China Economy Forum

[ahojunk]

Yesterday, it was reported that they plan to merge.
Today it's approved. That's really quick!

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China approves merger of major steelmakers
(Xinhua) 19:19, September 22, 2016

BEIJING, Sept. 22 (Xinhua) -- The merger of China's two major steelmakers, Baosteel Group and Wuhan Iron and Steel Group, has been approved by the State Council, the State-owned Assets Supervision and Administration Commission said Thursday.

Shanghai-based Baosteel Group, China's second-largest steelmaker, will issue new stock to shareholders of Wuhan Iron and Steel Group to absorb the other company, according to the merger plan announced Tuesday evening.

Last year, the crude steel output of Baosteel and Wuhan Iron and Steel was 34.94 million tonnes and 25.78 million tonnes, respectively. After the merger, the output of the newly merged company will exceed that of Hebei Province's HeSteel Group to rank first in China and become the world's second largest steelmaker, after ArcelorMittal.

Wuhan Iron and Steel was China's first giant steelmaker when it started production in 1958. Its listed arm posted a net loss of 7.5 billion yuan (1.1 billion U.S. dollars) in 2015, with total debts of 70 billion yuan.

The move is the latest effort by the Chinese government to cut steel overcapacity and continue the country's economic restructuring.

China is the world's largest producer and consumer of steel. The industry has long been plagued by overcapacity, which has become a major drag on China's growth in recent years.

Annual steel production in China is 1.2 billion tonnes, but the country aims to reduce steel production by 45 million tonnes in 2016.

China has shut down steel plants with a total capacity of over 90 million tonnes over the past five years and plans to reduce output by an additional 100 million to 150 million tonnes by 2020.

 

[Solomon2]

China embarked on wind power frenzy, says IEA
By Roger Harrabin BBC environment analyst

• 20 September 2016

GETTY IMAGES The last few years have seen a wind power boom in China
China has been building two wind turbines every hour, the International Energy Agency (IEA) has told BBC News.

This is the world's biggest programme of turbine installation, double that of its nearest rival, the US.

The nation’s entire annual increase in energy demand has been fulfilled from the wind.

But the IEA warns China has built so much coal-fired generating capacity that it is turning off wind turbines for 15% of the time.

The problem is that coal-fired power stations are given priority access to the grid.

An IEA spokesman told BBC News: “The rather rosy statement on wind energy hides the issue that 2015 and the first half of 2016 also saw record new installations of coal.

“China has now a clear over-supply. In the province of Gansu, 39% of wind energy had to be curtailed (turned off because there is not enough capacity on the grid).

The average European wind farm is forced to stop generating between 1-2% of the year.

'Unsustainable' position
He said: “China’s position is clearly unsustainable. It will need strong policy decisions, including the construction of many more grid lines and a phase-out policy for older, more inefficient coal power plants.”

State media has reported China’s plans to impose a moratorium on all new coal-fired plants until 2018.

The IEA says China installed more than 30,000 MW of new wind energy in 2015 – partly thanks to a rush driven by the Chinese government making its existing subsidies less attractive.

Construction has slackened in 2016, but only to a level of more than one turbine per hour.

Steve Sawyer from the Global Wind Energy Council told BBC News: “China’s build up of its capacity in wind - and now solar - is truly without parallel.

“It is no surprise that the Chinese grid’s capability to integrate this variable renewable energy has not progressed at the same rate, but to change this situation China needs to rapidly progress with electricity market reform.”

China has a recent history of setting targets on energy and climate change that it is sure it can achieve.

KEVIN FRAYER China has also been building its coal-fired generation capacity
The government apparently over-estimated the likely increase of electricity demand, which grew just 0.5% - as China’s growth slowed, and dirty industries either closed down or improved energy efficiency.

It’s this decrease in demand and increase in renewables that gave China the confidence to ratify the Paris climate change agreement last week.

Lu Kang, China’s Foreign Ministry spokesman, told BBC News: "China has made great efforts in areas including reducing emission, environmental protection and developing renewable sustainable energy.

“The International Community recognises our leading example role on climate change. I can assure you that China is determined to stick to this green sustainable path of development. This also serves China’s own need for development."

Complicated transition
Lauri Myllyvirta of Greenpeace China told BBC News: “China has a coal bubble: it already has more coal-fired generation than it needs yet it is still building one power station a week.

“This complicates the transition to clean energy because companies are unhappy because they can’t run their power stations as much as they expected – they are sitting idle for much of the time.

“It is also a massive waste of resources that could be spent on clean energy instead.”

The IEA says the boom in coal-plant building has been spurred by readily-available finance and help from local authorities. Mining and transport companies are diversifying into power plant construction.

In its first global review of energy investment, the IEA says the energy system is broadly turning towards low-carbon energy and energy efficiency - but investment in key clean energy technologies needs to triple to meet the climate targets agreed at the Paris climate summit.

 

[ahojunk]

China unveils major projects to boost growth
Source: Xinhua | 2016-09-23 15:38:52 | Editor: huaxia

BEIJING, Sept. 23 (Xinhua) -- Provincial projects worth more than 1 trillion yuan (149.25 billion U.S. dollars) were launched this week as China strives to boost growth, Shanghai Securities News reported Friday.

The projects are mostly infrastructure-related, with the southwest province of Sichuan introducing nine highway projects worth 128.8 billion yuan.

The Inner Mongolia Autonomous Region in the north unveiled 366 projects worth 739.6 billion yuan, including infrastructure, industrial parks and city planning.

The projects were unveiled as the National Development and Reform Commission (NDRC), China's top planner, urged faster approval procedures and vigorous implementation of projects under the country's 13th Five-Year Plan.

In the first eight months, China's infrastructure investment rose 19.7 percent year on year, gaining 0.1 percent from the January-July period, according to data from the National Bureau of Statistics.

"The 20-percent infrastructure investment growth is not enough to stabilize growth. The rate needs to be 22 or 23 percent," said Lian Ping, chief economist at the Bank of Communications.

The growth of infrastructure investment is likely to accelerate in the fourth quarter with implementation of major projects, faster approval by the NDRC and operation of public-private partnership (PPP) projects, he said.

The NDRC introduced a new list of PPP projects with 2.14 trillion yuan in total investment on Sept.14 as part of its efforts to promote investment amid an economic slowdown.

It approved infrastructure projects worth more than 1 trillion yuan in the first eight months, including nearly 285 billion in July and August.

China's economy grew 6.7 percent in the second quarter of the year, the lowest quarterly growth since the global financial crisis in early 2009, but still within the government's target range of 6.5-7 percent for 2016.

A slew of data released this month - from industrial output to retail sales - showed rebounding economic activity in August, boosted by government infrastructure spending and property sales.

Infrastructure investment is a key engine in China's economy, contributing 29.4 percent to total investment growth in 2015.

 

[ahojunk]

This is in preparation for the RMB to join the SDR...

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ICBC designated as RMB clearing bank in Russia
2016-09-24 08:20 | Xinhua Editor: Huang Mingrui


The People's Bank of China (PBOC) announced Friday that it has authorized the Industrial and Commercial Bank of China (ICBC) Moscow office to offer RMB clearing services in Russia.

Chinese and Russian central banks signed a memorandum in June on the establishment of a RMB clearing mechanism in Russia to "facilitate the cross-border use of yuan by enterprises and financial institutions from both countries."

Amid close economic ties between the two neighbors, the Russian central bank included RMB in its foreign exchange reserves at the end of 2015.

ICBC is the largest lender in China, and its Moscow branch is the biggest Chinese bank in Russia.

China-Russia merchandise trade grew 7.8 percent in the first eight months of 2016, sharply rebounding from a 27.8-percent decline for the whole of 2015, according to customs data.

The world's second largest economy is seeking wider use of its currency in global trade and investment. Earlier this week, the PBOC appointed the Bank of China as the RMB clearing bank in the United States.


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China retail sales up 10.6 pct in August
2016-09-13 10:37 | Xinhua Editor: Mo Hong'e

China's consumer goods retail sales grew 10.6 percent year on year in August, accelerating from the 10.2-percent growth posted in July on the back of robust online sales.

Total retail sales of consumer goods amounted to 2.75 trillion yuan (410.4 billion U.S. dollars) last month, according to the National Bureau of Statistics (NBS) on Tuesday.

The data showed strong consumption potential in rural areas, with retail sales expanding 10.9 percent, outpacing the 10.6-percent rate for sales in urban areas.

In the first eight months of the year, China's retail sales of consumer goods rose 10.3 percent year on year to 21 trillion yuan.

From January to August, online sales surged 26.7 percent year on year to three trillion yuan.

Retail sales have contributed significantly to China's economic growth as the country shifts from an export-driven economy to a consumer society.

In 2015, consumption contributed 66.4 percent to China's GDP, up 15.4 percentage points from 2014.

To further tap market potential, China is exploring opportunities in its underdeveloped rural areas, as well as e-commerce, to boost sales.

Chinese online retailers, chief among them Alibaba and jd.com, have been expanding their service network and establishing physical outlets in rural areas, which are equipped with computers and products on display, to make online shopping more accessible to rural residents. (Updated)

 

[ahojunk]

RMB is building up momentum to become a global currency.

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China's yuan heads for global currency status
2016-09-23 16:20 | Xinhua Editor: Xu Shanshan

The founding of the first renminbi (RMB) clearing bank in the United States and the yuan's imminent formal inclusion in an elite reserve currency basket are the RMB's latest victories on the way to becoming a global currency.

China's central bank said Wednesday it has designated Bank of China's New York branch to provide yuan clearing services in the United States, the first time China has set up an RMB clearing bank in the country.

It joined a list of offshore yuan clearing banks in Hong Kong, London, Singapore, Toronto and other overseas cities, which are expected to promote international use of the currency.

The move came days ahead of the RMB's inclusion in the Special Drawing Rights (SDR) currency basket by the International Monetary Fund (IMF), which will become effective starting Oct. 1 and make the yuan one of the five reserve currencies fully endorsed by the 189-member organization.

These developments will add to the momentum of the RMB's rise, officials and analysts said.

"The establishment of a clearing bank in the United States will promote the growth of RMB activity in the country and help accommodate an increase in volume and demand for RMB products and services," said Timothy F. Geithner, co-chair of the Working Group for U.S. RMB Trading and Clearing, in a press release.

Siddharth Tiwari, director of the IMF's strategy, policy and review department, called the RMB's upcoming inclusion in the SDR basket "an important milestone in the process of China's global financial integration."

With steady economic growth and higher bond yields, China has seen growing interest from overseas in using the yuan and holding government bonds, despite a depreciation of the currency against the U.S. dollar in recent months.

The RMB was the fifth most active currency for global payments by value in July, with a share of 1.9 percent, an increase from 1.72 percent in June, according to data from global transaction services organization SWIFT.

Since the beginning of the year, overseas institutions have added 96.5 billion yuan (14.5 billion U.S. dollars) of investment in China's treasury bonds, according to a report by investment bank China International Capital Corp. Ltd. (CICC).

While the Chinese currency has weakened against the dollar, global acceptance of the RMB has been on the rise and yuan assets are still attractive to foreign investors, said Zhou Chengjun, deputy head of a department overseeing monetary policy at the People's Bank of China (PBOC).

"Although there is a change in the currency trend, overseas holders of yuan assets can still enjoy the benefits of China's growth," Zhou said.

The yuan exchange rate composite index, which measures the yuan's strength relative to a basket of currencies including the U.S. dollar, euro and Japanese yen, fell 6.5 percent as of the end of August from the end of 2015, according to data released by the China Foreign Exchange Trade System.

However, investors still have strong faith in yuan assets, including Chinese government bonds, with the yield of China's 10-year treasury bonds at around 2.75 percent, compared with 1.6-1.7 percent for such bonds in the U.S. and near zero for those in Japan.

In the meantime, Chinese authorities have expanded overseas institutions' access to its inter-bank bond market and inter-bank foreign exchange market to facilitate foreign investment in yuan assets.

After the RMB joins the SDR currency club, foreign investors will be even more willing to hold yuan assets, the PBOC said in a report last month.

IMF data showed that the yuan accounted for about 1.1 percent of official reserves held by central banks worldwide at the end of 2014. Zhou estimates that the proportion could exceed 4 percent "in a short period" after the RMB's inclusion in the SDR basket.

The inclusion could also bring as much as 6.2 trillion yuan in net purchases of China's onshore bonds by the end of 2020, the Standard Chartered Bank predicted.

Moreover, much like a credit rating upgrade, the yuan's SDR status will increase its use in other areas such as financial transactions and financing activities, according to the CICC report.

Last month, the World Bank issued SDR-denominated bonds worth nearly 700 million U.S. dollars in China's interbank market, with the yuan to be used as the settlement currency for the first time.

"In the future, the yuan will not only become a global investment and reserve currency, but also a global currency for financial transactions," said Zhou.

To achieve this, the PBOC will advance reforms to make the yuan freely convertible under the capital account and open up foreign exchange markets, he said.

 

[TaiShang]

China fiscal revenue up 6.3% in first two months
(Xinhua)Updated: 2016-03-16 16:54

A clerk counts yuan bills at a bank in Huaibei, East China's Anhui province. [Photo/IC]

BEIJING - China's fiscal revenue rose 6.3 percent year on year to 2.74 trillion yuan ($421.3 billion) in the first two months of 2016, data from the Ministry of Finance showed on Wednesday.


The data came after China's fiscal revenue logged its slowest pace since 1988 last year as the broader economy slowed.

In breakdown, the central government collected 1.18 trillion yuan in fiscal revenue, up 1.6 percent year on year, while local governments saw fiscal revenue expand 10 percent to 1.56 trillion yuan.

Thanks to robust property transactions in major cities, real estate business taxes went up 20.2 percent year on year to 116 billion yuan. Resource taxes plunged 24.8 percent due to sluggish crude oil and coal prices.

During the January-February period, fiscal spending expanded 12 percent to 2.12 trillion yuan, with spending on the affordable housing program surging 30.7 percent.

To cushion the blow from sagging revenue growth and balance the need for a proactive fiscal policy to support growth, China plans to increase its deficit-to-GDP ratio to 3 percent this year from 2.3 percent last year.

The rise of 0.7 percent in the ratio, based upon China's GDP, would provide the government about 470 billion yuan more to spend, projected mainly to cover tax and fee reductions for enterprises.

**

China sees rising number of new firms in Jan-Aug
(Xinhua)Updated: 2016-09-26

BEIJING - The number of newly registered enterprises in China surged 28.9 percent year-on-year in the first eight months this year thanks to the country's continued efforts to streamline administrative procedures.

A total of 3.56 million new companies were set up in the Jan-Aug period, according to statistics from the State Administration of Industry and Commerce (SAIC).

An average of 14,600 new firms were set up daily, surpassing the average of 12,000 recorded in 2015, according to SAIC.

China has a total of 82.58 million market entities, said SAIC.

To foster new growth impetus and inject vitality into the economy, China has made efforts to facilitate business registration and introduced preferential tax policies, social security subsidies and easier business registration procedures.

China lifted restrictions on minimum registered capital, payment deadlines, down payment ratios and cash ratios of registered capital on March 1 last year in a move to encourage start-ups and energize the economy.

 

[JSCh]

Mine with 100 tons of gold discovered in Henan
Source:Global Times Published: 2016/9/26 0:33:39

A large gold mine with 100 tons of deposits and the life of 80 years has been discovered in Tongbo county, Central China's Henan Province.

Authorities from the Department of Land and Resources of Henan found the gold mine during the exploration for metal mines in Tongbo in mid-September, news site cnr.cn reported Sunday.

The mine is estimated to contain some 100 tons of gold and 120 tons of silver. Other mineral resources such as alkali, lead and zinc have also been discovered at the county, the report said.

According to a Wechat account named "Caijinren" under the China Gold News, the exploration program only involved an investment of 80 million yuan ($11.9 million), and its potential economic return is estimated at 25 billion yuan.

The Bureau of Geo-exploration and Mineral Development of Henan Province predicts that the area has potential to find 200 to 250 tons of gold and 5,000 tons of silver, which will make it the third major gold exploration base in Henan, cnr.cn reported.

Meanwhile, authorities in Northwest China's Xinjiang Uyghur Autonomous Region announced Sunday that a large lead and zinc deposit, allegedly China's largest, has been discovered in Xinjiang, the Xinhua News Agency reported Sunday.

According to Xinhua, the deposit, with reserves of nearly 19 million tons, is located 5,500 meters above sea level in Hotan county in southern Xinjiang, according to the regional geological and mining bureau.

By 2015, China has 1,265 gold mines with total deposits of 4,265 tons, the seventh-largest in the world, while the country's lead and zinc deposits amount to 3,572 tons and 9,384 tons respectively, the world's fourth-largest, according to chinamining.cn, a trade media website.

A report released by the United Nations Environment Programme (UNEP) in 2013 said China has become the world's largest consumer of primary materials, including minerals and metal ore, with domestic material consumption levels four times that of the US.

Large lead, zinc deposit found in Xinjiang
Source: Xinhua 2016-09-25 15:53:56

URUMQI, Sept. 25 (Xinhua) -- A large lead and zinc deposit, allegedly China's largest, has been discovered in northwest China's Xinjiang Uygur Autonomous Region, local authorities announced on Sunday.

The deposit, with reserves of nearly 19 million tonnes, is located 5,500 meters above sea level in Hotan County in southern Xinjiang, according to the regional geological and mining bureau.

Local geologists spotted the 6.6-square-kilometer deposit in 2011. They surveyed it for about six years and found that over 99 percent of its reserves are exploitable.

Previously, Xinjiang had not been among China's six traditional bases for lead and zinc, which are widely used in metallurgy, chemistry, pharmacy, light industry and military industries.

 

[JSCh]

Renminbi use surges in London in spite of Brexit
(China Daily) 10:51, September 26, 2016

File Photo/Xinhua​

London's offshore yuan activities continue to surge despite Brexit uncertainties, according to the latest figures from China's central bank.

The new figures, reflecting bilateral business confidence and the renminbi's growing international use, showed London's renminbi-denominated business transactions in August were 60 percent higher than July's.

The new figures were announced on Friday by Jin Mei, the People's Bank of China's chief representative in Europe, at a celebration hosted by London's renminbi clearing bank, China Construction Bank.

CCB London celebrated the significant milestone of clearing 10 trillion yuan ($1.5 trillion) of transactions between June 2014, when it was appointed by PBOC to be London's official renminbi clearing bank, and August 2016.

An official clearing bank facilitates efficient clearing of offshore renminbi transactions by working with the central bank.

Brexit refers to the June 23 referendum in which British citizens voted to leave the European Union.

In April, London overtook Singapore to become the world's second-largest offshore renminbi center behind Hong Kong.

Wang Zuji, president of CCB Corp, said CCB London fulfilled its promise of two years ago to provide "fair, efficient, accurate and professional clearing services", and contribute to Sino-British economic development and London's position as an important offshore renminbi center.

CCB London provides yuan clearing services from 1 am to 9 pm London time to cover the trading hours difference between Asian and North American markets.

Its yuan clearing enquiry service runs 24 hours. Ninety-five percent of CCB London's yuan clearing services are completed through its clearing systems automatically.

CCB London provides yuan clearing services for 67 financial institutions, of which only 24 are Chinese organizations, which demonstrates its international client base.

Key clients include international banks such as HSBC, Standard Chartered, Citibank and Bank of America, and other financial institutions including the London Stock Exchange, London Metals Exchange and Chicago Mercantile Exchange.

The fast growth of London's offshore yuan activities is taking place as the renminbi is increasingly used internationally as a trading and investment currency, and its growth as a global reserve currency will be marked by its inclusion in the International Monetary Fund's basket of special drawing rights currencies in October.

Jin said the SDR inclusion will create new opportunities for the development of the London offshore RMB market and also RMB internationalization.

The PBOC also will use policy initiatives to support RMB internationalization, Jin said. It will further deepen financial reforms, promote interest rate and exchange rate liberalization, widen the opening of the financial market, and realize orderly RMB convertibility under the capital account.

 

[JSCh]

China's industrial profits grow 19.5 pct in August
Source: Xinhua 2016-09-27 11:12:25

BEIJING, Sept. 27 (Xinhua) -- China's industrial profits rose 19.5 percent year on year to 534.8 billion yuan (about 80.3 billion U.S. dollars) in August, official data showed Tuesday.

The growth rate was faster than the 11 percent increase registered one month earlier, according to the National Bureau of Statistics (NBS).

In the first eight months of the year, industrial profits expanded 8.4 percent year on year, compared with a 6.9 percent rise during the January-July period.

The bureau's calculations include companies with annual revenues exceeding 20 million yuan.

NBS statistician He Ping said the August growth rate was the fastest monthly rate so far this year. He attributed the improvement to rising production and sales, a recovery in manufactured goods prices, lower operating costs, and a lower comparison base from last year.

During the first eight months, 33 of the 41 industrial sectors reported year-on-year profit increases, with high-tech sectors, including computers and telecommunications, posting profit increases of 19.8 percent year on year.

In contrast, electricity, energy production and the supply industry witnessed a 3.9 percent decrease in profits during the same eight-month period. Oil and gas exploitation also recorded losses.

 

[onebyone]

China's Economy Shows Fresh Signs of Strength

Bloomberg News
September 27, 2016 — 4:00 AM ICT
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China’s economy is showing fresh signs of strength, from increased business confidence to an expansionary factory gauge reading, according to the earliest private indicators for September.

Most private gauges showed improvement and a proxy for factory activity jumped to the strongest level in almost two years, suggesting better readings in August data have been followed up this month.

A steady flow of credit has boosted property sales, helping offset sluggish exports and continued weakness in private investment.


Here’s what those first indicators show:

SME Confidence
Standard Chartered Plc’s Small and Medium Enterprises Confidence Index rose to 56 this month from 54.9 in August. Sales and production recovered from weather-related disruptions, even as the investment appetite remained muted, Shen Lan, a Beijing-based China economist, wrote in a report. "Expectations relating to total financing, investment and employment weakened, indicating that SMEs’ confidence has not fully recovered," Shen said.

Satellite View
The China Satellite Manufacturing Index jumped to 50.2 in the first weeks of September, according to according to San Francisco-based SpaceKnow Inc., which uses algorithms and commercial satellite imagery to analyze thousands of industrial facilities. That’s the first reading above 50 since November 2014. Like the official manufacturing purchasing managers index, readings above 50 indicate expansion.

The official PMI probably held steady this month at 50.4, according to economist estimates in a Bloomberg survey. That would match the September reading, which was the highest in almost two years. The report is due for release Oct. 1.

Upbeat Executives
Business leaders are more optimistic. The Market News International China Business Sentiment Indicator surged to a 13-month high of 55.8 from a revised 54.1 in August as new orders helped to offset a softening in output. The indicator is based on a survey of executives of companies listed on the Shanghai and Shenzhen stock exchanges.
“The Chinese economy will likely end Q3 on a fairly strong note, with growth holding up in both manufacturing and services," Andy Wu, a senior economist at MNI Indicators, wrote in the report. "While the outlook remains challenging, our forward-looking activity indicators suggest that growth momentum is likely to continue into the final quarter of the year, supported by a continuation of policy easing.”

Sales Managers
An index by London-based research firm World Economics Ltd. was little changed at 51.3 in September. Services continue to be a growth engine, widening a lead over manufacturing. Business confidence remains low in comparison with previous years, and sales growth reflects continuing but modest growth, Chief Executive Ed Jones wrote in a statement.

Steel Outlook
The S&P Global Platts China Steel Sentiment Index climbed to 74.43, the second highest reading this year, from 62.68 in August. The gauge is based on a survey of about 70 to 85 China-based market participants including traders and steel mills.

Still, the steel outlook remains uncertain as surging propertyprices across China’s biggest cities may portend more local governments will roll out curbs on new home-buying.

"The market is definitely reacting to some potential tightening of funding and liquidity in the property sector, particularly in Tier 2 cities, to try and avoid the market overheating," said Paul Bartholomew, a senior managing editor for steel and raw materials at S&P Global Platts in Melbourne. "Many investors expect this to have a dampening impact" on demand, he said.

— With assistance by Miao Han

http://www.bloomberg.com/news/artic...ators-signal-factory-pickup-business-optimism

 

[onebyone]

China August industrial profits rise nearly 20%, fastest in 3 years
Tuesday, 27 Sep 2016 | 1:28 AM ET

In Pictures | Corbis | Getty Images
Workers operate on the assembly line at an automobile factory in Liuzhou, Guangxi Province, China.

Profits earned by China's industrial firms in August grew at the fastest pace in three years helped by rising sales, higher prices and lower costs, pointing to strengthening economic activity.


The world's second-largest economy has shown recent signs of stabilization, propped up by a housing boom and government spending, but growth has been patchy with companies in some sectors such as steel not faring as well due to excess capacity.

Profits in August jumped 19.5 percent to 534.8 billion yuan ($80.2 billion), the National Bureau of Statistics (NBS) said on Tuesday, the fastest monthly rate since August 2013. Annual profit growth was 11 percent in July.

Industrial profits in August have shown positive changes and government policies continue to produce effects, NBS official He Ping said in a statement accompanying the data.

He said rapid growth in August was also boosted by a low base of comparison last year.

China's traditional industries continue to struggle, particularly in sectors hobbled by overcapacity, He said.

The profit data by sector, however, highlights the uneven stabilization.

Manufacturing profits rose 14.1 percent from a year earlier while mining industry profits fell 70.9 percent.

Total profits for the January-August period rose 8.4 percent from the same period a year earlier, compared with a 6.9 percent rise in the first seven months of this year.
Chinese industrial firms' liabilities at the end of August were 4.6 percent higher than at the same point last year.

The data covers large enterprises with annual revenues of more than 20 million yuan from their main operations.

Bank of America Merrill Lynch highlighted risks to corporate earnings in a recent report on listed firms.

"We think a housing bubble in top cities is a genuine risk, and stimulus may weaken due to a renewed focus on the supply-side reform; we expect earnings to come under significant pressure again reasonably soon," it said.

The Asian Development Bank on Tuesday increased its growth forecast this year for China to 6.6 percent from 6.5 percent, and for 2017 to 6.4 percent from 6.3 percent, citing fiscal and monetary stimulus measures.

($1 = 6.6693 Chinese yuan)

Follow CNBC International on Twitter and Facebook.

http://www.cnbc.com/2016/09/27/chin...rofits-rise-nearly-20-fastest-in-3-years.html

 

[ahojunk]

China September inflation forecast at 1.6 pct
2016-09-28 10:58 | Xinhua | Editor: Mo Hong'e

China's Consumer Price Index (CPI) in September is likely to increase 1.6 percent year on year, higher than 1.3 percent in August, an industry report said on Tuesday.

The official CPI for September is due to be released by the National Bureau of Statistics (NBS) on Oct.14.

The Bank of Communications (BOC) said in a report that the expected rise is due to food prices, which account for around one-third of the CPI calculation.

Food prices will post an increase of between 1.9 and 2.4 percent year on year in September, with prices of vegetables, eggs and meat all increasing, said the report.

BOC expects the CPI to remain stable throughout the remainder of the year, but will see temporary increases in October and November as the National Day holidays in October will push up food prices.

China's CPI grew 1.3 percent year on year in August, down from July's 1.8 percent, according to the NBS.

The August data dropped for the fourth-consecutive month from 2.3 percent in April, when the CPI reached its highest level since July 2014.

 

[TaiShang]

EY: China's 2016 outbound FDI to exceed US$170 bln
By Guo Xiaohong
China.org.cn, September 29, 2016

China's outbound foreign direct investment (FDI) in 2016 is expected to exceed US$170 billion, hitting a record high, said EY in its 4th related report, released yesterday in Beijing.

In the coming years, China's overseas investment will continue to rise and maintain a double-digit growth rate, according to the report "China Go Abroad -- Key connectivity improvements along the Belt and Road in telecommunications & aviation sectors."

"Chinese enterprises are performing remarkably well in the global investment market in 2016," said Loletta Chow, Global Leader of EY's China Overseas Investment Network (COIN). "As a net capital exporter, China's outward investment has exceeded inward investment."

Chow attributed this to the implementation of the ‘going out' strategies, the accelerated internationalization of Chinese enterprises and the demand for overseas assets, especially dollar assets, under the depreciation pressure of renminbi.

With the "Belt and Road" initiative and other strategies serving as a powerful engine, more Chinese enterprises are expected to invest overseas.

Official data shows that China's non-financial outward FDI reached US$118 billion in the first eight months of 2016, an increase of 53.3% year-on-year.

The report also predicts that Chinese telecom enterprises will have great potential for development in developing countries along the Belt and Road. Aviation manufacturing is likely to become another business card in China's high-end manufacturing industry "going out" process, following the successes of high-speed rail and nuclear power.

Encouraged by a series of government policies, Chinese telecom enterprises have taken active actions to accelerate their overseas expansion. In April 2016, Sharing Mobile, a Chinese virtual network operator, acquired an 80% stake in a Nigerian telecoms operator for US$200 million.

According to the EY report, apart from the growth of international routes and transport capacity, Chinese enterprises have also made overseas investments in areas such as aviation infrastructure, aircraft manufacturing and air services.

Yet, EY, a global leader in assurance, tax, transaction and advisory services, also pointed out the risks behind the "going-out" strategy, including financial and market risks.

 

[ahojunk]

Op-ed: China shows reliability in global financial governance
By Zhong Sheng (People's Daily) 11:11, September 30, 2016

Starting from October 1, the Chinese yuan will be included in the Special Drawing Rights (SDR) basket of the International Monetary Fund (IMF) along with the US dollar, the Euro, the Japanese yen and the British pound.

This will be the first time for a currency of a developing country to be included in the basket. The representativeness and appeal of the SDR basket will be increased as a result and the international financial market will be further stabilized as well.

IMF Managing Director Christine Lagarde hailed the inclusion of the yuan into the SDR basket previously, saying that it is “an important milestone for the reform of the international monetary system.”

Charles Collyns,chief economist of the Institute of International Finance, also praised the increasingly heavier influence carried by the Chinese yuan in the international landscape.

With growing attention to the effect brought by the inclusion of the Chinese yuan to the international financial system, the world now expects China to play a bigger role in global rule-making, the economist added.

As a supplementary international reserve asset and a unit of account, SDR was first created to increase liquidity of the global market and reform the international monetary system. But its effect wasn’t satisfactory in the last fifty years.

In order to better reform the current global monetary system and the world financial architecture given such a background, it is important to turn SDR into a strong stabilizer in the international monetary system.

As an effort to build a more stable and resilient global financial architecture, China, as the rotating presidency of the G20 this year, restored the International Financial Architecture Working Group.

One of the group’s work priorities is to seek a broader use of SDR through listing SDR as reporting currency, issuing SDR-denominated bonds and other approaches.

Many such plans and initiatives contributed by China have been agreed upon by G20 leaders in their Hangzhou communiqué. For instance, they, in the communiqué, not only welcomed the inclusion of Chinese yuan into the SDR basket, but also expressed their support toward the ongoing examination of the broader use of the SDR, as well as the detailed measures to this end.

By advocating the establishment of the Asian Infrastructure Investment Bank and the BRICS Development Bank, incorporating Chinese yuan into SDR currency basket, and making efforts to improve international financial architecture during the G20 summit, China has shown its strong sense of responsibility as a major country in global economic governance.

All of these efforts made by China aim to build a more rational, balanced and fair global governance system, improve the international monetary system, safeguard the stability of global financial markets and finally inject confidence into world economy.

 

[grey boy 2]

China's manufacturing activity expands in Sept
(Xinhua) Updated: 2016-10-01 09:32

BEIJING - China's manufacturing Purchasing Managers' Index (PMI) came in at 50.4 in September, unchanged from August and staying in expansion for the second month in a row, according to data released Saturday by the National Bureau of Statistics.
http://www.chinadaily.com.cn/bizchina/2016-10/01/content_26956580.htm