What's news

Mainland stocks decline most in week

Chinese mainland's stocks fell, dragging the benchmark index down by the most in a week, on concern that proposed rules for banks may curb credit growth and speculation intensified that the government won't loosen property restrictions.

The Shanghai Composite Index fell 26 points, or 1.2 percent, to 2,201.35 at the close, the biggest drop since June 25.

"Investors are concerned about company earnings in the second quarter and there are expectations of further cuts in profit forecasts," said Chen Liqiu, a strategist at Jianghai Securities Co in Shanghai. "They are expecting property curbs to ease and it turns out it may be quite the opposite, so this is dragging on sentiment."

The Shanghai gauge has fallen 1.1 percent this month, adding to a June plunge of 6.2 percent, on concern the government isn't doing enough to stem an economic slowdown.

Veolia acquires majority stake in environmental firm

Veolia Environnement SA, the world's biggest water company, acquired a majority stake in a Chinese environmental services firm that won a 25-year contract to process hazardous waste in Hunan province. Revenue over the period of the contract is expected to be about 320 million euros ($398 million), according to a statement on Thursday from a unit of the Paris-based waste and water utility.

China's power subsidies 'negative for aluminum'

China's power subsidies for domestic aluminum producers have "bearish implications for fundamentals and prices", Barclays Plc said.

"The majority of global production is making a loss even when accounting for high physical premiums, which help to offset lower exchange prices," Gayle Berry, an analyst at the bank, said in a report on Thursday. The subsidies "disrupt efficient market mechanisms resulting in distortions and dislocations with bearish implications for fundamentals and prices".

Alibaba: Former head of group-buying site detained

Alibaba Group Holding Ltd, China's biggest e-commerce company, said a former general manager of its group-buying website was detained by the police on suspicion of accepting bribes.

The official of the Juhuasuan website was removed from his position in March for misconduct, according to a statement posted on Alibaba's e-commerce website Taobao.com on Thursday.

Taobao, China's biggest online shopping website with 500 million user accounts, set up a department in 2010 to handle complaints about the behavior of employees. In May, Alibaba said police arrested some workers at the Internet shopping site after a "small" number were accused of accepting improper benefits from vendors.

"We are transparently communicating with customers, vendors and third parties, as well as employees, when we find a situation involving misconduct inside the company," John Spelich, a Hong Kong-based spokesman for Alibaba, said by e-mail on Thursday.

Soros-backed MediaV expects 80 percent sales

MediaV Holding Co, a Chinese online advertising company backed by billionaire George Soros, expects sales to jump as much as 80 percent this year as a slowing economy prompts more customers to use its services to cut costs.

Revenue may rise to about 900 million yuan ($142 million) this year, Willy Yang, chief executive officer at Shanghai-based MediaV, said in a phone interview on Wednesday. Slowing industry growth this year is favoring the part of MediaV's business that helps smaller advertisers with limited budgets, he said.

MediaV buys advertising spots from online portals including those of Sina Corp, Sohu.com Inc and Tencent Holdings Ltd, and resells them to clients to allow multiple companies to share the same space.

Stricter rules may curb credit growth

China plans to retain a cap that allows lenders to lend out amounts equal to no more than 75 percent of their deposits and is considering draft rules that would further constrain credit growth, a senior official at the banking regulator said.

The regulations may be more strict than the loan-to-deposit ratios now set under the country's commercial banking laws, the China Banking Regulatory Commission official said, asking not to be named. The proposed rules, which are being drafted to put the international Basel III capital guidelines into effect, haven't been submitted to the State Council yet, the person said.

Mongolia bets on China coal imports for rails

Mongolian Mining Corp is betting China can supply enough demand to support the construction of an $800 million railway that will double Mongolia's ability to export products to the country that counts Mongolia as its biggest coal supplier.

Adding transportation links between the countries "will improve the position of Mongolia as the leading coking coal supplier to China," Battsengel Gotov, chief executive officer of MMC, told reporters in the Mongolian capital of Ulan Bator.

Beige book shows increase not reflected in official data

China's official statistics may be understating how quickly the world's second-biggest economy grew in the past quarter, according to independent data appearing in a new private survey modeled on the US Federal Reserve's Beige Book.

The China Beige Book, compiled from interviews with 2,000 company executives and bankers, found retail sales, property sales and manufacturing in China picked up pace in the second quarter while shortages of unskilled labor did not abate. CBB International LLC, the New York-based researcher that conducted the survey, provided a summary of that information to Bloomberg News on Wednesday.

China may become largest market for New Zealand

New Zealand Prime Minister John Key said China may eventually surpass Australia to become his country's biggest market for exports as Asian economies drive global economic growth while Europe struggles.

New Zealand's free-trade agreement with China has been "hugely successful" since it was signed in 2008, Key said in response to a question posed after giving a speech in Sydney on Thursday.

"We see huge opportunities in China," he said. "We think it's worked really well for us."

New Zealand's exports to China are increasing four times faster than its shipments to Australia.

Yuan drops most in five weeks on weaker fixing

The yuan declined the most in five weeks after policy makers weakened the daily fixing amid concern Europe's debt crisis is slowing global growth, prompting some analysts to cut forecasts for appreciation.

The central bank lowered the yuan's reference rate by 0.11 percentage points, the most since June 25, to 6.3193 against the greenback. The Dollar Index climbed the most in two weeks as reports showed services and manufacturing in the euro area shrank in June for a fifth month.

The People's Bank of China will probably curb currency gains as the economy slows, said Andy Ji, a Singapore-based strategist at Commonwealth Bank of Australia, the most-accurate forecaster of the yuan in the past six quarters.

China commodity prices to have global impact

Commodity markets in China, the largest user of copper and iron ore, will increasingly set global benchmarks as financial markets are opened to overseas investors, Australia & New Zealand Banking Group Ltd said.

"Greater access will make domestically generated prices more influential," the bank said in a report as it introduced a commodity index based on consumption patterns in China. Having markets that are more open "will accelerate the shift from a follower of international prices toward setting global benchmarks", ANZ said.

US jobless aid applications fall to lowest since mid-May

The number of people seeking unemployment aid last week fell to its lowest level since mid-May, suggesting layoffs are easing and hiring could pick up.

The Labor Department said Thursday that weekly unemployment benefit applications dropped by 14,000 to a seasonally adjusted 374,000, the fewest since the week of May 19.

The four-week average, which smoothes out weekly fluctuations, dipped by 1,500 to 385,750.

Weekly benefit applications serve as a measure of the pace of layoffs. When applications consistently fall below 375,000, it generally suggests hiring is strong enough to reduce the unemployment rate.

Lenovo to invest $30m to build unit in Brazil

Lenovo Group Ltd plans to invest $30 million to build a computer factory and a distribution center in Itu, in the Brazilian state of Sao Paulo, the company said on Thursday in an e-mailed statement.

The company will have as many as 700 employees at the unit in two years, when it's expected to reach its maximum capacity, Lenovo said.

GM China sales up on Buick, minivan demand

General Motors Co, the world's biggest automaker, boosted its vehicle sales in China in the first half of the year by 11 percent to hit a record high point, driven by demand for the Buick brand and Wuling minivans.

In the first six months, 1.42 million cars and minivans were delivered, according to a statement on the automaker's website on Wednesday. The number of June deliveries increased by 10 percent to reach 213,495 units, the company said.

GM is expecting its sales to continue increasing in China as sluggish deliveries in Europe cloud its outlook for global sales. The China Association of Automobile Manufacturers said last month that clear signs now indicate the demand for vehicles in the world's largest vehicle market is becoming more stable.

Aquatech wins wastewater recycling system contract

Aquatech International Corp, a US water purification technology provider, won a contract to install a wastewater recycling system for a concentrated brine treatment plant in China. Terms for the project at the Chinacoal Tuke fertilizer facility in Ordos, in the Inner Mongolia autonomous region, weren't disclosed in Thursday's company statement.

China Daily - Agencies

(China Daily 07/06/2012 page14)