Advisory Group in conjunction with logistics consultancy DC Velocity.
Most retailers are looking for the simplest means possible to integrate the new platforms within their existing infrastructure.
The study found out that three-quarters of retailers fulfilled orders from multiple channels through a single facility, laying a clear foundation of omnichannel practice.
In the survey, 86 percent said they took orders online (including mobile) while 77 percent also said brick-and-mortar, and 42 percent said they took orders from call centers and catalogs.
In terms of handling "last mile" deliveries, most merchants stick to the traditional courier delivery services at 43 percent, followed by third-party logistics partners at 23 percent. But others are experimenting creative options, including deliveries made by store staff and drones.
In China, e-commerce companies are experimenting with omnichannel solutions by offering warehouse-to-home and stores-to-home deliveries through partnerships and investments in offline supermarkets.
For instance, through its Cainiao logistics affiliate, an alliance of top Chinese shipping and courier companies, e-commerce giant Alibaba last year expanded its same-day and next-day deliveries from 50 cities to 200 cities.
According to a study by Goldman Sachs in March, Cainiao had 'Fulfilment Centers' dedicated to Alibaba's Tmall online marketplace operating in 19 cities at the end of last year.
It runs three fresh food distribution centers in three major Chinese cities: Beijing, Shanghai and Guangzhou. All of them support cold chain delivery of fresh food purchased on Taobao and Tmall to the doorsteps of Chinese consumers within 24 hours.
It recently upgraded the service by providing fresh, rather than frozen, imported Australian beef to the dining tables of residents in 12 cities in China. Cainiao said with its new technologies, meat can be preserved fresh between 0-4 degrees for up to 21 days.
Others are also making new moves on prompt deliveries. JD.com Inc has successfully used drones to deliver online purchases to rural shoppers, using unmanned aircraft for last-mile distribution.
Overseas experts expect China's new economic zone to deepen all-round opening up
April 6th, 2017
Aerial photo taken on March 31, 2017 shows Baiyangdian, north China's largest freshwater wetland, in Anxin County, north China's Hebei Province.
International media reports and observers say the establishment of China's new economic zone not only provides a new blueprint for the coordinated development of Beijing-Tianjin-Hebei (BTH) region, but also indicates China's determination to deepen its opening up in an all-round way.
China announced Saturday it would establish the Xiongan New Area in north China's Hebei Province, which is located some 100 km southwest of downtown Beijing.
Well-known international media outlets have enthusiastically reported about the new economic zone, regarding it a major decision of the Chinese government to promote the coordinated development of the BTH region, and a signal of China's willingness to continue to embrace globalization and free trade.
The Associated Press said the economic area is part of a plan to integrate the capital with its surrounding areas, noting that prior to this, the Chinese government had already planned to jointly develop Beijing, the port city of Tianjin and Hebei Province to boost regional and economic development in the northern region.
The Strait Times of Singapore said the removal of non-capital functions from Beijing is part of a greater strategy to integrate the development of Beijing, Tianjin and Hebei for a better economic structure, a cleaner environment and improved public services.
Bloomberg cited Bill Bowler, a sales trader at Forsyth Barr Asia Ltd. in Hong Kong, as saying that this would be one of the centerpieces of a high-level development plan for the Beijing-Tianjin-Hebei region.
Moreover, overseas analysts believe that the establishment of the new economic area will broaden economic growth and improve the level of China's opening-up.
Jose Ignacio Martinez, an international relations researcher from the National Autonomous University of Mexico, said Xiongan New Area's intended focus on developing high-end, high-tech industries has positive meaning for the country's overall industrial upgrading, and will stimulate a new round of China's economic growth.
Martinez also noted that Xiongan New Area's policy on opening up will further promote foreign direct investment and improve the level of China's opening up, citing the the successful examples of Shenzhen Special Economic Zone and the Shanghai Pudong New Area.
Paola De Simone, an expert on international law and economic analyst from Argentina, said China's determination to build the area is an important component of the effort to promote economic globalization, and the setting up of Xiongan New Area will continue to boost the openness and inclusiveness of China's foreign communication and cooperation.
Simone added that Xiongan New Area, along with the seven new free trade zones, demonstrates China's open and friendly attitude toward the world.
She said China's step-by-step promotion of opening up is conducive to improving its production efficiency, driving its consumption, boosting foreign direct investment and enhancing innovative ability.
Managing economic development as well as risks
April 5th, 2017
A worker at a plant in Xingtai, Hebei province, Jan 25, 2017.
Despite China's slower but more sustainable growth path, economic growth remains high by global standards as the country's population ages and the economy re-balances from investment to consumption and from manufacturing to services.
Still, as China's economic reforms continue, risks need to be addressed, as President Xi Jinping said recently, to cope with corporate over-leveraging, as well as to reduce overcapacity in the real estate and heavy industry sectors.
In the last few decades, the government has always been careful to pay attention to economic signals, including those against potential risks and problems, and carefully planned the structural reforms. The recently concluded annual sessions of the country's top legislature and top political advisory body also took note of the financial risks and adopted measures to tackle them.
Why is this important? Because the debt of non-financial enterprises in China has reached almost 170 percent of GDP by the end of last year, the highest level among leading economies, with State-owned enterprises accounting for more than 70 percent of the total corporate debt. In this context, the government's measures to tackle financial risks should include the gradual removal of implicit guarantees to SOEs and restricting leveraged investment in the assets markets.
China has already made progress on this front. Namely, the guidelines to deepen reforms of SOEs, issued in September 2015, describe six priority areas including aspects like mixed ownership and transitioning to a modern enterprise system. And 68 percent of the central government-controlled SOEs under the State-owned Assets Supervision and Administration Commission of the State Council had introduced non-State managers by the end of 2015, and more than 80 percent of all the SOEs under SASAC have set up or are in the process of setting up a board.
In addition to allowing companies with high debts (especially those in overcapacity industries) to exit the market, the government should also help them restructure, and ensure that the process takes place gradually in order to prevent the waste of valuable resources (which could be better used more efficiently or to make growth more inclusive).
Therefore, the Organization for Economic Cooperation and Development suggests that insolvency procedures of the so-called zombie enterprises could be accelerated to reduce uncertainty and compensate laid-off workers.
Another aspect emphasized by the OECD regards the sharing of the benefits of growth, since China's tax and transfer system remains less efficient than those in other leading economies. For example, many low-income households pay a higher share of their incomes as social security premiums than the richer ones. And workers who are outside the formal labor market are not required to participate in the pension and medical insurance schemes, potentially increasing their financial vulnerability.
Hence, the OECD believes that the authorities should base the calculation of social security contributions of low-income households on their actual incomes, instead of the current system that prescribes a minimum contribution calculated on an imputed value of their earnings equivalent to 60 percent of the previous year's local average wage. The subsequent loss of revenue can be partly offset by the money that can be realized by reforming the individual income tax system, say, by abolishing the tax exemptions that favor high-income households. For instance, the interest received on government bonds or savings in banks, which now is non-taxable income, should be taxed.
All in all, it is important to highlight that the Chinese economy will remain the major driver of global growth, which is good news to the world economy. And once enterprises improve their performance through innovation and entrepreneurship, and the SOE reforms gain pace through exposure to market mechanisms, more jobs will be created and the benefits of economic growth can be shared by all.
China's central bank continues to drain liquidity from market
March 31st, 2017China's central bank on Friday skipped the open market operations of reverse repos, draining liquidity from the market.
This was the sixth consecutive business day that the People's Bank of China (PBOC) has halted the open market operations of reverse repos, a process where it purchases securities from banks with an agreement to sell them back in the future.
This meant that there was no injection of short-term funds into the banking system, which led to a net cash withdrawal, as previous reverse repos matured Friday and siphoned 30 billion yuan (4.3 billion U.S. dollars) from the market.
The PBOC said in a statement that liquidity in the banking system was "at a relatively high level" as the government sped up fiscal spending near the end of the month.
Fiscal expenditures mean fiscal deposits flow into commercial banks from the central bank, thus, improving market liquidity.
China has pledged to pursue a prudent and neutral monetary policy in 2017, with the M2, a broad measure of the money supply, to grow by around 12 percent, one percentage point lower than the 2016 target.
China sees robust air passenger growth in January
March 21st, 2017China's civil aviation sector posted strong passenger growth despite a decline in cargo transportation in January this year, official data showed Monday.
Air passenger trips in January increased 17.6 percent year on year to 43.9 million, according to the Civil Aviation Administration of China.
The pace was faster than the 11.8-percent growth registered for the whole year of 2016.
Passenger trips made on domestic routes rose 17.4 percent year on year to 38.96 million in January, while those made on international routes surged 19.1 percent to 4.97 million.
In January, air cargo and mail freight topped 565,000 tonnes in January, decreasing 3.8 percent year on year, affected by waning domestic cargo and mail business.
Domestic air cargo and mail freight declined 5.6 percent in January year on year to 409,000 tonnes, while international cargo and mail freight increased 0.9 percent in January to 156,000 tonnes.
Unilever prepares sale of food brands: newspapers
March 20th, 2017Unilever is preparing a 6 billion pound ($7.44 billion) sale of some of its food brands, British newspapers reported on Saturday.
The Anglo-Dutch company is planning to sell Flora margarine and Stork butter brands, the Sunday Times said.
The Sunday Telegraph, which also cited a figure of 6 billion pounds, quoted sources as saying private equity firms Bain Capital, CVC and Clayton Dubilier and Rice have started working on offers for these businesses. Unilever did not immediately respond to a Reuters request for comment.
The maker of Knorr soups, Dove soap and Ben & Jerry's ice cream rebuffed a surprise $143 billion takeover offer from Kraft Heinz last month, stating that the group "sees no merit, either financial or strategic, for Unilever's shareholders."
The company has launched a business review to consider returning cash to shareholders, making medium-sized acquisitions and more aggressive cost cuts, the Financial Times reported on Wednesday. In a report released in January, Unilever stated that its food business sector sustained its return to growth, driven by the packs with easy-out technology and organic variants.
Shared bikes revitalize cycle industry
March 16th, 2017
Ofo bikes around Chaoyang Park in Beijing.
Until fairly recently, bicycle production had been considered a sunset industry, but a nationwide resurgence caused by the popularity of shared bikes has given it a second lease of life.
Li Dewu, the manager of a bike production company based in Shenzhen says he never expected such a spike in demand.
Last year the downturn in demand had Li worried about his business, but an order for thousands of shared bikes just before the Chinese New Year turned things around. Li described the major deal as a second madness in his twenty year career that made him both excited and yet also a little nervous.
Hu Zefeng, who runs a cycle production company in Shenzhen, also had a busy few months with deals for over 1.5 million bikes received in total. "We have employed about 500 new workers and added 7 more assembly lines from Shenzhen to Tianjin." Hu said.
The demand for bike parts and accessories has also seen a boost. Du Kaishan, manager of a bike saddle provider said: "my factory is over loaded now, with hundreds of thousands saddles having to be made in a single deal every month."
The ubiquitous shared bikes are causing a stir in China. Companies such as Ofo and Mobike have over 10 million registered users and distribute cycles to every corner of cities including Beijing and Shanghai.
According to statistics from the China Cycle Association, over 2 million shared bikes have been placed in more than 30 cities in China since 2016.
Pricier cycles
The expansion in the shared bike market has, however, been accompanied by a rise in the price of cycles. Producers have raised their prices by 5 percent on average, according to The Paper.
A manager at a cycle assembly factory in Suzhou said the high demand for shared bikes had resulted in a shortage of cycle supplies, which influences the cost of the end product.
An industry insider said another element triggering pricier bikes is the rising price of steel and rubber, the raw materials used to make cycle frames and tires. Some types of steel have seen a 35 percent increase in prices over the last year, rubber nearly 70 percent.
Most of the cycle producers though said that they would continue with the original price of each bike or perhaps raise it a little for regular clients. Ofo, Mobike and new business entrant Bluegogo have all denied that the cost of their cycles has gone up.
China enhances crackdown on capital market fraud
March 15th, 2017World Consumer Rights Day has arrived, and China plans to enhance its crackdown on capital market fraud.
The country's top securities regulator, the China Securities Regulatory Commission (CSRC), announced last Friday that it would impose the maximum penalty on office service provider China Nine Top and AnShan Heavy Duty Mining Machinery for severe violations of information disclosure rules.
China Nine Top is reported to have inflated its revenue and bank deposits while covering up an assets gap in order to restructure with the listed company AnShan Heavy Duty Mining Machinery.
Besides exposing companies faking assets to get listed, securities watchdogs have punished other capital market counterfeit practices such as inflating financial performance to avoid delisting, and fraudulent initial public offerings using fake documents.
In order to stay on the stock market, a property developer close to being delisted due to poor financial performance turned a profit from a loss in 2016 by selling part of its equity at an over-valued price in the fourth quarter, according to the Shenzhen Stock Exchange.
There will be enhanced supervision over year-end asset selling, and restructuring to crack down upon profit manipulation, according to the stock exchange.
In February, the CSRC announced 20 representative illegal stock market cases of 2016, including the high-profile case of Dandong Xintai Electric, the first company to be forced to delist from the Chinese stock market due to IPO disclosure cheating.
"We will continue to expose some influential fraud cases in areas like restructuring and acquisition," said Liu Shiyu, head of the CSRC, late February. "For wrongdoings on the capital markets, we will follow and treat them in a timely and tough manner."
The CSRC imposed 139 administrative punishment decisions last year, 13 as cases of financial fraud.
"Listed companies are profit-seeking, and it seems that they can get more than what they might have to pay for, by cheating, so they make reckless moves to try their luck," said Tian Lihui, a financial professor with Nankai University. "So there should be harsher punishment, and most importantly, improvement of the legal framework of the capital market, such as stricter requirements for information disclosure."
Meanwhile, regulators are also working on improving the delisting mechanism to improve the overall quality of the stock market and regulate backdoor listing.
"The CSRC will require stricter information disclosure to deter financial cheating, urge intermediaries like accounting agencies and stock exchanges to fulfill due responsibility and modify delisting standards," said Jiang Yang, deputy head of the CSRC, last week.
Lincoln to make SUV in China with Chang'an Auto Group
March 14th, 2017Lincoln, the luxury unit of Ford Motor Co, said on Monday that it plans to build a luxury sport utility vehicle in China in partnership with the Chang'an Automobile Group.
The as-yet unnamed vehicle will be built at a plant in the city of Chongqing. It is scheduled to go on sale in late 2019 only in China, the world's largest auto market, according to Lincoln spokesman Said Deep.
Building in China will help Lincoln meet growing customer demand and enable the company to become more responsive to changing customer preferences, Deep wrote in an email. "As Lincoln grows in China it makes sense to produce this new SUV in China," he added.
Lincoln exports its vehicles from North America to China, and reported sales of 32,558 in 2016, three times more than it sold in 2015.
Ford and its joint venture partners sold a record 1.27 million vehicles in China last year. Lincoln isn't the only US luxury brand taking aim at China. General Motors said its Cadillac volume in China rose 46 percent in 2016 to 116,406 , the first time it passed 100,000 vehicles in China in a single year.
Boeing's first overseas factory to be built in China's Zhoushan
March 13th, 2017Boeing and Chinese aviation manufacturer Commercial Aircraft Corporation of China Ltd.(COMAC) will start to build a Boeing 737 completion center in eastern China's Zhoushan city at the end of March, scheduled to make its first delivery in 2018.
This is Boeing's first overseas facility as part of its 737 production system, and designed to deliver 100 Boeing 737 planes a year.
In the joint-venture completion center, Boeing's 737 aircraft will be installed with flight entertainment systems and seats. The plant in Zhoushan, 287 km southeast of Shanghai, also provides services such as coating, repair and maintenance of Boeing aircraft.
Boeing and COMAC signed an agreement in October 2016 to set up the Zhoushan plant, which will consist of two parts: the 737 completion center, a joint venture of Boeing and COMAC, and the 737 delivery center owned by Boeing.
Construction of the delivery center will also start at the end of March.
To accommodate aircraft manufacturing in Zhoushan, Putuoshan Airport in the city is undergoing a 750 million yuan (108 million U.S. dollars) expansion to become an international airport.
In addition to supporting Boeing, the aviation base in Zhoushan will also develop an entire industrial chain for aircraft manufacturing, with the capacity of assembling, delivering and modifying 600 aircraft a year by 2025.
Zhoushan is an archipelago and island city in Zhejiang Province, which has the largest fishery in China and boasts strong shipbuilding, tourism and service industries.
5% listed Chinese companies led by females
March 8th, 2017
A female user of Red (Xiao Hongshu) poses with the company's staff at its anniversary celebration in Shanghai.
About one in every 20 A-share companies is led by female, according to a report by Securities Times released on International Women's Day on Wednesday.
The number of chairwomen in Chinese mainland-listed firms totals 151, accounting for 5 percent of all top posts. Equipment manufacturing, pharmaceuticals, chemical engineering, real estate, and automobile are the top five industries with most female business leaders.
About 70 percent of the chairwomen were born in the 60s or 70s, according to the report. Corporate head Hu Jiajia of Shanghai Metersbonwe Fashion & Accessories Co and Liu Xiaoqing of Dalian Yi Qiao Sea Cucumber Co, both 30, are the youngest.
Of the 153 A-share firms run by women, 56 are listed on Shanghai Stock Exchange, 45 on Shenzhen small-and-medium enterprise board, and 31 on NASDAQ-styled ChiNext board.
Among the 145 chairwomen who have disclosed their education background, four have doctorate degree and 10 have studied abroad, noted the report.
According to a survey by professional networking site LinkedIn, 44 percent of all senior management roles in companies were held by women last year.
The need to balance family obligations and pressure from society are still believed to be major obstacles for women in the business world.
Beijing crowned 'Billionaire Capital of the World' for second year: Hurun
March 7th, 2017Beijing beat New York City to become the "Billionaire Capital of the World" for the second year running, according to Hurun Global Rich List released on Tuesday.
The new list ranked 2,257 billionaires, up 69 from last year and a growth of 55 percent or 804 over the last five years.
Total wealth among billionaires increased by 16 percent to $8.0 trillion, equivalent to 10.7 percent of global GDP, and up from 7 percent of global GDP five years ago.
Rupert Hoogewerf, chairman and chief researcher of Hurun Report, said global wealth is being concentrated in the hands of the billionaires at a rate far exceeding global growth.
New York has the highest concentration of billionaires, with 86, followed by San Francisco and Los Angeles on 29 and 23 respectively. The USA is the world's capital for immigrant billionaires. Two-thirds self-made, with one-third inherited. Average age among USA billionaires increased to 66, two higher than the list average.
Bill Gates, 61, is still the richest man in the world, despite only growing 1 percent to $81bn. Warren Buffett, 86, held onto second place, increasing his wealth to $78 billion, up $10 billion after a surge in the Berkshire Hathaway share price.
Jeff Bezos, 53, of Amazon, has broken into the Top 3 for the first time. Mark Zuckerberg, 32, the youngest of the Top 10, shot up to fifth, his highest ranking yet.
Chinese billionaires led the USA for the second year running, with 609 compared with 552, up 41 and 17 respectively. Hoogewerf said "China and the USA have half the billionaires in the world."
The combined net worth of Chinese billionaires is $1.6 trillion, 2.1 percent of the global GDP. Real Estate has generated most billionaires (120), followed by Manufacturing and TMT with 115 and 78 respectively, according to the report.
China is number 1 in the world in terms of generating self-made billionaires akin to "rags to riches" and is home to two-thirds of the world's self-made female billionaires.
Led by Beijing, 5 Chinese cities made the top 10 cities and 7 the Top 20. Average age is 58, six years younger than the list average.
Shenzhen surprised many by adding 16 billionaires to propel it into fourth place, just behind Hong Kong.
A February IPO propelled Wang Wei, 46, of SF Express to third spot, with a five-fold growth in his wealth to $27 billion, just behind Wang Jianlin and Jack Ma. Corporate raider Yao Zhenhua of Baoneng saw the fastest growth on the list, rising almost eight-fold to $15 billion.
Investments overtook tech to become the main source of wealth for American billionaires, with 121 and 112 billionaires respectively, followed by retail with 57. The combined wealth of U.S. billionaires was $2.6 trillion, 3.4 percent of global GDP.
Telecom carriers to end domestic long-distance, roaming charges from Oct
March 6th, 2017
A mobile phone user walks past a logo of China Mobile's 4G service in Qingdao, Shandong province.
The country's three telecom carriers, China Mobile Communications, China United Network Communications Group and China Telecommunications Corp, announced steps to scrap domestic long-distance and roaming charges from October 1, 2017, a move to drive forward industrial transformation and boast the upgrading and adjustment of real economy.
Li Yue, president of China Mobile, the country's largest telecom operator said the domestic roaming charges account for 8 to 10 percent of its total revenue, removal of such fees will have an influence on the company, adding this will encourage China Mobile to improve operation and management efficiency.
China Unicom said it will increase the coverage of broadband access, develop innovative applications, and upgrade products and services in response to the initiative of "increasing broadband access speed and reducing tariff" by the authority.
The Ministry of Industry and Information Technology (MIIT) will push forward the initiative with more effective measures.
"We will strive to remove completely the domestic long-distance and roaming tariffs for mobile users, greatly reduce the tariff for international long-distance call and dedicated internet access price for small- and medium-sized enterprises," said Chen Zhaoxiong, vice-minister of industry and information technology.
The ministry will make efforts to regulate the tariff-setting behaviors of enterprises, promote healthy market competition and continue to improve market environment of telecommunications.
China's factory-gate inflation picks up in January
February 14th, 2017China's producer price index (PPI), which measures costs of goods at the factory gate, quickened growth pace year on year in January, fresh evidence of strengthening demand in the world's second-largest economy, official data showed Tuesday.
The PPI rose 6.9 percent year on year in January, an increase on the 5.5 percent registered in December 2016, according to the National Bureau of Statistics (NBS).
This represented the fifth straight month expansion of the PPI on a year-on-year basis and the highest reading since August 2011.
On a month-on-month basis, the PPI edged up 0.8 percent, with the growth pace narrowing down from the 1.6 percent recorded in December 2016.
NBS senior statistician Sheng Guoqing attributed the monthly PPI gain to factors including the carry-over effect of last year's price changes, spiking prices of metal, fuels, chemicals and other raw materials.
Factors including rebounding domestic demand and reducing outdated capacity helped push up the PPI and the index is likely to remain high in the coming months, according to Wen Bin, a senior researcher at China Minsheng Bank.
The January PPI figure outstripped market expectations, and Chinese policymakers should be alert to inflationary pressure caused by rapid PPI growth, according to Wen.
The PPI figures came alongside the release of the consumer price index, which rose 2.5 percent in January year on year, partially due to holiday effects.
Used car sales on upward trend as provinces remove trade barriers
February 13th, 2017China's used car sales hit a record high in 2016, posting 10.3 percent growth year-on-year, as local authorities have been removing barriers on cross-provincial-border vehicle sales.
Statistics from the China Automobile Dealers Association show that 10.39 million used cars were sold last year. Industry insiders expect yet more to be sold this year.
Although the sector's growth did not keep up with surging new car sales, which saw a 13.7 percent growth rate in 2016, it was the first double-digit growth in used car sales for the past several years, said Luo Lei, the association's deputy secretary-general.
"The hard-won achievement was mainly a result of local governments gradually opening their markets to used cars from other regions," said Luo.
The State Council, China's cabinet released an eight-article guideline in March 2016, instructing local governments to lift any limitations on the flow of used vehicles between provinces by the end of May. China has 172 million cars, but local bans have curbed the free flow of used cars, resulting in insufficient supply. However, the policy has not worked out, according to Luo. He said the association's monitoring shows that while seven provinces, including Sichuan and Heilongjiang, have fully removed the barriers, many others have failed to do so.
Luo said those seven provinces saw double-digit growth in their used car sectors, which was significantly higher than that recorded in the provinces that did not remove the limitations.
Industry insiders say local authorities have failed to lift the ban because used cars usually have higher emissions and contribute less to the local economy than new cars. Luo said more regions will catch up now that the Ministry of Commerce and the Ministry of Environmental Protection have issued orders to implement the State Council's guideline. He expects sales this year to hit a new high as a result.
"Used car transactions accounted for 5.8 percent of China's total car sales last year. As local authorities remove their bans, it may return to the normal level of 7.3 percent, which will be 12.5 million vehicles," Luo said.
Xiao Zhengsan, secretary-general of CADA, calls for more attention to be given to the sector's development, saying used cars will contribute to China's automotive market's growth.
"China has become the world's largest auto market, but if its growth is driven by stimulus policies, it is not healthy," said Xiao.
According to Xiao, used cars and car finance will prove to be two critical and healthy market forces. "I will say, if we fail to do a good job in used cars, then it is impossible for us to do a job in terms of new cars sales. In one or two years you will see if I am correct," he said.
In developed markets such as the United States, used car sales are usually more than double those of new cars, while in China, they represent less than 40 percent of new car sales.
China to reduce retailers' commercial logistics cost
February 10th, 2017China will improve its logistics network to reduce costs for wholesalers and retailers.
The government will reduce the ratio of the retail and wholesale sectors' overall logistics costs on total GDP to 7 percent by 2020, according to a plan released by the Ministry of Commerce and other ministries.
High logistics costs hold back enterprises' growth. The ratio of China's total logistics spending on total GDP stood at 14.5 percent in the first three quarters of 2016, much higher than the average 8-to-9 percent level in developed economies.
China will expand its commercial logistics network and improve efficiency through IT application.
The government will also establish several national and regional commercial logistics hubs and invest more in infrastructure development.
Alipay, WeChat, UnionPay have big plans to gain larger share of growing market
February 8th, 2017Titans clash over mobile payments
The competition in China's mobile payment market is growing tougher with the standardization of China UnionPay's quick-response code technology in December. The head-to-head digital hongbao wars between the two dominant players WeChat and Alipay during the Spring Festival holidays provides one piece of evidence. Behind the cutthroat turf war, both of the platforms have broader ambitions, including creating tailored financial products based on their collections of big data. In the near future, the industry will also be subject to tighter regulations.
It was not so long ago that the red envelopes, or hongbao, that people handed out during the Spring Festival holidays were actual red envelopes.
But over the last few years, many of the red envelopes stuffed with cash have existed only virtually on online payment platforms.
During this year's Spring Festival, a record of 46 billion electronic hongbao were sent and received via Chinese mobile social platform WeChat, which is operated by Tencent Technology Co, the Xinhua News Agency reported on Saturday. The figure was up 43 percent year-on-year.
Internet giants such as Tencent have promoted the use of virtual hongbao to expand their stakes in China's fast-growing mobile payment market, as local shoppers are now using their smartphones to pay for everything from taxi fares to medical expenses.
In 2016, China's third-party payment market is estimated to reach 20.3 trillion yuan ($2.96 trillion), up 45 percent from 2015, according to research firm Enfodesk. It projected that the market will grow by more than 20 percent annually to 33 trillion yuan by 2018.
The huge market base has lured a number of companies, making the turf war for China's mobile payment market more cutthroat.
Early market entrants including WeChat and Alipay, which are run by Tencent and Alibaba respectively, have developed swipe-and-go payment systems based on quick-response (QR) codes. The two companies, which together control more than 70 percent of the market, have strived to secure their predominant position by spending heavily on discounts.
As a result, the use of credit cards has declined, rattling the country's bank card association.
On December 12, 2016, China UnionPay announced its own standards for QR code payments. The move was followed by promotional campaigns involving more than 20,000 stores from December to February, a peak time for shopping.
Latecomer
It is not the first time that China UnionPay stepped up efforts to tap the mobile payment market. In December 2015, the bank card association rolled out its near-field communication (NFC)-based Quick Pass mobile payment tool, which enables consumers to make payments by tapping their smartphones against payment terminals.
But the NFC-based technology was not as popular as QR codes.
"That's probably why UnionPay developed its own QR code last year," said Li Yi, a research fellow at the Internet Research Center under the Shanghai Academy of Social Sciences.
Li was not optimistic that commercial banks would be able to break in. "WeChat and Alipay have a lock on the huge market thanks to an early entrance," he told the Global Times on Monday.
But UnionPay still stands a chance in the mobile payment market because its technology is safer and more trustworthy, Li noted.
An employee from a commercial bank, who preferred not to be identified, agreed. "UnionPay also has an advantage in large payment transactions because WeChat and Alipay are more frequently used in payment of small amount," the bank employee told the Global Times on Monday.
For example, the two digital wallets account for around 80 percent of the mobile payment market which are under 5,000 yuan, according to the employee.
However, Liu Dingding, an independent Internet industry analyst, pointed out that the cooperation between UnionPay and commercial banks is crucial to the bank card association's goal of getting to the top.
Currently, UnionPay and the commercial banks have a "strange bedfellows" relationship, Liu said.
"UnionPay is looking to promote QR code with banks, but the logistics behind major banks' moves are different - they seek to expand the user base of their own mobile applications so that they can engage with clients directly, which means banks may also cooperate with WeChat and Alipay if UnionPay's promotion has not achieved their desired result," Liu told the Global Times on Sunday.
Broader ambitions
To date, the battles in the mobile payment market between the two tech giants, Alibaba and Tencent, have also intensified.
Head-to-head against WeChat's hongbao-grabbing activities during the Spring Festival, Alipay continued last year's collection of five good fortune games with the introduction of augmented reality technology. Participants can split a 200 million yuan prize by scanning the street-side "fu" signs, or the Chinese character of fortune, that are ubiquitous during the holidays.
To attract users, the two digital wallets are also locked in a competition for offline payment points for businesses such as restaurants, supermarkets and department stores. Therefore, both platforms turned to third-party services providers who specialize in "offline promotion" and merchants services for potential offline business growth.
For example, WeChat announced in April a plan to attract third-party services providers with more than 300 million yuan in investments. Alipay also plans to provide 1 billion yuan in rewards to third-party services providers over the next three years.
But behind the tit-for-tat competition, both Alipay and WeChat have broader ambitions.
One is the collection of big data related to transactions, which enable those platforms to invent and tailor financial services such as marketing strategies, investment and loans to their clients, Liu said.
Tencent has been struggling with how to generate revenues based on its huge consumer bases. In an interview with Caixin magazine in January, Huang Li, director of WeChat Payment, refused to elaborate on the business blueprint for the platform, only noting that the company is considering a strategy "as a whole."
Regulatory controls
In the near future, the country's third-party payment market will face greater regulatory control.
In January, the People's Bank of China (PBC) announced a new regulation that requires third-party payment companies to deposit clients reserve funds in bank accounts that do not generate interest. The new rules are intended to ensure institutions do not put the money into "risky" financial services. It is expected to takes effect in April.
An Alibaba spokesperson refused to comment on the policy's effect on its business. He said that the company "welcomes the policy and will actively impose it."
According to a report published by research firm TrendForce, following the policy implementation, major domestic payment providers, including Alibaba and Tencent, will suffer a blow, as the policy prevents them from using the funds to generate interest income or grow their business.
But Li disagreed. "Large-scale firms do not rely on interest from client funds. So the new measures will only hurt small third-payment firms."
Yet the policy is likely to tip the scales in UnionPay's favor, Li noted.
Shanghai sees firmer annual trade rise
January 25th, 2017Shanghai's trade volume hit a record in December, which helped the city post better growth in annual trade than the national figure, Shanghai Customs data showed.
Imports through Shanghai were a record 186.81 billion yuan ($27.3 billion) in December, lifting the monthly trade value over 300 billion yuan for the first time to 306.03 billion yuan, customs said.
For 2016, the city's imports and exports totaled 2.87 trillion yuan, up 2.7 percent from a year ago. The rise reversed a 2.1 percent decline in 2015.
The city's imports rose 5.2 percent to 1.66 trillion yuan last year, faster than the national gain of 0.6 percent.
Exports dipped 0.5 percent to 1.21 trillion yuan, but the drop was smaller than the national decline of 1.5 percent.
Trade with the US, Europe and Japan rose 2.3 percent to 1.4 trillion yuan last year, accounting for 47.7 percent of the city's total foreign trade.
The city's trade with the 22 markets having free trade agreements with China rose 5.4 percent to 1.1 trillion yuan.
Shanghai's exports of integrated circuits rose 8.5 percent, medical devices gained 3.8 percent, and solar battery grew 1.5 percent, customs said.
Foreign trade through the free trade zone rose 5.9 percent to 783.68 billion yuan last year, accounting for 27.3 percent of the city's total trade volume.
Taiwan's jobless rate rises in 2016
January 24th, 2017Taiwan's average unemployment rate in 2016 stood at 3.92 percent, up 0.14 percentage points from 2015, the island's statistics authority revealed Monday.
On average, 460,000 people were out of work in 2016, increasing 20,000 from the previous year, with about 70,000 unemployed for a long period of time, the authority said. The total workforce in Taiwan reached 11.72 million last year.
The highest unemployment rate was observed among those who had a junior college education or higher at 4.23 percent in 2016. In terms of age, the unemployment rate among young people ages 15 to 24 reached as high as 12.12 percent, it said.
In December, the unemployment rate was 3.79 percent, both down 0.08 percentage points compared with November and the same period in 2015.
China's urban unemployment rate at 4.02 percent
January 23rd, 2017The registered unemployment rate in Chinese cities stood at 4.02 percent at the end of 2016, down from 4.04 percent three months earlier.
China created 13.14 million new jobs for urban residents last year, exceeding the official target, Lu Aihong, an official with the Ministry of Human Resources and Social Security, told a press conference on Monday.
The government has pledged to keep the whole-year registered unemployment rate below 4.5 percent and create at least 10 million jobs in 2016.
Baidu picks exec to tap new tech
January 18th, 2017Baidu has hired former Microsoft executive and artificial intelligence expert Lu Qi as president and chief operating officer to help the Chinese search engine tap emerging technologies.
The heads of Baidu's technology, financial services and search units will all report to Lu as Baidu aims for a strong management team to drive the next phase of growth, the company said yesterday.
"To achieve our goals, especially in artificial intelligence, which is a key strategic focus for the next decade, we will need to continue attracting the best global talent," Baidu Chairman and founder Robin Li said in a statement.
Lu's appointment, with immediate effect, came a day after Baidu opened an augmented reality lab and followed an announcement in September of a US$200 million venture fund for emerging technologies.
Volkswagen to provide 400,000 new energy cars for Chinese market by 2020
January 17th, 2017German automaker Volkswagen plans to provide more than 400,000 new energy cars for the Chinese market by 2020, according to Professor Jochem Heizmann, CEO of Volkswagen Group China, Monday.
According to the plan, the number will increase to 1.5 million by 2025.
The company announced earlier that it would introduce 15 models of new energy vehicles in China in the next three or four years, to address the environmental protection needs of the Chinese market, as well as 10 models worldwide in the next decade.
New energy vehicles sales of the company are expected to reach 2 million to 3 million in 2025, 20 to 25 percent of its total sales.
China is Volkswagen's largest market. Volkswagen Group China and its two joint ventures delivered 3.98 million automobiles to the Chinese mainland and Hong Kong in 2016, up 12.2 percent year on year.
Exodus of deliverymen to hit courier companies during Spring Festival
January 16th, 2017With this year's "Chunyun," the name given for the travel rush around Spring Festival, starting from Jan 13, some parcel deliverymen have returned to their hometowns to celebrate China's most important family holiday.
Courier companies, including SF Express, YTO Express and TTK Express, though have claimed that delivery and pickup will be normal during the Spring Festival holiday in response to the "No rest for the whole year" policy of the State Post Bureau.
However, due to the shortage of employees, some service stations will stop parcel pickup.
A deliveryman of YTO Express Beijing said that from Jan 15 parcels sent to other provinces will not be picked up, while Jan 20 is the deadline for parcels dispatched to be collected in the same city.
An employee of TTK Express said that parcel pickup will stop one week before the Spring Festival, china.org.cn reported.
Spring Festival, which falls on Jan 28 this year, is China's most important family holiday, with hundreds of millions heading for their hometowns to reunite with relatives and friends. It is expected to leave online shopping sites short-handed due to the exodus of workers.
Domestic express delivery services are getting a business boost from the explosive growth of e-commerce.
China's burgeoning courier service sector is predicted to generate 500 billion yuan ($72 billion) in business revenue this year, said Ma Junsheng, head of State Post Bureau. More than 40 billion express parcels will be sent in 2017, he added.
Baofeng establishes new company to expand culture business
January 13th, 2017Baofeng Group Co Ltd, a Beijing-based internet entertainment and video company, announced on Thursday that it has established Baofeng New Culture Co Ltd to expand its business in culture, tourism and virtual reality, or VR.
Baofeng New culture will focus on intellectual property, or IP, investment, project incubation and operations in the fields of culture and tourism.
Working with Chongqing municipal government, the company will launch a 200-million-yuan ($29 million) fund, which will be invested in digital industry, VR content and innovation, VR experience centers and related projects.
Feng Xin, chief executive officer of Baofeng Group, said he took a rosy view of future integration between VR and the culture industry.
"In the wave of high-tech, the cultural upgrading will create richer forms of cultural tourism. And VR will play a key role in the development of cultural tourism," Feng said.
The new company will integrate artificial intelligence, the internet of things, big data, cloud computing and other technologies to develop local cultural and historical IP.
Connecting tourists, brand owners and local tourist sites, the company aims to build a cultural geographic digital system. And the online platforms' experiences will boost offline consumption.
In 2016, the VR industry is moving forward rapidly; tech giants, including Google, Facebook, HTC, Samsung, Huawei and Xiaomi all cultivated VR hardware.
According to industry consultancy iResearch Consulting Group, China's VR market revenues are expected to top 5.6 billion yuan last year, and will reach 55 billion yuan by 2020.
In 2016, Baofeng Group's revenue in the VR sector reached around 20 million yuan, Feng said at the end of December.
Hon Hai takes hit from slowing iPhone sales
January 12th, 2017Hon Hai Precision Industry Co, the manufacturer of Apple Inc's iPhones, posted its first annual revenue decline since 1991, as it wrestled with a saturating global smartphone market.
The Taiwan-based firm said on Tuesday it recorded NT$4.36 trillion ($137 billion) in revenue in 2016, down 2.81 percent from a year earlier, after its biggest client Apple saw slowing iPhones sales.
Founded in 1974 by business tycoon Terry Gou, Hon Hai, also known as Foxconn Technology Group, is the world's largest contract manufacturer of consumer electronics. Apple accounts for half of its business.
James Yan, research director at Counterpoint Technology Market Research, said smartphone vendors and their supply chain partners are under big pressure as the global smartphone market slows down.
"Hon Hai's heavy reliance on Apple makes it extremely vulnerable to a single client's sales performance," Yan said.
Terry Gou, founder and chairman of Foxconn Technology Group.
In 2016, the global smartphone market was expected to grow by 0.6 percent year-on-year, far lower than the 10.4 percent growth rate in 2015, research firm International Data Corp estimated.
Hon Hai's decline came after Apple reported in October its first annual revenue dip since 2001. The US tech giant finds it increasingly hard to resonate with consumers in China, the world's largest smartphone arena where local players Huawei Technologies Co and Oppo Electronics Corp are gaining ground.
Nicole Peng, research director at Shanghai-based consultancy Canalys, said although Chinese brands such as Huawei and Oppo have also turned to Hon Hai to assemble smartphones, they only account for a small slice of the latter's business.
"There is an urgent need for Hon Hai to diversify its revenue sources. We expect shipments of iPhones to decline by 13 percent in 2016," Peng said.
Although Apple will see a stronger sales momentum this year, with a shipment of 211.7 million units of iPhones, it will still be far less than the 231.5 million units in 2015, Canalys forecast.
But Xiang Ligang, a smartphone expert and CEO of the telecoms industry website cctime.com, noticed a bright spot in Hon Hai's financial report.
"In the quarter ended in December, sales were up 9.76 percent year-on-year, signaling big demand for the iPhone 7 Plus," Xiang said.
"It is too early to predict how Hon Hai and Apple will perform in 2017, because this year marks the 10th anniversary of the iPhone and Apple may unveil a cutting-edge product to revive its sales," he added.
China creates over 13 million new jobs in 2016: official
January 11th, 2017China created over 13 million new jobs in urban areas in 2016 as part of an effort to stabilize the slowing economy. The country has seen over 1.2 million jobs created for three consecutive years, from 2014 to 2016, according to Economic Information Daily.
Despite the economic slowdown, the Chinese government has managed to keep a low urban registered unemployment rate, partially through employment services and support for college graduates, as well as for workers laid off from industries with excess capacity.
About 5.11 million workers in urban areas were re-employed from January to November 2016, or 102.2 percent of the goal set for the year. What's more, 1.54 million people categorized as difficult to employ found jobs, accounting for 128.3 percent of the annual target, according to reports.
Employment will remain a top priority in the next year due to lingering pressures. Experts believe 130 million new jobs will be created in 2017, as the industrial structure will be optimized and the economy stabilized. Reports indicate that approximately 25 million new jobs will be created during each year of the 13th Five-Year Plan period, among which 10 million are set aside for registered workers who have been laid off, 1.5 million are for college graduates and 3 million are for surplus agricultural laborers.
Employment will be the top priority of the Ministry of Human Resources and Social Security (MOHRSS), according to Yin Weimin, MOHRSS minister. A total of 7.95 million college students are expected to graduate in 2017, according to China's Ministry of Education.
Chen Baosheng, the minister of Education, said the numbers of college students who secured employment or started their own businesses after graduation has increased in the last three years. A report by Renmin University showed that 89.8 percent of college students have considered starting their own businesses, and 18.2 percent indicate firm plans to do so. The Ministry of Education called for improved policies that encourage college students to become entrepreneurs.
About 1.8 million jobs in the steel, coal and mining industries may have been lost by cutting overcapacity, which is the biggest employment pressure in five years, according to MOHRSS. The ministry has reportedly issued policies redistributing laborers in more than 20 provinces.
Online car sales companies merge
January 10th, 2017Two of China's online second-hand car trading platforms have announced plans to merge.
Companies clcw.com.cn and kx.cn agreed to work together to promote a customer-to-business model, known as C2B, to tackle the difficulty of individuals selling cars.
Clcw.com.cn has established nine branches across the country and accumulated more than 10,000 car dealers on its platform. Meanwhile, kx.cn has a strong brand influence and regional operation management.
Clcw.com has witnessed rapid growth since it was established in 2015. With 16,000 vehicles sold via its website and app last year, founder Xie Lei said its annual transactions have reached a value of 640 million yuan ($92.4 million).
Kaixin is the first online platform to adopt a C2B model to facilitate the selling of used cars from individuals to used-car dealers. With nine years of development, Kaixin became an industry giant and claims 8.8 percent of the used car dealing market in Shanghai.
"C2B can help customers sell cars at a reasonable price. It is the only model that suits China's actual conditions and caters to Chinese car-buyers' need," Xie said.
Xie said the newly-merged company will establish four operation centers nationwide, and more than 300 offline stores that provide related services in finance, insurance and ancillary products selling.
The company aims to reach a turnover of 12 billion yuan with 200,000 cars sold on its platform in 2017.
Services sector expands fastest in 17 months
January 6th, 2017
China's services sector expanded at the quickest pace in 17 months in December as new orders increased rapidly in a further sign that the economy was stabilizing, a private survey showed yesterday.
The Caixin General Services Purchasing Managers' Index edged up to 53.4 last month from 53.1 in November, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.
It was the highest reading since July 2015 as demand in the sector picked up.
A sub index showed growth in new work at services companies quickened to a 17-month record, according to the survey.
The fast growth in the services sector echoed an increase in manufacturing activities as the Caixin General Manufacturing PMI, released on Wednesday, rose to a four-year high of 51.9 points.
"Manufacturing and services both expanded in December, showing that recovery in the economy continued," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group. "The Chinese economy performed better in the fourth quarter than in the previous three quarters" adding that he was certain the government's full year growth target of between 6.5 and 7 percent will be reached.
In the first three quarters, China's GDP grew 6.7 percent, within the official target of 6.5 to 7 percent. But it was 0.2 percentage points lower than the annual growth in 2015.
Services made up 58.5 percent of GDP growth, up 3.4 percentage points from a year earlier.
The Caixin PMIs, slanted toward private and export-oriented companies, indicated the private sector expanded in December and outperformed China's official PMI.
China's official PMI, released on Sunday by the National Bureau of Statistics and the China Federation of Logistics and Purchasing and focusing on state-owned manufacturers, dipped to 51.4 in December from November's 51.7. But PMI stayed in the expansion zone for the fifth straight month with the reading above 50.
In the services sector, the official non-manufacturing PMI dipped to 54.5 from November's 54.7 points.
Chinese couriers to collect 500 bln yuan in 2017
January 5th, 2017China's burgeoning courier service sector is predicted to generate 500 billion yuan (72 billion U.S. dollars) in business revenue this year, a postal official said Thursday.
Over 40 billion express parcels will be sent in 2017, said Ma Junsheng, head of State Post Bureau (SPB).
In 2016, 31.3 billion parcels were sent, and the service created over 200,000 jobs, data from SPB showed.
The sector collected 400 billion yuan of business revenue last year, compared to just shy of 30 billion yuan in 2006, Ma said, calling the sector a "dark horse" of the economy.
China's courier market has grown from a handful of small businesses into a vibrant market contested by industry heavyweights, expanding 50 percent annually over the past six years, he said.
Leading delivery service provider ZTO Express became an NYSE-listed company in October 2016, the biggest U.S. IPO by a Chinese company after e-commerce giant Alibaba.
The debut came after the domestic listing of Yto Express, while competitors including SF Express, STO Express and Yunda Express expect to follow suit this year in a rush to buy more land, facilities, equipment and trucks.
The couriers' success is replicable and adaptable for the global market, Ma said.
Last year, the country's couriers helped deliver products bought online worth over 4 trillion yuan, or 12.5 percent of total retail sales of consumer goods, he said.
Still, China wants couriers to better serve its manufacturing industry and, to this end, it has launched 322 pilot coordination projects to accommodate an annual industrial output of over 120 billion yuan.
On the agriculture front, courier services have helped expand sales channels for farm products, and facilitated the sale of products worth over 100 billion yuan in 2016 and facilitated an on-going poverty-relief campaign.
The sector is well-positioned for the task, as courier services now cover 80 percent of towns and villages, and the country plans to extend this network by 2020, according to the SPB.
The increasing heft of the sector reflects China's solid progress in re-balancing its economic structure from manufacturing and investment to services and consumption.
Delivery and postal services are leading the growth in the service sector in China, home to the world's fastest growing postal market, Ma said earlier.
The country aims to deliver 50 billion express parcels annually, generating 800 billion yuan in business revenue, by 2020.
December manufacturing activities expand to four-year high: private survey
January 3rd, 2017China's manufacturing sector continued to expand with the purchasing managers' index hitting a 47-month high in December, a private survey showed Tuesday.
Caixin General China Manufacturing Purchasing Managers' Index (PMI), a private gauge of China's manufacturing activity, came in at 51.9 in December, up from 50.9 in November, according to a survey conducted by financial information service provider Markit and sponsored by Caixin Media Co. Ltd.
This was the index's biggest rise since January 2013, and production grew at the fastest pace in nearly six years thanks to an increase in total new work.
Official manufacturing PMI released on Sunday stood at 51.4 in December, lower than 51.7 in November and staying above the 50-point boom-bust line for the fifth straight month.
China's car sales growth to slow in 2017
December 29th, 2016Automobile sales are expected to slow next year after a boom in 2016, the Ministry of Commerce (MOC) said Thursday.
Growth in auto sales in 2017 could slow to an annual 2 percent to 6 percent, said MOC spokesperson Shen Danyang, citing industry estimates.
About 25 million cars were sold in China in the first 11 months this year, up 14.1 percent year on year thanks to a preferential car purchase taxation policy and other government measures.
Earlier this month, the Ministry of Finance continued its preferential car purchase taxation policy but cut the tax reduction ratio for 2017.
A high comparison base and a discounted preferential taxation policy will drag down auto sales growth next year, Shen said.
China's VR industry tumbles after explosive growth
December 28th, 2016When Fang Wenxin founded a virtual reality (VR) firm in 2015, he never expected the industry would go bust so soon.
The boom in China's VR industry following Facebook's U.S.$2-billion buyout of Oculus, a U.S. producer of VR gadgets and computer games, in 2014 has declined, with about 90 percent of start-ups in the domestic market declaring bankruptcy.
"There were about 200 to 300 firms engaged in producing VR helmets in 2015, but now no more than 10 companies remain functioning," Fang said.
During the past few months, domestic VR companies, such as Storm Magic Mirror, Miido and AlfaReal, started to downsize organizations or delay payments of employee salaries due to a diminution in venture capital.
According to the latest report issued by iiMedia Research, a third party data collector and analyst of technological digital platforms, the supply of high-end smart glasses in the domestic market has failed to lure consumers, with more than 70 percent of respondents among smart cell phone users expressing no willingness to buy one.
Taken up by gigantic tech firms, such as HTC, Facebook and Sony, the market for VR hardware has left slim chances for smaller manufacturers to slot in, so that the VR businesses of domestic manufacturers focus mostly on content production.
However, despite the increasing involvement of VR start-ups, cheap copycats have eaten up the market, blocking the channels necessary for high-end innovation to reach customers.
The slump in the VR market during the second half of 2016 in China is probably the result of deficient industrial innovations, said Wu Limei, an analyst of the iiMedia Research.
But the recent fall of the VR industry may be less ominous than a sign of industrial recession when the frenetic flows of capitals have cooled down.
Zhao Ziming, an analyst from Analysys, Ltd., an agent of data collection and analysis, said the industry will be reshuffled by the entries of big companies, like BAT and NetEase, following the bankruptcies of small companies with broken capital chains. The threshold will be elevated and the money will be spent more reasonably.
Investment in the Chinese VR industry soared to 270 million yuan (U.S.$38.9 million) in 2014, a robust rise followed by 2.4 billion yuan in 2015 and 1.54 billion yuan in the first half of 2016.
China's industrial profit growth accelerates to 14.5% in November
December 27th, 2016Profits of China's major industrial firms increased 14.5 percent year on year in November, up from 9.8 percent registered in October, official data showed Tuesday.
Profits of industrial companies with annual revenues of more than 20 million yuan (about 2.87 million U.S. dollars) totaled 774.57 billion yuan last month, the National Bureau of Statistics said.
In the first 11 months of the year, industrial profits expanded 9.4 percent year on year to 6.03 trillion yuan, faster than the 8.6 percent rise for the first ten months, the NBS said.
NBS statistician He Ping said the sharp growth in November was a result of acceleration in the growth of both industrial production and sales, a significant rise in producer prices and the strong performance of electronics, special equipment manufacturing and oil refining sectors.
China's producer price index (PPI), which measures costs for goods at the factory gate, continued its growth, rising by a five-year high of 3.3 percent year on year in November.
China's Sany sets up commercial bank
December 26th, 2016Sany Group, the parent company of heavy machinery manufacturer Sany Heavy Industry Co. Ltd, on Monday led a group of ten private companies in setting up a commercial bank.
The Sanxiang Bank, based in Hunan Province, will operate with a registered capital of 3 billion yuan (435 million U.S. dollars). It is China's eighth private commercial bank since the regulatory allowed private capital into the banking sector in 2013.
The Sanxiang Bank will focus on Chinese manufacturers, especially those investing heavily in technology.
Bank president Liang Zaizhong said that while operating with much less capital than state banks, it is China's first bank associated with a major manufacturer.
Sany Heavy Industry Co. Ltd. sells a wide range of construction machinery such as excavators and cranes and has extensive global presence. It operates 25 manufacturing bases and 100 offices worldwide. Key overseas research and production hubs are based in Brazil, Germany, India and the United States.
The company has ventures in clean energy, with a focus on wind power.
Taiwan unemployment rate falls to 3.87 pct in November
December 23rd, 2016Taiwan's unemployment rate was 3.87 percent in November, down 0.08 percent from October, and 0.04 percent lower year on year, the island's statistics agency said Thursday.
There were around 455,000 unemployed people in Taiwan at the end of November and 11.3 million in employment, according to a statement on the agency's website.
More university graduates landing jobs in the month were cited as the main reason for falling unemployment, the agency said.
The seasonally-adjusted rate of unemployment for the month was 3.84 percent, down 0.06 percent from October.
China faces trade friction with developing markets
December 16th, 2016Lack of differentiated competition amid global trade downturn to blame: experts
Trade frictions between China and other developing markets over almost everything from home appliances to chemicals are increasing, a heating up in competition that comes amid a downturn in global trade.
Some of the latest disputes were initiated by Argentina, which opened up five anti-dumping probes against Chinese imports, including on steel pipes, food processing machines and dishwashers, on December 7, according to trade alerts issued by China's Ministry of Commerce (MOFCOM).
Such "intensive" investigations aroused attention in China, Wang Hejun, director of Trade Remedy and Investigation Bureau with the MOFCOM, said in a press release on Wednesday.
According to the press release, China will thoroughly defend the rights of its firms and expects Argentina to strictly follow WTO rules.
So far this year, Argentina has launched 11 anti-dumping probes against imports from China, according to the MOFCOM.
China is Argentina's second-largest trade partner with $11.8 billion worth of goods exported to the Latin American nation in 2015, an increase of 9.7 percent year-on-year, according to media reports.
"Emerging nations including Argentina, India, Brazil and Pakistan are prone to file WTO complaints to guard their homegrown industries against imported peers, as they are suffering from sluggish global demands and economic downturns," said Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges.
Rising probes
In recent years, developing economies have filed more frequent complaints against China's exports.
MOFCOM data showed that, so far this year, Pakistan hit China with eight anti-dumping investigations and India has started some 20.
India initiated a total of 10 anti-dumping and anti-subsidy cases in 2015, according to a statement issued by China Council for the Promotion of International Trade in February.
That year, 49 anti-dumping and anti-subsidy investigations were launched by developing countries, accounting for more than 60 percent of all probes against China, and a 22.5 percent increase from 2014, the statement showed.
China's aggressive push in its going out strategy has made it an easy target for the current trade protectionism fever, Wang, the expert, told the Global Times Thursday.
The first 11 months this year witnessed a surge of 55.3 percent year-on-year in China's outbound investment to $161.7 billion, official data showed.
Premier Li Keqiang predicted in October that China's overseas investment would grow to about $720 billion in the following five years, and that its import volume would reach $8 trillion, according to the Xinhua News Agency.
A long-term challenge
"Most Chinese services and products sold to foreign consumers are the similar as products emerging countries are developing themselves," Chen Fengying, an expert at the Institute of World Economics Studies under the China Institute of Contemporary International Relations.
The lack of differentiation will continue to create heated competition and will spur more complaints from other developing countries and regions, Chen told the Global Times Thursday, signifying long-term challenges Chinese firms will face while going global.
Wang, the expert, suggested that China would see more trade disputes as long as there is no sign of recovery in global trade.
"The U.S. and the EU are expected to start more trade battles with China in the following years, which will drive some developing countries to follow suit," he explained.
President-elect Donald Trump is packing his transition team with veterans of U.S. steel battles with China, likely indicating a more aggressive approach to U.S. complaints against China, Reuters reported on Tuesday.
In order to carry out its "One Belt, One Road" initiative, China may need to make some compromises to settle trade disputes with other developing countries, Wang said.
Still, Chen noted that trade frictions with India, Argentina and other developing countries would not greatly impact Chinese trade volumes which mainly bank on the U.S. and EU markets.
In November, China exported 34.5 billion yuan ($4.98 billion) and 15.2 billion yuan worth of goods to India and Brazil, respectively. In contrast, China exported 247.4 billion yuan worth of products to the U.S. last month.
China predicts 958 million working-age population in 2030
December 15th, 2016The number of people in China of working age is expected to have shrunk slightly to 958 million by 2030, the Family Planning Association (FPA) announced Wednesday.
Wang Pei'an, vice president of the FPA, said the country had 1.003 billion people of working age in 2015, which will gradually decline to 958 million in 2030 and 827 million in 2050.
"Though China still has a healthy labor force at this moment, the decreasing number of women of childbearing age means we should not wait any longer to fully implement the two-child policy," Wang said.
There were 826 million people of working age in Western developed countries in 2015, thus, while boasting a huge population, China's overall labor productivity is just one eighth that of the developed countries, said Wang.
The FPA will improve its family planning services, such as reproductive health consultation, Wang said.
Wang added that the FPA will also pay special attention to protecting the rights and interests of the nation's migrant population, and will provide health services to "left-behind" women and children in rural areas.
Since Jan. 1, all married couples have been allowed to have two children. This follows an earlier easing of the policy in 2013 allowing couples to have a second child if either parent was an only child.
The latest change ended the "one child" policy that had been in place since the late 1970s.
Now, UnionPay slips through barcode for payments pie
December 13th, 2016
China UnionPay, the national bankcard association, launched on Monday its own app and security standard for two-dimensional barcode payment.
It thus joined existing players Alipay and WeChat Pay in the internet-based mobile payments segment.
Song Hanshi, general manager of UnionPay's technology department, said it will adopt unified technical solutions to achieve interconnectivity among different financial institutions and to ensure consistency in user experience.
Currently, commercial banks have their own two-dimensional barcode payment apps and UnionPay hopes to promote the use of barcodes across different banks.
It will also apply token technology to protect sensitive account information from leaking and to ensure payment security.
The bankcard association is working on risk control standards for two-dimensional barcode payments and will launch its own product in this area, according to Cai Jianbo, first executive vice-president of China UnionPay.
Zhao Yao, a special research fellow at the Institute of Finance and Banking at the Chinese Academy of Social Sciences, said: "This is an important measure taken by UnionPay and commercial banks to deal with competition from third-party payment institutions, in terms of retail payment, as small merchants have become increasingly unwilling to use POS (point-of-sale) machines due to higher bankcard swipe fees."
He said that UnionPay is likely to replicate its existing offline rules on bankcard fees, merchant administration and risk management, and apply them online.
"Whether or not it will succeed in the market is hard to say, considering that Alipay and WeChat Pay have taken a dominant share of the market. Not to mention that these two payment service providers can provide more payment scenarios through e-commerce, social networking and vertical applications than UnionPay and commercial banks," he said.
Wang Pengbo, a senior analyst with Analysys, a Beijing-based provider of big data analyses, agreed.
In e-commerce and social networking, Alipay and WeChat Pay definitely have an advantage now, he said.
"With UnionPay and its member institutions gradually expanding their market share in this field, the competition based on consumption scenarios will grow more intense," Wang said.
He noted that the UnionPay standards will also promote the protection of personal information and money security.
China homebuilders see record-high auctioned land price: report
December 7th, 2016Chinese largest real estate companies witnessed record-high costs for purchasing auctioned land in the first 11 months of the year, evidence that their profitability might be squeezed in the face of recent tightening moves, an industry report showed.
The combined funds earmarked for purchasing auctioned land for property development by the 40 largest Chinese homebuilders in terms of sales volume stood at 1.01 trillion yuan (147.3 billion U.S. dollars) by the end of November, said Centaline Property, a leading Chinese real estate agency.
This translates into an average price of 6,062 yuan per square meter, surging 50 percent from the previous year, the report said.
The report was released after several measures were introduced to rein in speculative housing purchases, check the risk of asset bubbles and stabilize the market, with dozens of Chinese cities modifying market rules, including the introduction of higher deposits and more purchase restrictions.
"More than 70 percent of these auctioned land plots are located in cities that have rolled out tightening moves, which presages sales and funding difficulties for some homebuilders," said Zhang Dawei, a Centaline Property analyst.
Observers believe that a surge in housing mortgage loans and auctioned land prices contributed to the sweeping increase in home prices across China earlier this year, triggering a string of policies to cool an overheated market.
Some Chinese local governments rely too heavily on land sales for fiscal revenue and deliberately slow supply to push up prices, experts have said.
Shanghai Finance Forum to bring insiders on financial challenges and opportunities
December 6th, 2016Shanghai Jiao Tong University Shanghai Advanced Institute of Finance (SAIF) will hold Shanghai Finance Forum (SFF) on Jan 14, 2017, bringing together leading scholars, policy makers and practitioners to a common platform led by a Nobel laureate to discuss challenges and opportunities as China continues to develop its financial markets.
The SFF aims not just to identify the issues but also to come up with possible solutions through rigorous research, in-depth discourse and intimate interaction. Nobel Laureate Robert Merton and former governor of India's Reserve Bank Raghuram Rajan will deliver keynote addresses and participate in the panel discussions.
The SFF will bring together about 350 of the world's experts and leaders as guests, seeking to foster deep discourse, meaningful debate, and the fruitful exchange of ideas and best practices. The discussions will be underpinned by rigorous academic research, and guided by international best practice and experience, to condense actionable insights for policymakers.
It also aims to raise the understanding of international investors on China's policy actions and circumstances as they may be misinformed or ill-informed on the challenges and opportunities of the country.
Sports unit of Wanda Group to seek listing
December 5th, 2016The sports unit of conglomerate Dalian Wanda Group will "eventually" get listed, Chairman Wang Jianlin said at a forum held in Beijing on Sunday, without giving a specific time.
Wanda will expand cooperation with international sports organizations and continue to seek opportunities in overseas acquisitions, said Wang, China's richest man, according to a report on news.xinhuanet.com on Sunday.
Wanda has been expanding its presence in the sports industry. In January 2015, it announced an investment of 45 million euros ($48 million) to acquire a 20 percent stake in top European soccer club Atletico de Madrid. In February 2015, Wanda acquired Infront Sports & Media AG, a leading sports marketing company based in Switzerland, for 1.05 billion euros. In August 2015, it acquired US-based World Triathlon Corp for $650 million.
Chinese companies have shown increasing interest in overseas sports deals, especially for soccer clubs. For instance, electronics retailer Suning Commerce Group Co in June bought nearly 70 percent of Italian soccer club Inter Milan for 270 million euros.
But Wang said that acquisition of sports clubs is only one aspect of Wanda's plans. The company aims to introduce more international sports events to China, according to the report.
Wang told the forum that he sees great potential in China's sports industry. While the total value of the U.S. sports industry accounts for some 3 percent of the country's GDP, China's sports industry only accounts for some 0.7 percent, according to the report.
Wanda has also made several major foreign acquisitions in the entertainment industry. It bought U.S. Legendary Entertainment for $3.5 billion in January and in November, it bought U.S.-based Dick Clark Productions for $1 billion. That company produces the Golden Globes film awards and the "Miss America" pageant.
Manufacturing PMI hits a two-year high
December 2nd, 2016China's manufacturing purchasing managers index continued rising in November to the highest level in two years, which indicates the country's economic performance is gradually improving, new data showed on Thursday.
The PMI stood at 51.7 in November, up from 51.2 in October, according to the National Bureau of Statistics.
This is the fourth consecutive month that the manufacturing PMI, a key gauge that monitors the activity of large and medium-sized enterprises in the manufacturing sector, stayed above the 50-point mark that distinguishes expansion from contraction in the sector.
Among the five major subindexes, production and new orders stayed in the expansionary range. In November, the production subindex increased to 53.9 from October's 53.3, while the new orders subindex increased to 53.2 from October's 52.8. Both were at the highest level so far this year.
Zhao Qinghe, senior statistician of the NBS, said that production and market demand both rebounded in November, and enterprises showed stronger desire to purchase.
Zhao said the increased costs of raw materials and transportation, which have reached the highest level in three years, are a major challenge for enterprises.
"Fluctuations of the RMB exchange rate have resulted in the increased cost of imported raw materials, which has a significant impact on electronic equipment manufacturing industries such as computers and telecommunication," Zhao added.
The Caixin/Markit Manufacturing PMI, which mainly monitors the market performance of small and medium-sized enterprises, was at 50.9 in November. Although the index stayed in the expansionary range, it declined from 51.2 in October, which shows a slowing expansion pace in the manufacturing sector.
"Caixin/Markit Index readings for both output and new orders declined, but those tracking input and output prices rose at a faster pace to hit their highest levels in five years, pointing to further intensification of inflationary pressure", said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group.
"The November PMI indicates that China's domestic economic operation is stable and the positive effect of supply side structural reform is gradually appearing," said Zhang Yiping, an economist with China Merchants Securities. "The quality of China's economic growth is gradually improving."
Chinese companies confident about future growth, interested in M&As: study
December 1st, 2016Most Chinese companies are confident about their revenue growth in the next three years, and nearly 70 percent of the interviewed companies are interested in mergers and acquisitions (M&As), according to a study report issued Monday on China's capital market.
The study, named China Capital Market Insight Survey 2016 and jointly developed by PricewaterhouseCoopers, BNY Mellon, ICR Inc. and Skadden, surveyed Chinese executives between July and September, receiving responses from 108 Chinese companies.
A majority of the executives are confident about their company's revenue growth in the next three years, the study showed. The executives were asked to rate their confidence in growth with figures from 0 to 10. Almost a quarter rated themselves 10, the highest confidence level, while three quarters were six or above in confidence.
The study also showed that Chinese companies have a strong appetite for M&As over the next 24 months. Among the public companies surveyed, 40.6 percent are interested in domestic M&As, while 28.1 percent are eyeing overseas deals. Meanwhile, private companies are also eager for M&As.
Chinese companies are accelerating raising capital in the global market, according to the study. While 43.8 percent of the public companies surveyed are planning to issue debt in the next 24 months, private companies rely more on equity investment, with 48.7 of them aiming to raise equity in the next 24 months.
Home market seen stable in 2017
November 30th, 2016China's housing market is expected to be stable next year although regulatory risks remain high amid rapidly rising home and land prices, international ratings firm Moody's said in its latest forecast.
"We expect the growth in nationwide contracted sales by value to be flat or slightly negative in 2017, against a high base of contracted sales for 2016," said Kaven Tsang, vice president and senior credit officer at Moody's. "We estimate sales growth of around 25 percent year on year for 2016."
Tsang predicted that sales volume to fall by 5-10 percent next year as major cities in September and October imposed tightening measures, turning the sector outlook to negative. But the drop will be partly offset by a modest rise in prices.
If sales volume rises by above 10 percent annually on a sustained basis and in a low regulatory risk environment, the outlook could shift to positive, Moody's said.
A sharp price decline seems unlikely in the next six to 12 months, given the relatively low inventory levels in high-tier cities, Moody's said.
Developers' gross margin will stabilize next year due to reduced destocking pressure and improved selling prices, amid the strong contracted sales registered in the past 12 to 18 months, said Moody's, which rated 50 developers in China.
Late on Monday, Shanghai announced down payment for first-time home buyers would be raised to 35 percent from 30 percent from yesterday. People who now don't own a house but have applied for mortgages from either commercial banks or public housing funds anywhere in the country will have to pay a minimum 50 percent down payment as they are considered second-home buyers in the city from now on.
China’s Top 30 firms post combined revenue up 55 per cent
November 29th, 2016China’s top grossing firms made 55 per cent more money in 2015 than two years previously, exclusive research by The Lawyer has revealed.
The Lawyer’s third edition of the China Top 30 report – an annual ranking and analysis of China’s leading law firms – found the combined revenue jumped from RMB12.95bn (£1.5bn) in 2013 to RMB20.16bn (£2.3bn) in 2015.
Revenue growth was largely fuelled by recruitment efforts including national expansion through regional bolt-ons.
The total number of lawyers in the top 30 firms increased by around 36 per cent in the same period, to 23,023.
In the two year time period many of the firms opened offices overseas or joined forces with established international firms.
Dentons (formerly Dacheng), King & Wood Mallesons (KWM) and Zhong Lun once again claimed the top three spots in the league table by total revenue, following double-digit revenue hikes.
Dentons, the biggest Chinese firm by revenue, saw its 2015 revenue grow by 29 per cent to RMB2.9bn from RMB2.25bn in 2014. KWM’s revenue increased at a slightly faster rate of 30 per cent to RMB2.1bn. Zhong Lun, the smallest of the top three, recorded the fastest growth, up 34.4 per cent to RMB1.98bn.
Below the top three, there were notable movements in this year’s top 30 firms by revenue list, including several new entries and exits. Shandong-based Jointide and Beijing-based JunZeJun dropped out of the table, while Shanghai’s Llinks and Shenzhen’s Guanghe made their first appearance.
Llinks posted a turnover of RMB236m after achieving a 50 per cent revenue? hike and claimed the 27th place as a result. Guanghe, riding on the country’s booming new over-the-counter equity exchange (new third board), which provides a speedy and favourable way of fundraising for start-ups, ranked 28th. It recorded a 69 per cent increase in revenue, from RMB136m to RMB230m.
The firms in the top 10 group remained largely unchanged on the previous year. However, AllBright, with a 48 per cent increase in revenue, moved up three places to fourth spot. Beijing-headquartered Jingtian & Gongcheng, with a 41.6 per cent revenue growth, made its debut in the top 10, replacing last year’s tenth high-grossing firm, JT&N.
Among the rest of the top 30 firms private equity and technology-focused Han Kun rose most rapidly, by six places to 17th. National giant W&H also moved up six places, to 19th. Beijing-based Tian Yuan was up five places to 11th, overtaking larger rivals such as Kangda, JT&N and Zhonglun W&D.
Some firms’ managing partners expressed concerns regarding continued growth prospects over the combing years, mainly due to China’s slower economic growth and greater uncertainty in some of the world’s largest economies.
However, many of the best performing firms expected to achieve a similar, if not faster, rate of revenue increase in the current financial year.
Top 30 by revenue (2015)
Rank 2015 Rank 2014 Rank Change Film
1 1 Equal Dentons (China)
2 2 Equal King & Wood Mallesons (China)
3 3 Equal Zhong Lun
4 7 increase AllBright
5 5 Equal Grandall
6 6 Equal Yingke
7 4 decrease JunHe
8 8 Equal Deheng
9 9 Equal Fangda Partners
10 13 increase Jingtian & Gongcheng
11 16 increase Tian Yuan
12 11 decrease Kangda
13 10 decrease JT & N
14 12 decrease Zhonglun W&D
15 17 increase Zhejiang T&C
16 14 decrease Zhong Yin
17 23 increase Han Kun
18 15 decrease Global Law Offices
19 25 increase W&H
20 18 decrease Longan
21 21 Equal Grandway
22 22 Equal Tahota
23 19 decrease Commerce & Finance
24 29 increase Haiwen & Partners
24 26 increase Beijing DHH
24 24 Equal Guantao
27 #### #N/A Llinks
28 #### #N/A Guanghe
29 27 decrease Co-Effort
30 30 Equal Hylands
Top 20 fastest growing firms by revenue (2015 vs 2013)
Rank Firm Two-Year Revenue Growth
1 Han Kun 185.7%
2 Guangdong Huashang 125.7%
3 Tian Yuan 117.8%
4 Beijing DHH 109.5%
5 Grandall 106.3%
6 Guanghe 98.3%
7 Zhong Lun 91.8%
8 Tiantong & Partners 90.0%
9 Zhejiang T&C 84.4%
10 Yingke 81.4%
11 Kangda 80.5%
12 Hylands 79.1%
13 Jingtian & Gongcheng 77.1%
14 AllBright 75.9%
15 Zhong Yin 72.6%
16 Dentons (China) 62.9%
17 Tahota 62.8%
18 JT & N 61.4%
19 Lifang 60.0%
20 Fangda Partners 58.3%
The Lawyer’s China Top 30 2016 report, released on 26 September 2016, identifies the top performing Chinese firms by various key metrics such as revenue, RPL, revenue growth and RPL growth last year.
The third annual edition of the report also contains three years of financial and technological data and indepth analysis on Chinese law firms’ strategies from some of the country’s most eminent lawyers.
Big Black Friday discount to boost overseas online purchases
November 25th, 2016The Black Friday shopping season is expected to spur Chinese online purchases overseas despite the recent weakening of the yuan.
Ymatou.com, a Shanghai-based e-commerce company dedicated to overseas products, has already rolled out special offers days before the shopping season and has seen rising sales compared with last year.
The company said it sold 60 million yuan ($8.67 million) worth of goods in the first 10 minutes when the sales started last Friday, a week earlier than the official start of the shopping season.
An 88,999-yuan Birkin bag was snatched up within two minutes and 320 Canada Goose jackets priced over 5,000 yuan were sold out in an hour.
The yuan further weakened on Thursday to pass the threshold of 6.9 against the U.S. dollar.
"The depreciation of the yuan does not dampen the frenzy of shopping abroad as most Western products on sale are still quite cheap compared with same products sold in franchised stores in China," Zeng Bibo, chief executive officer of ymatou.com, said on Thursday.
Chinese middle class shoppers are becoming increasingly sophisticated. "They want to buy high-quality products, enjoy good services and live a tasteful life," said Zeng.
The Black Friday shopping season seems a good opportunity for them to live such lives at a relatively low cost. The shopping festival is a period when retailers offer massive discounts to attract consumers.
Chen Tao, an analyst with Beijing-based internet consultancy Analysys, said Black Friday has been growing in popularity in China.
"But it is still in its infancy in China, and its size is quite small compared with China's homegrown online shopping festival Singles Day," he said.
"As Chinese middle class shoppers are becoming less and less price sensitive, what they care most about in cross-border shopping is the quality and brands of goods, fast delivery and good return policy, which will be the key areas for online retailers to work on," he added.
Weibo repositions itself as wide-ranging platform
November 22nd, 2016Weibo, which is often called China's homegrown version of Twitter, is no longer satisfied with just tweeting.
As part of Chinese internet company Sina Corp, Weibo Corp is positioning itself as a combination of Twitter, Instagram and YouTube in order to gear up its development as a "social media platform", said the company's top executive.
Charles Chao, chief executive officer of Sina and chairman of Weibo, said that "apart from being a real-time information network, Weibo is also equipped with the features of social networking systems".
Chao said the major reason for Weibo's rapid growth in the past year was the string of adjustments it made in the process of repositioning its strategy. "The next move is to focus on connecting people and content. We will build a vigorous ecosystem that can attract more people from various backgrounds," he said to China Daily at the sidelines of the third World Internet Conference, which ended on Friday in Wuzhen, Zhejiang province.
Launched in China about seven years ago, Weibo for a time was the leader in China's cyberspace until its thunder was stolen by WeChat, an instant messaging app launched by Tencent Holdings Ltd in 2011.
But, Weibo's changing strategy has pushed it to the top once again thanks to its effort to attract young people and users in smaller cities. It allows them to demonstrate fully who they are via text-based tweets, self-generated videos and even live-streaming.
Statistics from data research firm QuestMobile show that Weibo had 390 million monthly active users in September, ranking fourth of all apps in China. Its growth rate was 79 percent year-on-year, the most rapid of the top 10 apps listed by the research firm.
Chao said that Weibo is more open compared with WeChat because its social networking features are not constrained to close friends. "It gives each account -- individuals, superstars, web celebrities and institutes --opportunities to demonstrate their views and their capabilities, to set up a business and to spread information and content to a much broader audience," he said.
"That is the magic of Weibo. It is a wonderland that can make a nobody into a somebody, as long as they have talent," he added.
Chao discussed the rise of the web celebrity economy on Weibo as an example. By interacting with followers on Weibo, a former magazine model known as Zhang Dayi has become an online sensation. Zhang's fame in the virtual world helped her set a record of selling 20 million yuan ($2.9 million) worth of clothes online within two hours.
"We will keep making efforts to empower our users," he said. In the online celebrity sector alone, Weibo is working with more than 300 multichannel networks to help online celebrities gain fans, boost influence and speed up monetization.
Chao said it invested in companies that can bring synergy with Weibo. For example, the company, which debuted on the Nasdaq in April 2014, has already invested in Yixia, a startup with strong technology in video and live streaming.
Companies and Tsinghua work on vehicle communications standardization
November 16th, 2016Vehicle communication guidelines are set to be published by the end of this year, as wireless communication is now a fundamental technology for intelligent cars. So there needs to be a universal definition and standard.
Carmakers and Tsinghua University recently teamed up to define vehicle communication standards in order to help boost transportation safety and the development of vehicle intelligence. Communication standards are now included as part of the upcoming China Intelligent and Connected Vehicles Technology Roadmap.
"The development of vehicle intelligence requires the technologies of big data, cloud computing, and vehicle-to-vehicle communication," said Li Keqiang, director of the automotive engineering department at Tsinghua University.
A group was founded in October and is led by Tsinghua University, General Motors Co and Chang'an Automobile Ltd. Supported by the Society of Automotive Engineers of China, the group will exchange standards for vehicle-to-everything communication, or V2X, and complete a definition and demand analysis.
Industry insiders hope the group's work may help accelerate the application of intelligent transportation systems on a larger scale to prevent transportation accidents.
Yao Danya, professor of automation at Tsinghua University, said: "The focus of V2X communication is on improving transportation safety and easing traffic congestion."
Yao suggested that "China may accelerate the deployment of the technology, as long as local governments initiate the necessary infrastructure upgrades at high-incidence spots of traffic accidents."
V2X communications include vehicle-to-vehicle, vehicle-to-infrastructure and vehicle-to-pedestrian communications, and the technology supports Intersection Collision Alert and Emergency Brake Alert.
The deployment of V2X communications may elevate the overall efficiency of the nation's transportation by 30 percent, according to SAE-China's prediction. The United States' National Highway Traffic Safety Administration estimated the technology could help avoid 81 percent of traffic light accidents in the country.
V2X communication is the vehicles' language, so a complete set of communication standards is necessary for underpinning an intelligent transportation system using intelligent and connected vehicles.
Vehicle intelligence is based on the real-time calculation of big data collected by sensors and radars in the vehicle. The current solution uses a combination of an in-car computer and a cloud computing system.
The computer in the car reacts instantly to emergent safety threats. A lot more traffic information is uploaded through wireless connections to a cloud server for further processing, and the results are downloaded to command the vehicle.
The solution requires fast wireless connections to transmit big data in a flash and powerful enough servers to process the information in a brief period.
Gong Weijie, deputy secretary general of SAE-China, said: "The challenges to the intelligent vehicles' communication technologies are in the coordination among varied government bodies, including the Ministry of Transport, and the trans-industrial synergy among the mobile communication operators and equipment suppliers."
Carmakers have to join with communications operators and internet service providers. The State-controlled mobile operators are working on 5G mobile communication networks to fix the bandwidth bottleneck for data exchange.
The 5G data transmission, 100 times faster than 4G, is capable of transferring more data within a shorter period of time, and 1 million access points are planned to be built in each square kilometer, making V2X communication possible, according to China Mobile.
Alibaba sales to equal to fifth-largest economy
November 14th, 2016Challenges remain in cross-border trade and regulations
After setting a new record at the annual "Singles' Day" online shopping event, Chinese e-commerce giant Alibaba Group Holding will generate value that is equivalent to the fifth-largest economy in the future. Industry experts lauded the feat as "unprecedented" but also cautioned about future challenges.
The company surpassed 3 trillion yuan ($440 billion) in annual gross merchandise volume (GMV) for fiscal year 2016, a year-on-year increase of 27 percent, and it is expected to generate more than tens of billions in its daily GMV, mainly driven by this year's "Singles' Day," also known as double 11, shopping festival, Alibaba said in a press release sent to the Global Times during the weekend. Based on the current growth rate, the company will help create a "new economy" that combines billions of individuals and millions of enterprises worldwide, and size up to the equivalent of a GDP just behind the U.S., China, the EU and Japan, the release noted, without providing a timeframe.
A company's output can't be compared to a country's GDP, as the company still faces uncertainties in its corporate operations, but the business model that Alibaba has created will certainly have a significant impact on enterprises not only in China but also overseas, Zhang Yi, CEO of Guangzhou-based market research firm iiMedia Research, told the Global Times on Sunday.
"In the past decade, the e-commerce model has been playing a major role in solving the problem of asymmetric information in the marketplace, but it will focus more and more on how to better integrate online and offline sectors in the future, which will reshape global economic and trade landscape," he said.
Alibaba's business-to-consumer platform Tmall recorded a daily sales volume of 120.7 billion yuan on Friday. The 24-hour event this year covered 235 countries and regions, and 94 brands broke sales records of over 100 million yuan, the press release showed. For example, Japanese retailer Uniqlo surpassed 100 million yuan in online sales in less than three minutes, and multinational luxury goods conglomerate LVMH also exceeded expectations, for example its affiliated brand Guerlain broke monthly sales record in 12 minutes on the day.
Alibaba will maintain its growth momentum in the next five years as online retail has not reached the "growth ceiling" yet, said Liu Dingding, a Beijing-based independent industry expert. "Meanwhile, Alibaba is helping create hundreds and thousands jobs, which could also be seen as a contribution to the world development," he told the Global Times on Sunday.
Challenges remain
However, global trade has been sliding in recent years, and this year the growth will be the slowest since the financial crisis, according to the WTO estimates in September. To boost cross-border transactions, Alibaba included "buy globally, sell globally" in its strategy for this year's Double 11 shopping razzmatazz, which is in line with the group's founder Jack Ma Yun's proposal of building an electronic world trade platform (eWTP).
The eWTP would help small- and medium-sized enterprises (SMEs) overcome complex regulations, processes and barriers that hinder their participation in global commerce.
While pushing forward this idea, Alibaba has been facing mounting pressure from foreign regulators. For example, the U.S. Securities and Exchange Commission has recently probed the counterfeit goods on its platform, which could be seen as a result of the trade frictions between the countries, Liu said, noting however that there is no need to exaggerate the aftermath of this conflict, as the current success of Alibaba will eventually help the real economy, or the SMEs, to upgrade their business models and generate more profits.
Alibaba is not the only e-commerce giant that aims at connecting the world and trying to build a global business cycle, "U.S. e-commerce platform Amazon has been doing the same thing for years, but the outcome is not as good as expected," Zhang Yi said.
Zhang noted that like Amazon, the Chinese company's overseas business still accounts for a small part of its overall business due to barriers in international trade.
"Finding complementary areas for doing business is crucial for Alibaba, as shown by JD.com, another Chinese online supplier, which has purchased some of overseas retail marketplaces to better serve the diversified demand in China," he said.
China's Singles Day offers big opportunity for British retailers
November 11th, 2016Forget Black Friday, said a Telegraph report, as China's Singles Day, the world's biggest online shopping day of the year, kicked off at 0:00 local time (1600 GMT) on Friday.
More than one billion U.S. dollars was spent within the first five minutes and the number has soared to 9 billion as of 8:00 local time (2400 GMT), according to Chinese media reports.
Singles Day, which started as an "anti-Valentine's" celebration for single people in China back in the 1990s, was adopted by China's e-commerce giant Alibaba in 2009 and has since become the world's biggest online shopping day.
Last year, Chinese consumers bought 14 billion dollars of goods from Alibaba's Taobao and Tmall in just 24 hours, which resulted in 467 million parcels being delivered after 710 million payments were made, said Telegraph.
The sheer scale of the market combined with the acute Chinese appetite for British goods has opened a significant new sales venue, the Guardian said in a report.
Topshop, a British multinational fashion retailer of clothing, shoes,make-up and accessories, saw its sales surge by over 900 percent in 2015, it said.
"These results clearly indicate how impactful this online calendar moment has become, and as a key focus market for the brand we see 11.11 as a great way to raise brand awareness and conversion in China," a Topshop spokesperson was quoted as saying by the Guardian.
Fung Global expects sales of British brands to surge this year, driven by a tailwind from Chinese online shoppers' demands for overseas goods, said Telegraph.
The Hut Group, which owns beauty sites and Protein World, said it expects sales to double compared to 2015 with brands offering 40 percent off haircare products, it said.
Vitamin retailer Holland & Barrett is hoping to make 1.2 million dollars from the event alone this year, it added.
Waitrose, a chain of British supermarkets, partnered with Chinese marketing and logistics company and has started exporting to China in April, selling through the Royal Mail shop on Tmall, said the Guardian.
"Singles Day is a big occasion for consumers and businesses in China and has the potential to give the products we offer more exposure and provide another opportunity to test demand for our brand," Nigel Roberts, Waitcose B2B growth and development manager, was quoted as saying by the Guardian.
China's finance industry embraces change
November 10th, 2016
Bank of China chairman Tian Guoli speaks at the Bank of China - Bloomberg Global M&A Summit on Tuesday.
Mergers and acquisitions have accelerated the transformation of China's financial industry, according to leaders in the field.
Vice chairman and president of China Investment Corporation, Tu Guangshao told the Bank of China – Bloomberg Global M&A Summit on Tuesday that the sector was changing.
"The expansion from trade finance to acquisition finance will provide a strategic opportunity for development of the Chinese financial sector," Tu said.
"Acquisition finance requires financial institutions to adjust the content of services they provide, improve their product systems, increase the effectiveness of their organizational structures and put risk management well in place," he continued.
Zhu Min, former deputy managing director of the International Monetary Fund, said M&A is a crucial engine for post-crisis economic growth.
He said it will lead the global economy out of the gloom through supply-side restructuring.
In the first half of 2016, the volume of cross-border mergers and acquisitions led by Chinese buyers reached $149.2 billion, exceeding the total volume in 2015. The amount accounted for 23 percent of the total volume of global cross-border M&A, up from 6 percent in the same period last year, according to Tian Guoli, chairman of Bank of China.
"As the cross-border M&A by Chinese companies has entered a new stage, it is pushing forward the transformation and upgrading of China's financial sector," he said.
Bank of China has established an investment and loan linkage mechanism via diversified platforms and has 600 branches in 47 countries and regions.
"During the process of promoting industrial upgrade through cross-border M&A, Chinese companies should also pay close attention to potential risks to avoid shortsighted, irrational acquisitions that are seeking instant benefits," Tian said.
Certain M&A projects were overpriced and had problems with post-acquisition integration of businesses, he added.
Ad market reverses sales drop
November 9th, 2016China's overall advertising market edged up 0.1 percent in the first three quarters of this year, reversing from a 3.5 percent drop over the same period a year ago.
Traditional ad spending in the first nine months fell 5.5 percent, narrowing from the loss of 7.3 percent a year ago and a 6.2 percent drop in the first half of this year, CTR said in its quarterly report yesterday.
TV ad grew 1.4 percent in September, the biggest monthly gain since the start of this year, due to rising spending from key industries such as transport and real estate.
Newspapers saw worsening ad income which plunged 40 percent in the first three quarters, with property, commercial services and entertainment companies all cutting spending. Magazines also suffered a 29.9 percent loss in ad income from a year earlier.
Ad spending in movie theaters was the fastest growing sector in the first three quarters, jumping 57 percent.
Double-digit growth in Hangzhou
November 8th, 2016Hangzhou's gross domestic prod-uct for the first three quarters was 778.07 billion yuan ($116.13 billion), up 10 percent from a year earlier. The economy remained in the double-digit figures for six consecutive quarters, faster than the national average of 6.7 percent and the provincial aver-age of 7.5 percent, according to official statistics.
The city's service industry reported 475.19 billion yuan in added value, a year-on-year increase of 13.4 percent. The manufacturing industry achieved 281.54 billion yuan, up 5.4 percent while agriculture edged up 1.5 percent to 21.34 billion yuan.
The information sector, a key industry in the city's economic re-structuring, expanded 23.1 percent year-on-year to 186.58 billion yuan, and accounting for 24 percent of the city's GDP.
Retail sales rose 10 percent to 369.5 billion yuan, online retail sales jumped 29.3 percent to 210.7 billion yuan, and online consumer spending expanded 30 percent to 92.63 billion.
From January to August, the city registered 59,100 new companies, 26.3 percent more than the same period of last year. The average in-come for urban and rural residents reached 42,225 yuan and 21,404 yuan, respectively, up 8 percent and 8.4 percent.
Baidu executive resigns due to economic problems: media reports
November 7th, 2016Baidu Inc Vice President Li Ming-yuan resigned after he was reportedly accused of "economic corruption," said media reports.
The domestic Internet titan sent its employees a public letter via e-mail on Friday night, confirming "three blames" about Li.
First, it said, when Li participated in one of Baidu's acquisition projects, he had a "private economic exchange" worth an enormous amount, with the head of the company being taken over, the Beijing Youth Daily reported Sunday.
Second, within Li's business management scope, he had huge private economic exchanges with some partners in the game sector, the report said.
Also, Li didn't inform Baidu when other companies he held stakes had business links with Baidu.
"Li is a senior employee of Baidu and has made great contributions to the company … but nothing can be accomplished without norms and those who violate Baidu's rules will be strictly dealt with," the company was quoted as saying in the letter.
Li started his career in Baidu as an intern in 2004 and became the youngest vice president of the company nine years later in 2013 when he was 29.
Media speculated that Li was possibly involved in Baidu's acquisition of mobile application store 91 Wireless in 2013 and had since started to have economic exchanges with the latter.
After the acquisition, Li was assigned to be in charge of the Baidu mobile application distribution team, said media reports.
"The fact is that Li broke the company's rules, but the violations are not so serious that he will not be handed over to judicial organs," Li Chengdong, a Beijing-based independent analyst, told the Global Times on Sunday.
Currently, there is no firm evidence of which acquisition cases should be designated as those accounting for Li's private economic exchanges, said Li, the analyst.
Lots of netizens expressed doubts about the term "economic exchanges" mentioned in Baidu's letter and guessed that it meant Li was involved in corruption.
"I am not involved in corruption … do not underestimate Baidu's determination to tackle corruption. No matter who is involved in corruption, the company will call the police and discharge him and will never tolerate the mistake. No one can be an exception because this is the rule and the law, and it cannot be changed by someone's preference," Li was quoted as saying in his WeChat account on Saturday.
Li also said that the "economic exchanges" were normal economic exchanges and were not improper.
This kind of rule-breaking is often seen in Internet companies, noted Li, the independent analyst. "The vice president might have become a victim of political struggles in Baidu."
Traditional retail business faces recession in China
November 4th, 2016Traditional retailing business is facing a severe recession in China as the Japanese department store Ito-Yokado closed another outlet in Beijing on Nov. 1.
On Oct. 31, only the first floor and the underground supermarket of the six-floor department store in the Shilipu neighborhood of Beijing were open for service. And the two floors closed early at 7:00 p.m.
The closing of the Shilipu outlet is of great significance to Ito-Yokado, as it was the group's first outlet in Beijing.
Cheng Ning, head of the publicity department of Ito-Yokado's Beijing branch, said that the outlet was closed mainly because its sales remained low even after business adjustments.
After the closure of the Shilipu outlet, Ito-Yokado only has two outlets and one food store in Beijing, and Cheng said Ito-Yokado will "try all means to ensure the smooth operation of the stores."
In the past three years, Ito-Yokado has closed seven outlets in Beijing without opening any new ones.
The situation is no better for other department stores nationwide.
So far, 29 listed department stores, supermarkets and chain stores have released their Q3 financial reports, and 16 of them registered decline in sales as compared to the same period of last year.
The Dalian-based Friendship Group and the Wuhan-based Zhongbai Holding Group reported bigger declines among the 16 companies.
The Friendship Group, mainly engaged in the retail, hotel operation and real estate development, reported quarterly revenue of 492 million yuan (U.S.$72.79 million), down by 23.67 percent yearly. In the first three quarters, its shareholders saw a total loss of 162 million yuan (U.S.$23.96) in net profits, down by 799.02 percent yearly.
The Zhongbai Holding Group, mainly engaged in retail and logistics businesses, registered a total revenue of 11.64 billion yuan (U.S.$1.72 billion) from January to September, down by 6.07 percent yearly. Its shareholders saw a loss of a loss of 174.82 million yuan (U.S.$ 25.86 million) in net profits, down by 201.39 percent year on year.
In contrast to the sluggish situation in traditional retail sector, China's e-commerce industry is booming.
China's e-commerce powerhouse Alibaba posted robust revenue growth for its second fiscal quarter ending Sept. 30. Its revenue growth rose 55 percent yearly to 34.3 billion yuan (U.S.$5.07 billion) for the quarter.
Farmers use e-commerce to maximize profits
November 3rd, 2016After harvesting potatoes on his plot, Hao Jinde saved some for his family to eat and sold the rest, over 500 kg, making 600 yuan (88 U.S. dollars).
Instead of peddling on the street as in the past, this year Hao sold them to a store belonging to the online shopping platform, Lecuntao, at his village in Jingle County, a potato growing region in northern China's Shanxi Province.
"Compared with selling to the local guys, I got about 50 yuan more," Hao said.
Lyu Yaofeng, manager of the platform's Jingle County branch, said the platform could purchase the potatoes at a higher price, as they would sell them for a much higher retail price to villages about 100 km away where they do not produce potatoes.
At the same store, Hao and other villagers now have direct access to pears and other produce that can be delivered to their village at lower than market price.
"Most of the produce online come straight from where it is grown, which ensures lower prices," said Li Erping, manager of the store in Hao's village.
Lecuntao is an e-commerce platform aimed at the rural market, which sets up physical stores in rural villages. Since it was launched in 2014, its physical store network has grown to over 70,000 villages in China's 25 provinces. Rural customers can either order online or make their purchases at the physical stores in their village.
While the Chinese government is advocating e-commerce in rural area as part of poverty reduction efforts, online shopping platforms, including Alibaba's Taobao and JD, are also expanding their services to rural villages, which have helped with sales of agricultural produce.
In late October, Chinese authorities for the Internet, national planning and poverty alleviation jointly released a plan on poverty reduction using the Internet, encouraging e-commerce in rural areas and promising to expand broadband coverage to 90 percent of China's poverty stricken villages by 2020.
According to the Ministry of Commerce, the number of online shops selling agricultural produce exceeded 1 million by September this year, bringing sales to 170 billion yuan, and they are expected to hit over 220 billion by the end of the year; that is 6.3 percent of total online sales, and a 35 percent increase year on year.
When farmers have difficulty selling produce, the Internet is now a major channel to turn to.
According to an official in Linxian County, a date growing area in Lyuliang, dozens of online platforms were used to sell slow-moving date stocks last year. Thanks to the online sales, date sales increased by 30 to 40 percent, saving local farmers from financial losses.
"The 'Internet+' concept has changed rural China," said Fan Wusheng, director of the poverty alleviation office in Jingle County. "With their produce sold online, farmers are now able to make maximum profits."
Self-made chip rivals foreign ones
November 2nd, 2016A Shanghai-based company yesterday unveiled China's first self-developed chips used in computers and servers and in the process broke the dual monopoly held by US chip giants Intel and AMD.
Cooperating with industry partners Lenovo Group and other domestic personal computer vendors, Shanghai Zhaoxin Semiconductor Co plans to sell 1 million computers with the new chip by 2018, said Ye Jun, chairman and chief executive of the developer.
"We don't want to replace Intel and AMD immediately at the current stage. But it does make sense that we have another choice from a Chinese chip designer," Ye said during an interview at the company's booth at the China International Industry Fair yesterday.
The advantage of the self-developed chip is its high-level security, which will be used in government bureaus, state-owned firms and the military. Lenovo desktops featuring the chip are already used in some local government bureaus.
Rail-sea cargo service to slash costs
November 1st, 2016The new Taiwan-Pingtan-Europe rail-sea transport route will slash cargo costs between China's Taiwan province and Europe, an official from Pingtan in Fujian province said.
Once the services on the connected routes become regular, it will cut transport costs, said Qian Peng, deputy director of the transportation and construction bureau of Pingtan, which is part of the China (Fujian) Pilot Free Trade Zone established in 2014.
The trial run of the rail-sea link took place in November in 2015, which saw cargo transported from Taiwan Island to Pingtan, and eventually to Hamburg in Germany.
Pingtan is applying for the normal operation of the new link after the trial run.
Sea transport between Taiwan Island and Europe takes about 32 to 45 days. Air transport takes seven days but costs at least 10 times more than via the sea route. By comparison, the sea-rail link takes only around 13 days, Qian said.
Compared with the airlines, transport costs using the combined route are cut 80 percent for heavy cargo and 30 percent for light cargo.
The main products to be transported on the route will include electronics, seafood, hardware, and consumer goods from the island.
China's electric carmaker BYD debuts budget light train
October 14th, 2016BYD, China's leading new-energy vehicle manufacturer, unveiled its first light train Thursday, a low-cost overground metro system suitable for hundreds of medium and small cities.
The train system, "Yungui," which when translated means Cloud Rail, costs one-fifth of a regular metro line and cuts the construction time by two-thirds, according to BYD chairman Wang Chuanfu.
He said compared to metro lines in Beijing and Shanghai, Yungui has been tailor-made for smaller cities or the tourist and commercial zones of big cities where a full-developed metro system is not viable.
BYD is one of at least five Chinese companies capable of producing urban light trains, said Zhong Jianhua, deputy director of the experts committee for China Association of Metros. The other manufacturers include China Railway Engineering Corp. and CRRC Changchun Railway Vehicles Co. Ltd.
Zhong said the light train was essentially "made in China" as about 90 percent of the equipment was produced locally and is expected to become a new driver for growth of China's rail transport sector.
More than 20 Chinese cities have subscribed to building such light trains with a combined rail length of 3,000 kilometers, Zhong said, adding that demand would boost the country's rail transport sector.
He said the China-made light rail had been equally welcomed in the developing world, particularly in Southeast Asia. Exports may begin when the market is mature.
Third-party payment licenses become increasingly valuable
October 10th, 2016Some see activity as way to expand overall business
The market value of third-party payment licenses, which help companies expand their business beyond online payments, will continue to grow in the short term in China, analysts said.
The People's Bank of China (PBOC), the country's central bank, stopped issuing new licenses in March 2015, and it has been enhancing its regulations of the third-party payment market. There are likely to be different impacts on different types of licenses, Mu Chu, an analyst from mpaypass.com.cn, a Shenzhen-based mobile payment intelligence provider, told the Global Times on Sunday.
"For example, a license for bill collection via bank cards will not be as valuable as before, as the profit margin in the bill collection business has been shrinking since the government lowered the bank card transaction fee," he said.
The PBOC cut commission charges and fees for bank cards on September 6, according to its website.
Under the new policy, card-issuing banks can't charge merchants more than 0.35 percent of the transaction amount for debit cards or more than 0.45 percent for credit cards, the PBC's document showed. Previously, the transaction fee varied among sectors.
The move will drive out some small online payment companies that make profits through counterfeiting point of sales (POS) machines with different categories to avoid transaction fees, according to an article published on domestic news portal sina.com.cn in September.
A license that has multiple functions will be scarce but the most in demand, Mu noted Sunday.
"For example, a license that covers online payments, mobile payments and bill collection via bank cards that can be used nationwide will become more and more valuable," he said.
At present, 269 third-party payment companies have licenses, and authorities have come up with more severe measures to crack down on illegal online transaction activities since 2014, according to a report by Beijing-based market consultancy Analysys International.
"Regulators will become more and more cautious in controlling existing licenses, but considering the added value that third-payment licenses can offer companies, their value will continue to increase," Ma Tao, research director of the finance study at Analysys International, told the Global Times on Sunday.
A license cost about 50 million ($7.5 million) to 80 million yuan at the beginning of 2015, but it now costs more than 400 million yuan, the China Business Journal reported on Saturday.
Many licenses have been bought and sold repeatedly as supply is limited but demand remains high, the journal said, quoting anonymous industry insiders.
"It's not a surprise that licenses are becoming so expensive, as they help companies access the online payment market initially then expand their business," Li Chao, a senior analyst at Beijing-based research firm iResearch, told the Global Times on Sunday.
More and more companies are willing to pay more for licenses as they see the importance of the online payment market, and mergers between companies are aimed at offering a complete line of payment services, Li Zijian, vice president of Beijing-based third-party payment provider fullrich.com, told the Global Times on Sunday.
"Online payments enhance the connectivity between companies and customers and increase customer loyalty, which implies marketing opportunities," Li said.
Since the beginning of 2016, 14 merger and acquisition deals have been undertaken to get online payment licenses, according to the journal. For example, Midea Group Co spent 300 million yuan to buy Shenzhen-based third-party payment service provider Shenzhou Tongfu in August, a way to enter the online payment market, mpaypass.com.cn reported in August.
However, the growth of China's third-party payment market will slow in the near future. Total transactions in 2016 are expected to be 23 trillion yuan, representing a year-on-year growth of 52.8 percent, compared with 800 percent growth in 2013, the Analysys International report showed.
Companies should not look at obtaining online payment licenses and providing related services as an end in itself, as the market is close to saturation, Li noted. "To get more profit from the license, they should do more than offer online payment services," he said.
China pledges to streamline administrative approval, ease rules for foreign investors
October 9th, 2016The Chinese government on Saturday decided to streamline administrative approval, delegate more power to lower government levels and loosen rules on foreign investment in an attempt to revive the economy.
Premier Li Keqiang called for efforts to cut red tape and simplify procedures for new investment projects, according to a statement issued after an executive meeting of the State Council.
Provincial governments will approve investment projects related to container terminals, vehicle engines, urban transit systems and inland water transportation, according to the new regulations.
The China Railway Corporation will be allowed to make decisions regarding railways, bridges and tunnels, the statement said.
More private investment will be encouraged in various sectors, including medical care, education, culture and sports.
China will prohibit new projects related to industries struggling with overcapacity, such as steel, coal and electrolytic aluminum sectors.
In principle, no new gasoline-powered vehicle factories will be allowed to open.
In 2013 and 2014, the central government moved a raft of administrative approval procedures, and delegated approval power, to lower government levels.
The meeting stressed measures to improve the country's business environment. More efforts are needed to create a level playing field for both domestic and foreign companies, the statement said.
Following China's revisions to four laws regulating inbound investment last month, the meeting agreed that some administrative approvals will no longer be necessary for foreign investors setting up businesses on the Chinese mainland.
Such investors are now only required to report business plans to local regulators, as long as their business is not on a "negative list." The government estimates that this means more than 95 percent of procedures will be cut.
The practice has been proved satisfactory in pilot free trade zones in Shanghai, Guangdong, Tianjin and Fujian.
Despite an economic slowdown, China remains an attractive destination for foreign companies due to the country's continued opening up as well as the improving business environment.
Foreign direct investment in the mainland during the first eight months of 2016 increased 4.5 percent year on year to 85.9 billion U.S. dollars, up from 4.3 percent in the first seven months, according to the Ministry of Commerce.
Altogether 18,538 new foreign-funded enterprises were established in the country over the same period, up 10.2 percent on a year earlier.
The government will continue to improve services and supervision to expand the country's opening up, the statement said.
In addition, the meeting pledged efforts to modernize agriculture, encouraging diversified business models and the mechanization and informatization of the sector. Financing support will also be increased.
China will also curb agricultural pollution by adopting strict rules on the use of fertilizers and additives, and strengthen the supervision of farm produce.
The government will work to enhance farmers'incomes and guarantee their urban housing demands, the statement said.
Second Life in China English Teacher Recruitment Consultants Reveal The 4 Steps to Teach English In China
September 29th, 2016Any occupation that is associated with the learning, grooming and education of people is always highly rewarding, but along with the high rewards comes great responsibility. An English teacher in China job is similar; it involves interacting with people using engaging techniques to teach non-English speakers the English language. This is a reason why people looking to have a career as an English teacher should take a proper start to ensure a positive and rewarding career. The English teacher recruitment consultants at Second Life in China shared the 4 steps to teach English in China.
China is full of tremendous opportunities for English teachers “Demand for English teachers all over the world is growing quickly. As more countries interact with each other through business and other types of communication, the need for English speakers in foreign lands is growing. And nowhere is this need greater than in China.” - explained Second Life in China expert.
The first step of any major life altering step is to arrive to a decision about wanting to do something, similarly, when someone wants to teach English in China they should make up their minds and get ready to take a life changing plunge. By choosing to work in China, people will have an amazing chance to travel abroad and immerse themselves in the rich Chinese culture, also have the opportunity to learn new things including Mandarin Chinese and a new way of life. Additionally, English teachers in China are able to earn enough money to lead a comfortable life and also travel in China. According to experts, the salary benefits of teaching English in China include: A monthly salary of between 8,000-22,000RMB. The benefits include free flights, free housing, bonuses, airport pickup, and a Z visa, among other perks.
The second step of the process is to learn about the requirement and arrange all the necessary documents and make sure to fulfill all the requirements aid out by the Chinese State Administration for Foreign Expert Affairs before moving ahead with the plan. At this point, in the 3rd step is to contact Second Life in China, as one of the best recruitment agencies of the regions the company works with English teachers and schools to find a good fit for both parties. The consultants provide guidance and help in finding the right English teaching jobs in china and in settling down in China upon arrival.
The fourth and final step is to start enjoying the unique experience of living and working in china as an English teacher.
Huawei sees AI as mainstream strategy for solving problems
September 28th, 2016Won't duplicate Google's emphasis on consumer products
Chinese telecommunication giant Huawei Technologies Co sees artificial intelligence (AI) as an effective way of solving its own problems, which is a different path compared with other companies such as Google, experts said on Tuesday.
Huawei is focusing on how to apply AI to its own network to establish a global technology service to ensure network maintenance and breakdown diagnosis, which is different from what Google is doing, Xiang Yang, an industry expert at Beijing-based CCID Consulting, told the Global Times on Tuesday.
"For example, by using AI, Huawei could solve a network problem in Africa via tele-control," he said, noting that the disruptive technology will become the company's troubleshooter and help it increase its effectiveness.
Xiang made the comment after Ren Zhengfei, CEO of Huawei, said that the company will use "American bricks to build a Chinese Great Wall." He made the comment during a speech at Noah's Ark Lab, the company's research lab, in August, according to a transcript of the speech posted on the company's unofficial WeChat account on Sunday.
A huge global market of the network inventory is the best "stage" for AI, Ren said in the speech, noting that the company's trillion-dollar market requires more skillful and experienced staff in maintenance. And given this situation, AI has much potential, the transcript showed.
AI could help experts save time and focus on 10 percent of all problems, leaving the rest to automation, Ren noted.
The global market scale of the AI sector will reach nearly 119 billion yuan ($17.9 billion) by 2020, and the Chinese market will reach 9.1 billion yuan, according to a report published by Beijing-based industry consultancy iResearch in February.
So far, nearly 100 start-ups are focusing on this disruptive sector, which covers industries like industrial robots, service robots, intelligent hardware and cognitive technology, the report said.
And BAT - the domestic technology trio of Baidu Inc, Alibaba Group Holding and Tencent Holdings - have already entered the AI field but with different focuses.
Huawei will focus on "a mainstream course" and not come up with some "consumer products to earn some money," Ren said during the speech.
Applying AI to a product designed for the public is not in line with the company's core business, Zhao Ziming, an industry expert at Beijing-based consultancy Analysys International, told the Global Times on Tuesday.
"The company is striving to use AI technologies to improve the user experience," he remarked.
Huawei holds a positive attitude toward working with other companies in the AI sector, not only Chinese counterparts but also those overseas, Zhao said, noting that foreign companies have more advantages in this type of technology.
There is no need to compare Huawei with US tech companies like Google in developing AI, Xiang said, as the Chinese company is more focused on the application of some technologies in its own field. Meanwhile, the US company is stepping up efforts to make technological breakthroughs.
"But the two, along with many others in this field, should make AI fit into their own corporate strategies," he noted.
"For example, Google sold its robotics division Boston Dynamics to Toyota a few months ago, which showed that the company has to first figure out the purpose of working on AI," Xiang explained.
Domestic car manufacturers aim to become more premium than peers
September 26th, 2016
A Borgward BX7 is displayed at an auto show in Haikou, Hainan province, on Sept 10.
More domestic car brands have demonstrated their eagerness for recognition as premium, although none of the Chinese peer group have yet revealed a strategy that will lead them to the top. Although there are previous failures that serve as lessons from which the industry can learn, some of them might still not find the keys to customers' hearts.
Geely Automobile Holdings Ltd expressed its ambition to build premium lineups on its first universal platform. Meanwhile, Beijing-based Beiqi Foton Motor Co Ltd is offering an SUV carrying the originally Germany Borgward badge at a price of up to 300,000 yuan ($44,979).
When companies talk about "premium", they usually mean a "premium pricing strategy", setting the price of a product higher than similar products, as an attempt to seek maximum profit in a segment where customers are willing to pay extra.
Theoretically, a customer would settle the bill when he or she perceived the difference between the product and other similar ones, when there are limited alternatives, or when production costs could not be lowered.
But Geely and Borgward, which are looking to climb up the premium ladder, need a halo effect to persuade customers during their decision-making process. In the automotive field, customers' feelings and thoughts reverse primarily due to trend-setting designs and cutting-edge technologies.
A well-known example of this comes from Volkswagen's China business. The company shifted its mass models well away from its peers after boasting its unique "T&D" powertrain, which consists of a turbocharged engine and direct shift gearbox.
Chinese customers perceived the difference, as T&D doubled the vehicle's fuel economy and so halved its petrol consumption. There is no comparable function in the market, at a time when the gasoline price has hit 8 yuan a liter. So, customers are willing to pay a higher amount for a compact Golf or Sagitar, as high as some other international brands' mid-size models.
There were of course other factors that helped Volkswagen move upward, as these models and the DSG feature stepped down from the altar. But can we name one or two factors helping Geely go premium? Does Geely possess any superior difference from other premium rivals to convince customers to pay much more?
Geely's jointly developed compact modular architecture platform and the input from a Swedish design lead team are impressive, thanks to its connection with Volvo Cars. Looking back, Geely Automobile has successfully become far more premium than it used to be. But, when we look around in the overall premium segment, at least in the eyes of the Volkswagen fans, Geely today remains in need of something new to match Volkswagen's T&D offering.
As for the revived Borgward brand, it is already a success for Beiqi Foton, a business vehicle maker who might not have expected much. The automaker could apply a strategy to enter the passenger car market, to become as high profile as possible. After it has attracted enough potential customers that understand the brand, a later downgrade could be possible to achieve greater volumes.
Also, Borgward could learn from the Sino-Israeli joint venture Qoros Automotive Co Ltd, which cut its suggested retail prices by as much as 50,000 yuan last year after claiming to be premium since it was established in 2007.
Chinese graduates should intern instead of job-hopping
September 23rd, 2016
Amid the massive enrollment expansion of Chinese universities since 1999 and the global economic downturn, finding a desirable job in China is not easy for most new graduates.
Statistics show that only 62 percent of 177,000 graduates in Shanghai found jobs upon graduation in 2015, resulting in high unemployment rates in the city.
Ironically, more than half of all recent Chinese graduates in first-tier cities end up quitting their new jobs within the first two months, according to the figures released by recruitment platform 58.com.
A large percentage was said to be dissatisfied with their salaries while others sought work that would allow them to better improve their skills. A small number ultimately decided it would be easier just to return to higher education or go travel.
Analysts are trying to uncover the real reasons behind this bizarre trend of graduates giving up so soon after entering China's job market.
Some say that post-1990s and millennial-generation Chinese are notorious for being quick to quit, and others are outright criticizing them for being spoiled, immature and impatient - hallmark personality traits of today's young Chinese.
As a university student in my senior year, I can offer some perspective into this perplexing trend. You see, after spending our entire childhoods preparing for gaokao (the national college entrance exams) followed by four years in a university, it's understandable that many Chinese grads would prefer time off to play, travel, party or simply rest before diving into a lifelong career.
Additionally, as my fellow intern, Zhang Qin, here at the Global Times Metro Shanghai wrote in a recent TwoCents article, "Chinese students tend to sacrifice their personal interests in order to get accepted by a better-ranked university that may not offer their first choice of majors ... the decision of which major to pursue is usually influenced or wholly decided by our parents or teachers."
This, then, is also why so many Chinese grads find themselves feeling dissatisfied or downright depressed about their new jobs. It doesn't help that we are pushed by our families into a profession for which we may have no passion, leading to compromising our personal happiness.
Choosing a vocation and dedicating our lives to it is not as easy today as it was for our parents and grandparents. More options, along with more educated, eligible candidates, mean that most of us will have to enter a job at the very bottom, settling for minimal salaries.
Nonetheless, a few uni students I know are one step ahead of the rat race. There's a girl in my grade who has attended six internships throughout her undergrad years in order to identify a career she will be most competent in, then narrow down which specific company she'd most prefer working for. She is a true inspiration not just to our generation but to me personally.
This leads to my own internship here at the Global Times. Originally hailing from North China, I came to Shanghai to study because it is an ever-evolving metropolis full of opportunities.
Over the past three years I have tried to take advantage of all my spare time; instead of lazing around my dorm room, I have worked a number of part-time jobs and internships. I originally wanted to be an English interpreter, but my current internship as a journalist has allowed me to expand my horizons.
Quitting a salaried job right after starting is a permanent blight on your dossier; prospective employers will see how unreliable and irresponsible you are and probably not want to take a chance spending time and money on training you if they think you are just going to jump ship.
Indubitably, more than high scores or skill sets, what recruiters seek in young candidates are loyalty, persistence and strong character.
Yes, older companies may want to consider altering their archaic business models and outdated recruitment practices to better suit the impatient mind-sets of millennials; after all, it is us who will soon be taking over those companies.
But until then, it is wholly up to undergrads to prepare themselves for today's uncertain job market.
City acts to find jobs for college graduates
September 22nd, 2016
HUMAN resources authorities in Shanghai signed a contract yesterday with 51 local state-owned enterprises to help unemployed college graduates to find jobs.
Public employment agencies around the city will use the cooperation scheme to help the participating enterprises, including Shanghai Municipal Investment Group Corp, Bright Food Group Co, Shanghai Shendi Group Co and Shanghai Airport Authority, with recruitment as well as providing graduates high-quality job opportunities.
“The program is an addition to our regular recruitment methods,” said Song Haiwen, director of the human resources department of Shanghai International Airport Co.
“Students who graduated without jobs are not necessarily all incapable,” he added. Some might not have found suitable positions and some might have lost their jobs through no fault of their own. “We hope to offer them one more chance.”
The event also kicked off the month-long activities organized by Shanghai Human Resources and Social Security Bureau this month on the theme of “service for college graduates.”
The bureau’s branches in 16 districts will register students’ details and their needs, such as recruitment ads, internships, training and even psychological consultation to provide targeted services.
A total of 110 job fairs will be held this month, offering 16,000 jobs.
The annual event serving college graduates is organized to improve their employability. By the end of last June, nearly 75 percent of the 187,000 graduates of local colleges this year would have found jobs, according to local education authorities.
Xu Hongjue, director of the employment promotion center in Putuo District, said college students faced a number of problems in finding jobs.
“Many students lack the right self-positioning. They have to realize the situation that college students are no longer so rare as decades ago,” she said.
Many employers also complained that young people were less loyal than in times past and were quicker to switch jobs, she added, while some students were not skilled at communication.
Xu also pointed out that some students lacked career planning development as well as a passion for working.
Further information is available on the website of Shanghai Human Resources and Social Security Bureau. (http://jobs.12333sh.gov.cn/index.html).
Baoshan, Wuhan Steel merger to create 2nd-largest manufacturer
September 21st, 2016China's top steelmakers will merge to create the world's second-largest steel entity, it was announced yesterday.
Baoshan Iron and Steel Co, Baosteel's listed company, will issue new stocks to the shareholders of Wuhan Iron and Steel Group to complete the merger, the two state-owned companies said.
Baoshan is ranked fifth in terms of world production capacity. Wuhan is 11th. After the takeover, Wuhan Steel will delist from the A-share market on the Shanghai Stock Exchange.
Baosteel Group is China's second-largest steelmaker, and along with Wuhan Steel will have a joint annual production capacity of more than 60 million tons, making it the second-biggest producer behind ArcelorMittal.
The new entity will be called China Baowu Iron and Steel Group. China Business News reported yesterday that the state asset watchdog had given its nod and submitted the merger plan to the State Council for final approval. Once approved, the market value of the new group will surpass 108.5 billion yuan (US$16.3 billion), and its total assets will be worth 700 billion yuan.
The merger is in line with Chinese government's efforts to overhaul its steel sector, upgrade quality and cut overcapacity. Chi Jingdong, deputy director of China Iron and Steel Association, said the central government wants to consolidate 60-70 percent of the nation's steel output into 10 giant groups to enhance their competitiveness.
Chinese steel demand slumped as the global industry has been battling overcapacity. The crisis has seen manufacturers in Asia, Europe and the US suffer huge losses and led to accusations of dumping.
Shanghai-based Baosteel's net profit plummeted 83 percent to 1 billion yuan last year, while Wuhan Steel lost 7.5 billion yuan, compared with a 1.3 billion yuan net profit in 2014.
An analyst said the merger between Baosteel and Wuhan Steel was "merely the beginning" of more such acquisitions in China's steel industry.
"Restructuring in China's steel industry is the trend and it's an unstoppable one," Chen Bingkun, an analyst at Minmetals and Jingyi Futures, told AFP.
Restructuring of another two Chinese steel giants, both based in northeastern province of Liaoning, Ansteel and Benxi Steel Group, is next on the agenda, Shanghai Securities News reported yesterday.
Ansteel is the world's seventh biggest mill, and Benxi Steel ranks 21st. The listed arms of the two groups suspended trading in Shenzhen yesterday pending statements on the report. Investors in Hong Kong cheered the news, with Ansteel shares jumping 2.81 percent yesterday afternoon.
"China is now trying to cut down its steel production through policy. Restructuring is another way. Once the merged giants form a monopoly, it will start to control production," said Minmetals' Chen.
"The result of this restructuring is to integrate China's steel industry and pave the way for China to export its steel capacity."
However, another analyst did not see China having an edge over global competitors like ArcelorMittal and US Steel.
"I don't think these mergers will be able to change the current market status of the world's steel industry," said Qin Jiawei, a Hangzhou-based analyst with Xinhu Futures. "China's high-end steel products don't have the competitiveness in the international markets. It's not the size of the company that counts. You cannot change the global steel market by just adding them up."
China launches cyber security talent training nationwide
September 20th, 2016Authorities from Wuhan, capital of Central China's Hubei Province on Monday pledged to increase the number of scholarships to attract students pursuing cyber security, and run special recruitment for "maverick geniuses," which constitutes a part of nationwide efforts to train cyber security talent.
Li Shuyong, Wuhan government publicity department head, told the Cybersecurity Technology Summit during China Cybersecurity Week that the city government will cooperate with companies to cultivate the world's top cyber security talent.
Li said the local government will double the number of scholarships for cyber security majors and recruit top cyber security graduates in Chinese and overseas schools as well as from competitors at cyber security contests. She added it will also open a class for minors and run special recruitment for "maverick geniuses."
She also said the city government will establish an innovative evaluation system. Instead of taking exams, cyber security majors will be evaluated based on their performance and given priority to practical and entrepreneurship training.
The Wuhan government will also offer twice the salary and research funds to the best cyber security experts than those from other fields. They will also receive 2 million yuan ($299,823) in subsidies and a high of 100 million yuan in funding if they have typical technologies and can create a significant impact on the economy. China needs at least 500,000 cyber security talents, but only about 8,000 such majors graduate each year, said an education official at the 4th China Internet Security Conference in August.
In January, a training center for cyber security and communication talent was established in Sichuan Province, aiming to provide training for students and faculty in Sichuan and Hong Kong.
In February, China launched its first special fund for cyber security with an initial capital of 300 million yuan. The fund will be used to provide financial assistance to experts and teachers who specialize in cyber security.
Demand rises for graduates
September 19th, 2016Domestic service majors from the first university in China to launch the course are so popular that many are approached by potential employers even before they graduate.
Jilin Agricultural University in Changchun, the capital of the northeastern province, which established the major in 2003, recruits about 60 students a year.
The employment rate for domestic service graduates has reached almost 90 percent and many earn decent money while still students, according to Li Lei, director of the university's domestic service laboratory. "As interns in the last semester before graduation, many have been able to earn 3,000 to 5,000 yuan ($450 to $750) a month."
According to a report published by MyCOS, an educational data and consulting company, the average monthly salary for graduates of the class of 2014 reached 3,487 yuan just six months after graduation.
"There is still a shortage of talent in the booming industry, so some companies come to our university to recruit," Li said.
However, only about 40 percent of graduates choose to work in the domestic service industry. That's because many of the original students were transferred to the major when they failed to gain entry to their preferred major, so they have no interest in the sector. However, the proportion has declined and the major is now the first choice of 50 to 60 percent of the students, Li said.
The university's domestic service department employs 13 teachers who are experts in a range of fields, including sociology, medical science, nutrition and management science. Half of them hold doctorates. About 60 percent of courses on the major are practical subjects, including designing and making clothes.
The university receives many visitors from other universities, and at least one university in Guangdong province and another in Hunan province have also established the major, Li said.
Li Juanhui, a junior student, said she chose the course because it is "a distinctive major--new, but promising" and there is "a shortage of talent in the industry".
She said many people still make "incorrect assumptions", and "it will require the efforts of several generations of teachers and students to overcome prejudice against the major".
The 21-year-old said she may begin preparing for exams for postgraduate study or to become a civil servant in the second semester.
Fellow student Dong Jian said he has come to enjoy the major, even though it was not his first choice.
However, the 21-year-old said he is confident about the sector's future so he may undertake postgraduate study or look for work at a primary or junior school as a teacher of courses related to family life.
China's express delivery sector sees strong growth
September 18th, 2016China's express delivery sector has grown steadily in the first eight months despite a slowing economy, according to the State Post Bureau.
Revenue for Chinese express delivery businesses hit 234.36 billion yuan (about 35.5 billion U.S. dollars) in the first eight months of 2016, up 43 percent year on year, said the bureau in an online statement.
A total of 18.27 billion deliveries were made during the same period, up 55 percent year on year, according to the bureau.
Despite a slowing economy, express delivery services have grown steadily as online shopping gains popularity in China.
China aims to nearly quadruple revenues of its express delivery market by 2020 in a move to boost consumption and services, as the economy slows with softening trade and investment.
The express delivery industry will have a target annual revenue of 800 billion yuan by 2020, according to a policy document released by the State Council last October.
The amount is nearly four times the 2014 revenue, which reached 204 billion yuan.
Baidu sets up venture capital firm for innovation in artificial intelligence
September 14th, 2016Baidu Inc announced Tuesday that it will set up an independent venture capital firm to focus on investing in early-stage high-tech innovative projects related to artificial intelligence (AI), augmented reality and virtual reality, according to media reports.
The company, named Baidu -Venture, has received the first round of funding of $200 million, -chinanews.com reported on Tuesday.
Baidu CEO Li Yanhong will serve as chairman of the firm and of its investment committee. He will participate in the review and assessment of the projects, said the report.
Baidu Venture will operate independently from Baidu, with innovative assessment mechanisms to accelerate the decision-making process and boost the company's investment efficiency, domestic news portal -leiphone.com reported on Tuesday.
Leading AI scientists, including those in Baidu, will be invited to serve as consultants, leiphone.com noted.
It is another milestone in Baidu's strategic move into the AI sector, which Li said "will be a core tool for remarkable changes in daily life, just as electricity was over a century ago."
He spoke at the Baidu World -Conference on September 1, the Xinhua News Agency reported the same day.
Allen Zhu, managing director of GSR Venture, said the AI sector "has already attracted investment from the capital market."
Zhu predicted that it will be "the next promising investment opportunity after the Internet."
In 2015, China's market for AI amounted to 1.2 billion yuan ($179.65 million), according to consultancy iResearch Consulting Group.
The sector is expected to reach 9.1 billion yuan in 2020.
Baidu is one of the pioneers in the field. Earlier this month, the company unveiled its AI system called Baidu Brain, which is able to recognize and process speech, images and words, as well as build user profiles, said Xinhua's report.
It launched the Institute of Deep Learning in 2013 to develop AI technology, chinanews.com noted.
Firms need to step up efforts on standardization, says official
September 13th, 2016Chinese enterprises should make more efforts to participate in international cooperation in standards to promote their overseas development, said Zhang Xiaogang, president of International Organization for Standardization (ISO).
"Chinese enterprises should pay more importance to international standards and increase awareness in participating in international standardization affairs," Zhang said in an exclusive interview with China Daily ahead of the 39th ISO General Assembly. "They should increase their familiarity of the rules on the formulation of international standards."
The 39th ISO General Assembly will open on Monday in Beijing, and delegates from all of the ISO's 163 members are expected to attend the meeting. This is the second time that the general assembly of the world's biggest organization for standardization has been held in China.
"The meeting will expedite China's participation in international standardization affairs, and play a role beyond measure in facilitating integration between China and the international community in economy, trade, science and technology, and other fields," Zhang said. "It will also greatly contribute to China's economic upgrade."
The technical standards, such as those for measurements and units, and industrial standards issued by the ISO have been widely adopted and have had far-reaching influence in global technological and economic development, Zhang said.
Participation into international standardization can help enterprises to master international rules, familiarize themselves with the latest technological development, increase their competitiveness and brings them economic benefits, he said.
China has made remarkable progress in international standardization in recent years. China led in the formulation of 182 international standards between 2001 and 2015. The figure was 13 between 1947, when the ISO was founded, and 2000, Zhang said.
Despite this progress, China still lags far behind developed countries in international standardization. Around 95 percent of international standards are made led by Western countries, he said. Only 0.7 percent of international standards were led by China, and these standards are mainly limited to industries in which China enjoys traditional advantages, such as fireworks, he said.
To reduce the gap, China needs intensified participation in the formulation of international standards, and the government should consider national plans for internationalization of Chinese standards, he said.
Meanwhile, the government should foster an incentive mechanism to encourage enterprises to cooperate with standardization research institutes to promote advantageous technical standards held by enterprises to become international standards, Zhang said.
In addition, enterprises should make more efforts to cultivate employees who excel in foreign languages, master certain fields of technology, and are familiar with the rules of international standards formulation, to improve international cooperation and exchanges in standardization, he said.
Meng Yongye, deputy director of the Center for International Language Service and Management, at the University of International Business and Economics in Beijing, said with more Chinese enterprises investing overseas, more Chinese technologies will also go overseas, and they should aim to internationalize their standards if they want to become world-class enterprises.
Less than 5 percent of Chinese standards have English versions, far below countries such as Japan and Germany.
China will take a series of measures to encourage internationalization of Chinese standards, such as encouraging enterprises and experts in the formulation and revision of international standards, and carry out mutual recognition of standards with China's major trade partners, Tian Shihong, director of China's Standardization Administration, said at a news conference in August.
Tens of Thousands of Jobs Go as China’s Biggest Banks Cut Costs
September 12th, 2016China’s four biggest banks reported that staff numbers fell by the most in at least six years in the first half, highlighting the possibility that employment has peaked at the firms that are the world’s biggest providers of banking jobs.
A decline of 1.5 percent from the end of last year left 1.62 million workers at Agricultural Bank of China Ltd., Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Bank of China Ltd., earnings filings showed. Agricultural Bank, the No. 1 bank employer, saw its number of employees slip below half a million.
While a fall in the first half is not unusual, the 25,000-job decline is the biggest since at least 2010 and analysts at firms including BOC International Holdings Ltd. and DBS Vickers Hong Kong Ltd. say changes to how banking is done will limit prospects for increases.
“Chinese banks went through years of expansion, adding physical outlets that helped to push their staff numbers to a peak,” said Polar Zhang, a Beijing-based bank analyst at BOC International. He expects the workforce to “dwindle” on technological advances and cost cutting.
Chinese lenders take four of the top five slots for employment by listed banks around the world, ahead of the likes of Wells Fargo & Co., HSBC Holdings Plc, JPMorgan Chase & Co. and Citigroup Inc., data compiled by Bloomberg show. Russia’s Sberbank PJSC is in the top five.
Economic Slowdown
Lenders from Citigroup to Deutsche Bank AG have cut staff and costs in revamps since the global financial crisis.
While Chinese banks have avoided the multi-billion dollar fines for compliance breaches that have weighed on their international counterparts, they’re under pressure from an economic slowdown and a rising quantity of bad loans. Margins are falling as the government deregulates the industry and online and mobile players like Zhejiang Ant Small & Micro Financial Services Group -- also known as Ant Financial -- and Tencent Holdings Ltd. eat into their businesses.
Chinese lenders have generally reduced numbers by not replacing staff who leave, according to Shujin Chen, a Hong Kong-based analyst at DBS Vickers Hong Kong. Workers are departing in search of better pay, she said, adding that banks would need less staff as artificial intelligence and online and mobile transactions played a bigger role and lenders developed robots that would interact with customers.
Besides a reduced number of workers, the first-half data also pointed to pressure on pay. The big four banks’ combined staff compensation costs -- including salaries, bonuses, allowances and post-employment benefits -- fell 2.6 percent from a year earlier. At the mid-sized China Minsheng Banking Corp., the decline was 22 percent.
Flat revenue and rising pressure on asset quality means “banks have been pushing even harder in cost optimization,” Wei Hou, a Hong Kong-based analyst at Sanford C. Bernstein & Co., wrote in a note.
— With assistance by Jun Luo
Banking Layoffs Continue in China as Salaries Slashed in First Half
September 9th, 2016The departures come as the banking industry struggles against strong financial headwinds.
China’s biggest banks have eliminated thousands of jobs in the past six months to June 2016, as the nation’s banking industry, despite avoiding the huge fines for compliance breaches that weighed on their Western peers, has seen a challenging year amid a sluggish economy, lower interest margins and top-down financial reforms.
Big banks in China have announced almost 1.62 million new job cuts this year, and thousands more are expected, as the wave of lay-offs that began in 2013 shows no sign of abating.
So far, 10 out of the 16 listed mainland banks have reported a headcount drop. The top six listed banks, which reported their weakest profit growth in a decade, have cut a combined total of 34,691 jobs in the first half of the year, the semi-annual reports of the banks showed. This marks the biggest scale of employee departure ever recorded in China’s banking sector, which has expanded uninterrupted over the past 10 years.
Salaries are also going down
According to several media reports, many banks have been easing staff for different reasons, with China Merchants Bank scaling back the most, cutting 10 per cent of its workforce. Bank of China said its headcount at the end of June 2016 had decreased by 6,881 to a total of 303,161 employees. Agricultural Bank, the nation’s biggest bank employer, lost 4,023 staff while Industrial and Commercial Bank of China cut back by 7,635. China Construction Bank also shed 6,721 staff to 362,462.
Besides a reduced number of workers, salaries are also going down as Chinese banks’ profits slid 3.5 per cent on the year, while the four state-owned banks reported profit growth below one per cent. In addition, the first-half data showed that Industrial and Commercial Bank of China, Agricultural Bank of China and China Construction Bank reduced their salary expenses, including salaries, bonuses, allowances and post-employment benefits, by 1.6 percent, 2.9 percent, and 2.18 percent respectively.
Compensation structures are generally different in Chinese banks compared to their Western peers. For example, the average annual income for a mid-level banker can typically range between $100,000 to $125,000 while similar international counterparts offer more than double those salaries. They also offer longer holidays and fewer travel curbs, while Chinese staff can only get five days annual leave and must request approval from authorities before being allowed travel abroad.
China's Belt and Road Initiative to stimulate Asian, global economic growth: Bangladesh economist
September 8th, 2016Belt and Road Initiative proposed by China could stimulate sustainable Asian and global economic growth, a leading Bangladeshi legal economist told Xinhua.
In an exclusive interview recently, MS Siddiqui, a professor at Dhaka's Daffodil International University, said the Belt and Road Initiative will connect countries that represent 30 percent of world gross domestic product (GDP), 63 percent of global population, and most of known energy reserves.
PROMOTE INFRASTRUCTURE DEVELOPMENT
In particular, countries along the Belt and Road routes, especially those with underdeveloped infrastructure, low investment rates, and low per-capita incomes, could experience a boost in trade flows and benefit from infrastructure development, said Siddiqui.
The Belt and Road Initiative refers to the Silk Road Economic Belt and 21st Century Maritime Silk Road, in a bid to revive the historic trade routes by boosting cooperation between China and other nations.
The Silk Road Economic Belt revival project could involve more than 60 countries and regions.
According to the economist, Chinese investment in large infrastructure projects constitutes the basis of the China-led initiative, which consists primarily of infrastructure that facilitates east-west trade over land, such as railways, roads and pipelines.
China has committed a total of about 100 billion U.S. dollars to a trio of new infrastructure funds, allocating 40 billion U.S. dollars to the Central Asia-focused Silk Road Fund, 50 billion U.S. dollars to the new Asian Infrastructure Investment Bank (AIIB), and 10 billion U.S. dollars to the BRICS-led New Development Bank, he mentioned.
The vision document for the Belt and Road Initiative, goes well beyond just infrastructure, and envisions closer coordination of economic development policies, harmonization of technical standards for infrastructure, removal of investment and trade barriers, establishment of free trade areas, financial cooperation and "people to people bonds" involving cultural and academic exchanges.
Personnel exchanges and cooperation, media cooperation, youth and female exchanges, and volunteer services, are also major components of the initiative, he said.
"China would be able to better secure its energy and raw materials supply, which now predominantly gets shipped through the Strait of Malacca and the South China Sea as China is gradually becoming more influential economically and diplomatically. Eventually it will shift geo-strategically from a 'low-profile' international strategy and take on a far greater role in global affairs."
With the Belt and Road Initiative, Siddiqui said China as "a new great power is trying to supplement the international economic order."
OPPORTUNITY FOR BANGLADESH
"Bangladesh is in a strategic location between China, India and ASEAN countries and hence is well placed to be a trading and manufacturing hub. Bangladesh needs such increased connectivity with other economies in this region and China's Belt and Road Initiative will see the realization of this economic area."
He added that Bangladesh should seek more Chinese support to help develop more mega infrastructures and develop other facilities related to finance and technology.
"Following China's construction here of the multipurpose road-rail Padma Bridge bridge, we are expecting China to help develop a deep sea port," the economist said.
Bangladesh also needs Chinese support on regional and global issues and has invited China to be involved in regional issues with other relevant countries, he said.
Siddiqui went on to explain that the current infrastructure and energy sector projects bottlenecking in Bangladesh transpired mainly from a shortage of long-term investments.
The Bangladeshi government's budgetary allocations and long-term financing from local and foreign enterprises including banks, non-banking financial institutions and insurance companies, were not sufficient for maintaining the required investment for these sectors, he said.
"Bangladesh will have to spend between 7.4 billion and 10 billion U.S. dollars a year until 2020 to bring its power grids, roads and water supplies up to the standard needed to serve its growing population. In total, the country will require between 74 billion and 100 billion U.S. dollars between 2011 and 2020, or between 7.38 to 10.02 percent of its gross domestic product to improve infrastructure."
BCIM (Bangladesh, China, India and Myanmar) economic corridors will increase trade, transport, tourism and investment for Bangladesh, due to its strategic location between India and China, he said.
"The availability and affordability of workers and its geographical location are important aspects of Bangladesh developing into regional hub, yet it urgently needs a port, and related infrastructure to boost connectivity with other nations through ocean and land routes. The Belt and Road Initiatives will open up numerous opportunities for Bangladesh," said Siddiqui.
CONNECTING WORLD EFFICIENTLY
He said Chinese investment in large infrastructure projects constitutes the basis of the Belt and Road Initiative and emphasizes the commercial and open nature of the modern version of this network, he said.
He further explained that the ambitious programs of infrastructure construction along the main Asia-Europe shipping route will also result in connecting the world more efficiently.
"Firstly, China is gradually becoming more influential economically, diplomatically and geostrategically in regions close to Europe, therefore stronger investment and trade relations between China and countries in Africa, the Middle East and Central Asia are increasing China's stake in regional affairs, as friendly relations with Beijing increase," Siddiqui said.
"Secondly, the Chinese government has an increased ability to influence routes trade between China and the European Union. And in the long term it is likely that transport and supply chain routes involving Asia and Africa will increasingly bypass those of Europe," the economist concluded.
Chinese Job Recruitment App Raises RMB200 Million
September 7th, 2016
Shanghai-based online recruitment app HunterOn says it has raised RMB200 million to expand its recruitment services to more sectors, including finance, healthcare and consumer.
UOB Venture Management, an investment arm of Singapore's United Overseas Bank Group, led the series C round, and existing investor IDG Capital Partners also participated in the round.
Founded in 2012, HunterOn provides a platform connecting recruiters and headhunters. Its web and mobile apps aggregate 20,000 headhunting companies and 60,000 headhunters, providing services to 30,000 companies.
The company previously raised US$10 million in a series A round from IDG and China Growth Capital in 2014. It completed a US$20 million series B financing led by Sequoia Capital with participation from IDG Capital in the same year.
The hiring of senior level professionals is mostly conducted via headhunters in China, and HunterOn is creating an Alibaba-like platform for human resources, UOB Venture Management said in a statement.
Tencent is top Asian company
September 6th, 2016Gets big boost from mobile Internet services
Internet giant Tencent Holdings has become the company with the highest market value in Asia at HK$1.99 trillion ($255.8 billion), overtaking domestic rival Alibaba Group Holding and many time-honored brands in China, media reports said Monday.
It is also the first time that Tencent surpassed China Mobile, which is valued at $254 billion, to become the top company in Asia, domestic news portal -wallstreetcn.com noted.
Alibaba ranked third at $250.2 billion, followed by South Korea-based tech company Samsung Electronics Co at $229.4 billion, according to the report.
"Tencent's market value is based on its current and previous good financial situation, which is driven by the company's core businesses including advertisements, games, e-commerce and financial services," Li Chengdong, a Beijing-based independent e-commerce strategy -analyst, told the Global Times on Monday.
Tencent's first-half revenue reached 67.7 billion yuan ($10.21 billion), up 48 percent year-on-year, said the financial report released by the company on August 17.
Gross profit rose 40 percent year-on-year to 39 billion yuan, the report showed.
Tencent has benefited from China's fast-developing mobile Internet industry, which tops the world with 700 million to 800 million users, noted Liu Dingding, an Beijing-based independent industry analyst.
Li said that Tencent has a large base of active users who spend a long time on its products such as online chat tools QQ and WeChat, which makes its products unique in the era of mobile Internet.
Apart from its robust mobile game business, the growth of Tencent has been fueled by other activities such as video, digital reading, music, streaming media and Web ads, domestic news portal lanjinger.com reported Monday, citing an industry study from JPMorgan Chase & Co.
Tencent's mobile game revenue will approach 40 billion yuan in 2016, up 89 percent year-on-year, the JPMorgan report said.
It also forecast that the revenue of Tencent's social network will increase 30 percent this year and 25 percent in 2017.
"Tencent's WeChat business also reported a great performance in recent months," Liu told the Global Times on Monday.
For WeChat, including Chinese version Weixin, monthly active users reached 806 million in the first half of 2016, up 34 percent year-on-year, said Tencent's interim report.
Weixin further penetrated into communication scenarios at work, with more than 20 million registered users of -Weixin enterprise accounts, which facilitate internal office automation operations, the report noted.
"The company will continue to boost such businesses as WeChat, cloud computing and big data," Liu said.
Tencent has much scope for growth in businesses like finance and e-commerce, experts noted.
"Tencent has become the biggest shareholder of JD.com Inc and will join forces with jd.com to further develop its e-commerce business, posing tougher competition for Alibaba," Liu said.
Salary rise of 8-15% for skilled talents
August 29th, 2016
SKILLED professionals in China are receiving an average pay rise of 8-15 percent this year as demand for talents continues in the information technology sector, ZW HR Consulting said in a report yesterday.
However, those “with desired skills such as leadership capabilities, on-the-job experience and language proficiency can receive up to a 25 percent rise in salary,” said Frank Yu, chairman of ZW HR Consulting.
He added that candidates are now getting 8-15 percent increase in salary.
The pay rise and growth in recruitment this year will continue to be as active as last year as employers pursue a small pool of workers with strong technical and business skills, the firm said from analysis of job placements and interviews with firms and job seekers.
The IT sector will continue to outperform and drive growth in 2016 as demand will be particularly high for specialists, mobile engineers and software developers, ZW said, adding that engineers in research and development are also highly sought-after.
“We anticipate high levels of hiring activity will continue throughout 2016. Many companies are still positive when it comes to their hiring activities,” said Yu .
Demand for professionals in digital marketing, client relationship management and e-commerce continues to exceed the supply of candidates as online businesses in China are set to grow rapidly, according to the report.