China Economy Forum

[Edison Chen]

China's central bank extends MLF

China's central bank has extended the term of a due medium-term lending facility (MLF) valuing 269.5 billion yuan (43.99 billion US dollars) and added another 50 billion yuan.

The move was made to stabilize the market using stimulus and guidance of MLF in anticipation of the upcoming Spring Festival, which usually causes a seasonal liquidity fluctuation, the People's Bank of China (PBOC) said during an announcement Wednesday.

The MLF operation targets joint-stock commercial banks, city commercial banks and rural commercial banks, with a term of three months and an interest rate of 3.5 percent, according to the PBOC.

The PBOC implemented new tools last year to tackle the changing economic landscape, including MLF and pledged supplementary lending (PSL).

The new tools are more flexible and targeted to ensure sufficient liquidity, support reasonable credit growth and facilitate structural adjustment, the central bank explained.

On January 9, PBOC announced it will continue with prudent monetary policies in 2015 with better coordination of tight and loose monetary measures and proper fine-tuning.

China's central bank extends MLF - Global Times

 

[Yizhi]

China establishes e-commerce union to monitor, share quality information
English.news.cn 2015-01-23

HANGZHOU, Jan. 22 (Xinhua) -- An e-commerce union has been established to share product quality information and identify blacklisted businesses, a senior official with the quality watchdog said Thursday.

Zhang Qinrong, deputy head of China's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), said the union will connect e-commerce enterprises and rid the market of those that are dishonest or illegal.

The e-commerce industry is booming in China, with online retail turnover hitting 1.8 trillion yuan (293.89 billion U.S. dollars) in the first three quarters of 2014, up 49.9 percent from a year ago.

Meanwhile, complaints over counterfeit or poor quality products needed to be addressed by unified supervision.

Zhang said the AQSIQ has set up a public service platform for sharing information and is planning to build a database to select and analyze information.

 

[TaiShang]

Li Ka-shing set to buy UK's O2 for $15b

January 23, 2015

Hutchison Whampoa Ltd, the conglomerate controlled by Hong Kong's billionaire Li Ka-shing, is in exclusive negotiations to buy UK's second-largest mobile operator, O2, for about 10 billion pounds ($15 billion), announced the company in a filing to Hong Kong Exchanges on Friday.

A woman speaks on a mobile telephone outside an O2 store in central London Nov 24, 2014. [Photo/Agencies]

The deal is part of a dazzling shopping spree by Li Ka-shing, one of Asia's wealthiest men, as his empire just bought Britain's train company Eversholt Rail for an enterprise value of 2.5 billion pounds, announced its counterpart on Tuesday.

According to Financial Times, O2's shareholder Telefonica wants the cash to help reduce its high net debt levels and fund deal-making in more core countries such as Brazil, while Hutchison Whampoa has recently freed additional money to strike deals in Europe following a corporate reorganization.

The 86-year-old billionaire announced earlier on Jan 9 that he would split his conglomerate into two listed companies, one focusing on property and the other on telecoms, retail and energy.

According to Bloomberg, the UK is primed for more deals after wireless-market leader EE began exclusive talks last month to be acquired by BT Group Plc, leaving smaller carriers looking for ways to compete. Hutchison shares were up 0.7 percent to HK$99 in pre- market trading on Friday before the suspension.

The company was also studying other options in Europe including merging its Italian mobile unit with a local competitor, said Bloomberg.

 

[TaiShang]

Ping An buys another London landmark

January 23, 2015

Ping An Life Insurance (Group) Co of China Ltd has acquired another landmark site in London, after it bought the Lloyds of London building a year and half ago.

Photo shows the Tower Place in central. [Photo/Tower Place website]

The second-largest insurer in China has bought Tower Place in the city of London from Deutsche Asset & Wealth Management's real estate investment business, Gaw Capital Partners, a Hong Kong-based private-equity fund management company said in a statement on Friday.

Deutsche Asset & Wealth Management sold Tower Place on behalf of its open-ended real estate fund Grundbesitz Europa.

Gaw Capital Partners said it provided services, including due diligence, to Ping An. It did not disclose the exact purchase number. But real estate website Propertyeu.info said the deal was worth 327 million pounds ($491 million).

Ping An in July 2013 bought the Lloyds of London building for 260 million pounds ($387 million) from a German fund managed by Commerz Real.

Tower Place is located in the financial section of City of London. Its main tenant is Marsh & McLennan Cos Inc.

According to CBRE's latest report, the level of cross-border investments by Asian investors continued to rise in the first half of 2014, an increase of 40 percent from the prior year with 23 percent of the active capital coming from China, second to Singapore (29 percent) and Hong Kong (25 percent). Outbound real estate investment has become the "new normal" for Chinese enterprises, the global real estate service company said

 

[TaiShang]

China's newly established firms surge 46 pct in 2014
2015-01-22

BEIJING, Jan. 22 (Xinhua) -- The number of newly founded companies in China surged almost 46 percent year on year to 3.65 million in 2014, the latest data showed.

The total registered capital of the new companies reached 19.05 trillion yuan (3.11 trillion U.S. dollars), marking a year-on-year increase of 99 percent, according to data released on Thursday by the State Administration for Industry and Commerce.

The government agency said that the number of newly established firms meant 10,600 new companies were set up each day since March of last year, when the country reformed its business registration rules, sparking a business startup boom.

The data also suggested that the majority of new companies established last year were in the tertiary industry, with their numbers hitting 2.87 million, up 50 percent year on year.

The number of new foreign-funded companies increased 5.76-percent to hit 38,400, the data showed. The rise also reversed consecutive drops for two years prior to 2014.

Apart from new companies, the country also saw a startup boom in individually owned businesses in 2014. These businesses employed a total of 250 million people across the country, up 14.26 percent from a year before, the data showed.

The State Council, China's cabinet, announced in February 2014 measures to reform business registration in an effort to ease market access by scrapping previous requirements for minimum registered capital for startups and simplifying complicated approval procedures.

 

[Edison Chen]

China's coal production sees first drop since 2000

BEIJING - China's coal production dropped in 2014, the first time since 2000, the China National Coal Association said Friday.

In the first 11 months of last year, China produced 3.5 billion tons of coal, 2.1 percent less than the same period in 2013, said Jiang Zhimin, vice-president of the CNCA, during a media briefing.

The CNCA estimated a 2.5 percent drop in production for the whole year.

As of the end of 2014, coal stocks in Chinese coal companies stood at 87 million tons, up 2.6 percent from the beginning of the year. Coal stocks in major power plants hit 94.6 million tons, 17.1 percent higher than the beginning of the year, the CNCA said.

In the first 11 months, major coal companies recorded profits of 110.5 billion yuan ($18 billion), down 44.4 percent from the same period in 2013. Over 70 percent of coal companies are in the negative zone, due to prominent issues such as salary reduction and arrears.

Contributing factors to the grim situation include sluggish coal demand, overcapacity and a large import volume, said Jiang, adding relief measures carried out by the coal industry were beginning to see some positive changes.

Jiang predicted that coal oversupply and pressure on coal companies will remain in 2015 as China enters a "new normal" featuring tightened environmental protection and quality growth with cleaner energy.

 

[JSCh]

Chinese, Greek PMs hail port expansion project
English.news.cn | 2015-01-23 13:16:29 | Editor: Yang Yi

Greek Prime Minister Antonis Samaras (C) and Chinese Ambassador to Greece Zou Xiaoli (1st L) cut the ribbon during the starting ceremony of the expansion of Pier III of Piraeus port in Athens, Greece, Jan. 22, 2014. Antonis Samaras on Thursday inaugurated the expansion project of Piraeus port's Pier III run since 2009 by Piraeus Container Terminal (PCT), a subsidiary of Chinese shipping conglomerate COSCO. The upgrade will increase the annual capacity of PCT to 6.2 million TEUs from 3.7 million containers in 2014. (Xinhua/Chen Zhanjie)

ATHENS, Jan. 23 (Xinhua) -- Chinese Premier Li Keqiang and Greek Prime Minister Antonis Samaras have hailed the Chinese-funded expansion of Piraeus port in Greece.

At a ground-breaking ceremony on Thursday for the expansion of Pier III, Samaras thanked China's trust in and commitment to Piraeus and Greece as a whole and wished for more Chinese investment in his country.

The Chinese premier sent a congratulatory message on the occasion.

"China highly values its relations with Greece and hopes that through joint efforts with Greece, the Piraeus port will be turned into a first-class port in the Mediterranean Sea and a vital hub of the region, and on that basis, the building of the China-Europe Land-Sea Express Line will be accelerated. By so doing, we will move China-Greece practical cooperation steadily forward and deliver even greater benefits to our two countries and peoples," read the message.

"China and Greece are enjoying all-round and rapid development of bilateral relations. Our political mutual trust is growing, and our practical cooperation is yielding new results. Our cooperation on the Piraeus port, in particular, has set a fine example."

Samaras said the investment showed the prospect and potential of privatization and the significance of the presence of foreign investors.

Piraeus port has been run by a subsidiary of Chinese shipping conglomerate COSCO since 2009 in the wake of a financial crisis.

Commercial traffic through the port has increased eight-fold since COSCO's takeover, attracting international giants such as ZTE and Hewlett-Packard to use the cargo terminals as logistics centers for their products.

According to a recent study by the Greek National Bank, the concession of Pier II to COSCO and the steps taken after that will lead to the boost of GDP by 2.5 percent by 2018 and the creation of about 125,000 new jobs in the area.

 

[bobsm]

China train maker CNR says secures 30 deals worth $3.9 billion | Reuters

China train maker CNR says secures 30 deals worth $3.9 billion
SHANGHAI Sun Jan 25, 2015 7:32pm EST

SHANGHAI (Reuters) - China CNR Corp Ltd (601299.SS) (6199.HK), one of the country's top train makers, said on Sunday it had recently signed 24.3 billion yuan ($3.9 billion) of deals with both Chinese and foreign firms.

The 30 contracts involve high-speed trains, urban subways and electric vehicles, and are equivalent to about 25 percent of CNR's 2013 revenue, it said in a statement. CNR did not provide details on when the deals were signed.

They included a 4.1 billion yuan ($658 million) subway deal with the Massachusetts Bay Transportation Authority, which Reuters reported in October.

CNR plans to merge with CSR Corp Ltd (601766.SS) (1766.HK), another of China's top state-owned train makers, which will create a $26 billion company able to compete with the likes of Germany's Siemens and Canada's Bombardier for global rail deals.

(Reporting by Engen Tham; Editing by Edwina Gibbs)

 

[bobsm]

Yuan Passes Canada Dollar to Rank Fifth for Global Payments
by Fion Li
9:50 AM BNT
January 28, 2015

(Bloomberg) -- The yuan overtook Canada’s dollar to rank fifth for use in global payments, bolstering the case for the International Monetary Fund to endorse it as a reserve currency.

The proportion of transactions denominated in yuan climbed to a record 2.17 percent in December, from 1.59 percent in October, the Society for Worldwide Financial Telecommunications said in a statement. Later this year, the IMF will conduct the next twice-a-decade review of the basket of currencies in its Special Drawing Rights that members can count toward their official reserves. The basket currently comprises U.S. dollars, euros, yen and British pounds.

“The yuan has a very high chance of being chosen as a reserve currency in the next IMF review,” said Nathan Chow, an economist at DBS Group Holdings Ltd. in Hong Kong. “The yuan could even surpass the yen in the rankings this year.”

China is the world’s second-largest economy, behind only the U.S., as well as the biggest exporter, and the yuan passed the euro in 2013 to become the second-most used currency in global trade finance. The nation is promoting greater usage of its currency by appointing clearing banks in the world’s financial centers and expanding a program that allows yuan held offshore to be invested in its domestic capital markets.

The dollar and the euro remained the two most-used currencies globally in December with respective shares of 44.6 percent and 28.3 percent, according to Swift, a Belgium-based financial-messaging platform. The pound ranked third with 7.92 percent and Japan’s yen was fourth with 2.69 percent.

More at: Yuan Passes Canada Dollar to Rank Fifth for Global Payments - Bloomberg Business

 

[bobsm]

China Trumps U.S. for Foreign Investment

By PAUL HANNON
Updated Jan. 29, 2015 5:09 p.m. ET

China became the world’s top destination for foreign direct investment in 2014, edging the U.S. out of that position for the first time since 2003, according to figures released Thursday by the United Nations Conference on Trade and Development.

Foreign businesses invested $127.6 billion in China, up from $123.9 billion in 2013, while their investments in the U.S. fell to $86 billion from $230.8 billion, Unctad said. The decline contributed to the U.S. slipping to third among all recipients of such investment, behind also Hong Kong.

China’s elevation is part of a longer-term trend in foreign investment away from developed and toward developing economies, which last year attracted 56% of all overseas investments by businesses, up from 52% in 2013 and double their share before the financial crisis of 2008.

The change comes after years in which the country has been gaining ground as an FDI destination, as its economy has expanded to become the world’s second largest.

“China has been steady with modest growth over the past few years, and it is expected to continue,” said James Zhan, director for investment and enterprise at Unctad. “There have been structural changes in inflows to China, from manufacturing toward services, and from labor-intensive to tech-intensive.”

More at: China Trumps U.S. for Foreign Investment - WSJ

 

[TaiShang]

Hanergy solar panels power Guangzhou Honda factory
By Chen Boyuan

0 Comment(s)

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Representatives from both Guangzhou Honda and Hanergy launch the rooftop distributed PV project at Guangzhou Honda's factory at Zengcheng on Jan. 29. [Photo by Chen Boyuan / China.org.cn]


Guangzhou Honda's factory at Zengcheng will be partly powered by solar energy following the official establishment of the 17 megawatts distributed photovoltaic project jointly launched with Hanergy on Thursday, Jan. 29.

The 17MW distributed building-integrated PV project, which has already linked to China's national power grid, is the biggest of its type in the country's auto industry. It covers a total floor space of around 230,000 square meters and is capable of generating 19 million kilowatt hours of electricity each year, or 50,000 to 60,000 kWh per day.

The electricity generated by the project will fulfill at least 20 percent of the power demands of the factory, according to Yu Jun, deputy general manager of Guangzhou Honda. He added that the "extra green power" generated on non-production days will be sold to the city's local power grid.

"The 17MW distributed PV project we launched with Hanergy is Guangzhou Honda's response to the country's call for emissions reduction, which we regard as our responsibility to the environment as well as to society," Yu said at the project's launch on Thursday.

The project’s implementation will mean the factory will burn 890 tons less of standard coal for power generation each year, which is equivalent to planting 950,000 trees. Moreover, the rooftop panels have other, hidden benefits that include extending the life of the factory's PVC-covered roofs and lowering the factory's interior temperature by three degrees Celsius, according to Hanergy, which will be responsible for the operation of the PV project.

The joint project with Guangzhou Honda is another milestone in Hanergy's efforts to seek alliances with major companies, following its partnership with IKEA, Tesla and Aston Martin Racing.

Wang Junjuan, vice president of Hanergy Holding Group who actually oversees the project, said that Hanergy's persistence in developing clean energy has matched Guangzhou Honda's pursuit of value in a green economy. She affirmed that the shared rights and responsibilities of running the PV project will be a model for other clean energy makers seeking diversified profit modes.

Wang declined to elaborate on the joint project's profitability, insisting that the bank, not her, will have the final word on the matter.

"Although the central government has provided a subsidy of 0.42 yuan (6.86 U.S. cents) on each kilowatt hour of PV electricity generated, the banks have been excessively cautious in issuing loans. However, this project managed to secure a loan from ICBC, which is well known for its prudence," said Wang, implying that the bank's confidence predicts a profitable future for the PV project.

Many insiders continue to hold on to the stereotype that northwest China is better suited for PV development since its dry climate and low population density is more appropriate for PV projects’ massive installments. But Dr. Shen Hui, professor of solar energy systems at Sun Yat-sen University, said that south China is equally suitable for PV development because the frequent rain in the region increases the air's transparency and cleans panels more frequently, both key factors in ensuring PV panels’ efficiency.

 

[Keel]

Chinese Airport Engineers Break New Ground in Kenya
By Sean Xiao, China Daily | Jan. 30, 2015

A drawing of the new terminal at Jomo Kenyatta International

What happens when different companies from different parts of the world, used to using different standards, get together to build a major expansion and upgrade to one of Africa's premier airports?

In the case of the international airport serving Nairobi, Kenya, it has been a feat of hard work, debate, learning and, ultimately, pride in achievement. It has been a first for the engineers of Beijing-based AVIC-Intl Airport Construction.

On March 9, 1958, Jomo Kenyatta International Airport, formerly called Embakasi Airport, was opened by the last colonial governor of Kenya.

The airport was renamed in honor of former Kenyan prime minister and president, Mzee Jomo Kenyatta, after his death on Aug. 22, 1978. It is Kenya's largest aviation facility, and the busiest airport in East Africa. Its importance as an aviation center makes it the pacesetter for other airports in the region.

Today, Jomo Kenyatta International serves a daily average of 19,000 passengers from Africa, Europe and Asia. Currently the airport cannot meet the growing air traffic needs.

The groundbreaking of a new passenger terminal dubbed the "Greenfield Terminal", with a capacity of 20 million passengers, was held on Dec. 3, 2013. It is set to be the single largest terminal in Africa and is to be completed in 2016. The estimated cost is US$654 million.

Once complete, the terminal will have 60 check-in positions and 32 contact points and eight remote gates. The terminal is also expected to have an automated baggage handling commercial retail center.

It will have a traffic-handling capacity of 3,133 international passengers, 2,403 transiting passengers and 845 domestic passengers in a typical peak hour. The airport will have an official capacity of 2.5 million passengers but handles an average of 6.5 million passengers every year. Traffic at the airport grows at a rate of 12 percent per annum and is expected to hit the 25 million mark by 2025.

The engineers for the project, including on landside and the airfield side, are from AVIC Airport of Beijing. The architects for the terminal are Pascall+Watson, a London-based firm. Construction of the new terminal will be done by Anhui Civil Engineering Group and China National Aero-Technology International Engineering Corporation. The project supervisor is the Louis Berger Group, a US-based firm.

This is a challenging and interesting project for AVIC Airport. It is the first time the firm has designed an airport based on British/Euro standards. There are many Chinese firms doing construction work in Africa, but not design.

AVIC Airport has a tight time frame for this project. It started the design work in September 2014. Because of the tight project schedule, AVIC Airport engineers have worked overtime on this project, trying to complete the design work on time, under budget and with satisfaction.

AVIC Airport has experienced engineers who are having to design in accordance with standards that are different from what they are used to. This combination of different companies accustomed to using different systems means issues sometimes have to be hashed out.

AVIC engineers, for example, disagreed with Pascall+Watson over the "building gross area" because the way to calculate it is different in British/Euro standards and Chinese standards. In order to be compliant with British/Euro standards and local engineering practices and regulations, they have visited the Kenya Meteorological Department, the Ministry of Transport and Infrastructure, local engineering firms and universities and discussed the design issues with British firms.

AVIC Airport also has had to face unfamiliar design approaches and requirements of design depth in different stages. For example, "30 percent design" was confusing to AVIC engineers because they never use the terminology "30 percent design". They mistook it for "conceptual design", with a few drawings and general notes.

Different engineering expressions on the drawings were another challenge. They have their standard ways to put designs on the drawings. The site condition, local geotechnical conditions, materials available and costs also challenged AVIC Airport's design work.

AVIC engineers have had a lot of pressure on them, but they seem to enjoy the work and have made progress every day. The sense of achievement in overcoming challenges has encouraged the engineers.

The author is an international airport expert based in the U.S.

 

[Yizhi]

2.8 billion trips expected during spring festival in China
English.news.cn 2015-01-29



BEIJING, Jan. 29 (Xinhua) -- A total of 2.807 billion trips are expected to be made by Chinese people during the Spring Festival travel rush, according to the Ministry of Transport Thursday.

The number, which excludes trips through public buses and taxi, is 3.4 percent higher than the previous year, said Xu Chengguang, spokesman of the ministry.

The 40-day travel frenzy is known as "Chunyun", the hectic period surrounding Chinese New Year which falls this year on Feb. 19. Chunyun began on Feb. 4 and will last until March 16.

Several new high-speed railways have been built and put into operation in 2014 that will further help reduce crowds during the travel rush, Xu said.

China Railway Corporation earlier this month had announced plans to run more trains to cope with the travel rush.

Chinese New Year celebrations, known as Spring Festival, are China's most important family holiday, with hundreds of millions of people heading to their hometowns to meet with relatives and old friends, putting huge stress on transportation system.

Chinese people have never been more affluent and keen to travel, nor have there ever been more migrant workers in cities far from home. Every year, stress on the transportation system becomes greater and greater, despite great improvements in infrastructure over the last few years.

The transport networks -- road, rail, aviation and waterways -- have set new highs for "Chunyun" numbers almost every year in the past decade.

Railways are expected to see a rise of 10 percent in passenger trips year on year, a greater rise than any other transport options, official data showed.

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[TaiShang]

God speed, China HSR!!!

 

[ahojunk]

2.8 billion trips in 40 days.
It's mind boggling.

Let me see;
that's 70 million trips per day during that period.