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Domestic consumption surpassed investment to become the strongest driving force of the Chinese economy last year, indicating a new growth model has started forming as the country enters a new development era, the National Bureau of Statistics says.

Total consumption accounted for 51.2 percent of GDP growth last year, compared with 48.6 percent from investment. Net exports accounted for just 0.2 percent of the GDP growth, the bureau said.

Xie Hongguang, the deputy director, said: "It means that the consumption-driven growth model has started taking shape, and the economic structure has started improving."

Investment process to be simplified

Offshore investment and fundraising procedures for Chinese state-owned enterprises will soon be simplified, media reported on March 3. The People's Bank of China and related government bodies have submitted a proposal to streamline "going out" procedures for Chinese firms to the State Council, a central bank official told Securities News in Shenzhen. "Restrictions on overseas investment and financing by Chinese SOEs will be eased, and firms will not have to apply for permission to raise funds in foreign markets on a case-by-case basis," said Guo Jianwei, a deputy director of the central bank's renminbi policy department.

UnionPay transactions surge in holiday period

Interbank transactions through China UnionPay cards totaled 238 billion yuan ($38 billion; 34 billion euros) during the week-long Chinese New Year holiday, up 16 percent from the previous year. The number of overseas transactions via UnionPay cards rose nearly 50 percent in the period, indicating cardholders are using their UnionPay cards more frequently when traveling abroad, the bank card operator said. Transaction volumes rose sharply in overseas markets including South Korea and the US, where UnionPay cards are widely accepted and cardholders can enjoy various discounts.

Volvo clocks up record sales despite profit alert

Volvo Car Group, whose Chinese parent company's listed arm issued a profit warning in December, said earnings rose 17 percent after record sales last year. Operating profit rose to 2.25 billion kronor ($271 million; 243 million euros) from 1.92 billion kronor a year earlier, said the car maker, whose headquarters are in Gothenburg, Sweden. Revenue rose 6.3 percent to 130 billion kronor. "We expect continued growth this year in Europe as well as in China," said Hakan Samuelsson, the chief executive officer. "This year we'll see the US returning to growth after many challenging years."

Insurer reports big rise in profit

AIA Group Ltd, the third-largest Asia-based insurer by market value, posted a larger-than-expected 22 percent increase in full-year profit, led by business growth in China. Net income rose to $3.45 billion (3 billion euros), or 28.73 cents a share, in the 12 months to November, from $2.82 billion, or 23.5 cents a share, a year earlier, the Hong Kong-based insurer said. The value of new business, a measure of future profitability of new policies, rose 24 percent to $1.85 billion. Mark Tucker, the chief executive officer, is credited with boosting the number of agents, improving their productivity and shifting toward more profitable products since taking over months before AIA went public in October 2010.

Finance house assets rise 13.9 percent

The total assets of China's financial institutions amounted to 170 trillion yuan ($27 trillion) at the end of January, up 13.9 percent year-on-year. Their total liabilities rose 13.4 percent to 157.18 trillion yuan during the same period, the China Banking Regulatory Commission said. The assets of large State-owned commercial banks were worth 68.04 trillion yuan on Jan 31, accounting for 40 percent of the total. The commission said commercial banks recorded non-performing loans of 842.6 billion yuan by Dec 31 as the ratio of such loans reached 1.25 percent, 25 basis points higher than at the beginning of last year.

Access threshold rules for engine makers

The government is likely to publish access threshold rules for the internal combustion engine industry soon, according to a China Securities News report, citing a source with the Ministry of Industry and Information Technology. A previous draft of the rules stipulated that the fixed-asset investment of an internal combustion engine maker in its R&D unit should be no less than 100 million yuan ($15.9 million; 14.2 million euros), and that for fuel system, pressurization system, and after-treatment system suppliers should be no less than 50 million yuan. Moreover, every year enterprises should spend more than 3 percent of their gross sales revenue on developing their products and improving their processes.

UK post office links with Tmall Global

The Royal Mail in Britain has announced that it will join Tmall Global, operated by China's Alibaba Group Holdings Ltd, to boost its logistics services overseas. As Asia's largest business-to-consumer retail platform, Alibaba's Tmall Global connects 302 million online Chinese consumers with virtual store fronts and payment portals, Royal Mail said. Its Tmall online shop front would provide consumers with access to small and medium-sized UK retailers and exporters who want to do business in China. The postal service provider will handle the documentation for British firms and provide marketing, promotions and customer services in exchange for commission on the sale of products and revenue for shipping them through its Parcelforce express unit.

Telecom firms issue 5G collaboration plan

At the Mobile World Congress in Barcelona, the Telecom operator China Mobile and its counterparts from Japan and the Republic of Korea have jointly issued a statement on 5G collaboration. According to the statement, the three basic telecom operators will join in a study of the Asian market, exploration of 5G business, development of new vertical markets and identification of 5G key technologies and system.

Lenovo charts plan to challenge Xiaomi

Lenovo Group Ltd plans to challenge Xiaomi Corp in the world's largest smartphone market by focusing more on online sales after demand from Web shoppers brought a successful return of its Motorola brand to China. "We're going head to head" with Xiaomi, Liu Jun, president of Lenovo's mobile business group, said in an interview at the Mobile World Congress in Barcelona. "They have the advantage that they did a very good job in the online market. Lenovo's advantages are hardware, supply chain and innovation."

Orient Securities to raise $1.6b in IPO

Orient Securities Co, Citigroup Inc's Chinese partner in an investment-banking venture, is seeking $1.6 billion (1.4 billion euros) in what could be the country's largest initial public offering in more than three years. Orient Securities plans to sell as many as 1 billion shares in Shanghai, the brokerage said in offer documents dated March 3 posted on the website of the city's stock exchange. Proceeds from the sale will be used to expand businesses including wealth management, margin financing and investment banking, Orient said. Chinese brokerages are raising capital after last year's rally in equities pushed the amount of money clients borrowed for stock investment to record levels.

China Daily

(China Daily European Weekly 03/06/2015 page18)