What's news

Train merger gets green light from shareholders

Shareholders of CSR Corp and CNR Corp approved a proposed merger of the two companies on March 9, paving the way for the establishment of the world's largest maker of rolling stock with annual revenue of more than $30 billion.

All assets, liabilities, certifications, staff, contracts and other rights and obligations of the two companies will go to the new merged entity, both CSR and CNR said in separate announcements.

CNR holds 51.83 percent of its listed company, while HKSCC Nominees Ltd holds 17.39 percent and an investment subsidiary of the parent group holds 2.82 percent. The rest is held by parties including China's National Social Security Fund and China Construction Bank Corp.

Yuan-based global payment system ready

The highly anticipated China International Payment System to facilitate international usage of the renminbi is ready and may be launched as early as September or October, three sources with direct knowledge of the matter told Reuters. The system, which would be a worldwide payments superhighway for the renminbi will replace a patchwork of networks and allow hassle-free renminbi transactions, greatly boosting the internationalization of the Chinese currency. "The CIPS is ready now and China has selected 20 banks to do the testing, among which 13 banks are Chinese banks and the rest are subsidiaries of foreign banks," said a senior banking source involved in the matter.

Alibaba's funding channels for UK firms

Alibaba Group Holding Ltd has enlisted two United Kingdom-based startups to provide financing for small businesses looking to buy from Chinese suppliers, aiming to help cash-strapped firms access the world's largest economy. The partnerships with Iwoca Ltd and Ezbob Ltd announced by Alibaba on March 11 are a first for the Chinese company in Europe, and are intended to provide short-term working capital to businesses that otherwise would have trouble securing funds from banks.

Huawei, Intel expand computing alliance

Huawei Technologies Co Ltd and Intel Corp are expanding an existing alliance to provide cloud computing to global telecom carriers, even as several United States-based tech firms court Chinese companies to gain access to the tough mainland market.

Internet firms urged to develop electric cars

China will encourage Internet companies such as Leshi Internet Information & Technology Corp to develop electric vehicles, said Miao Wei, minister of Industry and Information Technology, because they have the potential to create a new manufacturing model for the auto industry. "We will encourage them because they can completely outsource their production," Miao said on March 5 in Beijing.

Tesla Motors to cut employees in China

High-end electric vehicle maker Tesla Motors Inc said on March 9 it is cutting jobs in China under a restructuring plan launched earlier this year, after missing a sales target in the world's biggest car market. Tesla declined to specify how many jobs would be cut, and did not comment on a report in the Economic Observer last week that it was eliminating 30 percent of its staff or about 180 of its 600 employees in China. Some positions are being eliminated while others are added, but overall headcount has gone down in a restructuring drive that was announced earlier this year, Tesla spokesman Gary Tao said.

Industrial Bank may acquire brokerage firm

Industrial Bank Co Ltd is planning to acquire brokerage Huafu Securities Co, people familiar with the matter said, as the securities regulator considers allowing lenders in the industry. Industrial Bank has submitted its proposal to the State Council, sources said, asking not to be identified as they are not authorized to speak publicly. Huafu's Communist Party committee has reportedly moved its office into the lender's headquarters in Fuzhou, capital of Fujian province.

Free trade agreement with Georgia on cards

Georgia and China have agreed to set up a joint working group to study the feasibility of a free trade agreement, according to China's Ministry of Commerce on March 11. In addition to a joint statement on the FTA signed on March 10 by the two countries' commerce and economy departments in Beijing, a memorandum of understanding on strengthening cooperation for the Silk Road Economic Belt initiative was signed. Commerce Minister Gao Hucheng said the move was of "strategic importance" for economic and investment cooperation between China and the Eurasian area.

Interest-rate swaps climb to six-month high

Interest-rate swaps rose to a six-month high in China on March 9 as a bigger-than-expected jump in exports reduced prospects for monetary easing. Overseas sales surged 48 percent from a year earlier in February, exceeding the median estimate of 14 percent, according to a Bloomberg survey. Including January figures, shipments rose 15 percent, outpacing the 6-percent trade growth mark the government is targeting for 2015. The central bank cut its benchmark interest rates on March 1 for the second time in three months and in February relaxed reserve requirements for all banks for the first time since 2012.

UBS names new head of China operations

Switzerland-based UBS Group AG announced that Karen Chen has taken over as president of UBS (China) Ltd and will be nominated as executive director in addition to her role as head of wealth management. Chen joined UBS (China) in 2014 from Commonwealth Bank of Australia where she was CEO for its China division. She has also held senior positions across various functions at Standard Chartered Bank.

Auto sales surge for GM and its Chinese partners

Auto sales of General Motors Co and its joint ventures in China reached a record 261,072 units in February, up 1.3 percent year-on-year. Buick sales fell 0.1 percent from the previous year to 59,088 units in February; Chevrolet sales climbed 2.5 percent to 47,521 units; Cadillac sales hit a record 5,959, up 36.1 percent; and Baojun sales rose 391.6 percent to 27,542 units, the Detroit-based automaker said. In February, Shanghai GM's domestic sales were up 2.4 percent year-on-year to 112,568 units, it said.

Hongyan nuclear plant gets green light

Units five and six of the Hongyan River nuclear plant in Liaoning province received official approval from the National Development and Reform Commission on March 10, China General Nuclear Power Corp, the project's operator, said in a news release. "After that, the National Nuclear Safety Administration will issue a construction permit. At that time, the Hongyan River program can start construction," the statement said. It marks the first time in four years that a new nuclear project has been approved, following the country's suspension of new nuclear projects due to Japan's Fukushima nuclear disaster in 2011.

Money market funds post major growth in assets

Total assets for money market funds surged six-fold in the 18 months through December, rising to 2.2 trillion yuan ($351.3 billion), according to Fitch Ratings. The expansion was driven mainly by retail investments in e-commerce-related funds, Fitch analysts Li Huang, Charlotte Quiniou and Alastair Sewel wrote in a report. Retail investors accounted for more than 70 percent by the end of last year's second half, the report said, adding that the five largest asset managers held 51 percent of total assets. Yu'ebao, managed by Tianhong Asset Management Co and sold online by Alibaba Group Holding Ltd, was the largest with 26 percent.

China Daily

(China Daily European Weekly 03/13/2015 page18)