Permalink 02:37:08 pm, by dacare, 105 words, 132 views   English (US)
Categories: News of China

Auto sales to decelerate

Growth in China's auto sales will likely slow to 4.6 percent this year, lower than the previous forecast of 8.3 percent, Bloomberg Tuesday quoted the head of the country's auto association as saying.

Dong Yang, secretary-general of the China Association of Automobile Manufacturers (CAAM), noted a slowdown in sales over the past two months and said the industry body was looking into the reason for the weakness.

Auto sales rose 2.5 percent in September compared with the same month a year earlier, its slowest pace in 19 months, dragged down by sluggish sales of commercial vehicles such as trucks, the CAAM said last week. Sales rose 4 percent in August.

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Permalink 09:51:10 am, by dacare, 190 words, 151 views   English (US)
Categories: News of China

Shanghai financial sector buzzing

Financial innovation, market development and the globalization of the yuan have boosted the index tracking Shanghai's financial industry by 5.3 percent in the first half of this year, a joint industry report said yesterday.

The Shanghai Financial Prosperity Index rose to 3,242 points by the end of June, up 164 points from last year, boosted by innovation activities, market development and the yuan's internationalization, the Shanghai Financial Association and Roland Berger Strategy Consultants said in the joint report yesterday.

The sub-index measuring the general development of the city's financial industry gained 4 percent to 4,517 points as the foreign exchange, money, fund and gold markets ranked the top four by market growth.

Another sub-index that tracks the development of the yuan's internationalization jumped 84 percent from last year to 36,024 points.

"Financial innovation such as cross-border yuan settlement under the current account and for foreign direct investment, and yuan-denominated two-way cash pooling tools launched in the Shanghai pilot free trade zone gave a fresh impetus to the internationalization of the yuan," Jerry Zhang, chief executive officer of Standard Chartered Bank China, said yesterday.

"Meanwhile, the Chinese currency has also gained more acceptance in overseas markets," Zhang said.

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Permalink 10:23:21 am, by dacare, 170 words, 173 views   English (US)
Categories: News of China

Shanghai FTZ to hold 1st culture fair Oct 15,2014

Shanghai's pilot free trade zone will hold its first culture licensing fair in November for cross-border trading of authorized cultural products.

The event offers a gateway for Chinese cultural enterprises to showcase their creations such as artworks, animation and online games and to expand their licensing network worldwide. It will also offer a platform for international intellectual property right holders to source for Chinese partners.

"Taking advantage of the zone's opening-up policies, cross-border cultural trade via the zone will enjoy easier customs clearance and bonded warehousing services," said Ren Yibiao, general manager of the National Base for International Culture Trade (Shanghai), the organiser of the fair.

More than 100 exhibitors from home and abroad will attend the fair to be held from November 13 to 15 in the FTZ.

China has widened access for foreign investors in the cultural industry in the zone. With a bonded warehouse for artworks, the FTZ also helps boost cross-border art trading by easing procedures and cutting time and costs for artworks to enter and leave the country.

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Permalink 11:27:28 am, by dacare, 663 words, 104 views   English (US)
Categories: News of China, Comp, Salary & Benefit

China’s state sector leaders embrace pay cuts of up to 60%

The corporate reporting season for China’s largest state-owned enterprises, which concluded last month, featured an unusual theme. Despite earning far less than their international counterparts, the men who steer the country’s largest companies welcomed recently announced plans to cut their pay.

“The biggest difference between China and western countries is that we pursue the goal of getting rich together,” Fu Chengyu, head of the country’s largest refiner, told reporters. “If you want to earn big sums, you should not be an SOE executive.”

As Sinopec chairman, Mr Fu earned Rmb863,000 ($141,000) in 2012, a paltry figure when compared, for example, with the more than $3m earned by Christophe de Margerie at the French oil major Total. The contrast in other sectors is even starker. The president of Bank of China, one of the country’s “big four” lenders, was paid Rmb997,000 ($163,000) last year – or less than 1 per cent of the $20m pocketed by JPMorgan’s Jamie Dimon.

According to local media reports, leaders of the country’s top 50 SOEs will face pay cuts of up to 60 per cent as the government imposes an annual pay cap of Rmb900,000. President Xi Jinping announced plans to rein in executive pay in August, but the new guidelines have not yet been released by the ministries of finance and human resources.

In August Zhang Yun, president of Agricultural Bank of China, said he would “firmly support and strictly implement the decision”. Mr Zhang, who earned just over Rmb1m in 2013, faces a pay cut of at least 10 per cent.

Those who welcome Mr Xi’s initiative, which coincides with China’s most ambitious anti-corruption campaign, argue that it is misleading to compare SOE executives with their international counterparts, especially in industries that are protected from overseas and private sector competition.

“SOEs enjoy a lot of policy support from the government,” says Gao Minghua, a corporate governance expert at Beijing Normal University. “Those factors must be removed before you can compare SOE executives to multinational executives.”

The more important comparison, he adds, is between SOE executives and their own employees: “There is a large income gap in China that is having a negative impact on society. The salary gap between senior executives and average employees must be appropriate. If too small, it will lessen executives’ initiative. If too big, it will lead to social instability.”

According to a recent pay study co-authored by Mr Gao, senior executives at listed Chinese financial companies are paid 50 times as much as the average worker.

“It doesn’t make sense to benchmark Chinese SOE executives against western – and especially American – executives,” agrees Kjeld Erik Brodsgaard, director of Asia research at the Copenhagen Business School. “None of these guys are ever going to become the head of GE or a big American financial institution. They stay in China and move around as civil servants. In a Chinese context they are supermanagers.”

Mr Fu at Sinopec is a classic example of a Chinese supermanager. He had previously run China’s largest offshore oil company, Cnooc, and his transfer to Sinopec was decided neither by the refiner’s board nor by the State-owned Assets Supervision and Administration Commission.

Better known as Sasac, the government commission is nominally charged with administering China’s largest SOEs; in fact, it is overshadowed by the Communist party’s powerful Organisation department, which both transferred Mr Fu to Sinopec and appointed his successor at Cnooc. “Sasac was supposed to manage and control these companies but it never really happened,” says Mr Brodsgaard. “Sasac was not authorised to receive dividends from these companies and doesn’t even appoint their chairman and chief executives.”

Sasac’s authority was further undermined last year by the arrest of its former head, Jiang Jiemin ; the former SOE oil executive was caught up in a larger investigation into his patron, Zhou Yongkang, who once sat on the Communist party’s all-powerful standing committee and ran China’s domestic security services.

Additional reporting by Wan Li

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Permalink 10:41:20 am, by dacare, 1025 words, 129 views   English (US)
Categories: News of China

Banking on growth in mobile tech

A visitor reads a brochure in front of a promotional board at the opening of the 2014 China Internet Conference on Aug 26 at the Beijing International Convention Center.

Early-bird advantage bound to help 'unconventional' 99wuxian.com

Mobile devices will soon play a more important role in everyday lives and encompass a range of activities like locking a door, driving a car, booking a table at a restaurant, paying utility bills and shopping, said Zhang Li, president of 99wuxian.com.

The Hong Kong-incorporated company operates an online marketplace that can be used on smartphones and other handheld devices and allows consumers to purchase physical and intangible items through online service providers. "It (mobile devices) is certainly the future," said Zhang.

Shopping via mobile phones is something that is already familiar to most Chinese consumers, says Zhang, adding that she buys groceries from the online supermarket Yihaodian.com while waiting for a train or plane. But what her company is doing is something much more than that. 99wuxian, often likened to an unconventional B2B2C platform, serves as a bridge that connects the commercial banking system and product providers on its mobile phone e-commerce platform.

According to Tianjin-based Tian Hong Asset Management Co Ltd, the number of users who have bought the popular online financial product Yu'ebao introduced by Alibaba exceeded 100 million by mid-July, with the total volume of the product amounting to over 574 billion yuan ($93 billion).

It is trends like these that have made commercial lenders realize the magnitude and importance of Internet technologies and the role that they play in long-term growth, said Zhang. "The Internet technologies have helped the commercial lenders get connected to more stores and users and thereby more profits."

99wuxian.com was officially launched in 2011 and considers itself a bridge that caters to all needs. The company says that several online and offline stores are connected to commercial lenders through its mobile phone platform. Thanks to the growing number of products and services on the platform, 99wuxian also earns good revenue.

At the same time, Zhang admits that the changing market landscape was not something that she envisaged when the company was set up. "I used to believe that payment channels are indispensable for the future development of mobile Internet. But over time, I have realized that it is more important to provide value-added services to customers. Demand for payment services will increase along with the growth in the products and services on the platform," she said.

Zhang believes that transactions made from mobile phones will ultimately define the future consumption trends. "Though mobile e-commerce started rather late in China, in 2009 to be precise, it has evolved rapidly from 2012 onwards. Several e-commerce leaders such as Alibaba and JD.com have included mobile payment results in their financial reports lately, and such business accounts for 20 to 30 percent of their overall revenue."

Mobile Internet, Zhang says, is one sector where companies like 99wuxian are in the same boat as others. "Every player is at the same stage. On the other hand, in e-commerce, companies like Alibaba are way ahead of competition. We have decided to focus on mobile Internet, as it is our core capability and inherent advantage and something for which we have abundant resources. More importantly, we are one of the early birds," Zhang said.

99wuxian managed to make profits just a year after it was established, which is rare among e-commerce companies. Its total transaction volume amounted to 4.96 billion yuan last year, while profits during the first six months of the year stood at about 5.9 million yuan.

Currently, 99wuxian has 32 million registered users. But the company and the lenders it has been working with have around 330 million consumers who have downloaded the smartphone applications. In this sense, about 10 percent of 99wuxian's partners' customers have turned into its users, Zhang said.

"What this means is that there is ample room for growth. We plan to increase the total number of registered users to 100 million by the end of next year," she said, adding that the company is already the market leader in the B2B2C sector in China.

Though 99wuxian successfully listed its shares in Australia last year, Zhang says that the company's rapid growth has not been truly reflected in its share prices. "We are considering other capital market options so that they truly reflect the company's value. We also have a rich treasure trove of valuable customer data.

"Every Internet company will follow a zigzag path when they are trying to expand their businesses. This is something that no one can avoid. Therefore, we don't want to go a roundabout way when it comes to the capital market. That's why we decided to go public. I am happy that we are on the right track for continuous, rapid long-term growth," she said.

To Zhang, everything is about timing. "You have to pick the right timing. One cannot start too early, as there is no mature market yet. But you cannot start too late either, because that would mean lagging behind," she said.

Describing herself as "an old soldier in the Internet industry", Zhang says she has remained with the Internet industry all through her career. During her first three years of working at Hong Kong's largest information and communications technology company PCCW, she worked with the team to promote broadband Internet and helped boost revenue of the business by over 40 percent within two years. After that, she joined Ctrip in 2000 and soon became the general manager of Ctrip Hong Kong, where she managed to bridge the gap between today's largest online travel agency and overseas hotels.

Recognizing the trends is also important for companies to succeed, she says, adding that most of 99wuxian's early customers were in the age group of 23-35. But the same has now changed to 18-47. "It is just a matter of time," she said.

"We seldom bought things online in the past. But now consumption habits have changed tremendously. Mobile phone users are always more active than the personal computer users and Internet companies develop more rapidly than traditional industries in general. Mobile users tend to rapidly pick up new habits," she said.

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Permalink 02:55:40 pm, by dacare, 128 words, 131 views   English (US)
Categories: News of China

Holiday bank card outlay climbs 25%

Bank cardholders spent 51.6 billion yuan ($8.4 billion) through China UnionPay's payment network during the seven-day National Day holiday, up 25 percent from the same period a year ago, as travel-related expenditure increased.

The volume of interbank transactions also jumped 27 percent from a year ago to 420 million, the country's sole bankcard transaction firm said yesterday.

Shopping contributed the most — 80 billion yuan — during the holiday, China UnionPay said.

Railway and airline tickets as well as other transport-related spending jumped 56 percent from a year ago. The spending at scenic spots and hotels rose 39 percent and 10 percent respectively.

The size of cross-border bank card transactions through UnionPay network rose 9 percent while the number of transactions soared 36 percent.

Total spending at restaurants and eateries gained 7 percent while the average amount of each transaction fell 8 percent.

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