China Economy Forum

[cirr]

Jul 14, 2015 9:06am

CIC buys Europe shopping mall portfolio for 1.3 bln euro

China Investment Corp. (CIC), the nation’s sovereign wealth fund, has acquired a shopping mall portfolio in Europe for about 1.3 billion euro (US$1.44 billion), the Wall Street Journal reported.

The portfolio, comprising 10 shopping centers in France and Belgium, was bought from CBRE Global Investors, the report said, citing company statements.

CIC acquired the properties along with an affiliate, AEW Europe, marking one of its biggest such deals in Europe.

Chinese investors have been snapping up international property in the recent past as they seek to diversify their holdings.

In the past 12 months, they purchased US$4.7 billion of real estate in Europe, including the latest CIC deal, according to one estimate.

In April, Shanghai-based conglomerate Fosun Group bought an office building in Milan for US$372 million.

– Contact us at english@hkej.com

CG/RC

CIC buys Europe shopping mall portfolio for 1.3 bln euro

 

[TaiShang]

Harvest sets record
Source:Agencies-Global Times Published: 2015-7-15 22:58:06

The nation's output of summer grain increased for a 12th consecutive year in 2015, lifted by intensified government support for agriculture and favorable weather, according to figures released on Wednesday by the National Bureau of Statistics.

Summer grain production reached a record 141.07 million tons this year, up 3.3 percent, or 4.47 million tons, from 2014.

The total growing area for summer crops was 27.69 million hectares this year, up 0.4 percent from last year. The additional land added 548,000 tons to the yield.

 

[Jlaw]

China growth slowdown may widen Vietnam trade gap, official says

China’s economic slowdown may widen Vietnam’s trade deficit as the Southeast Asian nation counts on its largest trading partner to buy commodities, according to a government official.

“It would hurt our exports to China, especially with agricultural products,” Nguyen Duc Kien, deputy head of the National Assembly Economic Committee, said in a telephone interview on July 10. “Meanwhile, our imports from China may surge as Chinese producers may lower prices to dump their products abroad.”

China has been Vietnam’s biggest trade partner since at least 2007. The recent stock plunge and the slowdown in China’s growth has triggered concerns in regional governments including Indonesia and Philippines.

“A surge in sales of Chinese products at low prices in Vietnam would hurt domestic manufacturing with producers of goods similar to those imported from China likely suffering the most,” said Kien. “Yet, the Chinese stock rout may prompt investors to switch to other regional markets, including Vietnam.”

Some benefits

Vietnam posted a trade deficit of $700 million in June, data from the Hanoi-based General Statistics Office showed. Imports from China reached $24.4 billion in the first six months, up 24 percent from a year ago while exports to China climbed 3.6 percent to $7.7 billion in the same period.

The benchmark VN Index climbed 0.4 percent as of 10:40 a.m. in Ho Chi Minh City. The measure has advanced 15 percent this year.

Certain Vietnamese industries may benefit from cheaper Chinese raw materials, said To Hoai Nam, vice-chairman of Vietnam Association for Small and Medium-sized Enterprises.

“Producers of garment, apparel and footwear will have a chance to expand production as the slowdown will force Chinese suppliers to lower prices,” Nam said in a phone interview.
------------------------------

Viets really want China's economy to crash? LOL.

 

[Jlaw]

EU May Renew Oldest Duties on China in Silicon-Metal Case - Bloomberg Business

The European Union may renew tariffs on silicon metal from China for another five years to curb competition for EU producers such as Ferroatlantica SL, a step that would prolong trade protection in place for a quarter of a century.

The EU opened an inquiry into whether to re-impose the duties as high as 19 percent meant to punish Chinese exporters such as Datong Jinneng Industrial Silicon Co. for allegedly having sold silicon metal in the EU below cost, a practice known as dumping.

The investigation will determine “the likelihood of continuation or recurrence of dumping and injury” from China, the European Commission, the 28-nation EU’s trade authority in Brussels, said on Thursday in the Official Journal. The anti-dumping duties were due to lapse on May 30 and will now stay in place during the probe, which can last as long as 15 months.

The case of silicon metal, used in the chemical and aluminum industries by companies such as Wacker Chemie AG and Trimet Aluminium AG, highlights how EU trade protection against China can become entrenched. China faces more EU anti-dumping duties than any other country, reflecting European concerns about the Chinese threat to the manufacturing base in Europe.

Of the current EU anti-dumping levies on about 50 kinds of goods from China ranging from solar panels to tableware, the measures on silicon metal have been in place for the longest time along with duties on a hard-metal material known as tungsten carbide, according to the commission’s database on trade cases.

Anti-Dumping Duties
A more prominent case of decades-long European anti-dumping duties against China involves bicycles. The EU has imposed levies on imports of Chinese bikes since 1993.

The EU introduced anti-dumping protection on silicon metal from China in 1990 as a fixed duty per metric ton and re-imposed it in 1997 in the form of an ad valorem duty amounting to 49 percent.

The bloc renewed the levy a second time in 2004 after finding Chinese silicon-metal exporters continued to undercut European producers. When it re-imposed the measure a third time in 2010, the EU also cut the rate to 16.3 percent for Datong Jinneng Industrial Silicon and to 19 percent for all other Chinese silicon-metal exporters to ease the impact on European users.

The threat to renew the current anti-dumping duties stems from a Feb. 27 request by lobby group Euroalliages on behalf of companies representing more than 25 percent of EU production of silicon metal, according to the commission, which listed Ferropem and RW Silicium GmbH as other European manufacturers.

 

[ahojunk]

EU May Renew Oldest Duties on China in Silicon-Metal Case - Bloomberg Business

The European Union may renew tariffs on silicon metal from China for another five years to curb competition for EU producers such as Ferroatlantica SL, a step that would prolong trade protection in place for a quarter of a century.

The EU opened an inquiry into whether to re-impose the duties as high as 19 percent meant to punish Chinese exporters such as Datong Jinneng Industrial Silicon Co. for allegedly having sold silicon metal in the EU below cost, a practice known as dumping.

The investigation will determine “the likelihood of continuation or recurrence of dumping and injury” from China, the European Commission, the 28-nation EU’s trade authority in Brussels, said on Thursday in the Official Journal. The anti-dumping duties were due to lapse on May 30 and will now stay in place during the probe, which can last as long as 15 months.

The case of silicon metal, used in the chemical and aluminum industries by companies such as Wacker Chemie AG and Trimet Aluminium AG, highlights how EU trade protection against China can become entrenched. China faces more EU anti-dumping duties than any other country, reflecting European concerns about the Chinese threat to the manufacturing base in Europe.

Of the current EU anti-dumping levies on about 50 kinds of goods from China ranging from solar panels to tableware, the measures on silicon metal have been in place for the longest time along with duties on a hard-metal material known as tungsten carbide, according to the commission’s database on trade cases.

Anti-Dumping Duties
A more prominent case of decades-long European anti-dumping duties against China involves bicycles. The EU has imposed levies on imports of Chinese bikes since 1993.

The EU introduced anti-dumping protection on silicon metal from China in 1990 as a fixed duty per metric ton and re-imposed it in 1997 in the form of an ad valorem duty amounting to 49 percent.

The bloc renewed the levy a second time in 2004 after finding Chinese silicon-metal exporters continued to undercut European producers. When it re-imposed the measure a third time in 2010, the EU also cut the rate to 16.3 percent for Datong Jinneng Industrial Silicon and to 19 percent for all other Chinese silicon-metal exporters to ease the impact on European users.

The threat to renew the current anti-dumping duties stems from a Feb. 27 request by lobby group Euroalliages on behalf of companies representing more than 25 percent of EU production of silicon metal, according to the commission, which listed Ferropem and RW Silicium GmbH as other European manufacturers.

This looks to me as a case of politics over-riding economics.

 

[LowPost]

Premier Li Keqiang meets World Bank president

Premier Li Keqiang told World Bank President Jim Yong Kim in Beijing on July 16 that the Chinese economy has great resilience, potential and room for maneuver.

On July 15, the world’s second-largest economy posted better-than-expected economic growth of 7 percent in the second quarter.

The Premier said the Chinese government has the capability to handle various risks in economic development and maintain healthy growth in the Chinese economy.

Premier Li said China is willing to strengthen its partnership with the World Bank, and the Chinese government pays great attention to suggestions on China’s health reform by a joint research report of the World Bank and the World Health Organization.

Kim, on a three-day visit to China starting July 15, said China is a strong partner in development and a strong partner for the World Bank Group, and the World Bank shares the commitment to ending poverty and boosting shared prosperity.

“I look forward to a continued strong, cooperative, and productive relationship, which will benefit developing countries around the world,” he said.

China and the World Bank signed an agreement to set up a $50 million fund to help reduce poverty, part of their ongoing collaboration to combat downward pressure on the global economy and push forward China’s health reform.

The fund, which is expected to start later this year, was signed on July 16 during Kim’s visit to Beijing. The fund will finance investment projects, operations, knowledge development and human-resources cooperation at both global and regional levels, according to the World Bank.

Premier Li meets WB president

 

[Jlaw]

Chinese economy "the envy of the world": WBG chief

English.news.cn 2015-07-17 20:41:09

by Xinhua Writer Jiang Xufeng


BEIJING, July 17 (Xinhua) -- Visiting World Bank Group (WBG) President Jim Yong Kim Friday commended China's reform resolve and global leadership in development, noting that the WBG is exploring co-financing options with the newly-established Asian Infrastructure Investment Bank (AIIB).

ENVY OF THE WORLD

"China has built the world's second largest economy and it has undertaken significant reforms aimed at providing all of its citizens with an opportunity to enjoy greater prosperity," the WBG chief said at a press conference in Beijing.

While China's growth has gradually slowed since 2012--what President Xi Jinping has called the "new normal"--the nation remains "the largest contributor to world growth since the global financial crisis" with roughly 30 percent of global growth over the last couple of years coming from China alone, he told reporters.

China's growth slowed to 7.4 percent last year and the WBG predicts about 7-percent for 2015, which is still "the envy of the world," he said.The press conference came two days after China released its Q2 economic growth figure which stood at 7 percent.

Despite recent stock market fluctuations, "China's economy is strong and its fundamentals are sound," he said at the end of his visit, during which he met with Premier Li Keqiang and other top policymakers.

Commenting on recent equity market volatility, Kim described China's stock market as "relatively young" and said that all over the world, governments often take measures to reduce volatility in the markets.

China's stock market was among the world's best performers earlier this year, with the Shanghai Composite Index (SCI) up more than 150 percent in 12 months, partly fueled by margin trading. However, the SCI recently lost more than 30 percent in less than a month, as margin traders unwound positions and some investors cashed out.

The market has shown signs of recovery, coming at the same time as some significant changes, including major brokerages putting their own capital into the market and rule changes to allow pension funds to own stocks. It seems unlikely that the market correction will have a huge impact on the real economy and derail China's reform agenda, and Kim stressed that China is determined to continue with reform and transform its growth model.

Chinese leaders are firm that economic and social reforms will ensure "more efficient, equitable, and environmentally sustainable" growth, he said.

During his meeting with Kim Thursday, Premier Li Keqiang also said, "We are well positioned and capable of coping with various challenges, stabilizing market expectations and maintaining sound economic development."

China has lifted more than 600 million people out of poverty in the last 25 years, more than the rest of the world combined during that time. Citing a 50 million U.S. dollar trust fund China has agreed to establish with WBG to finance poverty eradication, Kim noted: "Today, there's no question that China is increasing its role in development around the world."

When it begins operating later this year, the fund will finance operations, research and human resource cooperation at both global and regional levels.

WBG-AIIB PARTNERSHIP

While in China this week, Kim also met Jin Liqun, secretary-general of the AIIB interim secretariat, to discuss how the new bank can hit the ground running. The AIIB took a key step forward last month when founder members agreed on a framework and management structure.

More funding for infrastructure will ultimately help the poor, said Kim. "We agreed with secretary-general Jin Liqun and the interim secretariat to explore co-financing options in the coming months. We plan to hold a meeting later this year in Washington D.C. to talk about specific projects in which we would be co-investors," he said.

"We regularly enter into such arrangements with multilateral development banks because it broadens the pool of financing available for a range of infrastructure projects -- bridges, water treatment plants, roads, and telecommunications, to name just a few.

"With strong environmental, labor and procurement standards, the AIIB will join us and other development banks in addressing huge infrastructure needs that are critical to ending poverty, reducing inequality and boosting shared prosperity," Kim added.

WBG data shows emerging markets and low-income countries facing an annual shortfall of one trillion to 1.5 trillion U.S. dollars in infrastructure spending.

"We need new investors in infrastructure and we think the AIIB will be an important partner," Kim said.

 

[TaiShang]

China's Lifan Starts Construction of Car Plant in Russia
2015-07-17 22:42:09 Xinhua Web Editor: Linxi

Chinese motorcycle and automobile manufacturer Lifan on Thursday started construction of a production plant in central Russia's Lipetsk.
The plant is expected to start production in 2017 with an annual capacity of 60,000 cars, Vice President of Lifan Industry Groups Mou Gang said at the ground-breaking ceremony.

Located in Lipetsk's special economic zone, the car plant, once completed, will become the sixth overseas plant of Lifan, a privately-owned Chinese company headquartered in southwest China's Chongqing Municipality.

"We envisages expanding on the Russian market during the time when it is shrinking, as any economy has its periods of ups and downs," Mou told Xinhua, adding that Lifan sees all existing car makers in the Russia market as partners rather than competitors.

Ivan Koshelev, director-general of the special economic zone, said the zone's successful development in recent years proved that Western sanctions did not scare foreign investors off.

"Many more Chinese companies would start their business in Lipetsk," Koshelev told Xinhua. "Investors come here not for profit only. They just enjoy working in our environment."

The Chinese car manufacturer, which entered the Russian market in 2007, has invested 300 million U.S. dollars in its Lipetsk branch, which will also be Lifan's first car plant with a complete assembly cycle in Russia.

 

[TaiShang]

I heard on CCTV that China's first crude oil futures will be launched within three months.

 

[TaiShang]

China Mobile to Cut Salaries of Managerial Staff by 50%

According to the salary reduction plan announced Wednesday, the top-ranking officials of China Mobile will suffer a 50% decrease in their pay, the managers from provincial branches will see their salaries cut by 40%, and the directors from different departments within the corporation will be take a 20% reduction in their payrolls.

China Mobile's salary reduction is in response to a salary reform plan governing the state-owned corporations that was promulgated on January 1 of this year.

China Mobile to Cut Salaries of Managerial Staff by 50% - People's Daily Online

 

[Jlaw]

China Mobile to Cut Salaries of Managerial Staff by 50%

According to the salary reduction plan announced Wednesday, the top-ranking officials of China Mobile will suffer a 50% decrease in their pay, the managers from provincial branches will see their salaries cut by 40%, and the directors from different departments within the corporation will be take a 20% reduction in their payrolls.

China Mobile's salary reduction is in response to a salary reform plan governing the state-owned corporations that was promulgated on January 1 of this year.

China Mobile to Cut Salaries of Managerial Staff by 50% - People's Daily Online

This makes sense from the article:

"the total salary increase in a corporation must not be bigger than the increase in its profits. In other words, if the profits of an enterprise drop, then its total salary must also go down."

 

[Bussard Ramjet]

I was just reading some economists and investors, and the respect and awe they had for Chinese system of Economic Governance, has ebbed a bit.

People who were earlier totally bullish on China, are getting nervous, because Chinese stock markets have lost International Legitimacy which China was so desperately trying, to open up its financial accounts, invite global investors with truck loads of money into the market. And for a while many investment banks and hedge funds were considering moving part of their wealth into China.

But, alas, China messed up its Stock Market. With majority of the market not trading, brutal regulator interventions, diktat to not sell stocks to big stock holders etc. The rules of the stock market are unclear, and totally haphazard.

 

[Jlaw]

I was just reading some economists and investors, and the respect and awe they had for Chinese system of Economic Governance, has ebbed a bit.

People who were earlier totally bullish on China, are getting nervous, because Chinese stock markets have lost International Legitimacy which China was so desperately trying, to open up its financial accounts, invite global investors with truck loads of money into the market. And for a while many investment banks and hedge funds were considering moving part of their wealth into China.

But, alas, China messed up its Stock Market. With majority of the market not trading, brutal regulator interventions, diktat to not sell stocks to big stock holders etc. The rules of the stock market are unclear, and totally haphazard.

What are the market rules in India? Are your stock markets run efficiently. Are Dalits allowed by law to invest in the stock market?

 

[Bussard Ramjet]

What are the market rules in India? Are your stock markets run efficiently. Are Dalits allowed by law to invest in the stock market?

The market rules in India are analogous to those of the west.

Yes. I won't deny presence of insider trading like all. But there are clear rules that are relatively stable. Government doesn't interfere in the markets. Market mechanism has more of a say. Stocks can stop trading for the day after a 10% drop. Brokers aren't forced to buy stocks. Banks aren't told to inject money into stocks etc.

Yes. This is actually like saying that Qiang people aren't allowed to invest. For Qiang and some of the minorities were considered barbarians earlier. Dalits are as much Indian as anyone else. Our current Prime Minister Modi is also from a Low Caste. He is THE most powerful person in India today.

 

[cirr]

Silex Microsystems has been purchased by GAE

OFweek | Posted: 23 Jul 2015, 15:20

(OFweek) – It is said that the Hong Kong holding company for investment GAE（strongly related to a Beijing-based company）announced to purchase 98% of the world’s largest pure MEMS OEM Silex Microsystems’ stock rights recently. The transaction has been closed on July 13, but the detailed transaction amount hadn’t been revealed. Edvard Kalvesten, the founder and CEO of Silex Microsystems, still kept 2% of the stock rights. Silex’ organizational structure and business operation won’t be changed after the purchase and the original management team will still perform their duties as previously planned.

The management team of Silex Microsystems believes that this purchase is a good opportunity to help the company keep its position as the world’s largest pure MEMS OEM. The new shareholder has a professional and in-depth understanding of the semiconductor industry and it has been approved of expanding the capacity of Silex Microsystems’ 8 inch MEMS production line in 2015. Besides, the new shareholder is a strong backup force for the follow-up investment of Silex Microsystems in the future. The investment will help Silex Microsystems better provide the world’s creators with MEMS OEM service and enhance its position as the world’s largest MEMS OEM.

Silex Microsystems has been purchased by GAE - OFweek News