版权所有 - 中国日报�(ChinaDaily) China Daily <![CDATA[Trade talks journey arduous, but can be done step by step]]> http://www.chinadaily.com.cn/kindle/2019-07/19/content_37493400.htm

Responding to Washington's latest threat to impose additional tariffs on another $325 billion of Chinese exports, the Chinese Foreign Ministry called on Washington to show "determination and perseverance" and work with Beijing to find a way out of the current impasse.

Washington says the two sides still have a long way to go before they can conclude a trade deal, but as the Foreign Ministry spokesperson said, "A journey of a thousand miles begins with a single step."

The question that the two sides now have to answer is what that first step is to be to get the stalled trade negotiations moving again.

In recent remarks on the trade talks, US officials claim Washington is not in a hurry, and a quality deal is all that matters.

Yet their remarks over the lack of progress in restarting the talks, and the subsequent threats betray Washington's anxiety that time is a luxury it does not possess and its eagerness to get a deal over the line. A sign that, instead of intimidating Beijing, the "maximum pressure" Washington has been employing is biting itself, despite all claims to the contrary.

Considering their dramatically divergent assessments of bilateral trade and what has left them at loggerheads, it is unrealistic to anticipate that a deal that is acceptable to both sides will be conjured up in a very short period of time, no matter how much it might have appeared that a deal was within reach. It will take time to reach complete agreement on the outstanding issues, as Beijing and Washington still have divergent ideas of what would constitute a fair and acceptable deal.

Patiently addressing the remaining sticking points is the only way to ensure the talks are constructive and the only viable path to producing a negotiated resolution to their trade conflict.

If the threatened tariffs are imposed, and the impasse drags on, Washington will sooner or later appreciate what Beijing means when it says it has "systemic advantages" on its side.

Washington always talks a good game, but it's not going to be fooled by its own words. It's well aware that it is playing a game where either both will be winners or both will be losers.

Thus, despite all the verbal bravado, it remains in favor of a negotiated outcome.

Since both parties want to resume the negotiations and don't really want to cause negative impacts for the other, they should be able to walk back a bit and find a point where they can agree to restart their talks and proceed step by step from there.

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2019-07-19 07:58:19
<![CDATA[No condoning racism whatever the excuse]]> http://www.chinadaily.com.cn/kindle/2019-07/19/content_37493399.htm

Things have turned ugly for Shandong University's foreign students' "buddy program".

While the university has apologized for the "negative effect" caused by its choice of words such as "making friends with foreigners of the opposite sex" on the application form to hire Chinese students for the program - a universal practice which aims to help a student better adapt to the new environment on a foreign campus - a stream of racist vitriol has continued to ferment online, targeting not only the university, but foreigners at large as well. Some have called on the authority to take immediate action to block the entry of "foreign garbage" into the country.

Racist rants against foreigners are not uncommon, usually reviling them for having sex with easily duped innocent young Chinese women, using drugs and spreading AIDS.

The usual racist tropes. Negative news about foreigners, such as the recent incident in which seven foreign teachers and nine foreign students at a language school in Jiangsu province were busted for drugs, only serves to strengthen the ingrained prejudice against what some see as "foreign losers" in China.

To be fair, with Han Chinese accounting for more than 90 percent of the population, China has never exhibited the extreme racism that is evident in some Western countries.

Nevertheless, there should be zero tolerance toward racism and discrimination in any form, and it should be stamped down on whenever it raises its ugly head, especially with the increasing exchanges between China and the rest of the world.

Rather than shun the topic which has long been a taboo in China, we should tackle racist slurs head-on, using facts to refute rumors related to foreigners and even legal weapons to deter hate speeches and acts. Of the more than 140 million foreigners who entered China last year, the number of those who committed crimes is negligible.

That's why the country's immigration department is streamlining procedures to make it easier for foreigners to get long-term visas and even permanent residence permits, so as to attract more foreign talents to the country.

As China opens wider and becomes a more popular destination for foreigners, all Chinese need to be more confident when dealing with foreigners, not looking up to them, nor looking down on them, instead treating them as equals, no matter where they come from.

Meanwhile, as the heated discussions continue over how Shandong University and other Chinese institutions of higher learning offer preferential treatment, including high scholarships to foreign students - which has understandably sparked resentment among their domestic peers - the education authorities must convincingly justify the practice.

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2019-07-19 07:58:19
<![CDATA[IMF must continue to reform no matter who is at the helm]]> http://www.chinadaily.com.cn/kindle/2019-07/19/content_37493398.htm THE EXECUTIVE BOARD OF THE INTERNATIONAL MONETARY FUND announced on Tuesday that it has accepted the resignation of Managing Director and Chairwoman Christine Lagarde, who is to take over as head of the European Central Bank, and it has initiated the procedure of looking for a successor. China Radio International comments:

The IMF is at a critical moment in the reform of its members' quotas and voting power. No matter who succeeds Lagarde, it is important the IMF continue to enhance the voice of emerging markets and developing countries, so that it can strengthen its legitimacy and effectiveness.

Given their fast growth and contribution to global growth - half of the world's gross domestic product is generated by emerging and developing economies, and they also contribute 80 percent of global economic growth - they should have a greater quota and voting power in the organization so that it can better fulfill its duties.

The IMF is a major heritage of the Bretton Woods System that is committed to promoting global currency cooperation, providing funds and assistance, and maintaining international financial stability.

Since she became leader of the organization in 2011, Lagarde has made important efforts to push the envelope of badly needed reform. In 2016, the 2010 IMF quota and governance reform plan, which had been resisted by the United States since day one, was finally implemented, the emerging markets and developing countries combined gained a 6 percent quota increase and voting power, and two positions on the executive board, and all the executive directors are elected.

Still there is a long way to go, as the developed countries still dominate the IMF, and the US still has veto power on important decisions.

In the future, whoever is at the helm of the IMF, it will be seen that the rising proportion of emerging market countries and developing countries in the global economy is an irresistible trend, so it is necessary to continue to strengthen the voice of these countries in the IMF.

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2019-07-19 07:58:19
<![CDATA[Spotting kids drowning in video games]]> http://www.chinadaily.com.cn/kindle/2019-07/19/content_37493397.htm THE NATIONAL HEALTH COMMISSION released an expert consensus on curbing and treating gaming disorder, which repeated the World Health Organization's decision this May to list it as a new disease. China Daily writer Zhang Zhouxiang comments:

According to the WHO's definition, gaming disorder is the uncontrollable and persistent playing of video and computer games. Under the WHO definition, gaming disorder is a pattern of behaviour characterized by impaired control over gaming, increasing priority given to gaming over other activities to the extent that it takes precedence over other interests and daily activities, and the continuation or escalation of the pattern despite negative consequences.

When someone becomes "drowned" in video games, as the Chinese describe it, he/she can give up almost everything else, including sleeping, eating and drinking.

A browse through past reports shows that from 2006 to now, every year there are people who have died after playing video games for a whole night. In November 2017, even a 20-year-old game anchor who hosted video games online died after playing for more than 18 hours a day.

It is fair to say gaming disorder is a problem that must be addressed, especially since the majority of video game players are youngsters who are more susceptible to gaming disorder.

However, it must be stressed that video games per se are not the problem. Addiction to them is.

China is home to the world's biggest internet population with more than 800 million users, and the video gaming industry is estimated to be worth $30 billion a year in revenue. That means a lot of gamers. But not all of them have gaming disorder.

Instead of being an official move against the gaming sector, as some have claimed, the expert consensus this time has hit the point. By clearly defining gaming disorder and setting clear, unambiguous standards, it helps to distinguish ordinary video game players from heavy addicts. This will lessen the concerns of parents and enable those children who do have gaming disorder to receive help.

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2019-07-19 07:58:19
<![CDATA[Only the courts can judge merits of a grievance]]> http://www.chinadaily.com.cn/kindle/2019-07/19/content_37493396.htm Editor's note: Zhang Koukou, who was given the death penalty for intentional homicide after killing three neighbors whom he held responsible for the death of his mother, was executed on Wednesday. China Youth Daily comments:

Zhang was 13 in 1996 when he witnessed the death of his mother after she was beaten on the head with a stick supposedly by Wang Zhengjun, one of the sons of Wang Zixin. Although it was claimed that he took the blame instead of his brother Wang Xiaojun, as he was only 17 at the time and therefore would be tried as a minor. He was given a seven-year prison sentence for deliberate injuring Zhang's mother.

The Supreme People's Court, which upheld Zhang's death sentence said Zhang committed an "extremely serious crime" and the death sentence reflects the principle of "matching the punishment to the crime".

Zhang was sentenced to death at his first trial, and the sentence was upheld after he appealed and at the subsequent mandatory death penalty review procedures. His lawyer participated in the whole process and provided necessary legal services for Zhang.

Before his execution, the Hanzhong court arranged for Zhang to meet with his family members according to the law, and during the execution, the procuratorate assigned staff to supervise his execution according to the law.

Zhang's execution serves as a lesson in legal education for the public. In a modern and civilized society under the rule of law, people should settle disputes with others through the courts. The era of bloody revenge is gone. Even if Zhang was dissatisfied with the trial of Wang Zixin, that gives him no excuse to do what judges are supposed to do.

Believing in, respecting and abiding by the law is the only legal way to solve problems and conflicts with others. Anyone turning a blind eye to the law and taking justice into their own hands will inevitably be punished by the law.

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2019-07-19 07:58:19
<![CDATA[Hot words: Regulation on improving the business environment]]> http://www.chinadaily.com.cn/kindle/2019-07/19/content_37493395.htm 优化营商环境条例 (yōuhuà yíngshāng huánjìng tiáolì)

The National Development and Reform Commission, the country's top economic planner, is soliciting public opinions till Aug 12 on measures to improve the business environment.

This is the country's first national level document on improving the business environment, and it includes the market environment, business services, supervision and law enforcement as well as legal guarantees.

China has made great efforts to improve its business environment in recent years. China's business environment ranking in the World Bank's global business environment report for 2019 was 32, up from 78 in the 2018 report.

According to the NDRC, the new national regulation not only focuses on the prominent problems that exist and provides institutional solutions, it also learns from international experiences and promotes the successful domestic practice to reform the business environment in various fields.

It aims to purify the market environment and improve government services, in order to safeguard the rights and interests of market participants and enhance their confidence and sense of gain.

The document also deepens the reform of separating permits from business licenses, promotes Internet Plus supervision and implements full coverage supervision in special fields including vaccines, medicines, special equipment and dangerous chemicals.

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2019-07-19 07:58:19
<![CDATA[What lies behind the success of AIIB]]> http://www.chinadaily.com.cn/kindle/2019-07/19/content_37493394.htm The Asian Infrastructure Investment Bank's board of governors approved the applications of three African countries - Benin, Djibouti and Rwanda - at its fourth annual meeting in Luxembourg on July 13, taking the total number of members to 100. That the AIIB's membership has reached the century mark reflects the high degree of global recognition and trust it has earned as a multilateral development bank in just three and a half years.

Meticulous planning, constructive efforts and visionary leadership are needed to make a development bank successful in today's turbulent global financial market. As a China-proposed multilateral development bank, the AIIB has been playing a pioneering role in innovative development by overcoming a series of challenges. And it has achieved success and global trust because of its strict self-discipline and painstaking pursuit of excellence.

First, China's contribution and leadership are fundamental to the AIIB's success. Fifty-seven founding members from Asia, Europe, Africa, Oceania and Latin America endorsed China's initiative to establish the AIIB, as it is designed to play a complementary role to the World Bank and the Asian Development Bank, as well as facilitate the development of developing countries.

As the largest shareholder of the AIIB and host of the bank's headquarters, China played the leading role in implementing the multilateral agreement, capitalizing the subscription share and improving the governance structure to ensure the bank functions efficiently.

Second, the emphasis on infrastructure and connectivity has provided the AIIB with a huge market and a bright future, which is important because Asia, which is the development focus of the bank, has a population of 4 billion and diverse economic and social dynamics, and requires massive funds to improve infrastructure and interconnectivity.

According to different outlook reports by international organizations such as the United Nations, the World Bank and the ADB, the investments from existing development banks - the World Bank and the ADB included - are not enough to meet the demand for infrastructure. And the AIIB could narrow this investment gap.

At its first official ceremony, the AIIB made it clear its main aim is to finance infrastructure construction to promote sustainable development and improve connectivity primarily in Asia. With this aim in mind, the AIIB explored its potential market while avoiding any conflict of interests with the development banks already active in the region, and building cooperation and collaboration with the existing development banks to promote inclusive growth.

Since January 2016, the AIIB has provided $8.5 billion in loans to 45 projects in 18 member countries in East, Southeast, South and Central Asia, the Middle East and Africa, especially in transportation, renewable energy, telecommunications, and urban development. Those projects have improved (or are expected to improve) productivity and raised the living standards of people in developing countries, and thus unleashed their economic potential.

Third, the AIIB's adherence to multilateralism and openness has helped build comprehensive partnerships both with developing and developed economies. Besides, the AIIB has set the bar at par with other multilateral development institutions and forged a good working relationship with them including the World Bank, ADB and the European Bank for Reconstruction and Development.

The governance structure and decision-making process of the AIIB are based on multilateralism. And despite China theoretically having a veto on significant issues by virtue of being the largest (about 30 percent) shareholder, it has never used it even once - and would never use it without reason.

China has helped establish the AIIB to facilitate global development and regional connectivity. And through the AIIB, China has been promoting constructive reforms in the global financial system and development institutions, without having any intention to replace them.

And fourth, the AIIB blueprint focuses on cautiously but professionally advancing development in accordance with international standards, particularly because risk-aversion is the first rule of international finance and it would be irresponsible to carry out random "social experiments" in global development.

The AIIB has prudently weighed the different and diverse requests from both developed and developing member economies before taking any decisions so that the future of the projects are not jeopardized.

More important, the AIIB has improved its operations and strengthened its governance capability in accordance with global norms, built an institutional culture, and formed dozens of professional teams. In the process, the bank has accumulated abundant experiences in investing in and maintaining sustainable infrastructure facilities. No wonder it has received the highest credit ratings from the world's three biggest rating agencies - Standard& Poor's, Moody's and Fitch.

The author is an associate professor at the School of Government, and director of the Center for BRICS Cooperation Studies at Beijing Normal University. The views don't necessarily represent those of China Daily.

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2019-07-19 07:58:19
<![CDATA[Rice turning a blind eye to racial divide in Washington]]> http://www.chinadaily.com.cn/kindle/2019-07/19/content_37493392.htm Former US national security advisor Susan Rice was in the spotlight earlier this week for calling Chinese diplomat Zhao Lijian a "racist" after the latter described on Twitter the racial divide in Washington. Rice's charge, however, shows her disconnect with reality.

Rice, born and still living in Washington, should know well the serious racial issues haunting the United States capital, although unlike most African-Americans there, she grew up in a well-to-do family and neighborhood and attended the National Cathedral School, an elite private girls' school. She later studied at Stanford and Oxford, where she obtained her PhD and has since had a successful career.

But her success story is not representative of the African-American population either in Washington or other US cities. The fact that Barack Obama, an African-American, was elected US president, something truly worth celebrating, does not mean the US is free of racial problems.

On the contrary, a Gallup poll in February showed that 59 percent of blacks describe current black-white relations as bad, up from 33 percent in 2013. And according to a Pew survey in April, more than 40 percent of the respondents said the US hasn't made enough progress toward racial equality. Plus, there is skepticism, especially among black people, that blacks will ever enjoy the same rights as whites.

If these facts are not enough, Rice, who was a senior fellow at the Brookings Institution from 2002 to 2009, should read the research reports that some of her former colleagues worked on.

A report in December 2017 by Brookings scholar Jenny Schuetz said metropolitan areas in the US are racially segregated. As for Washington, the report said the divide is east-west, with mostly blacks living on the eastern side of the District of Columbia and the adjacent suburb of Prince George's County, Maryland.

A 2015 report by Brookings scholars Stuart Butler and Jonathan Grabinsky stated that while racial segregation has been declining over the last 50 years in the larger metropolitan areas, there are exceptions to this rule, one of which is Washington. It said "there remains a stark, persistent, white-black racial divide" from the rate of poverty to the level of education.

Rice can also compare notes with her current colleagues, such as Derek Hyra, an associate professor at the American University, where Rice is now a distinguished visiting research fellow in its School of International Service. I cherish my chat with Hyra on the racial issue two years ago in Washington and learned a lot from his book, Race, Class, and Politics in the Cappuccino City.

Rice may call me biased if I share my observations on the racial issue after living and working in Washington for five years. But fellow journalists have covered extensively the racial segregation in Washington.

Aaron Wiener, a veteran reporter at the Washington City Paper, described Washington as the sixth most segregated city. "DC remains wildly segregated, with an overwhelming white majority west of Rock Creek Park and an overwhelming black majority east of the Anacostia River ... DC's racial divide is evident to anyone who's spent time in the city. It shows up in every facet of District life, including voting patterns, home purchase, and school choice," Wiener wrote in an article.

Senator Bernie Sanders, during his campaign for the 2020 US presidential election, made it a priority to repair the US public education system and end school segregation and racial discrimination against students.

Rice would do better to devote time to such campaigns and fix the racial problems rather than distracting public attention by making a fuss over Zhao's tweet.

The author is chief of China Daily EU Bureau based in Brussels.

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2019-07-19 07:58:19
<![CDATA[Tailor-made menswear gets a makeover]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492931.htm Simplified services allow customers to upload body measurements and place orders using their mobile phones

The office of startup Match U is located on Shanghai's Bund, which is lined with some of the world's most prestigious banks and financial institutions, and sits in an area that has nurtured some of China's finest bespoke tailors.

The founders of Match U are trying to leverage China's decades of experience in apparel manufacturing and leading artificial intelligence technology to create a new approach to tailoring.

"Match U offers tailor-made shirts and menswear, but the term 'tailor made' has been redefined," said Wei Xing, co-founder of the company established in 2016.

At a cost of 199 yuan ($29) to 399 yuan, consumers can get a made-to-measure cotton shirt after uploading a few key body measurements on their phones. Aside from the conventional options of small, medium and large, the style choices offered include collars, cuffs, waists and front plackets. It takes one to two weeks for manufacturing and delivery after the order is placed over the phone.

"Traditional tailor-made is strongly associated with luxury. Customers are paying as much for the products as for the meticulous, personal services and the exclusive, well-decorated spaces where such services are provided. We have removed all the unnecessary parts and are targeting office workers and fresh graduates," said Wei.

Together with four co-founders, the Shanghai Jiao Tong University graduate made several entrepreneurial forays before settling on "accessible menswear tailoring".

"We have spotted a gap between the supply and demand. On one hand, manufacturers and brands are struggling to keep consumers in an increasingly competitive market. On the other hand, the young consumers are always looking to find the next perfect shirt or dress," said Wei.

Today, the company is in partnership with a dozen apparel factories across the country, which help produce not only shirts, but also jeans and jackets for the company's 1.5 million members.

Sales this year are expected to reach 800 million yuan, four times that of 2018.

"I don't think we are in competition with any particular brand. Instead, we are creating a new category," said Wei.

But she admitted that the pricing of their offerings has put them in the same field as fast fashion brands like Uniqlo and China's homegrown menswear giant Heilan Home.

"The market for menswear in China has been underestimated for a long time. It's not like men don't need to look smart or have the financial capability to spend, but it's in our traditional mindset that there is not a market for them. If there is any difference, it is that they are less willing to spend time on selecting styles and brands, which means higher brand loyalty," said Wei.

Consultancy firm Euromonitor International estimated that China's menswear market was worth over 572 billion yuan in 2018, up 7 percent year-on-year. While it still accounts for about one-third of the total apparel market, it is projected to enjoy a higher-than-average growth rate and surpass 612 billion yuan by 2023.

Everbright Securities estimated that China's tailoring market would be worth 200 billion yuan by 2020, almost twice that of 2016, and about 80 percent of the business would come from the mid-price sector.

In Beijing, a similar team has its eye on the market too.

Online business, Smart Shirt, which was launched in May, was introduced to China by four young Chinese people with similar academic background in aviation to the founders of Australian brand Decent Shirt.

After managing the Chinese factories for the Australian brand, the founders decided to bring the concept of C2M(custom to manufacture) to China, targeting those aged 20 to 30 in bigger cities.

In the first month following its launch on a WeChat mini program, it sold hundreds of shirts, which was better than expected as the small team spent nothing on advertising, according to Hu Shizhe, a 26-year-old co-founder of the company.

Looking ahead, Hu told China Daily that they want to become the country's best online tailor-made brand for men.

"Being the best does not necessarily mean being the largest, or the richest, but a model that is considered the prototype in the industry, which latecomers want to follow, and consumers aspire to," said Hu.

For Match U, the future plan is more concrete: to combine offline and online markets by working with conglomerates like Wanda and Suning.

The company has developed an AI body-measuring cabin, which consumers can walk into, turn around and have their measurements taken with the precision of a Savile Row tailor within minutes. The machines, which cost 100,000 yuan each, will be placed in cinema halls and shopping malls to help attract new customers for the business.

Tang Xiaofan contributed to the story.

 

Staff of startup Match U work at the company. Gao Erqiang / China Daily

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2019-07-18 07:25:45
<![CDATA[Suitsupply hoping to sustain double-digit growth in China]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492930.htm Dutch entrepreneur Fokke de Jong has built his menswear brand into a $400 million fashion empire and won over a galaxy of celebrities including Bruno Mars and Leonardo DiCaprio over the past two decades.

Looking ahead, however, the 46-year-old founder and CEO of Suitsupply is pinning his hopes on sustaining, if not accelerating, the company's double-digit growth in China, a market where men have been said to be "unsuitable for suits".

"The reason why Chinese men don't look good in suits is not because of their bodies, but because there hasn't been enough attention paid to creating a good fit," said De Jong when he visited China to discuss the opening of a number of new stores in the coming years.

Since entering China in 2015, the Amsterdam-based company has opened six stores in the country, including those in Shanghai, Beijing and most recently Shenzhen. Globally, it has expanded its presence with 110 outlets, including ones in Paris, New York, and one near Savile Row in London.

"In general, we have a strategy in China to add more. We believe in a growth path that is relative. It's harder to grow from zero to 10 stores than from 10 to 100," said De Jong, adding that his China team is looking at 15 to 20 cities in the country for potential locations.

The company plans to open another four stores in China by the end of this year, and then double its presence in 2020.

While the United States is now its largest single-country market with 45 stores, De Jong believes it's just a matter of time before China surpasses the US in terms of sales.

"China is now one of our top five markets. Chinese consumers have the style consciousness of the French and Italians, and the spending power of those in the US," said De Jong.

In 2018, sales from the company's Chinese stores increased by 35 percent year-on-year, 15 percentage points higher than the average annual growth rate of China's domestic luxury market estimated by consultancy firm Bain& Co.

"Maybe 10 years ago we would have found it extremely difficult to sell a suit in China, where everything was about logos and brands. But right now the timing for us is perfect," said De Jong.

While he argued that there is no one-to-one competition in today's world of luxury and fashion, the majority of Suitsupply's clients are coming from higher-end brands, which have long dominated the menswear market.

Essentially, the strategy of the company is to compete in the mid-market on price, but in the high-end market on quality.

Suitsupply claims to be able to provide suits of the same quality as those labeled Armani or Zegna, yet with a price tag that is less than one-fifth of the big names.

The claim is backed by a test done by The Wall Street Journal, in which a panel of judges selected by the US publication put the Dutch brand's $600 suit in joint first-place with a $3,600 one from Armani.

De Jong said he reduced costs by cutting out intermediaries in the production process, locating stores in cheaper "destination like" places, and spending as little as possible on marketing and advertising.

As one of the first in the luxury sector to adapt to the high-street model of vertical integration, Suitsupply controls everything from cloth weaving to final sales. It sources the majority of its fabrics from Italian textile mills, which also supply to the likes of Chanel and Burberry; has signed exclusive partnerships with a number of Chinese tailors to produce the suits; and opens and operates all of its retail outlets.

"We decided to produce in China not because we want to produce something cheaper, but because it's the only place in the world that can make the products the way we want. China has people who are eager to learn, great quality of work, and the world's best manufacturing," said De Jong.

The company's first brick-and-mortar retail space was situated at a highway exit between Amsterdam and Rotterdam, where customers could pick up and try the suits after purchasing online. This model continues despite most customers now buying directly from physical stores.

In Shanghai, for example, the store is housed in a historic villa in a residential neighborhood, instead of a sleek shopping mall.

"The idea is to remove the trimmings of conventional luxury, which are a little ballooned to justify the enormous prices, and bring things back down to earth," said De Jong.

While De Jong believes in free advertising such as word-of-mouth, the company is also known for its bold, if not controversial, visual campaigns that have touched such topics as religion and same-sex love over the years.

It was the first fashion brand to show two men kissing in an advert in its 2018 Spring Summer campaign. According to the BBC, the brand lost 12,000 followers on Instagram after the post went up.

"If you do things like that, there are always people who don't like it. But it's not important. What's important is that the people you want to reach like it," De Jong said in response to the controversy.

In fact, such images, especially those shared on social networks, have been and will continue to be one of the most robust engines driving the growth of the menswear market.

"Men today need the right fitting and styling as much as women, as the number of images every man sees every day on social media may be more than what one person saw in a year decades ago. It increases awareness and eventually translates into action," he said.

Consultancy firm Euromonitor projected that menswear will outperform womenswear by 2022 globally, though the former only accounted for less than a quarter of the broader $1.7 trillion apparel and footwear market in 2017.

Marguerite Le Rolland, a consultant in beauty and fashion at the firm, attributed the change to the greater emphasis placed by men on their appearance, partially resulting from the rise of social media.

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2019-07-18 07:25:45
<![CDATA[IMAX bullish on China market]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492929.htm Firm enhances ties with cinema chain partner to further tap demand from local audiences

Growing demand by Chinese consumers for quality content and a better watching experience is boosting the local premium film screening market, which should lead to more robust growth of the sector, an industry insider said.

"A growing number of Chinese consumers are seeking premium film watching experiences, and we are working to deliver more quality and differentiated content with our technologies, things that Chinese audiences want to see and want to enjoy," said Jim Athanasopoulos, chief financial officer of IMAX China.

Athanasopoulos' remarks followed IMAX China's announcement on Tuesday to expand its partnership with cinema chain CJ CGV Co Ltd to open 40 new IMAX theaters across the country. The new IMAX theaters will feature the IMAX laser projection system.

 

Moviegoers sit in an IMAX theater in Hangzhou, capital of Zhejiang province. Provided to China Daily

To date, there are over 600 IMAX theaters across China.

"The tie-up is aimed to leverage the two companies' resources to promote premium screenings to a wider market in China ... as continuous profit has been witnessed in the box office across our theater network this year," said Athanasopoulos.

As of July 14, the total box office receipts of IMAX theaters in China hit 1.6 billion yuan ($232 million), up 35 percent year-on-year and on track to surpass the $337 million for the whole of 2018, a performance that was up 16 percent year-on-year for the period.

Those earnings mark a stark contrast with China's lower-than-expected box office market. The National Radio and Television Administration said box-office revenue hit 31.17 billion yuan in the first half of 2019 in China, down 2.7 percent year-on-year.

To Athanasopoulos, Chinese audiences' increasing demand for blockbusters and higher-resolution screens is part of the reason why premium film screenings are welcome.

"We saw strong demand in blockbusters, not only those (from) Hollywood but also Chinese-language films, which are increasingly welcomed by Chinese audiences."

Athanasopoulos was talking about the science-fiction hit The Wandering Earth during the Spring Festival holiday. IMAX China's bet on the film garnered earnings of over 300 million yuan from the box office.

"We see that continuing to happen in the future ... and that's part of the reason why we made an expansion plan to tap China's fast-growing premium film screening market, which we think is taking up a larger share of China's overall box office market," he added.

IMAX China's move to expand came amid growing concerns China is tempering demand for films.

Chen Shaofeng, a professor in culture and entertainment at Peking University, said although IMAX China set an expansion plan, the amount of new cinemas (40) still seems to be modest. "The overall market performance might be an influence," he added.

"The lower-than-expected box office performance this year is partly because of a drop in cinema visits, particularly in third-and lower-tier cities where demand is weakening," Chen said.

A rough industry estimate from entertainment analysis website Dengta under online ticketing platform Taopiaopiao shows cinema visits slumped by nearly 100 million to around 807 million in the first half of this year.

"On one hand, rising ticket prices prevent many people from visiting cinemas, as cinemas stopped selling cheap tickets at 9.9 yuan or 19.9 yuan," Chen said.

The professor was referring to subsidies mainly offered by online ticketing platforms to make ticket prices lower in order to attract audiences.

"It's understandable that most moviegoers prefer to watch blockbusters in theaters with high-resolution screens and better services to enjoy and watch other movies shortly after they are pulled from theaters on video-sharing platforms, usually few months later," Chen said.

"As the box office receipts are stagnating, many cinema chains will continue to seek solutions to attract and retain audiences, such as IMAX screenings," Chen said.

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2019-07-18 07:25:45
<![CDATA[CRCC signs contract for two office buildings in central Moscow]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492928.htm China Railways Construction Corp signed its first building construction contract in Russia with Afi Development Group on Monday in Moscow, showcasing its expansion plans in that country.

The contract makes CRCC the general contractor to build two office buildings, one 20 stories and one 13 stories, in central Moscow. The total value of the contract is 6.7 billion rubles ($107 million), and the overall construction area of the projects will be around 9,200 square meters.

Meng Tao, president of CRCC Russia Corp, said the buildings will be built over 24 months.

Mark Groysman, general manager of Afi Development, said the closer relationship between China and Russia has brought Chinese construction firms into the Russian market.

"Our company had made a thorough study of all the global constructors for a long time before we chose our partner for this construction project," Groysman said.

The company wants its buildings to be landmarks in the downtown area of Moscow and wanted a "top general constructor with the best construction technology".

Groysman said CRCC's tremendous ability in quality control has been demonstrated by the company's Moscow underground rail projects, plus its abundant experience in overseas markets.

Afi Development is a leading developer in the local real estate industry and has invested in several skyscrapers in the central business district of Moscow.

Meng said cooperation with Afi Development is a milestone for the Chinese company as it is not only the its first building construction project in Russia, but it also helped lay a solid foundation for CRCC to explore the Russian market.

Meng said the signing of the contract not only reflects acknowledgment of CRCC's reputation for building construction in Russia, but enables the company to provide better service to the local people.

"The aim of the Belt and Road Initiative is to connect the involved economies and benefit local residents," Meng said, adding the new buildings will benefit tens of thousands of Russians living nearby.

Groysman said the cooperation with CRCC was achieved due to the help of the Chinese embassy and the promise provided by the Sino-Russian strategic partnership.

Minister-Counselor at the Chinese embassy in Russia, Li Jingyuan, echoed Groysman by noting that relations between China and Russia had reached a historical high.

"The cooperation in infrastructure construction is key to boosting the development of positive China-Russia economic interaction, and the Chinese embassy in Russia will continue to offer full support to cooperation between companies from both sides," Li said.

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2019-07-18 07:25:45
<![CDATA[Shanghai eyes science and tech hub status]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492927.htm City wants to be global destination for AI and smart manufacturing efforts

After burnishing its credentials as a hub for finance and shipping, Shanghai is looking to be a global destination for science and technology efforts by setting up specialized artificial intelligence hubs and stepping up smart manufacturing development.

Indications that the city is fast becoming a national and global highland for AI became evident after 20 tech giants like IBM, Microsoft, Alibaba and a research facility affiliated to Tongji University decided to set up shop in Shanghai's AIsland, a dedicated hub in the Zhangjiang Science City in Shanghai's Pudong New Area.

The 66,000-square-meter hub is the latest demonstration of a central government decision in May to launch the Shanghai National Pilot Area for the Innovative Development of New-Generation AI, the first of its kind nationwide.

 

Robots perform soldering operations on an auto production line during an industry expo in Shanghai. Du Yang / China News Service

"AI's application requires coordinated adaptation to real-life scenarios," said Xia Yuzhong, who oversees AI and information services at the Science and Economy Commission of Shanghai Pudong New Area.

"We hope these top-tier AI companies can lead the industrial application and innovation aggregation of AI and generate more transferable and duplicable experiences to other parts of the country."

The AI zone, which is expected to see more than 30 application scenarios, will conduct a number of pilot programs such as smart parking, intelligent lighting, environment monitoring and unmanned convenience stores, said Han Lu, deputy general economist of Shanghai Zhangjiang Group Co Ltd, operator of the zone.

"The pilot zone should be a prototype mimicking what future cosmopolitan life should look like, "Han said, adding that the zone will feature the city's first 5G+AI pilot zone and host over 8,000 research and development personnel.

Microsoft opened an AI and internet of things lab on the "island" in May. This is its third and largest such facility worldwide, through which the first batch of 30 clients stand to benefit from turning prototyping into products by leveraging Microsoft's AI and internet of things (IoT) solutions, said Lin Miaojing, project director of the Microsoft AI and IoT lab.

Shanghai is dedicated to making AI and smart manufacturing two key pillars to drive its economy, of which 70 percent comes from modern services.

To shore up growth in the real economy, Shanghai has pledged to build two world-class smart manufacturing industrial clusters focusing on automobile and electronics information, as the city strives to achieve 100 indigenous breakthroughs in core technologies by 2021.

The city's Three-Year Plan on Smart Manufacturing, which was officially approved by the Shanghai Municipal Commission of Economy and Informatization on Tuesday, has put forward a goal to make intelligent manufacturing equipment a 130-billion-yuan ($18.9 billion) industry, recording a compound annual growth rate of 15 percent.

Among them, robotics and related systems are expected to account for 60 billion yuan, ranking first nationwide.

The commission, which is responsible for the plan's implementation, said it will prioritize the nurturing of a batch of unicorn firms and "hidden champion" companies on critical equipment and core components.

These include fostering 10 listed companies on the country's technology-focused board, the STAR Market, leading the formulation of over 50 standards on smart manufacturing, as well as nurturing the establishment of two to three national and three to five public service platforms of industrial influence.

It will promote the adoption of 5G communications, AI and big data in the application of smart manufacturing. It is also eyeing to create industrial synergies across the Yangtze River Delta Region.

On the implementation front, the municipality has vowed to establish 100 national level pilot smart factories, 1,000 pilot plants that received mutual recognition among the Yangtze Delta Region, and promote the intelligent transformation of 10,000 factories.

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2019-07-18 07:25:28
<![CDATA[Supply-chain finance curbs stressed]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492926.htm

China's banking and insurance regulator recently issued guidelines that require banking and insurance institutions to offer comprehensive financial solutions to companies in the upstream and downstream of a supply chain based on real business transactions, making a new effort to tighten regulation of supply-chain finance.

The guidelines, issued by the China Banking and Insurance Regulatory Commission, require banking and insurance institutions to stick to the principle of ensuring the truthfulness of transactions to prevent fabricated financing through falsified transactions, reported Caixin Media, a Beijing-based media group providing financial and business news.

The regulator reportedly stressed that banks should ensure that they acquire first-hand, original transaction data from the borrower and its partner that helps enhance its credit. Banks should also adhere to comprehensive risk surveillance by monitoring risks associated with not only the lead company in a supply chain, but also companies in the upstream and downstream of the supply chain, according to the CBIRC.

The guidelines were issued following quarrels between financial institutions and large online retailers JD and Suning.com Co over their roles in fraudulent fundraising by their suppliers, backed by accounts receivable from the online retailers. But both JD and Suning.com said they are unaware of the above mentioned financing activities.

Zeng Gang, deputy director of the National Institution for Finance and Development, said the biggest risk of supply-chain financing lies in the truthfulness of transactions based on which a bank makes a lending decision.

"How to prevent operational risk, such as collusion between financial officers of a core company with other businesses in the upstream and downstream of a supply chain to commit loan fraud, is a major problem to be solved by banks providing supply-chain finance solutions. Banks should repeatedly verify whether or not a transaction is real by improving business process management and reducing manual operational risk to the greatest extent with the use of financial technologies," he said.

In the guidelines, the regulator also encouraged banking and insurance institutions to embed new technologies, such as blockchain and the internet of things, into business transactions and use technologies including electronic fence and satellite positioning to remotely monitor the logistics and inventory of the borrowers.

China Zheshang Bank, a Hong Kong-listed national joint-stock commercial lender headquartered in Hangzhou, Zhejiang province, has used the blockchain technology during its exploration with supply chain finance.

Based on the creditworthiness of Zhejiang Rifa Textile Machinery Co, a manufacturer of spinning and weaving machines, CZBank granted lines of credit to Rifa's downstream small and medium clients to bridge the funding gap for their equipment purchases.

The financial innovation helped more than 100 private textile companies upgrade their equipment, increased Rifa's sales revenue by 300 million yuan ($43.6 million), and reduced the financial costs of its downstream enterprises by around 20 percent, according to CZBank.

Supply-chain finance is an important measure for banks to further support the real economy, which refers to the part of the economy that produces goods and services, and better serve small businesses. During the process, improvement of the legal environment, information infrastructure construction, technology adoption, and industry research are all essential factors for supply-chain finance risk management, said Zeng.

Having said that, it is still worth noting that banks ought to pay close attention to possible systemic risks associated with supply-chain finance, he added.

"As the risk of supply-chain finance relies heavily on the business conditions of core companies, banks should also strengthen forward-thinking research of a particular industry. Based on the results of studies, banks could set an upper limit on the line of credit and make decisions on when to develop supply chain finance, when to contain the business, and when to withdraw from it," he said.

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2019-07-18 07:25:28
<![CDATA[Bankruptcy system to be beefed up]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492925.htm China is considering building the personal bankruptcy system and will take measures to root out zombie companies from the market, as part of its greater goal to foster a more efficient economy, said the country's top economic regulator.

The country will promote the establishment of a bankruptcy system for insolvent individuals in a step-by-step way, according to the new reform plan released by the National Development and Reform Commission and 12 other central government agencies.

The plan aims to build a comprehensive personal bankruptcy system by focusing on resolving the joint liabilities arising from corporate bankruptcy and gradually promoting reasonable liability exemptions for individuals, when their consumer debt meets the requirement.

The latest reform move is part of the country's larger efforts to foster high-quality development, which will help deepen supply-side structural reform, improve the market economy and optimize the business environment, said experts and analysts.

"It is the first time that China has proposed a personal bankruptcy system in such a key plan," said Dong Ximiao, a researcher at the National Institution for Finance and Development. "Once formulated, it will remedy the absence of a personal bankruptcy system and improve China's current bankruptcy system. After the establishment of a personal bankruptcy system, the debtor will be given a chance at a new beginning, which is conductive to the optimal allocation and efficient use of resources."

Personal bankruptcy is a legal system under which an insolvent individual who declares bankruptcy distributes all of his or her property in an equitable manner to all creditors, and is exempted from the liability the individual is unable to pay back. China's current bankruptcy system framework is the Enterprise Bankruptcy Law, which ignores natural persons.

"More efforts are needed to improve the credit system of the whole society and the related system, which will help build a comprehensive personal bankruptcy system. Or it may become a means for some individuals to escape debts," said Tang Jianwei, chief researcher at the Financial Research Center of Bank of Communications.

According to Tang, the new plan will help establish an "exit system "for all types of market entities, including natural persons and zombie State-owned enterprises, which will help build a modern market economic system, ensure fair market competition, cut overcapacity and strengthen supply-side structural reform.

Wang Wenhua, a professor at the Law School of Beijing Foreign Studies University, spoke highly of the new reform plan, which she said will keep up with the trends of internationalization and uniformity in legislation.

"The establishment of a personal bankruptcy system is necessary for Chinese legislation to keep pace with that internationally, as personal bankruptcy occupies an important position in the bankruptcy law system of advanced countries worldwide," Wang noted.

"It is conductive to better protect the rights and interests of market entities, stabilize and improve the business environment and promote a healthy and sustainable market economic order."

"The local judiciary and law enforcement agencies also need to take measures accordingly. And the creditors, debtors and liquidators also need to strengthen their own legal awareness," Wang added.

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2019-07-18 07:25:28
<![CDATA[First batch of 5G phones get quality certification]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492924.htm The battle over 5G smartphones has intensified in China, with the first batch of eight 5G phone models having obtained the quality certificate needed to hit the market.

Huawei Technologies Co's four 5G models, including Mate 20X 5G and Mate X 5G, have obtained China Compulsory Certification, according to the website of the China Quality Certification Centre.

Other smartphone vendors Oppo, Vivo, ZTE and One Plus also each have one 5G model that secured the certificate.

It is worth noting that Xiaomi, Samsung and Lenovo failed to make their way into the first batch. Xiaomi said on Wednesday that it will apply to conduct quality tests next week in accordance with its product launch schedule.

Smartphones in China need to acquire three licenses before they are allowed to be sold to the public. The licenses include China Compulsory Certification, a license to allow smartphones to get connected to the 5G network, and Radio Type Approval Certification.

Oppo said on Wednesday that its Oppo Reno 5G model has already secured all of the three licenses and the phone will be available in the China market in the third quarter of this year.

Tang Hai, chief 5G scientist at Oppo, said obtaining the licenses proves that the quality and the performance of Oppo's 5G smartphone is recognized by industry regulators. The company's Reno 5G has already been available in Switzerland since May.

Huawei announced in June that its Mate 20X 5G had obtained the country's first license to allow terminal telecommunication equipment to enter the 5G network in China. The company is scheduled to release the phone on its home turf on July 26.

On Wednesday, the IMT-2020(5G) Promotion Group, an organization affiliated with the country's top industry regulator to boost the development of the superfast technology, said Huawei's self-developed 5G chip has already passed the tests of all networks.

Qin Fei, general manager of Vivo's telecom research institute, said the company's 5G smartphone will hit the streets in August and the testing speed of its model has reached one gigabit per second.

Xiang Ligang, director-general of the Information Consumption Alliance, said this year will only see a very small number of 5G smartphones sold, but companies are all trying to have the first-mover advantage to appeal to consumers.

According to a report by market research company Counterpoint, global 5G smartphone shipments are expected to reach 108.2 million units in 2021, up an estimated 255 percent year-on-year.

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2019-07-18 07:25:28
<![CDATA[Beijing's regional economy rises to $221b in first six months]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492923.htm Beijing's regional GDP hit more than 1.52 trillion yuan ($221 billion) in the first half of 2019, growing 6.3 percent year-on-year, and output by the tertiary industry rose 6.5 percent to 1.26 trillion yuan due to the strong contribution of the financial and service sectors, Beijing's statistics authority said.

"The city's economic development was steady with an upward momentum during the first half of 2019," Pang Jiangqian, deputy head of the Beijing Bureau of Statistics, said at a media briefing on Wednesday.

"As the development quality has been continuously improving, the city's economy is getting stronger and more resilient."

During the first six months of 2019, output in the primary, secondary and tertiary industries stood at about 4.94 billion yuan, 257.26 billion yuan, and 1.26 trillion yuan, respectively. The three sectors climbed by 17.5 percent, 5 percent and 6.5 percent year-on-year.

Industries with comparative advantages such as finance, information services, science and technological services contributed 67 percent to the city's economic growth. The output of the financial industries during the first half of 2019 reached 293.47 billion yuan, up 9.1 percent.

The output in the information transmission, software, and information technology industry touched 181.18 billion yuan, an increase of 13.7 percent. Output in scientific research and the technological services industry during the first six months of 2019 hit 177.25 billion yuan, increasing 8.4 percent.

The service industry remains a major support to the city's economy, accounting for 85.1 percent of the overall economic growth in the region, Pang explained.

High-tech industry output increased 8 percent during the first six months, while the rate of increase for strategic emerging industries was 8.5 percent.

Online retail sales posted growth of more than 20 percent, 19.7 percentage points faster than retail sales' growth.

From January to May, the revenue growth of industrial enterprises in internet information services, internet platform services and internet data services enterprises were all running above 30 percent.

Growth in the consumption sector also accelerated, with faster rates in both service and commodity consumption, Pang said, adding that the structure of fixed asset investments was optimized with faster investments growth in key industries such as finance, information technologies, commercial services, and transportation.

In the first half of this year, the nominal growth rate of per capita disposable income of Beijing residents was 8.9 percent. The actual increase was 6.9 percent after deducting the price factor, which was 0.6 percentage point faster than the economies' growth rate, said Bian Jing, deputy head of the Beijing Survey Office of the National Bureau of Statistics.

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2019-07-18 07:25:28
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492922.htm Govt and policies

China's excavator sales rise by 6.6% in June

Sales for China's major excavator producers increased in June, data from industry association have shown. The country's 25 leading excavator makers sold a total of 15,121 excavators last month, up 6.6 percent year-on-year, the China Construction Machinery Association said. In breakdown, 12,409 excavators were sold in the domestic market, down 0.3 percent year-on-year, while exports of the equipment soared 56.4 percent to 2,695. Major manufacturers sold a total of 137,207 excavators in the first half of the year, up 14.2 percent from the same period last year. Over the period, exports of the equipment surged 38.7 percent from a year ago to 12,335.

Farm produce prices show modest growth

China's farm produce prices posted modest increases last week, the Ministry of Commerce said on Tuesday. From July 8 to 14, the overall price of farm produce rose 0.9 percent on a weekly basis, following a 0.4-percent increase in the previous week. The average wholesale price of 30 types of vegetables went up 1.7 percent from a week ago, while wholesale prices of pork went up 1.8 percent. The wholesale prices of beef and mutton increased 0.2 percent and 0.6 percent, respectively. Food accounts for about one-third of China's consumer price index, a main gauge of inflation.

Garment sales on the upswing in nation

China's garment industry saw an increase in domestic sales in the first five months of this year despite slower expansion in the industry. From January to May, retail sales of garment enterprises above a designated size amounted to 397.4 billion yuan ($57.71 billion), up 2.3 percent year-on-year, according to the Ministry of Industry and Information Technology. Investment in the garment sector increased 3.9 percent during the period, with 13,631 enterprises above designated size reporting combined operating revenues of 621.4 billion yuan, up 2.49 percent year-on-year, while the profits of these companies decreased 1.3 percent to 30.8 billion yuan during the period.

Courier sector sees steady expansion

China's courier sector posted steady business expansion in June, official data showed. The country's courier firms delivered 5.3 billion parcels last month, up 25.3 percent year-on-year, according to the State Post Bureau. This beat Japan's total parcel volume of 4.25 billion in 2017. Business revenue rose 23.9 percent year-on-year to reach 63 billion yuan ($9.3 billion) in June, according to an estimate. A total of 27.6 billion parcels were delivered during the first half of the year, raking in about 338.46 billion yuan in business revenue.

Sichuan's foreign trade up 21.9% in first half

The foreign trade volume of Southwest China's Sichuan province rose 21.9 percent year-on-year to 303.3 billion yuan ($44.13 billion) in the first half of this year, local customs authorities said on Tuesday. According to Chengdu customs, Sichuan's trade with members of the European Union rose 44.6 percent to 53.94 billion yuan, accounting for 17.8 percent of its total. Its trade with member states of the Association of Southeast Asian Nations rose 23.5 percent to 58.83 billion yuan. The province's trade with economies along the Belt and Road reached 81.9 billion yuan, an increase of 13.1 percent year-on-year, accounting for 27 percent of its total.

Macao's forex reserves increase to $20.68b

The preliminary estimate of the foreign exchange reserves in China's Macao Special Administrative Region reached 166.4 billion patacas ($20.68 billion) at the end of June, the SAR's Monetary Authority said on Tuesday. The reserves increased by 1.3 percent from the revised value of 164.3 billion patacas for the previous month. Macao SAR's foreign exchange reserves at the end of June 2019 represented 10 times the currency in circulation or 82.0 percent of pataca M2 at the end of May 2019. The trade-weighted effective exchange rate index for the pataca dropped 0.13 points month-to-month but rose 3.50 points year-on-year to 106.7 in June 2019, implying that overall speaking, the exchange rate of the pataca declined against the currencies of Macao's major trading partners on a monthly basis but increased on an annual basis.

Companies and markets

CATL profit surges on booming NEV market

Contemporary Amperex Technology Co Ltd (CATL), China's largest automotive lithium-ion battery maker, forecast a 120 percent to 150 percent annual profit growth in the first half of 2019 amid a booming new energy vehicle (NEV) market. Net profit in the January-June period rose to between 2 billion yuan ($290 million) and 2.28 billion yuan, CATL said in a filing to the Shenzhen Stock Exchange. CATL said the strong profit growth came after it attracted more customers, strengthened cost control and the NEV market boom resulted in a bigger demand for its lithium-ion batteries. Despite sluggish sales of gasoline-powered vehicles, China's NEV market has experienced a boom.

FAW Jiefang sells 1m J6 heavy-duty trucks

Sales of the Jiefang J6 heavy-duty trucks have reached 1 million units, making the J6 a leading truck model in China, according to FAW Group Corp. A ceremony to witness the one millionth J6 truck rolling off the production line was held on Monday in Changchun, capital of Northeast China's Jilin province. The red truck was delivered to its buyer at the ceremony. The J6 model is for civil use and came onto the market in 2007.FAW Jiefang launched its seventh generation truck J7 last year, aiming to compete with imported truck brands and enter the European market.

Around the world

Ikea to move its only US factory to Europe

Swedish furniture company Ikea will close its only manufacturing site in the United States in December and move it to Europe to reduce costs, US media reported on Tuesday. According to CNN, Ikea will end production at its plant in Danville, Virginia. The facility opened in 2008 and produces wooden shelves and storage units, and the shutdown will cut about 300 jobs. "We made every effort to improve and maintain the competitiveness of this plant, but unfortunately the right cost conditions are not in place to continue production in Danville for the long-term," plant manager Bert Eades was quoted as saying in a statement.

Singapore's non-oil exports down 15.8%

Singapore's non-oil domestic exports (NODX) to China fell 15.8 percent year-on-year in June, following a 23.3-percent contraction in May, the government agency Enterprise Singapore said on Wednesday. Enterprise Singapore attributed the decline mainly to the exports of non-monetary gold, integrated circuits and primary chemicals, which fell by 55.3 percent, 39.7 percent and 50.5 percent year-on-year, respectively. In a breakdown, the electronic exports of Singapore to China decreased by 36 percent year-on-year in June, while the non-electronic exports went down 11.3 percent year-on-year.

Myanmar's foreign trade tops $26b

Myanmar's trade with foreign countries has reached more than $26.58 billion as of July 5 in current fiscal year 2018-19, according to the country's Commerce Ministry. From Oct 1, 2018 to July 5 2019, the country's export earned $11.72 billion while its import shared $14.86 billion. During the period, Myanmar's trade with foreign countries through sea routes reached $19.7 billion while its border trade amounted to $6.87 billion.

China Daily - Agencies

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2019-07-18 07:25:28
<![CDATA[Guangdong plans to launch financing platform for smaller companies]]> http://www.chinadaily.com.cn/kindle/2019-07/18/content_37492921.htm A financing platform for small - and medium-sized enterprises in Guangdong province will be officially launched in September, aimed at efficiently providing fundraising solutions for SMEs, a senior official with the local financial supervisory authority said.

"The platform will become an open financing ecological system, based on integration of big data of company credits and financing solutions," said He Xiaojun, director of the Guangdong Local Financial Supervision and Administration Bureau.

He gave the remarks after Guangdong announced measures to support the development of local SMEs through financing on Wednesday.

"The core work of the announcement of measures is to establish a credit evaluation system for SMEs and to tackle the problem of information asymmetry of SMEs in financing," He said.

The credit evaluation of SMEs will be based on the local government's database of companies, using advanced financial technology to provide services for qualified SMEs, the official added.

"As Guangdong is a power house in manufacturing, foreign trade and scientific innovation, we have made tailored financing measures for companies, which are specialized in manufacturing, foreign trade and innovation," said He.

Citing financing measures for foreign trade companies, He said SMEs would no longer wait for too many credit approvals in their fundraising.

"Foreign trade companies are enabled to submit their financing requests after they obtain certification of deals. Financial organizations will easily make confirmation of their credits with platform data which are from (the) local customs and foreign currency administration authority," said He.

According to He, up to 53 percent of trade in Guangdong and the neighboring special administrative regions of Hong Kong and Macao are conducted by SMEs.

"The financing platform will also integrate data of foreign trade companies with authorities from Hong Kong and Macao," the director said.

Guangdong has around 11 million SMEs and accounts for nearly one fourth of the nation's foreign trade, according to He.

"The establishment of such a financing platform would help greatly increase fundraising efficiency for thousands of foreign trade-oriented companies in the Pearl River Delta," said He.

The financing platform is in pilot operation, with the first deal of loans for a foreign trade company completed successfully.

"A growing number of companies would benefit from the use of the platform apps after it is officially launched in September," said He.

Yang Shan, who runs an ultrasonic cleaning equipment company in Shenzhen, said the company has a great demand for financing after its sales expansion in the past few years.

"We have made more investments in research and development of high-tech ultrasonic cleaning facilities," said Yang.

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2019-07-18 07:25:28
<![CDATA[Supercomputing efforts set to gain momentum in China]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492473.htm Work on next generation of exascale models likely to be completed by 2021

Research and development work on the next generation of exascale supercomputers, the Tianhe-3, is expected to be completed by around 2021, according to the National Supercomputer Center in Tianjin.

Making the announcement at a ceremony to mark the country's 40-year development in supercomputing, officials said that the new machines will have a calculation speed that is 200 times faster than the present models and have storage capacity that is 100 times more than the Tianhe-1. The speed is expected to hit a billion billions, or 1 followed by 18 zeros.

Insiders indicated that 2021 could see tough competition among the exascale supercomputers around the world in their final stage of research.

 

Scientists check the condition of the Tianhe-3 supercomputer at the National Supercomputer Center in Tianjin in April. Xinhua

The US' first exascale supercomputer will be delivered by 2021, while the European Union and Japan have announced their completion by around 2020.

Liu Guangming, director of the National Supercomputer Center in Tianjin, said the Tianhe-3 has seen several major self-innovations including three chips for many core processors, interconnection and routers; nodes for servers, computing and storage, some 10 printed circuit boards; new hardware systems for computing, high-speed interconnection, parallel storage, service processing, surveillance and analysis; and software systems for system operation, parallel research and development, application support and comprehensive management.

The supercomputer will see widespread applications on the convergence front in cloud computing and big data, computing and stimulation on highly efficient weather forecasts, massive measurements in wind tunnels, earthquake monitoring and geology research, medical care, information security services, intelligent urban services, and effectively advancing the next generation of artificial intelligence development for the country.

The Tianhe-3 based in the Binhai New Area is expected to herald a new chapter for the intelligent manufacturing industry in the city and drive technology innovation among Beijing, Tianjin and Hebei provinces.

Liu said: "The past 10 years have seen an innovation convergence in homegrown computing technologies, high-efficiency semiconductors, high-speed interconnections and operational systems. The next decade will be a golden one for companies like Sugon and Insper, especially for their high speed servers and computing systems."

After Tianhe released the prototype of China's first new-generation exascale supercomputer Tianhe-3 in July last year, the prototypes of other exascale supercomputers of Sunway and Sugon were announced.

Currently, how big data, artificial intelligence and exascale supercomputers can promote traditional industries' transformation and regional development will be the key challenge for the sector, said experts.

Zhang Yunquan, director of the National Supercomputer Center in Jinan, East China's Shandong province, said that China's supercomputers are feeling the pinch from the gaps in applications and software development.

"In areas such as manufacturing industries and basic research sectors where supercomputers are used widely, foreign software companies have dominated the market ... and China needs to make huge investments on software procurement and upgrading.

"In addition, China has a shortage of software development research personnel for supercomputers," said Zhang, adding that China's supercomputer makers should transfer their development model to be more market and application driven.

In addition, focus needs to be paid to software development and education and stimulation of human resources.

Mei Jianping, deputy director-general of the High and New Technology Department of the Ministry of Science and Technology, said the country will continue to support the establishment of the supercomputer centers in key areas, and enhance their collaboration with other key supercomputer centers in China.

To date, China has built six national supercomputing centers since 2009, mainly as new drivers of innovation.

Since the establishment of the center in Tianjin was approved by the Ministry of Science and Technology in May 2009, five other supercomputing centers were founded in Shenzhen, Jinan, Changsha, Guangzhou and Wuxi.

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2019-07-17 07:53:38
<![CDATA[Italian firms eyeing more alliances to boost economic ties]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492472.htm Italy will look to increase exports of goods that appeal to young millennial customers in China, the biggest drivers of consumption, as part of its efforts to boost e-commerce cooperation, officials said.

Carlo Ferro, president of the Italian Trade Agency under the ministry of economic development in Italy, said that Italian companies are actively seeking opportunities to gain a bigger market share in China, and are mulling options, such as sales of innovative products or services online, to attract young Chinese buyers.

"This is particularly so for businesses in wine, design, fashion, and furniture ... they are eager to get closer to Chinese consumers and create more modern and tech-savvy products to meet their diverse demands," Ferro said, adding that e-commerce is an effective way for the companies to achieve this goal.

"During our visit to China, we held discussions with government officials and companies, especially e-commerce firms like Suning and JD," he said.

According to ITA, representatives from Italian brands were also part of the discussions that the delegation had with Chinese e-commerce firm Suning. The two sides inked an agreement for cooperation in online and offline distribution of products.

"We are excited about this collaboration as it combines the excellence of Made in Italy with the innovations of the Suning sales model. Thanks to its logistics network and innovative technologies, many Italian brands can now be known and appreciated by a new generation of Chinese consumers," said Ferro.

This March, ITA reached an agreement with Suning, under which the Chinese e-commerce giant promised to introduce 150 Italian brands on its platform this year, and will select and introduce 200 brands every year from 2020.

"Currently there are still gaps in the perception of products, between consumers on one side and producers on the other. We have many products that reflect the culture, the creativity of the maker, and this is not necessarily understood in China. We need to do more to promote a better mutual understanding among citizens, aside from strengthening economic ties," Ferro said.

The momentum created by the Belt and Road Initiative could be an opportunity, Ferro said.

"The Belt and Road Initiative is a framework that can facilitate (multifaceted) relationships and create new momentum to facilitate economic exchanges," Ferro said.

"Italy is the first country that is involved with the Belt and Road Initiative among G7 countries. It is an important step that is seeing new momentum," Ferro said.

Ferro's visit to China follows a joint declaration between the two countries to enhance financial market cooperation and facilitate two-way financial market access earlier this month. The joint declaration was released after the first China-Italy Finance Dialogue in Milan.

Wang Xiaosong, a researcher at the National Academy of Development and Strategy of Renmin University of China, a think tank, and a professor in economics with the university, said trade between China and Italy has great potential as China has a large demand for smart manufacturing, which Italy is good at. But this is not something that many business owners in China are aware of, he said.

"Chinese companies have built strong relationship with German and French manufacturers in the past years. However, not many people are aware that Italy also has many good brands in high-end product manufacturing with innovative technologies. With increasing communication and cooperation between the two countries, the outlook for trade is very promising," Wang said.

According to Wang, the Belt and Road Initiative will bring great benefits to the involved countries, as it can strengthen economic ties and promote multifaceted communications.

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2019-07-17 07:53:38
<![CDATA[Nation plans to expand charging infrastructure for new energy vehicles]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492471.htm Development of charging infrastructure for new energy vehicles is fast catching up with the growth in sales of such vehicles, although the number of NEVs in China still outstrips the existing charging facilities, according to industry experts.

They said the main driving force for the fast development of charging infrastructure includes the increased demand, due to rapid growth of NEVs, as well as the government's efforts.

"The development of charging infrastructure is important for the development of the NEV industry, because lack of charging facilities is usually a major barrier for NEV purchases," said Tong Zongqi, director of the information department under the China Electric Vehicle Charging Infrastructure Promotion Alliance.

"As the NEV sector develops rapidly, demand for charging facilities has also been growing steadily."

Although China already has a large number of charging piles, they are not enough, and to some extent the lack of charging facilities has become a bottleneck for the quick development of the NEV industry, Tong said.

According to the latest statistics from Tong's organization, by the end of June, charging piles for NEVs in China totaled more than 1 million units, with a year-on-year growth of 69.3 percent.

Charging piles in public places stood at 412,000 units by the end of June, while the number in other locations stood at 591,000.

A total of 10,926 charging piles were built in June in public places. Earlier, 11,656 were built on average each month from July 2018 to last month, which resulted in an overall growth of 51.5 percent year-on-year.

However, despite the fast growth, currently every 3.5 NEVs in China share a charging pile on average, far from the ideal situation, and that has prompted the government to ramp up efforts to strengthen NEV infrastructure construction and operation, according to Tong.

Tong said the Chinese authorities have funded his organization to build a national charging facility surveillance platform that plans to connect charging facilities, NEV enterprises, charging service providers, and local charging facility surveillance platforms.

The national platform aims to improve NEV drivers' charging experiences by optimizing connectivity of the charging facilities to increase availability, and other related services including those for entertainment. The platform will also provide data analysis for enterprises and government to help them make decisions.

Since its launch in early 2019, the platform has connected a number of companies and local platforms, he said.

The Chinese authorities are expected to increase financial support for NEV infrastructure as they slash subsidies for the sector, experts said.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said NEV production in China is on a fast track and in less need of financial support compared with charging infrastructure, although the former still needs further tech breakthroughs to reduce production costs.

In March, four ministry-level authorities, including the Ministry of Finance and the Ministry of Industry and Information Technology, announced a new policy to further whittle down NEV subsidies to meet the 2020 goal of completely phasing out subsidies with a smooth transition, as well as to improve the technological standards on NEVs.

Subsidies on different NEVs vary from 47 percent to 60 percent, depending on the distance they can cover, and on average the 2019 subsidies fell by 50 percent from that of 2018.

Moreover, the policy asked local governments to stop subsidizing NEV purchases from June 26, and instead, to strengthen financial support for the development of charging infrastructure like charging stations and related services.

Till now, several local governments, including Beijing and Shanghai, have announced new moves in line with the new policies of central authorities.

Hainan and Zhejiang provinces, the Guangxi Zhuang autonomous region and Tianjin Municipality have rolled out detailed three-year or five-year plans.

However, different levels of charging infrastructure development in different regions are expected to continue, and coastal areas are likely to keep their lead, due to higher popularity of NEVs there compared with other regions, especially the northeast, according to Tong.

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2019-07-17 07:53:38
<![CDATA[AI still 'has a long way to go']]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492470.htm New technology to integrate deeper and deeper into various industries, say top experts

Development of the artificial intelligence industry still has a long way to go before it can become "real intelligence" and be applied in various sectors, industry experts and market insiders said.

"At the present time, AI is still at the stage of machine learning. It is now driven by data," said Zhang Zhengyou, director of AI Lab &Robotics X at internet conglomerate Tencent.

"A key issue that needs to be addressed for AI development is how to utilize the technology so that machines can know and understand people better," he explained.

 

A girl watches an AI-supported robot arm making a billboard during a high-tech exhibition in Shenzhen, Guangdong province. Xinhua

He made the remarks at the 2019 Global Artificial Intelligence and Robotics Summit held in Shenzhen from Friday to Sunday.

China is stepping up efforts to develop the AI industry as part of the nation's broader drive to become a global leader in the sector.

The country's technology companies including Tencent, Alibaba and Baidu are competing to gain a foothold in AI as the new technology integrates deeper and deeper into various industries.

"AI is bringing fresh vitality to various industries. It will bring a new technological revolution and unleash enormous energy, pushing forward the world's progress," said Xu Yangsheng, an academician at the Chinese Academy of Engineering.

So far, AI has been used in just a few industries such as finance and security so there is enormous room for industry players to explore, Xu added.

Zhang said Tencent's AI Lab is focusing on applying AI to video games, where the internet giant excels. In addition, the lab is also working on the integration of AI with the agriculture and medical service industries.

"As different industries have different ways to take advantage of AI technology, the application may vary a lot. That's why the current level of the technology is not mature and diversified enough to offer support," said Wen Hao, co-founder of AI startup CloudWalk Technology. "There is still a long way to go before the large-scale application of the technology."

"For example, the financial industry requires a high accuracy rate, while for the security industry, the capability of a quick search is a must. So our major challenge is how to make AI better serve industries and how to make it individualized," he said.

Wen also stressed the importance of privacy in the process, saying that laws and data protection standards have to catch up with rapid technological development.

The Internet Society of China said in a report that there were 3,341 AI enterprises in the nation at the end of last year, accounting for more than 20 percent of the world's total.

The market size of the local AI industry is expected to reach 50 billion yuan ($7.3 billion) by the end of this year and hit 71 billion yuan in 2020, from 33.9 billion yuan last year. The growth represents a 52.8 percent year-on-year rise compared with the same period of an earlier year ago.

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2019-07-17 07:53:38
<![CDATA[Huami unveils new classic smartwatches]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492469.htm US-listed Huami Corp unveiled a new smartwatch on Tuesday to target fans of classic designs after the tech company became the second most popular adult smartwatch brand in China.

Huang Wang, co-founder and CEO of Huami, said the company's product lineup already has great appeal to sports enthusiasts and lovers of basic smartwatches, with 4.5 million units of smartwatches sold so far.

"The new watch is designed to attract consumers who prefer classical designs while enjoying the features of smartwatches," Huang said.

Another key advantage of Huami's smartwatches lies in its long battery life. Huami said its new smartwatch named Amazfit GTR can last as long as 24 days on a single charge in daily use scenarios, Huang added.

The move came after Huami accounted for 17.1 percent of the China adult smartwatch market from January to March, just behind market leader Huawei Technologies Co, market research company International Data Corp said.

The strong performance coincides with the robust financial data of Huami. The company said its profit grew more than 400 percent to 75.3 million yuan ($11.2 million) in the first quarter.

A source close to Huami told China Daily that it will launch more than 10 new smartwatches in the second half of 2019 so it can be present in every segment of the smartwatch market.

Huami helps Xiaomi Corp design and manufacture wearables including fitness trackers and smartwatches, enabling Xiaomi to overtake Apple Inc as the top wearable vendor in the third quarter of 2018.

It is now planning to make self-branded smartwatches and other products. Huami unveiled a smartwatch that can accurately monitor heart rates last year before Apple launched a similar heart monitor with its smartwatch in September.

The company has developed a chip whose algorithm can identify the heart rate data of different users, similar to the ability of smartphones to identify fingerprints and faces of different users.

IDC said in its latest report that China's adult smartwatch market will likely maintain strong momentum this year after experiencing explosive growth in 2018.

The smart wearables sector has experienced some growing pains, but with improved battery life and rich capabilities, it is seeing new growth opportunities, said Fu Liang, an independent analyst who has been following the consumer electronics industry for more than a decade.  

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2019-07-17 07:53:38
<![CDATA[Economy on sound footing in first half]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492468.htm NDRC unveils range of measures to support high-quality development

China's economic growth held steady in the first half of 2019 despite headwinds, as positive factors are increasing to support high-quality development, the country's top economic regulator said on Tuesday.

The National Development and Reform Commission said it will take key measures in a new push to shore up points of weakness, ensure stable investment, further improve the coordination mechanism, promptly begin construction of major national projects, promote the healthy growth of private investment and deepen reform in delegating powers, enhancing regulation and strengthening public services.

Meng Wei, spokesperson for the NDRC, said the country maintained overall economic stability with steady growth, and economic performance remains within a reasonable range.

"We are in face of a complex and grave economic situation with increasing external uncertainties and new downward pressure," Meng said at an NDRC news conference on Tuesday in Beijing.

"We should think about worst-case scenarios while being confident and maintaining strategic resolve. China is still in an important period of strategic opportunity for development. The fundamentals of the Chinese economy are sound and will remain sound over the long term."

China's economy expanded 6.3 percent year-on-year in the first half of this year, meeting the GDP growth target of 6 to 6.5 percent set for 2019, according to the National Bureau of Statistics.

In the first half, investment in fixed assets, excluding rural households, reached 29.9 trillion yuan ($4.3 trillion). Fixed asset investment increased 5.8 percent year-on-year, 0.2 percentage point faster than that in the first five months. Specifically, investment in high-tech services rose 13.5 percent year-on-year during that period.

The NDRC said it approved 94 fixed asset investment projects in the first six months, mainly in the fields of energy, transportation and high-tech. The overall investment hit 471.5 billion yuan.

Meng noted as China has a sufficient supply of industrial and agricultural products, the overall price level will remain steady for the rest of the year.

In the first half, China's consumer prices increased mildly and producer prices for industrial products were generally stable, NBS data showed.

The consumer price index, a key gauge of prices for goods and services, went up by 2.2 percent year-on-year in the first half, 0.4 percentage point faster than the first quarter. Core CPI excluding the price of food and energy increased 1.8 percent year-on-year, 0.1 percentage point lower than that in the first quarter.

"For the current and the future period, the Chinese economy faces big impacts from changes in external trade and international financial conditions, which will generate a lot of downward pressure on the economy," Yu Ze, a researcher at the National Academy of Development and Strategy of Renmin University of China, said in a report published at a macro economy forum held last month in Beijing.

"Although the Chinese economy has shown some resilience, it will need more supportive policies in the short term. We expect GDP will grow 6.1 percent this year, 0.5 percentage point down from 2018."

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2019-07-17 07:53:20
<![CDATA[Mergers of central SOEs to gather pace this year]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492467.htm China will continue to restructure its centrally administered State-owned enterprises to serve the needs of national strategies and the real economy in the second half of this year, said a senior official from the country's top State assets regulator on Tuesday.

The government is actively conducting strategic restructuring of its central SOEs in fields including equipment manufacturing, shipbuilding and chemical engineering to optimize the distribution of State-owned capital, said Peng Huagang, secretary-general of the State-owned Assets Supervision and Administration Commission.

"For the next step, we will vigorously promote professional integration between central SOEs, especially those with homogenized businesses," he said, adding that the government is making plans to accelerate the pace of professional integration in the power, nonferrous, steel, offshore engineering equipment and environmental protection industries, in order to continuously restore the earning strength of central SOEs.

 

Employees of State-owned Beijing Urban Construction Group work on the construction site of a sports facility in Beijing. Kuang Linhua / China Daily

The official made the remarks after the central government approved a restructuring plan involving Beijing-headquartered China Poly Group Corp and China Silk Corp, announced on July 8.

This is the second move regarding the merger of central SOEs this year, after China State Shipbuilding Corp and China Shipbuilding Industry Corp, the country's two biggest State-owned shipbuilders by production capacity, announced that they were planning a strategic restructuring on July 2.

The government has carried out the reorganization of 21 groups, involving 39 central SOEs such as China North Railway and China South Railway, China Nuclear Engineering and Construction Corp and China National Nuclear Corp since 2012. China to date has 96 central SOEs, according to the SASAC.

As central SOEs took proactive measures to tackle complicated economic situations both at home and abroad by expanding global market channels and adding expenditure on research and development, their net profit jumped 8.6 percent year-on-year to 703.77 billion yuan ($102 billion) in the first half of this year, data from the SASAC show.

Central SOEs' operating revenue reached 14.5 trillion yuan between January and June, up 5.9 percent on a year-on-year basis. A total of 15 central SOEs saw revenue growth of more than 20 percent during this period, while 35 of them witnessed over 10 percent revenue growth.

Industries including transportation, power generation, mining and construction witnessed relatively fast revenue growth, while petroleum and petrochemicals, metallurgy, and equipment manufacturing maintained stable revenue growth.

Peng said that the government supports the listing of central SOEs on the newly launched science and technology innovation board, or the STAR market, in Shanghai, because this can be a practical platform for central SOEs to develop strategic emerging industries and make breakthroughs in the area of innovation.

The SASAC received 14 applications and related documents from central SOEs after China Railway Signal and Communication Co, the world's largest provider of rail transportation control systems by market share, gained the green light from the authorities on June 21 to be the country's first central SOE to be listed on the STAR Market.

Zhou Lisha, a researcher at SASAC's research institute, said the government previously paid more attention to the scale of SOE revenue, but for the next stage, more attention will be placed on SOEs' returns in areas such as net assets, revenue margin, debt elimination, investment in research and development, and the level of securitization to support the national economy.

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2019-07-17 07:53:20
<![CDATA[Bonds help to give GDP growth a shot in the arm]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492466.htm

China will increasingly rely on longer-term and special-purpose government bonds to finance construction and stabilize the economy, preventing the GDP growth rate slowing to a multi-decade low in the second half of this year, said economists.

In June, local governments issued 717 billion yuan ($104 billion) in special bonds, the record so far in 2019, accounting for nearly one-third of the total special bond issuance in the first half, the Ministry of Finance said on Tuesday.

During the January to June period, 64.8 percent of the funding from special bonds was directed toward fixed-asset investment, especially for infrastructure construction and shantytown renovation, said Hao Lei, head of the ministry's Budget Department.

"The rising financing requirements for infrastructure projects will drive up effective investment and enable more private funds to spur economic growth," said Hao.

The annual quota for special bonds was unchanged so far at 10.77 trillion yuan this year, around 44.73 percent of the total local government bond quota, according to the Ministry of Finance.

During the first half of this year, overall local government bonds, also including budgeted general bonds, increased by 2.18 trillion yuan. This amount was 70.7 percent of the new debt limit of 2019, compared with 15.5 percent at the same time last year, the ministry said.

"According to statistics reported by local governments, we predicted that the annual issuance target can be reached by the end of September, as required by the State Council's executive meeting," Hao added.

Policymakers issued a document in June that allowed local governments to use special bonds to raise capital for high-quality infrastructure construction projects.

The document also encouraged financial institutions to provide funding to companies related to the construction, including State-owned enterprises and local government financing vehicles, easing some previous restrictions on lending to the vehicles.

Jennifer Wong, vice-president credit officer of the Sub Sovereigns department, Moody's Investors Service, said that the use of special bonds proceeds as projects' capital can boost infrastructure investment and support economic growth, without adding direct debt to local governments' balance sheets.

The Ministry of Finance also announced the first-half fiscal income and expenditure statistics on Tuesday. By the end of June, the government's fiscal income was 10.78 trillion yuan, up 3.4 percent from a year earlier, slower than the pace of 3.8 percent in the first five months, as a result of the tax and fee reduction policy.

Tax income declined by 3.3 percent year-on-year in the second quarter, as the new value-added tax cut policy took effect in May. The overall tax income growth moderated to 0.9 percent in the first half, according to the ministry.

Given the slower income growth and the large gap of infrastructure financing, the government will rely more on funding through bonds. The special bond, which was introduced in August 2015, is a favorable instrument which can further leverage capital from other lenders, especially from the private sector, said experts.

The National Bureau of Statistics reported a rebound of fixed-asset investment by the end of June, up to 5.8 percent from 5.6 percent by May, although the overall GDP growth retreated to a nearly three-decade low of 6.2 percent in the second quarter.

To support the Ministry of Finance's bond issuance plan in the coming months, the central bank is expected to maintain relatively lower interest rates and ample liquidity, especially in the interbank market, "until it is clear that domestic growth is rebounding", said Lu Ting, chief economist at Nomura Securities.

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2019-07-17 07:53:20
<![CDATA[Regulator aims to stabilize nation's housing market]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492465.htm As Chinese property developers are flocking to issue offshore bonds, the nation's top regulator has stepped up efforts to prevent financial risks and stabilize the real estate sector, said experts.

Chinese real estate enterprises issued 604.7 billion yuan ($87.9 billion) worth of bonds domestically and overseas so far this year, among which $38.4 billion were offshore, reaching a historic high in terms of volume, and it is approaching the total amount of 2017, according to a report by Chinese financial information service provider Wind Information.

The financing spree is continuing in July with 15 property developers announcing overseas financing plans to raise more than $10 billion in total till now, according to Centaline Property research findings.

Closely watching the financing activities, the National Development and Reform Commission put restrictions on Chinese property companies' offshore fundraising last Friday which required that property developers can only issue foreign currency bonds to refinance mid-to long-term debt that is due within the next 12 months.

"The decision is a cautious move given the financial risks with regard to the high amount of offshore bonds this year," said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.

Being a capital intensive industry, real estate developers have a good appetite for financing through various channels including loans, bonds and equity. Amid the mounting expectations of more restrictive measures to rein in onshore financing, many property developers are turning their attention overseas as an alternative.

Along with the polarizing real estate sector, major developers are in need of a large amount of capital to sustain their expansion in scale and market share, and, as a result, property developers' liability continues to rise. The 176 major Chinese real estate companies' combined liability with interest increased from 4.5 trillion yuan to 6.8 trillion yuan between 2016 and 2018, according to data collected by Shanghai-based CRIC(China Real Estate Information Corp) China.

Since the restrictions for offshore financing were eased by the NDRC in September 2015, a growing number of Chinese enterprises have taken this route, and this led to gradual tightening measures on real estate developers since 2017 in order to prevent financial risks, according to a report by Tianfeng Securities.

Chinese property developers have a total of more than $30 billion worth of debt due within a year. Evergrande tops the list as the most heavily indebted group with more than $18 billion in total.

Coupled with the market expectations of more stringent financing policies and high amount of due debt, as well as the land market sales fever, property developers have accelerated their financing since the last quarter of 2018, according to Zhang Dawei, chief analyst at Centaline Property Agency Ltd.

"The trend became even clearer after the Spring Festival, when real estate companies' fundraising activities increased significantly after the credit market loosened," said Zhang.

The nation's 50 major cities saw land sales worth 2.15 trillion yuan so far this year, an increase of 15.9 percent year-on-year, according to Centaline data.

Despite the deleveraging in China since early 2018, 63 percent of respondents said that while banks and regulatory bodies have been more stringent in terms of companies' debt issuance, their ability to secure required financing remains acceptable, according to a survey conducted by Colliers International.

With capital flow controls expected, 58 percent of respondents were inclined to raise money in the domestic market, while 33 percent will look for sovereign debt as the major source of funding, added the survey that polled fund managers, developers, SOEs, banks and insurers, and private investors both in China and overseas.

A total of 6.16 trillion yuan was invested in the real estate sector from January to June, up 10.9 percent year-on-year, among which 73.3 percent, or 4.52 trillion yuan went to residential properties, according to National Bureau of Statistics data.

"There has been some property developers financing excessively. Such activities have occupied too much credit resources and reduced the efficiency of capital, as well as hiked the risks in property investment," Guo Shuqing, head of the China Banking and Insurance Regulatory Commission, said during the Lujiazui Forum in Shanghai in June. Guo added that the real estate sector is sustainable, but housing is for living in, not for speculation. History has proved that heavy cost will be paid if a nation's economy growth relies heavily on the property sector.

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2019-07-17 07:53:20
<![CDATA[Dairy industry sees improved quality and safety]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492464.htm China's dairy output has grown rapidly over the years, boosted by advanced livestock farming and large-scale milking techniques, with sharp growth seen in both dairy processing and consumer products, industry leaders said.

At the latest China Dairy Exhibition held in Tianjin between July 9 and 14, Li Defa, head of the China Dairy Association, said cow farming productivity in the country has grown to 30.1 million metric tons last year, with large-scale farms comprising the majority of the farm operation models.

"Mechanical milking at large-scale farms in China has significantly improved the quality and safety of raw milk," Li said.

 

Employees of Beijing Sanyuan Food Co Ltd, a leading dairy company in China, work at a production facility in Beijing. Provided to China Daily

China has become the largest importer and exporter of dairy products, cows and pasture grass. Total exports and imports hit almost $11 billion in 2018. Exports reached $360 million and imports stood at $10.6 billion.

Li said about 61.4 percent of farms have more than 100 cows, which is up 40 percentage points from the level in 2008.

Processed dairy products have also seen visible progress in quality and production capacity.

In 2018, nationwide dairy products reached 26.8 million metric tons and the number of dairy producers totaled 587. Revenue of medium and large-scale dairy farms or companies reached 339.8 billion yuan ($49.4 billion).

Since 2000, consolidation has accelerated the development of the domestic dairy manufacturing industry.

In 2018, medium-and-large-sized dairy processing enterprises accounted for 79 percent of nation's dairy companies. More than six dairy firms have revenues of over 10 billion yuan, which is more than 57 percent of the revenues from the dairy manufacturing business. The top three domestic dairy companies have about 49.8 percent of the total dairy industry revenue in China.

By the end of 2018, 17 Chinese dairy companies have invested overseas.

During the exhibition, the Sino-Dutch Dairy Development Center had a signing ceremony for cooperation agreements with two leading dairy firms in China. The center was founded in 2013 by China Agricultural University, Wageningen University& Research, and Royal FrieslandCampina N.V, a Dutch multinational dairy cooperative.

The center aims to raise the production safety and quality of the Chinese dairy industry through knowledge sharing, building a trustworthy third party platform, and strengthening its international consulting team.

Sun Zhihai, general manager of Yunnan Niuniu Husbandry Co Ltd, said the company decided to join the Sino-Dutch Dairy Development Center to help contribute to the "farm-to-dining table" safety control system in the dairy industry in China.

Yunnan Niuniu Husbandry is the single largest farm and has the highest-degree of automation and the most efficient producer of milk in southwestern China.

Another participant at the signing ceremony was Beijing Sanyuan Food Co Ltd, a leading dairy producer in northern China. So far there are 10 member companies cooperating with the center.

Li Shengli, director of the Sino-Dutch Dairy Development Center, said China's dairy industry has seen challenges stemming from insufficient production capacity and shortfalls in efficiency.

It is vital for the players in the domestic dairy industry to learn from advanced experience at home and abroad to raise industry management efficiency and productivity, pushing the scale of development in farms and diversity in dairy products, he said.

Large-scale farming has brought along food and nutrition improvements but has also resulted in environmental issues, said Li.

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2019-07-17 07:53:20
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492463.htm Govt and policies

Central bank injects $23.3b worth of funds

The People's Bank of China, the central bank, on Tuesday continued to pump cash into the financial system through open market operations to maintain liquidity in the market. The central bank conducted 160 billion yuan ($23.3 billion) of seven-day reverse repos, a liquidity-injecting process in which it purchases securities from commercial banks through bidding with an agreement to sell them back in the future. The interest rate for the operation stood at 2.55 percent, the central bank's statement said. It said that Tuesday's operation is aimed at offsetting the impact of factors such as tax payment.

Nation's power use up 5% in first half

China's electricity consumption, a key barometer of economic activity, rose 5 percent year-on-year in the first half of 2019, the country's top economic regulator said on Tuesday. Total power use hit 3.4 trillion kilowatt hours in H1, according to Meng Wei, a spokesperson with the National Development and Reform Commission. Specifically, power use by secondary industry increased by 3.1 percent, and that by tertiary industry 9.4 percent. Some 28 provincial regions saw a growth in electricity consumption, with the use in three regions expanding over 10 percent. In June alone, the country's power use grew 5.5 percent year-on-year, 3.2 percentage points higher than that in May, said Meng.

China's used vehicle sales rise in June

China's second-hand automobile sales saw strong growth in June, following a slight decline in May. Second-hand auto fairs across the country reported sales of 1.24 million vehicles last month, up 7.18 percent compared with May and up 17.76 percent year-on-year, data from the China Automobile Dealers Association showed. In May, the sales dropped by more than 3 percent from a year earlier. About 6.86 million used vehicles were sold in the first half, up 3.93 percent year-on-year, the data showed. Multi-purpose vehicles posted strong sales growth of over 10 percent during the period, while sales of passenger cars and coaches edged up.

Liquor companies report stable growth

China's alcohol enterprises above a designated size saw a total revenue of 348.52 billion yuan ($50.65 billion) in the first five months, according to the Ministry of Industry and Information Technology. The reading was up 6 percent compared with the same period last year, the ministry said. During the January-May period, the profit of 2,121 alcohol makers with annual revenue over 20 million yuan grew 20.2 percent year-on-year to reach 68.21 billion yuan, the ministry said. Chinese liquor-making enterprises above a designated size saw their output reach 3.26 million kiloliters in the first five months, up 0.4 percent year-on-year.

Companies and markets

Renminbi weakens against greenback

The central parity rate of the renminbi, or the yuan, weakened 33 basis points to 6.8710 against the US dollar on Tuesday, according to the China Foreign Exchange Trade System. In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day. The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

CSRC greenlights two IPOs on STAR Market

China's securities regulator has approved the initial public offering registration applications of two companies on the science and technology innovation board. Shanghai Haohai Biological Technology Co Ltd and Jiangsu Cnano Technology Co Ltd have been approved to be listed on the sci-tech innovation board, the China Securities Regulatory Commission said in a statement on Monday. It did not specify the total amount of funds to be raised. The companies and their underwriters will confirm IPO dates and publish their prospectuses following discussions with the stock exchanges.

WiMi Hologram sets terms for US float

WiMi Hologram Cloud Inc, a leading holographic augmented reality application platform in China, announced terms on Monday for its initial public offering on the US stock market. The company plans to offer 4 million American Depositary Shares (ADS) at a price range of $7.50 to $9.50, according to its latest prospectus filed with the US Securities and Exchange Commission. It intends to list the ADS on the Nasdaq Global Market under the symbol "WIMI". Net proceeds from the offering will be mainly used for research and development purposes, strategic acquisitions and investments in complementary business, as well as other general corporate purposes, said the company.

Greenland posts 46% profit growth in H1

Greenland Holdings Co Ltd, a major property developer in China, said its net profit for the first half of 2019 rose 45.7 percent year-on-year to 8.8 billion yuan ($1.3 billion). Meanwhile, business revenue grew 27.5 percent year-on-year to 201.6 billion yuan, with earnings per share standing at 0.72 yuan, according to its financial report filed to the Shanghai Stock Exchange. The company's debt-to-asset ratio fell 1.27 percentage points from the end of last year to 88.22 percent, the report said. Contract sales reached 167.7 billion yuan in the six-month period, up 3.1 percent year-on-year, the developer said.

Around the world

White House projects $1 trillion deficit

The White House has revised the fiscal year 2019 budget deficit to a projected $1 trillion, the highest since 2012, Office of Management and Budget (OMB) said in its recently released Mid-Session Review. Without reform, trillion-dollar deficits will continue throughout the budget window, and will drive debt to more than $33 trillion by 2029, the OMB report said. "The trend of growing deficits can be reversed only through concerted efforts of spending restraint and restoring government to the proper size," it said. The expanding deficit partially resulted from a 10-year $1.5 trillion tax cut rolled out in late 2017, which substantially reduced corporate and individual income tax rates, it said.

Vietnam's state budget collection increases

Vietnam posted budget collection of 745.4 trillion Vietnamese dong ($32.4 billion) in the first half of this year, up 13.2 percent on-year, the country's Ministry of Finance announced. Domestic revenue grew 13.6 percent from the same period last year, while revenue from import-export activities rose by 13.7 percent. Between January and June, Vietnam's budget spending stood at 666.1 trillion Vietnamese dong, up 2.6 percent year-on-year. As a result, budget surplus was around 84.3 trillion Vietnamese dong.

Delinquency ratio for household debt rises

Delinquency ratio for household debts in South Korea rose slightly in May as delinquent credit loan increased in the month, financial watchdog data showed on Monday. The ratio of bank household loans, overdue at least one month, stood at 0.32 percent of the total as of the end of May, up 0.02 percentage points from a month earlier, according to the Financial Supervisory Service. The delinquency ratio for mortgage loan was unchanged at 0.22 percent, but credit loan to households extended by banks advanced 0.05 percentage points to 0.55 percent in the month. The financial watchdog said it will encourage banks to prepare sufficient loan loss reserves for possible defaults.

China Daily - Agencies

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2019-07-17 07:53:20
<![CDATA[OLED maker Visionox to expand presence in smartphones, wearable devices]]> http://www.chinadaily.com.cn/kindle/2019-07/17/content_37492462.htm

Visionox Co Ltd, a leading Chinese manufacturer of organic light-emitting diode or OLED screens, is accelerating its expansion in smartphones, wearable devices, vehicle-mounted systems and intelligent homes due to the surging demand for flexible display screens.

"With the development of 5G, big data and cloud computing, the display panels will change peoples' lifestyles and enhance the visual experience," said Xu Fengying, vice-president of Visionox, adding that cutting-edge technologies will stimulate applications for flexible screens.

"The OLED industry is growing very rapidly. Visionox will focus on independent innovation and team with other companies in the industrial chain to produce flexible products," Xu added.

The company official emphasized the flexible active-matrix organic light-emitting diodes or AMOLEDs will have wider applications in smartphones, computers, smart wearables, vehicles, smart homes, virtual reality and augmented reality.

AMOLEDs are more flexible with a faster response and have high contrast and wide visual angles when compared to traditional liquid crystal displays or LCD panels.

The company has provided AMOLED technology for smartphone maker Xiaomi Corp's under-screen camera since June. Xiaomi's prototype foldable phone also used an OLED display panel from Visionox, Xu said.

The company has also offered AMOLED screens for ZTE Corp's first 5G flagship smartphone, the ZTE Axon 10 Pro, which was launched in May.

In April, another smartphone manufacturer, Nubia Technology Co Ltd, unveiled its first wearable watch-like smartphone called Alpha, which features a four-inch flexible screen manufactured by Visionox.

The firm currently has about 6,000 OLED patents. It grew out of the OLED project team of Tsinghua University and has been in the sector for more than two decades. It has two sixth-generation flexible AMOLED display screen production lines in Gu'an, Hebei province, and Hefei in Anhui province.

Its AMOLED display screen production line in Gu'an went into operation last year. It can turn out 30,000 glass substrates (1,500 mm by 1,850 mm) every month, and meet the high-end, foldable screen demand for 90 million smartphones.

Visionox started building its second flexible AMOLED production line in Hefei in December. It also has a monthly capacity of 30,000 substrates.

Allied Market Research, a company that studies business trends, said global revenue in the OLED market will reach $37.2 billion in 2020, a compound annual growth rate of 18.3 percent.

South Korean companies such as Samsung and LG account for the majority of that revenue, but experts said more Chinese companies are entering the market.

BOE Technology Group Co Ltd is challenging the dominance of South Korean companies after investing heavily in the sector.

The Beijing-based supplier of semiconductor display products now has three sixth-generation flexible AMOLED production lines. It started mass production of the panels from its facility in Chengdu, Sichuan province, in October 2017.

The panels are being used by more than 10 smartphone manufacturers such as Huawei, Oppo, Vivo, Xiaomi, ZTE and Nubia. The company's second line in Mianyang, Sichuan province, started mass production on Monday. Work on the third facility began in Chongqing last year.

"China's semiconductor display industry has taken large steps forward in the past decade, changing the display industry's global competitive landscape. China has transformed into the world's largest consumer market and manufacturing base for display terminals, with huge market potential," said BOE Vice-President Zhang Yu.

"AMOLED technology is the future trend for smartphone panels," Zhang said. "At the moment, technological upgrades of display panels on smartphones concentrate on appearance, function and image quality."

In addition, Shenzhen China Star Optoelectronics Technology Co Ltd announced a new production line for large-screen ultra-high definition 8K display products and OLED screens in November.

Spurred by growing demand, shipments of foldable AMOLED panels are expected to reach 50 million units by 2025 for the first time since their launch in 2018, global consultancy IHS Markit said.

"Chinese panel companies are developing rapidly in the flexible and foldable screens sector, but we still lag behind South Korean competitors in key technical talent, craftsmanship and product reliability," said Wang Jian, an analyst at Beijing-based market researcher Sigmaintell Consulting.

Wang said AMOLED technology will be very important for smartphone panels in the next few years and its future prospects are promising, while adding the flexible display technology will play a vital role in the small-and medium-sized display sector.

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2019-07-17 07:53:20
<![CDATA[Opening-up spurs upgrading of economy]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492096.htm In his famous book The Rise and Decline of Nations, Mancur Olson, the late economics professor at the University of Maryland, argued that if societies don't continuously evolve their economic structures, then they will become stagnant and innovation will stop.

Industry groups will try to use protectionist policy to protect their position, thus hurting economic growth and leading to national decline, he said.

Opening up to foreign competition is an essential step toward preventing this ossification. Many historical examples show that a nation that tries to protect its industry from competition just ends up with inefficient industries and a left-behind economy.

For 40 years, China's reform and opening-up process has improved economic efficiency and upgrading by iteratively reforming economic and legal structures.

China has been able to maintain high economic growth for a very long period through this process of continuous institutional innovation. This gradual process of continuous reform while institutions are built has proven much more successful than the "shock therapy" implemented by Russia, Poland and others in the 1990s.

In the last few months, many additional reforms aimed at further opening up the Chinese economy to foreign firms and supporting the private sector have been announced. These reforms are coincidentally consistent with some of the requests by the United States in the trade negotiations.

But, they are being made for the long-term benefit of the Chinese economy. They are a natural continuation of the long trajectory of economic reform.

Key reforms have been in four areas: allowing 100-percent foreign ownership of investments in areas of the economy not explicitly excluded by a negative list, increased protection of intellectual property rights, opening up China's financial markets to foreign competition, and promoting the health of the private sector.

Wider access to foreign investors

At the recent G20 summit in Osaka, Japan, President Xi Jinping announced that China will release an updated negative list, which will further open up the agriculture, mining, manufacturing, and service sectors to foreign investment and foreign competition.

A negative list allows foreign investment except in areas where it is explicitly prohibited. So, foreign companies can now consult the list to determine what kinds of investments are allowed.

In June, the National Development and Reform Commission announced that by the end of this year, China will lift all barriers to foreign investment not included on the negative list.

In sectors ranging from automobiles to movie theaters to finance, China is also removing the requirement that foreign investors have to form a joint venture with a Chinese partner.

We are already starting to see examples. The new Tesla plant under construction in Shanghai will be the first wholly foreign-owned automobile plant in China producing for the Chinese market. ExxonMobil and BASF are establishing wholly owned petrochemical plants in South China's Guangdong province. And, foreign banks and financial firms will be allowed to create wholly owned subsidiaries in China.

Tariffs are also being cut. For example, starting July 1, the 20-to 25-percent tariffs for imported vehicles were cut to 15 percent and the duties on auto parts were lowered to 6 percent from the previous levels of 8 to 25 percent.

At the recent Summer Davos meetings in Dalian, Liaoning province, Premier Li Keqiang said: "China's guiding principle is clear: We will keep to reform and opening-up, and foster a world-class, market-oriented business environment governed by a sound legal framework."

He further said that these steps will "more effectively protect the rights and interests of foreign investors". The new Foreign Investment Law says that equality has been made one of the top priorities, as it emphasizes that foreign and domestic companies will be "treated as equals".

IPR protection

China is a highly competitive economy. In the past, some sectors have been a "wild west" where Chinese firms did not hesitate to copy each other or foreigners. But, as China has developed its own technology and moved up the value chain, protecting intellectual property rights has become a high priority for the government.

At the China Development Forum in March, Vice-Premier Han Zheng emphasized: "We will step up our efforts for IPR protection as well as law enforcement in various aspects, and establish a system of punitive punishment for IPR infringement to significantly raise the cost of violating the law."

And, President Xi announced that China will strengthen intellectual property rights protection in his April speech to the second Belt and Road Forum for International Cooperation.

Also, the removal of the requirement that foreign companies enter into joint ventures should alleviate any fears about mandatory technology transfers.

Financial market reforms

Reform of the financial sector is moving especially rapidly. China will allow full foreign ownership of securities firms, futures businesses and life insurance companies by 2020, a year earlier than was scheduled, Premier Li Keqiang told the Summer Davos Forum. Foreign institutions will be offered treatment equal to that of domestic companies in credit references, credit ratings and payments, he said.

Li emphasized that this reform is part of a broader push to force domestic firms to upgrade as they face foreign competition. "Further opening to foreign investors, we are not just providing them with opportunities to enter the Chinese market. We are also providing opportunities for the financial sector to upgrade and to improve its quality on a level playing field," Li said.

Measures to boost private sector

The Chinese government has also recently announced measures to improve the availability of credit for the private sector and reduce taxes on it.

In a discussion with foreign CEOs at the Summer Davos meeting, Li noted that small and medium-sized companies and private enterprises provide over 80 percent of employment in urban areas and 60 percent of GDP.

He also said that at the beginning of this year, China had introduced 200 billion yuan ($29 billion) of annual tax cuts aimed at improving the environment for SMEs. The government also introduced a series of measures for further tax and fee cuts in May, amounting to 1.7 trillion yuan for the whole year.

A month earlier, the government announced financial reforms designed to increase the availability of loans and cut interest rates to SMEs. Li said at Summer Davos that the government will work to cut financing costs for SMEs, which generally are higher than that for large companies, by 1 percentage point this year.

So, by the end of May, the balance of loans for small and microsized enterprises with a total credit line of up to 10 million yuan for each borrower increased by 21 percent year-on-year to 10.3 trillion yuan, according to the People's Bank of China, the central bank.

Li said tax and fee cuts are a crucial measure to motivate enterprises, which can reinvest the savings into technological innovation and stabilize employment. More measures will be taken to improve the business environment and boost investment and consumption.

Any of these steps would be a major reform. Taken together, they are a big move in the process of using both domestic and foreign competition to push upgrading of the Chinese economy.

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2019-07-16 07:29:18
<![CDATA[China can withstand economic headwinds]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492095.htm Despite downside pressure, the Chinese economy is expected to remain stable in the second half of this year. The year-on-year GDP growth rate for 2019 is expected to be no lower than 6.2 percent.

Several factors will help China withstand headwinds from global slowdown and other external instabilities.

First, as the country is a developing economy with lots of weak links, investments in numerous areas still offer prospects of relatively high returns.

Second, consumption is expected to continue a steady growth, given the stimulus of recently implemented large-scale tax cuts. Additional policies to boost consumption are probably on the horizon.

Also, macro policies still have room for maneuver toward steady growth. Proactive fiscal policy will continue in the second half. Meanwhile, monetary policy could be adjusted to counter downside pressure, as inflationary risks are controllable and as the US Federal Reserve may cut interest rates in the coming months.

Against the backdrop of increasing policy support for the real economy, an upside for the A-share market can be expected in the second half of the year, given the relatively cheap valuations of listed firms.

Fluctuations in the bond market may offer investment opportunities as the room for further interest rate falls is limited.

In the long term, China will rely on new growth points to achieve a healthy development. The shift in driving forces, however, takes time to realize, making it important to foster the new economy and vitalize traditional growth engines for the purpose of stabilizing growth.

The launch of the Nasdaq-style tech board STAR Market is conducive to helping new-economy enterprises develop themselves, and provides a new channel for domestic investors to share the benefits of economic upgrading.

Infrastructure investment currently grows fairly slowly as financing condition has tightened. Policy support is expected to strengthen, to meet local governments' reasonable financing needs relating to infrastructure investment.

In addition, financing difficulty faced by enterprises has been eased to some extent this year with quickened credit expansion. But structural obstructions in financing channels remain, making more policies to facilitate financing of small businesses necessary.

Xu Gao is chief economist of BOC International (China) Co Ltd. The analysis above is based on his recent interview with China Securities Journal.

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2019-07-16 07:29:18
<![CDATA[Lessons from G20 summit: Trade is paramount, but long, bumpy road ahead]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492094.htm The outcome of the much-anticipated Xi-Trump meeting at the G20 summit in Osaka was largely in line with our expected central case, with the United States and China agreeing to resume talks and not escalate the dispute further.

The language was more positive than we expected, and we think markets will react in a limited but positive manner.

The June 29 meeting itself lasted 40 minutes, 10 minutes shorter than the allotted time, suggesting smoother proceedings than anticipated. President Donald Trump later tweeted that he had "a great meeting" with Xi that was "far better than expected".

Both sides agreed to restart talks based on "equality and mutual respect", an important point for China, which had complained about US "bullying tactics".

The US agreed not to impose further tariffs for the time being, which President Xi Jinping had made a precondition for meeting President Trump. However, few details emerged about the timeline and substance of a deal.

A significant change since the 2018 G20 meeting is that sanctions against Huawei Technologies appear to be more explicitly linked to the trade discussion, with reports that Xi has demanded that Huawei be removed from the blacklist before a final trade deal is struck.

During the news conference, Trump said he would allow some US technology sales to Huawei, as long as they do not raise "national (security) problems".

This adds an additional layer of complexity to any potential deal. In the US, Trump has faced resistance from Republicans and Democrats to link Huawei to the trade negotiations. More generally, the obstacles we have previously highlighted to a deal are still present:

While China still appears open to a trade deal, it is unlikely to compromise on sovereignty and reforms that could jeopardize its growth model, and is prepared for the worst should negotiations fail.

As the US presidential election approaches, Trump may be more cautious on moves that could jeopardize the slowing US economy. That said, Trump has said he is in "no hurry" to strike a deal.

But he faces bipartisan pressure to remain tough on China, and appears to sincerely believe that tariffs have been a net positive for the US economy.

Both countries are increasingly conscious of a more confrontational edge to the strategic relationship, which extends beyond trade, subsidies and intellectual property theft, and toward geopolitics and competing political and ideological systems.

We maintain our base case (probability 50 percent) that negotiations will continue in an on-and-off fashion but without a resolution. We still put the probability of a deal being reached in the next six months at 30 percent, higher than that of an escalation (20 percent).

In any case, as this newspaper had warned, there is a long and bumpy road ahead.

The fact that the trade dispute with China is not resolved - even if escalation has been avoided - means that Trump may be reluctant to continue active trade disputes with the European Union and Japan at the same time.

Recall that the deadline for a decision on auto tariffs was extended to Nov 14. We do not change our central assumption that auto tariffs will not be implemented this year, but see a significant risk of escalation, given the wide gulf between the negotiating objectives of the US and the EU, notably on agriculture.

Businesses will have to continue to deal with the ongoing uncertainty, which is likely to continue to weigh on investment and trade.

Meanwhile, the focus is now squarely on central banks and monetary policy. We continue to expect the Federal Reserve to deliver 50 basis points in rate cuts this year, with the first cut of 25 bp at the meeting this month-end and the European Central Bank to respond with the introduction of tiering and a first rate cut in September.

The G20 was able to deliver a joint communique, though this was only achieved by removing any potentially contentious points such as protectionism and climate change.

The free-trade agreement between the EU and the South American bloc Mercosur is a historic achievement that took two decades to negotiate and a welcome sign that protectionism isn't king everywhere.

The deal encompasses 88 billion euros ($99 billion) worth of goods, 34 billion euros in services, and estimated savings for EU companies of over 4 billion euros. However, it may yet unravel at the ratification stage over environmental protection issues.

Soon after leaving Japan, Trump also visited the Republic of Korea and became the first sitting US president to step on the soil of the Democratic People's Republic of Korea at the Demilitarized Zone. He agreed with Kim Jong-un, top leader of the DPRK, to resume talks on denuclearization.

Daniel P. Ahn, lead writer of this commentary, is BNP Paribas Securities Corp's chief US economist and head of Markets 360 North America. Luigi Speranza, chief global economist at BNP Paribas in London, Xingdong Chen, chief China economist of BNP Paribas in Beijing, and Paul Hollingsworth, senior European economist and head of UK economics of BNP Paribas in London, are co-writers of this commentary.

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2019-07-16 07:29:18
<![CDATA[Beijing in league of 'innovative cities']]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492093.htm Beijing has been included among the top global innovative centers, as the national economy undergoes growth toward higher value-added activities and new growth drivers, experts said.

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Municipality gaining in VC funding, patent filings, high-tech investments

Beijing has been included among the top global innovative centers, as the national economy undergoes growth toward higher value-added activities and new growth drivers, experts said.

The capital city ranks fourth in terms of innovation among all cities worldwide, following San Francisco, Tokyo and Singapore, according to a recent report by consultancy firm JLL. Shanghai and Shenzhen are the other Chinese cities in the top 20 list.

Major metrics include international patent applications, venture capital attraction, investment in high-tech industries and research and development expenditure.

"Yet the top positions are not all dominated by US cities, but rather evenly spread across the three main global regions, with Asia-Pacific cities having a stronger presence in these rankings than they would have had even a few years ago," according to the report, based on a survey of over 100 cities.

"Innovation is a crucial factor in today's technology-driven world," said Jeremy Kelly, director of global research at JLL. "China's leading cities are poised to become increasingly important players in the global marketplace for information, innovation and technology."

He added the growth in Beijing's innovation is evident in some areas.

International patent applications, for example, have expanded nearly ninefold over the last decade and it is now one of the world's top 10 cities in this measure. Similarly, the number of equity funding deals to startups in Beijing increased by six times over the previous five years, according to Kelly.

The report said Beijing is the third largest destination for venture capital funding - which surpassed $100 billion from 2016 to 2018, following San Francisco and San Jose, and is three to four times more than traditional financial centers like New York and London.

The city has also nurtured the most unicorns outside of Silicon Valley and generated many global tech companies such as Baidu, Xiaomi and Sina, and is home to some of China's best universities and top talent, according to JLL.

Wang Zhe, an economics lecturer at Australia-based Macquarie University, said: "The government and universities have released many policies to encourage graduates to start their own businesses, such as providing incubators or office space, which has helped build an ideal environment for entrepreneurship."

Nicolas du Cray, partner at Cathay Innovation, a global venture capital fund, said Beijing is the base for major telecom operators, internet companies and mobile service companies, as well as colleges focusing on computer sciences and mechanical engineering, which together create an innovation ecosystem.

Other cities have advantages in some special segments. Hangzhou in Zhejiang province leads in e-commerce, while Shanghai leads in financial technology, he said.

The JLL report also said innovation ecosystems within cities not only are key to driving productivity and economic growth, but also increase demands for real estate, particularly when combined with a high concentration of human capital.

The top performing cities have recorded the fastest, most vigorous office rental growth over the past decade and are attracting a higher proportion of real estate capital, it said.

According to Kelly, the real estate market impact can be already seen in diversifying sources of demand from sectors such as technology and new media.

For example, high-tech companies accounted for a larger share of leasing activity in Beijing over the last three years than other cities in the study, he said.

Wang Guanchun, chairman and CEO of Laiye, a Beijing-based intelligent robot startup, said office location plays an important role in seeking the best tech talent and the most experienced "neighborhoods".

"We are neighbors to outstanding companies such as Google, Apple, and Intel, which makes it easier to facilitate exchanges and learning, helping us become a smart robotics company with global influence."

In 2014, the central authorities emphasized the position of Beijing as the national political center, cultural center, international exchanges center and technological innovation center.

By 2030, Beijing is expected to become a new engine for innovation in the globe and spearhead the nation's innovation efforts, according to a document released by the State Council in 2016.

The city will further promote technological innovation by deepening reform of technology-related systems, training top talent, furthering opening-up and developing major innovative clusters - the Zhongguancun Science City, Huairou Science City, Future Science City and the Beijing Economic-Technological Development Area, according to a Xinhua News Agency report in April.

 

Visitors look at a drone during the 2019 National Mass Innovation and Entrepreneurship Week in Beijing in June. Zou Hong / China Daily

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2019-07-16 07:29:18
<![CDATA[Rich pickings ahead for power sector financing, says report]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492092.htm China's power demand will increase by 65 percent through 2050 from the current level, while its GDP is likely to grow by 225 percent, and the huge demand will create huge investment opportunities, said a new industry report.

By 2050, electricity demand in Asia will nearly double, and to meet the growing demand, the Asia-Pacific region will account for nearly half of the globe's new investment, which will be $5.8 trillion. China, together with India, will create investment opportunities worth $4.3 trillion, according to Bloomberg New Energy Finance.

As the cost of renewable energy continues to fall, it will challenge the current dominant position of coal in the power sector. It is likely that there will be no new coal-fired power projects in China from 2025, and coal-fired power generation will fall from 2027. By 2050, coal-fired power will take up about 15 percent of total power generation.

"As a result, investments will mainly flow to the renewables sector," said Luan Dong, China renewable analyst at Bloomberg New Energy Finance.

According to a recent report by the China Electricity Council, in 2018, investment into the power generation projects of major power generation enterprises nationwide totaled 278.7 billion yuan ($40.5 billion), down 3.9 percent on a year-on-year basis. However, distribution network investment surged 6.4 percent year-on-year to 302.3 billion yuan. Investment in national power grid construction remained mostly flat at 534 billion yuan.

A report from tech and consulting firm Capgemini estimated that China's total installed capacity will reach 1.23 billion kilowatts by 2020, and the power generation industry will require an investment of $180 billion during the same period.

Chen Chiping, vice-president of Capgemini China, said that given that China's gross domestic product is expanding at a rate of around 6.5 percent, by 2020, China's electricity market should grow with an annual additional 4,800 kW installed capacity, and the total investment will reach $590 billion. "The large scale of investment will bring business opportunities for foreign investors."

"Even with the high growth rate of installed capacity, the level of China's installed capacity per capita by 2020 will merely reach that of the United States in the 1950s. There is a huge potential for investment in China's electricity industry," Chen said.

For international investors, Capgemini suggested they should enter the Chinese market along the electricity industrial chain. At the industrial chain front end, investors can bring advanced resources such as the long-term supply of natural gas, to integrate into the power generation part to expand in the Chinese market. In the traditional thermal power generation part, investors should pay attention to asset acquisition opportunities as well as demand from State-owned enterprises to deepen reforms and introduce foreign technologies.

At the end of the industrial chain, as suggested by Capgemini, international investors can enter the Chinese market by offering customers with consultancy services, software design plans, as well as energy-saving solutions.

"For major State-owned power generation enterprises, although they can consider investing in the traditional coal power sector, short-term power surplus means higher investment risks. Companies need to consider more about acquiring existing power plants rather than building new ones, and consider market integration in the target area to increase market share," said the report by Capgemini.

In the short term, investors should consider investments through joint ventures, or sign a self-supplied power plant operation contract with large users to manage investment, starting with cooperation, and finally transitioning to a direct supply agreement to win large users at the right time.

 

Workers check power transmission lines in Mingguang, Anhui province. Song Weixing / For China Daily

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2019-07-16 07:29:18
<![CDATA[Australian firm, New Century team up to add jobs]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492091.htm SYDNEY - A zinc producer in Australia's far north is set to hire a workforce made up of 50 percent indigenous staff, after a landmark joint partnership agreement was reached with the local aboriginal community.

Situated in Queensland state's Gulf of Carpentaria, the area around the New Century Resources mine site is a vast and remote region.

Although a beautiful landscape with such isolation, many indigenous communities nearby have experienced high levels of unemployment and a significant amount of social disadvantage.

That's why local aboriginal workers will be prioritized under the new joint venture arrangement between the Downer Group, a large mining services company that will oversee the New Century zinc mine, and the traditional landowners, the Waanyi people.

"It's a deal that we haven't seen done anywhere else in Australia before," head of corporate affairs for New Century Resources, Shane Goodwin, told Xinhua News Agency recently.

"Last year, we announced a Cultural Heritage Management Agreement with the Waanyi people, which provides access to some known mineral resources that have the potential, if they're mined, to impact on sites of cultural significance.

"So we went through a process of negotiating with the Waanyi people to have access to those mineral resources, but they made it clear to us that although the compensation arrangements are important, what they're really interested in is undertaking the work and being part of the work."

But as well as a commitment to employing members of the indigenous community with a 50 percent target, Goodwin said the agreement actually goes one step further.

"From our perspective, the more important aspect is that the Waanyi people will be genuine 50 percent joint venture partners, so the profits derived from all of the work will be shared 50/50 between the Waanyi-Downer corporate entity," he said.

With the site effectively shut down in 2016, in 2017 New Century Resources set a plan in place to begin the economic rehabilitation of the site.

In this process, operators will pick up the waste product from the past 20 years of mining and extract any remaining valuable minerals.

New Century Resources then hopes to use the profits generated to develop other hard rock areas of the site that have not yet been mined.

Used mainly in galvanizing steel, around 50 percent of New Century's zinc is sent to China.

"The smelters in China have been receptive to having Century back on the radar as a provider of zinc concentrate into the marketplace and that's been really positive and a really good experience," Goodwin said.

"So in two ways, we have that relationship with China, both as a customer, but also as a massive supporter on the economic rehabilitation story."

The new project is expected to begin before the end of 2020.

Xinhua

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2019-07-16 07:29:18
<![CDATA[Healthy snacks enjoy bumper sales]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492090.htm High-calorie biscuits, chocolate and candies are no longer as popular as they used to be. Quality-conscious young Chinese consumers are going for healthier snack food.

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Growing spending power and pursuit of high-quality products spur demand

High-calorie biscuits, chocolate and candies are no longer as popular as they used to be. Quality-conscious young Chinese consumers are going for healthier snack food.

Locally-made snacks like nuts are enjoying a bumper year, spurred by the growing spending power of consumers and their pursuit of healthy and high-quality products.

"With the increase of per-capita income and the ongoing consumption upgrade trend, Chinese consumers are eating more and more snacks. Yet, compared with the United States, Europe, Japan and South Korea, China's average consumption volume and value on snacks is still relatively low, and it has significant growth potential," said Neil Wang, president of consultancy Frost & Sullivan in China.

"Healthier and high-quality snacks will make up for larger market share and attract more consumers. The growth speed of e-commerce platforms and specialty stores is foreseen to be faster than traditional supermarkets and individual sellers. The new-generation customers have formed a habit of online shopping, and such a trend is expected to continue," he said.

One top beneficiary is Anhui Three Squirrels Electronic Commerce Co Ltd, a Wuhu, Anhui province-based snack maker, which is one of China's biggest online snack retailers.

The company made its public debut at the Shenzhen Stock Exchange on Friday. The stock surged 9.98 percent to its daily limit high during Monday trading and closed at 23.25 yuan ($3.38) per share. Its market value stood at 932 million yuan.

Shares of Three Squirrels have soared from its initial offer price of 14.68 yuan.

The seven-year-old snack producer's products including nuts, preserved meat, and dried fruit. It was ranked the top snack retailer by sales revenue on Alibaba's Tmall online shopping platform for five straight years.

The company started its business by selling online. Since 2016, it began to launch offline stores. Now, it has more than 70 brick-and-mortar stores nationwide, the company said.

In the first quarter, Three Squirrels' sales revenues hit 2.87 billion yuan, 27.17 percent higher year-on-year. During the period, its net profit reached 249 million yuan, up 6.95 percent year-on-year, its earnings report said.

Top domestic snack producer Bestore Food Co Ltd, which is based in Wuhan, Hubei province, also has plans to list in Shanghai.

Shanghai-based snack food chain Laiyifen, Hunan-based Yanjin Shop Food Co Ltd, and Tianjin Guifaxiang, one of China's time-honored brands, have all listed in the country's exchanges.

Three Squirrels, Bestore, and Hefei Huatai Food Co Ltd, the parent group of ChaCha, took the top three market positions in the category of nuts, seeds and trail mixes. The trio accounted for 52 percent of the market share in China last year, among a total of more than 2,500 industrial players, said market research provider Euromonitor International.

From 2005 to 2014, the annual compound growth rate of snack foods in China was 22 percent. By 2020, the market scale of the sector is expected to reach 2 trillion yuan, a report by market research company Ebrun said.

 

Mascots of Anhui Three Squirrels Electronic Commerce Co ring the bell during the company's listing ceremony at the Shenzhen Stock Exchange on Friday in Shenzhen, Guangdong province. Mao Siqian / Xinhua

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2019-07-16 07:29:18
<![CDATA[China's entertainment industry sees drop in first-half earnings]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492089.htm

China's entertainment sector, which was on a roll last year, seems to have run into a rough patch judging by the lower-than-expected profit of top companies in the first half of this year.

China's leading Wanda Film Holding Co Ltd reported an estimated drop in first-half profit of between 55 percent and 65 percent year-on-year to between 481 million ($70 million) and 619 million yuan, compared to the same period in 2018 when the company's profit hit 1.38 billion yuan.

Another giant, Huayi Brothers Media Corp, posted an estimated loss of between 324.79 and 329.79 million yuan during the same period. Its profit last year during the first half of the year stood at 277.37 million yuan.

Some 12 major entertainment companies, including those that posted hefty revenues last year such as The Wandering Earth's producer Beijing Jingxi Culture and Tourism Co Ltd, also reported loss, according to a rough estimate by industry analysis service provider Mirror Entertainment.

Beijing Jingxi Culture and Tourism reported a loss of roughly between 48 million and 68 million yuan in the year's first half.

"The reasons why a majority of entertainment companies saw a drop in profit can be complicated. On one hand, last year's tax crackdown and tightened regulatory policies in taxes have certainly struck some major players, costing them both time and money to pay the fine and restructure their businesses," said Chen Shaofeng, a professor in culture and entertainment at Peking University.

"On the other hand, China's film box office market is heading toward saturation, which means that the profit surge that many entertainment companies saw in the past is less likely to happen," Chen added.

Data from the National Radio and Television Administration showed box office revenue in the first half of 2019 in China stood at 31.17 billion yuan, down 2.7 percent year-on-year. Cinema visits dropped 10.3 percent year-on-year to 808 million visits within the same period.

Chen believes, though, the companies will bounce back.

"The industry is still likely to see a boom in the near future as there is more market potential to be tapped, such as film derivatives (toys and figure models), various genres of intellectual properties or trans-media storytelling (presenting the story with multiple platforms like films, TV shows, and games)," Chen said.

"Such approaches to IP development can be an effective way to generate more revenue for entertainment companies," he added.

Wanda and Huayi said in their statements that losses were due to a lack of projects premiering in the first half of the year. Most of Huayi's film projects such as The Eight Hundred directed by Guan Hu would premiere in the second half of 2019.

"It's common that entertainment companies adjust their film distribution plans based on market demand, and choose to release their films during a certain period of time to maximize their profits," Chen said.

"But it is certainly not the reason why a majority of entertainment companies saw a drop in profit. Although it is common for entertainment companies to premiere their major film projects in second-half seasons with peak demand, it is unlikely for most of them to do so at the same time, as the first half of the year also has many peak movie-going seasons," said Chen.

"As you can see, there are several films that became a hit during the holiday, like The Wandering Earth, a film with a 4.65 billion yuan box office. Its box office record was the second highest in China's history and turned out to be a revenue spinner for its major producers," Chen said.

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2019-07-16 07:29:18
<![CDATA[Services stay in the driving seat]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492088.htm China's service sector expanded by 7 percent year-on-year in the first half of the year, driven by the fast growth of information technology, transportation and financial service companies, data from the National Bureau of Statistics showed on Monday.

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Sector's expansion shows improved quality of growth amid upgrading

China's service sector expanded by 7 percent year-on-year in the first half of the year, driven by the fast growth of information technology, transportation and financial service companies, data from the National Bureau of Statistics showed on Monday.

The service industry continues to be a strong driver of the economy, outperforming the overall GDP growth of 6.3 percent in the first half of the year as well as industrial growth of 6 percent during the same period.

The software and information technology sector was biggest contributor to the expansion of the service industry, growing by 20.6 percent year-on-year in the first half of the year, while transportation and financial services saw growth of 7.3 percent, according to the NBS.

Economists said that the robust growth of the service sector reflects the resilience of the Chinese economy which has seen an improved structure. The service sector contributed to 60.3 percent of the overall economic growth in the first half of the year, official data showed.

"The quality of economic growth is improving along with the process of the supply-side structural reform," said Xu Hongcai, an economist with the China Center for International Economic Exchanges.

"This was reflected by data which showed that the service industry accounted for 54.9 percent of GDP, up 0.5 percentage point year-on-year. Consumption also accounted for 60.1 percent to the overall economic growth," he said.

Meanwhile, companies in the service sector saw faster revenue growth from January to May, which rose 10.1 percent year-on-year. Technology companies in the service sector saw their revenue grow by more than 12 percent year-on-year.

Wang Xinzhe, chief economist at the Ministry of Industry and Information Technology, said the software and information technology service sector is the most concentrated area of research and development and its steady growth is driving the development of traditional industries such as manufacturing.

"This has also helped push forward the development of the nation's digital economy and its integration with the real economy," he said.

Companies are also expressing rising confidence in the Chinese economy and their growth prospects. A survey by global auditing and consulting firm KPMG found that about 77 percent of the surveyed 125 CEOs from companies headquartered in the Chinese mainland and Hong Kong are upbeat or very upbeat on domestic economic growth despite possible global economic headwinds.

The CEOs are increasingly confident in the growth prospects of their companies, with most expecting to see top-line revenue growth and an increase in headcount over the next three years, the survey showed.

Despite the slower-than-expected GDP growth of 6.2 percent in the second quarter, the resilience of the Chinese economy has strengthened, said Steven Zhang, chief economist with Morgan Stanley Huaxin Securities Co Ltd.

Policies in the second half of the year should focus on stimulating effective demand and channeling more funds into the economy to help reduce smaller companies' financing costs, he said in a research note.

Xinhua contributed to this story.

 

Deliverymen prepare to deliver food in a street in Guangzhou, capital of Guangdong province. Chen Jimin / China News Service

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2019-07-16 07:28:56
<![CDATA[Retail sales point to growing consumption power]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492087.htm

Retail sales of consumer goods in China grew to 19.5 trillion yuan ($2.83 trillion) in the first half of this year, a positive sign showing the country's increasing consumption power despite headwinds, official data showed on Monday.

The increase of 8.4 percent year-on-year in retail sales is good news in the face of "a complex economic situation with increasing external uncertainties and new downward pressure", according to the National Bureau of Statistics.

The figures from the NBS revealed that online sales occupied nearly 25 percent of overall retail sales and totaled 4.8 trillion yuan in the first six months.

Online sales increased 17.8 percent year-on-year, 2.5 percentage points faster than the first quarter.

Mao Shengyong, spokesperson for the NBS, noted that e-commerce is a major driver of China's retail economy.

"China's retail sales of consumer goods surged 9.8 percent year-on-year in June, especially driven by the rapid growing online sales and this year's June 18 retail festival," Mao said at a news briefing held on Monday in Beijing. "And we've witnessed fast growth in online sales of cosmetics and home appliances."

Chinese major e-commerce platforms continued to break records in online sales during this year's June 18 shopping festival from June 1 to 18, which is the second-largest after Singles Day on Nov 11.

JD reported sales for the 18-day festival period hit a staggering 201.5 billion yuan, compared with 159.2 billion yuan in 2018.

Alibaba also reported strong sales for the annual shopping event, with more than 110 brands on its Tmall platform reporting a turnover of over 100 million yuan.

"China's e-commerce sector has posted remarkable achievements as it drives global development," said Jennifer Ye, PwC China consumer markets leader. "Chinese internet giants are leveraging their own capital and technological advantages to create retail ecosystems, while consolidating offline spaces and upstream and downstream industries to maximize their competitive edges."

PwC estimated in a recent report that China's overall retail market will hit $6.77 trillion in 2019, of which e-commerce retail sales will reach $1.25 trillion, up 9 percent and 21 percent year-on-year respectively.

According to the report, while Chinese consumers are willing to embrace changes, they are also constantly changing and becoming more discerning.

In particular, consumers born in the 1980s and 1990s will prefer entertaining and practical shopping experiences, instead of simply combining the in-store experience with a digital app.

In 2018, 52 percent of Chinese consumers spent more on experiences, such as travel, dining out and activities, than the previous year, compared with 26 percent in the United States, the report noted.

Statistics from Alibaba's restaurant review and lifestyle services platform Koubei showed that diverse demand is growing and the nighttime economy is blossoming across the nation.

According to the Koubei data, consumption that satisfies solo consumers is rising in the nighttime hours, including spas, manicures, yoga and reading. And more parents are spending money on parent-child services during nighttime hours, such as parent-child swimming.

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2019-07-16 07:28:56
<![CDATA[Experts: Stabilization of land, home prices is very likely prospect]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492086.htm Fewer cities reported price hikes in new and pre-owned homes in June from the previous month, suggesting that the target of stabilizing land and home prices is achievable, said experts.

A total of five cities saw their new home prices decline in June, up from two in May, and the trend is more apparent in the secondary market as 20 out of China's 70 major cities tracked by the National Bureau of Statistics (NBS) reported price declines in pre-owned homes from the previous month in June.

Liu Jianwei, a senior statistician at the NBS, gave the credit to firm stance of the central government in combating speculation in housing market, and local governments' strict measures in stabilizing land prices, home prices and market expectations.

The June data showed an across-the-board decline in home price growth in both month-on-month and year-on-year terms, said Zhang Dawei, chief analyst at Centaline Property Agency Ltd.

A total of 63 cities' new home prices grew in June, four less than 67 in May, and 45 of the 70 cities saw their pre-owned residential property price grow, down from 55 in May.

"The drop in growth reflects the growing expectation of more tightening measures to come. As many as 251 real estate restriction policies were announced in the first half of this year, 31 percent more than the same period last year," said Zhang.

"The 70 cities' new home price index grew 0.7 percent on average from May, staying flat compared to a month ago, which shows a weakening growth momentum. It is predictable that more cities will report a home price drop in coming months," said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.

"The more representative data collected in the used home market showed the 70 cities' home price grew at an average growth rate of 0.28 percent month-on-month in June, which is a clear cooling down from 0.43 percent in May and 0.53 percent in April," said Zhang.

New home prices in four first-tier cities edged up 0.2 percent from the previous month on average, among which, Shenzhen took the lead by rising 0.5 percent, followed by Shanghai and Guangzhou at 0.3 percent, while Beijing was the only first-tier city to see mild drop of 0.1 percent from May for new home prices, according to the NBS.

In the pre-owned home market of the four cities, their average prices stayed the same from May. Beijing and Guangzhou stayed unchanged, and Shanghai and Shenzhen edged down 0.1 percent, according to NBS figures.

Compared to last year, the four top tier cities saw 4.4 percent and 0.2 percent growth in their new and existing home prices.

"Although Xi'an in Shaanxi province led the growth of new home trading among all 70 cities in the past seven months year-on-year, we can find the city has recently launched a series of harsh measures related to home purchases, which will lead to a downward adjustment in its home price growth," said Yan.

The real estate data published on Monday, including home prices, real estate investment, and sales, showed the sector is stabilizing and continuing to grow amid ongoing urbanization, rigid demand from first time buyers and those looking for better living conditions, said Mao Shengyong, spokesman of the National Bureau of Statistics.

There was 6.16 trillion yuan ($896 billion) invested into real estate sector from January to June, up 10.9 percent year-on-year, among which 73.3 percent, or 4.52 trillion yuan, went to residential properties, a growth of 15.8 percent year-on-year, according to NBS data published on Monday.

"We still see ample room for the central government to increase monetary and fiscal support to shore up the market. If the economy has a clearer direction in the second half, it will help stabilize market confidence and home sales volume in the second half of the year," said Stephenie Zhou, head of project sales for JLL Shanghai.

Abiding by the principle that housing is for living in, not for speculation, as well as having policies tailored to meet cities' varied requirements, the stabilization of land prices and housing prices is achievable, said Mao.

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2019-07-16 07:28:56
<![CDATA[Huawei hopes to bring its flair for innovation to TV manufacturing industry]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492085.htm Honor, one of the two signature smartphone brands of Huawei Technologies Co, announced on Monday that it will unveil a smart big-screen product in August, marking the company's official entry into the TV-related sector.

Zhao Ming, president of Honor, said: "We hope to leverage our years of innovation in smartphones to reshape the role of TV in our lives."

On top of boasting the entertainment features of traditional TVs, Honor's smart-screen product will function as a center for information sharing for families and a center for multi-device interaction.

According to Zhao, the new product will also have big potential in industrial use, given its strong computing, telecommunication, interaction and sensory capabilities.

He said Honor started thinking about how TVs and other big-screen products would evolve with technological advancements as early as in 2015.

"TV has its irreplaceable advantages. TVs and smartphones will work as two centers in people's daily lives," Zhao said, adding that currently R&D spending on TVs is still not enough, which impedes the industry's development.

"Huawei's strong R&D push into TVs can even outperform that of some entire TV companies. That's one of our edges," Zhao said.

China's TV market is forecast to see a slide of 1.6 percent year-onyear in sales in 2019, with about 47 million TVs sold, according to market research company All View Cloud.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association, said: "Despite the mounting competition in the TV market, products that can bring new value are still of great appeal to consumers and Honor's success in smartphones and its popularity among young users can give it an edge in big-screen products."

The move came as Huawei is facing restrictions from the US government which banned the Chinese company in May from buying US technologies without special government approval.

Reuters reported on Monday that the US government may grant licenses to companies to restart new sales to Huawei in two to four weeks after US President Donald Trump said US companies can continue selling certain telecom components to Huawei at the G20 summit in Osaka, Japan, late last month.

At the same time, Huawei is reportedly shrinking its business in the US, as the world's largest telecom equipment maker plans layoffs at its US-based research and development subsidiary Futurewei Technologies, the Wall Street Journal reported.

The exact number of layoffs could not be determined, but the R&D unit hires about 850 people in labs in places such as Texas, California and Washington state, WSJ cited anonymous sources as saying.

Huawei declined to comment on the two stories.

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2019-07-16 07:28:56
<![CDATA[Institute to support pilot free trade zone in Shandong province]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492084.htm

A research institute that focuses on the development of pilot free trade zones was founded in Jinan, capital of East China's Shandong province, on Monday in a bid to provide intellectual support for the province's campaign on building a pilot FTZ.

Backed by the School of International Trade and Economics at Shandong University of Finance and Economics, the institute will emphasize sectors such as big data in FTZs, financial reform and innovation at FTZs, policy assessment and talent training.

Local media reported Shandong has been actively exploring the building of a pilot free trade zone and has submitted plans to higher authorities.

"The move is an effort to implement President Xi Jinping's speech at G20," said Zhao Zhongxiu, president of the university, referring to China's plan to expand the opening-up of its economy.

Six new pilot free trade zones are to be established, President Xi said in his speech at the recent G20 summit in the Japanese city of Osaka.

Xi also said the negotiation process of the trilateral free trade agreement between China, Japan and South Korea would be promoted.

This offers opportunities to Shandong which possesses unique regional advantages to participate in international cooperation, especially in cooperation with Japan and South Korea, Zhao said.

Shandong is home to most of the South Korean-funded enterprises in China. The area also released measures in building a China-South Korea industrial park in Yantai, a coastal city of the province, in November last year.

Covering over 80 square kilometers, the park aims to attract more than 100 new South Korean projects by 2025.

Statistics from the Shandong commerce department showed that more than 4,380 South Korean enterprises have been operating to develop in Shandong by the end of last year.

The province has benefited from the free trade agreement between China and South Korea which was signed in 2015.

In the agreement, Shandong's coastal city of Weihai and Incheon in South Korea were selected as demonstration zones for regional cooperation. Since then, the two cities have carried out a series of cooperation ventures in the fields of science and technology, medical and healthcare, tourism and cultural exchanges.

The cooperation has boosted the economic development of the two countries. The total volume of imports and exports between Weihai and South Korea in 2017 reached $8 billion, nearly double the number of 2015, a report by the China Business News said.

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2019-07-16 07:28:56
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-07/16/content_37492083.htm  

Banking sector profits to stay steady this year

Profits of China's banking sector are expected to remain steady this year, with faster growth in asset scale and ample liquidity, according to an industry report. The 2018 net profit of commercial banks reached 1.83 trillion yuan ($266.6 billion), up 4.7 percent year-on-year, said the report released by the China Banking Association. In 2018, the bank provision coverage ratio, a measure of funds set aside to cover bad loans, rose 4.89 percentage points to 186.31 percent. The banking sector will face the challenges of intensified competition for capital sources and flexible pricing of deposit interest rates in 2019, pushing commercial banks to improve financial services and diversify debt instruments.

Beijing plans to extend public transport timings

The Chinese capital will extend the running time of part of its public transport on Fridays and Saturdays from May to October every year in an effort to spur what it calls the "nighttime economy." The nighttime economy refers to business activities between 6 pm and 6 am in the service sector. Many Chinese cities, especially metropolises such as Beijing and Shanghai, have rolled out plans to support nighttime consumption. Beijing will extend its metro line 1 and line 2 for an extra one hour and 1.5 hours respectively with the last trains departing after 12:30 am, according to a plan of the municipal government. Both lines run across some of the busiest shopping areas such as Wangfujing and Xidan in downtown Beijing.

Chengdu sees growth in freight to Europe

Chengdu, capital of Southwest China's Sichuan province, saw 619 China-Europe freight trains in the first half of 2019, up 48.4 percent yearon-year. China-Europe freight trains starting from Chengdu are upgrading services for economic and trade exchanges, according a provincial meeting on economic development. The China-Europe freight train network has helped companies in China and neighboring countries to improve their trade with countries along the railway lines.

CSRC issues nearly $171m fines in H1

The China Securities Regulatory Commission issued 1.174 billion yuan ($171 million) of fines in the first half of this year, according to China Securities Journal. During the period, the CSRC handed out 110 administrative penalties and prohibited 12 people from entering the securities market, the journal said. Securities agencies will remain the focus of CSRC supervision and punishment in H2, said Tian Lihui, a professor of finance at Nankai University. The CSRC will also step up inspections and punishments of listed firms' activities, including information disclosure, refinancing and mergers and acquisitions, said Pan Xiangdong, chief economist at New Times Securities.

Nation sees 472 new public offering funds

China saw a total of 472 public offering funds issued in the first half of this year with a combined value of 479.3 billion yuan ($69.8 billion), the China Securities Journal reported. The figure was up from the 452 funds worth of 448 billion yuan from last year, and the amount raised during the January-June period was the highest since 2016, the newspaper said, citing financial data provider Wind. Bond funds took the lead in new issues with a value of 293.1 billion yuan, contributing to over half of the total value while that of equity funds, hybrid funds and Qualified Domestic Institutional Investor program funds stood at 56.5 billion, 125.4 billion and 4.3 billion yuan respectively.

Fortune China unveils list of top 500 firms

Fortune China released the list of China's top 500 public companies, noting a record high operating revenue. The operating revenue of the top 500 listed companies hit 45.5 trillion yuan ($6.63 trillion), up 14.8 percent year-on-year, data from the Fortune China website showed. However, the net profit of the 500 only grew 4.21 percent, declining from the 24.24 percent last year, to 3.63 trillion yuan. China Petroleum and Chemical Corp, China National Petroleum Corp and China State Construction Engineering Corp ranked as the top three.

US audio tech company bullish on prospects

Leading US audio tech company Dolby Laboratories sees steady expansion in China thanks to the growing uptake of its advanced imaging and sound technologies in affluent cities. The San Francisco-based company has been actively promoting Dolby Vision and Dolby Atmos (advanced sound system) around the world in recent years, especially in China which is expected to be the world's largest film market by 2020. It also partners with several major cinema lines in China to build Dolby Cinema, a specially designed cinema equipped with Dolby technologies to enhance the audience's viewing experience.

Daimler expects sharp fall in annual profit

German carmaker Daimler foresees a major slump in profits this year, the company said. The Daimler Group's earnings before interest and taxes (EBIT) for the second quarter of 2019 were "significantly below market expectations." The company announced a preliminary loss of 1.6 billion euros ($1.8 billion) for Q2. Last year, the company's Q2 EBIT was 2.6 billion euros. EBIT was impacted by a reassessment made in connection with "ongoing governmental and court proceedings and measures relating to Mercedes-Benz diesel vehicles", which increased Daimler's expenses by around 1.6 billion euros.

Bank lending slows in Laos amid downturn

The injection of bank credit into the economy continues to slow, amid economic downturn in Laos, local daily Vientiane Times reported on Monday. Credit growth was lower than the targeted 55 percent of GDP approved by the National Assembly. According to a recent Lao government report, credit growth further moderated to 3.13 percent over the past three months of 2019, representing only 46.32 percent of GDP. The decline in credit growth was attributed to three factors. The first is insufficient capital funding by some commercial banks and their ineffective lending practices. Some banks have more debts than anticipated. Secondly, the two state banks did not perform well and were uncompetitive against private commercial banks, and the third factor is related to the effects of informal lending.

Malaysia's factory output grows in May

Malaysia's Industrial Production Index rose 4 percent year-on-year in May, driven by growth across the board, official data showed. Malaysian Statistics Department said in a statement that index for electricity grew 5.7 percent in the month, while index for manufacturing and mining expanded by 4.2 percent and 3 percent, respectively. The major sub-sectors contributing to the increase of manufacturing sector in May were transport equipment and other manufactures products which increased by 6.9 percent; electrical and electronics products that went up 3.7 percent; petroleum, chemical, rubber and plastic products that accelerated 3.2 percent.

Cuba revises 2018 GDP figure up to 2.2%

Cuba revised up its economic growth for 2018 over the weekend. "In 2018, the GDP growth was 2.2 percent at current prices, higher than the 1.2 percent estimated last December," Economy Minister Alejandro Gil told a session of the National Assembly of People's Power. The minister said the new growth figure was obtained after balancing the results in the entire fiscal year. According to Gil, a higher-than-expected growth in various sectors leads to the revision of the GDP growth for 2018. The construction sector, for instance, recorded a 9.3 percent increase, compared to an expected 2.2 percent fall.

China Daily - Agencies

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2019-07-16 07:28:56
<![CDATA[Energy behemoths swear by opening-up]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491683.htm China's shortened negative lists in the mining sector, and the lifting of restrictions on the exploration and development of petroleum and natural gas reserves, represent a rare opportunity that is likely to be utilized to the hilt by energy multinationals such as French oil giant Total, Anglo-Dutch behemoth Royal Dutch Shell, British heavyweight BP and international metals and mining company Eurasian Resources Group, industry experts said.

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Shorter negative lists for foreign investment and development get thumbs up

China's shortened negative lists in the mining sector, and the lifting of restrictions on the exploration and development of petroleum and natural gas reserves, represent a rare opportunity that is likely to be utilized to the hilt by energy multinationals such as French oil giant Total, Anglo-Dutch behemoth Royal Dutch Shell, British heavyweight BP and international metals and mining company Eurasian Resources Group, industry experts said.

On June 30, China updated two negative lists as part of the government's efforts to improve international cooperation and widen market access.

And from July 30, it will also lift restrictions on the exploration and development of energy resources by Chinese-foreign equity joint ventures as well as non-equity JVs.

"I'm pleased to witness China is pushing forward its opening-up policy. The continuous improvement of business environment for foreign investors gives us more confidence in the future development of China's economy," said William Zhao, chairman of Total's China unit.

"As our business is present across the entire value chain of China's energy industry, I believe the company will gain access to more opportunities in a fairer business environment."

Total is currently undertaking several natural gas projects in China with local partners. These include the South Sulige project with China National Petroleum Corp, the country's biggest oil and gas company, in Inner Mongolia; and the offshore exploration of the Taiyang block in the northern edge of the South China Sea with China National Offshore Oil Corp, China's largest producer of offshore oil and gas.

Total is the first international energy company to conduct offshore oil and gas exploration in China, Zhao said.

As China shifts its energy mix accent from traditional energy to gas and other renewables, Total is actively expanding its natural gas, renewables and energy storage businesses here, he said.

Agreed Zhang Xinsheng, executive chairman of Shell in China. "The progress in the opening-up in the upstream sector is very encouraging as it means more choices and more options for us to invest in the sector and in the country.

"Shell values relationships with local partners in China and would continue bringing its technology leadership and expertise to partners and customers in the future," he said.

BP said recent industry developments in China like the revision of the negative list for foreign investment shows the nation's commitment to opening-up.

"Eliminating the restrictions on joint ventures and cooperation in oil and gas exploration and development, plus introducing multi-market entities (including foreign companies) in domestic oil and gas resource exploration and development, will enhance market activity, create a fair and open access environment, and help further enhance the exploration and development efforts and technological advances of domestic oil and gas resources," said Yang Xiaoping, chairman and president of BP China.

"Meanwhile, the opening-up of access to natural gas-related fields will further promote the development of natural gas in China, to support the nation's low-carbon transformation, and bring more clean energy to the public."

China's oil and gas exploration sector has been long dominated by State-owned enterprises, including China National Petroleum Corp and China Petroleum and Chemical Corp, the world's largest refiner by volume.

Exploration and development of petroleum and natural gas have long been limited to Chinese-foreign equity JVs or non-equity JVs of foreign companies, which include the tight gas development project between French oil giant Total and China National Petroleum Corp in the Erdos Basin and oil giant Royal Dutch Shell's tight gas project in Shaanxi province in cooperation with China National Petroleum Corp.

Pang Guanglian, deputy secretary-general of the China Petroleum and Chemical Industry Federation, said China has always been committed to opening-up, improving the business environment and encouraging foreign investment in the country's key sectors.

The government decided to lift the 30-site limit for international fuel retailers last June, after which many global oil and gas giants, including BP and Royal Dutch Shell, moved to expand their presence in the country, investing in gas stations, he said.

Pang said he believes the recent move shows determination of the government to continue opening-up and will continue to ease market access to foreign energy companies.

Henry Liu, vice-president and general manager of Honeywell UOP China, a strategic business unit of Honeywell's performance materials and technologies group, said the government's shortened negative list will provide more opportunities and a more tolerant business environment for foreign companies in China like Honeywell UOP.

The company will continue promoting its localization strategy and expanding business in the country, he said.

Incidentally, the government has also lifted curbs on foreign investment in the exploration and exploitation of molybdenum, tin, antimony and fluorite.

"This not only demonstrates China's commitment to attracting more foreign investment and establishing a more friendly international trade environment but marks a significant step to bring China's opening-up to a new high," said Benedikt Sobotka, CEO of Eurasian Resources Group.

"It will bring more investment opportunities for foreign mining companies as well."

According to Sobotka, the decision will ease the financial burden of Chinese mining companies in developing these metals and boost international mining companies' cooperation with Chinese partners.

For ERG, easing of foreign investment restrictions in tin and antimony fields, which are China's strategic metals, proves the country has a strong desire to share the fruits of international cooperation and show its determination to sustain the opening-up policy.

"We look forward to seeing more results brought by China's further opening-up," he said.

Analysts believe China's recent moves will bring in overseas capital, technologies and talent, which will likely help upgrade local industries.

"Opening-up and foreign investment will facilitate China to switch from an export-oriented economy to a domestic consumption-driven economy," said Zhu Yi, a metals and mining analyst with Bloomberg Intelligence.

"China's mining industry has been long developed, but some sub-sectors including moly, tin and antimony have the potential to increase their product grade and improve production process," she said.

"Upgrades to produce high-value-added products, improvement of production efficiency, and reduction of hazardous emissions - that will be the focus, going forward, which should benefit from foreign investment."

 

Visitors discuss at Shell's booth during the 19th International Conference & Exhibition on Liquefied Natural Gas on April 1 in Shanghai. Provided to China Daily

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2019-07-15 07:49:37
<![CDATA[Chinese automakers evolve, innovate, to keep pace with times]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491682.htm CHANGCHUN - Over six decades ago, China set up its first automobile manufacturer in the northeastern industrial city of Changchun as the country began to beef up its economy, and unveiled the nation's first domestically produced passenger car in 1958.

Today, the country is the world's largest automobile manufacturer and seller. It has been so in the past decade. It sold 28.08 million vehicles last year, accounting for 30.6 percent of the global market.

Despite getting a late start, China's automobile manufacturers have been narrowing down the gap with global competitive players and embarked on a journey of becoming a globally popular auto retailer.

China ended its history of no domestically-made vehicles when the first Jiefang truck rolled off the line in 1956. So far, the brand has sold more than 7 million vehicles and has expanded its presence to 80 countries and regions.

In 1957, however, China's automobile engineers were faced with a bigger challenge of producing the country's first sedan car, said Liu Jingchuan, chief designer of the former China FAW Group Corporation, the cradle of the country's automobile industry.

"Back then, we were in desperate need of expertise and experience in manufacturing automobiles and faced shortages in equipment," Liu, who is in his 90s, said.

Despite the great difficulties, engineers worked day and night before the first domestically produced sedan car, the Dongfeng, rolled off the line on May 12, 1958.

Liu became the first passenger of the first Dongfeng sedan car. "My test ride attracted a mass of employees gathering along the sides of the road as I drove around the factory," Liu said.

The Dongfeng sedan unveiled the first chapter of China's domestic car brands. On August 1, 1958, the country's first high-end passenger car, the Hongqi, was manufactured and became the exclusive vehicle brand for State leaders during national events.

Since China's reform and opening-up in late 1970s, a nationwide reform has enabled the auto industry to go full steam ahead with various products and stronger production capacity.

"The early generation of automobile manufacturers survived the hardship of growing out of nothing, and we should act as curators of innovation based on their achievements," said Cui Xiaojuan, chief engineer of FAW Jiefang Powertrain Development& Application.

At the end of the 1990s when expressways increased rapidly and demand for long-distance transport was on the rise, FAW's CA6110 diesel engine, a previously popular product with nearly two decades of history, failed to meet the market demand and gradually lost its edge.

"To break the plight, the Jiefang, China's first truck brand, had to develop a quality high-horsepower diesel engine with independent intellectual property rights," said Cui in charge of the daunting task.

She added that the engine is the heart of a vehicle, and independent research and development capabilities are vital to the industry.

Partnering with Austria's AVL List GmbH, a world-leading producer of power-train systems, China FAW Group Corporation developed the country's first self-manufactured CA6DL diesel engine on December 20, 2013, a more competitive kind with cutting-edge technology in the global market.

"The new engine filled in the gap that there were no self-manufactured heavy vehicles in China," Cui said.

In 2001, China's automobile industry ushered in a wave of globalization after entry into the World Trade Organization.

Auto companies in China began to acquire their foreign counterparts and learned from world experience. Since 2009, China has become the world's largest producer and seller of automobiles.

The ongoing technological revolutions of informatization, automation and artificial intelligence have also propelled the industry into vigorous and prompt actions after over 60 years of catching up, said Han Linghai, director of Engine Product Development at the FAW Research and Development Institute.

Xinhua

 A Dongfeng Renault Automobile Co employee gives finishing touches to a vehicle at an assembly line in Wuhan, capital of Hubei province. Song Rongcheng / For China Daily

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2019-07-15 07:49:37
<![CDATA[Qunar's cultural trips indulge domestic travelers]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491681.htm Rock rubbings, protection of wetlands along the Yellow River, participation in performing arts, craftwork, and opportunities to experience folk customs - these are some of the offerings coming the Chinese travelers' way, thanks to Qunar, an online travel firm.

Owned by China's largest online travel agency Ctrip, Qunar is redefining domestic tourism by harnessing the power of cultural elements.

It launched over 100 culture-themed tours in late June. These include in-depth trips, group excursions, and individual tours. Most trips are in the economy class. The most expensive tour - it lasts seven days and covers the Tibet autonomous region - sells for less than 6,000 yuan ($873).

Travelers are encouraged to write or recollect and sing folk songs, and attend traditional Chinese dramas such as Beijing opera, Shaanxi opera and Sichuan opera.

They can also go to the historical Qianmen Street in Beijing to watch a Beijing opera show in virtual reality, try on related costumes and interact with some famous opera artistes.

More than 60 culture-themed tours of Qunar target destinations in southwestern China. Provinces such as Yunnan, Guizhou, Sichuan and the municipality of Chongqing are popular.

These tours are expected to help drive local tourism, reinforce the region's vitality and promote local talent.

"Some of our customers were born in the 1990s. They account for over one-third of the total. There is a trend among younger consumers to buy Chinese-made fashion and other trendy items like clothes, signifying style and taste, and we think they should also go on domestic tours and explore traditions, history and culture," said Huang Fan, general manager of destination marketing at Qunar.

"Culture-oriented travels are expected to become a new growth point in the next decade. We would like to revitalize the rich and longstanding historical and cultural heritage in China through niche travel products. China has top tourism resources, and we will keep developing and exploring more routes in western China, and attract more foreign travelers to visit those scenic spots."

Last year, the culture and tourism departments of the government joined forces, which spurred culture-oriented travels. During the weeklong National Day holiday in October last year, the number of domestic tourists reached 726 million. More than 90 percent of them participated in cultural events.

Besides, more than 78 percent of the tourists spent more than two days in experiencing culture, according to the China Tourism Academy.

"In the 'new era', soft power like culture is important. Trips to places with intangible cultural heritage can help young travelers to strengthen their confidence in the national culture," said Cheng Lu, chairman of the Association for Promotion of West China Research and Development.

During the 13th Five-Year Plan period (2016-20), more than 80 million people are expected to work for the cultural tourism sector.

The sector is foreseen to account for 15 percent to 18 percent of China's GDP, according to a paper by Li Ji, a professor of the Guanghua School of Management, which is part of Peking University in Beijing.

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2019-07-15 07:49:37
<![CDATA[Innovation key to enhanced electronics]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491680.htm Jason Juang, managing director of HP China, clearly remembers details of his first visit to the Chinese mainland 26 years ago.

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Jason Juang shapes HP's new strategy in gaming PC market to boost sales in China

Jason Juang, managing director of HP China, clearly remembers details of his first visit to the Chinese mainland 26 years ago.

The Shanghai airport was small and shabby. Even a short shower was enough to flood it.

In 1993, as an employee of the US tech giant HP Inc, Juang was sent to the Chinese mainland to share his marketing knowledge and experiences with the local staff. Back then, computers were a luxury for many Chinese companies, let alone individual consumers.

Within less than three decades, however, China has become the world's largest market for electronics. Having witnessed ups and downs of the country's electronics market for over 20 years, Juang said he is amazed by its unbelievable transformation from nothing to top.

"We knew it (the transformation) would happen, but never expected it to come at such a stunning speed," said Juang.

The 56-year-old senior executive has spent most of his career with HP, starting from a front-line sales professional to his current position at the helm of the company's China business. His down-to-earth working style has had an impact on how HP China works.

Now riding the gaming and esports boom in China, Juang wants to inject a fresh and strong momentum into the 80-year-old US company's business in the country. He wants to bring state-of-the-art, tailor-made products to China and encourage local innovation.

"With 619 million e-gamers, China is now the world's largest gaming market. Such a sprawling size has triggered changes in what consumers want," Juang said.

The gaming images are getting increasingly refined, which generates higher demand for PC hardware. "I am very excited when I see my daughter play e-games, The games are just like immersive movies, with players functioning as film directors who can control how the story develops."

He noticed such a trend in 2014 while exploring how to better sell consumer electronics online. He met executives from JD Inc, a Chinese e-commerce platform. The platform's giant data pool and buyers' online feedback revealed an increasing interest among consumers in gaming-related electronics.

Juang decided to launch the HP Omen, a tailor-made PC laptop for local gaming enthusiasts. It proved to be a hit. It was later launched in Australia, and quickly became the top gaming PC brand there as well.

"Fortunately, the US headquarters listened to our voice and they trusted us to make such a decision," Juang said.

According to him, such trust cannot be built in a day. It is a longtime process of two-way communication and "we need to prove to them through success and facts".

Apparently, the senior executive has done a good job in that respect, with Alex Cho, president of HP's global personal systems, recently praising that "Chinese gamers' feedback and insights importantly inspire our worldwide gaming strategy and ecosystem".

To better understand local users' interests, HP has set up a gaming community, which now has 400,000 members. The company organizes a string of offline activities to help grow the community and learn from their feedback.

"We pursue meaningful innovation. That is, the technology must mean something to consumers so their feedback matters," Juang said, adding that HP has learned a lot from consumers in hardware design, what should be included in PC accessories, and the addition of a command center in the HP Omen PC series to allow rapid settings for games.

To better resonate with young people in China, HP has launched initiatives like HP Dream Factory to support the next generation of entrepreneurs in China. As a noncommercial student program of HP in China, HP Dream Factory now covers more than 200 colleges in 30 cities to function as a platform for students to sharpen their business acumen.

According to research company International Data Corp, the market for gaming desktops, notebooks, and monitors will grow 7.3 percent this year to reach 41.5 million units.

Jitesh Ubrani, an analyst at IDC, said in a research note that the rise of esports, and an abundance of video games, will continue to drive the market forward, reaching 55.3 million units by 2023 at a compound annual growth rate of 7.4 percent.

HP will no doubt seek to garner as much market share as possible. Until then, part of Juang's spare time, if any, will be spent visiting Beijing's traditional vegetable markets to buy food.

For him, that is the other side of China's high-rise office towers. Embracing more sides can help him better understand the world, he said.

"Though HP is the world's largest PC maker, we must approach our business with a small company's mindset," Juang said. "We should never take anything for granted - we should not think that whenever we enter a market, people will always pay for our products."

According to him, brand or product positioning in niche markets is the most interesting thing in China, because the nation is so gigantic that every niche market can present tons of opportunities.

"Every time we talk about it, we feel infinite vitality. But every time we enter a niche, we also feel mounting competition," Juang said.

Though the global PC industry is now 40 years old, Juang said the entry of Chinese smartphone brands such as Xiaomi and Huawei into the arena demonstrates that there is still room for growth and new possibilities for PCs in China.

"We can better find our fundamental advantages - our product quality and service - amid competition," Juang said.

 

Jason Juang, managing director of HP China, delivers a speech at the 2019 HP Gaming Festival in Beijing on May 14. Provided to China Daily

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2019-07-15 07:49:37
<![CDATA[On the move]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491679.htm Garnier to leave Carrefour for Kingfisher job in UK

Thierry Garnier (pictured), CEO of Carrefour China, resigned after the company agreed to sell its 80-percent stake to Chinese retailer Suning.com Co. Garnier will remain in his position till this fall though. He was appointed CEO and member of the board of Kingfisher, a global home building materials retailer based in London. He joined Carrefour in 1997 as hypermarket director and was later appointed international executive director of the Carrefour Group. He was president of Carrefour China since 2012.

Bank of China elevates Liu Liange to chairman

Liu Liange, until recently the deputy Party chief, vice-chairman and president of Bank of China, has been appointed the bank's Party chief and chairman. Liu once served the People's Bank of China as deputy head of international division, president of the Fujian branch and head of anti-money laundering bureau. He was also deputy Party chief, vice-chairman and president of the Export-Import Bank of China.

Liu Haoling to helm New China Life Insurance

New China Life Insurance Co Ltd named Liu Haoling as its new chairman. Liu, 48, is experienced in the asset management sector. He once served China Investment Corp as senior manager of the legal compliance department. He was also once managing director of Central Huijin Investment Ltd, and supervisor of China International Capital Corp Ltd.

Compiled by China Daily

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2019-07-15 07:49:37
<![CDATA[Green routes to high-quality development]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491678.htm Clean energy, environmentally friendly technology, green infrastructure, planet-preserving finance... sustainable economic development on a global scale is achievable with sustained efforts, sharp focus, visionary policy and imaginative project implementation - that's the takeaway for umpteen businesses participating in, and benefiting from, China-led Belt and Road Initiative, experts said.

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BRI champions global prosperity via eco-friendly infrastructure and technology

Clean energy, environmentally friendly technology, green infrastructure, planet-preserving finance... sustainable economic development on a global scale is achievable with sustained efforts, sharp focus, visionary policy and imaginative project implementation - that's the takeaway for umpteen businesses participating in, and benefiting from, China-led Belt and Road Initiative, experts said.

The BRI is getting greener, they said. China spearheads the BRI to create transcontinental infrastructural and trade networks across land and sea routes, so as to deliver development and prosperity to billions of people around the world.

More businesses are sewing up plans to invest trillions of dollars to promote environmentally friendly infrastructure and technology projects in over 130 economies participating in the BRI.

And given the BRI's global scale, the go-green thrust on development will have far-reaching impact on the participating economies in the coming decades, they said.

"With the deepening of the BRI, green development should be taken as a top priority, in addition to other key factors like gross domestic product and employment," said Ma Jun, chairman of the Green Finance Committee of the China Society for Finance and Banking.

Ma made the remarks at a panel discussion during the World Economic Forum's Annual Meeting of the New Champions 2019. Known as Summer Davos, the event was held in Dalian, Liaoning province, earlier this month.

"The majority of investments worldwide in the coming decades will be in the BRI economies. So, the initiative is expected to drive a huge amount of capital globally," said Ma.

The timing of his remarks coincides with China's newfound focus on environmentally friendly development via the BRI, to be in line with the UN 2030 Agenda for Sustainable Development.

China's stance is expected to inject fresh impetus into efforts for economic development in BRI economies. Green BRI is also part of China's broader efforts to promote high-quality development. High-quality infrastructure construction will greatly improve environment and lead to high-quality economic growth, experts said.

President Xi Jinping shared his vision for green development at the first Belt and Road Forum for International Cooperation in May 2017.He urged participating economies to embrace "the new vision of green development and a way of life and work that is green, low-carbon, circular and sustainable".

Xi reiterated his vision at the second BRF in April this year. Joint development of the initiative is also aimed at building an open and green development road, he said.

China and other BRI economies reached a broad consensus at the forum on high-quality, green development. The country aims to bring greater development opportunities to other countries around the world through the BRI.

Jeffrey Wong, head of advisory at market consultancy KPMG China, said at Summer Davos: "During this process (of BRI-related development), Chinese companies are actively engaged in a lot of environment-related projects, such as renewable energy like wind and solar, clean energy including LNG and LPG as well as environment utilities."

These projects have helped reduce consumption of energy and boosted the development of local economies, he said.

For instance, Chint Group, a Chinese industrial electrical equipment and new-energy enterprise, is helping construct several hundred photovoltaic power stations in economies relating to the BRI.

Photovoltaic, generated by solar cells, is a clean and renewable energy. It has long been considered the key to a country's efforts to transform its energy mix and boost safety.

Nan Cunhui, chairman and founder of Chint, said: "While helping build photovoltaic infrastructure, we also brought our most advanced clean technologies and concepts to BRI economies, especially the underdeveloped ones, and that turned out to be an important accelerator of local economic and social development."

The Leqing, Zhejiang province-based firm has also offered its high - and low-voltage products and services to 80 percent of the BRI markets including Pakistan, Thailand, Egypt and Russia, Nan said.

According to a report by the Global Development Policy Center's Global China Initiative at Boston University, China's investments in power generation have been "more green than black" over the past few years.

Over 50 percent of the country's investments in power generation projects around the world are related to clean energy that has water, wind or the sun as the main source, the report said.

The total investment in energy projects in BRI-related countries and regions has reached $186.3 billion. Of this, the clean energy sector accounts for 26 percent.

In Chile, South America, the first batch of 100 Chinese-made electric buses of BYD, which offer quiet, smooth, quick and green rides, are being inducted into the local public transport fleet.

Chilean President Sebastian Pinera said the nation hopes to cooperate with Chinese companies like BYD in clean energy. Chile boasts solar, wind and tidal energy resources and is in need of such projects that can exploit them, he said.

KPMG's Wong allayed fears that the BRI may gradually morph into a vehicle that transports pollution from China to other countries. "China's green BRI proves that the concept of production capacity cooperation does not really mean shifting industry that may be highly polluting and a big consumer of energy, from China to BRI countries.

"Instead, China is sharing advanced technologies and industry expertise to benefit BRI countries, helping them develop the local industry, and enabling sustainable growth."

Besides technologies and expertise, effective financing is crucial for green development. The Asian Development Bank estimated that Asia would need $1.7 trillion of infrastructure investment annually between 2016 and 2030.

So, China has led the path of green finance by encouraging flow of capital into more sustainable projects. It helped found the Silk Road Fund in December 2014 to offer investment and financing support for trade and economic activities within the framework of the BRI.

The Chinese government contributed $40 billion to the fund and added 100 billion yuan ($14.5 billion) in 2017. By the end of last year, the fund had pledged to back 28 projects entailing investments of over $11 billion.

At the WEF's Dalian event, Sun Chanthol, Cambodia's minister of public works and transport, acknowledged the significance of this move. "It was not easy for most developing countries to get financing for road and railway construction, yet China-led BRI, including the Silk Road Fund, has offered a (helping) hand."

Such help enabled Cambodia to build its first high-speed railway, which is expected to reduce air pollution and congestion as well as promote economic prosperity, he said.

Another shining example of development-oriented finance is green bonds. When the World Bank issued the first-ever green bond over 10 years ago, it was a novelty that raised tens of millions of dollars. But by mid-2018, the world had $1.45 trillion of climate-aligned bonds outstanding.

"China has been leading the region's shift toward financing with green bonds ... and has been at the forefront of using green bonds to finance sustainable development," said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, in an article published in China Daily.

In 2016, China officially launched its green bond market and issued labeled green bonds worth 205.2 billion yuan.

China was also the first country to make it compulsory for all listed firms and bond issuers to disclose the environmental, social and governance risks associated with their operations by 2020.

Several large Chinese banks, including Industrial and Commercial Bank of China Ltd, Bank of China Ltd and China Development Bank Corp, have issued climate bonds.

This April, ICBC also issued its first green bond focusing on Belt and Road interbank cooperation. Offered in three currencies, the bond aims to support the development of green projects under the BRI and boost interbank cooperation in the region.

Media reported that China is by far the largest issuer of green bonds among the world's emerging markets. Internationally aligned green bond issuance from China reached $31.2 billion in 2018, accounting for 18 percent of global issuance, said a report published by the Climate Bonds Initiative and China Central Depository& Clearing Co Ltd.  

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2019-07-15 07:48:48
<![CDATA[Small firms can play a big role]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491677.htm I was still at college when China launched the Belt and Road Initiative in 2013. I remember Ohana, one of my friends from Vietnam, said back then that the BRI appeared to be a China-led project in which only big State-owned enterprises could participate.

However, when I met her during this May Day holiday break in Vietnam, she told me she was surprised to find small and private businesses playing a role in the BRI.

Her brother landed a decent job with a small Chinese textile company that expanded its business to Vietnam under the BRI framework.

As Ohana spoke about the benefits the Chinese firm brought to its Vietnamese staff of 80, I started to think that small private firms can play a bigger role in promoting the BRI, and in making it greener in the future.

China's stunning economic development over the last four decades would not have been possible without the private sector playing a key contributory role.

Currently, private enterprises contribute over half of the country's tax revenue, over 60 percent of the annual GDP, more than 70 percent of technological innovation and over 80 percent of urban employment.

I once interviewed executives of China Communication Technology Co Ltd. I was surprised to find that the private satellite service provider had a wide presence in BRI economies. It provides telecommunications services that were hitherto dominated by SOEs.

The Shenzhen-based company is offering services and products in Europe, the Middle East and nine other countries and regions participating in the BRI. It has also secured a number of orders from civil aviation and public security departments in the Philippines, Indonesia and Malaysia. CCT has reportedly started to offer private satellite services in the Philippines.

"In the past, we could cooperate only with local telecom carriers in foreign countries through equipment sales. But with the BRI, we are changing our profile from a 'seller' to an 'operator' in overseas markets," said Wu Guangsheng, president of CCT.

Shi Guilu, chairman of Shaanxi-based Rongmin Holding Group, a private-sector company engaged in real estate, advanced agriculture and culture industries among others, said the BRI is now being promoted on a bigger scale and at a higher level. So, private businesses are playing an increasingly "irreplaceable" role, he said.

"Major State-owned enterprises are better in leading big projects while private businesses are more flexible," Shi said.

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2019-07-15 07:48:48
<![CDATA[Energy security through deals abroad]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491676.htm China National Petroleum Corp, the country's largest oil and gas company, has stepped up efforts in recent years to import more gas from Central Asian countries and Russia.

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PetroChina focuses on Central Asia, Russia for fuel imports to help 300 million people

China National Petroleum Corp, the country's largest oil and gas company, has stepped up efforts in recent years to import more gas from Central Asian countries and Russia.

The China-Central Asia natural gas pipeline built by the company, which runs through China, Turkmenistan, Kazakhstan and Uzbekistan, has transported 270 billion cubic meters of natural gas to China since it was put into operation some 10 years ago, said the company, which is also known as Petro-China.

The current capacity for annual natural gas transmission from Central Asia to China is up to 55 billion cu m. The pipeline, the country's first transborder energy channel that brings gas from abroad over land, represents more than 15 percent of yearly national gas consumption. It benefits more than 300 million residents from 27 provinces on the mainland and Hong Kong Special Administrative Region, it said.

Bloomberg Intelligence data show China's dependence on imports to meet domestic gas demand is expected to rise to 75 percent in 2020 from 57 percent in 2017. PetroChina has been diversifying its transborder gas transport and construction of cross-border natural gas pipelines in recent years.

To ensure adequate gas supply for the biggest gas-consuming nation worldwide, PetroChina has been diversifying its channels to import more gas from abroad, including conventional gas, shale gas, tight gas and coal bed gas.

It has forged a variety of gas cooperation deals and undertaken investments with foreign players in recent years, and is set to have its gas production growth surpass that of oil between 2018 and 2020.

A second line for the China-Russia oil pipeline began commercial operation in January, raising China's annual imports of crude oil from Russia through the pipeline from 15 million metric tons to 30 million tons.

The China-Russia East-Route Natural Gas Pipeline, which is still under construction, is expected to begin gas supplies within this year, according to the Ministry of Commerce. The new pipeline will introduce 38 billion cu m of gas from Russia each year after completion.

It is expected to reduce carbon dioxide emissions by up to 164 million tons, sulfur dioxide emissions by 1.82 million tons and nitrogen dioxide emissions by 460,000 tons.

The Yamal liquefied natural gas project in the Arctic region of Russia, a joint venture of PetroChina and Novatek, Russia's independent natural gas producer, also foresees much of its output being supplied to China and other Asian countries after its completion by the end of this year.

Being the world's first integrated project for polar natural gas exploration, development, liquefaction and transportation, Yamal produces 16.5 million tons of LNG each year. What is shipped to China now accounts for 10 to 15 percent of the country's annual LNG imports, said the company.

It has substantially diversified the country's gas import channels and increased the percentage of LNG in the country's gas imports, said PetroChina.

Analysts said gas-rich countries like the Central Asian nations and Russia will play a significant role in the natural gas trade cooperation with China in the future.

China is likely to see continuous growth in natural gas imports as the domestic production and pipeline imports might not satisfy the country's growing gas appetite, said Li Li, energy research director at ICIS China, a firm providing analyses of China's energy market.

The complementary roles as importer and producer of natural gas have created win-win deals that could bridge the demand-supply gap among many countries.

China has been a strategic partner and top buyer of abundant oil and gas resources from Russia and Central Asia. Support from Chinese financial institutions such as the China Development Bank also helped deepen bilateral cooperation, she said.

Bloomberg Intelligence data showed that pipeline gas imports from Central Asia and Russia into China are expected to reach 85 billion cu m by 2020.

According to Li, increasing demand in China has helped forge robust energy industry relations, particularly in the field of natural gas, between the country and Russia, Kazakhstan and Uzbekistan in recent years.

To further facilitate the trade, it is necessary to upgrade the country's pipelines, storage facilities and transportation networks to ensure adequate and timely gas supply, she said.

 

A staff worker checks pipeline equipment used in the transport of natural gas from Central Asia to Fuzhou, Fujian province, on Dec 12,2016. Lyu Ming / China News Service

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2019-07-15 07:48:48
<![CDATA[Short-term stays boost sharing economy, finds report]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491675.htm Curiosity and a sense of adventure among wanderlust-bitten Chinese travelers are imparting an exciting touch to the business of holidays, encouraging people to go beyond conventional hotel stays and soak in new experiences through vacation rentals, a report has found.

Released by the State Information Center, the report said China's short-term lodging sector, which includes the segment of homestays, is booming, thanks to its relatively lower costs, conveniences and novel experiences on offer.

Transaction volume of the sector rose 37.5 percent year-on-year to 16.5 billion yuan ($2.4 billion) in 2018, the report stated.

Various online platforms that champion the sector's cause offered 3.5 million housing units for short-term stays in nearly 500 Chinese cities last year.

The sector now boasts more than 4 million landlords or innkeepers and nearly 80 million users, the report said.

"Compared with the traditional online travel agencies, vacation rental platforms perform two key functions. One, they help landlords reduce operational and maintenance costs and also offer various value-added services to customers. Two, the platforms use sophisticated systems to support the entire social credit system," said Yu Fengxia, deputy director of the Sharing Economy Research Center, which is part of the SIC.

Yu noted first-and quasi-first-tier cities still constitute the main market for shared accommodation, while some second-and third-tier cities are accelerating the push to embrace the emerging sharing economy. Yu said 76 percent of tourists will choose second-and third-tier cities as destinations.

According to the report, Chengdu in Sichuan province topped all other cities in terms of the number of active users, followed by the three municipalities of Beijing, Shanghai and Chongqing, and Xi'an in Shaanxi province.

Lijiang in Yunnan province, Qinhuangdao in Hebei province and Guilin in the Guangxi Zhuang autonomous region have seen explosive growth in bookings on short-term lodging platforms, rising 650 percent, 600 percent and 300 percent year-on-year in 2018 respectively.

The report said an increasing number of younger people prefer to list their properties on such platforms or rent properties listed on them. Some 70 percent of the hosts and landlords on major short-term accommodation platforms were born in the 1980s and 1990s.

Females (60 percent) outnumber males among hosts or landlords on such platforms. Among all room guests, more than 70 percent are aged between 18 and 35.

Family vacations, with pets as part of the touring party, are a new trend. Nearly 39 percent of those booking short-term accommodation on platforms bring along their families. More than 40 percent of platform users have pets, among which nearly 67 percent prefer taking pets along.

With people's consumption power growing and their demand for high-quality services increasing, users will choose comfortable middle-and high-end accommodation instead of cheap ones. Therefore, participants will focus on offering mid-level and high-end homestays, the report said.

Quality is the new buzzword in China's sharing economy as focus shifts from speedy business expansion. The report said the annual growth rate of short-term lodgings is expected to remain around 50 percent in the next three years.

Jiang Qiping, secretary-general of the Center for Informatization Study, which is part of the Chinese Academy of Social Sciences, said China's sharing economy will continue to expand, which will bring a wide range of services to people.

"To better develop the sharing economy, we need to learn from the experience so far and from lessons in the consumer internet field, so as to grasp new opportunities brought by the industrial internet," he said.

"Sharing economy participants should better cater to people's increasing need for life services and help improve the quality of users' lives."

Jiang said the key is to strengthen self regulation in the emerging sector and create a better environment for its further development.

"On the one hand, providers of short-term accommodation should become both supervisors and defenders of the sector, fully taking the responsibility for its present and future, in terms of service quality and safety. On the other hand, the government needs to strengthen the supervision and administration of the market and widen market access," he said.

Another report released by the SIC earlier this year showed China's sharing economy saw transactions worth 2.94 trillion yuan last year, up nearly 42 percent year-on-year.

 

Liu Fang (center), a guesthouse owner in Wuyuan, a county in Jiangxi province, informs her guests about the history of Huizhou-style antique houses on June 28. Zhang Ruiqi / Xinhua

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2019-07-15 07:48:48
<![CDATA[Talent key to cyber-security, say experts]]> http://www.chinadaily.com.cn/kindle/2019-07/15/content_37491674.htm

Cultivation of cybersecurity talent will depend on collaboration among industry, academia and the government, as China pushes for new ideas and novel solutions to address potential online threats, according to industry experts.

Threats to cybersecurity continue to grow, and the global society needs bold ideas and innovations to address these challenges, said Lyu Yiping, director of the Keen Security Lab of Tencent, an in-house cybersecurity research arm.

"It is an era in which the world we live in depends on network connections in everything we do... this is a team sport that requires building a community of people to manage risks," he said.

Lyu made the remarks at Tencent's cybersecurity contest in Shanghai last month. The competition, known as Tencent Capture The Flag, is an occasion to attract the best young experts specialized in detecting software vulnerabilities and protecting systems from the threat of malicious actors.

With cybercriminals like organized hacking groups causing losses of billions of dollars every year, the need for individuals capable of securing networks against attackers has never been greater.

China's information security industry is projected to reach 100 billion yuan ($14.6 billion) in sales this year, according to the Qianzhan Industry Research Institute.

But that might come to pass only if certain problems are overcome. For instance, data from the Cyberspace Administration of China last year suggested the country currently lacks more than 700,000 cybersecurity professionals. That number is expected to double by 2020.

Education and training programs can give students the opportunity to build relevant skill sets. One common approach is to use cybersecurity competitions, which allow students to gain experience working as a team and confront others realistically in simulated cybersecurity situations, Lyu said.

With the advent of technologies such as 5G, cybersecurity can take on new forms like internet of things and vehicle-to-everything, said Jiang Kaida, vice-director of the Network and Information Center at Shanghai Jiao Tong University.

"The competitions offer students the chance to experience challenges modeled on real-world situations and progress with the times."

Contests, he said, allow students to build practical skills while improving their ability to work as teams in a fast-paced, adversarial environment.

Such contests, together with other hands-on learning opportunities, can help students develop problem-solving and analytical skills, which are deemed critical and sought after by employers, said Chen Chen, an internet security researcher of Fudan University.

The future would require joint efforts across the private sector, research institutions and the government in organizing similar events and promoting the exchange of personnel.

For instance, certain Tencent contest winners were immediately offered full-time jobs at Tencent Keen Security Lab. Others received offers for well-paid jobs from leading internet firms.

"Successful programs have been a combination of private companies and academia - companies are providing universities with insights into certain areas where it is difficult to find talent, and academia is developing the curricula to address the deficit," said Chris Hall, an analyst at global consultancy PwC.

The Cyberspace Administration of China has encouraged security and internet companies to increase cooperation initiatives with educational institutions.

In response to the policies, software firm Qihoo 360 has established security laboratories and partnerships with numerous universities and institutions, including Peking University, Tsinghua University and the Chinese Academy of Sciences.

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2019-07-15 07:48:48
<![CDATA[Temasek says China to stay major focus]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491268.htm Singapore fund optimistic on new technology and sustainable growth

Singapore's state-owned investor Temasek affirmed its long-term and stable investment strategy in China, after it reported a large net divestment globally in the 2018-19 financial year, the company's senior Chinese management told China Daily on Thursday.

"China is one of the most important investment destinations for Temasek, and we remain optimistic on China's trajectory in the medium to long term," said Wu Yibing, head of Temasek China.

During the 12 months to March, Temasek invested S$24 billion ($18 billion) worldwide and divested S$28 billion, as "the company anticipated an increasingly challenging environment since July in 2018", according to its 2019 annual report.

By the end of the last financial year, China had the largest share of the Singaporean investor's portfolio, alongside with Singapore, with a proportion of 26 percent, or about S$81.38 billion. The share was unchanged from 2018, compared with 25 percent in 2017, showed the report.

The outlook in China may come under more pressure from a prolonged trade dispute with the US, Wu said.

"But we believe the Chinese government still has room for policy adjustments to mitigate risks, and we expect more reform efforts to transition the economy toward a more sustainable growth path."

Wu listed major trends for future investment: longer life spans, rising affluence and sustainable living driving social progress, enabled by technological solutions for sharing economies, smarter systems and a more connected world.

Shen Ye, managing director of Temasek China, said the team will focus on new technology and sustainable growth, following the standards of environment, social and governance (ESG) investment.

Financial services remain the largest share - 25 percent - of Temasek's portfolio by sector. For the new investments, the company said it would continue to focus on non-bank fintech and payments platforms such as Ant Financial in China that operates the flagship Alipay payments platform.

Wu said China's further opening-up, especially in the financial sector, will bring more opportunities to foreign investors, and a "fair competition environment" will further improve the business environment in China.

"So we have the confidence here."

He also expected the newly launched science and technology innovation board to support the growth of Chinese high-tech start ups, which is also a key area for Temasek's investment.

For the last year, Temasek reported a record net portfolio value of S$313 billion, remaining anchored in Asia with 66 percent exposure by underlying assets. Exposure in Europe increased to 10 percent from 9 percent a year earlier, and that for North America rose to 15 percent from 13 percent.

The company's S$4 billion net divestments, in the meantime, were the largest since the S$7 billion reported in 2009, given the increasing challenging global environment, according to the annual report.

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2019-07-14 14:22:42
<![CDATA[Airline industry heading for summer boom]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491267.htm With the approaching of the peak air transport season in summer, and the grounding of troubled B737 MAX aircraft, demand has exceeded supply in the domestic aviation market, which will lift flight ticket prices and boost the sales of carriers and their stock performance, industry analysts said.

New York investment bank Goldman Sachs shifted its overall view of China's aviation sector to positive, as it expects the valuations of the sector will be supported by growing demand.

Goldman Sachs upgraded shares of State-owned carriers Air China and China Eastern Airlines from "neutral" to "buy" on Thursday, for shares listed in the Shanghai A-share board and in Hong Kong, according to its report.

The firm forecasts that the annual demand growth rate of China's aviation sector will accelerate to 12 percent or more. So far this year, the growth rate has been 10 percent, it said.

Air China shares edged up 0.33 percent in Thursday trading to close at 9.1 yuan ($1.32). China Eastern shares rose 0.5 percent in trading to close at 6.04 yuan. In the same note, Goldman Sachs raised its target price of Air China stocks to 12.4 yuan, and raised its target price of China Eastern stocks to 8.3 yuan.

"The aviation sector in China is expected to have a good performance this year, fueled by the ongoing consumption upgrade trend in the country, despite the fact that the growth rate will slow down a bit, and the cost of air fuel may edge up in the second half of year," said Zou Jianjun, a professor at the Civil Aviation Management Institute of China.

"With the grounding of 96 B737 MAX planes in China, the model's largest market, air transport supply is inadequate to meet demand during the peak summer season, which will benefit the profitability of carriers, and those airlines with clear strategies and sound networks will perform better," he said.

In the first half of this year, airport stocks overall have surged by 60.5 percent year-on-year, and airline stocks have climbed by 20.8 percent year-on-year.

Since early July, airlines have increased their capacity by more than 10 percent year-on-year, and passenger flows have jumped rapidly, with a large number of people taking their summer vacations, according to a report from China Merchants Securities Co Ltd.

"Particularly, the demand of travel to South Korea and Japan has been robust, and the positive sales of flight tickets will stay until early August. Given that it is hard to predict when B737 MAX aircraft will resume their flights, the overall supply and demand pattern of the sector has been improved with benign competition," said Su Baoliang, a researcher at Merchants Securities.

 

Performers dance at the airport in Kuche county, Xinjiang Uygur autonomous region, on Thursday, to celebrate the launch of direct flights between Kuche and Xi'an, capital of Shaanxi province. Yuan Huanhuan / For China Daily

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2019-07-14 14:22:42
<![CDATA[Xiao Guan Tea aims to expand its aroma]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491266.htm Xiao Guan Tea, which is known for offering a luxurious aluminum small-sized container to keep tea leaves for each single brew, has recently rolled out new lines of large-sized packages for multiple brewing, as part of efforts to diversify its product range and expand customer reach.

The tea maker has expanded the size of each package to 40 to 50 grams, featuring six types of teas including Long Jing and Pu'er, at a more affordable price of 150 yuan ($21.84) per package.

In comparison, its high-end product is designed at 4 grams for each brew at 50 yuan.

"The design of the bigger package is intended to offer convenience to people who have a habit of tea drinking on a daily basis at an average price and standard quality," said Mei Jiang, general manager of marketing center of Xiao Guan Tea, at the launch event on Wednesday in Beijing.

Mei said, unlike coffee, in tea selection and purchase, it is harder for consumers to tell which tea is good due to the lack of industrial standards.

The Beijing-based company has spent two years building up standards in the tea industry, from planting, harvesting, manufacturing and monitoring to control the consistent quality of each package of products.

Adopting materials and techniques from formula milk, the new package means the tea leaves will last longer in terms of taste and flavor once it has been opened, said Mei.

He added that the company is also developing colorful and fashionable wrapping for younger consumers later this year, or even tea bag products similar to Lipton tea under Unilever.

The average age of consumers buying Xiao Guan Tea online is between 18 and 35, lower than the average age of consumers of traditional tea products, Mei said.

Xiao Guan Tea's customer base is mostly female and 70 percent are under 40.

Launched in 2012, the tea maker, which focuses on a luxury retail experience at high-end shopping centers, has expanded quickly to more than 600 franchise stores and is available at 5,000 other retail stores in the country.

Its e-commerce distribution has expanded to Tmall and JD. In 2018, Xiao Guan Tea's retail sales reached 2 billion yuan, ranking as the No 1 tea brand in the country. This year, the growth is expected to be 10 to 20 percent, said Mei.

Its investment on research and development is more than 30 million yuan.

One out of five products are sold online. Its 1.5 billion yuan manufacturing plant at Huangshan Mountain is expected to go into production this year.

Zhu Danpeng, a food and beverage analyst, said the company is going to build more brands, distribution channels, consumers and retail scenarios to enhance its brand awareness and increase customer reach.

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2019-07-14 14:22:42
<![CDATA[Social commerce sector on the up]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491265.htm The market size of China's social commerce sector is expected to reach 2.07 trillion yuan ($302 billion) in 2019, an increase of 63.2 percent year-on-year, as the use of mobile technologies to access social media is increasingly popular in China, a new industry report said.

The sales revenue from social commerce platforms will account for 20 percent of the country's online retail market this year, and this proportion will amount to more than 30 percent in 2020, according to the report issued by the Internet Society of China and Chuangqi Social Commerce Research Center.

Social commerce is a subset of e-commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services.

The report also said the number of people engaged in the social commerce field is expected to reach 48.01 million in 2019, up 58.3 percent year-on-year. In addition, the tendency with regard to the integration of online and offline shopping channels will be strengthened, with diversified, personalized products favored by Chinese consumers.

Experts said social commerce has become a driving force of the booming e-commerce sector. "E-commerce on social networking platforms is rising in the retail industry because people increasingly use mobile phones and tablets to replace PC-based online shopping, so group-buying has gained traction," said Cao Lei, director of the China E-Commerce Research Center.

He added that social commerce will become the mainstream method in the e-commerce industry, and will attract more tech giants and capital as the cost of acquiring consumers' data flow is relatively low.

"Social commerce is playing a crucial role in the digital retailing industry. Essentially, almost everyone in China is jumping on the social commerce bandwagon and showing great enthusiasm for the platforms by engaging in a variety of social commerce activities," said Cici Wu, a research analyst at consultancy firm Mintel.

"Although more consumers today still prefer traditional e-commerce than social commerce channels, their expectations for the latter are more optimistic," Wu noted, adding that the post-1990 generation favor social commerce over traditional e-commerce platforms.

Shanghai-based social commerce platform Red, known in Chinese as Xiaohongshu, has begun testing live broadcasts and real-time sales. Online influencers have been invited to use the live streaming feature, which lets broadcasters interact and sell products directly to viewers.

Founded in 2013, Red initially began with the objective of helping Chinese people traveling abroad share their shopping experiences online before changing into a social commerce site selling international luxury brands and sought-after foreign products.

Moreover, Pinduoduo's group buying-and-discount model continuously grabbed the headlines last year. Founded in 2015, the company follows the model of "the more people buy the cheaper the price". It is now the third-largest e-commerce platform in China, behind Alibaba and JD.

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2019-07-14 14:22:42
<![CDATA[SMEs to get further policy support]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491264.htm Small firms to benefit from govt measures to control risks and prevent local labor market shocks, say industry experts

Chinese policymakers are likely to further ease monetary policy and promote bank loans for smalland medium-sized companies in the second half of this year, introducing measures to control risks and prevent shocks in the local labor market, according to industry experts.

Further easing monetary policy can help to achieve the goal, said Huang Yiping, an economist at Peking University and a former member of the central bank's monetary policy committee.

 

A billboard promoting financial services for small businesses at the booth of SPD Bank during a recent industrial expo in Shanghai. Jin Rong / For China Daily

Other economists said injecting liquidity through standing lending facilities can be expected, which will allow medium and small banks to access cheaper funds from the interbank market, and to raise loans for small businesses.

China's total outstanding loans for small enterprises surged to their highest level in Asia in May, at 10.3 trillion yuan ($1.5 trillion), a 21 percent increase from a year earlier, 5.8 percentage points higher than at the end of 2018, according to data from the People's Bank of China.

The PBOC and the China Banking and Insurance Regulatory Commission jointly issued a white paper last month, pledging to enhance support for SMEs in multiple ways such as cutting financing costs and allowing a higher ratio of nonperforming loans.

"Global trade tensions are escalating, which has weakened external demand and given export-intensive small businesses a shock. The output and order volumes of some export companies have been affected and they face future uncertainties," said the white paper.

"How to price SME loans is the key, the price needs to reflect companies' real risk level," said He Dayong, managing director and partner at Boston Consulting Group.

"An up-floating interest rate for companies with higher default risk can better encourage banks to issue loans to SMEs. Otherwise, cheaper yet high-risk credit will erode banks' profits and even drive small banks into operational difficulties," He said.

"Financial regulators' tolerance of higher NPL ratios for SME loans will also motivate commercial banks' lending," he added. "The challenge is how to precisely assess SMEs' financial risks and to prevent fraud based on limited information. Utilization of big data and advanced technology such as AI may be the key."

For SMEs, borrowing from banks is much cheaper than some non-banking channels such as private financing and peer-to-peer platforms. Banks' average lending rate was 6.16 percent in December, compared with 16.45 percent for private loans in Wenzhou, a city in Zhejiang province with many SMEs. The cost of P2P lending was about 13 percent, according to the white paper.

The State Council, the country's cabinet, announced in June that it will permit NPL ratios for SME loans to rise to 3 percent from 2 percent.

The average NPL ratio for SMEs was 5.9 percent in May, compared to 1.4 percent for large companies and 2.6 percent for medium-sized ones, the PBOC said.

The central bank has taken proactive measures in the first six months to increase loan supply to small companies. It required large banks to increase SME loans by 30 percent and cut average financing costs by 1 percentage point.

The PBOC also cut the reserve requirement ratio of medium and small banks again on June 17, injecting additional capital into the financial sector.

Overall credit growth quickened slightly in the first quarter, as the government's policy priorities shifted toward sustaining growth and stability. With GDP growth remaining steady from January to June, some economists are concerned that the faster pace of credit expansion could result in an increase in financial leverage.

Credit motivation, however, may increase pressure on smaller lenders, as they lack capital when profit growth slows. As such, the PBOC is encouraging commercial banks to issue perpetual bonds and convertible bonds to supplement their capital.

The financing needs of private corporate borrowers in China are still underserved by the formal banking sector because of structural factors, including implicit and explicit government guarantees for State-owned enterprises, and information asymmetries between lenders and private sector borrowers, according to industry experts.

"Banks' corporate loan growth continues to outpace the broader category of micro and small enterprise loan growth by a wide margin, suggesting that they remain cautious in allocating credit to small private companies and favor large corporate borrowers such as State-owned enterprises," said George Xu, a Moody's analyst.

China's crackdown on shadow banking since the end of 2016 has reduced credit availability for private and small companies, although it contained financial systemic risk to some extent, said Xu.

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2019-07-14 14:22:42
<![CDATA[Private banks use high-tech to offer cost-effective services]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491263.htm Private banks in China are increasingly using cutting-edge technology and expertise to offer cost-effective services to micro and small enterprises.

MYBank, the online lending offshoot of Ant Financial Services Group, wants all Chinese mom-and-pop shops to be able to apply for and receive loans in one second within the next three years, as it continues to leverage artificial intelligence, computing and risk management to increase efficiency and reduce costs.

The number of micro and small enterprises served by MYBank has jumped 10-fold in the past three years to some 17 million, Hu Xiaoming, the newly appointed chairman of the bank, said during a conference last month celebrating the bank's fourth anniversary.

 

An online store owner applies for a loan through a MYBank mobile phone app in Jingdezhen, Jiangxi province. Provided to China Daily

Roughly 73 percent of applicants get loan approvals on their first attempt, and 80 percent of them don't have a credit history in other financial institutions to gauge, Hu said.

"According to our in-house statistician, out of 100 loan applicants, 99 can repay in time," he said. "It shows the level of creditworthiness of these smaller business owners."

MYBank extends loans based on customer risk assessment that is determined by big data analysis powered by algorithms. According to data released last year by Ant Financial, by circumventing human involvement, the cost of issuing a loan is slashed from 2,000 yuan ($290) to just 2.3 yuan.

Thanks to its technological prowess, MYBank gained its reputation by issuing a brand-new industry standard: three minutes for application submission, one second for loan issuance, and zero human intervention.

The "310 model" and its tech suite were officially opened up to other banks last June through a "Star Plan" heralded by Ant Financial. Hu said 50 Chinese financial institutions have already embraced such technologies in their daily operations.

According to Toward Universal Financial Inclusion in China, a joint report published by the People's Bank of China and the World Bank in 2018, only 14 percent of China's small businesses have access to loans or lines of credit, compared to 27 percent of smaller firms in G20 members.

"Due to a lack of credit history and collateral, micro and small businesses have suffered from a credit crunch due to higher costs, bigger risks and the discrepancy between supply and demand," said Li Dongrong, president of the National Internet Finance Association of China.

The goal to accelerate the penetration of credit services is further fueled by the proliferation of the mobile internet and the increasing adoption of the quick response code, a popular payment method in China using a smartphone. Several million street side business owners and shopkeepers accept bills via QR code payment, Ant Financial said.

A survey conducted by the National Bureau of Statistics earlier this year showed that each small enterprise stands to create employment for on average seven to eight people, while each individual industrial and commercial entity can create employment for 2.9 people.

MYBank reported net profits of 670 million yuan in 2018, one of the lowest readings among Chinese banks, according to its annual report released in April. But Hu said earnings and profits have never been the primary target of MYBank.

"Our goal was originally to be the bank that services the largest number of micro and small enterprises with the smallest profits," he said.

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2019-07-14 14:22:42
<![CDATA[Lender relies on family credentials to minimize nonperforming loans]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491262.htm The most common reasons for small business owners failing to repay loans on time are moral hazard such as gambling, unsalable products due to market changes, and acting as guarantor for a friend or relative's now overdue loan, said Mu Yuehong, client manager at Bank of Taizhou Co Ltd.

Mu, 41, joined Bank of Taizhou, a city commercial bank that specializes in making loans to micro and small enterprises, in 2003. She now manages about 280 clients, most of whom are self-employed entrepreneurs.

To prevent the occurrence of nonperforming loans, she tries to learn as much as possible about small business owners' family relationships, their business operation history, the accumulation of capital, the real purpose of the loan, and the total value of guarantees they have provided for other loans.

"After talking to a small business owner, my colleagues and I will cross check the information by reviewing bills, bank statements and credit reports provided by the People's Bank of China, the central bank. We will search for the firm on mainstream business data search platforms and local government-backed credit information sharing platforms, in addition to talking to employees about business operations and the financial situation of the firm," said Mu.

If a business owner lives in a village, client managers make local inquiries, which is an effective way to gain a deeper knowledge of the person, she added.

The subbranch of Bank of Taizhou where she works is located in the rural-urban fringe of Huangyan district in Taizhou, a coastal city in Zhejiang province known for its robust business activities in the private sector.

Due to rapid growth of the mold industry in Huangyan, a large number of self-employed entrepreneurs who manufacture plastic products such as hangers, toothbrushes and cups live in the area surrounding the subbranch.

Some of them have applied for loans to purchase raw materials and equipment. The injection molding machines most widely used by small local plastic product manufacturers cost 150,000 yuan ($21,850) to 250,000 yuan per unit.

"Generally speaking, if a small business is run by a couple who are focused on a particular industry and have no bad habits such as gambling, and if the business is running smoothly, its owner will receive a loan from our bank as the probability of risk occurrence is fairly low," she said.

By the end of May, the nonperforming loan ratio for micro and small loans offered by Bank of Taizhou was only 0.54 percent. Among 325,700 clients that had taken out loans at the bank, 94 percent had a line of credit of up to 1 million yuan, and the average line of credit was 393,200 yuan per client.

The bank has developed its own measures and system for risk analysis and identification, highlighting the importance of family governance and the skills of small business owners, rather than corporate governance and collateral.

"In Taizhou, it is common for a man to be the chairman of a small business and his wife to be the financial officer. Under these circumstances, it might be hard for him to differentiate his own property from that of his family and company. Therefore, how harmonious a family is and how hard the family members work greatly affect loan security. If a couple gets divorced, which can arise due to issues such as gambling, it will introduce risk to our bank's loans. That's why we think family governance is important," said Wang Weiwen, marketing director at Bank of Taizhou.

As decision-makers, subbranch managers will approve or reject 90 percent of the applications for one-year working capital loans. For first-time applicants, once their loan applications are approved, it usually takes three days to complete the procedure. After that, client managers will revisit the client within a month to ensure that the loan is used for production and business operation.

The bank also conducts off-site inspections and client risk monitoring based on big data and digitized client profiles to categorize risks according to the degree of seriousness and to identify clients worthy of closer inspection, Wang said.

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2019-07-14 14:22:42
<![CDATA[Concentrated solar power projects fast gaining ground]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491261.htm Innovative tech set to be an integral part of nation's electricity generation system

Concentrated solar power generation is making tangible progress in China, with the sector set to be an integral part of the country's current power system soon, said experts.

Concentrated solar power, or CSP, is a technology that uses mirrors to concentrate and reflect sunlight to drive traditional steam turbines to create energy.

 

Technicians check concentrated solar power generation equipment in Aksay Kazak autonomous county, Gansu province. Xinhua

Last year, three major CSP demonstration projects having an installed capacity of 200 megawatts in total were put into operation. These are China's first commercial CSP demonstration plant in Delingha of Qinghai province by China General Nuclear Power Corp, a 100-megawatt plant in Dunhuang, Gansu province, by Beijing Shouhang IHW Resources Saving Technology Co Ltd, and a 50 MW plant in Delingha co-invested by Helius New Energy Co Ltd and Zhejiang Supcon Solar Technology Co Ltd.

According to industry newspaper China Electric Power News, six CSP projects are likely to be put in operation this year.

The projects are among the first batch of 20 CSP demonstration plants approved by industry regulator, the National Energy Administration, with planned installed capacity totaling 1.35 gigawatts.

Preferential policies from the government helped ensure financial support to these projects. According to the National Development and Reform Commission, CSP projects that were put into operation by Dec 31, 2018, can enjoy a flat sales price of 1.15 yuan (17 cents) per kilowatt when trading with grid companies. The price is considered an encouraging move for CSP companies, as the average traded power price (with grid companies) in 2017 was only about 0.38 yuan per kilowatt, official data show.

"CSP plants have great environmental benefits as a type of clean energy compared with fossil fuels. CSP plants also generate more stable power than photovoltaic plants," said Han Xiaoping, chief researcher at energy analysis website China5e.

"Moreover, CSP allows power generation at night as current CSP plants are able to storage heat from the sun, and convert it into electricity at night, when people come home after a day's work, usually a peak period for electricity," Han said.

According to Han, CSP plants can be a great addition to the current power system, as electricity cannot be stored with current technologies.

"With three CSP plants already being put into operation, and six more on the way, China's development in the CSP sector is set to blossom," Han said.

Agreed Wang Jixue, deputy director of new energy in the China Renewable Energy Engineering Institute. Wang told China Electric Power News that although the market is still small in China, tangible achievements, including tech innovation in theory and practical experience, were made in the demonstration projects, with support from the government.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, was more conservative about the industry.

"The problem is that the cost of CSP projects is too high, speaking of the land they occupy and the expense of their equipment. That is a problem that hinders the industry's development and a problem many companies are trying to tackle," Lin said.

Qinghai Supcon Solar Power, the owner of the 50 MW CSP plant in Delingha, is one of those companies.

"Lowering building and operation costs is one of our major tasks in upcoming works," said Fan Yuhua, chief engineer at Qinghai Supcon Solar Power Co Ltd, a joint venture of Helius New Energy and Zhejiang Supcon Solar.

"Using domestic equipment is a good approach, but not many manufacturers in China are producing equipment we need due to limited industry demand," Lin said.

According to Lin, another problem that hinders the industry development is land.

"Building CSP plants and developing technologies need a large space, a big area so that they can place all the mirrors," Lin said.

"Land can be very costly, and that is one of the reasons why most CSP projects are being built in Northwest China where land prices are relatively lower, and of course they have good sunlight resources," Lin said.

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2019-07-14 14:22:42
<![CDATA[Summer camps, study tours turn popular with Chinese parents]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491260.htm Spending over 20,000 yuan ($2,911) to send a 10-year-old child to a 10-day summer camp may appear a steep price for most Chinese parents. But for many like Jinan-based Zhao Qi, a white collar worker, the price is worth it despite the fact that it is four times the average monthly salary in the city in Shandong province.

"We believe that the price is totally worth it considering that the curriculum focuses on STEM(science, technology, engineering, and math) and critical thinking, essential skills in today's work environment. For instance, children are trained in real-life scenarios, like how to 'make' water with limited resources as if they are living in outer-space, to learn to find problems and solve them. The learning experience is just not quantifiable," Zhao said.

Spurred by the growing demand for children's quality education, many Chinese parents are now willing to spend money on camp education and study tours for their children, making the industry a booming market with great potential.

The total value of the study tour and camp education market was about 94.6 billion yuan in 2018, according to data from New Oriental Global Study Tour and iResearch. The industry is expected to see a 20 percent compound annual growth and reach a scale of 172.5 billion yuan by 2021.

Lyu Senlin, founder and chief researcher at industry consultancy Learneasy Times Online Education Research Institute, said there is enough potential for growth as the industry becomes more flexible.

"Other than the traditional forms of camp education and study tours like those with STEM themes, there are several new approaches like the Wushu (martial arts)-themed camps aimed at developing children's interests," Lyu said.

"But science-themed camp education and study tours are still the top choices for parents and children," he said.

A rough industry estimate shows that the number of participants in camp education and study tours amounted to about 31.21 million in 2018, with 30.16 choosing domestic services, and about 1.05 million choosing to send their children overseas. Children who are studying at elementary and middle schools accounted for the majority of participants, said a report by China Business Journal.

The rapidly developing market has also been backed by a slew of favorable policies. According to China Business Journal, an increasing number of local governments have rolled out measures, such as encouraging schools to organize study tours and making it an important indicator in evaluating students' school performances, after the central authorities reiterated the importance of promoting study tours in 2016.

The large market potential has also attracted interest from the investing community. By the end of last year, nearly 30 startup companies in the education and study tour segment had gained pre-Series A funding, according to data from Chuanxibang, a marketing and communication service provider in the education industry.

Jiang Feng, co-founder of the Qinghai-based Mars Camp which has been developed by a Beijing-based company with the same name, said they are looking for investment to sustain their investment of 150 million yuan to further develop lessons and enhance services.

"The booming market has been challenged by lack of proper industry regulations and standards. It's not hard for a company to make an entry into this industry, but not a lot are able to offer proper services, especially those related to safety," Lyu said.

Mars Camp, located in Cool Lake township of Haixi Mongolian and Tibetan autonomous prefecture in Qinghai province, is located in the middle of the Gobi desert and aims to emulate life in outer space and how best to cope with it.

"I think camp education, and various forms of study tours, are a great addition to my daughter's school learning, because they can easily let her know how to apply the knowledge she learned from class to real life," said Zhao from Jinan.

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2019-07-14 14:22:42
<![CDATA[Bilibili carves a niche with synchronized online interactions]]> http://www.chinadaily.com.cn/kindle/2019-07/14/content_37491259.htm Video is the go-to-business in China's thriving internet sector. From tech giants like Alibaba and Tencent to highflying apps like Douyin and Kuaishou, industry players are sparing no effort to be part of the intense race to gain user traction.

Video site Bilibili, however, has carved out a unique niche by cultivating a vibrant online environment, based on synchronized online interactions.

At a grand gala in Shanghai celebrating Bilibili's 10th birthday on June 26, Chief Executive Officer Chen Rui made a rare appearance and shared the latest strategy of the site, which is deemed "ground zero" for much of China's post-1990 and post-1995 generations' internet culture.

Starting out as an obscure online spot for animation, comics and games, Bilibili has turned into a Nasdaq-listed media conglomerate encompassing all video themes one can imagine. Today it is also on the radar for nurturing, producing and distributing movies, TV series and comics.

Bilibili's 100 million monthly active users now spend on average 81 minutes on the site per day, playing videos for a total of 510 million times, according to Chen.

The platform is also enriched by over 730,000 original content curators who submit 2.08 million indigenous videos accounting for 89 percent of the total videos being played.

But one feature that serves as a genuine differentiator is its "danmu", or "bullet comments" system. It is a loanword from Japanese animation circle, depicting a user conversation system where time-synced comments are overlaid directly on top of the video as it plays.

The comments can either be in real-time or left by previous viewers pegged to specific moments of a video. Such spontaneous interaction creates a social watching experience similar to that of sitting in a rowdy theater: during pivotal moments in a video, reactions wash over the video in a dense tidal wave, as if you are sharing your feelings instantly with your online neighbors.

"Here at Bilibili, we see the generation of over 1.4 billion danmu comments each month. It is the epitome of emotional interaction and makes Bilibili a genuine, heartwarming community," Chen said.

Another factor gluing the Bilibili users tight is setting a high threshold for membership in pursuit of cultural recognition. While anyone can watch the majority of videos on the site, only members who have passed a 100-question test regarding animation culture, the danmu etiquette and other related topics, are granted more rights such as uploading videos and prioritized comments.

"Contrary to the common practice of lowering the threshold for user acquisition, such settings ensure the bulk of participants at least understand the norms of the community, which helps the platform hold onto users and enhances their loyalty," said Ma Shicong, an internet analyst with consultancy Analysys.

Thanks to that congruence, Bilibili isn't just intriguing to comic and animation lovers, but it has serious undertakings. The platform is shaping up to be the country's top self-learning platform, with 4.2 million videos on a variety of educational topics accessed by 18.27 million avid learners.

"It is a paradise, an encyclopedia, a fenceless university, and a gas station," said Zhang Zhaozhong, a retired professor from the National Defense University of the People's Liberation Army and a rear admiral. His series of online videos populating military knowledge among youngsters has secured him some 2 million followers.

But Bilibili's ambition does not stop there. It proposed a "Made by Bilibili" plan last year, aiming to invest in high-quality content production houses to craft original content.

In the past three years, Bilibili has been involved in the investment and release of 71 Chinese-made comics, accounting for half of all homemade comics during the same period. In the latest development, it announced the launch of the animation adaptation sci-fi trilogy The Three-Body Problem, based on the namesake sci-fi novel by popular Chinese writer Liu Cixin.

They plan to coproduce the animation with two other Chinese companies - the Three-Body Universe (Shanghai) and Wuhan-based animation maker YHKT Entertainment.

Ruan Rui, CEO of YHKT Entertainment, said the animation is at the script writing stage and will be shot with 3D technologies. Ruan did not reveal whether the animation will be a series or a film.

"Animation, as an image art form, is especially suitable for presenting science fiction content. I look forward to seeing the adaptation go beyond my imagination," Liu, the author, said at the launch ceremony.

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2019-07-14 14:22:42
<![CDATA[Imagine that! Virtual reality]]> http://www.chinadaily.com.cn/kindle/2019-07/13/content_37491231.htm As science advances exponentially, the choice between living in a real or simulated world may just be around the corner

It's late. The wrought iron gates of the cemetery stand just ahead, but what's on your mind right now is the rain, falling in sheets and getting home as fast as you can. Your car is back there, hung up in a ditch where you skidded off the road, braking to avoid the washout. The quickest way home - the shortcut through the cemetery, then back to the main road.

"Abandon hope all ye who enter here" flashes through your mind. You struggle up and over the cemetery gate, and trudge on, finding your way through the low lying mist. Wait is something moving just up there, among the headstones? That's nuts. Nobody would be out this late, in a storm. But that something is moving and you can see clearly, a lost face, pale and ashen, a face of terror and madness. You feel your guts get tight. This is unreal. But wait. Don't be afraid. You're in control. You're in virtual reality - where anything can happen. Let your imagination soar. You could be the hero of your own life's epic adventure.

"The only limitation is what we have bonded to our imaginations, so dinosaurs, or outer space, or aliens, anything that is under our imaginations could be realized, to certain degrees of virtual reality," says Henry YK Lau, associate dean, (Innovation) at Hong Kong University's Faculty of Engineering.

The shape of things to come

The future presents a pretty cloudy picture - a specter even. You know - things like robots taking jobs - millions and millions out of work - bitter, alienated and nothing to do? You might even think, we're living in an age of monsters: exotic diseases able to spread around the world, mass extinction and yikes! scientists say an asteroid could wipe out everything; reasons to want to escape to a place that feels safe, like virtual reality. So, we asked the experts: could we, someday, choose between life in reality or in virtual reality?

"Sure. In my book I lay out what I call the Road to the Simulation Point, which consists of stages of technology or gates that would have to be crossed. (We have reached) what I would call stage 5 (of 10), so we're half way there," says Rizwan Virk, a computer scientist, engineer, and executive director of Play Labs, at the Massachusetts Institute of Technology. His book, The Simulation Hypothesis, published in March, is a current bestseller on Amazon.com. Virk predicts that inside a century, science will produce a simulation game, indistinguishable from reality.

What's the point? you may ask. Well, modeling Earth and stars will mean astronomical advances in science. On the other hand, we have a 2017 poll by Pew Research, showing that 72 percent of people are worried about losing their jobs to a robot.

"You have a small subset of people who have deep technical knowledge. They are going to take out businesses, they're going to take out jobs," says Udeme Ekong, doctor of Artificial Intelligence and CEO and co-founder of the content-driven social networking site Bloverse. "That will create a divide where you have people who have no purpose, no way of making a living and they are basically, given a stipend by government. So, I think in 50 years we will be in that state where the average individual spends 80 percent of his time in virtual reality."

Hard bending your mind around the changes happening all around us, right now and this is just the beginning.

"What it's gonna bring is mind-blowing, says Professor Tomas Laurenzo, assistant professor at CUHK, the Chinese University of Hong Kong. His research focuses on "Interaction Design + Human Computer Interaction, Artificial Intelligence, and Virtual Reality."

"Everything is about to change," Laurenzo says. "One of the things is this redundancy gap, in a big part, because of the liberation of attention - things that used to require - not intelligence but attention, like driving a car, they will not require that attention just liberating the attention is gonna change everything."

You almost get the picture of the Eloi - the innocents in the HG Wells sci-fi novel, The Time Machine - idle, lazy, ignorant and helpless. Can the idled innocents of the not too distant future be spared lives of idle stupidity?

Escape from reality

You may not know that the global market for computer games is "bigger than the movies," already. That market is headed for a $131.23 billion pay day next year. The global cinema market expects only $50 billion in 2020. (Source: Statista).

Newzoo, a website that tracks global gaming trends, in its annual Global Games Market Reports, cites 2.3 billion active gamers around the world in 2018. Tencent's Honor of Kings was the highest-grossing mobile game in 2017 boasting 200 million monthly active users in China alone. That's mind-boggling. The global population by May 2018 was estimated at 7.6 billion.

Now, we have so-called esports. Viewers around the world are tuning in to watch international competitions in some of the world's most popular games. This has become so big, that the International Olympic Committee is considering trying out "electronic sports" as an Olympic event at the 2022 Beijing Winter Olympics. The message: Don't underestimate the influence of computer games.

Where next?

"Once, once we've moved from the current stage of augmented reality, virtual reality," says Virk. "The next stage is photorealistic fully augmented reality and mixed reality, so that you can actually create photorealistic objects.... and if you can make them appear, even without glasses throughout the room, then we get to the next stage."

Virk added that technology is already pretty good at reducing any environment to pixels on a screen, but "what we can't do yet is render those pixels in real time." It means on a virtual tour, computers aren't fast enough yet, to load graphics instantaneously. There's lag time.

Just because the technology has quite a way to go that hasn't stopped progress in mind-blowing directions. Take your favorite social media platforms, Weibo, WeChat, Facebook, Snapchat. Those are the step toward social virtual reality. In social virtual reality, people, through their generated avatars will be able to come together, sharing experiences in virtual reality. "Hey, let's meet at the Taj Mahal, and then take in a show at the Follies Bergere, in Paris!"

Companies like Alt VR's Frontrow allow subscribers to see their favorite artists in live performances - even interacting with the performers.

That market in the US was worth $10 billion last year.

"There was recently a concert in (the video game) Fortnight that had millions of people attending," observes Virk. "So it was one of the most attended concerts ever and they were all attending it inside the video game ... where their avatars (their characters in the game) attended."

Maybe you've heard of Illusion VR, a device that comes with a head set, and a bodysuit that claims to provide a full body virtual interface. What's it for? You guessed it - virtual sex.

Professor Lau looks toward new communities, without borders, interaction with people all over the world, even tactile communication. "VR can be very individualistic. So I would like to, maybe make my avatar, virtually to have a more profound influence over a wide audience. But the same time, it's the communities, the virtual communities, that everybody, every individual real human may have freely to interact with either real or virtual avatars."

How far down the road are the fantastic visions? It's hard to say. Science grows and accelerates like compound interest - a discovery in one area leads to a breakthrough in another - and that speeds up developments in other areas. The advance of science is not a linear progression but a dynamic structure. The choice between living in reality or virtual reality may come sooner than we think.

The author is a senior editorial consultant at China Daily Hong Kong.

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2019-07-13 07:06:41
<![CDATA[Reality: a persistent illusion?]]> http://www.chinadaily.com.cn/kindle/2019-07/13/content_37491230.htm Reality, as we see it is pretty pliable. If we can create a virtual reality simulation, indistinguishable from reality, can we even guess what reality is, in the first place?

"Reality," Albert Einstein reminds us, "is an illusion, albeit a persistent one."

Rizwan Virk, a computer scientist at the Massachusetts Institute of Technology, in common with other scientists has a slightly different take on reality. It's not our "perception," he says. "Reality, is information," data - collected, and rendered into pixels - the most basic units of the pictures, we see. Millions of pixels give us a kind of replication or reality on our televisions and computer screens.

Take a digital photograph and zoom in as close as you can. Those tiny dots you can see are pixels. Those will be invisible with the next big step in virtual reality, the evolution of "8K Ultra High Definition" imagery.

We have to think about the people who will populate the virtual world - the computer generated characters. Did you know today's screen stars are an endangered species? Maybe, they'll be part of the Sixth Great Extinction. Technology is creating "virtual actors" to replace them.

"You've heard about the virtual news readers developed by China's official news agency. There is a male and a female. They are virtual characters but they can read the news and they have facial expression."

Facial expression is a big deal as technology works to develop virtual humans. Before people say what they are thinking - their feelings are telegraphed by their body language.

There's a debate about whether technology is capable of creating, self-aware, self-motivating, virtual humans. Professor Tomas Laurenzo of the Chinese University of Hong Kong doesn't believe it's possible to create self-actualizing replicas of humanity, when we take into account the cultural and experiential qualities of human beings.

Virk argues that technology can build virtual characters able to pass the Turing Test. To pass the Turing Test, a computer or generated character would be able to answer questions so the querent wouldn't know if he was talking to a computer or a real person.

These character simulations have been around in computer games for decades and we see their evolution in voice assistants like Google's Siri or Amazon's Alexa.

Virk outlined for China Daily where he believes technology must go, before we create a simulation, indistinguishable from reality.

Stage 5: The Present: low resolution virtual reality, using 3D glass.

Stage 6: "Photorealistic" augmented and mixed reality. The ability to see without glasses, rendered objects (that aren't actually there), generated by holographic rendering and 3D printing.

Virk: "Once you have a 3D model, you can print out pixels, for the object, (3D printing) so you'll have a three-dimensional object."

Stage 7: Computer/Mind interface (brain implants).

Virk: (interface) able to broadcast, directly to the mind with the ability to read brain reactions.

Stage 8: Implanted Memory through a physical Computer/Mind interface. (Think of the film, Total Recall).

Stage 9: Artificial Intelligence in computer generated characters, capable of passing the Turing Test.

Stage 10 Downloadable Consciousness, from the augmented human brain to a computer, (digital immortality). The Matrix!

"This topic scenario of all these redundant people being entertained, which is basically a matrix right? being pacified and entertained as well living lives in a closed environment."

The Matrix, the iconic 1999 sci-fi film, depicted a world in which humanity is unknowingly trapped in a matrix of illusion a system controlled by outside entities - maybe even aliens.

You may be incredulous when you learn that this has become a topic for serious discussion among scientists. The theme was picked up by Oxford philosopher Nick Bostrom, who wrote in a 2003 paper, "we are almost certainly living in a computer simulation." It's not so much that scientists are buying in to the "extraterrestrial" thing. Tomas Laurenzo believes we live in a matrix, so does Elon Musk and Rizwan Virk thinks we all may be part of a massive computer game.

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2019-07-13 07:06:41
<![CDATA[Huawei asks US to remove export curbs]]> http://www.chinadaily.com.cn/kindle/2019-07/13/content_37491220.htm Huawei Technologies Co said on Friday that it has yet to see any benefit from the US government's promise to relax restrictions on it and called for a direct removal of the company from a security blacklist.

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Firm plans more investments to ensure cybersecurity, protect users' privacy

Huawei Technologies Co said on Friday that it has yet to see any benefit from the US government's promise to relax restrictions on it and called for a direct removal of the company from a security blacklist.

"So far, no concrete changes have happened (to supplier issues)," said Liang Hua, chairman of Huawei, in a news conference in Shenzhen, Guangdong province. "If the US companies obtain licenses to continue selling products to Huawei, we will cooperate with them. But we hope there is some certainty in the licenses so that businesses can be controllable."

Liang's comments came after the US Department of Commerce said it would issue licenses to US companies seeking to sell products to Huawei when there is no threat to national security.

Huawei was put on the US Entity List in May, which banned it from buying technologies originating in the US without special government approval.

Liang said despite the US government "crackdown", Huawei has achieved growth in the first half of this year and specific financial data will be released by month's end.

The senior executive also explained that the company's self-developed operating system Hong-Meng is designed to power internet of things applications such as self-driving vehicles and remote medical services.

"When it comes to operating systems for smartphones, Android and its open ecosystem is still the top choice. It is undecided yet whether to use HongMeng for smartphones," Liang said.

According to Huawei, the company will step up investments to ensure cybersecurity and protect users' privacy.

In 2018, Huawei has evaluated 2,778 of its mainstream suppliers for cybersecurity risks, and verified the progress of related corrective action plans. It also signed a data protection agreement with 582 suppliers for privacy protection, and performed due diligence on these suppliers, said the 2018 Sustainability Report which Huawei unveiled on Friday.

Lyu Tingjie, a professor at Beijing University of Posts and Telecommunications, said Huawei has demonstrated strong resilience toward all the geopolitical pressure, and its consistent research and development input will help it overcome all the challenges.

"But the US government has become the biggest source of uncertainty for the global electronics industry. It constantly changes its attitude and failed to clarify what products can be resumed to sell to Huawei," Lyu said.

On Friday, Liang also highlighted Huawei's determination to pursue green development by achieving innovation in the course of its 5G research, product development, and engineering.

Huawei has managed to reduce the power consumption per 5G site to 20 percent less than the industry average. This has been made possible by the new Huawei chipsets, system software, professional services, and advanced hardware and heat dissipation technologies.

"These innovative technologies have made Huawei's 5G more energy-efficient. With the right solutions, Huawei's 5G will be a green technology," Liang said.

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2019-07-13 06:26:29
<![CDATA[Lenovo unveils upgraded high-performance computing platform]]> http://www.chinadaily.com.cn/kindle/2019-07/13/content_37491219.htm

Tech firm Lenovo Group Ltd unveiled its upgraded high-performance computing platform on Friday, as the country's tech giants pushed forward the research and development of supercomputers in an attempt to post global leading breakthroughs.

The latest system is named Shenteng X9000. It is an integrated solution network embedded with several key technologies such as high-performance computing, artificial intelligence and big data, which industry insiders said can tackle a variety of scenarios.

"The country's high-performance computing has embraced new breakthroughs," said Tong Fuyao, senior vice-president of Lenovo.

China has emphasized the importance of high-performance computing, highlighted by the use and application of supercomputers, in making innovations.

Top500, one of the most authoritative rankings on supercomputers globally, said the country continued to dominate the world's fastest supercomputers in terms of the number of systems.

With 219 systems, the nation tops the supercomputer list and accounted for 43.8 percent of the world's total, followed by the United States with 116 and Japan with 29.

In the list, Lenovo claimed the greatest number of systems globally with 173, while the country's server maker Inspur Group hit 71, and supercomputer manufacturer Sugon stood at 63.

"Compared with our competitors, Lenovo is a unique company that can offer solutions spanning cloud to the edge, meaning the firm can meet all kinds of demands from clients," said Scott Tease, executive director of HPC and AI at Lenovo.

Even though the US Commerce Department added five Chinese supercomputer companies to its Entity List barred from buying US technology, Scott said Lenovo has been able to deal with the development because "Lenovo is a China-based company but (has) globalized" its operations.

"We consider ourselves a global asset for high-performance computing. We are able to drive the value of high-performance computing throughout different countries, not just for one or two countries only," he said.

Qian Depei, dean of the School of Data and Computer Science of Sun Yat-sen University, pointed out that though China has gained momentum in the number of supercomputers globally, there are still many challenges ahead, especially in the E-level supercomputer.

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2019-07-13 06:26:29
<![CDATA[Concentrated solar power projects fast gaining ground]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490853.htm Innovative tech set to be an integral part of nation's electricity generation system

Concentrated solar power generation is making tangible progress in China, with the sector set to be an integral part of the country's current power system soon, said experts.

Concentrated solar power, or CSP, is a technology that uses mirrors to concentrate and reflect sunlight to drive traditional steam turbines to create energy.

Last year, three major CSP demonstration projects having an installed capacity of 200 megawatts in total were put into operation. These are China's first commercial CSP demonstration plant in Delingha of Qinghai province by China General Nuclear Power Corp, a 100-megawatt plant in Dunhuang, Gansu province, by Beijing Shouhang IHW Resources Saving Technology Co Ltd, and a 50 MW plant in Delingha co-invested by Helius New Energy Co Ltd and Zhejiang Supcon Solar Technology Co Ltd.

According to industry newspaper China Electric Power News, six CSP projects are likely to be put in operation this year.

The projects are among the first batch of 20 CSP demonstration plants approved by industry regulator, the National Energy Administration, with planned installed capacity totaling 1.35 gigawatts.

Preferential policies from the government helped ensure financial support to these projects. According to the National Development and Reform Commission, CSP projects that were put into operation by Dec 31, 2018, can enjoy a flat sales price of 1.15 yuan (17 cents) per kilowatt when trading with grid companies. The price is considered an encouraging move for CSP companies, as the average traded power price (with grid companies) in 2017 was only about 0.38 yuan per kilowatt, official data show.

"CSP plants have great environmental benefits as a type of clean energy compared with fossil fuels. CSP plants also generate more stable power than photovoltaic plants," said Han Xiaoping, chief researcher at energy analysis website China5e.

"Moreover, CSP allows power generation at night as current CSP plants are able to storage heat from the sun, and convert it into electricity at night, when people come home after a day's work, usually a peak period for electricity," Han said.

According to Han, CSP plants can be a great addition to the current power system, as electricity cannot be stored with current technologies.

"With three CSP plants already being put into operation, and six more on the way, China's development in the CSP sector is set to blossom," Han said.

Agreed Wang Jixue, deputy director of new energy in the China Renewable Energy Engineering Institute. Wang told China Electric Power News that although the market is still small in China, tangible achievements, including tech innovation in theory and practical experience, were made in the demonstration projects, with support from the government.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, was more conservative about the industry.

"The problem is that the cost of CSP projects is too high, speaking of the land they occupy and the expense of their equipment. That is a problem that hinders the industry's development and a problem many companies are trying to tackle," Lin said.

Qinghai Supcon Solar Power, the owner of the 50 MW CSP plant in Delingha, is one of those companies.

"Lowering building and operation costs is one of our major tasks in upcoming works," said Fan Yuhua, chief engineer at Qinghai Supcon Solar Power Co Ltd, a joint venture of Helius New Energy and Zhejiang Supcon Solar.

"Using domestic equipment is a good approach, but not many manufacturers in China are producing equipment we need due to limited industry demand," Lin said.

According to Lin, another problem that hinders the industry development is land.

"Building CSP plants and developing technologies need a large space, a big area so that they can place all the mirrors," Lin said.

"Land can be very costly, and that is one of the reasons why most CSP projects are being built in Northwest China where land prices are relatively lower, and of course they have good sunlight resources," Lin said.

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2019-07-12 07:48:56
<![CDATA[Summer camps, study tours turn popular with Chinese parents]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490852.htm Spending over 20,000 yuan ($2,911) to send a 10-year-old child to a 10-day summer camp may appear a steep price for most Chinese parents. But for many like Jinan-based Zhao Qi, a white collar worker, the price is worth it despite the fact that it is four times the average monthly salary in the city in Shandong province.

"We believe that the price is totally worth it considering that the curriculum focuses on STEM(science, technology, engineering, and math) and critical thinking, essential skills in today's work environment. For instance, children are trained in real-life scenarios, like how to 'make' water with limited resources as if they are living in outer-space, to learn to find problems and solve them. The learning experience is just not quantifiable," Zhao said.

Spurred by the growing demand for children's quality education, many Chinese parents are now willing to spend money on camp education and study tours for their children, making the industry a booming market with great potential.

The total value of the study tour and camp education market was about 94.6 billion yuan in 2018, according to data from New Oriental Global Study Tour and iResearch. The industry is expected to see a 20 percent compound annual growth and reach a scale of 172.5 billion yuan by 2021.

Lyu Senlin, founder and chief researcher at industry consultancy Learneasy Times Online Education Research Institute, said there is enough potential for growth as the industry becomes more flexible.

"Other than the traditional forms of camp education and study tours like those with STEM themes, there are several new approaches like the Wushu (martial arts)-themed camps aimed at developing children's interests," Lyu said.

"But science-themed camp education and study tours are still the top choices for parents and children," he said.

A rough industry estimate shows that the number of participants in camp education and study tours amounted to about 31.21 million in 2018, with 30.16 choosing domestic services, and about 1.05 million choosing to send their children overseas. Children who are studying at elementary and middle schools accounted for the majority of participants, said a report by China Business Journal.

The rapidly developing market has also been backed by a slew of favorable policies. According to China Business Journal, an increasing number of local governments have rolled out measures, such as encouraging schools to organize study tours and making it an important indicator in evaluating students' school performances, after the central authorities reiterated the importance of promoting study tours in 2016.

The large market potential has also attracted interest from the investing community. By the end of last year, nearly 30 startup companies in the education and study tour segment had gained pre-Series A funding, according to data from Chuanxibang, a marketing and communication service provider in the education industry.

Jiang Feng, co-founder of the Qinghai-based Mars Camp which has been developed by a Beijing-based company with the same name, said they are looking for investment to sustain their investment of 150 million yuan to further develop lessons and enhance services.

"The booming market has been challenged by lack of proper industry regulations and standards. It's not hard for a company to make an entry into this industry, but not a lot are able to offer proper services, especially those related to safety," Lyu said.

Mars Camp, located in Cool Lake township of Haixi Mongolian and Tibetan autonomous prefecture in Qinghai province, is located in the middle of the Gobi desert and aims to emulate life in outer space and how best to cope with it.

"I think camp education, and various forms of study tours, are a great addition to my daughter's school learning, because they can easily let her know how to apply the knowledge she learned from class to real life," said Zhao from Jinan.

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2019-07-12 07:48:56
<![CDATA[Bilibili carves a niche with synchronized online interactions]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490851.htm Video is the go-to-business in China's thriving internet sector. From tech giants like Alibaba and Tencent to highflying apps like Douyin and Kuaishou, industry players are sparing no effort to be part of the intense race to gain user traction.

Video site Bilibili, however, has carved out a unique niche by cultivating a vibrant online environment, based on synchronized online interactions.

At a grand gala in Shanghai celebrating Bilibili's 10th birthday on June 26, Chief Executive Officer Chen Rui made a rare appearance and shared the latest strategy of the site, which is deemed "ground zero" for much of China's post-1990 and post-1995 generations' internet culture.

Starting out as an obscure online spot for animation, comics and games, Bilibili has turned into a Nasdaq-listed media conglomerate encompassing all video themes one can imagine. Today it is also on the radar for nurturing, producing and distributing movies, TV series and comics.

Bilibili's 100 million monthly active users now spend on average 81 minutes on the site per day, playing videos for a total of 510 million times, according to Chen.

The platform is also enriched by over 730,000 original content curators who submit 2.08 million indigenous videos accounting for 89 percent of the total videos being played.

But one feature that serves as a genuine differentiator is its "danmu", or "bullet comments" system. It is a loanword from Japanese animation circle, depicting a user conversation system where time-synced comments are overlaid directly on top of the video as it plays.

The comments can either be in real-time or left by previous viewers pegged to specific moments of a video. Such spontaneous interaction creates a social watching experience similar to that of sitting in a rowdy theater: during pivotal moments in a video, reactions wash over the video in a dense tidal wave, as if you are sharing your feelings instantly with your online neighbors.

"Here at Bilibili, we see the generation of over 1.4 billion danmu comments each month. It is the epitome of emotional interaction and makes Bilibili a genuine, heartwarming community," Chen said.

Another factor gluing the Bilibili users tight is setting a high threshold for membership in pursuit of cultural recognition. While anyone can watch the majority of videos on the site, only members who have passed a 100-question test regarding animation culture, the danmu etiquette and other related topics, are granted more rights such as uploading videos and prioritized comments.

"Contrary to the common practice of lowering the threshold for user acquisition, such settings ensure the bulk of participants at least understand the norms of the community, which helps the platform hold onto users and enhances their loyalty," said Ma Shicong, an internet analyst with consultancy Analysys.

Thanks to that congruence, Bilibili isn't just intriguing to comic and animation lovers, but it has serious undertakings. The platform is shaping up to be the country's top self-learning platform, with 4.2 million videos on a variety of educational topics accessed by 18.27 million avid learners.

"It is a paradise, an encyclopedia, a fenceless university, and a gas station," said Zhang Zhaozhong, a retired professor from the National Defense University of the People's Liberation Army and a rear admiral. His series of online videos populating military knowledge among youngsters has secured him some 2 million followers.

But Bilibili's ambition does not stop there. It proposed a "Made by Bilibili" plan last year, aiming to invest in high-quality content production houses to craft original content.

In the past three years, Bilibili has been involved in the investment and release of 71 Chinese-made comics, accounting for half of all homemade comics during the same period. In the latest development, it announced the launch of the animation adaptation sci-fi trilogy The Three-Body Problem, based on the namesake sci-fi novel by popular Chinese writer Liu Cixin.

They plan to coproduce the animation with two other Chinese companies - the Three-Body Universe (Shanghai) and Wuhan-based animation maker YHKT Entertainment.

Ruan Rui, CEO of YHKT Entertainment, said the animation is at the script writing stage and will be shot with 3D technologies. Ruan did not reveal whether the animation will be a series or a film.

"Animation, as an image art form, is especially suitable for presenting science fiction content. I look forward to seeing the adaptation go beyond my imagination," Liu, the author, said at the launch ceremony.

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2019-07-12 07:48:56
<![CDATA[Honeywell targets digital shift of Chinese companies]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490850.htm US conglomerate gives RT-Mart more than 20,000 mobile computers

US-based conglomerate Honeywell will continue to promote the development of new retail solutions from procurement, commodity production and processing, and commodity settlement and operation of an entire supply chain as part of its broader drive to bolster digital and intelligent transformation of Chinese companies.

"China is one of the world's leading markets for technological innovation, digital transformation and industrial internet of things development," said Gaven Chai, president of Honeywell Safety and Productivity Solutions China.

Chai noted smart supply chain solutions such as connected logistics and intelligent warehousing are the key factors influencing the digital transformation of new retail-related enterprises.

"On one hand, we will continue to conduct mergers and acquisitions in the smart supply chain sector, while strengthening cooperation with integrators. On the other hand, we will increase our research and development efforts to continuously improve end-to-end supply chain solutions," Chai explained.

The company sees growth opportunities from home appliances, cold chain, and pharmaceuticals industries in China. It signed a memorandum of strategic cooperation with Chinese home appliance giant Hisense Group to collaborate on building an integrated logistics ecosystem and help build the country's leading internet logistics network platform.

It will invest more in platform building and further strengthen cooperation between domestic and foreign companies, Chai said.

In addition, Honeywell is finding opportunities in the rapid development of new retail logistics and is offering dedicated solutions to many enterprises.

According to Chai, the company has provided the workers of supermarket chain RT-Mart with more than 20,000 sets of mobile computers to improve the efficiency of its retail operations. Alibaba's Hema Fresh required a lot of self-service equipment, which Honeywell provided through a wide range of self-service cash register OEM scanning solutions.

"For e-commerce, shoppers are increasingly expecting a variety of options for shopping, both in-store and online, as well as for how they receive or pick up their orders. This omni-channel distribution model is putting increased pressure on retailers to provide better access to both online and offline channels to achieve data interoperability," Chai noted.

Chai said Honeywell's end-to-end intelligent supply chain solutions are sufficient to meet the application needs of e-commerce.

"Smart logistics depends on the continued development of next-generation technology and networks, and the 5G era will have a significant impact on the logistics sector. One benefit is to capture and share information instantly and deliver that data to the equipment, the work and enable end-to-end seamless integration," Chai said.

It will also promote the deployment of artificial intelligence in the field of logistics, and distribution centers can benefit from 5G systems to help improve automation, productivity and safety.

"The core of 'new retail' is consumer-centered, which means the comprehensive integration of membership, payment, inventory, service and other data, and the linkage of online and offline industry, which will definitely have a profound impact on the future development of Chinese business," said Cao Lei, director of the China E-commerce Research Center.

 

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2019-07-12 07:48:56
<![CDATA[Maoyan teams up with Tencent for foray into entertainment sector]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490849.htm Online film ticketing platform Maoyan Entertainment has announced a strategic partnership with Tencent to further tap into China's burgeoning entertainment market.

The tie-up is expected to build a top-level film marketing and distribution system, and leverage the two companies' resources, executives of the two companies said.

"Maoyan currently accounts for 60 percent of market share among China's online film ticketing service providers and we are eyeing more fields such as live performances, sports events, and exhibitions. The partnership is no doubt a strategic move for us to expand our entertainment content distribution network," Maoyan CEO Zheng Zhihao said.

Zhan Weibiao, managing director of Tencent Investment, added: "It (the partnership) is just the beginning. With Maoyan's growth and upgraded strategy, Tencent is eyeing a more comprehensive cooperation in numerous sectors in the entertainment industry."

The partnership came at a time when the market of online film ticketing in China is booming amid fierce competition, with most of the investments going to the top players.

An industry report from iiMedia Research said online film ticketing now accounts for 85.7 percent of the total film ticketing market. In the first quarter of 2019, film tickets sold from Maoyan made up 42.6 percent of total film tickets sold, slightly higher than its major competitor Taopiaopiao, whose market share was 31.5 percent.

Taopiaopiao is also an online film ticketing service provider backed by Alibaba.

Chen Shaofeng, a professor of culture at Peking University, said China's online film ticketing industry is seeing intense competition after tech giants jumped into the fray.

"The internet development has brought great vigor to China's film ticketing market and it will continue to influence the market and the overall entertainment industry with new forms of products and services. That's also what film ticketing service providers are seeking (new products and services) to make them stand out against their peers and win more market (share)," Chen said.

Zheng of Maoyan said the company has been stepping up efforts to develop from a one-stop ticketing platform to become an internet-powered entertainment service provider so it can move up the industry value chain.

"We are seeking to expand our online ticketing services from film to other internet-empowered entertainment services like live performances, short videos, and KOL (key opinion leader) management," Zheng said.

Maoyan has mapped out a series of measures to achieve those goals. Zheng categorized the platforms into five pillars. They are online ticketing, industry data analysis, funding for content creators, a marketing platform, and one for products and services.

The company plans to build a comprehensive data platform with its newly established tool "Zhiduoxing" and its think tank Maoyan Research Institute to offer marketing analysis services to industry players.

"Going ahead, the online film ticketing service providers are likely to see more varieties of innovative products and services," Chen explained.

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2019-07-12 07:48:56
<![CDATA[Temasek says China to stay major focus]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490848.htm

Singapore fund optimistic on new technology and sustainable growth

Singapore's state-owned investor Temasek affirmed its long-term and stable investment strategy in China, after it reported a large net divestment globally in the 2018-19 financial year, the company's senior Chinese management told China Daily on Thursday.

"China is one of the most important investment destinations for Temasek, and we remain optimistic on China's trajectory in the medium to long term," said Wu Yibing, head of Temasek China.

During the 12 months to March, Temasek invested S$24 billion ($18 billion) worldwide and divested S$28 billion, as "the company anticipated an increasingly challenging environment since July in 2018", according to its 2019 annual report.

By the end of the last financial year, China had the largest share of the Singaporean investor's portfolio, alongside with Singapore, with a proportion of 26 percent, or about S$81.38 billion. The share was unchanged from 2018, compared with 25 percent in 2017, showed the report.

The outlook in China may come under more pressure from a prolonged trade dispute with the US, Wu said.

"But we believe the Chinese government still has room for policy adjustments to mitigate risks, and we expect more reform efforts to transition the economy toward a more sustainable growth path."

Wu listed major trends for future investment: longer life spans, rising affluence and sustainable living driving social progress, enabled by technological solutions for sharing economies, smarter systems and a more connected world.

Shen Ye, managing director of Temasek China, said the team will focus on new technology and sustainable growth, following the standards of environment, social and governance (ESG) investment.

Financial services remain the largest share - 25 percent - of Temasek's portfolio by sector. For the new investments, the company said it would continue to focus on non-bank fintech and payments platforms such as Ant Financial in China that operates the flagship Alipay payments platform.

Wu said China's further opening-up, especially in the financial sector, will bring more opportunities to foreign investors, and a "fair competition environment" will further improve the business environment in China.

"So we have the confidence here."

He also expected the newly launched science and technology innovation board to support the growth of Chinese high-tech start ups, which is also a key area for Temasek's investment.

For the last year, Temasek reported a record net portfolio value of S$313 billion, remaining anchored in Asia with 66 percent exposure by underlying assets. Exposure in Europe increased to 10 percent from 9 percent a year earlier, and that for North America rose to 15 percent from 13 percent.

The company's S$4 billion net divestments, in the meantime, were the largest since the S$7 billion reported in 2009, given the increasing challenging global environment, according to the annual report.

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2019-07-12 07:48:36
<![CDATA[Airline industry heading for summer boom]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490847.htm With the approaching of the peak air transport season in summer, and the grounding of troubled B737 MAX aircraft, demand has exceeded supply in the domestic aviation market, which will lift flight ticket prices and boost the sales of carriers and their stock performance, industry analysts said.

New York investment bank Goldman Sachs shifted its overall view of China's aviation sector to positive, as it expects the valuations of the sector will be supported by growing demand.

Goldman Sachs upgraded shares of State-owned carriers Air China and China Eastern Airlines from "neutral" to "buy" on Thursday, for shares listed in the Shanghai A-share board and in Hong Kong, according to its report.

The firm forecasts that the annual demand growth rate of China's aviation sector will accelerate to 12 percent or more. So far this year, the growth rate has been 10 percent, it said.

Air China shares edged up 0.33 percent in Thursday trading to close at 9.1 yuan ($1.32). China Eastern shares rose 0.5 percent in trading to close at 6.04 yuan. In the same note, Goldman Sachs raised its target price of Air China stocks to 12.4 yuan, and raised its target price of China Eastern stocks to 8.3 yuan.

"The aviation sector in China is expected to have a good performance this year, fueled by the ongoing consumption upgrade trend in the country, despite the fact that the growth rate will slow down a bit, and the cost of air fuel may edge up in the second half of year," said Zou Jianjun, a professor at the Civil Aviation Management Institute of China.

"With the grounding of 96 B737 MAX planes in China, the model's largest market, air transport supply is inadequate to meet demand during the peak summer season, which will benefit the profitability of carriers, and those airlines with clear strategies and sound networks will perform better," he said.

In the first half of this year, airport stocks overall have surged by 60.5 percent year-on-year, and airline stocks have climbed by 20.8 percent year-on-year.

Since early July, airlines have increased their capacity by more than 10 percent year-on-year, and passenger flows have jumped rapidly, with a large number of people taking their summer vacations, according to a report from China Merchants Securities Co Ltd.

"Particularly, the demand of travel to South Korea and Japan has been robust, and the positive sales of flight tickets will stay until early August. Given that it is hard to predict when B737 MAX aircraft will resume their flights, the overall supply and demand pattern of the sector has been improved with benign competition," said Su Baoliang, a researcher at Merchants Securities.

 

Performers dance at the airport in Kuche county, Xinjiang Uygur autonomous region, on Thursday, to celebrate the launch of direct flights between Kuche and Xi'an, capital of Shaanxi province. Yuan Huanhuan / For China Daily

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2019-07-12 07:48:36
<![CDATA[Xiao Guan Tea aims to expand its aroma]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490846.htm Xiao Guan Tea, which is known for offering a luxurious aluminum small-sized container to keep tea leaves for each single brew, has recently rolled out new lines of large-sized packages for multiple brewing, as part of efforts to diversify its product range and expand customer reach.

The tea maker has expanded the size of each package to 40 to 50 grams, featuring six types of teas including Long Jing and Pu'er, at a more affordable price of 150 yuan ($21.84) per package.

In comparison, its high-end product is designed at 4 grams for each brew at 50 yuan.

"The design of the bigger package is intended to offer convenience to people who have a habit of tea drinking on a daily basis at an average price and standard quality," said Mei Jiang, general manager of marketing center of Xiao Guan Tea, at the launch event on Wednesday in Beijing.

Mei said, unlike coffee, in tea selection and purchase, it is harder for consumers to tell which tea is good due to the lack of industrial standards.

The Beijing-based company has spent two years building up standards in the tea industry, from planting, harvesting, manufacturing and monitoring to control the consistent quality of each package of products.

Adopting materials and techniques from formula milk, the new package means the tea leaves will last longer in terms of taste and flavor once it has been opened, said Mei.

He added that the company is also developing colorful and fashionable wrapping for younger consumers later this year, or even tea bag products similar to Lipton tea under Unilever.

The average age of consumers buying Xiao Guan Tea online is between 18 and 35, lower than the average age of consumers of traditional tea products, Mei said.

Xiao Guan Tea's customer base is mostly female and 70 percent are under 40.

Launched in 2012, the tea maker, which focuses on a luxury retail experience at high-end shopping centers, has expanded quickly to more than 600 franchise stores and is available at 5,000 other retail stores in the country.

Its e-commerce distribution has expanded to Tmall and JD. In 2018, Xiao Guan Tea's retail sales reached 2 billion yuan, ranking as the No 1 tea brand in the country. This year, the growth is expected to be 10 to 20 percent, said Mei.

Its investment on research and development is more than 30 million yuan.

One out of five products are sold online. Its 1.5 billion yuan manufacturing plant at Huangshan Mountain is expected to go into production this year.

Zhu Danpeng, a food and beverage analyst, said the company is going to build more brands, distribution channels, consumers and retail scenarios to enhance its brand awareness and increase customer reach.

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2019-07-12 07:48:36
<![CDATA[Social commerce sector on the up]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490845.htm The market size of China's social commerce sector is expected to reach 2.07 trillion yuan ($302 billion) in 2019, an increase of 63.2 percent year-on-year, as the use of mobile technologies to access social media is increasingly popular in China, a new industry report said.

The sales revenue from social commerce platforms will account for 20 percent of the country's online retail market this year, and this proportion will amount to more than 30 percent in 2020, according to the report issued by the Internet Society of China and Chuangqi Social Commerce Research Center.

Social commerce is a subset of e-commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services.

The report also said the number of people engaged in the social commerce field is expected to reach 48.01 million in 2019, up 58.3 percent year-on-year. In addition, the tendency with regard to the integration of online and offline shopping channels will be strengthened, with diversified, personalized products favored by Chinese consumers. 

Experts said social commerce has become a driving force of the booming e-commerce sector. "E-commerce on social networking platforms is rising in the retail industry because people increasingly use mobile phones and tablets to replace PC-based online shopping, so group-buying has gained traction," said Cao Lei, director of the China E-Commerce Research Center.

He added that social commerce will become the mainstream method in the e-commerce industry, and will attract more tech giants and capital as the cost of acquiring consumers' data flow is relatively low.

"Social commerce is playing a crucial role in the digital retailing industry. Essentially, almost everyone in China is jumping on the social commerce bandwagon and showing great enthusiasm for the platforms by engaging in a variety of social commerce activities," said Cici Wu, a research analyst at consultancy firm Mintel.

"Although more consumers today still prefer traditional e-commerce than social commerce channels, their expectations for the latter are more optimistic," Wu noted, adding that the post-1990 generation favor social commerce over traditional e-commerce platforms.

Shanghai-based social commerce platform Red, known in Chinese as Xiaohongshu, has begun testing live broadcasts and real-time sales. Online influencers have been invited to use the live streaming feature, which lets broadcasters interact and sell products directly to viewers.

Founded in 2013, Red initially began with the objective of helping Chinese people traveling abroad share their shopping experiences online before changing into a social commerce site selling international luxury brands and sought-after foreign products.

 

Moreover, Pinduoduo's group buying-and-discount model continuously grabbed the headlines last year. Founded in 2015, the company follows the model of "the more people buy the cheaper the price". It is now the third-largest e-commerce platform in China, behind Alibaba and JD.

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2019-07-12 07:48:36
<![CDATA[Dairy giant using innovation to expand in global markets]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490844.htm China Mengniu Dairy Co Ltd, the nation's leading dairy producer in terms of revenue, is banking on innovation to further open the doors for its globalization ambitions, its top official said.

"Innovation is inherent in our DNA and will be our calling card in global markets," Mengniu CEO Lu Minfang said in an interview with China Daily. "As the first Chinese dairy firm to go overseas, globalization is taken as one of our top priorities."

Lu made the remarks during the World Economic Forum's annual meeting of New Champions 2019, also known as the Summer Davos. The event was held in Dalian, Liaoning province, earlier this month.

Mengniu announced a strategic cooperation pact with top Uruguayan dairy producer Conaprole, and the pair will cooperate in trading related dairy products in the years ahead.

"The cooperation with Conaprole is part of our goal to leverage international resources to better serve customers both in China and abroad," said Lu. "With this transformation, Mengniu is now eyeing the global market to produce dairy products that can rival top ones in the foreign markets."

Industry insiders said the move marks an important step for Mengniu's expansion overseas, given that Uruguay is the ninth-largest dairy exporter in the world.

Shares of Mengniu in Hong Kong have risen steadily since the news, touching a 52-week high at HK$32.25($4.13) during the session on Thursday.

Lu said Mengniu has expanded its business to over 10 countries and regions such as Southeast Asia and Oceania, with many markets participating in the Belt and Road Initiative. "The BRI has offered us unprecedented opportunities and it will be one of our key business focus in the years ahead," said Lu.

Southeast Asia's 600 million people boast a naturally huge business market and the region has great potential in terms of economic growth, he noted.

"While beefing up in the Southeast Asian markets, we want to encourage a healthy style of eating food in the region," said Lu.

People around the world, especially the young, are paying more attention to their health, taking note of the food they eat and trying to adopt a healthy lifestyle.

To meet such demand, the company opened a factory in the Cikarang industrial zone in West Java, Indonesia, in November last year, its first factory in the region. The daily capacity of the plant has reached 260 metric tons, and the annual output value is expected to touch $160 million.

The company said it has started to sell its YoyiC liquid yogurt in Indonesia, the most populous country in Southeast Asia with more than 200 million people. In five years, the company is expected to offer 1,000 jobs to Indonesians.

Mengniu also has a presence in countries such as Australia, Singapore, Malaysia, Cambodia and Myanmar.

Analysts said the push by Chinese companies to expand abroad is also due in part to increasingly fierce domestic competition.

"As the bar for the food and beverage industry is relatively lower compared with other segments, the number of such companies is increasing at a very fast pace, making the domestic competition even more fierce," said a report by Qianzhan Industry Research Institute.

To give it an edge in global markets, Lu said the company is pushing its resources into innovation.

"Last year, we have poured a total of 160 million yuan ($23.3 million) in research and development, which was 20 percent more than that of the previous year," he explained.

Such a large investment will support Mengniu's business in foreign countries where dairy product markets are already mature.

Liu Peng, a food industry analyst from TF Securities, said the overseas mapping of Chinese dairy companies is to create an ecosystem by integrating resources all over the world.

"But the main challenge lies in whether these firms can succeed in foreign markets and attract local consumers with strong Chinese characteristics."

To name a few such products with broad appeal, the company has developed Tetra Pak's eight-sided packaging, which is easy to hold, and boxed dairy products that can be consumed directly from the pack.

It has also launched China's first high-end milk product Telunsu.

Lu voiced agreement with the analyst from TF Securities.

"Going overseas is never easy and always brings challenges. Running a business in less familiar economies requires us to know better about the local culture, innovate our products and work with the locals," Lu said.

In New Zealand, 80 percent of Mengniu's staff are locals who understand domestic demand.

"After we acquired a large company in Australia in 2016, we retained 95 percent of their local employees," Lu said.

Lu added their products must also meet increasingly diversified demand from quality-conscious consumers.

The dairy maker has seen growth in the sales of yogurt, low-temperature milk and cheese products in the past few years. Products with high added value in terms of flavor, nutrition, packaging and convenience are favored by more customers.

"Branding is our other strategy to make more foreign customers know better about made-in-China brands," he noted.

That can also be done through sponsorship of sports events.

"Sport is the mutually intelligible language for people of all nationalities and backgrounds. Therefore, sponsorship of sports clubs and international events can be extremely beneficial in assisting a market entry or simply raising a brand's international profile," David Haigh, CEO of Brand Finance, a London-based brand valuation consultancy, said in an earlier interview with China Daily.

Mengniu was founded in 1999 in the Inner Mongolia autonomous region. It sells liquid milk, yogurt, milk beverages, ice cream and other dairy products.

In the past 20 years, Mengniu grew from a small business in North China into one of the two biggest dairy product companies in the country, the other being the Yili Group.

Mengniu was one of the sponsors of last year's FIFA World Cup in Russia, which allowed the firm to broadcast a commercial during each of the 64 soccer matches in the tournament.

Lu recalled the founder of Mengniu aimed to be "a leader of dairy products in the Inner Mongolia autonomous region, then in China and finally in the world".

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2019-07-12 07:48:36
<![CDATA[SMEs to get further policy support]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490843.htm Small firms to benefit from govt measures to control risks and prevent local labor market shocks, say industry experts

Chinese policymakers are likely to further ease monetary policy and promote bank loans for smalland medium-sized companies in the second half of this year, introducing measures to control risks and prevent shocks in the local labor market, according to industry experts.

Further easing monetary policy can help to achieve the goal, said Huang Yiping, an economist at Peking University and a former member of the central bank's monetary policy committee.

 

A billboard promoting financial services for small businesses at the booth of SPD Bank during a recent industrial expo in Shanghai. Jin Rong / For China Daily

Other economists said injecting liquidity through standing lending facilities can be expected, which will allow medium and small banks to access cheaper funds from the interbank market, and to raise loans for small businesses.

China's total outstanding loans for small enterprises surged to their highest level in Asia in May, at 10.3 trillion yuan ($1.5 trillion), a 21 percent increase from a year earlier, 5.8 percentage points higher than at the end of 2018, according to data from the People's Bank of China.

The PBOC and the China Banking and Insurance Regulatory Commission jointly issued a white paper last month, pledging to enhance support for SMEs in multiple ways such as cutting financing costs and allowing a higher ratio of nonperforming loans.

"Global trade tensions are escalating, which has weakened external demand and given export-intensive small businesses a shock. The output and order volumes of some export companies have been affected and they face future uncertainties," said the white paper.

"How to price SME loans is the key, the price needs to reflect companies' real risk level," said He Dayong, managing director and partner at Boston Consulting Group.

"An up-floating interest rate for companies with higher default risk can better encourage banks to issue loans to SMEs. Otherwise, cheaper yet high-risk credit will erode banks' profits and even drive small banks into operational difficulties," He said.

"Financial regulators' tolerance of higher NPL ratios for SME loans will also motivate commercial banks' lending," he added. "The challenge is how to precisely assess SMEs' financial risks and to prevent fraud based on limited information. Utilization of big data and advanced technology such as AI may be the key."

For SMEs, borrowing from banks is much cheaper than some non-banking channels such as private financing and peer-to-peer platforms. Banks' average lending rate was 6.16 percent in December, compared with 16.45 percent for private loans in Wenzhou, a city in Zhejiang province with many SMEs. The cost of P2P lending was about 13 percent, according to the white paper.

The State Council, the country's cabinet, announced in June that it will permit NPL ratios for SME loans to rise to 3 percent from 2 percent.

The average NPL ratio for SMEs was 5.9 percent in May, compared to 1.4 percent for large companies and 2.6 percent for medium-sized ones, the PBOC said.

The central bank has taken proactive measures in the first six months to increase loan supply to small companies. It required large banks to increase SME loans by 30 percent and cut average financing costs by 1 percentage point.

The PBOC also cut the reserve requirement ratio of medium and small banks again on June 17, injecting additional capital into the financial sector.

Overall credit growth quickened slightly in the first quarter, as the government's policy priorities shifted toward sustaining growth and stability. With GDP growth remaining steady from January to June, some economists are concerned that the faster pace of credit expansion could result in an increase in financial leverage.

Credit motivation, however, may increase pressure on smaller lenders, as they lack capital when profit growth slows. As such, the PBOC is encouraging commercial banks to issue perpetual bonds and convertible bonds to supplement their capital.

The financing needs of private corporate borrowers in China are still underserved by the formal banking sector because of structural factors, including implicit and explicit government guarantees for State-owned enterprises, and information asymmetries between lenders and private sector borrowers, according to industry experts.

"Banks' corporate loan growth continues to outpace the broader category of micro and small enterprise loan growth by a wide margin, suggesting that they remain cautious in allocating credit to small private companies and favor large corporate borrowers such as State-owned enterprises," said George Xu, a Moody's analyst.

China's crackdown on shadow banking since the end of 2016 has reduced credit availability for private and small companies, although it contained financial systemic risk to some extent, said Xu.

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2019-07-12 07:48:36
<![CDATA[Private banks use high-tech to offer cost-effective services]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490842.htm Private banks in China are increasingly using cutting-edge technology and expertise to offer cost-effective services to micro and small enterprises.

MYBank, the online lending offshoot of Ant Financial Services Group, wants all Chinese mom-and-pop shops to be able to apply for and receive loans in one second within the next three years, as it continues to leverage artificial intelligence, computing and risk management to increase efficiency and reduce costs.

The number of micro and small enterprises served by MYBank has jumped 10-fold in the past three years to some 17 million, Hu Xiaoming, the newly appointed chairman of the bank, said during a conference last month celebrating the bank's fourth anniversary.

 

An online store owner applies for a loan through a MYBank mobile phone app in Jingdezhen, Jiangxi province. Provided to China Daily

Roughly 73 percent of applicants get loan approvals on their first attempt, and 80 percent of them don't have a credit history in other financial institutions to gauge, Hu said.

"According to our in-house statistician, out of 100 loan applicants, 99 can repay in time," he said. "It shows the level of creditworthiness of these smaller business owners."

MYBank extends loans based on customer risk assessment that is determined by big data analysis powered by algorithms. According to data released last year by Ant Financial, by circumventing human involvement, the cost of issuing a loan is slashed from 2,000 yuan ($290) to just 2.3 yuan.

Thanks to its technological prowess, MYBank gained its reputation by issuing a brand-new industry standard: three minutes for application submission, one second for loan issuance, and zero human intervention.

The "310 model" and its tech suite were officially opened up to other banks last June through a "Star Plan" heralded by Ant Financial. Hu said 50 Chinese financial institutions have already embraced such technologies in their daily operations.

According to Toward Universal Financial Inclusion in China, a joint report published by the People's Bank of China and the World Bank in 2018, only 14 percent of China's small businesses have access to loans or lines of credit, compared to 27 percent of smaller firms in G20 members.

"Due to a lack of credit history and collateral, micro and small businesses have suffered from a credit crunch due to higher costs, bigger risks and the discrepancy between supply and demand," said Li Dongrong, president of the National Internet Finance Association of China.

The goal to accelerate the penetration of credit services is further fueled by the proliferation of the mobile internet and the increasing adoption of the quick response code, a popular payment method in China using a smartphone. Several million street side business owners and shopkeepers accept bills via QR code payment, Ant Financial said.

A survey conducted by the National Bureau of Statistics earlier this year showed that each small enterprise stands to create employment for on average seven to eight people, while each individual industrial and commercial entity can create employment for 2.9 people.

MYBank reported net profits of 670 million yuan in 2018, one of the lowest readings among Chinese banks, according to its annual report released in April. But Hu said earnings and profits have never been the primary target of MYBank.

"Our goal was originally to be the bank that services the largest number of micro and small enterprises with the smallest profits," he said.

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2019-07-12 07:48:36
<![CDATA[Lender relies on family credentials to minimize nonperforming loans]]> http://www.chinadaily.com.cn/kindle/2019-07/12/content_37490841.htm The most common reasons for small business owners failing to repay loans on time are moral hazard such as gambling, unsalable products due to market changes, and acting as guarantor for a friend or relative's now overdue loan, said Mu Yuehong, client manager at Bank of Taizhou Co Ltd.

Mu, 41, joined Bank of Taizhou, a city commercial bank that specializes in making loans to micro and small enterprises, in 2003. She now manages about 280 clients, most of whom are self-employed entrepreneurs.

To prevent the occurrence of nonperforming loans, she tries to learn as much as possible about small business owners' family relationships, their business operation history, the accumulation of capital, the real purpose of the loan, and the total value of guarantees they have provided for other loans.

"After talking to a small business owner, my colleagues and I will cross check the information by reviewing bills, bank statements and credit reports provided by the People's Bank of China, the central bank. We will search for the firm on mainstream business data search platforms and local government-backed credit information sharing platforms, in addition to talking to employees about business operations and the financial situation of the firm," said Mu.

If a business owner lives in a village, client managers make local inquiries, which is an effective way to gain a deeper knowledge of the person, she added.

The subbranch of Bank of Taizhou where she works is located in the rural-urban fringe of Huangyan district in Taizhou, a coastal city in Zhejiang province known for its robust business activities in the private sector.

Due to rapid growth of the mold industry in Huangyan, a large number of self-employed entrepreneurs who manufacture plastic products such as hangers, toothbrushes and cups live in the area surrounding the subbranch.

Some of them have applied for loans to purchase raw materials and equipment. The injection molding machines most widely used by small local plastic product manufacturers cost 150,000 yuan ($21,850) to 250,000 yuan per unit.

"Generally speaking, if a small business is run by a couple who are focused on a particular industry and have no bad habits such as gambling, and if the business is running smoothly, its owner will receive a loan from our bank as the probability of risk occurrence is fairly low," she said.

By the end of May, the nonperforming loan ratio for micro and small loans offered by Bank of Taizhou was only 0.54 percent. Among 325,700 clients that had taken out loans at the bank, 94 percent had a line of credit of up to 1 million yuan, and the average line of credit was 393,200 yuan per client.

The bank has developed its own measures and system for risk analysis and identification, highlighting the importance of family governance and the skills of small business owners, rather than corporate governance and collateral.

"In Taizhou, it is common for a man to be the chairman of a small business and his wife to be the financial officer. Under these circumstances, it might be hard for him to differentiate his own property from that of his family and company. Therefore, how harmonious a family is and how hard the family members work greatly affect loan security. If a couple gets divorced, which can arise due to issues such as gambling, it will introduce risk to our bank's loans. That's why we think family governance is important," said Wang Weiwen, marketing director at Bank of Taizhou.

As decision-makers, subbranch managers will approve or reject 90 percent of the applications for one-year working capital loans. For first-time applicants, once their loan applications are approved, it usually takes three days to complete the procedure. After that, client managers will revisit the client within a month to ensure that the loan is used for production and business operation.

The bank also conducts off-site inspections and client risk monitoring based on big data and digitized client profiles to categorize risks according to the degree of seriousness and to identify clients worthy of closer inspection, Wang said.

 

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2019-07-12 07:48:36
<![CDATA[Consumption upgrading heats up cold chain logistics]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490411.htm Industry giants step up efforts to strengthen capacity as increasing demand for commodities such as fresh food and medicine drive expansion of sector

China's cold chain logistics market is set to boom and is likely to become the most lucrative sub-industry in the logistics field thanks to the consumption upgrade and increasing demand for commodities like fresh food and medicine.

Major e-commerce players and logistics giants are accelerating efforts to establish self-operating cold chain warehouses and expand their cold chain delivery services in China.

Cold chain logistics refers to the use of temperature-controlled systems within an uninterrupted series of storage and distribution activities.

 

Fresh food packages are sorted and delivered at a JD logistics center in Xi'an, capital of Shaanxi province. Provided to China Daily

Recently, Chinese e-commerce giant JD teamed up with Mengniu Dairy Co Ltd, China's major dairy maker, in the cold chain logistics sector.

According to the agreement, JD's cold chain unit will make its network of cold chain warehouses across the nation available to Mengniu for its frozen products, as well as integrated industry solutions covering cold chain storage management, trunk line transportation and quality guarantee.

JD will offer the whole process of supply chain services, including warehousing, packaging, sorting and distribution, to reduce the frequency of transportation and minimize the risk of unfreezing.

Founded in 1999, Mengniu ranked among the top 20 in the global dairy industry for 10 consecutive years, with products including liquid milk, ice cream, milk powder and cheese.

Industry insiders said cold chain logistics was one of the difficulties that restricted the development of ice cream enterprises for a long time. In particular, high-quality ice cream has a high milk content, which melts easily.

Therefore, the scientific management of cold chain storage, the temperature in the transportation process and the integration degree of the supply chain are all crucial.

Depending on JD's self-developed intelligent temperature monitoring platform, the temperature and quality of the ice cream can be guaranteed. Automated sorting equipment has been employed in highly automated warehouses, and will increase efficiency by two to three times.

JD will also be responsible for transporting ice cream from 13 factories owned by Mengniu to dealers nationwide.

"With the upgrading of consumption, e-commerce has become an emerging channel for ice cream sales, which introduces higher requirements for the cold chain," said Lu Jianjun, a senior executive from Mengniu's frozen products division.

Lu said the cooperation with JD's cold chain unit will not only help improve the cold chain distribution level of Mengniu's frozen products, but also extend such services to third and fourth-tier cities and rural areas, bringing fresher ice cream products and more efficient logistics services to more consumers.

"The cold chain logistics industry is still in its infancy, and is highly fragmented and regional," said Li Xiuqiang, who is in charge of strategic planning for JD's cold chain unit.

In 2017, JD signed a memorandum of understanding with Japan's Yamato Group, one of Asia's leading logistics companies. The partnership focuses on enhancing operational efficiency, with a particular emphasis on building a cold chain logistics network in China.

China's fledgling cold chain logistics market is expected to reach 470 billion yuan ($68.5 billion) by 2020, with a compound annual growth rate surpassing 20 percent, according to the China Federation of Logistics and Purchasing.

CC Fresh, a cold chain logistics company under the e-commerce giant Alibaba Group Holding Ltd, is cooperating with Sino Australia Top Beef (Beijing) Co Ltd, a firm that mainly imports beef from Australia, to jointly develop the cold chain resources in the Beijing-Tianjin-Hebei region and speed up the construction of the national cold chain logistics network.

Fan Jiyuan, chairman of CC Fresh, said the company pays attention to data collection and analysis in managing the logistics network and makes use of big data to enhance efficiency.

Wang Xiaoping, associate dean of the logistics school at Beijing Wuzi University, said demand for fresh products from Chinese consumers is increasing, and e-commerce giants are gearing up to expand their presences in the cold chain field, which will drive the rapid growth of the industry.

In 2018, Chinese courier giant SF Holding Co Ltd joined hands with US-based supply chain system provider Havi Group to establish a joint venture engaged in cold chain logistics in China.

"The new joint venture will provide customers throughout the cold chain market with end-to-end solutions and services," said SF Holding Assistant Chief Executive Eddie Huang.

Huang said SF is delighted to be partnering with Havi to promote the growth and development of the cold chain logistics sector in China. SF has experience in the B2C market whereas Havi is strong in the B2B market.

SF Holding's cold chain business revenue reached 4.24 billion yuan in 2018, an increase of 84.8 percent year-on-year, according to the company's latest financial results.

In addition, retailer Suning.com Co is strengthening its cold chain services. Statistics from the company showed its cold chain storage area amounted to 200,000 square meters in the first quarter of 2019.

Industry statistics showed the market still has plenty of room to grow as only about 19 percent of the China market has access to cold chain technologies, compared to 85 percent in Europe and Japan.

"More efforts are needed to strengthen the construction of cold chain infrastructure. Moreover, we should gradually establish the standard system of cold chain logistics, especially for food," said Cui Zhongfu, secretary-general of the China Federation of Logistics and Purchasing.

 

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2019-07-11 07:27:47
<![CDATA[Investment in innovation proves a smart move]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490410.htm China has become the largest global market for leading South Korean logistics service provider CJ Logistics, boosted by thriving retail and e-commerce businesses in the country, requiring more high-end and smart logistics services, said a top executive.

Auh Jae-hyuck, CEO of CJ Logistics China, said CJ Logistics, the logistics arm of South Korea's global lifestyle corporation CJ Group, has grown steadily in China thanks to its rising businesses dealing with contract logistics, parcel services, forwarding and international express services, and project logistics.

Revenue in China is expected to reach 9.6 billion yuan ($1.4 billion) this year, or about 13 percent of global revenue, with growth of 31 percent year-on-year on average between 2016 and 2019, said the CEO. Last year, revenue in China reached 7.5 billion yuan, with contract logistics contributing 62 percent.

According to Auh, CJ Logistics global revenue was $8 billion in 2018, having increased by more than 2.4 times in five years and it aims to become one of the world's top five logistics solutions providers by 2020.

CJ Logistics has grown from many acquisitions and mergers in countries and regions including China, India, Malaysia, the United Arab Emirates, Vietnam and the United States.

"No traditional logistics company would survive without taking the initiative to transform into a high-tech-based firm," said Auh.

CJ Logistics has invested heavily in innovation and technology to become a smart logistics provider using software to optimize its operations including automatization, systemization and artificial intelligence-supported systems.

In April, the company invested 240 million yuan in a cosmetics warehouse that covers 36,000 square meters in Shanghai, with automated sorting equipment.

The firm's largest automated hub in Asia, CJ Logistics Megahub Gonjiam, which is located in South Korea, is able to handle 1.7 million parcels per day as its innovative automated sorting belt helps to reduce parcel sorting time.

Auh said the rising demands from Chinese clients in terms of smart logistics have pushed the company to innovate and integrate its services with better technologies.

Compared with giant retailers such as Walmart, smaller-sized retailers like coffee chains and restaurants place higher delivery and storage demands on logistics services. Also, the sharp growth in e-commerce has brought CJ Logistics more business from companies looking for fast and accurate transport, storage, sourcing and delivery to consumers.

CJ Logistics' leading position in the market comes from M&A and joint ventures since it entered the China market in 2004. In 2015, it acquired the Chinese logistics company Rokin Logistics.

CJ Rokin Logistics is the biggest cold chain logistics company in China and has 48 terminals, 22 warehouses, and logistics networks that connect 1,500 cities. The company manages logistics for global companies. In 2016, it joined with Chinese home appliance giant TCL Group to form a joint venture CJ Speedex.

Last year, CJ Logistics opened up an international multimodal transport service between Europe and Asia called the Eurasia Bridge Service or EABS.

According to CJ Logistics data, in 2017, the rail freight transport market between Europe and China was estimated at 550 billion won ($470 million), and this year it is showing an annual growth rate of 10-20 percent. This market is also predicted to grow to over 750 billion won by 2020.

In addition to its current routes, CJ Logistics plans to expand its rail freight transport. The company plans to have 52 routes from China to Europe and 74 routes from Europe to China in the future, connecting major countries and cities.

 

An employee checks an automated robot arm, which can make packing boxes that are customized for various products at a CJ Logistics warehouse in China. Provided to China Daily

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2019-07-11 07:27:47
<![CDATA[Zuoyebang to further online efforts]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490409.htm Livestreaming courses will continue to be a major focus, says company's CEO

The rapid capital influx into China's online education sector will be good for the industry in the long run, but meanwhile, will raise the bar for startups, an industry insider said.

Hou Jianbin, founder and CEO of Zuoyebang, a leading online education startup, said a large amount of capital in the online education sector is "beneficial" as it will accelerate the growth of the whole industry.

"The capital will bring upgrades and accelerate the development of the education segment indeed, but the sector is supposed be boosted at an even pace, with patience and enough time," Hou said. "Also, the cost of gaining users and the threshold of the emerging sector will be raised."

Though it's getting more difficult to "bite a piece of the pie" from the country's online education segment, Hou told China Daily that the company has been gaining momentum as its total revenue growth is 4.5 times bigger now than that of last year.

Hou made the remarks in an interview during the World Economic Forum's Annual Meeting of the New Champions 2019, also known as the Summer Davos, in Dalian, Liaoning province, earlier this month.

For now, Hou denied plans to go public.

"We are not in a hurry to go public. Before that, we hope to achieve a better business performance and build a more solid foundation," the CEO said.

"But once the company goes public in the future, it will definitely be eye-catching ... in its scale, valuation or performance," he added.

Founded in 2015, Zuoyebang raised $350 million in its latest series D financing last year, with top investors such as Goldman Sachs, Sequoia Capital China and GGV Capital.

A report by market consultancy ASKCI Consulting Co said there were 369 moves to raise funds in the education sector last year, the highest record in the past 10 years, and more than half were conducted by online education companies.

Speaking of the booming online education sector, Hou said livestreaming courses in the kindergarten to 12th grade will continue to be a major focus and "will be the biggest contributor of monetizing" by outfits in the sector.

"Livestreaming courses have abundant forms and each specific subject can be divided into different courses which will generate big amounts of revenue," he said.

As an after-school mentoring platform, Zuoyebang started its business by enabling students to take pictures of their questions and search for answers. Later, it developed its major business into livestreaming courses.

The Beijing-based company has 400 million registered users and 80 million monthly active users, its data showed.

"We are optimistic about the prospect of Chinese online education and we think that the country is expected to generate a group of education companies valued at several billion dollars," Steven Ji, co-founder of Sequoia Capital, said.

"It's not an easy task to grab users from the huge cake," Ji said, adding that Zuoyebang is strong at gaining users and that's why they have invested in the company.

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2019-07-11 07:27:47
<![CDATA[London Lord Mayor visits China to boost capital market links]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490408.htm The Lord Mayor of London Peter Estlin will visit China from Friday to Saturday in a bid to strengthen links between the capital markets of the two countries following last month's launch of the Shanghai-London Stock Connect.

Estlin will visit Shanghai, Suzhou in Jiangsu province, and Hangzhou in Zhejiang province, together with Nikhil Rathi, CEO of the London Stock Exchange Plc, and attend several events and meetings with government and industry partners.

Two roundtable meetings will be held on the subject of capital market ties and promoting London as a center for initial public offerings and bond listings.

He will also attend a fintech forum that will feature speeches by the leaders of the Fosun Group and Ant Financial, an affiliate of e-commerce giant Alibaba Group.

"As China continues to expand and open up its economy, ties between our two countries continue to gather momentum and go from strength to strength, with bilateral trade now nearly 70 billion pounds ($87.2 billion)," Estlin said.

"This was again shown recently through the launch of the hugely ambitious Shanghai-London Stock Connect, an initiative that allows global investors to benefit further from China's growth through London, while UK-listed companies can access Chinese investors directly.

"My visit to Shanghai will look at how we can ensure this innovative mechanism is a success, so that we can further link our capital markets for the benefit of both countries, and indeed the world," he added.

Estlin serves as an international ambassador for the UK's financial and professional services sector and will visit around 30 key international markets during his year in office. His trip to China will be his third to Asia since taking office.

The long-awaited Shanghai-London Stock Connect was launched in London on June 17 and aims to offer more opportunities for British and Chinese financial institutions to buy each other's stocks.

It allows global investors to benefit from China's stable economic growth and ongoing reforms through London, while companies listed on the London Stock Exchange will be able to access Chinese investors directly.

The link offers the first opportunity for foreign companies to list in the Chinese mainland and the first chance for Shanghai Stock Exchange-listed companies to be able to raise capital abroad.

"The Shanghai-London Stock Connect is a significant step toward collaboration of UK and Chinese capital markets," said Mathew Cheung, chief executive of London-based fintech company ipushpull.

"Both markets are a vital source of capital for fast growing fintechs who have plans to list. The stock connect will further enhance liquidity and opportunities for these companies, as well as Chinese and British investors," he said.

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2019-07-11 07:27:47
<![CDATA[AIIB sees prospects in Europe]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490407.htm Bank to hold annual meeting in Luxembourg, its first outside Asia

Multilateral development institution the Asian Infrastructure Investment Bank is targeting Europe to expand infrastructure construction financing, as it is a significant region included in the Belt and Road Initiative, a senior executive of the bank told China Daily in a recent interview.

Although the AIIB has not yet announced any investment strategies in Europe, "we can and it could make sense for us, especially (for the projects) connecting with Asia," said Joachim Amsberg, vice-president of the AIIB, illustrating that some possible projects in Europe could be ports and railways.

According to the senior AIIB executive, Austria recently has shown interest in railway lines from Central Europe to Asia, and the AIIB "could possibly invest in that, but there is no specific plan at this stage".

The bank will hold its first annual meeting outside Asia, starting on Friday. AIIB chose Luxembourg as the host, which was the first European country to sign up as an AIIB founding member in 2015.

"Luxembourg, even though it is a small country, is important on the finance map. It is a very welcome opportunity to go to Europe and engage more European banks, investors and governments," said Amsberg.

One of the key issues that members will discuss at the annual meeting is strengthening Asia-Europe cooperation, the AIIB announced on its website. The theme of the annual meeting is "connectivity and collaboration".

"European and Asian countries are more connected, especially through infrastructure, transport and energy linkages, and the AIIB can bring them together with trade agreements. We have been talking a lot about how to connect Europe with Asia and how to collaborate between European and Asian countries," said the vice-president.

A special forum will also take place during the meeting, involving interactive workshops on private equity investments, financing for energy projects and AIIB procurement policies and practices, the bank said.

China sees Europe as a significant part of the Belt and Road Initiative, said analysts. Following the second Belt and Road Forum for International Cooperation in Beijing in April, seven European countries were set to endorse the BRI, according to a communique. Italy signed a BRI agreement with the Chinese government. Greece has also tightened its BRI relationship with China.

Besides Europe, AIIB's focus will remain in Asia, the AIIB leader said. He also mentioned possible investment expanding into other areas, such as renewable energy and ports and railways in Latin America.

Amsberg reiterated that "any country is welcome to join the bank", including Japan and the United States, but there are no ongoing negotiations with these two countries.

Speaking at the G20 summit in Osaka last month, President Xi Jinping emphasized the important role of high-quality infrastructure construction in boosting inclusive development, saying that the BRI is open for all parties to achieve shared development.

Xi noted that the BRI forum in April reached a broad consensus and produced fruitful outcomes on the high-quality building of the Belt and Road.

In light of the trade tensions between China and the United States, uncertainties are rising in the global economy, but the Belt and Road Initiative can better connect emerging and advanced economies, while offering growth opportunities, said Yaseen Anwar, former governor of the Central Bank of Pakistan.

As a BRI fund arm and a multilateral institution, the AIIB can issue high-quality loans to strengthen regional financing and reduce exposure to export risk, according to Anwar.

The AIIB plans to make $4 billion investment in infrastructure projects this year, compared with $3 billion in 2018, according to a statement on the website. "Quality comes first before quantity. We gradually grow our investment, and we start with high-quality projects that meet environmental and social standards as well as avoid corruption, rather than building up investment as quickly as possible," said Amsberg.

Before joining the AIIB, Amsberg had 25-years of working experience with the World Bank. He said the AIIB has been more recognized by the international community as a multilateral organization, having 97 countries in its membership.

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2019-07-11 07:27:27
<![CDATA[Vehicle sales drop by 9.6% in June]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490406.htm China's automotive market continued its downward spiral in June, which has prompted the country's leading industry association to downgrade its estimate to a fall of up to 5 percent from 2018.

Vehicle sales last month stood at 2.056 million, down 9.6 percent year-on-year, which marked the 12th straight monthly fall, said the China Association of Automobile Manufacturers on Wednesday.

Sales from January to June totaled 12.32 million, falling 12.4 percent year-on-year.

Passenger vehicles, which accounted for the absolute majority of the auto market, stood at 10.12 million in the same period, marking an even steeper fall of 14 percent.

 

New energy vehicles roll off BYD's production line in Xi'an, capital of Shaanxi province. Xinhua

"As things have turned out, it would be exceedingly difficult to realize the estimate we made earlier of zero percent growth," said Shi Jianhua, deputy secretary-general of the association.

The CAAM nevertheless expected the market would be better in the second half of the year because the base number starting from July 2018 was lower and models in line with the new emissions standard will be gradually introduced into the market.

By the end of June 20, there were 2,144 State VI models from 99 carmakers, accounting for around half of all models in the market, according to statistics from the China Passenger Car Association.

More than a dozen provinces and municipalities in China adopted the new emissions standards in July, and dealers' promotional efforts to sell off their stock of State V vehicles pushed up the sales in June.

Statistics from the China Passenger Car Association showed that retail sales of sedans, sport utility vehicles and multi-purpose vehicles last month grew 4.9 percent year-on-year, the first time in more than a year.

But Li Zehan, an analyst at China Galaxy Securities, said that the discounts in June may affect retail sales in the third quarter because the prices are returning to normal.

Li said the wholesales from carmakers will likely to rise as dealers would like to build up their stock of vehicles in line with new emissions standard.

Yet so far most carmakers have been affected to some extent.

Geely, the best-selling Chinese brand, delivered 90,875 vehicles in June, falling 29.3 percent year-on-year. Its sales from January to June totaled 651,680 units, down 14.99 percent.

The carmaker has scaled down its 2019 sales target from 1.51 million to 1.36 million, almost 10 percent less than its deliveries last year.

GM is one of the most popular international carmakers in the country. Together with its joint ventures, it saw an almost 15 percent fall in sales from January to June to 1.57 million.

The US carmaker expected the Chinese market to remain flat this year but it added that a number of new models would be launched in the second half of the year.

Despite the downward pressure, premium carmakers are doing a better job.

BMW sold 350,070 BMW and MINI-branded vehicles from January to June, up 16.8 percent year-on-year.

Porsche's China sales soared 28 percent in the same period despite a lukewarm first quarter.

Jens Puttfarcken, president and CEO of Porsche China, said the carmaker will see its sales hit a record this year.

New energy vehicles are insulated from the market fluctuations as well. Sales of electric vehicles, plug-in hybrids and fuel cell cars totaled 134,000 units in June, up 56.3 percent.

In the first six months, new energy vehicle sales reached 614,000 units, up 48.3 percent from the same period a year ago.

The association expects an overall rising trajectory for the segment. At least 1.6 million new energy vehicles will be sold this year, up from 1.2 million in 2018.

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2019-07-11 07:27:27
<![CDATA[Nation's NEV industry to accelerate development]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490405.htm

The Chinese authorities' ramped-up efforts to promote high-quality development in the new energy vehicle sector, reflected by the most recent release of an updated list on NEVs to enjoy exemptions of vehicle and vessel tax, will further help boost the healthy development of the sector and also promote clean energy consumption, industry insiders said.

The vehicle and vessel tax, paid annually by car or ship owners, varies between hundreds of yuan to thousands of yuan, depending on engine sizes and the capacity of vehicles or ships.

According to the latest list of NEVs and small engine vehicles to enjoy vehicle and vessel tax cuts that the Ministry of Industry and Information Technology issued recently on its website, vehicle and vessel tax will be slashed completely for 444 types of NEVs and halved for 72 types of energy-saving vehicles.

Moreover, the list has extended tax cuts to more NEVs compared with the previous list, and makes higher requirements on the performance of the NEVs to be included, such as lower power consumption per 100 kilometers, the increased energy density of battery packs, and a higher cruising range, according to Cui Dongshu, secretary-general of the China Passenger Car Association.

"The new list mirrors the progress of China's NEVs, especially in key performance indicators, and such progress is driven by incentives from the Chinese authorities," Cui said.

"It is obvious Chinese NEVs have been making remarkable progress in high-quality development, and this will continue."

The Chinese authorities announced cuts in vehicle and vessel tax on vehicles and ships that use new energy or engines smaller than 1.6 liters as early as in 2012 and 2015, in a bid to save energy and combat pollution.

NEVs enjoying the exemptions include pure electric commercial cars, plug-in hybrid vehicles, and fuel-cell commercial cars.

Since 2018, with an updated policy, the authorities have been rolling out lists of specific NEVs and small engine vehicles regularly for them to get tax cuts or exemptions.

Cui said the extended tax exemption to more NEVs this time will especially better support the development of commercial NEVs, whose owners are more sensitive to prices and taxes, because they usually own a large number of such vehicles.

Inclusion into the newest tax exemption list also endorses the quality and technical capabilities of such NEVs, which will help the manufactures to build brand image and attract customers, he said.

Qiu Kaijun, an industry observer and founder of Evobserver, an influential social media platform in the NEV industry, said the vehicle and vessel tax cut measures are part of the authorities' broader efforts to boost the development of the NEV industry, as they aim to encourage purchases of NEVs, although the effects are not as influential as other incentives including financial subsidies and rebates of purchase tax.

The NEV industry in China has been developing very fast in recent years, as the country pushes forward with efforts to build a globally competitive automobile industry.

In 2018, NEV sales in China maintained robust growth of 61.7 percent year-on-year, although the broader auto market sales contracted 2.8 percent year-on-year, according to statistics from the China Association of Automobile Manufacturers.

For the January-May period this year, China's NEV production and sales reached 480,000 units and 464,000 units, up 46 percent and 41.5 percent year-on-year, respectively, according to Xin Guobin, vice-minister of industry and information technology.

China had 340 million motor vehicles by the end of June this year, while the number of NEVs had reached 3.44 million, according to figures released by the Ministry of Public Security on Wednesday.

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2019-07-11 07:27:27
<![CDATA[Stable growth ahead for China's banking sector]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490404.htm China's banking sector will continue to see stable development this year but the banks may face slower profit growth and rising pressure on their asset quality, a report said on Wednesday.

Uncertainties in global economic growth, rising trade friction as well as stricter financial regulation at home would mean that Chinese banks will continue to face challenges, according to a report released by the China Banking Association.

The report is an annual review and assessment of the Chinese banking industry with a focus on areas such as the banks' asset quality, liability business and risk management capability.

The banks will have to deal with risks associated with the cleanup of the loss-making "zombie" companies, potential credit default by some real estate companies and risks from local government debt. The rise of protectionism and uncertainties in the global markets are also likely to affect banks' cross-border business, the report said.

Despite the challenges, Chinese banks have managed to maintain stable operations with steady rise in asset scale and improved risk management capability, said Lian Ping, the lead author of the report and chief economist of the Bank of Communications.

As the end of the first quarter this year, Chinese banks' total assets reached 276 trillion yuan ($40.1 trillion), up by 7.7 percent year-on-year. The non-performing loan ratio of commercial banks stood at 1.8 percent as of the end of the first quarter, slightly higher than the ratio of 1.74 percent in 2017. The banking sector also reported net profit of 571.5 billion yuan in the first quarter, up 6.09 percent year-on-year, according to the China Banking Association.

Lian said the banking sector has seen high-quality growth with better risk management, more effective internal controls and compliance practices, and greater ability to serve the real economy.

While the banks may face greater pressure on asset quality, the overall bad loan ratio is unlikely to rise above 2 percent this year, Lian added.

Pan Guangwei, executive vice-president of the China Banking Association, said that the Chinese banking sector will play a bigger role in serving the nation's high-quality economic growth.

The banks will explore more business opportunities in the Belt and Road Initiative and major national development strategies. They will also boost credit support for smaller businesses, high-tech and innovative firms and the manufacturing industry, Pan said.

Zeng Gang, deputy director of the National Institution for Finance and Development, said that the banks have to switch from pure expansion of asset scale into improving the quality of their services.

"The transformation of the banks' business model requires more sophisticated management to help reduce costs and more innovative tools to help replenish capital and raise the efficiency of the banks' use of capital," Zeng said.

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2019-07-11 07:27:27
<![CDATA[China set to become largest market for OLED televisions]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490403.htm

China is expected to become the world's largest market for organic light-emitting diode (OLED) televisions in the next two or three years as increasing numbers of affluent consumers want premium TVs that deliver outstanding picture quality and wider viewing angles, industry insiders said.

Wen Jianping, president of All View Cloud, a Beijing-based consultancy specializing in home appliances said the price of OLED TVs will continue to fall in the next two years, with sales rising to 380,000 units this year, and reaching 800,000 units in 2020.

"The OLED TVs will be the future development direction of the TV industry, and also an opportunity for TV manufacturers to expand their profit margins," Wen said, adding competition in the traditional liquid crystal display (LCD) sector is fierce, with the problem of seriously homogeneous products now showing up.

OLED is a relatively new technology and part of recent innovations in display. It has a fast response rate, wide viewing angles, super high-contrast images and richer colors. It is much thinner and can be made flexible, compared with traditional LCD display panels.

Shenzhen-based TV maker Skyworth Group is banking on such cutting-edge and innovative OLED technology to conquer the domestic TV market.

Wang Zhiguo, chairman and president of Shenzhen Skyworth-RGB Electronic, a subsidiary of Skyworth Group, said the low price wars in the LCD TV market have an influence on China's high-end TV segment priced from 6,000 yuan ($871) to 7,999 yuan. He said Skyworth will invest no less than 10 million yuan to popularize OLED technology across the nation.

Skyworth has been producing OLED TVs in partnership with South Korea's largest panel maker LG Display since 2013. Statistics from AVC showed sales of Skyworth OLED TV accounted for 46 percent of total OLED sales in the Chinese market in 2017, followed by LG (16 percent) and Sony (14.9 percent).

"The penetration rate of OLED TVs in China is relatively low, while such type of TV has become the representative of high-end TVs in the United States, Europe, Japan and other countries," said Park Changhyuk, general manager of LG Display China's promotion unit, adding that China has huge growth potential for OLED TVs.

He estimated that demand for OLED TVs in China will reach more than 2 million units within two to three years, making China the largest OLED TV market in the world.

LG Display has set up an OLED panel production plant in Guangzhou, capital of Guangdong province, and will start mass production in the third quarter of this year, manufacturing 10 million units a month in 2021.

Statistics from All View Cloud showed TV sales reached 47.74 million units nationwide last year, up 0.5 percent compared with the previous year. But related sales revenue only totaled 149 billion yuan, down 8.6 percent year-on-year.

The data also said the global shipment of OLED TVs reached 2.4 million units in 2018, an increase of 69.4 percent year-on-year.

Opportunities and challenges will coexist in the TV industry this year, said Peng Jianfeng, deputy secretary-general of the China Video Industry Association.

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2019-07-11 07:27:27
<![CDATA[5G to spark technological changes throughout nation]]> http://www.chinadaily.com.cn/kindle/2019-07/11/content_37490402.htm

Fifth generation mobile communication technology, or 5G, will bring about a fundamental technological revolution in 2019, a report said.

The 5G technology will bring not only upgraded communication technology, but would spark widespread changes in several areas, the annual report on the Development of China's Media Investment 2019 released by JIC Huawen Investment Ltd and the enterprise supervision division of People's Daily said.

"Similar to the 4G era that fostered a thriving mobile gaming and video sector, the emerging 5G, artificial intelligence, cloud computing and other new technologies will bring the media sector new changes in terms of interactions, effects and modes," the report said.

"In the upcoming 5G era, We will witness growing demand and consumption for content, especially in the field of gaming and videos. And new platforms with huge internet data flow will pop up," it said.

Zhang Lulu, a researcher at JIC Huawen, said with the increasingly stringent regulatory environment, content and technology are the fundamental driving force for development of the cultural industry.

"The technology-driven innovation, instead of the business driven model, now becomes the mainstream. And the investment that aims to empower the funded firms has replaced financial investment," Zhang added.

The report cited statistics from research and consulting institute ChinaVenture, saying China has experienced a bumper year for both private equity and venture capital investments in the cultural and media industry. The number hit a five-year high at $11.12 billion in 2018.

Media networks, online videos, movies and music attracted nearly 85 percent of total investment in 2018, with short videos becoming the most popular investment target, the report noted.

The boom in short videos swept the nation last year. As of December 2018, China had 648 million short videos users, accounting for 78.2 percent of the total number of internet users. According to data-monitoring firm TrustData, more than 80 percent of the users are under 30 years old.

"In addition to short videos, we also see medium-length and long videos thriving in the 5G age," said Yu Guoming, executive director of the School of Journalism and Communication at Beijing Normal University.

Yu noted that short video platforms like Kuaishou and Douyin allow people from different regions and social groups to get together in the same community and are able to exchange ideas and express themselves equally.

"I believe 5G technologies will speed up the process," Yu said, adding that 5G technologies would foster a "wide range of technological transmission forms. Investors should focus on projects that are able to foster active information flows in society, expand people's social horizons and help people know more about the world in a simplified way, such as paid content."

The report said that with the authorities creating a better environment for copyright protection, the paid content field will continue to see rapid growth.

China is planning to develop its cultural industry into a pillar of the national economy by 2020, according to the national 13th five-year program (2016-20) on cultural development reform.

The government blueprint noted that the country will help create cultural company groups which have core competitiveness and a high market share, saying several of them should strive to be among the leaders in the industry globally by 2020.

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2019-07-11 07:27:27
<![CDATA[Hainan to promote market vitality]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490057.htm Rollout to help in industrial upgrade and institutional innovation efforts in province, say top authorities

Hainan, China's southernmost province, will pilot intensified implementation of the competition policy in its key business sectors, in a bid to promote institutional innovation and industrial upgrading, according to the provincial authorities.

The move follows the establishment of the China (Hainan) Pilot Free Trade Zone, the country's newest yet largest FTZ, covering 35,400 square kilometers and 32 times the size of Hong Kong, to intensify competition policy implementation on a pilot basis in Hainan, the first province agreed by the central authorities to conduct the practice province-wide, said officials with the Hainan Provincial Administration for Market Regulation.

 

The plan for the pilot program proposed that by 2020, Hainan FTZ should have preliminarily established the competition system, the policy system and organizational guarantee system; regulations and practices that hinder fair competition in Hainan's 12 key industries should be thoroughly cleaned up and abolished. It noted that local administrative monopoly should be effectively curbed, and social awareness of competition culture be fostered.

The plan also proposed a long term target which, by 2035, will help make Hainan free trade port with Chinese characteristics a new global highland of fair competition.

"Hainan is making full preparation for the establishment of a fairness review and anti-monopoly commission and a special advisory group to investigate and evaluate the overall market competition situation, issue assessment reports and coordinate important issues of anti-monopoly law enforcement and the implementation of competition policy in Hainan FTZ," said Yan Li, head of the antitrust bureau under the Hainan provincial administration for market regulation.

She said, in line with the spirit of the central authorities in supporting Hainan FTZ, Hainan has selected key areas such as the seed industry, medical services, education, tourism and finance to pilot intensified implementation of competition policy to encourage institutional innovation and upgrading of its industries.

"There are still problems such as monopoly agreements, administrative monopoly and abuse of dominant market position that have excluded or restricted business competition in Hainan. It is therefore of crucial importance for Hainan to intensify the role of competition policy to accelerate the construction of Hainan Free Trade Zone and Free Trade Port with Chinese characteristics," said Yan.

Monopoly of local farm produce, tropical fruits and vegetables, for instance, has often led to abnormal prices that were even higher than those that were sold in other regions on the Chinese mainland and caused consumer complaints, according to reports from local media.

"Competition is the soul of market mechanism. Implementing competition policy in China's FTZs will promote institutional innovation, enhance their development and explore effective ways to strengthen the fundamental roles of competition policy," said Gan Lin, vice-minister of the State Administration for Market Regulation and commissioner and secretary-general of the Anti-Monopoly Commission of the State Council, China's Cabinet.

She said more than 130 countries and regions have established competition policies, especially Hong Kong Special Administrative Region, Singapore and other internationally renowned free trade ports that are well known for their complete competition policies and systems.

Yan, head of the local antitrust bureau, said the State plan for Hainan made it clear that industrial policies that used to stress differentiation, selectivity will be switched to inclusiveness and functionality, and the remaining preferential policies will be kept transparent, so as to create a fair market environment for both domestic and foreign investment, State-owned and private enterprises, no matter big or small.

"Hainan is taking a series of measures to build the review and third-party evaluation system and mechanism for intensified implementation of competition policy, including a coordination mechanism between competition policy and industrial policy, preliminary study and research for drafting the measures for anti-monopoly work in the Hainan FTZ and revising the regulations on anti-unfair competition in Hainan," said Yan.

She said Hainan will make greater efforts in cracking down on monopoly, misleading and fake commercial promotion, commercial bribery in daily livelihood sectors such as public utilities, raw materials, building materials, daily consumer goods, education, tourism, medicine and e-commerce.

"Competition is the essence of market economy, the foundation of stimulating market vitality and the motive force of expanding market opening," said Chi Fulin, president of the China (Hainan) Institute for Reform and Development.

He said it is a basic requirement and an important task of optimizing the business environment to strengthen the basic position of competition policy, give full play to the decisive role of the market in resource allocation and for local government to play a better role.

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2019-07-10 07:37:21
<![CDATA[Hospital payment mechanism tweaks to benefit patients]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490056.htm China is tweaking the existing payment mechanism adopted by hospitals to make it more beneficial for patients as part of its deepening medical reforms.

The National Healthcare Security Administration and three other departments jointly issued a circular in early June indicating that the nation will launch a pilot program of diagnosis-related groups, or DRGs, a patient classification to standardize medical insurance payment, in 30 cities.

Patients will be categorized into DRGs with similar clinical symptoms and resource costs according to their age, gender, length of stay and clinical diagnosis. Medical fees and insurance payments will thus be based on DRG classification instead of specific patients.

The pilot cities, including Beijing, Tianjin and Shanghai, are scheduled to start the new payment mode in 2021 before a simulated run in 2020, said the circular.

Shen Shuguang, vice-president of the China Association of Social Security, said during an interview with the People's Daily that DRG payment is beneficial to standardize diagnosis and treatment and improve the efficiency of medical insurance fund use.

In the past, China's hospitals charged patients for treatment projects, and the more medicine and treatment a doctor gives to a patient, the more he as well as the hospital where he works can earn. With the new charging method, doctors' and hospitals' income will be based on hospitals' cost control.

Feng Guosheng, director-general of Beijing Chaoyang Hospital, said that "the new charging method is beneficial to mobilize the enthusiasm of hospitals and medical professionals to reduce costs and improve service quality, control the unreasonable growth of medical expenses, and promote the transformation of medical institutions' operational mechanism".

Specifically, he noted that through timely evaluations of medical expenses and cost analysis, DRG will reinforce hospitals' operational control. "The hospitals' profit and loss are clear at a glance. Administrators can quickly spot the problems, whether they are from inappropriate use of consumables, excessive use of drugs, or unqualified treatment."

Statistics from the National Health Commission showed that in 2018, China's total medical expenses reached 5.8 trillion yuan ($842 billion), accounting for 6.4 percent of the gross domestic product. Residents' personal medical expenses totaled 1.67 trillion yuan, or 28.7 percent of the total medical expenses.

"Apart from the medical reimbursement, I spent over 3,000 yuan at my own expense in hospital last year. Once a doctor recommended me to conduct a gynecologic examination, which was not covered by the healthcare insurance, it cost me nearly 1,000 yuan. I sometimes feel overcharged by the hospital," said Zhang Yuan, a 40-year-old civil servant in Beijing.

"The new charging method means that medicine, consumables and inspection items will no longer be an income source for doctors. Doctors are no longer motivated to give as many inspections as possible, but to control costs on the basis of curing patients," said Liu Zhichen, a DRG expert at the National Health Commission.

"The payment system based on DRG helps hospitals to build a mechanism that benefits patients more, in that they are encouraged to shorten the patients' hospitalization period to control treatment costs," she said.

However, implementing DRG is challenging for Chinese hospitals which have got used to the traditional charging method. "Currently in China, there is no standard for DRG classification, and the difficulties lie in precise clinical diagnosis classification and clinical operation cost accounting," said Wang Yipeng, director of the Chinese branch of the International Classification of Disease under the World Health Organization.

"This requires a thorough reform of the hospitals' operation mode. Through DRG research, hospitals can make comparisons between various treatment plans and find out the best clinical solution with low cost and high efficiency. Hospitals are encouraged to control medical costs by shortening average duration of hospitalization and lowering patients' induced medical consumption," Liu said.

Research showed that after Germany implemented the DRG method, patients' average duration of hospitalization at 750 trial hospitals decreased by 30 percent. In the meantime, numerous private hospitals in Germany achieved robust development because of competitive advantages.

"The DRG reform is both a challenge and an opportunity for hospitals. If they can quickly change their business philosophy and establish strategic goals for efficient operation, they will be able to realize core competitive advantages and achieve sustainable development," Liu said.

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2019-07-10 07:37:21
<![CDATA[Carbon emissions to taper off by 2030]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490055.htm

Carbon emissions of China's power sector will peak in 2027, and will reduce to 79 percent of that in 2005 by around 2030, more than fulfilling the sector's carbon reduction commitments within the Paris Agreement on climate change, a new industry report said.

In 2050, carbon emission intensity or energy expenditure per unit of GDP in China's power sector, will further decline to 5 percent of that in 2005, according to Bloomberg New Energy Finance, Bloomberg's primary research service on energy.

"China's power sector will go through a very efficient process of reducing carbon emissions, and the carbon emission intensity in 2050 is estimated to be below 52 percent of that compared with today," said Luan Dong, China renewable analyst with Bloomberg New Energy Finance.

Luan made the remarks during a conference to launch the organization's 2019 New Energy Outlook in Beijing, which is an annual long-term economic forecast of the world's power sector.

That is an even greater achievement, if considering China's rapid electricity demand growth - the report estimated power demand in China will increase 65 percent through 2050, while Chinese GDP is likely to grow by 225 percent.

As costs of renewables continuously decline, they will challenge the current dominant position of coal in the power sector, according to Luan.

Onshore wind and photovoltaic power's costs of generation for new capacity will be more than 30 percent lower than new coal-fired power capacity in 2025, and then two to three years later, costs of new onshore wind and PV capacity will become lower than running thermal capacity, he said.

Currently, the cost of new onshore wind and PV projects in China, at the level of about $50 per megawatt-hour, is getting close to that of coal-fired power, he said.

Luan estimated that there will likely be no new coal-fired power projects in China from 2025, and coal-fired power generation will fall from 2027. By 2050, coal-fired power will take up about 15 percent of total power generation, he said.

He also estimated in 2025, the share of fossil energy in China's cumulative installed power capacity will decrease to 47 percent from the current share of 58 percent, while the share of renewables will increase to 50 percent from 39 percent.

In 2050, the share of fossil energy among cumulative installed power capacity is expected to drop to 23 percent, while the cumulative installed power capacity of renewables will surge to 67 percent, he said.

Wind and PV will take up 47 percent of total power generation in 2050, and the share for all renewables will be as high as 61 percent, while fossil energy will contribute only about 25 percent of total power generation, Luan said.

West China, with wide application of ultrahigh-voltage electricity transmission and increase in wind and PV power generation, is set to export 23 percent of its total power generation to other regions, becoming the top power export region in China, said Luan.

He said electricity vehicles and air-conditioners are the two sectors that will see remarkable growth in China's overall power demand.

He said about 10.4 percent of gross electricity demand will come from electric vehicles in 2050, while air-conditioners' share in gross electricity demand will reach 12.4 percent then.

Li Junfeng, president of the Chinese Renewable Energy Industries Association, said renewable energy is expected to meet most of the energy demand in China, as China keeps its commitment on carbon emission reductions.

Installed power capacity of renewables in China totaled 728.96 gigawatts by the end of 2018, accounting for 38.4 percent of the total, and registering a year-on-year growth of 11.7 percent, according to the China Renewable Energy Development Report 2018.

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2019-07-10 07:37:21
<![CDATA[STAR Market to see flurry of debuts this week]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490054.htm New board to focus on information disclosure, rather than profitability

Investors looking for opportunities in the A-share market will be busy this week as a total of 22 newly listed companies are open for subscription during trading.

Shanghai-based e-glass fabric maker Grace Fabric Technology, which was offered on Tuesday, is the only A-share main board listed company. The 21 other firms will be listed on the technology-focused STAR Market at the Shanghai Stock Exchange.

On Wednesday alone, nine STAR Market listed companies will be open for subscription, a daily record at the Shanghai bourse.

Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, said the new board's emphasis on information disclosure rather than profitability and the initial public offering pricing system is a sign the Chinese stock market is becoming more market-oriented.

But Dong warned investors should raise their risk awareness and avoid speculative trading.

"The IPO pricing of the new board is market-based, meaning that it is no longer subject to administrative approval. So it requires that investors must have greater risk awareness and tolerance," Dong said.

Chu Zhipeng, an analyst of the secondary market research at the Shanghai-based financial service provider Noah Holdings Ltd, said the mid to long-term prospects of the A-share market are improving.

Dai Kang, chief strategist of GF Securities, said the pharmaceutical and technology companies to be listed on the STAR Market have higher PE ratios than their counterparts listed on the other boards of the A-share market.

The Beijing-based China Railway Signal and Communication Corp Ltd has the most attractive PE ratio of 19.06, with the industry average at 37.96. CRSC planned to raise 10.5 billion yuan ($1.5 billion) via a public offering of shares on the STAR Market.

Shanghai-based semiconductor manufacturer Advanced Micro-Fabrication Equipment Inc, however, has the highest PE ratio among the companies at 119.19, while the industry average comes in at 31.81.

Initiated in early November, the Nasdaq-like STAR Market was officially launched on June 13. The Shanghai bourse said on July 5 that the first 25 companies, whose IPO registration has been approved by the China Securities Regulatory Commission, will start trading at the Shanghai exchange on July 22.

The launch of the STAR Market in Shanghai was seen by analysts as a milestone event in the development of China's capital market. The board in the long run will likely have significant impact on the A-share market's valuations and investment choices.

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2019-07-10 07:37:21
<![CDATA[Hunan high-speed railway gets major boost]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490053.htm The construction of a high-speed railway in Central China's Hunan province got a major boost when the first cement-and-steel box girder was installed on Zhangjiashan Bridge, helping to ensure the line will officially run by the end of 2021.

The 816-metric-ton box girder was successfully put in place to link the first two piers of the bridge, part of the Zhangjiajie-Jishou-Huaihua High-Speed Railway, which kicked off its construction on Dec 18, 2016 with an investment of 39 billion yuan ($5.6 billion). The train will run at 350 kilometers per hour.

The 247.5-km long railway linking the top-rated Wulingyuan scenic spot in Zhangjiajie city in the north and Huaihua city in the south is expected to help boost tourism in northwestern Hunan when it goes into operation.

The 32-meter long, 12.2-meter wide box girder was prefabricated by the First Division Co of China Tiesiju Civil Engineering Group Co Ltd in a precasting yard in Zhangjiajie, said Fang Taiping, an official of the division in the company.

He said the Yongding yard will precast 221 double-line box girders, which are either 24 or 32 meters long, in a bid to fulfill their task in building tunnels, roadbeds, bridges and railway stations.

The yard's modern digital technology and scientific management will help to safeguard the top quality of all box girders, Fang said.

Upon completion, the high-speed railway will help improve the north-south railway transportation in central and western China, he said.

"From now on, the building of the railway line will turn to the superstructures, as all the foundations on the ground have been laid," Fang said.

Song Heng, chief of cyberspace at CTCE, said building the railway is extremely difficult as it needs to pass through mountain ranges and basins that have complex geologic structures with varied topography and landforms.

The whole line will have eight railway stations, 186 bridges and 124 tunnels, he said, adding that it can join three other railways in Zhangjiajie. It will also join the Sichuan-Hunan Railway in Jishou, another railway in Fenghuang station, and link two other railways in Huaihua.

The Zhangjiajie-Jishou-Huaihua railway will be later extended from Huaihua to Guilin, a city popular with sightseers in the Guangxi Zhuang autonomous region, Song said.

"By then, the whole railway will become a boutique tourist route linking Zhangjiajie, Fenghuang and Guilin, all top scenic spots in China," he said.

The whole railway is also part of the country's national precision poverty alleviation strategy as it will link eight counties, county-level cities and districts in three cities in western Hunan, helping to promote economic takeoff in areas hit by poverty, Song noted.

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2019-07-10 07:37:21
<![CDATA[Clarity urged on Sino-US trade issues]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490052.htm Washington should face the matter of deficit squarely: former vice-premier

The "real" trade imbalance between the world's two largest economies has long been overstated by 20 percent. Better data would give a more balanced picture of Sino-US trade and reflect the gains that both sides derive from their economic relationship, said former Chinese Vice-Premier Zeng Peiyan.

There has always been divergence between Chinese and US figures on the bilateral trade gap due to the different methods used. Current methods omit trade in services from the trade balance, overlooking China's role in processing trade, and thus overestimating the trade deficit, Zeng told a seminar in Hong Kong on Tuesday.

 

The Cosco Development, the largest container ship to ever call on a US East Coast port, passes as a crowd gathers on River Street in Savannah as it moves on to the Garden City Terminal on the Savannah River. Provided to China Daily

The two-day event, themed "US-China Trade and Economic Relations: What Now, What Next", invited former government officials, industry representatives and academics from home and abroad to share their insights on the year-old Sino-US trade friction, which has become the single most important factor in the global economy and markets.

"The real trade imbalance should be viewed in a more comprehensive and objective manner. Trade statistics should be improved to account for not only trade in goods but trade in services, to focus on both the total value of trade and the true value added in each country, and to reflect the perspective of gross domestic product as well as gross national product," said Zeng, who is also the chairman of the China Center for International Economic Exchanges.

There is no shortage of research whose findings undercut the economic foundation for US tariffs on Chinese products. According to the research jointly conducted by the two countries' commerce ministries, the US trade deficit with China has been overrated by 20 percent for years.

Such an overvaluation manifests itself in two aspects, Zeng explained. On the one hand, the US has long put the entrepot trade and re-exports from economies such as Hong Kong on China's books. In addition, there has always been difference between the sale price of Chinese exporters and the bid price of US importers due to the existence of international intermediaries. This leads to disparate customs statistics on both sides.

Zeng's remarks echo the report published by China's Ministry of Commerce last month, which showed the "real" bilateral trade imbalance is merely $153 billion, or 37 percent of the headline figure released by the US government.

In the processing trade, Chinese exports of products assembled from imported components, the valued added to the product by China only remains a small fraction of the value used in the US calculations and should be taken into full account, the ministry argued.

Zeng said he believed the US restriction on high-tech exports to China is the policy reason for its growing trade deficit with China. In 2018, US exported $39.1 billion high-tech products to China, less than one forth of the high-tech products imported from China and accounting for just 10.6 percent of the total US technology exports worldwide.

Citing a research finding, Zeng said if Washington eases the curbs on technology exports to China to the level of restrictions placed on France, it will essentially cut down on the trade deficit with China by 35 percent.

As China reinforces the key principle raised in the last round of negotiations, access to US technology exports, an agreement for China to buy technology exports, currently blocked by the US, would help meet the needs of Chinese consumers and companies while reducing the trade deficit, Zeng said.

Such open trade speaks volumes that trade is mutually beneficial rather than the lopsided economic tie-up. "The US has gained tangible benefits from its economic and trade relations with China," Zeng noted.

"The US government should face the issue of trade deficit squarely. It should take a serious look at the reasons behind as well as the gains and losses from the trade imbalance. Simply levying tariffs is of no help but will be counterproductive."

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2019-07-10 07:37:01
<![CDATA[Farming robot makes its debut in Fujian]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490051.htm While industrial robots have become a common sight in factories across eastern China, the country's agriculture sector is seen by some as a place where few technologies can take root, due to the high cost and sophisticated natural environment involved in growing food.

But a research institute and a startup based in Fuzhou, capital of East China's Fujian province, are determined to change the perception by jointly developing an agricultural robot.

The white, 5G-enabled, sensor-rich agricultural robot can move between two rows of leafy greens in a greenhouse, collect data about the plants, and feed it back to the control room.

 

A farming robot moves in between two rows of plants in a greenhouse in Fuzhou, capital of Fujian province. Provided to China Daily

Developed by Fujian Academy of Agricultural Sciences and Fujian Newland Era Hi-Tech Co Ltd, the robot is part of their efforts to build an autonomous running farm.

Different from industrial plants where robots can follow preset routes and do fixed jobs such as feeding standardized electronic parts, agricultural environments are far more complex, said Zhao Jian, deputy head of the digital agriculture institute of FAAS.

"Farm robots also have to adapt to a wide variety of highly differentiated crops, livestock and aquatic products," said Zhao.

To solve the challenges, the research institute and Newland have jointly developed a more sophisticated artificial intelligence system. Computer algorithms as well as the hardware for positioning, map construction, route design and avoiding obstacles have all been optimized to suit the agricultural environment, taking into consideration fertilization, watering the plants, bumpy roads and other natural factors.

The robot's head is equipped with two 5 megapixel cameras as the "eyes" and two 7 megapixel cameras as its "ears". With sensors at the top of its head and mouth, the robot can also detect wind velocity, carbon dioxide levels, humidity, temperature and other data about the natural environment of the green house.

The farm robot has been successfully tested for compatibility with the 5G mobile communication technology, which allows the data to be analyzed by computers enabled by AI in the control room more efficiently.

"Currently, the robot can inspect farms automatically and collect data samples used to power various applications. It can determine plants' health condition and decide if pest control measures are warranted," said Chen Li, deputy director of marketing at Newland.

According to Chen, the robot is still a prototype and on the basis of that the two sides hope to step up investments to develop versatile robots that can even pick fruit with a bionic hand in the future.

"Based on the mass agricultural data and images we have acquired, we hope to build an optimized plant growth model to achieve automatic control of the growth environment and early warning of pests and diseases," Chen added.

China is now the world's largest market for industrial robots. As labor costs continue rising, the demand for robots will be stronger in the nation, said Wang Tianmiao, president of the Smart Manufacturing Research Institute at Beihang University.

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2019-07-10 07:37:01
<![CDATA[Stability still watchword for policymakers in H2]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490050.htm

Moves can be expected from the Chinese monetary authority, if the upcoming economic data disappoint the market, as analysts said economic stability remains the policymakers' priority in the second half of this year.

Major economic indicators will be published over the next week, including second quarter GDP, industrial output and fixed-asset investment growth. Some economists predicted a slightly moderate growth in the April-to-June period, compared with 6.4 percent in the first three months.

In face of even more uncertainties related to US-China trade tensions, once the first half economic report slips off the policymakers' expected zone, a series of policies, especially in terms of monetary and fiscal policies, will debut later this month to stabilize growth and ease market sentiment, analysts said.

"Currently, the priority target of monetary policy is to curb further slowing in the growth of the economy," said Yu Yongding, a senior economist at the Chinese Academy of Social Sciences.

"For the next step, China's monetary and fiscal policy needs to remain loose. Monetary easing is to lower interest rates and to coordinate with treasury bond issuance by the Ministry of Finance. The bonds will raise money for infrastructure construction, a major driving force of economic growth," said Yu.

The People's Bank of China, the central bank, will probably encourage bank lending to the small and private sector in the second half, coupled with targeted easing measures, such as reserve requirement ratio cuts and targeted Medium-term Lending Facility (MLF). The targeted easing aims to keep lower financing costs, according to economists.

The PBOC paused cash injections via reverse repo for 12 consecutive days as of Tuesday, as the current banking liquidity is at "a relatively high level", said a statement on the bank's website.

The overnight repo rate, a rate to show the interbank borrowing costs, declined to a historically low level on July 2, to 0.7 percent, compared with the 10-year bottom of 0.72 percent in July, 2009, according to data from the Wind Info. The borrowing costs usually increase when liquidity is tight.

Although the current ample liquidity gives the central bank a break, the interest rate cut still stands at the top of the PBOC's policy list, especially if the worst-case scenario happens or the US imposes more tariffs on $300 billion of Chinese goods, said Qu Hongbin, an economist with HSBC.

If Sino-US trade tensions escalate, the Chinese authorities can respond to the more pronounced negative economic impact by providing policy support, said a research note from Moody's Investors Service.

The PBOC is considering kicking off reform of the existing interest rate regime. The possible step is to replace the one-year benchmark leading rate with a more sensitive and market-driven rate. Experts expect the loan prime rate, or LPR, may become the next benchmark.

LPR is the lending rate offered by 10 major commercial banks to their most favorable customers. Currently, the National Interbank Funding Center publishes LPR of one-year maturity. The average LPR in July was 4.31 percent by Tuesday, compared with the one-year benchmark lending rate at 4.35 percent.

Moody's affirmed a "stable" outlook of China's economy last week, maintaining the "A1" rating. From Moody's projection, the leveraging level may continually rise, although at a moderate pace, as policy emphasis tends to shift between deleveraging and support to growth over the medium term. The public sector debt is likely to rise towards 160 percent of GDP in 2025 from 137 percent in 2018.

Policymakers may have less room for policy stimulus, due to a rapid accumulation of debt, falling return on investment and falling current account surplus. Inflation is not a big concern despite surging pork prices, said Lu Ting, chief economist in China with Nomura Securities.

"Domestic policies will, to a large extent, be dependent on the China-US trade tensions," he added.

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2019-07-10 07:37:01
<![CDATA[Daxing airport to be a star attraction]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490049.htm The new gigantic star-shaped Beijing Daxing International Airport, due to open by Sept 30, will have its domestic and international departure halls stacked vertically. This is the first such design among global airports, and will offer passengers more convenient and faster check-in and transfer services, its designer said on Tuesday.

Given the terminal's centralized design, the distance between the central area and the farthest boarding gate will be 600 meters of walking distance at the maximum, much less than many other Asian and European terminals, and the speed of baggage reclaim will be faster, said French firm ADP Ingenierie, the architectural designer of terminal 1 of Daxing airport.

Located 60 kilometers south of Beijing's city center, the new low-carbon airport is expected to serve as China's largest integrated transportation hub and one of the largest worldwide. More than 50 domestic and foreign carriers have shown interest in operating flights from there.

Building of the infrastructure of the new airport has been completed. Terminal 1 will have an annual capacity of 45 million passengers at its opening, which will be able to meet the transportation demand of the upcoming 2022 Beijing Winter Olympic Games.

"The new airport requires a lot of compact aircraft parking stands and gates, and as such required us to break with the traditions of designing modular terminals that spread horizontally," said Jean-Charles Content, lead architect of Asia-Pacific of ADPI.

"So we designed a compact single terminal, and it didn't require rapid transit trains for now. Later, when the passenger flow will be expanded to 72 million annually, a rapid transit system is required, and the space has been reserved," he said.

"The lower level will be purely domestic departures, and the upper level will mainly be international departures, combined with several domestic checking islands at the sides, thus it would be convenient for international and domestic transferring passengers," he added.

Passengers can easily find their way within the open interior layout of the terminal, with restaurants and shops located around the central area with a skylight. Besides, there are five ancient Chinese style gardens with distinctive features located at the end of five departure lounges for passengers to take rest and wait for their flights, the designer said.

Meanwhile, China Eastern Airlines, which will move to the new airport along with China Southern Airlines, earlier said that it has proposed plans for off-airport check-in and bag drop services to the airport authorities, and related equipment is expected to be built at several places such as metro stations in the city.

"Remote self check-in facilities will be established at the connecting deck of metro stations and terminals, and they will start operations once the airport opens. Remote baggage check services will be introduced at a later time," said Yao Yun, deputy general manager of the global baggage control center at China Eastern Airlines.

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2019-07-10 07:37:01
<![CDATA[China International Import Expo to attract more participants]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490048.htm The Second China International Import Expo to be held on Nov 5-10 in Shanghai will see bigger exhibition areas and wider participation, government officials said at the CIIE road show in Tianjin on Monday.

"Although the registration for the exhibitors has been closed, some companies are still trying to achieve an opportunity to join the event," said Liu Fuxue, deputy head of the CIIE Bureau.

The participation of Fortune 500 companies numbered more than last year and the exhibition area has been expanded by 10 percent to 30,000 square meters.

New exhibition areas on luxury goods, products of artificial intelligence and virtual reality, and elderly care facilities will be added to the world's top import-themed expo this year.

Liu now expects more buyers from the North China region including Beijing, Tianjin and nearby Hebei province to take part in the event which boasts state-of-the-art products and leading technologies.

He said the event will benefit the industrial structure of the region and the escalating level of consumer spending.

Last year, Tianjin companies invested large amounts of capital in advanced machinery and high-quality agricultural products during the expo.

"A total of 2,417 Tianjin companies joined the event and 62 agreements worth a total of 1.5 billion yuan ($217.9 million) were inked during the fair," said Zhang Aiguo, director of the Tianjin Municipal Bureau of Commerce.

To date, 54 such agreements have been completed, he said.

This year, more Tianjin companies in aerospace, airplane and intelligent manufacturing are eyeing the opportunity to take part and Tianjin will host an equipment manufacturing seminar during the show.

Liang Feng, president of the China National Machine Tool Sales and Technical Service Corporation, who will take part in the Tianjin seminar, noted that based on last year's experience, the firm will lead a group of Chinese machine tool companies to help facilitate trade between domestic buyers and foreign exhibitors.

 

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2019-07-10 07:37:01
<![CDATA[Lack of natural gas storage capacity restricting supply]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490047.htm More underground facilities needed to address problems created by weak consumption in summer, surging demand in winter

While China needs more natural gas to meet its surging demand for clean fuel, a lack of storage capacity is making it difficult for the country to cope with supply crunches in winter months when demand surges to heat homes.

China, the world's biggest energy user, needs underground gas storage facilities to address the imbalance created by weak consumption in summer and surging demand in winter, industry insiders said.

The lack of storage capacity is restricting gas supply, and the country's total underground storage capacity available for peak shaving is significantly lower than the international average of 15 percent, according to analysts at London-headquartered analytics firm IHS Markit Ltd.

 

Technicians check gas storage facilities in Puyang, Henan province. Ma Hongshan / For China Daily

The gas from underground storage facilities reached 9.3 billion cubic meters last year, compared to a record 7.4 billion cubic meters during the winter's severe supply squeeze in 2017 and an average of 4-6 billion cubic meters during the previous few winters. However, it only contributed 3.5 percent of the country's total gas consumption last year, far lower than the world average of 12 percent and 20 percent for top consuming nations such as the United States and Russia, according to figures from Reuters.

Bloomberg Intelligence estimated earlier that China's gas storage will rise to 4.1 percent of demand in 2020.

There are 715 underground gas storage facilities worldwide, with 66 percent of them located in developed countries in North America and the European Union. Compared with the United States, which has more than 400 underground gas storage facilities, China has 26 with a total storage capacity of approximately 20 billion cubic meters.

China National Petroleum Corp, the country's biggest oil and gas company, built 23 of the 25 State-owned facilities, with the remaining two built by China Petroleum and Chemical Corp, the world's largest refiner by volume.

With the increasing penetration of gas in the heating sector, especially in northern regions, gas demand in China will become more seasonal and the country is in urgent need of more storage capacity, said IHS Markit.

China consumed 280.3 billion cubic meters of natural gas in 2018, up 18.1 percent year-on-year, while it also aims to increase the share of gas in its energy mix from the current 7.8 percent to 10 percent of the nation's primary energy demand by 2020, according to the National Development and Reform Commission, the nation's top economic regulator.

As a result, China has been speeding up expansion of its much-needed underground gas storage facilities in recent years. It has issued several policies since 2017 focusing on storage buildup and the related pricing mechanisms. The 13th Five-Year Plan on Natural Gas Development set a target for underground storage working capacity to reach 14.8 billion cubic meters by 2020 from the current capacity of around 10 billion cubic meters.

The National Development and Reform Commission and the National Energy Administration released a document last April, stipulating that all gas supply entities must have sufficient gas storage by 2020, with gas supply companies to have a storage capacity no lower than 10 percent of the contract sales of that year; local governments at or above the county level to have storage capacity able to meet at least three days of gas demand; and urban gas enterprises to have a storage capacity of at least 5 percent of their gas consumption.

Analyst said if these targets were met, China would be able to achieve a 16 percent storage level, which is similar to other large gas markets.

Considering the country's high dependence on oil and gas imports, it's necessary to ramp up construction of gas storage tanks and come up with a more open and liberalized gas sector in the country, said Li Li, research director at energy consulting company ICIS China.

However, some analysts still express concerns regarding intensive capital requirements, weak investment efficiency, long construction periods and geological challenges.

"While challenges are expected to be resolved in the long term as the investment life for natural gas storage is normally 10-20 years, all participants, including the country's national oil corporations and urban gas enterprises, are currently facing similar challenges," said Mu Lei, an associate in the field of Asian oil and gas at JPMorgan's Asia-Pacific Equity Research.

"China natural gas storage capacity expansion was only accelerated a few years ago, and the policymakers, storage operators, buyers and suppliers all have limited experience working together under fast industry expansion," he said.

Jin Yonghao, deputy director of Changchun Gas, was quoted by the Jiemian news website as saying that considering the complex geological structures, long-term investment periods and long construction periods, urban gas enterprises often faced severe financial stress.

Chi Guojing, former secretary-general and now assistant president of the China Gas Association, said gas supply companies, local governments and urban gas enterprises faced challenges to meet the government's 2020 target.

"The policymakers should work closely with all industrial participants to enable favorable investment returns, a fluent mechanism and healthy market as the first step of upcoming industrial reform."

According to Mu, there are primarily two types of underground gas storage in China - depleted oil and gas reservoir storage and salt cavern storage - both of which have unique and specific geological requirements, which also pose challenges for gas suppliers.

Depleted reservoir storage has a lower unit construction cost to operational volume and large capacity, but it requires a large amount of pre-injected natural gas (cushion gas) to maintain the reservoir above operational pressure. Salt cavern storage, on the other hand, requires a long construction period using water to dissolve underground rock salt to create storage space, creating a higher unit construction cost to operational volume, but a limited amount of cushion gas requirement, higher turnover and recoverable cushion gas, he said.

"With a positive outlook for China's natural gas demand growth, we believe the natural gas storage business has great development potential," he said.

Mu believed with a strong government push, underground storage construction will accelerate and likely meet the 2020 target, despite challenges, including a lack of technically suitable storage sites and a clear pricing mechanism, which might still continue to impede near-term storage expansion.

According to Xie Dan, deputy director of Sinopec Gas Company, independent business operation for the gas storage facilities is the inevitable direction to solve the problem of insufficient gas storage facilities in China. He suggested that instead of fixed premiums for winter pricing, storage facilities should be run independently in a fully liberalized market that reflects price spreads between low and high seasons, which will also provide storage investors with good returns.

Zhang Mingsen, former deputy chief engineer at the Beijing Research Institute of Chemical Industry under the State-owned oil giant China Petroleum and Chemical Corp, suggested that the government should provide fiscal and tax subsidies for the construction of underground gas storage facilities and improve the pricing mechanism for natural gas to achieve a more open gas market system.

Sufficient storage facilities and competent peak load regulation capacity are necessary for a stable supply of natural gas and China should align itself with world standards, with gas in storage contributing more than 10 percent of annual gas consumption, he said.

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2019-07-10 07:37:01
<![CDATA[CNPC to invest in 23 new projects]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490046.htm

China National Petroleum Corp, the country's largest oil and gas company, plans to build 23 new gas storage facilities and expand 10 existing ones by 2030, with a total investment of more than 50 billion yuan ($7.26 billion), as national gas producers nationwide are stepping up investment in gas storage facilities to ensure sufficient gas supply.

The working gas capacity of the 23 new gas storage facilities is expected to exceed 15 billion cubic meters, the company said.

It will also build six regional gas storage centers across China in the next 11 years, part of the company's efforts to secure supplies of natural gas during peak demand season over winter, especially in the northern parts of the country.

The company currently has 23 underground gas storage facilities nationwide, accounting for the majority of the gas storage capacity in the country held in 26 storage facilities. It vows to further take advantage of its gas storage capacity to ensure sufficient supply.

China, the world's second-largest economy, consumed 280.3 billion cubic meters of natural gas last year, up 18.1 percent year-on-year, according to figures from the National Development and Reform Commission, the nation's top economic regulator.

The growth accelerated from a rise of 15.3 percent registered in 2017, it said.

The surge is in accordance with the country's recent attempt to promote efficient, large-scale use of natural gas in the industrial fuel, gas-fired power and transport sectors, to combat air pollution. It aims to make natural gas consumption account for about 10 percent of the country's energy mix by 2020 and 15 percent by 2030.

Bloomberg Intelligence estimated earlier that nationwide gas storage will rise to 4.1 percent of demand in 2020, compared with 2.8 percent in 2015.

While China is already the world's biggest gas importer, with 125.4 billion cubic meters of gas shipments last year, a year-on-year increase of 31.7 percent, its 26 gas storage sites had just 8 billion cubic meters in storage as of 2018, contributing 3 percent of the country's total gas consumption, it said.

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2019-07-10 07:37:01
<![CDATA[Fiscal, tax subsidies for construction to boost sector's development]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490045.htm Fiscal and tax subsidies for the construction of underground gas storage facilities and improvements to the pricing mechanism for natural gas will help China achieve a more open gas market system, according to industry insiders.

Against increasing demand for natural gas, especially during the peak consumption period in winter, the government should step up construction of underground gas storage facilities with competent peak load regulation capacity to ensure a stable supply of natural gas, said Zhang Mingsen, former deputy chief engineer at the Beijing Research Institute of Chemical Industry under the State-owned oil giant China Petroleum and Chemical Corp.

The government needs to come up with fiscal and tax subsidies for the constructors at the initial phase, he said.

According to Zhang, underground gas storage has always been an important part of the natural gas industrial chain, serving as an indispensable mechanism to regulate and adjust the peak demand for natural gas.

Underground gas storage facilities see high capacity and high gas storage pressure, and their small land usage and the fact that they are less susceptible to extreme weather also enable a relatively lower cost compared with other storage facilities, said Li Li, research director at energy consulting company ICIS China.

As much as 66 percent of the world's 715 underground gas storage facilities are located in developed countries in North America and the European Union.

China currently has 26 underground gas storage facilities with a storage capacity of approximately 20 billion cubic meters as of the end of last year.

However, the effective working storage capacity is only around 10 billion cubic meters and only accounts for some 3 percent of the country's total gas consumption, far lower than the global average of 12 percent.

According to Li, as the country's reliance on gas imports has been climbing in recent years and reached 45 percent last year, it is urgent that China steps up construction of the facilities.

China's gas storage facilities, rather than operating independently, have long been auxiliary to the pipelines, which has substantially constrained development and is standing in the way of a more open and liberalized gas sector in the country, she said.

China's imports of natural gas surged 31.9 percent year-on-year to a record 90.4 million metric tons in 2018, according to statistics from the General Administration of Customs.

According to China National Petroleum Corp's Economics and Technology Research Institute, China imported 125.4 billion cubic meters of gas in 2018, climbing 31.7 percent compared with the previous year and reaching a foreign gas dependence ratio of 45.3 percent.

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2019-07-10 07:37:01
<![CDATA[TUV Rheinland focuses on China for growth]]> http://www.chinadaily.com.cn/kindle/2019-07/10/content_37490044.htm Ralf Scheller, member of the Executive Board of TUV Rheinland AG, an international testing, inspection and certification services provider, believes that the Chinese market is key to the company's growth prospects in providing technological services as a result of the country's fast development.

Founded in Cologne in 1872, the Germany-headquartered company entered China in the 1980s and has set up offices in more than 20 cities including Beijing, Shanghai and Guangzhou.

"Over the past 30 years, we have witnessed a tremendous reform in the development of China," Scheller said.

Companies not only require developing products with high technologies, but also show a big interest in expanding markets abroad, he added.

Scheller has worked at TUV Rheinland since 1991. In 2010, the company reorganized its structures in China, aiming to optimize resources among the Chinese mainland, Hong Kong and Taiwan. In the same year, Scheller was appointed as CEO and president of the company's China region, continuing in this role until 2016.

"We have seen much more focus on the local market as our service transformed to fit the local need," he said.

In this regard, the company has expanded its business to better meet and serve customers' needs both in the local and international markets.

"Customers prefer all-in-one service rather than going to different units for different services," Scheller said, adding that it is a reason for the company expanding its portfolio in China to keep up with the demand and needs of its customers.

During its 30-year development in China, TUV Rheinland has not only helped local customers achieve success, but also developed its business further, he said.

Over the past few years, TUV Rheinland has invested 300 million yuan ($43.6 million) in China in areas such as service upgrades including investing in new technology laboratories as well as upgrading existing test facilities. In 2018, the company set up the Internet of Things Excellence Center in Shenzhen, Guangdong province, which not only caters to 5G products but all wireless technologies.

TUV Rheinland has also been investing in photovoltaic testing over the past 10 years and developing test methods for autonomous vehicles to ensure testing in a safe environment. The company plans to continuously invest in certification and testing of new and upcoming technologies such as loT, wireless, artificial intelligence, big data, cybersecurity and autonomous driving.

"We understand that our customers are looking forward to connection with the IoT, and this requires the third parties to generate trust in consumers and users of the equipment by guaranteeing that all applications are safe, data is not being compromised and privacy is protected," Scheller said.

"In Europe, we have some projects mainly providing guidance, involving planning and setup of the 5G network."

Businesses may not necessarily understand the difficulties of the new technology, but they have to use it. The company has experts with deep knowledge on the differences between 5G and 4G technologies and ensuring the interoperability of old and new networks, he said.

"For almost 150 years, our mission has been to make sure that new technologies are supporting the development of mankind without doing harm to the environment. We also share our knowledge with society by providing training to the workforce," he said.

With the promotion of the Belt and Road Initiative, the company has extended its business in such fields as industrial manufacturing, transportation and new energies.

The initiative provides great opportunities for many countries to improve their infrastructure and participate in international trade, Scheller noted.

"We are playing the partner role in working with Chinese companies in setting up big plans outside China to ensure that their infrastructure is in place based on the requirements of targeted markets," Scheller said.

"There are many projects we are working on, and I'm sure this is just a beginning."

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2019-07-10 07:37:01
<![CDATA[Smart tech transforming medical sector]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489692.htm Chinese hospitals, especially those with good reputations in big cities, are always crowded, with patients who have traveled long distances to wait for several hours, or even all night, just for a few minutes' consultation with a doctor.

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Online platforms open new channels for patients to purchase medicines, allowing doctors to focus more on patients

Chinese hospitals, especially those with good reputations in big cities, are always crowded, with patients who have traveled long distances to wait for several hours, or even all night, just for a few minutes' consultation with a doctor.

Many patients visit hospitals not because they are in urgent need of medical care, but because they want follow-up treatment for chronic conditions or simply to get medicine.

This is because doctors in China are only allowed to prescribe medicines in limited doses: usually in third-tier hospitals only enough to last up to two weeks and in community hospitals prescriptions only last one month maximally, and patients cannot buy prescription drugs without a prescription.

Thanks to the internet and smart hospital technologies, a change is under way that is making it easier for patients to get the medicines they need.

Bestyoo, an enterprise affiliated to Chinese pharmaceutical company Baheal Pharmaceutical Group, has been cooperating with local governments and hospitals to establish online prescription transferring and sharing systems to solve such problems by diverting patients' drug purchases from hospitals to offline pharmacies.

Bestyoo has designed two information system products - one for local governments and the other for hospitals.

The system for local governments incorporates real-time prescriptions information from medical institutions, medical insurance billing information, and drug sales information in a region. The prescription information, once verified and approved by a pharmacist, will be transferable between different medical institutions, or from medical institutions to approved pharmacies, drug delivery services, and online sales terminals, if patients authorize the transfer with text message verification codes.

The system for hospitals is designed to connect to a hospital's existing information system, or HIS, allowing prescription information to be transferred to approved pharmacies with the permission of patients.

Ma Guanglei, president of Bestyoo, said the company's platforms make it much easier for patients to get medicines legally and safely from pharmacies.

"For first-time patients at hospitals using the company's information systems, if they decide not to buy drugs in the hospital, they can authorize transfer of the prescription information to a chosen pharmacy, and collect the medicine themselves or have it delivered," he said.

For patients getting follow-up treatment, they can have online consultations with doctors either through the hospitals' WeChat accounts or Bestyoo app, or simply ask for a renewed prescription.

Once doctors prescribe medication, patients can collect the medicine from their chosen pharmacy, as long as the pharmacies are connected to the Bestyoo platforms and have the drugs.

If patients have questions about their medication, if they are suffering from side effects or need help understanding drug guidelines, for example, they can consult pharmacists online through the platforms, according to Ma.

The company says it established China's first third-party online prescription information transferring and sharing platform in 2017, jointly with the health authorities of Wuzhou in the Guangxi Zhuang autonomous region.

Since then, 21 hospitals and more than 100 pharmacies in Wuzhou have connected to the Bestyoo platform, which also incorporates the public medical insurance billing system and drug distribution system.

In July 2018, the social security authorities of Wuzhou signed contracts with several pharmacy chains, so that when patients buy medicine from those pharmacies through the Bestyoo platform, their bills will be settled directly with the public medical savings account.

Now, patients waiting in lines in hospitals in Wuzhou are rare, more than 200,000 patients have used the platform, and the average time a patient spends getting drugs has been reduced by 20 minutes, according to the company.

About 10 hospitals in Handan, Hebei province, have been connected to the city's prescription transferring and sharing platform, while most hospitals in Baiyin have been connected to Gansu province's provincial prescription transferring and sharing platform, as a pilot demonstration project, according to Ma.

Individual hospitals using Bestyoo platforms include nationally renowned institutions such as Beijing Fuwai Hospital, under the Chinese Academy of Medical Sciences, and Peking University People's Hospital, also in Beijing.

Apart from Bestyoo, many other companies are also exploring the area.

In early 2018, online healthcare giant WeDoctor announced plans to build a national prescription information transferring and sharing platform.

The platform aims to connect hospitals, pharmacies, drug distributors, and billing systems of local public medical savings accounts.

The company said the platform is connected to more than 30,000 pharmacies nationwide, and about 70,000 prescriptions are transferred from hospitals to pharmacies every day on average.

Zhang Jun, deputy head of Peking University People's Hospital, said the hospital uses a Bestyoo prescription transferring and sharing platform, because it wants to contribute to China's healthcare reform and improve patients' medical experience, through using online healthcare and smart hospital technologies.

The Chinese government has been trying to lower costs and improve experiences in the medical sector through a series of reforms centering on reducing the reliance of public hospitals on drug sales as an important source of income, such as ending public hospitals' longtime practice of selling drugs at a markup in 2017, and the release of guidelines and regulations on online healthcare and smart hospitals in 2018 and 2019, he said.

Outpatient medical services involve arranging a consultation, consultation, and post-consultation medication, and as the internet and smart hospital technologies have transformed the first two, it is time to use them to create better outcomes in the final stage, according to Zhang.

"Using the internet and smart hospital technologies (to transfer outpatients' prescription information) is an effective way to achieve the ultimate goal of separating drug sales from hospitals, so that patients visit a hospital for diagnosis and treatment, not medication," he said.

The digitalized platform helps with post-consultation patient management, improves medication safety, and more importantly, reduces visits for patients suffering from chronic diseases, so that the hospital can better serve patients with complicated medical conditions, he said.

Besides, since patients' medical records have become digitally traceable, it also helps with accumulating and sorting data for clinical studies, he said.

However, the Bestyoo platform designed for the hospital is only connected to about 40 pharmacies. Zhang hopes more pharmacies will join because that means more choice and convenience for patients.

He also hopes the public medical insurance in Beijing will cover drugs bought at pharmacies.

Public hospitals are still responsible for the majority of drug sales in China, although the share is declining slowly, according to a report by medical information provider Menet.com, despite Chinese authorities' attempts to reduce the reliance of hospitals on drug sales as a source of income, amid broader efforts to lower drug prices and tackle corruption.

Drug sales in China totaled 1.71 trillion yuan ($248 billion) in 2018, of which public hospital sales contributed 67.4 percent, the report said.

Wang Zhong, a researcher with the economics institute of Beijing Academy of Social Sciences, said it is important that hospitals cannot select pharmacies, otherwise corruption might arise.

He also said it is important to protect patients' privacy, because advertisers might be tempted to get hold of patients' medication information.

 

An employee checks medicine stocks at the First People's Hospital in Lianyungang, Jiangsu province. Geng Yuhe / For China Daily

 

 

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2019-07-09 07:59:59
<![CDATA[Hospitals should not be key drivers of drug sales]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489691.htm Government efforts to reduce the reliance of public hospitals on drug sales for revenue are driving the growth of alternative sales channels, but obstacles hindering development persist, industry experts said.

In China's drug market, hospitals have long been the main channel for dispensing drugs, and the move away from this model reflects healthcare reforms to promote better and more affordable medical services and to curb excessive prescription, experts said.

According to Wang Bin, managing director of ECE Capital - an investment banking platform in areas including the medical and health industry - medicines used to treat outpatients suffering from chronic diseases, tumors and autoimmune diseases are the easiest breakthroughs for alternative sales channels.

"Outpatient treatment is not that profitable for hospitals, but it is quite time-consuming for doctors," he said.

Authorities hope the success of a three-level medical care system, with which patients choose medical institutions of different levels according to the severity of their illness, will provide inexpensive and quality medical care for patients with conditions that do not require urgent treatment at smaller medical facilities, which will reduce the number of hospital visits for outpatients suffering from chronic diseases, he said.

The sales of drugs that are expensive and which often cannot be reimbursed, such as those used to treat tumors and autoimmune diseases, are also becoming less attractive for hospitals due to new performance criteria used to evaluate public hospitals, including drug sales caps, he said.

However, promoting drug sales through channels other than hospitals is proving difficult.

The online drugs market is constantly growing, especially for prescription drugs. However, a lack of willingness or capability to monitor and block abuse of prescriptions and fake prescriptions is damaging the credibility of online drug sales channels, despite that some big players are paying great attention to medication safety and drug distribution traceability, Wang said.

It is also difficult to build third-party prescription transferring and sharing platforms on a large scale because medical information, especially prescriptions, must remain confidential, he said.

Moreover, when patients get medicines from hospitals, they receive instructions from both doctors and hospital-based pharmacists, while other drug sales channels often are weak in providing professional direction, he said.

Another hurdle is the fact that Chinese patients are accustomed to seeing a doctor in a hospital, especially a doctor with a good reputation in a big hospital, and it is difficult to change people's mindset, according to Zhao Heng, the founder of consulting company Latitude Health.

Zhao added that on the other hand, authentic prescriptions are essential for the healthy development of a wider drug sales market, but doctors are not motivated to support the transfer and sharing of prescriptions.

If patients can buy medicines where they want, it will weaken the influence of doctors over drug sales, he explained.

Internet hospitals, third-party prescription transferring and sharing platforms, and online drug sales are ways to promote drug sales through channels other than hospitals, but their share in the total drug sales market is small, and it is difficult for them to establish a successful business model, Zhao said.

One reason is that drugs bought through such channels often cannot be reimbursed, and another reason is they cannot compete with the large number of offline pharmacies near hospitals, which often have special connections with doctors and can easily attract customers, he said.

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2019-07-09 07:59:59
<![CDATA[Wind, solar photovoltaic power gaining momentum]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489690.htm Wind and solar photovoltaic power are likely to achieve grid price parity within 2020, while at the same time, their quick development will further diminish the share of hydropower in the total power output by renewables in China, according to industry experts.

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Renewables to help create low-carbon and clean, safe energy mix, say experts

Wind and solar photovoltaic power are likely to achieve grid price parity within 2020, while at the same time, their quick development will further diminish the share of hydropower in the total power output by renewables in China, according to industry experts.

Zheng Sheng'an, president of China Renewable Energy Engineering Institute, estimated the rapid growth of wind and solar power will continue throughout 2025, driven by the country's commitment to reducing carbon emissions even as conventional hydropower is slowing down due to restraining factors such as increased costs and environmental protection.

Installed capacity of renewable energy in China totaled 728.96 gigawatts by the end of 2018, which accounted for 38.4 percent of the total installed capacity, and increased 11.7 percent year-on-year, while the year-on-year growth of installed power capacity was 6.7 percent in 2018, according to the China Renewable Energy Development Report 2018, released by the CREEI last week.

Newly installed renewable capacity in 2018 was 76.44 GW, taking up 63.8 percent of the newly installed energy capacity. Renewable electricity output in 2018 was 1,867 terawatt-hours, increasing 10.1 percent from 2017.

The report estimated that renewables in China will continue to see rapid growth, and in 2020, the installed conventional hydropower connected to the grid will be 340 GW, while that for wind power and solar power will be 230 GW and 250 GW.

Currently, among all the major renewables, which also include biomass and geothermal energies, development of wind and solar energies reported the most remarkable progress.

About 85 percent of newly installed renewable capacity in 2018 was for wind and solar energy.

The output of wind and solar power contributed 34 percent to the total renewables output in 2018, almost triple that in 2011(13 percent), while hydropower's contribution to total renewable power output decreased to 66 percent in 2018 from 87 percent in 2011.

"It seems the development of conventional hydropower lags behind the goals set by the 13th Five-Year Plan (2016-20), due to declining profitability and increased environmental protection requirements," Zheng said.

Most of the hydropower to be developed is now located in western regions or the upper reaches of rivers, where smaller water flow and lack of infrastructure and consumption demand bring about difficulties and challenges to develop hydropower, he said.

At the same time, due to technological improvements and enhanced operation, cost of wind and solar power is continuously dropping, increasing wind and solar power's competitiveness against coal-fired power, he said.

The national average for the cost of onshore wind power was about 7,000 yuan ($1,023) per kilowatts last year, while in some places the figure was even below 6,000 yuan. In addition, offshore wind power develops quickly with emerging new technologies, said Zheng.

He cited the example of Ningxia Hui autonomous region, where the capacity of 20 wind power projects approved through a competitive process totaled 1.93 million kW, with average power price dropping by 7.9 percent.

The nationwide competitive onshore wind allocation process is driving the reduction in government's financial support for the wind power sector, while the curtailment rate of wind power is declining, he said, adding except for Gansu and Xinjiang, the curtailment rate of wind power in most areas of China stood below 10 percent last year.

As for solar power, newly installed capacity of PV power was 44.26 million kW in 2018, and the cumulative capacity of photovoltaic power connected to the grid has reached 174 GW, which accounts for 9 percent of total power capacity, said Zheng.

"The layout of solar power in China is optimizing, as growth in solar power capacity is of similar pace in the central, eastern and southern parts of China," he said.

He also mentioned that the cost of PV power has been reduced due to price decline in PV modules and was roughly 5,500 yuan per kW, with the lowest below 5,000 yuan per kW.

Last year, the curtailment of PV power in China was 5.5 billion kilowatts-hours, reducing 1.8 billion kilowatt-hours year-on-year, and the curtailment rate was as low as 3 percent, according to the report.

He said renewables are essential for China to establish a clean, low-carbon and safe energy mix, and to reduce foreign energy reliance.

To improve the effective utilization of renewable-generated power, especially concerning the relatively high curtailment of wind and solar power in West China, Xu Xiaodong, deputy head of the China Electric Power Planning and Engineering Institute, suggested a unified power grid should be built in West China, to serve as a bridge connecting wind, solar power and hydropower, so as to better leverage on their abilities to support each other's utilization, and thus to cut curtailment.

He also suggested more work and research should be carried out so that the existing ultrahigh voltage power transmission channels in West China could be better used to transfer renewables-generated power to areas with power demand.

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2019-07-09 07:59:59
<![CDATA[Chinese flange makers to develop more innovative manufacturing methods]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489689.htm China's major flange producing county Dingxiang in Shanxi province is stepping up development of innovative manufacturing technologies, in line with the government's mission to promote high-quality development.

The county announced recently that it has partnered with top institutes like Tsinghua University to explore tech innovation especially in forging and thermo-processing. The goal is to develop more high-end products, like aluminum magnesium alloy flanges other than forged steel flanges, to move up the global value chain.

"Encouraging innovative technologies is a strategic direction for our county this year. Meanwhile, we plan to roll out a series of measures to boost industry standards and attract more investment, hoping to make Dingxiang a top-level flange producer worldwide," said Zhang Hairui, an official with the Dingxiang county government.

To date, Dingxiang is home to 324 flange-making companies, and their annual production capacity has reached 1 million metric tons. According to Zhang, flange products from Dingxiang account for about 30 percent of China's total flange output. Its production of flanges used in wind turbine towers accounted for 60 percent of China's total output.

In 2018, total output of the forging sector (mainly flanges) in Dingxiang reached 860,000 tons, up 19.4 percent year-on-year, with total value hitting 8.7 billion yuan ($1.26 billion), up 16.2 percent year-on-year.

According to Zhang, flanges made in the county are currently sold to over 40 countries and regions.

A flange is a ridge used externally or internally, to attach two objects such as pipes, or to add stiffness of certain objects. Flanges can be used in numerous areas. Zhang said Dingxiang's flange products are used in industries like aerospace, petrochemicals, and thermal power generation. Guanjiaying Flange, a major flange producer from Dingxiang, is now a major supplier for global oil and gas company Royal Dutch Shell.

"Right now we also see flanges being used in new fields, like steam turbines. We believe it (new products) will become a new growth pillar for Dingxiang's flange industry," Zhang said.

"Going forward, we will make efforts to make Dingxiang's flange manufacturing more appealing to the global market, through tech innovation and product quality enhancement," he said.

Tech adaptation in manufacturing has been a focus of efforts of companies and government. The industry regulator the Ministry of Industry and Information Technology had selected a total of 305 pilot projects for smart manufacturing by 2018 to encourage tech innovation in traditional industries.

A rough estimate shows that their production efficiency has risen 37.6 percent on average, after the projects adopted tech innovation in their manufacturing workshops.

In contrast, their cost of production has been lowered by 21.2 percent on average, and the cycle of product research and development has been shortened by 30.8 percent on average.

Wang Xiaosong, a researcher at the National Academy of Development and Strategy of Renmin University of China, a think tank, and also a professor in economics with the university, said that tech innovation is "a fundamental driving force "of high-quality development in the manufacturing sector.

"Tech innovation helps raise productivity and promotes energy-efficient production processes for manufacturing companies, through which they can increase their global competitiveness," Wang said.

A poll from consulting firm McKinsey in 2017 showed that about 86 percent of Chinese companies were positive about smart manufacturing, and had expectations that tech innovation has huge potential to create more benefits for their companies.

"But companies still face great challenges in their pursuit of tech innovation and high-quality development, as many companies that lack tech or financial support, or excessive production capacity, are likely to be wiped out from the market," Wang said.

China still has a lot to do to catch up with some developed countries in smart manufacturing and high-quality development. "However, the country has made great achievements. The outlook is bright," he said.

 

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2019-07-09 07:59:59
<![CDATA[Expanding market access opens new growth avenues for foreign enterprises]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489688.htm BEIJING - Global retail giant Walmart Inc is planning to further increase its investment in the Chinese market after opening a mega perishable products distribution center in South China's Guangdong province in March.

The US-based multinational said on Monday it would spend around 8 billion yuan ($1.16 billion) over the next 10 years to build or upgrade over 10 distribution centers to boost online and offline businesses to meet Chinese customers' demand for fresh goods and convenient services.

The investment plan came a day after China released a revised list of industries for foreign investment, which includes logistics of ordinary goods, cold chain logistics for fresh agricultural goods and special medicines.

Walmart is looking for sustainable and quality growth in the Chinese market and the revised foreign investment list further supports its investment plan for upgrading local logistics supply chains, said Ryan McDaniel, senior vice-president of supply chain with Walmart China.

Along with the catalog, two shortened negative lists were also rolled out.

The two lists, one for pilot free trade zones and one for the rest of the country, contain fewer access-limiting measures. Pilot FTZs now have 37 items that are restricted for foreign investors, down from 45, while non-FTZ areas are required to implement 40 items instead of 48.The negative lists outline sectors that are restricted to foreign investment.

"This is great news for us. While we are at the beginning of 5G's commercial deployment, the Chinese government's open policy will help drive the healthy growth of our industry and accelerate 5G applications in industrial verticals," said Zhao Juntao, president of Ericsson China, as the negative lists ease market access to value-added telecom services.

One of the highlights of the revised negative lists is further opening-up in the exploration and development of petroleum and natural gas.

"I'm pleased to witness that China is pushing forward its opening-up policy. The continuous improvement of the business environment for foreign investors gives us more confidence in the future development of the Chinese economy," said William Zhao, Total China country chair.

The French energy giant is the first international energy company to conduct offshore oil and gas exploration in China. "As our business has a presence across the entire value chain of China's energy industry, I believe, the company will have access to more opportunities in a fairer business environment," Zhao said.

China bucked a global trend of foreign direct investment slide by attracting $138.3 billion last year. In the first five months of this year, the country saw an FDI inflow of $54.6 billion, up 3.7 percent year-on-year.

Chinese Premier Li Keqiang said last Tuesday at the Summer Davos Forum that China will remain firmly committed to opening-up and building an open economy of higher standards.

The country will become more open, transparent and predictable for foreign investment, and its business environment will further improve, according to Li.

 

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2019-07-09 07:59:59
<![CDATA[Bay Area eyes more investors]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489687.htm Financial service providers in the Guangdong-Hong Kong-Macao Greater Bay Area are seeking to attract investors with more cross-border products, as the area gains increasing popularity globally.

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Local financial institutions set to introduce new cross-border services, products

Financial service providers in the Guangdong-Hong Kong-Macao Greater Bay Area are seeking to attract investors with more cross-border products, as the area gains increasing popularity globally.

Some experts believe it is time to establish an integrated market and supervision mechanism in the area to facilitate the development of its financial industry.

A survey of about 4,000 people living in the area by the Shenzhen Financial Society showed 70 percent of interviewees said cross-border consumption needs to be more convenient. Half expect an easing in policies related to the purchase of cross-border wealth management and insurance products.

With that in mind, many financial firms are competing to launch more convenient cross-border products this year.

CGB (China Guangfa Bank) said on July 5 to lower the threshold for Hong Kong and Macao citizens to apply for credit cards so they do not need to provide extra deposits, collateral or complicated certificates of income and employment.

Lyu Shengnan, assistant president of CGB's Credit Card Center, said owning mainland credit cards could help Hong Kong and Macao citizens to set up personal credit records so it is more convenient for them to borrow for vehicle and property loans in the future.

In addition, she said the bank is opening its first branch in Hong Kong soon.

Bank of China in March also launched a pilot program in Hong Kong for local citizens to open mainland accounts without having to travel there for the application. The account can be linked to mainland mobile payment applications for convenience in digital payments.

UnionPay, on the other hand, has lifted the burden on Hong Kong and Macao citizens in setting up mainland bank accounts to make a cross-border payment while charging no extra service fee.

Anticipating an increase in traffic, mainland mobile payment service providers such as Alipay and WeChat Pay are also stepping up the pace to expand in Hong Kong, starting with mainland tourists and cross-border transportation.

In security trading, agencies are using easier processes and lower cost to lure new clients. Valuable Capital Ltd, a Hong Kong-based broker backed by SINA Corporation Group, started to open stock accounts online from last September after the service was allowed by local governments.

The startup recently set foot in the A-shares market as well, promising to charge only one third of the industry's average commission so its Hong Kong clients can trade in the three markets of the mainland, Hong Kong and the United States.

"Financial companies in the Bay Area have been spontaneously exploring the integration of their services for individuals and corporations in the region," said Xing Yujing, president of the Shenzhen Central Subbranch of the People's Bank of China, the country's central bank.

She believed they are prepared to follow unified rules and regulations so that capital flow channels in the Bay Area could be essentially linked, instead of the current system of product-based integration.

She said a joint committee of GBA financial institutions should be established to coordinate the differences of rules and standards in Hong Kong, Macao and Guangdong so they could operate under a unified set of guidelines.

 

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2019-07-09 07:59:59
<![CDATA[WeWork teams up with Alibaba Cloud to further nation's opening-up]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489686.htm China's resolve to further open up has been reflected by the global coworking and community service provider WeWork's latest partnership in the country.

In late June, WeWork announced it would team up with Alibaba Cloud - the intelligence backbone of e-commerce juggernaut Alibaba - to roll out a program targeting international companies "looking to enter and succeed in China".

China Gateway, as the program is called, will offer cloud services, flexible work spaces and access to the local community and business ecosystem for international firms, the two companies said.

Softbank Telecom China has also joined the program as a strategic partner to provide consulting services to those companies.

"The Chinese market is so huge and important that a company is not qualified to label itself as an 'international' one if it has not done well in the Chinese market," said Alan Ai, general manager of WeWork China.

"Over time, we have seen some multinational companies confronting setbacks in China since the market here is so different. Therefore, one of the purposes of China Gateway is to help multinational companies avoid detours or mistakes in the country," he added.

When WeWork first stepped into the Chinese market three years ago, most of its overseas clients in the country then were specialized in consulting, retailing and the automobile sector.

But it has witnessed a growing number of technology and financial companies showing their willingness to come to China. Companies from North America, Europe, and Asia are the most interested in exploring the Chinese market, said Ai.

So far, WeWork has opened more than 70 working spaces in eight cities across China since its entry in 2016. Its latest space was opened in Xi'an, capital of Shaanxi province, and began operations at the beginning of this month.

While multinational companies made up most of WeWork China's clientele early on, domestic companies now account for about 60 percent of WeWork China's members, with multinational companies accounting for the rest, said Ai.

Larger corporations, in addition to the small- and medium-sized enterprises which made up the majority of WeWork China's members, are showing increasing interest in the flexible working spaces that the company provides, according to Ai.

Industry leaders, such as e-commerce giant JD, automotive maker SAIC Motor and cosmetics retailer Sephora, have also chosen WeWork's working space for their employees.

To cater to the rapid development of the companies in China, WeWork has provided the services to large corporations to build their regional headquarters or other tailor-made services, Ai said.

Founded in New York in 2010, WeWork has opened 485 coworking spaces in 105 cities in the world by the end of the first quarter of 2019. It has so far sought 14 rounds of financing totaling $12.8 billion, said market information provider Crunchbase.

WeWork's Co-Founder and CEO Adam Neumann said in early January that the company is getting ready for an initial public offering. A report by New York-based research group CB Insights said in February that WeWork is now the world's fourth largest unicorn company, with a market valuation projected at $47 billion.

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2019-07-09 07:59:59
<![CDATA[Forex reserves rise in June]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489685.htm China's foreign exchange reserves rose to a 14-month high in US dollar terms at the end of June, amid higher asset values and generally balanced foreign exchange supply and demand, the top foreign exchange regulator said on Monday.

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Increase due to growing global confidence in nation's economy and opening-up

China's foreign exchange reserves rose to a 14-month high in US dollar terms at the end of June, amid higher asset values and generally balanced foreign exchange supply and demand, the top foreign exchange regulator said on Monday.

Analysts said the foreign exchange reserves are expected to remain stable in the coming months, but cautioned on the need to improve the efficiency of money supply that has been injected into the economy to avoid capital outflow risks.

Foreign exchange reserves increased for the second consecutive month to $3.1192 trillion in June, up $18.2 billion or 0.6 percent from a month earlier, Wang Chunying, spokesperson of the State Administration of Foreign Exchange, said in a statement on Monday.

The rise was mainly attributable to changes in asset values, including a weaker dollar and an uptrend of global financial asset prices, Wang said.

As market expectations grew over an interest rate cut this month by the US Federal Reserve, the US dollar index dropped by nearly 1.7 percent in June to 96.2, boosting the value in US dollar terms of reserve assets denominated in other currencies, said a report from China International Capital Corp Ltd.

Global stock and bond markets also gained amid expectations of an easing monetary environment in June, the report said.

During the January-June period, China's foreign exchange reserves went up by $46.5 billion or 1.5 percent, with every month except April registering a rise, according to the SAFE.

Foreign exchange reserves have been stable with a moderate rise since the beginning of the year, with an overall balance between supply and demand in the foreign exchange market and positive changes in cross-border fund flows, Wang said.

"A rising foreign investment inflow, including direct investment and securities investment, should be the major driving force of the uptrend of foreign exchange reserves this year," said Liu Chunsheng, an associate professor with the Beijing-based Central University of Finance and Economics.

"Behind the increase was foreign investors' confidence in China's growth prospects as well as the country's accelerated opening-up, especially for the financial sector," Liu said.

During the first quarter, net inflow of direct investment stood at $26.5 billion, while net inflow of securities investment was $19.5 billion, according to the SAFE.

For the second half of the year, foreign exchange reserves are expected to remain basically stable and above $3 trillion, given stable economic fundamentals and regulators' ability to counter cross-border flow risks, Liu said.

"Developments in Sino-US trade frictions may cause fluctuations in cross-border flows, but the influence should be limited as market participants have got used to twists and turns in trade talks," Liu added.

According to the SAFE, China will continue promoting high-quality development and all-round opening-up, which will cement growth momentum and provide a solid basis for the stability of foreign exchange reserves.

Yang Weiyong, an associate professor at the University of International Business and Economics in Beijing, said regulators need to rise to potential capital outflow risks associated with further opening-up.

"China should refrain from monetary overflow in the face of downside risks, as this could cause long-term capital outflow pressure," Yang said. "Instead, the monetary authorities should focus on re-channeling money supply occupied by low-efficiency sectors into more vibrant private enterprises."

 

 

A cashier counts currency notes at a branch of Bank of China in Lianyungang, Jiangsu province. Provided to China Daily

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2019-07-09 07:59:34
<![CDATA[Overseas investors see opportunities in Chinese bonds]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489684.htm The opening-up of the Chinese financial market is reflected by the overseas investors swarming into the Chinese bond market.

According to the latest statistics from China Central Depositary and Clearing, the amount of Chinese bonds held by overseas institutional investors reached 1.65 trillion yuan ($240 billion) by the end of June, hitting a record high.

Overseas institutions' investment in Chinese bonds increased by 34.6 billion yuan in June, which was the seventh month in a row that these institutions have increased the Chinese bond allocation in their portfolio.

Data from China Foreign Exchange Trade System (CFETS) showed that a total of 108 overseas institutional investors from 47 countries and regions had entered China's interbank bond market by the end of June.

Besides, up to 1,038 institutional investors had joined the bond connect program by the end of June, which was double the number registered during the same period last year. The bond connect program between the Chinese mainland and Hong Kong markets was launched in early June 2017.

The lucrative Chinese bond market when compared to the other parts of the world makes the former extremely attractive to overseas investors. Public information showed that the yields on 10-year US treasury notes came at 2.04 percent on July 5 while that of 10-year China treasury bonds was registered at 3.17 percent on the same day.

The long-term yields of the treasury bonds in the eurozone and Japan have even dropped below zero, according to China International Capital Corp (CICC). By the end of June, the global amount of the bonds with negative yields has amounted to $12.5 trillion, outnumbering the size registered in 2016 and hitting another record high.

As the fixed-income research team of CICC predicted, there is high possibility for the global interest rate to hit another historic low. Global capital has been withdrawing from risk assets and flowing into the bond market. In this sense, the Chinese bond market which promises higher yields is more attractive to investors.

Even when the renminbi fluctuated earlier this year, overseas investors increased their investment in Chinese bonds. This has indicated that overseas investors have much faith in the renminbi and the long-term prospects of Chinese economy, wrote the CICC analysts in a note.

The Bloomberg Barclays Global Aggregate Index started including China's yuan-denominated bonds on April 1. Analysts believe that the other major global bond indices, the FTSE World Government Bond and the JPMorgan Government Bond Index-Emerging Markets, will follow suit in the near future.

Mark Leung, chief executive officer of JPMorgan in China, said that importance of the yuan-denominated bonds has been underrated in the global major indices given the size of China's economy. The number of reform policies that Chinese central regulators have introduced over the past few years, including the opening-up of the onshore interbank market and the bond connect program, will help to attract the attention of the global indices.

Up to $300 billion of capital will be flow into the Chinese market if all the three major indices include yuan-denominated bonds, JPMorgan estimated.

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2019-07-09 07:59:34
<![CDATA[Tower firm planning alliances to reduce 5G network expenses]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489683.htm China Tower Corp, which manages most of the nation's telecom towers, is working to reduce the construction cost of 5G networks across China by sharing existing public resources as much as possible.

Gu Xiaomin, general manager of China Tower, said with provinces, autonomous regions and municipalities across China scrambling to build the network for the fifth-generation mobile communication technology, it becomes a key issue how to quicken the roll-out while not putting too much financial pressure on telecom carriers.

"Our solution is to partner with railways, real estate, power grid, transportation and other sectors to leverage their existing tower resources, to cut the construction costs," Gu said.

Telecom towers are where base stations are set up to receive mobile signals and they are the key part of a communication infrastructure. China Tower Corp is finding ways to place base stations on electric poles and light poles among others to reduce unnecessary construction of new telecom towers.

The move came as more base stations are needed to support 5G network than 4G networks. The new-generation superfast technology has higher frequency and one base station can cover a smaller area with mobile signals.

"We have prepared for dozens of millions of towers for 5G. And 80 percent of micro 5G base stations nationwide will be constructed on existing electric poles, light poles and other forms of towers, which will dramatically lower (the) cost," Gu said.

The 5G telecom infrastructure at the Beijing Daxing International Airport has already been finished by following such a model of sharing resources, the senior executive said.

Established in 2014, China Tower handles the tower assets of the nation's top three telecom carriers - China Mobile, China Unicom and China Telecom. Its aim is to reduce duplication of construction and expenditure. The three companies are its shareholders as well as its major clients.

The move is part of the Hong Kong-listed company's efforts to strengthen cooperation with energy and other companies. The cooperation is based on the fact that telecom towers can be shared by different industries because they have access to both wired and mobile networks and are linked to a steady power supply.

Fu Liang, an independent analyst who has been following the telecom industry for more than a decade, said the sector demands huge capital support to build out 5G and China Tower's solutions can ease the financial burden on telecom operators.

China is forecast to invest $184 billion into 5G network construction by 2025, an estimate by Global System for Mobile Communications Association, which represents the interests of mobile operators worldwide.

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2019-07-09 07:59:34
<![CDATA[China Silk Corp to join Poly Group in latest restructuring]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489682.htm The number of China's centrally administered State-owned enterprises has been reduced to 96 after the central government approved a restructuring plan involving Beijing-headquartered China Poly Group Corp and China Silk Corp, the country's top SOE regulator announced on Monday.

After the restructuring, China Silk Corp, an SOE previously managed by the State-owned Assets Supervision and Administration Commission of the State Council, will become part of China Poly Group Corp, SASAC said in an online statement.

The is the second move regarding the merger of central SOEs this year, after China State Shipbuilding Corp and China Shipbuilding Industry Corp, the country's two biggest State-owned shipbuilders by production capacity, announced that they were planning a strategic restructuring last week.

This is an important part of deepening SOE reform, and the layout and structure of State-owned capital will be further optimized, China Poly said in a statement, stressing that the group will actively conduct restructuring and integration, and improve the efficiency of resource allocation to ensure a smooth transfer of assets.

"As China strives to build a group of world-class SOEs that lead in high-quality development, the central government has been accelerating the pace of the restructuring of its SOEs, which have similar industrial structure and products," said Zhou Lisha, a researcher at SASAC's research institute.

The government previously paid more attention to the scale of SOE revenue, but for the next stage, more attention will be placed on SOEs' returns in areas such as net assets, revenue margin, debt elimination, investment on research and development, she said, adding that it is practical for large-scale central SOEs to merge with smaller central SOEs to form a bigger group to further compete with established foreign rivals.

China Poly was founded in 1992. The group to date has more than 90,000 employees and runs businesses in a number of areas including international trade, real estate development, manufacturing and engineering services, culture and arts business, civilian explosive materials and blasting services, and financial services. Its business covers over 100 countries worldwide and over 100 cities throughout China.

Established in 1946, China Silk is a large company with businesses engaged in silk, petrochemicals, fashion magazines, estate management, new materials and foreign trade. It currently has 26 subsidiaries, four overseas trade branches and more than 2,000 employees. It doesn't have listed assets in the stock market.

China Poly's operating revenue exceeded 300 billion yuan ($43.58 billion) in 2018, while its total profit amounted to 40 billion yuan. The group's total assets exceeded 1 trillion yuan by the end of last year, ranking 312th among the Fortune 500.

At present, China Poly has 11 secondary subsidiaries and five listed companies in both the Chinese mainland and Hong Kong. Its business covers two-thirds of the economies participating in the Belt and Road Initiative, helping local economies with infrastructure construction and livelihood projects.

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2019-07-09 07:59:34
<![CDATA[Foreign investment welcomed in gas and heating network]]> http://www.chinadaily.com.cn/kindle/2019-07/09/content_37489681.htm

The government's widening of market access for foreign investment in the urban gas and heat-supply pipeline network represents a major opportunity and has been well received by domestic gas companies.

The National Development and Reform Commission and the Ministry of Commerce released two updated negative lists for this year under which gas and heat pipelines in cities with more than 500,000 people no longer needed to be controlled by Chinese entities.

Li Li, energy research director at ICIS China, a think tank focusing on energy trends, said the industry direction has been for a more open and tolerant environment for both domestic and foreign players in the energy-related infrastructure facility construction sector.

"While there might be explosive growth space for natural gas demand, the right choice of infrastructure investment will still be very rewarding," she said.

But she warned that companies should be cautious with scientific evaluation instead of investing in a random way.

Domestic private energy firm Enn Energy Holdings Ltd said the government's further loosening of curbs on foreign investment with the new negative list in fields of urban gas demonstrates the country's resolve to expand its opening up of the sector.

Foreign investment plays a significant role in the country's infrastructure construction, and the policy will push forward the urban gas development in the country while promoting companies' enthusiasm to invest in a pipeline network, it said.

It currently operates 187 city gas projects nationwide, and vows to further expand the market with the government's easing of foreign investment curbs in the sector.

ENN is one of China's five leading gas groups. The others are the Hong Kong and China Gas Co Ltd (Towngas), Kunlun Energy Company Ltd, China Resources Gas Group Ltd (CR Gas) and China Gas Holdings Ltd.

Towngas currently has urban gas projects in 131 cities nationwide including Nanjing and Wuhan, with annual gas sales reaching 23 billion cubic meters and a gas supply pipeline network of 108,000 kilometers.

While some doubts that market saturation in the urban gas sector in China might not leave too much development space for foreign players, Towngas said China is witnessing rapid growth in natural gas consumption, so the opportunity for pipeline networks remains enormous.

The Hong Kong and China Gas Co Ltd (Towngas), Hong Kong's first public utility which was founded in 1862 and moved into the gas business in the mainland in 1994, said the policy represents a precious opportunity for the company in the field of gas and thermal network investment in the country.

The market will be more open and fair and Towngas will be involved in investing in domestic public utility projects, said the company.

China's natural gas development has witnessed rapid development in the past few years.

China's annual gas consumption reached 280.8 billion cubic meters last year, up 18 percent year-on-year, an annual report released by the China Electric Power Planning and Engineering Institute said. The country is expected to consume as much as 310 billion cubic meters of natural gas this year, 10.4 percent higher than the previous year, it said.

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2019-07-09 07:59:34
<![CDATA[Trade talks can't solve America's twin deficits]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489250.htm The trade war truce agreed upon by President Xi Jinping and President Trump at the G20 Osaka summit is very good news for the economies of both countries. Highly disruptive breaks in supply networks and in established trading patterns will be avoided. Everyone from soybean farmers to high-tech companies can breathe a tentative sigh of relief.

But it is important to realize that no possible trade agreement can reduce the overall trade deficit of the US, which stood at $879 billion in 2018, or any other nation. A country's trade deficit is not determined by exchange rates or by tariffs. Instead, it is determined primarily by the domestic savings and investment rates within the country itself.

The US faces a coming crisis in its twin deficits - large and growing government budget deficits and trade deficits. Both are caused by a lack of savings.

I taught macroeconomics in a graduate-level executive management program for 17 years. My students, who were all experienced managers aged 40 to 50, found this hard to understand, or even believe. They would ask: "What's the connection between savings rates and trade deficits? Explain this again."

It's straightforward.

Americans don't save enough to pay for both the country's investment and the government budget deficit.

So, the only possible source of additional funds is from foreigners.

If a country saves less than it invests, then foreigners have to make up the difference. Written as an equation: savings minus investment equals exports minus imports.

For example, the US saves less than it invests, so it must import more than it exports. That is, it must run a trade deficit. This must be financed by some country, substantially China, that saves more than it invests and thus runs a trade surplus.

Foreigners don't send goods to America for free. They are, in fact, making a loan to the US. So, a trade must be balanced by an equal and opposite transfer of financial assets from Americans to foreigners. In practice, these assets are mostly US government debt - US Treasury bills.

Government spending is a form of consumption, so government budget deficits reduce the overall savings rate. Last month, the US Congressional Budget office released its annual long-term budget outlook projections. The conclusions, while expected, are still frightening.

The current US government debt held by the public is $16.2 trillion, about 80 percent of GDP(which was $20.5 trillion in 2018), only slightly less than the level built up to fund World War II.

The CBO estimates that this will steadily rise to 144 percent of GDP by 2049 - an unprecedented level, even in wartime.

The rise in government debt is caused by an aging population that demands more government support plus rising medical care prices.

The US is certainly not alone in running large government deficits. Many European countries are in similar or worse positions. And, Japanese government deficits are much larger.

The US is, however, unusual in that it is able to get foreigners to finance a substantial portion of its deficit. In total, foreign investors and governments finance almost half of the US government debt. As explained above, this financing is just the mirror image of trade surpluses these countries run with the US.

This might sound like a good deal for the US. It does stimulate the economy in the short term. But, in the long term, it just allows American individuals to consume and the US government to spend without making hard choices.

Former French president Valery Giscard D'Estaing described the international role of the US dollar as creating "exorbitant privilege "for the US. But I think it has created an extraordinary danger for the US by allowing the country to run "twin deficits" in its government budget and trade accounts for much longer than would have been possible for any other country.

Herbert Stein, the chairman of the President's Council of Economic Advisors under president Nixon, famously stated Stein's Law, which says: "If something cannot go on forever, it will stop."

Stein was already writing about the then-new twin deficits in the early 1970s. Nobody then expected them to continue getting bigger and bigger for 50 years. Yet, there are good reasons to believe that they can't continue much longer.

At some point, foreign economies will change so that they can no longer fund US deficits.

We already see fundamental changes. China's extremely high savings rates have come down and its consumption rates are going up. So, China will have progressively smaller trade surpluses. Japan is already running trade deficits. So, the two largest lenders will not be available.

At the moment, the US economy looks great. Unemployment rates are very low. Famously, the unemployment rate for minorities is the lowest in history. The stock market is booming and growth is good.

But Stein's Law applies here. At some point in the near future, the US will have to make hard choices about how to solve the twin-deficit problem.

What are the options? The investment rate could go down - but that would slow future growth and technology development. The savings rate could go up - but we have no idea how to accomplish this. Taxes could go up - but this would probably lead to a decrease in private savings, a drop in stock values, and a rise in unemployment. Government spending could go down - but this is unlikely since aging people are demanding more government payments.

As hard as these choices are, some combination of them will have to be implemented sometime in the next decade. Personally, I'm afraid the crisis will hit just at the time when I need to begin receiving social security retirement payments and withdrawing funds from my stock portfolio.

And, the CBO says there are downside risks that could make the budget deficit much worse.

A big risk is that the interest rate paid on US Treasury bills, which has been at historic lows since about the year 2000, will go up sharply. If the rate rose to 5 percent, closer to the historic norm, the budget situation would quickly deteriorate.

Former Federal Reserve chairman Ben Bernanke said in 2004 the world is in a "savings glut", which keeps the interest rate down. But, a large part of the population in many countries is getting ready to retire, so the international savings rate will go down, driving up interest rates.

Also, for a long time, there have not been many promising things to invest in - but, the new technologies related to artificial intelligence, 5G, robotics, and the internet of things will require lots of investment over the next 10 years, so the real demand for capital will go up. Again, this will likely drive up interest rates.

A comprehensive trade agreement between the US and China will be very good for both economies. And, a harmonious relationship between the two countries is important for the future of the world.

But fundamental economic problems facing the US and other countries are not caused by international trade deficits. The US has hard choices to make about its domestic economic policy that can't be dodged for long.

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2019-07-08 07:56:36
<![CDATA[Supply chain won't flee China due to tariffs]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489249.htm Editor's Note: The Main Street column features opinions of leading economists and industry luminaries who have expressed their views on hot topics in media recently.

As tariff tensions between China and the US intensified this year, trade of China, the US and other countries has been affected.

The import and export volumes of China have shrunk by a certain degree, but remained generally controllable as the trade surplus has grown steadily.

Although the US tariffs slapped on Chinese exports were aimed to reduce perceived trade deficit, that has not happened. In fact, after new tariffs were imposed, US trade deficit has widened.

The trade friction has started to affect East Asia, Southeast Asia, Latin America and other countries and regions.

The trade dispute between China and the US is increasing risks to the global value chain and pushing it toward a crash. China needs to stick to the bottom-line.

While taking appropriate and necessary counter-measures, it needs to further open up, deepen reforms, and consolidate investment and economic cooperation with the economies involved in the Belt and Road Initiative.

During the ongoing trade dispute, the US has slapped 20-percent tariffs on almost half of entire Chinese exports, but such measures have not helped the US to improve trade environment or narrow the deficit.

Since the second half of 2018, US' monthly trade growth rate has declined significantly. In April, its exports even showed a 2.12 percent yearly decline. (China's goods trade surplus with the US was $323.33billion in 2018.)

The bilateral tariffs have to some extent changed the trade situation, but the US' dependence on Chinese goods has made it impossible to source a more suitable trade partner in the short term.

Since the tariffs were implemented in 2018, the proportion of Chinese goods merely nudged from 21.6 percent in 2017 to 21.2 percent of US' entire imports, while its exports to China reduced from 8.4 percent in 2017 to 7.2 percent in 2018. Soybean and fossil fuels such as crude oil were among the most affected products during the friction.

Against the backdrop of Sino-US trade friction, foreign direct investment in China has maintained stable growth. That was due to the promising domestic consumption market and the improving infrastructure. It can also be attributed to the optimizing business environment, especially after the country released the first Foreign Investment Law in March, which was the first fundamental law in foreign investment.

China needs to pay enough attention to the fact that some foreign investors may consider retreating from certain industries in China. However, I don't think the friction will cause the entire supply chain to flee China.

The country still offers unmatched advantages like skilled workers, mature infrastructure, a huge domestic market and large manufacturing capacity. These are almost impossible to find in Southeast Asia in the foreseeable future.

Li Daokui, director general and chief economist at New Development Bank, director of the Academic Center for Chinese Economic Practice and Thinking at Tsinghua University, spoke at the release of a report on China's macroeconomy on June 23.

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2019-07-08 07:56:36
<![CDATA[Help firms hurt by tensions]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489248.htm In the wake of trade tariff tensions, China (and the US) need to be aware of the potential risk of a breakdown in the industrial chain. A study found that if the trade friction lasts for one more year, countries will face the risk of industrial chain breakdown.

The trade friction will affect foreign investment. Some companies may shrink the size of their business, or even close down and move out of China.

Normal retreat of foreign investors is understandable. But Chinese companies investing overseas can also move to another destination. So, any abnormal retreat of foreign investors due to the trade friction and increasing tariffs should receive close attention.

If the entire value chain and the industrial chain of foreign investment break down, it will have a profound impact on the real economy. If there is any trend of foreign investment fleeing China, it would affect China's exports, imports, economic growth and employment.

A few measures might help China avert any such possibilities.

One, seize the right moment to reach an agreement. It's better than no deal. China and the US appear to have missed two chances to sign a trade deal. This, however, does not mean that both countries can't reach a deal when the moment is right.

Two, China needs to support foreign companies that have been affected by the trade friction. The country needs to ensure they stay on for a longer time to see if there will be any change in the situation. Once foreign companies move out of China, it would be hard for them to come back. So, China needs to do its best to support them during this time of hardship.

Three, China needs to further deepen the opening-up policy to restore confidence in its economy. It also needs to accelerate the progress of a China-led global value and industrial chain. While the existing value chain is facing the risk of a breakdown, it needs to build a global value chain and lead it, to compensate for the damage done so far.

Lu Jinyong, director of the international investment research center at the University of International Business and Economics, said on a seminar hosted by the Center for China and Globalization on June 10.

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2019-07-08 07:56:36
<![CDATA[CSIC sews up plan to speed up China's smart shipbuilding]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489247.htm China Shipbuilding Industry Corp, the primary contractor for the country's naval force, will accelerate the development of intelligent manufacturing processes at its shipyards as part of efforts to build high-end ships, its executives said.

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SOE to also focus on manufacturing high-end vessels and gigantic intelligent carriers

China Shipbuilding Industry Corp, the primary contractor for the country's naval force, will accelerate the development of intelligent manufacturing processes at its shipyards as part of efforts to build high-end ships, its executives said.

CSIC's goal is to catch up with global rivals in the field, they said.

CSIC is known for its abilities to build conventional ships like bulk vessels, container ships and oil tankers. Now, the Beijing-headquartered company is enlarging its focus areas to develop high-end ships like floating hospitals, 20,000 twenty-foot equivalent unit container vessels, ocean farms, as well as dual-fuel ships and gas-powered ships with smart systems and latest wind-power technologies, said He Jiwu, CSIC's vice-president.

The company signed agreements worth 14.3 billion yuan ($2.08 billion) with both domestic and global shipowners and clients in the areas of shipbuilding, ship-leasing and ship-financing on June 27 in Beijing.

Under the deals, CSIC will deliver very large crude carriers or VLCCs, mega bulk carriers, oil tankers, chemical carriers to shipowners. It will also provide deep-sea intelligent fishing equipment and desulfurization facilities for mega container ships, and nuclear power equipment and other complete sets of equipment to its clients.

Dalian Shipbuilding Industry Co Ltd, a subsidiary of CSIC, delivered the world's first intelligent VLCC named New Journey to China Merchants Energy Shipping Co Ltd late last month in Dalian, Liaoning province.

Built over a period of three years, the VLCC is 333 meters long and 60 meters wide. Its dead weight is up to 308,000 tons. It is the first VLCC in the world that obtained the i-ship (intelligent) symbols from the China Classification Society.

In the construction of the New Journey, the shipbuilder received strong technical support from several research institutes, including the Shanghai Merchant Ship Design and Research Institute and the Shanghai Electrical Apparatus Research Institute.

Guan Yinghua, deputy technical director at Dalian Shipbuilding, said the delivery of New Journey underlines the need to develop large intelligent ocean-going vessels.

"Currently, all countries in the world are actively promoting intelligent navigation and developing intelligent technology for ships, which plays an important role in improving maritime traffic safety, energy saving and emission reduction, as well as economic efficiency," she said.

Guan also said with the top-level design of network and information platforms, the oil tanker has the functions of autopilot navigation, intelligent cargo management, integrated energy efficiency management, equipment operation and maintenance, and communication between ship and ashore.

"For example, the intelligent cargo management system collects information from more than 600 monitoring points, then analyzes it to give reasonable feedback for decision-making," she said.

Before its delivery, the New Journey was put through 45-day sea trials involving use of intelligent equipment, system installation and testing. It is the sixth-generation VLCC independently developed by Dalian Shipbuilding, and also the 97th VLCC delivered by the company. It has orders to build 109 VLCCs, or over 15 percent of the world's fleet in that class.

Wang Baochun, vice-president of CCS Dalian branch, said the intelligent carrier enables collection of navigation data, which will facilitate remote control and partially automated sailing.

The delivery of the New Journey will further promote development of high-quality vessels and enhance the market competitiveness of the Chinese super-large intelligent crude carrier industry, said Guan from DSIC.

"Intelligent ships are the products in demand in the shipping market. When we receive new orders, we would very much like to urge shipowners to lay more cable and allow for more space for the purpose of converting their ships into intelligent vessels in the future," she said.

Contact the writers at zhongnan@chinadaily.com.cn

Kai Zheng, CSIC's gigantic tanker with a tonnage of 308,000 metric tons, launches in Dalian, Liaoning province, on June 23. Lyu Wenzheng / For China Daily

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2019-07-08 07:56:36
<![CDATA[Waterdrop to expand online health insurance, seek investor backing]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489246.htm Waterdrop Inc, a Chinese third-party online insurance broker, is set to expand its health insurance business.

The move is expected to help it to fend off rivals and gain an edge in the emerging fields of online healthcare insurance and healthcare crowdfunding.

The firm said it raised more than 1 billion yuan ($146 million) in a fresh round of financing to further expand its health insurance offerings online.

The Series C round of financing was led by Boyu Capital. Other backers included Tencent Holdings Ltd, CICC Capital and Gaorong Capital.

Shen Peng, founder and CEO of Waterdrop, said the money raised will be used to build a professional team focused on selling health insurance online and to develop artificial intelligence apps in health insurance.

"We will accelerate the push to grow the health insurance and the healthcare business with mutual aid products and services, to offer better user experiences," Shen said. "With the booming mobile internet and increasing popularity of mobile payments, we now are able to allow more users, especially those living outside the first - and second-tier cities in China, to enjoy good health insurance coverage.

"As major insurance companies mainly serve middle-and upper-income families in large cities, Waterdrop Inc aims to cater to those living in the third-, four - thand fifth-tier cities as well as the younger generation born in the 1980s and 1990s."

Seeing the trend, Waterdrop has announced a brand upgrade strategy to work with more insurance companies, aiming to expand its insurance offerings.

So far, it has launched more than 80 health insurance products provided by over 60 third-party insurance companies. More than 12 million users have bought the insurance products on the Waterdrop insurance platform online, and the premiums exceeded 500 million yuan in May, the company claimed.

Among the 12 million users who bought Waterdrop insurance products, 90 percent said it was their first time to buy insurance online. And 73 percent are willing to buy Waterdrop insurance products once more, the company said.

Yang Guang, partner of the parent company and general manager of the online platform, said Waterdrop will connect consumers and insurance firms.

"On the one hand, we will use a series of internet operations to have a better understanding of users. On the other hand, we will accordingly customize the products and match the products to the most relevant audience with its recommendation algorithms," Yang said.

He said there is a huge room for growth in the current market. "China has around 800 million internet users, while only 220 million buy insurance online. It is important to expand the offerings that users actually need and provide better user experience that ensures all problems will be solved."

The booming internet technologies have brought together financial institutions, insurers, online insurance brokers and other related enterprises into a new insurance ecosystem, said Huang Kai, executive director of Boyu Capital.

"We are glad to see that the emerging internet-based insurance platforms such as Waterdrop Inc are helping transform people's spending habits in the field of health insurance," Huang said. "In recent years, commercial insurance has played a key role in the continuous improvement of the domestic social security system. And online insurance brokers are one of the key drivers that have produced a breakthrough via technological innovation.

"This fosters not only the innovation of the channels but the internet-based improvement of the entire service process."

Waterdrop is one of a number of Chinese online firms looking to tap the internet finance sector, which is already crowded and boasts big names such as Didi Chuxing, Ant Financial, and Meituan-Dianping.

Xue Hongyan, director of the Internet Finance Research Center, which is a part of the Suning Institute of Finance, highlighted the emerging wave of internet firms tapping into the sector, saying it is hard for traditional financial platforms to attract users to spend time on them.

"Actually, users would love to spend more time on popular mobile apps. And the cooperation of the internet firms and traditional financial companies will help optimize the allocation of their resources."

ouyangshijia@chinadaily.com.cn

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2019-07-08 07:56:36
<![CDATA[Information technology remains top career draw for graduates, says report]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489245.htm Information technology or IT remains the most popular career option for fresh graduates in China as relatively higher salaries, large number of jobs available and bright prospects in the sector trump the low mood created by recent layoffs, according to an industry report.

Published by 58, a life services platform, the report showed 16.6 percent of fresh graduates surveyed received job offers or hoped to work in the IT sector.

The IT sector encompasses technical jobs in the areas of computers, internet and telecommunications.

Amid economic restructuring in China, occupations requiring solid professional knowledge and brain power are highly preferred by young graduates, said Li Yan, director of the 58 Talent Recruitment Research Institute.

Also, such IT-related jobs often provide higher compensation, comfortable work environment and broader space for personal development. The occupation is considered the icing on the cake among college students who newly enter the work force, she said.

That is interesting because this year saw some internet companies in China cutting jobs, which spread fears that such layoffs could become the industry rule rather than the exception, experts said.

Charlie Liu, IT practice leader and partner of global executive search firm Heidrick & Struggles in China, said despite the layoffs, the internet sector still has much vitality as it leads all industries in innovation. This, he said, keeps demand for more talent strong.

"It's natural that some companies lay off some staff or experience a slowdown in hiring, profit growth and business expansion when the industry sees rapid development," he said. "But the fact is, competition among IT companies for top talent is very fierce."

According to a report in May on Zhaopin, a Chinese online recruitment services provider, the China Institute for Employment Research (CIER) index - a measure of the degree of supply-demand tension in the labor market - of the internet industry was at 2.54 from February to May, a peak season for job-hunting after Spring Festival, down from 3.35 in the same period last year, which indicates that students graduated this year have less job opportunities in the internet industry.

However, based on the data of 88,150 graduates this year, Zhaopin found the internet industry still attracts most job-seekers, thanks to the perception that it offers high salaries and good corporate culture.

However, Li Qiang, executive vice-president of Zhaopin, said some graduates tend to chase hot career options blindly, without rational decision-making, so they end up in certain segments that are not really career-boosters.

"Universities and similar institutions must provide career guidance to students and encourage them to find opportunities in other fields as well, in tune with their aptitude and demand for talent in industries of the real economy," he said.

Fresh graduates in China hit an all-time high of 8.34 million this June, 140,000 more than that in 2018. About 88 percent of interviewees of Zhaopin said they experienced difficulty in their job-hunt, up 5.3 percentage points year-on-year.

Liu from Heidrick & Struggles suggested that students should also develop soft skills like communication, ability to make presentations and team spirit, and not just be content with knowledge and skills they pick up as part of their formal education. Internships could help in this context, he said.

According to Zhaopin's report, 57.66 percent of the interviewees who already received job offers agreed that internships helped them land their jobs. "A clear career target" and "rich social experiences "also contributed to their success.

Li from Zhaopin said since demand for human resources with diverse skills and cross-industry knowledge will only increase going forward, graduates will likely have more chances of finding a job, though such jobs may not necessarily be related to the majors they studied at university.

The 58 report showed that up to 93 percent of graduates surveyed are agreeable to working overtime, showing their enthusiasm and strong motivation in the first job.

chenmeiling@chinadaily.com.cn

Job-seekers pose queries at a job fair in Kunming, capital of Yunnan province. Provided to China Daily

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2019-07-08 07:56:36
<![CDATA[Smartening automakers with finest steel]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489244.htm For Fernando Teixeira, a love of engineering and the search for a better life led him to accept a top job with an industrial group. As CEO of Valin ArcelorMittal Automotive Steel Co in China, or VAMA, for the last four years, he refreshed its marketing strategies and developed a sense of the country's consumption upgrade, which was visible even in vehicle sales.

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Fernando Teixeira drives VAMA's strategy to lower emissions and enhance safety

For Fernando Teixeira, a love of engineering and the search for a better life led him to accept a top job with an industrial group. As CEO of Valin ArcelorMittal Automotive Steel Co in China, or VAMA, for the last four years, he refreshed its marketing strategies and developed a sense of the country's consumption upgrade, which was visible even in vehicle sales.

VAMA is a joint venture between Luxembourg-based ArcelorMittal and State-owned Hunan Valin Steel located in Loudi, Hunan province, with an annual production capacity of 1.5 million metric tons of steel. It supplies high-end steel to the automotive industry.

Despite declining growth in the assembled car market last year, sales of high-end vehicles, electric vehicles and the next-generation cars have continued to rise as Chinese consumers now expect more from their vehicles, said Teixeira.

Producing thinner high-strength and energy-saving steel products is the key to remaining competitive in the business, he said.

The market for materials in the automotive industry is fairly competitive. The proliferation of alternative materials, such as aluminum and composite materials, which are often referred to as new materials, has give steel the image of a "traditional material".

"But what we should understand is that steel for the automotive manufacturing sector is constantly changing, and the materials used in the car today are not comparable to the steel of a decade ago."

The joint venture benefits from ArcelorMittal's technology accumulation and global resources, including over 199,000 employees, 12 research and development centers, industrial facilities and supporting facilities in over 60 countries and regions, Teixeira said.

VAMA will push its next-generation press-hardening steel into the Chinese market soon to help carmakers reducing vehicle weight, lower emissions and enhance passenger safety.

Teixeira said VAMA is looking for the right time to expand its manufacturing facilities in Hunan as the company's sales revenue in China posted double-digit growth last year.

"Operating a plant in central China's Hunan province brings VAMA closer to suppliers of raw materials and provides a central location to supply our products to automakers across the country," Teixeira said.

Boosted by innovation and opening-up, Hunan province has attracted a number of automotive enterprises such as SAIC Volkswagen, GAC-Mitsubishi, BYD, and Geely, as well as other automotive suppliers including Germany's Robert Bosch GmbH.

Having lived in China for four years, Teixeira thinks the development of high-end manufacturing in China is the fastest in the world, and many domestic and global automakers are seeking solutions to get products to the market faster and lower costs. To that end, they are adopting new materials and technologies.

Automotive steel manufacturing relies on an entire industrial chain, starting from raw material procurement for steel making, hot rolling, advanced technology in cold rolling and galvanizing and finally sales and comprehensive services, said Zhao Ying, a researcher at the Institute of Industrial Economics, which is part of the Chinese Academy of Social Sciences in Beijing.

"From the beginning of the vehicle design, there will be lot of requirements for the original equipment, especially in material and tire technologies, which usually take between two and three years to follow the vehicle model to develop together," Zhao said.

Under such circumstances, challenges and opportunities co-exist for suppliers of raw materials and parts. They must sense the market trend in advance, and create extra time to deploy the right kind of resources to improve their product content and meet demand over the next two to three years, he said.

Teixeira believes that China's new energy vehicle market, especially in the electric vehicle segment, will see stable growth in the long term.

"Young consumers in China no longer use a car for long years until it is beyond repair. Rather, they tend to change cars to keep pace with the evolution of automobile technologies. They want to experience the newest features," he said.

Teixeira and his wife divide their time between Changsha and Loudi. He enjoys making beer using his professional equipment and "secret recipe", and regards himself as a fan of both regular beer and craft beer.

He also loves riding bicycle and taking part in outdoor activities. What brings him true joy, he said, is spending time with his little daughter during their spare time. Although a Brazilian, he is determined to master the Chinese language.

zhongnan@chinadaily.com.cn

Fernando Teixeira, chief executive officer of Valin ArcelorMittal Automotive Steel Co in China, gives a speech at the company's annual meeting in Changsha, capital of Hunan province, on June 19. Provided to China Daily

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2019-07-08 07:56:36
<![CDATA[On the move]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489243.htm Canadian Solar elevates Zhuang to CEO

Canadian Solar Inc appointed Zhuang Yan (pictured), chief commercial officer and senior vice-president, as executive CEO as the company founder Qu Xiaohua is on leave for medical treatment. Qu said he will still take part in major decision-making activities, and is confident Zhuang will lead the company well during his absence. Zhuang worked as a board director at Canadian Solar since 2006, and was later promoted to CCO.

Micron Tech appoints Gao to key VP role

Semiconductor company Micron Technology Inc appointed Gao Yunsong as vice-president for government relations in China. Gao will be based in Beijing. President and CEO Sanjay Mehrotra said Gao will bring in abundant industry experience and her expertise will be a great addition to the company's Chinese operations. Before joining Micron, Gao was a co-CEO at virtual reality company DreamCraft Attractions.

Audi names Wuest as president of local unit

Audi China appointed Gaby-Luise Wuest as its president. Former president Thomas Owsianski was named president and CEO of the Argentina branch of Volkswagen. Audi said Gaby-Luise Wuest has rich management experience and working skills. She was in charge of Audi's sales business in the Chinese mainland and Hong Kong since April 2018, and then led the company's products strategy in the Chinese market.

Compiled by China Daily

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2019-07-08 07:56:36
<![CDATA[Pioneering daily use of cutting-edge tech]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489242.htm In Fuzhou, capital of East China's Fujian province, a white, 5G-enabled, sensor-rich agricultural robot moves between two rows of leafy greens in a greenhouse, collects data about the plants, and feeds it back to the control room.

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China spearheads the world's efforts to marry AI with 5G for commercial applications across industries

In Fuzhou, capital of East China's Fujian province, a white, 5G-enabled, sensor-rich agricultural robot moves between two rows of leafy greens in a greenhouse, collects data about the plants, and feeds it back to the control room.

The farm robot has been successfully tested for compatibility with the 5G mobile communication technology.

What this means in real terms is this: pictures and other data can be transmitted from farmland in almost real time. Latency, or the time lag, is no longer than just one-hundredth of a second.

This allows the data to be analyzed by computers enabled by artificial intelligence, or AI, in the control room more efficiently, according to the Fujian Academy of Agricultural Sciences and Fujian Newland Era Hi-Tech Co, the two entities that developed the robot.

As if to soften the aura of its high-tech innards, the robot sports an eye-pleasing external look of an adorable cartoon, with its smooth, round base, which hides wheels underneath it, adding to the overall cuddly effect.

The robot can move in a smooth, fluid, jerk-free motion in all directions. It can inspect farms automatically and collect data samples used to power various applications. It can determine plants' health condition and decide if pest control measures are warranted. Odds are, in the not too distant future, the 5G super robot can even pick fruit with one of its bionic hands.

The robot is part of broader trend in China, which is this: tech companies are teaming up with a variety of industries - agriculture, automobile, healthcare, what have you - to explore possibilities of combining 5G and AI to revolutionize the traditional sectors of the economy.

From conducting the world's first 5G-enabled surgery on a human and transmitting 8K ultra-high-definition TV content through 5G networks to piloting self-driving buses and cars, China is pioneering cutting-edge technologies for commercial use.

The high-tech push is expected to be accelerated now that the nation kicked off the 5G era last month.

Yang Kun, an expert at the China Academy of Information and Communicat ions Technology, a research institute based in Beijing, said 5G enables data transfers at speeds at least 10 times faster than 4G, so it is possible to gather high-quality data quickly, which is necessary to ensure AI is effective.

"AI applications have existed before the commercial use of 5G, but it is the superfast speed, gigantic computing capacity and massive device connectivity of 5G that will spawn the use of AI in more sectors and on a far larger scale," Yang said.

Agreed Lyu Tingjie, a professor at the Beijing University of Posts and Telecommunications. According to him, 5G's responsive speed can empower mission-critical applications that were impossible with 4G networks.

"When a needle pinches your finger, it takes one hundredth of a second for you to feel the pain. And theoretical latency of 5G is one-tenth of that. Only with such speed can remote surgeries and autonomous driving see wider applications," Lyu said.

In March, a patient with Parkinson's disease underwent China's, and possibly the world's, first 5G-based remote surgery.

With technological support from Huawei Technologies Co and China Mobile, a doctor in Sanya, Hainan province, remotely operated surgical instruments to implant a deep brain stimulator known as a "brain pacemaker" into the patient in Beijing around 2,500 kilometers away.

Ling Zhipei, chief physician of the First Medical Center of the Chinese PLA General Hospital, conducted the three-hour surgery. "The 5G network has solved problems like video lag and remote control delay experienced under the 4G network, ensuring a nearly real-time operation," Ling said.

On June 6, China granted commercial 5G licenses to China Mobile, China Telecom and China Unicom, the nation's top three telecom carriers by the number of subscribers. State-owned China Broadcasting Network Corp also received the 5G license.

China is already regarded the leader in rolling out 5G applications. The nation is forecast to invest $184 billion in 5G by 2025, according to a report released by the Global System for Mobile Communications Association, which represents the interests of more than 750 mobile operators worldwide.

Such investments are expected to power China's big AI push. The nation is implementing an AI development plan that aims to build a 1 trillion yuan ($146 billion) AI core industry by 2030, which is expected to stimulate related businesses to the tune of 10 trillion yuan.

Digital technologies such as AI, next-generation network security, robotics, blockchain, internet of things, 3-D printing and virtual reality all depend on data, and 5G can address this need for data collection and its quick, smooth transmission, said Zhong Zhenshan, vice-president of emerging technology research at the China branch of International Data Corp.

Wang Xianchang, a professor at Jilin University, said the most important use of AI is to allow machines to automatically make decisions. The best application scenario in civil use is self-driving vehicles. And 5G will allow such decisions to be made properly and more reliably. When a car runs into emergencies like a pedestrian suddenly jaywalking, a delay in seconds of data transmission among sensors equipped within the car will likely cause a potentially grievous, even fatal, accident. 5G is here to prevent such things from happening, Wang said.

Currently, self-driving buses are under test in a string of cities across China, including Shenzhen, Guangdong province, and Changsha, Hunan province.

Chinese online search engine operator Baidu Inc announced plans as early as in December 2017 to mass-produce autonomous buses for designated areas. It will partner with bus manufacturer Xiamen King Long United Automotive Industry Co.

In East China's Anhui province, carmaker Anhui Jianghuai Automobile Co Ltd teamed up with Baidu to develop cars with auto-pilot systems.

Xiang Ligang, director-general of the Information Consumption Alliance, said the commercial use of 5G will impart further momentum to AI, but more discussions are needed to talk about the legal and ethical issues surrounding its wider applications.

China took a step in that direction in June when it issued new guidelines for scientists and lawmakers to promote the "safe, controllable and responsible use" of AI for the benefit of mankind.

Xue Lan, dean of Schwarzman College at Tsinghua University and chairman of the committee that issued the guidelines, said AI has raised many new and complex issues, like data privacy, machine ethics, safety, risks and misuse like spreading misinformation using "deepfake videos", and AI-manipulated footage.

But AI is not as uncontrollable or mystical as some people appear to presume, experts said. The regulatory or supervisory mechanisms could steer it in the right direction and leave enough room for exploration, course-correction, remedies and calibrated growth, analysts said.

Contact the writers at masi@chinadaily.com.cn

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2019-07-08 07:56:10
<![CDATA[Customizing heavy-duty trucks to power the world]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489241.htm China National Heavy Duty Truck Group Corp - Sinotruk - is seeking bigger market share overseas, and expects this year's exports of heavyduty trucks to reach 45,000 units, up almost 24 percent year-on-year, a key company executive said.

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Exports, a broader portfolio, after-sales service in Sinotruk's focus for edge abroad

China National Heavy Duty Truck Group Corp - Sinotruk - is seeking bigger market share overseas, and expects this year's exports of heavyduty trucks to reach 45,000 units, up almost 24 percent year-on-year, a key company executive said.

"To achieve this goal, we are looking at specific local demand and strengthening our after-sales service network in overseas markets where we are strong already. We are also seeking breakthroughs in new markets such as BRICS member countries like Brazil, Russia and India," said Liu Wei, deputy general manager, who oversees Sinotruk's exports.

Based in Jinan, capital city of East China's Shandong province, Sinotruk sold 12,589 heavy trucks overseas during the first four months of this year, accounting for 48 percent of the total heavy truck exports of China during the period.

Liu said this year, the company is making efforts to set up after-sales service networks and spare parts supply centers to upgrade its service level in overseas markets.

The company has refreshed its human resources practices last September, to ensure employees working overseas reap the benefits of the company's go-global strategy.

"Our employees are now promoted according to their performance and business achievements, not just on the basis of seniority or years of experience. This has greatly encouraged our employees to make top-grade contributions," said Liu.

He said the company currently has over 300 employees working overseas. Most of them were born in the 1980s and 1990s.

Founded in 1956, the company produced China's first-ever heavy-duty truck. It is also one of China's first heavy-duty vehicle manufacturers to explore overseas markets.

In 2003, the company exported only around 40 vehicles. The go-global strategy was adopted in 2004. Since then, it has exported more than 350,000 vehicles to over 110 countries and regions. It has been China's largest heavy truck exporter for 14 years in a row.

To date, the company has set up 69 representative offices and distribution service offices around the world. It has also developed 110 tier-1 distributors, 105 service outlets and 101 accessories outlets in more than 60 countries.

To better meet local demand, it has established nine cooperative knockdown production plants globally and 16 hubs of automobile parts in 12 countries and regions in Africa, the Middle East, Central and South Americas, and Asia.

"Every market has its own features, so we need to optimize our products according to local situations," said Lan Junjie, general manager of the company's international department.

He cited the company's experience in the Philippines, where it has been producing lighter vehicles to meet the local market demand.

While maintaining its momentum in Africa and Asia, the company is foraying into high-end markets in countries and regions like Australia, New Zealand and Hong Kong.

In March, the company delivered the first batch of new street washer vehicles to Hong Kong's local government. This gave the company a toehold in the competitive Hong Kong market, which has stricter automotive fuel and emission standards.

Lan said the move laid a foundation for the company to expand its business in developed markets.

"Our country's higher emission standards have promoted Chinese companies to enhance their core scientific research and development abilities and upgrade the manufacturing level. In five to 10 years, we hope that we can compete with rivals like Volvo technologically," Lan said.

The company has invested heavily in R&D. It now has more than 3,400 patents, of which 240 are invention patents.

This year, the company's substantially increased R&D budget would reach 2 billion yuan ($290 million), said Wan Chunling, chief accountant at Sinotruk. It will hire 1,000 graduates, include foreigners, this year.

"The Belt and Road Initiative is speeding up, creating more opportunities for technological and economic cooperation abroad. Such cooperation will definitely bring more opportunities for companies to expand their business in markets involved in the Belt and Road Initiative," said Zheng Guibin, former deputy director of the Shandong Academy of Social Sciences.

Besides the heavy-duty truck, the light-duty truck is also fading into focus, with exports reaching 460 units during the first four months of this year, up 52 percent year-on-year. The target markets during the first four months were mainly in Africa, the Southeast Asia, South Asia and South America.

The company has also been following the latest trends in the sector, including new energy vehicles, connectivity and autonomous driving, company executives said.

zhaoruixue@chinadaily.com.cn

Workers assemble a vehicle at the plant of China National Heavy Duty Truck Group, or Sinotruk, in Addis Ababa, capital of Ethiopia. Provided to China Daily

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2019-07-08 07:56:10
<![CDATA[Spearheading the AI campaign for China's economic growth]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489240.htm The government of Shanghai is sewing up a plan for the introduction of artificial intelligence in a variety of fields, as part of the metropolis' efforts to pioneer the nation's AI drive.

In mid-June, it announced its plan at a news conference. The decision is among a batch of moves to make the AI industry a driver of economic growth.

Shanghai's AI ambition is best exemplified by the formation in May of the nation's first pilot zone for the innovation and application of this cutting-edge technology.

The dedicated area, approved by the Ministry of Industry and Information Technology, has set for itself three main goals: one, to establish an AI core industrial cluster; two, to promote AI applications; and three, to build a supporting system for AI innovation, according to the Shanghai Commission of Economy and Informatization.

A series of mechanisms and facilities are in place to bolster the goals. Last week, the city unveiled its first dedicated AI incubator, serving as an accelerator to turn abstract AI ideas into prototypes and later into potentially tangible products.

Backed by the SCEI, the facility will provide working space, data bases, technical support, financing and resources matchmaking with application scenarios. Such a model will be duplicated across the city in due time, according to the commission's chief engineer Zhang Ying.

Five AI startups have signed agreements with the first AI space, covering new areas that arose from the combination of AI and medical care, education and big data.

The incubator's launch last week coincided with the city's announcement of a series of awards. Dubbed SAIL and dedicated to an AI-themed contest, the award winners will be announced ahead of the 2019 World Artificial Intelligence Conference in August.

"The SAIL awards are not only an influential part of the WAIC competition, but an important carrier in the integration of industries, universities, research and applications in the field of AI," said Zhang.

The inaugural WAIC last September attracted a host of high-profile personalities such as Turing Award winner Raj Reddy.

Opportunities abound for tech enterprises to join Shanghai's AI drive, experts said. The city has formed an AI industrial alliance dedicated to "resources matchmaking". This move is expected to help Shanghai become a global leader in pioneering the latest AI practices.

Formed at the end of April, the 22-member bloc summons leading AI enterprises ranging from domestic internet giants such as Alibaba, Tencent and Baidu to international powerhouses such as the Microsoft Asia Research Center (Shanghai) and ABB, a Swiss conglomerate that also specializes in robotics and automation technology.

Once operational, the alliance will provide resources matchmaking for participating enterprises, an essential step toward fostering AI's development, given the rich application scenarios available in the city, said Zhang Hongtao, who oversees the AI unit at the SCEI.

AI specialists like SenseTime are taking such initiatives as combining AI with art. By teaming up with the Museum of Contemporary Art Shanghai, SenseTime is advocating the use of art and paintings to explain its indigenous facial recognition, data visualization and other AI techniques used in artistic painting and graffiti.

Apart from technology gurus, the alliance also brings in core players in the telecom, financial and manufacturing sectors in a bid to "create industrial synergies, offer specialized AI services and conduct overseas exchanges", said Wu Jianxiong, chairman of INESA(Group) Co Ltd, a key initiator of the organization.

Following the announcement of the alliance, the city has unveiled the first batch of 12 AI pilot scenarios, where local authorities have advocated that AI be leveraged to power various industries.

These included using AI in teaching, medical diagnosis, cargo transportation, financial and civic services among others, said Zhang of the SCEI.

To keep the momentum going, Shanghai has decided to solicit the second batch of AI best-practice solutions in 10 key areas including medical care, education, city management, culture, and tourism, she said.

hewei@chinadaily.com.cn

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2019-07-08 07:56:10
<![CDATA[Smart 'brain' can combine with 5G to boost innovative business]]> http://www.chinadaily.com.cn/kindle/2019-07/08/content_37489239.htm Now is an exciting time to be an engineer or technology enthusiast. We're starting to see ideas that were talked about as only concepts in science fiction, making their way into the mainstream.

For instance, AI(artificial intelligence) and 5G(fifth-generation telecom technology) are the most frequently heard buzzwords. Be it a keynote speech or a research paper, these buzzwords are always there somewhere. They were ringing in my ears all the time during the Mobile World Congress Shanghai late last month.

China Mobile, the nation's top telecom carrier, has pledged last week to implement a "Double Gigabyte" initiative, supporting superfast internet connection for both mobile and fixed broadband connections.

According to its Vice-President Jian Qin, the company will allocate 100 billion yuan ($14.5 billion) to facilitate the internet connectivity infrastructure to reach the above standard across 100 cities by 2020.

He spoke about the use of AI technologies in building smart homes, neighborhoods and cities through immersive and interactive experience in educational, medical, transportation and other scenarios.

Undoubtedly, 5G and AI are helping speed up the process of making a robot steward that can oversee all domestic affairs a reality. But how AI and 5G can pair up to accomplish wonders needs a bit of explanation.

5G, as an advanced digital cellular network protocol, opens up new frequency spectrum, bringing with it much higher throughput and latency performance. It is not just merely an upgraded 4G - it taps new spectrum that is 100 times faster, and greatly enhances end-user experience of mobility, besides driving innovative business opportunities and user cases.

While 5G can be regarded as a string of new technologies, the logic of algorithm behind AI has some profound history. Data sets and the expected outcomes associated with them are input into a processor and it outputs a pattern. And that means the accuracy of machine learning and the amounts of data are positively correlated.

It is thus fairly easy to comprehend why AI needs 5G to thrive because the latter is feeding the invaluable troves of data for algorithms to keep improving themselves. Meanwhile, AI, driven by advances in machine learning, provides the ability to make sense of the chaos and complexity of 5G.

To start with, AI can smartly manage the deployment and operations of 5G technologies, detecting malfunctions in real time and significantly trimming operational costs. This would ensure the smooth user experience of 5G to a wealth of end-devices hungry for broad bandwidth.

Another tantalizing example of the AI-5G tie-up is autonomous driving. Autonomous cars are essentially data centers on wheels. That "intelligence" requires the rich and rapid movement of data that 5G is expected to offer.

Many Chinese cities are gearing up to build themselves into smart cities, which can only be achieved by the marriage of the smart brain of AI and a fast mobile communication infrastructure like 5G.

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2019-07-08 07:56:10
<![CDATA[Mutual trust holds key to trade talks]]> http://www.chinadaily.com.cn/kindle/2019-07/07/content_37488939.htm China and the United States need to build stronger mutual trust and understanding to advance their economic and trade consultation, experts said.

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US side needs to realize that 'bullying measures' are not workable solutions

China and the United States need to build stronger mutual trust and understanding to advance their economic and trade consultation, experts said.

This call came after President Xi Jinping and his US counterpart Donald Trump agreed on Saturday at the G20 Summit to resume trade talks that were stalled in May.

"The Xi-Trump meeting at the G20 Summit is of great significance," said Dong Yan, director of the international trade office at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences.

The consensus reached between the two leaders to advance bilateral relations featuring "coordination, cooperation and stability" can guide the future direction of trade talks, Dong said. "It will help the two countries to get the talks back on track, which can ease the downward pressure on global economic growth," she said.

Although there are good prospects for the future, Dong noted, "There will be twists and turns along the way, so more mutual trust and understanding is needed between the two sides."

China and the US have been embroiled in a nearly yearlong trade dispute, and have exchanged tariffs on billions of dollars of each other's imports. Before the top leaders' meeting at the G20 Summit, negotiators from both sides had held 11 rounds of high-level talks.

Wang Xiaosong, a professor of international trade at Renmin University of China's School of Economics, said both negotiating teams need to make continued efforts in the upcoming negotiations.

"Trade talks should be conducted in the spirit of equality and mutual benefit. Negotiators need to enhance their mutual trust and get a greater understanding of each other," he said.

Possible factors impeding the progress of the talks include the fact that the two sides still have a difference over China's purchase value of US products, he added.

After his meeting with Xi on Saturday, Trump said at a news conference that existing tariffs would remain in place on Chinese imports while negotiations continue, but additional tariffs he had threatened to impose on other Chinese goods would not proceed for the "time being", US media reported.

Gao Feng, spokesman of the Ministry of Commerce, said on Thursday that if China and the US could reach a trade deal, the US must eliminate all tariffs that have been imposed on Chinese imports.

Dong said: "The US side needs to realize that trade bullying measures are not workable solutions to address existing issues with China. Furthermore, it is necessary to build a new mechanism that can fit the environment where the economic strengths of China and the US have been changing."

"The US side should become aware of China's sincerity in pushing forward with trade talks, as well as the country's concrete progress that has been made in reform and opening-up," Dong said. She cited that two shortened negative lists - identifying sectors in which foreign participation is restricted, will take effect on July 30.

Dong said there are encouraging signs that in the US, those who support the decoupling of the US and China economies had failed to get the upper hand.

While China and the US agreed to resume their talks, some argued that even though the two sides can possibly solve trade issues, their confrontation over technology would continue to intensify.

"Such an argument was influenced by the so-called 'China threat theory', and was exaggerated to some extent," said Zhou Mi, deputy director of the Institute of American and Oceania Studies of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

"If the US side insists on its policies containing China's technologies, Chinese companies will concentrate their efforts in making more technological breakthroughs. They may offer products and services in accordance with a different system of standards (from the traditional one)," he said.

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2019-07-07 14:13:58
<![CDATA[China still a vital market for hardwood from United States]]> http://www.chinadaily.com.cn/kindle/2019-07/07/content_37488938.htm The American Hardwood Export Council is optimistic toward the Chinese market and committed to discovering more demand for sustainable products despite the headwinds resulting from trade tensions between the two countries.

As the largest export destination for US hardwood, China remains a crucial market for the US hardwood industry and the industry is committed to working with the China market, said Michael Snow, the council's executive director.

"American hardwood exports to China face many challenges, including tariffs, extreme weather and a general slowing of demand, but China remains the largest export market for American hardwood," said Snow.

"We will continue to put more effort into collaboration and promotion in the China market, discover more market needs, fully utilize the low-carbon, sustainable and environmentally friendly characteristics of American hardwood and promote American hardwood application in more fields," Snow added.

Despite the trade dispute, during the past 28 years in the Chinese market, the AHEC said Chinese consumers' awareness of high-quality sustainable materials has grown.

"We welcome a higher consumer awareness in China as well as the rest of the world," said American Hardwood Export Council Chairman Scott Seyler.

He added that as wood proved to be better in terms of environmental impact than other materials, the council was glad to see the positive trend in China.

The trade friction between the two countries has led to a yearly decline in the export volume of US hardwood lumber from January to April.

"American hardwood lumber exports totaled $484 million in China from January to April, a decline from the previous year. Looking forward to the second half of this year and toward the future, we hope that market conditions will recover as soon as possible," he said.

According to the council's report, the market value for the US hardwood lumber exports has fallen from $2.1 billion in 2017 to $1.9 billion in 2018.

"We recognize that the longer this goes on, there will be long-term damage on both sides. We have already seen some of the member companies of AHEC stop operating because they have lost the Chinese market," he added.

"Since 2007, US companies'investment in China has yielded growing profits. While China had a trade surplus, the benefits US companies gained from their China operations were also profound," said Huang Qunhui, an industrial economics researcher at the Chinese Academy of Social Sciences.

"The current global industrial chain was formed under the leadership of US-based multinational companies, so a trade war will only result in losses for US companies."

 

An employee sorts boards as they exit a cutting machine at the Nicolet Hardwoods Corp lumber mill in Laona, Wisconsin, the United States. Bloomberg

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2019-07-07 14:13:58
<![CDATA[Baidu condemns attack on its CEO]]> http://www.chinadaily.com.cn/kindle/2019-07/07/content_37488937.htm Internet search giant Baidu Inc has strongly condemned the man who poured water on the head of Robin Li, its chairman and chief executive officer, during the company's annual developers' conference in Beijing on Wednesday, saying that the man's "malicious" action was "shameful" and "disturbing".

The man, surnamed Cheng, was given five days of administrative detention on Thursday morning for disturbing public order by Beijing police.

The police conducted an investigation and made the decision after receiving a report from Baidu staff members at about 11 am on Wednesday, according to a statement posted on the Sina Weibo account of the public security sub-bureau in the capital's Chaoyang district.

Baidu released a written statement on Wednesday evening, saying that "if our society tolerated such extreme behavior, then similar practices could be repeated in future conferences and events, and everyone exposed at public events could become potential targets. People definitely don't want to see this."

It said the man had been taken away by police for investigation. "Some unexpected things will happen on the road to artificial intelligence. However, our determination to move forward will not change," Baidu said.

Li was speaking about the AI-powered valet parking service when a man in a black T-shirt rushed up to the stage from the audience and upended a small bottle of water over his head.

"What's your problem?" Li said in English. About 20 seconds later, he continued his speech. "As everyone has just seen, there will be a variety of unexpected happenings on the road to AI."

A video of the attack quickly spread on Chinese social media and aroused public attention. A Sina Weibo user named Zhinanshangshu was suspected by Chinese netizens as being behind the attack on Li.

The user had been uploading photos to his Sina Weibo account detailing his plans, and had posted the caption he was "ready to go on stage" and "what will happen if I pour water over your boss' head "under a photo of the conference venue before the incident.

Baidu didn't confirm if that user and the man on stage were the same person, but said live-blogging the incident was "shameful" and "disturbing".

"If the person poured water on the speaker who was giving a speech, it will not only interfere with the normal progress of the conference, but also insult the speaker's personality and dignity to a certain degree," said Cao Lei, director of the China E-Commerce Research Center, adding that such behavior could be punished for disturbing public order.

Cao said the netizens should make comments on Baidu rationally, but don't take "extreme" actions and attack others.

"The incident has also exposed some problems such as inadequate security at large venues, which has also sounded alarm bells for other internet companies," Cao added.

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2019-07-07 14:13:58
<![CDATA[Seazen Holdings' chairman held in criminal custody for 'personal reasons']]> http://www.chinadaily.com.cn/kindle/2019-07/07/content_37488936.htm A black swan seemed to be looming in front of the property empire Seazen Holdings soon after its chairman was detained on suspicion of molesting a nine-year-old girl.

The Putuo branch of the Shanghai Public Security Bureau said in a notice on Wednesday night that a 57-year-old suspect surnamed Wang was accused of molesting a girl on June 30. The suspect has been held in criminal custody by Putuo police.

The A-share listed Seazen said in an exchange filing late on Wednesday that its chairman Wang Zhenhua - the company's actual controller - has been held in criminal custody for "personal reasons".

The scandal was first reported by the Shanghai newspaper Xinmin Evening News on Wednesday afternoon and instantly went viral on the internet. The two Hong Kong listed subsidiaries, Future Land Development Holdings Ltd, plunged by 23.86 percent and S-Enjoy Service Group shed 23.72 percent during the last hour of trading on Wednesday. Seazen Holdings was unaffected since the A-share market closed earlier.

But the fluke did not last long. Future Land's price dropped by the daily limit of 10 percent soon after the market started trading on Thursday. Future Land and S-Enjoy continued to report 10.57 percent and 13.11 percent slide respectively. With that, the Seazen companies have lost 30 billion yuan ($4.4 billion) within two days.

The company's related bonds were also heavily hit. Its two bonds issued at the Shanghai Stock Exchange both dropped more than 8 percent on Thursday. Its US dollar bond due by 2023 shed a 27 percent on Wednesday, hitting a record high.

Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution, said that the scandal of Wang molesting a girl can be defined as a black swan incident for the company. It has made a huge contrast to the steadily advancing business of the company over the past two years. It will be a harsh task for the company to retain its corporate image, he said.

Seazen was founded in Changzhou, Jiangsu province, in 1993. Gauged by sales revenue, Seazen entered China's Top 10 developers list compiled by real estate market tracker CRIC for the first time in 2018. Its turnover surged 74.8 percent to 221.1 billion yuan last year.

But the rapid expansion has resulted in Seazen's high debt level. According to the company's 2018 fiscal report, Seazen's total liabilities came at 279.4 billion yuan. Its asset liability ratio soared to 88.51 percent by the end of first quarter.

Seazen immediately appointed 32-year-old Wang Xiaosong, the scandal-hit chairman's only son, as the new chairman. The son started his career at Seazen in 2009 but resigned in 2016. But he returned as president of the company last August after his father stepped down from the post.

Hui Jianqiang, head of research with Beijing Zhongfang-Yanxie Technology Service Ltd, suggested to the new chairman that apologies should be made to the victim in public.

He also warned that the stock market plunge in the past two day is "just the prelude of greater losses. Seazen is likely to see more sells in coming days, and its financing, sales and partnership will feel the pinch of this incident, which poses a big challenge for the new head."

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2019-07-07 14:13:58
<![CDATA[Online gaming companies going global]]> http://www.chinadaily.com.cn/kindle/2019-07/07/content_37488935.htm A growing number of Chinese online gaming companies are expanding globally, as gaming regulators have tightened their grip on the local market, which is reaching saturation point.

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Domestic players facing tighter regulations and stiff competition at home are increasingly looking further afield

A growing number of Chinese online gaming companies are expanding globally, as gaming regulators have tightened their grip on the local market, which is reaching saturation point.

"It is a growing trend that more Chinese companies are seeking opportunities globally," said Feng Bo, an internet industry solution expert at Tencent Cloud. "Domestic players face stiff competition in the market. And they need to confront various challenges, such as tight regulation controls and the declining demographic dividend."

China has long been the world's largest gaming market by revenue in recent years. However, for the first time since 2015, the United States will overtake China to become the largest gaming market by revenue globally with $36.9 billion this year, according to a recent report.

According to the Global Games Market report, released by gaming analytics company Newzoo in June, the nine-month freeze on game licenses, which ended last December, has heavily impacted China, and thus the Asia-Pacific is no longer the fastest-growing region. Latin America is now the fastest-growing games market in the world, with a compound annual growth rate of 10.4 percent.

According to the report, mobile gaming remains the largest segment in 2019, producing revenue of $68.5 billion - 45 percent of the global games market. And the growth in mobile game revenue will continue to outpace PC and console revenue growth in the coming years.

China's gaming industry is suffering its slowest revenue growth in a decade. The domestic gaming market grew by 5.3 percent year-on-year to 214.44 billion yuan ($31.22 billion) in 2018, compared to a 23 percent increase in 2017, according to statistics from Chinese gaming database Gamma Data Corp.

Overseas markets have become a key source of income for Chinese gaming companies. Last year, Chinese gaming developers earned $9.59 billion from self-designed online games in overseas markets, up 15.8 percent year-on-year.

To tap the fast-growing gaming markets internationally, an increasing number of gaming firms are already introducing games targeting overseas regions, and many have been reaping the rewards.

Legacy of Discord - Furious Wings, a Chinese fantasy-themed mobile game, has attracted a huge following globally, as it has gained leading spots in the sales rankings of 57 countries and regions.

Published by Shanghai-based Yoozoo Games Co Ltd, the action role-playing game now supports 16 languages, covering more than 190 countries and regions in the world.

"The competition is getting fiercer in overseas markets," said Liu Wanqin, Yoozoo's overseas distribution vice-president. "The challenge with overseas expansion is mainly how to deal with cultural differences and how to communicate with the game players. Thus we need to have a full understanding of both Chinese culture and the culture of specific overseas markets, which will help improve the creativity and technical levels of the games and produce high-quality content."

Liu said Yoozoo aims to be a leading gaming firm with a sense of globalization and strong international competitiveness.

"We've adopted a strategy that combines globalization and localization," Liu added. "On the one hand, we will introduce games based on globally influential intellectual property works, such as Games of Thrones, to cater to those who love intellectual property-related derivative works. On the other hand, we will launch specific games that meet local users' needs."

Founded in 2009, Yoozoo now owns branches globally, including in the United Kingdom, Germany, Japan, South Korea, India and Singapore.

Attaining nearly 1 billion registered users worldwide, Yoozoo has established a global distribution network covering more than 200 countries and regions. The company said it will continue to develop in regions where it has already gained an edge, such as North America, Europe, Southeast Asia and South Asia. And it will further expand globally, especially in South Korea, Japan and the Middle East.

Yoozoo gained the 11th spot in App Annie's Top 52 Publishers List of 2018 by earnings. The company reported its revenues surged by 10.68 percent year-on-year to 3.58 billion yuan in 2018, more than half of which was gained from overseas markets.

Statistics from App Annie showed mobile game revenues gained from the iOS App Store surged by 4 percent year-on-year in China last year, while the global number hit 13 percent.

Chinese gaming publishers earned $6 billion in overseas markets, with an increase of 49 percent year-on-year, App Annie said.

The US topped all other countries and regions in terms of the largest source of overseas income, followed by Japan and South Korea.

"While the domestic gaming market witnessed slow growth in 2018, Chinese gaming firms have earned a lot in fast-growing overseas markets," said Ren Ning, customer director at App Annie China region. "A growing number of Chinese gaming firms are expanding globally, and the trend will continue this year. As users' habits and tastes differ from country to country, Chinese gaming firms can always find a suitable place to launch their games and expand their business, giving them an equal shot to go global."

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2019-07-07 14:13:58
<![CDATA[Perfect World gears up overseas expansion to integrate worldwide resources]]> http://www.chinadaily.com.cn/kindle/2019-07/07/content_37488934.htm Perfect World Co Ltd, a leading Chinese gaming and movie conglomerate, is gearing up its overseas expansion as it looks to gain an edge in the global gaming market.

"Globalization is a key strategy for us," said Xiao Hong, CEO of Perfect World. "After years of overseas development, we are now seeking to integrate global resources instead of simply seeking expanding business in overseas regions."

Ever since Perfect World established its first overseas subsidiary in the United States in 2008, it has made a name and money for itself. The company was one of the largest game exporters in China during the past decade, occupying about 40 percent of the total at its peak.

The Beijing-based company reported in April that its revenue for 2018 rose 1.31 percent year-on-year to more than 8 billion yuan ($1.16 billion), of which 5.42 billion yuan was from the gaming sector. And its overseas revenue reached 1.48 billion yuan in 2018, up by 20.09 percent year-on-year.

The company said its overseas revenue was mainly from the overseas PC and console gaming sectors.

"We aim to become an influential player internationally," Xiao said. "Entering a new phase of global resource integration, we are committed to combining global expertise and taking the good parts to offer a world-class product."

For instance, the company's French team Magic Design Studio has developed a 2-D action-adventure game called Unruly Heroes. Based on the story of China's classic fantasy novel Journey to the West, the game was nominated for Best PC Game and Best Visual Art award at the Ping Awards 2018.

"Gaining a high score of 9.9 on Taptap (a mobile game sharing community), the game is the latest example of our global resources integration strategy," Xiao said. "And now our team will develop a new mobile version of Unruly Heroes."

So far, Perfect World has wholly owned subsidiaries in North America, Europe and Asia, and has set up 20 overseas branches in countries and regions including the US, the Netherlands, France, South Korea and Japan.

Now, Perfect World wants to expand to more markets globally, especially emerging markets.

"To further boost our overseas business, we need to focus on those emerging markets with exponential growth potential," Xiao said.

According to the Global Games Market Report 2019 from Newzoo, mobile gaming will remain the largest segment in 2019, generating revenues of $68.5 billion - 45 percent of the global games market. And the growth in mobile games revenue will continue to outpace PC and console revenue growth in the coming years.

Seeing this booming trend, Perfect World is accelerating its push to develop mobile gaming in overseas markets, especially Western countries.

"Previously, we mainly provided PC and console games in Western countries, as the two categories occupy the largest share in the local gaming market," Xiao said. "Noticing the rapid growth in mobile games, we will make new moves in the North America region this year."

Another report released by Google and Chinese gaming database Gamma Data Corp shows that revenue generated by Chinese mobile game companies only accounts for 15.8 percent of the total overseas market, and thus there is huge room for growth.

China's mobile gaming revenue reached $19.44 billion in 2018, occupying 30.8 percent of total global revenue, the report said.

In fact, China's mobile games market is suffering its slowest revenue growth in a decade. The country's licensing freeze lasted nine months till December, contributing to a 15.4 percent year-on-year growth in the mobile games industry last year, compared to the 41.7 percent year-on-year increase in 2017, statistics from Gamma Data showed.

Liu Wei, an analyst from market research company iResearch, said the approval freeze led to thousands of new games being blocked from the market in 2018.

"The demographic dividends are wearing off, which is another factor driving the slowing growth," Liu said.

"While the gaming sector is still under a regulatory environment of tight controls of total video games numbers, it will take a while for gaming companies to adapt to the new environment and make moves accordingly," he added.

 

Performers are dressed like games characters at the stand of Perfect World Co Ltd during an exhibition in Shanghai. Provided to China Daily

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2019-07-07 14:13:58
<![CDATA[China-Africa trade ties to blossom]]> http://www.chinadaily.com.cn/kindle/2019-07/07/content_37488933.htm Tangible progress was made in bilateral economic ties and trade cooperation between China and Africa during the first China-Africa Economic and Trade Expo held in Changsha, Hunan province, last month.

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Changsha expo makes tangible progress in new bilateral deals and projects

Tangible progress was made in bilateral economic ties and trade cooperation between China and Africa during the first China-Africa Economic and Trade Expo held in Changsha, Hunan province, last month.

Eighty-four deals worth $20.8 billion were inked between China and African countries during the three-day expo, covering a wide range of areas, including trade, investment, infrastructure, agriculture, manufacturing, aviation, tourism and sister city relations.

The expo, themed "Win-Win Cooperation for Closer China-Africa Economic Partnership", attracted more than 6,600 guests and over 3,500 exhibitors, buyers and visitors from home and abroad, including 53 African countries.

Business executives, officials and government officials attending the expo hailed the event as an exchange platform for China and Africa to share information and experiences.

Tarek Amri, vice-president at Sany Heavy Industry Co Ltd and former ambassador of Tunisia in China, said the expo offers good opportunities for both sides to sit together and identify projects for implementation.

Ye Xinping, chairman of Hunan Construction Engineering Group, said the expo is in line with the new trend, new features and new demands for China-Africa economic and trade development in the new era.

"It helps gather more resources to inject new impetus into Sino-African economic and trade cooperation," Ye said. "China and Africa are making efforts to shift the model of economic development, foster new growth drivers and seek new opportunities in cooperation. The two sides will build broader cooperation in areas of mutual interest."

State-owned Hunan Construction Engineering Group mainly focuses on building and installation, road and bridge construction, survey and design, scientific research, equipment manufacturing and real estate development. So far, it has participated in key projects in more than 30 countries and regions globally, covering areas such as roads, housing construction, municipal projects, water projects, electric power and airports.

"Similar to China in the 1980s, Africa is at the initial stages of highspeed development. Thus local governments need to focus on infrastructure and energy construction and address projects closely related to people's lives, such as water, electricity and food," Ye noted. "Actually, those are what Chinese enterprises are good at," he said.

The company has built landmark projects in several African nations, like the iconic wrestling ring in Dakar, Senegal. Covering an area of 18,000 square meters and capable of accommodating some 20,000 spectators, the modern structure was delivered in 2018 after two years of construction. The project created 3,000 jobs for locals and helped train more than 1,000 skilled workers.

"China is serious about further opening up and building stronger economic and trade ties with Africa," said Mark Greeven, professor of strategy and innovation at the Switzerland-based International Institute for Management Development. "While a lot of countries, especially the developed economies, are mainly focused on other parts like Europe and the United States, China seeks opportunities in emerging nations in Africa, something that will help Africa's inclusion in global trade routes."

"There is a lot of potential in African markets, as seen in the entrepreneurial activities of some African countries," Greeven said. "Today, many African nations like Kenya and Ghana are starting to emerge as entrepreneurial hot spots, boasting a lot of economic activities and an emerging group middle class."

Greeven said that for expansion in the African markets, Chinese companies need to better realize and understand the way of doing business in the continent.

"Expos like the one held in Changsha are primarily mechanisms for both sides to set to know each other's practices, habits, needs, expectations and find ways to work together," Greeven said. "It's going to take a while to know each other better. And both sides need to build up an understanding of each other and find ways to do business together."

China has been the largest trading partner of Africa for 10 consecutive years. Last year, trade volume between China and Africa amounted to $204.2 billion, up 20 percent year-on-year, statistics from the Ministry of Commerce showed.

By the end of 2018, more than 3,700 Chinese companies were present in Africa, with combined direct investment over $46 billion.

Yonov Frederick Agah, deputy director-general of the World Trade Organization, said there are many dimensions to the China-Africa partnership with the most important one being multifaceted engagements with an overlapping focus on cooperation.

China is helping economic development in Africa through the infrastructure and technologies it is creating on the continent and the employment, market opportunities that it is helping to generate, he said.

"I believe the China-Africa Economic and Trade Expo is a reminder that the search for mutual credibilities should encourage more cooperation and trust in the global trading system," Agah said.

Charles Kayonga, Rwanda's ambassador to China, said the expo is an excellent opportunity to showcase China's pledge to further open up its markets to Africa and offer a platform for players from Africa to display/sell their made-in-Africa products.

"China has several infrastructure projects in Rwanda and is willing to offer support in this regard. Last July, when China's top leadership visited Rwanda, we signed 15 agreements, and we are continuing to implement them with China's support. We are supporting mineral exploration, and we are working on building mineral processing plants... the future (of China-Rwanda economic relations) is bright," Kayonga said.

 

African artists perform a traditional dance at the exhibition area during the first China-Africa Economic and Trade Expo held in Changsha, Hunan province, last month. Xu Xing / For China Daily

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2019-07-07 14:13:58
<![CDATA[Construction services firm eyes infrastructure boost]]> http://www.chinadaily.com.cn/kindle/2019-07/07/content_37488932.htm Construction services firm China CAMC Engineering Co Ltd is further expanding its presence in Africa and looking to participate in more local projects via investment-construction-operation, a senior company executive said.

"We are gearing up to spend more money and resources to develop the rapidly growing African markets, "said Liu Shengcheng, vice-president of CAMCE, a subsidiary of China's State-owned China National Machinery Industry Corp (Sinomach). "With the industrial upgrading and transformation, I believe there is huge room for growth in African markets in the future."

The company aims to be an internationally renowned investment development and engineering services provider, and will focus on areas related to local people's livelihood and projects that bring economic benefits and improve the local infrastructure.

According to Liu, the company is currently looking for investment projects in Ethiopia, Kenya, Zambia, Tanzania and other African countries.

"We are looking to develop our business in Africa by way of investment-construction-operation, especially in the fields that we are familiar with, such as factory construction, agricultural products processing, water treatment and power projects.

"Buoyed by the Belt and Road Initiative, more Chinese companies are accelerating their push to go global, providing strong support for African infrastructure construction," Liu said. "As African infrastructure has greatly improved, Chinese firms need to focus on production capacity cooperation, especially in the field of investment.

"After 40 years of development, China has accumulated abundant experience in fields including industrial planning, enterprise management and technological research and development. Implementing projects with the investment-construction-operation model will be a win-win strategy for both sides. For China, it will bring long-term benefits. For Africa, it will alleviate the government's debt burden and create more jobs for local people," Liu added.

Founded in 2001, the Shenzhen-listed CAMCE mainly focuses on international project general contracting, domestic and overseas investment and trade business. The company has signed new contracts worth over $5 billion within the markets related to the Belt and Road Initiative between 2013 and 2018.

To date, the company has set up branches in 14 African economies. It has operated a wide range of projects that cover fields including industrial engineering, power engineering, transportation, water projects, agriculture, petrochemicals and mining.

"We have participated in not only many infrastructure projects but also many industrial projects that help create revenue. With the improved African infrastructure construction, the next focus will be industrial projects," Liu said.

He said Chinese engineering companies have worked closely with those from developed countries in African markets, instead of fiercely competing with them.

"Many African countries can hardly afford the cost of projects taken by companies from advanced countries. Actually, developed countries mainly serve as investors, consultants and equipment suppliers in African markets," Liu said.

Among CAMCE's ongoing projects, the Welkait sugar plant project in Ethiopia stands out.

Located in Tigray province in northern Ethiopia, the project has a contract value of $647 million. The project includes the construction of a sugar plant with daily sugar cane crushing capacity of 24,000 metric tons and a bagasse-fired power plant, which will help make up locals' demands for sugar and power.

Once completed, the project will directly create 1,000 jobs, and the supporting production business and living facilities will offer job opportunities for more than 10,000 people.

Mark Greeven, professor of strategy and innovation at Switzerland-based International Institute for Management Development, noted a whole range of African countries with large populations and strong economic development offers great opportunities for trading partners like China.

"As the two sides have very different cultural backgrounds, it is important for Chinese companies to realize and understand the way of doing business in Africa," Greeven said.

Actually, Liu said the company was looking not just to expand in African markets but to focus on facilitating localization in those markets. "We will further expand to more countries in Africa. To better cater to the local markets and build better relationships, we will subcontract almost all civil engineering work and hire locals to help operate our African projects.

"We need to localize our overseas business to deal with problems as locals do, which will benefit both sides and help increase mutual understanding."

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2019-07-07 14:13:58
<![CDATA[Agriculture cooperation likely to see fast growth]]> http://www.chinadaily.com.cn/kindle/2019-07/07/content_37488931.htm Agricultural cooperation between China and Africa is set to see a rapid growth, judging by the expressions of interest and deals signed between the two sides at the recently-held China-Africa Economic and Trade Expo in Changsha.

Deals for eight agricultural projects worth $2.747 billion were signed at the expo along with proposals to strengthen South-South and Triangular Cooperation raised by seven organizations, including the China International Center for Economic and Technical Exchanges, the China National Hybrid Rice R&D Center, and the African Union.

The expo follows the eight initiatives unveiled at the 2018 Beijing Summit of the Forum on China-Africa Cooperation to boost trade and investment between the two regions.

Ma Youxiang, head of livestock production at the Ministry of Agriculture and Rural Affairs, said China has been offering tech and financial support to Africa's development of agriculture, and has made several significant achievements.

"Going forward, China and Africa will see compelling opportunities for cooperation in the agricultural sector, with policy and cooperation mechanisms, agricultural trade and investment, technical cooperation, and intellectual support (training and education) being the focus areas," Ma said.

Agriculture has been a major area of cooperation between China and African countries. To date, China has signed memorandums of understanding, or protocols in the agricultural sector with 21 African countries and made investments of over $2.12 billion. China's agricultural projects in Africa have created more than 20,000 jobs and offered technical guidance to over 100,000 local farmers.

Ma Guohui, deputy director at the China National Hybrid Rice R&D Center, said the center has set up hybrid rice trial programs in many African countries like Madagascar and Liberia, and has been offering technical support to local staff.

"China's hybrid rice research is leading the world and has made significant contributions in easing Africa's food shortage problems. Compared with conventional rice, hybrid rice has obvious advantages in production. In China, grain output from hybrid rice plantations can feed up to 80 million people," Ma said.

In May, the China National Hybrid Rice R&D Center set up a research center in Madagascar, in association with the Madagascar agriculture ministry and local companies.

"Going forward, we are eyeing more cooperation with African countries, and will try to connect with more academic organizations and companies. We will also work to develop new kinds of hybrid rice that are suitable for African countries and offer technical training to more local staff," Ma said.

Fadel Ndiame, vice-president of the Alliance for a Green Revolution in Africa, an association aiming to boost agricultural development in Africa, said the expo benefited African countries through better communication in agricultural techniques.

"(We need to) have good technologies ... to have the ecosystem, the institution extension, finance, (and) processing, to guarantee the quality of rice," Ndiame said.

"The expo gave us an insight into those experiences. It also enabled African leaders who have a plan to make concrete deals," Ndiame said.

Vincent Bamulangaki Ssempijja, Uganda's minister of agriculture, said he strongly believes that by working with China through joint venture businesses, investment arrangements and win-win cooperation, the majority of African countries can quickly eradicate poverty.

"On the wider front, Uganda has already put in place favorable investment policies that have attracted the interest of Chinese companies," the minister said.

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2019-07-07 14:13:58
<![CDATA[Iron ore futures fall on major bourses]]> http://www.chinadaily.com.cn/kindle/2019-07/06/content_37488843.htm

Authorities to probe illegal behavior pertaining to price manipulation

Iron ore futures fell sharply on Friday, after a top official of the China Iron and Steel Association said authorities will crack down on illegal behavior related to iron ore price manipulation.

On early Friday morning, Qu Xiuli, deputy head of the CISA, said iron ore prices have formed a severe inverse relationship with steel output prices in China, and the Chinese authorities, noticing the sharp rise in iron ore prices, are investigating the cause and will strictly crack down on behaviors disturbing the market, including unjustified price increases and price manipulation.

Qu made the remarks early Friday during the 4th China Steel Derivatives International Conference held in Shanghai.

Qu stressed that the slide in steel output prices and soaring iron ore prices have continuously cut down the profitability of steel companies, making it difficult for steel companies to cope with the situation.

The distorted price relationship between iron ore and steel production is damaging the sustainability of the steel industry, she said.

The association also has assembled a special panel with executives from leading Chinese steel mills to study issues related to iron ore imports, such as the security of supplies, the pricing mechanism, and the tracking of the market.

The panel will report to the Chinese authorities about factors disturbing the normal market order of iron ore, as well as give them suggestions on how to regulate the market.

The most active iron ore future on the Dalian Commodity Exchange, for delivery in September, slumped 5.85 percent to 829.5 yuan ($120) a metric ton at closing. The lowest price during Friday's trade was 816 yuan a ton.

Previously, iron ore futures on the Dalian Commodity Exchange reached a record high in more than five years on Wednesday, as the most-active iron ore contract surged to 911.5 yuan a ton. It then closed 3.77 percent lower at 868 yuan on Thursday.

Platts Iron Ore Index also showed iron ore prices have almost doubled in the past year.

Experts said such sharp rises in iron ore prices are not well supported, although reasonable growth in iron ore prices was expected earlier, considering the increased demand from the Chinese market and shrinking global supply.

"The price of iron ore has increased more than the extent that can be supported by fundamentals, like supply and demand," said Zhu Yi, a senior metals and mining analyst with Bloomberg Intelligence.

The tight supply from overseas mines and rising demand from domestic steel mills are two of the fundamental reasons for the price jump, but profit margins of domestic steel mills are pressured currently due to high iron ore prices, she said.

Li Xinchuang, president of the China Metallurgical Industry Planning and Research Institute, said the increased output of Chinese mills, growing about 10 percent from 928 million tons of crude steel last year, indeed helps bolster iron ore price, especially when the main iron ore producers have lowered output and estimates due to mine shutdowns and weather disturbances.

"It is absolutely abnormal that iron ore has become more expensive than in 2008, when oil prices and shipment costs were much higher than now," he said.

He said the profit margin of China's steel industry will slip to less than 3 percent this year from 6.93 percent last year, mainly due to the impact of soaring iron ore prices, although imprudent output expansion from some steel mills is also a factor.

He said action should be taken to crack down on speculation, because futures are supposed to be a hedging tool helping the industry to reduce risk, not the other way around.

Steel mills should curb imprudent output expansion, and the industry should strengthen reuse and recycling of scrap steel to reduce reliance on foreign iron ores, he said.

Zhu estimates as supply will gradually increase, iron ore price increase will be limited in the second half of this year, and steel mills will then have better profit prospects.

Contact the writers at liuzhihua@chinadaily.com.cn

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2019-07-06 07:32:51
<![CDATA[Chinese brandy producer eyes pole position]]> http://www.chinadaily.com.cn/kindle/2019-07/06/content_37488842.htm

With around 10 kilograms of Ugni Blanc grape being fermented into wine and then distilled twice to age in oak barrels for at least six years, a bottle of 700 ml Koya brandy is created, giving Chinese consumers more choices for high-end brandy.

To expand the Koya products in the domestic market, Yantai Changyu Pioneer Wine Co Ltd, China's leading wine producer, officially opened Chateau Koya, the country's first professional brandy chateau, in Yantai, Shandong province, on June 28.

"Koya brandy is positioned toward middle-and high-end customers," said Sun Jian, general manager of Changyu, adding Koya products enrich the company's brandy portfolio.

The Koya brandies being put into the market have three series: Koya VSOP which mature in oak barrels for six years, the 10-year Koya XO, and the 15-year Koya XO.

As early as in 1915, a brandy product of Changyu won a gold medal at the Panama-Pacific International Expo in San Francisco.

Last year, the company produced over 40,000 metric tons of brandy, generating 1 billion yuan ($145 million) worth of sales for Changyu, the company said.

"Along with our domestic wine and imported wine, brandy products will be a major driver of our company's sales in the near future," said Zhou Hongjiang, chairman of Changyu.

Designed and built in the medieval Romanesque style of Europe, the main buildings of Chateau Koya cover an area of two hectares. The chateau has over 60 hectares planted with Ugni Blanc grape. It is expected to produce 300 tons of Koya products annually.

"There is a huge domestic market potential for brandy products. The domestic demands for brandy will remain high," said Wang Yancai, director of the China Alcoholic Drinks Association. "China's growing middle-income group offers better opportunities for growth."

The demand for brandy in China has grown steadily over the past few years. Data provided by CADA showed the amount of brandy consumed in 2018 reached 172,500 tons, from 152,200 tons in 2017 and 75,500 tons in 2010.

China's brandy production though is in its early days. Dozens of domestic wine companies produce brandy and only a few of them are in scale. Around 139,300 tons of brandy were produced in China last year, CADA said.

"China's current brandy market is mainly dominated by foreign products," said Wang Qi, executive vice-chairman of CADA. Last year, China bought 24.4 million bottles of cognac, becoming the third-largest consumer of cognac in the world.

Retail prices of Koya products on China's leading retail portal Taobao stand at a similar level with high-end foreign brandy products. On Taobao, a 700-ml bottle of Hennessy VSOP is priced from 488 yuan to 599 yuan while the same volume of a six-year Koya VSOP is 468 yuan.

"Chinese brandy producers can embrace precious opportunities to develop the domestic market if they can carry on Chinese wine-making culture, (and) use world class winemaking skills to ensure the brandy quality," said Wang Qi.

"Chinese brandy producers like Changyu have been making achievements on innovating efficient ways to create quality products. To promote the overall brandy industry in the domestic market, Chinese producers need to communicate and learn from their foreign counterparts," said Xu Yan, deputy head of Jiangnan University.

zhaoruixue@chinadaily.com.cn

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2019-07-06 07:32:51
<![CDATA[Online gaming companies going global]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488584.htm A growing number of Chinese online gaming companies are expanding globally, as gaming regulators have tightened their grip on the local market, which is reaching saturation point.

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Domestic players facing tighter regulations and stiff competition at home are increasingly looking further afield

A growing number of Chinese online gaming companies are expanding globally, as gaming regulators have tightened their grip on the local market, which is reaching saturation point.

"It is a growing trend that more Chinese companies are seeking opportunities globally," said Feng Bo, an internet industry solution expert at Tencent Cloud. "Domestic players face stiff competition in the market. And they need to confront various challenges, such as tight regulation controls and the declining demographic dividend."

China has long been the world's largest gaming market by revenue in recent years. However, for the first time since 2015, the United States will overtake China to become the largest gaming market by revenue globally with $36.9 billion this year, according to a recent report.

According to the Global Games Market report, released by gaming analytics company Newzoo in June, the nine-month freeze on game licenses, which ended last December, has heavily impacted China, and thus the Asia-Pacific is no longer the fastest-growing region. Latin America is now the fastest-growing games market in the world, with a compound annual growth rate of 10.4 percent.

According to the report, mobile gaming remains the largest segment in 2019, producing revenue of $68.5 billion - 45 percent of the global games market. And the growth in mobile game revenue will continue to outpace PC and console revenue growth in the coming years.

China's gaming industry is suffering its slowest revenue growth in a decade. The domestic gaming market grew by 5.3 percent year-on-year to 214.44 billion yuan ($31.22 billion) in 2018, compared to a 23 percent increase in 2017, according to statistics from Chinese gaming database Gamma Data Corp.

Overseas markets have become a key source of income for Chinese gaming companies. Last year, Chinese gaming developers earned $9.59 billion from self-designed online games in overseas markets, up 15.8 percent year-on-year.

To tap the fast-growing gaming markets internationally, an increasing number of gaming firms are already introducing games targeting overseas regions, and many have been reaping the rewards.

Legacy of Discord - Furious Wings, a Chinese fantasy-themed mobile game, has attracted a huge following globally, as it has gained leading spots in the sales rankings of 57 countries and regions.

Published by Shanghai-based Yoozoo Games Co Ltd, the action role-playing game now supports 16 languages, covering more than 190 countries and regions in the world.

"The competition is getting fiercer in overseas markets," said Liu Wanqin, Yoozoo's overseas distribution vice-president. "The challenge with overseas expansion is mainly how to deal with cultural differences and how to communicate with the game players. Thus we need to have a full understanding of both Chinese culture and the culture of specific overseas markets, which will help improve the creativity and technical levels of the games and produce high-quality content."

Liu said Yoozoo aims to be a leading gaming firm with a sense of globalization and strong international competitiveness.

"We've adopted a strategy that combines globalization and localization," Liu added. "On the one hand, we will introduce games based on globally influential intellectual property works, such as Games of Thrones, to cater to those who love intellectual property-related derivative works. On the other hand, we will launch specific games that meet local users' needs."

Founded in 2009, Yoozoo now owns branches globally, including in the United Kingdom, Germany, Japan, South Korea, India and Singapore.

Attaining nearly 1 billion registered users worldwide, Yoozoo has established a global distribution network covering more than 200 countries and regions. The company said it will continue to develop in regions where it has already gained an edge, such as North America, Europe, Southeast Asia and South Asia. And it will further expand globally, especially in South Korea, Japan and the Middle East.

Yoozoo gained the 11th spot in App Annie's Top 52 Publishers List of 2018 by earnings. The company reported its revenues surged by 10.68 percent year-on-year to 3.58 billion yuan in 2018, more than half of which was gained from overseas markets.

Statistics from App Annie showed mobile game revenues gained from the iOS App Store surged by 4 percent year-on-year in China last year, while the global number hit 13 percent.

Chinese gaming publishers earned $6 billion in overseas markets, with an increase of 49 percent year-on-year, App Annie said.

The US topped all other countries and regions in terms of the largest source of overseas income, followed by Japan and South Korea.

"While the domestic gaming market witnessed slow growth in 2018, Chinese gaming firms have earned a lot in fast-growing overseas markets," said Ren Ning, customer director at App Annie China region. "A growing number of Chinese gaming firms are expanding globally, and the trend will continue this year. As users' habits and tastes differ from country to country, Chinese gaming firms can always find a suitable place to launch their games and expand their business, giving them an equal shot to go global."

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2019-07-05 08:06:40
<![CDATA[Perfect World gears up overseas expansion to integrate worldwide resources]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488583.htm Perfect World Co Ltd, a leading Chinese gaming and movie conglomerate, is gearing up its overseas expansion as it looks to gain an edge in the global gaming market.

"Globalization is a key strategy for us," said Xiao Hong, CEO of Perfect World. "After years of overseas development, we are now seeking to integrate global resources instead of simply seeking expanding business in overseas regions."

Ever since Perfect World established its first overseas subsidiary in the United States in 2008, it has made a name and money for itself. The company was one of the largest game exporters in China during the past decade, occupying about 40 percent of the total at its peak.

The Beijing-based company reported in April that its revenue for 2018 rose 1.31 percent year-on-year to more than 8 billion yuan ($1.16 billion), of which 5.42 billion yuan was from the gaming sector. And its overseas revenue reached 1.48 billion yuan in 2018, up by 20.09 percent year-on-year.

The company said its overseas revenue was mainly from the overseas PC and console gaming sectors.

"We aim to become an influential player internationally," Xiao said. "Entering a new phase of global resource integration, we are committed to combining global expertise and taking the good parts to offer a world-class product."

For instance, the company's French team Magic Design Studio has developed a 2-D action-adventure game called Unruly Heroes. Based on the story of China's classic fantasy novel Journey to the West, the game was nominated for Best PC Game and Best Visual Art award at the Ping Awards 2018.

"Gaining a high score of 9.9 on Taptap (a mobile game sharing community), the game is the latest example of our global resources integration strategy," Xiao said. "And now our team will develop a new mobile version of Unruly Heroes."

So far, Perfect World has wholly owned subsidiaries in North America, Europe and Asia, and has set up 20 overseas branches in countries and regions including the US, the Netherlands, France, South Korea and Japan.

Now, Perfect World wants to expand to more markets globally, especially emerging markets.

"To further boost our overseas business, we need to focus on those emerging markets with exponential growth potential," Xiao said.

According to the Global Games Market Report 2019 from Newzoo, mobile gaming will remain the largest segment in 2019, generating revenues of $68.5 billion - 45 percent of the global games market. And the growth in mobile games revenue will continue to outpace PC and console revenue growth in the coming years.

Seeing this booming trend, Perfect World is accelerating its push to develop mobile gaming in overseas markets, especially Western countries.

"Previously, we mainly provided PC and console games in Western countries, as the two categories occupy the largest share in the local gaming market," Xiao said. "Noticing the rapid growth in mobile games, we will make new moves in the North America region this year."

Another report released by Google and Chinese gaming database Gamma Data Corp shows that revenue generated by Chinese mobile game companies only accounts for 15.8 percent of the total overseas market, and thus there is huge room for growth.

China's mobile gaming revenue reached $19.44 billion in 2018, occupying 30.8 percent of total global revenue, the report said.

In fact, China's mobile games market is suffering its slowest revenue growth in a decade. The country's licensing freeze lasted nine months till December, contributing to a 15.4 percent year-on-year growth in the mobile games industry last year, compared to the 41.7 percent year-on-year increase in 2017, statistics from Gamma Data showed.

Liu Wei, an analyst from market research company iResearch, said the approval freeze led to thousands of new games being blocked from the market in 2018.

"The demographic dividends are wearing off, which is another factor driving the slowing growth," Liu said.

"While the gaming sector is still under a regulatory environment of tight controls of total video games numbers, it will take a while for gaming companies to adapt to the new environment and make moves accordingly," he added.

 

Performers are dressed like games characters at the stand of Perfect World Co Ltd during an exhibition in Shanghai. Provided to China Daily

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2019-07-05 08:06:40
<![CDATA[China-Africa trade ties to blossom]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488582.htm Tangible progress was made in bilateral economic ties and trade cooperation between China and Africa during the first China-Africa Economic and Trade Expo held in Changsha, Hunan province, last month.

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Changsha expo makes tangible progress in new bilateral deals and projects

Tangible progress was made in bilateral economic ties and trade cooperation between China and Africa during the first China-Africa Economic and Trade Expo held in Changsha, Hunan province, last month.

Eighty-four deals worth $20.8 billion were inked between China and African countries during the three-day expo, covering a wide range of areas, including trade, investment, infrastructure, agriculture, manufacturing, aviation, tourism and sister city relations.

The expo, themed "Win-Win Cooperation for Closer China-Africa Economic Partnership", attracted more than 6,600 guests and over 3,500 exhibitors, buyers and visitors from home and abroad, including 53 African countries.

Business executives, officials and government officials attending the expo hailed the event as an exchange platform for China and Africa to share information and experiences.

Tarek Amri, vice-president at Sany Heavy Industry Co Ltd and former ambassador of Tunisia in China, said the expo offers good opportunities for both sides to sit together and identify projects for implementation.

Ye Xinping, chairman of Hunan Construction Engineering Group, said the expo is in line with the new trend, new features and new demands for China-Africa economic and trade development in the new era.

"It helps gather more resources to inject new impetus into Sino-African economic and trade cooperation," Ye said. "China and Africa are making efforts to shift the model of economic development, foster new growth drivers and seek new opportunities in cooperation. The two sides will build broader cooperation in areas of mutual interest."

State-owned Hunan Construction Engineering Group mainly focuses on building and installation, road and bridge construction, survey and design, scientific research, equipment manufacturing and real estate development. So far, it has participated in key projects in more than 30 countries and regions globally, covering areas such as roads, housing construction, municipal projects, water projects, electric power and airports.

"Similar to China in the 1980s, Africa is at the initial stages of highspeed development. Thus local governments need to focus on infrastructure and energy construction and address projects closely related to people's lives, such as water, electricity and food," Ye noted. "Actually, those are what Chinese enterprises are good at," he said.

The company has built landmark projects in several African nations, like the iconic wrestling ring in Dakar, Senegal. Covering an area of 18,000 square meters and capable of accommodating some 20,000 spectators, the modern structure was delivered in 2018 after two years of construction. The project created 3,000 jobs for locals and helped train more than 1,000 skilled workers.

"China is serious about further opening up and building stronger economic and trade ties with Africa," said Mark Greeven, professor of strategy and innovation at the Switzerland-based International Institute for Management Development. "While a lot of countries, especially the developed economies, are mainly focused on other parts like Europe and the United States, China seeks opportunities in emerging nations in Africa, something that will help Africa's inclusion in global trade routes."

"There is a lot of potential in African markets, as seen in the entrepreneurial activities of some African countries," Greeven said. "Today, many African nations like Kenya and Ghana are starting to emerge as entrepreneurial hot spots, boasting a lot of economic activities and an emerging group middle class."

Greeven said that for expansion in the African markets, Chinese companies need to better realize and understand the way of doing business in the continent.

"Expos like the one held in Changsha are primarily mechanisms for both sides to set to know each other's practices, habits, needs, expectations and find ways to work together," Greeven said. "It's going to take a while to know each other better. And both sides need to build up an understanding of each other and find ways to do business together."

China has been the largest trading partner of Africa for 10 consecutive years. Last year, trade volume between China and Africa amounted to $204.2 billion, up 20 percent year-on-year, statistics from the Ministry of Commerce showed.

By the end of 2018, more than 3,700 Chinese companies were present in Africa, with combined direct investment over $46 billion.

Yonov Frederick Agah, deputy director-general of the World Trade Organization, said there are many dimensions to the China-Africa partnership with the most important one being multifaceted engagements with an overlapping focus on cooperation.

China is helping economic development in Africa through the infrastructure and technologies it is creating on the continent and the employment, market opportunities that it is helping to generate, he said.

"I believe the China-Africa Economic and Trade Expo is a reminder that the search for mutual credibilities should encourage more cooperation and trust in the global trading system," Agah said.

Charles Kayonga, Rwanda's ambassador to China, said the expo is an excellent opportunity to showcase China's pledge to further open up its markets to Africa and offer a platform for players from Africa to display/sell their made-in-Africa products.

"China has several infrastructure projects in Rwanda and is willing to offer support in this regard. Last July, when China's top leadership visited Rwanda, we signed 15 agreements, and we are continuing to implement them with China's support. We are supporting mineral exploration, and we are working on building mineral processing plants... the future (of China-Rwanda economic relations) is bright," Kayonga said.

 

African artists perform a traditional dance at the exhibition area during the first China-Africa Economic and Trade Expo held in Changsha, Hunan province, last month. Xu Xing / For China Daily

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2019-07-05 08:06:40
<![CDATA[Construction services firm eyes infrastructure boost]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488581.htm Construction services firm China CAMC Engineering Co Ltd is further expanding its presence in Africa and looking to participate in more local projects via investment-construction-operation, a senior company executive said.

"We are gearing up to spend more money and resources to develop the rapidly growing African markets, "said Liu Shengcheng, vice-president of CAMCE, a subsidiary of China's State-owned China National Machinery Industry Corp (Sinomach). "With the industrial upgrading and transformation, I believe there is huge room for growth in African markets in the future."

The company aims to be an internationally renowned investment development and engineering services provider, and will focus on areas related to local people's livelihood and projects that bring economic benefits and improve the local infrastructure.

According to Liu, the company is currently looking for investment projects in Ethiopia, Kenya, Zambia, Tanzania and other African countries.

"We are looking to develop our business in Africa by way of investment-construction-operation, especially in the fields that we are familiar with, such as factory construction, agricultural products processing, water treatment and power projects.

"Buoyed by the Belt and Road Initiative, more Chinese companies are accelerating their push to go global, providing strong support for African infrastructure construction," Liu said. "As African infrastructure has greatly improved, Chinese firms need to focus on production capacity cooperation, especially in the field of investment.

"After 40 years of development, China has accumulated abundant experience in fields including industrial planning, enterprise management and technological research and development. Implementing projects with the investment-construction-operation model will be a win-win strategy for both sides. For China, it will bring long-term benefits. For Africa, it will alleviate the government's debt burden and create more jobs for local people," Liu added.

Founded in 2001, the Shenzhen-listed CAMCE mainly focuses on international project general contracting, domestic and overseas investment and trade business. The company has signed new contracts worth over $5 billion within the markets related to the Belt and Road Initiative between 2013 and 2018.

To date, the company has set up branches in 14 African economies. It has operated a wide range of projects that cover fields including industrial engineering, power engineering, transportation, water projects, agriculture, petrochemicals and mining.

"We have participated in not only many infrastructure projects but also many industrial projects that help create revenue. With the improved African infrastructure construction, the next focus will be industrial projects," Liu said.

He said Chinese engineering companies have worked closely with those from developed countries in African markets, instead of fiercely competing with them.

"Many African countries can hardly afford the cost of projects taken by companies from advanced countries. Actually, developed countries mainly serve as investors, consultants and equipment suppliers in African markets," Liu said.

Among CAMCE's ongoing projects, the Welkait sugar plant project in Ethiopia stands out.

Located in Tigray province in northern Ethiopia, the project has a contract value of $647 million. The project includes the construction of a sugar plant with daily sugar cane crushing capacity of 24,000 metric tons and a bagasse-fired power plant, which will help make up locals' demands for sugar and power.

Once completed, the project will directly create 1,000 jobs, and the supporting production business and living facilities will offer job opportunities for more than 10,000 people.

Mark Greeven, professor of strategy and innovation at Switzerland-based International Institute for Management Development, noted a whole range of African countries with large populations and strong economic development offers great opportunities for trading partners like China.

"As the two sides have very different cultural backgrounds, it is important for Chinese companies to realize and understand the way of doing business in Africa," Greeven said.

Actually, Liu said the company was looking not just to expand in African markets but to focus on facilitating localization in those markets. "We will further expand to more countries in Africa. To better cater to the local markets and build better relationships, we will subcontract almost all civil engineering work and hire locals to help operate our African projects.

"We need to localize our overseas business to deal with problems as locals do, which will benefit both sides and help increase mutual understanding."

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2019-07-05 08:06:40
<![CDATA[Agriculture cooperation likely to see fast growth]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488580.htm Agricultural cooperation between China and Africa is set to see a rapid growth, judging by the expressions of interest and deals signed between the two sides at the recently-held China-Africa Economic and Trade Expo in Changsha.

Deals for eight agricultural projects worth $2.747 billion were signed at the expo along with proposals to strengthen South-South and Triangular Cooperation raised by seven organizations, including the China International Center for Economic and Technical Exchanges, the China National Hybrid Rice R&D Center, and the African Union.

The expo follows the eight initiatives unveiled at the 2018 Beijing Summit of the Forum on China-Africa Cooperation to boost trade and investment between the two regions.

Ma Youxiang, head of livestock production at the Ministry of Agriculture and Rural Affairs, said China has been offering tech and financial support to Africa's development of agriculture, and has made several significant achievements.

"Going forward, China and Africa will see compelling opportunities for cooperation in the agricultural sector, with policy and cooperation mechanisms, agricultural trade and investment, technical cooperation, and intellectual support (training and education) being the focus areas," Ma said.

Agriculture has been a major area of cooperation between China and African countries. To date, China has signed memorandums of understanding, or protocols in the agricultural sector with 21 African countries and made investments of over $2.12 billion. China's agricultural projects in Africa have created more than 20,000 jobs and offered technical guidance to over 100,000 local farmers.

Ma Guohui, deputy director at the China National Hybrid Rice R&D Center, said the center has set up hybrid rice trial programs in many African countries like Madagascar and Liberia, and has been offering technical support to local staff.

"China's hybrid rice research is leading the world and has made significant contributions in easing Africa's food shortage problems. Compared with conventional rice, hybrid rice has obvious advantages in production. In China, grain output from hybrid rice plantations can feed up to 80 million people," Ma said.

In May, the China National Hybrid Rice R&D Center set up a research center in Madagascar, in association with the Madagascar agriculture ministry and local companies.

"Going forward, we are eyeing more cooperation with African countries, and will try to connect with more academic organizations and companies. We will also work to develop new kinds of hybrid rice that are suitable for African countries and offer technical training to more local staff," Ma said.

Fadel Ndiame, vice-president of the Alliance for a Green Revolution in Africa, an association aiming to boost agricultural development in Africa, said the expo benefited African countries through better communication in agricultural techniques.

"(We need to) have good technologies ... to have the ecosystem, the institution extension, finance, (and) processing, to guarantee the quality of rice," Ndiame said.

"The expo gave us an insight into those experiences. It also enabled African leaders who have a plan to make concrete deals," Ndiame said.

Vincent Bamulangaki Ssempijja, Uganda's minister of agriculture, said he strongly believes that by working with China through joint venture businesses, investment arrangements and win-win cooperation, the majority of African countries can quickly eradicate poverty.

"On the wider front, Uganda has already put in place favorable investment policies that have attracted the interest of Chinese companies," the minister said.

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2019-07-05 08:06:40
<![CDATA[Novartis seeks nod for 50 drugs]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488579.htm Swiss pharmaceutical giant Novartis AG plans to submit applications for 50 innovative drugs focusing on unmet medical needs in China by 2023, riding the wave of streamlined and accelerated new drug approvals in the country.

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Company plans to tap unmet medical needs with innovative NDAs in China

Swiss pharmaceutical giant Novartis AG plans to submit applications for 50 innovative drugs focusing on unmet medical needs in China by 2023, riding the wave of streamlined and accelerated new drug approvals in the country.

Most of the drugs will target major diseases plaguing Chinese patients such as cardiovascular, eye and respiratory diseases, and tumors, John Tsai, head of global drug development and chief medical officer for Novartis, said in an interview with China Daily in Shanghai on Thursday.

A drug treating asthma may become the first orally taken medicine to provide both efficacy and convenience for the patient population in China, Tsai said.

"We have a 5,000-patient study going on and will be reporting out before the end of this year. This unique oral drug will help patients with asthma in China," he said.

The country's regulators have streamlined and sped up new drug approvals by including fast track approvals of medicines with an urgent clinical demand or those treating rare diseases.

A report by global market consultancy McKinsey showed nearly 50 new medicines were approved in China in 2018, and the approval period was reduced by a year.

Regulatory reform has been tremendous in allowing pharmaceutical companies to develop drugs much faster than in the past, Tsai said, and examples would include timelines for clinical trial application, which used to take up to three years and is now as short as three months, similar to the main markets in the rest of the world.

"In light of the governmental regulatory reforms, we are working to have every pivotal drug development program include China from the beginning by default," said Tsai.

With such advances, the company was able to obtain 24 approvals for new drug applications in China in the last two years, including those for nine new molecular entities.

"Such a pace makes China definitely the fastest marketplace in terms of the number of applications compared with anywhere else in the world," Tsai said.

Such a pace also derives from Novartis' robust pipeline of drugs and its commitment to the Chinese market, which brought into being an end-to-end research group consisting of 700 scientists from discovery, translational research, to development research based in Shanghai and Beijing to advance treatments with a focus on patients in China, Tsai explained.

This research group started in 2006 to focus mainly on diseases prevalent in China and Asia, such as liver cancer, gastric cancer, and nasopharyngeal carcinoma, a type of head and neck cancer. "We do have drugs and keep exploring drugs that will treat such diseases," he said.

Healthcare information company IQVIA estimated the pharmaceutical market in China would reach $170 billion in 2021, a nearly 50 percent increase from the size five years ago.  

 

A Novartis employee walks past equipment at a research lab in Shanghai. Bloomberg

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2019-07-05 08:06:40
<![CDATA[Artificial intelligence set to revolutionize wealth management]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488578.htm

Wealth management is on the cusp of a revolution powered by artificial intelligence that offers predictive analysis and recommendation engines so individuals can make better investment decisions.

The next wave of computational tools is already available to users of Ant Fortune, the wealth management platform of Ant Financial Services Group, as the number of individual investors in nonmoney market funds doubled in the past year thanks to higher returns on investments backed by algorithms. Ant Financial is an affiliate of Alibaba Group.

During a recent conference in Shanghai, Ant Financial said AI has fueled 70 percent growth in the number of transaction users from last year on its Ant Fortune platform, with those who have purchased automatic investment plans having jumped 1.7 times year-on-year.

"Ant's ambition is to mimic a high-end private banking model, where customers place the majority, if not, all of their assets in one channel because they can fulfill different financial tasks through a unified platform," said Li Chao, a senior analyst at iResearch.

Launched four years ago, the Ant Fortune app works as a retailer that features and sells selected financial products from its sister companies and third-party financial institutions.

So far, some 80 fund companies have set up virtual stores through the "Fortune Account" function, with nearly 5,000 fund products available to its over 600 million end users, company statistics showed.

Third parties will be able to sell their own products to users directly and publish content on the app. The admin dashboard for Fortune Account owners provides data analysis and customer relation management tools. With the aid of AI, Ant Fortune will also help push their products to targeted users.

Ant's advantage is based on its massive customer base, a comprehensive payment system, and the consequent fame needed to win the trust of both partner institutions and end users.

"By far, average transaction value of institutions that have opened storefronts via Ant platform is 62 times that of those who have not. Besides, the former's asset management scale is 68 times that of the latter," said Huang Hao, president of Ant Financial's digital finance business unit.

Building on the momentum, Ant Fortune debuted its AI bot assistant on smart wealth management. The intelligent assistant can, in real time, help users review their asset allocation, evaluate their investment portfolio, learn financial knowledge and risks, as well as receive customized asset allocation suggestions.

The platform's algorithm recommends funds based on each user's financial profile and goals, closing financial literacy gaps that in the past may have prevented many users from investing.

Digital disrupters, led by China's internet and online commerce giants, have grabbed a roughly 30 percent share of the Chinese mainland's fund distribution market by "tapping into underserved customer segments with high mobile penetration," said Ray Chou, a Shanghai-based partner with consulting firm Oliver Wyman.

He identified the winning recipe as robo-advisory, which applies AI and advanced data analytics to leverage their customers' spending patterns and other behaviors generated to improve customer targeting and expand its offerings.

The consultancy estimated that in China, credit-tech enabled outstanding balance will reach 68 trillion yuan ($9.9 trillion), or 35 percent of the total balance in the market, by 2022.

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2019-07-05 08:06:40
<![CDATA[Mutual trust holds key to trade talks]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488577.htm China and the United States need to build stronger mutual trust and understanding to advance their economic and trade consultation, experts said.

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US side needs to realize that 'bullying measures' are not workable solutions

China and the United States need to build stronger mutual trust and understanding to advance their economic and trade consultation, experts said.

This call came after President Xi Jinping and his US counterpart Donald Trump agreed on Saturday at the G20 Summit to resume trade talks that were stalled in May.

"The Xi-Trump meeting at the G20 Summit is of great significance," said Dong Yan, director of the international trade office at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences.

The consensus reached between the two leaders to advance bilateral relations featuring "coordination, cooperation and stability" can guide the future direction of trade talks, Dong said. "It will help the two countries to get the talks back on track, which can ease the downward pressure on global economic growth," she said.

Although there are good prospects for the future, Dong noted, "There will be twists and turns along the way, so more mutual trust and understanding is needed between the two sides."

China and the US have been embroiled in a nearly yearlong trade dispute, and have exchanged tariffs on billions of dollars of each other's imports. Before the top leaders' meeting at the G20 Summit, negotiators from both sides had held 11 rounds of high-level talks.

Wang Xiaosong, a professor of international trade at Renmin University of China's School of Economics, said both negotiating teams need to make continued efforts in the upcoming negotiations.

"Trade talks should be conducted in the spirit of equality and mutual benefit. Negotiators need to enhance their mutual trust and get a greater understanding of each other," he said.

Possible factors impeding the progress of the talks include the fact that the two sides still have a difference over China's purchase value of US products, he added.

After his meeting with Xi on Saturday, Trump said at a news conference that existing tariffs would remain in place on Chinese imports while negotiations continue, but additional tariffs he had threatened to impose on other Chinese goods would not proceed for the "time being", US media reported.

Gao Feng, spokesman of the Ministry of Commerce, said on Thursday that if China and the US could reach a trade deal, the US must eliminate all tariffs that have been imposed on Chinese imports.

Dong said: "The US side needs to realize that trade bullying measures are not workable solutions to address existing issues with China. Furthermore, it is necessary to build a new mechanism that can fit the environment where the economic strengths of China and the US have been changing."

"The US side should become aware of China's sincerity in pushing forward with trade talks, as well as the country's concrete progress that has been made in reform and opening-up," Dong said. She cited that two shortened negative lists - identifying sectors in which foreign participation is restricted, will take effect on July 30.

Dong said there are encouraging signs that in the US, those who support the decoupling of the US and China economies had failed to get the upper hand.

While China and the US agreed to resume their talks, some argued that even though the two sides can possibly solve trade issues, their confrontation over technology would continue to intensify.

"Such an argument was influenced by the so-called 'China threat theory', and was exaggerated to some extent," said Zhou Mi, deputy director of the Institute of American and Oceania Studies of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

"If the US side insists on its policies containing China's technologies, Chinese companies will concentrate their efforts in making more technological breakthroughs. They may offer products and services in accordance with a different system of standards (from the traditional one)," he said.

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2019-07-05 08:06:09
<![CDATA[China still a vital market for hardwood from United States]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488576.htm The American Hardwood Export Council is optimistic toward the Chinese market and committed to discovering more demand for sustainable products despite the headwinds resulting from trade tensions between the two countries.

As the largest export destination for US hardwood, China remains a crucial market for the US hardwood industry and the industry is committed to working with the China market, said Michael Snow, the council's executive director.

"American hardwood exports to China face many challenges, including tariffs, extreme weather and a general slowing of demand, but China remains the largest export market for American hardwood," said Snow.

"We will continue to put more effort into collaboration and promotion in the China market, discover more market needs, fully utilize the low-carbon, sustainable and environmentally friendly characteristics of American hardwood and promote American hardwood application in more fields," Snow added.

Despite the trade dispute, during the past 28 years in the Chinese market, the AHEC said Chinese consumers' awareness of high-quality sustainable materials has grown.

"We welcome a higher consumer awareness in China as well as the rest of the world," said American Hardwood Export Council Chairman Scott Seyler.

He added that as wood proved to be better in terms of environmental impact than other materials, the council was glad to see the positive trend in China.

The trade friction between the two countries has led to a yearly decline in the export volume of US hardwood lumber from January to April.

"American hardwood lumber exports totaled $484 million in China from January to April, a decline from the previous year. Looking forward to the second half of this year and toward the future, we hope that market conditions will recover as soon as possible," he said.

According to the council's report, the market value for the US hardwood lumber exports has fallen from $2.1 billion in 2017 to $1.9 billion in 2018.

"We recognize that the longer this goes on, there will be long-term damage on both sides. We have already seen some of the member companies of AHEC stop operating because they have lost the Chinese market," he added.

"Since 2007, US companies'investment in China has yielded growing profits. While China had a trade surplus, the benefits US companies gained from their China operations were also profound," said Huang Qunhui, an industrial economics researcher at the Chinese Academy of Social Sciences.

"The current global industrial chain was formed under the leadership of US-based multinational companies, so a trade war will only result in losses for US companies."

 

An employee sorts boards as they exit a cutting machine at the Nicolet Hardwoods Corp lumber mill in Laona, Wisconsin, the United States. Bloomberg

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2019-07-05 08:06:09
<![CDATA[Baidu condemns attack on its CEO]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488575.htm Internet search giant Baidu Inc has strongly condemned the man who poured water on the head of Robin Li, its chairman and chief executive officer, during the company's annual developers' conference in Beijing on Wednesday, saying that the man's "malicious" action was "shameful" and "disturbing".

The man, surnamed Cheng, was given five days of administrative detention on Thursday morning for disturbing public order by Beijing police.

The police conducted an investigation and made the decision after receiving a report from Baidu staff members at about 11 am on Wednesday, according to a statement posted on the Sina Weibo account of the public security sub-bureau in the capital's Chaoyang district.

Baidu released a written statement on Wednesday evening, saying that "if our society tolerated such extreme behavior, then similar practices could be repeated in future conferences and events, and everyone exposed at public events could become potential targets. People definitely don't want to see this."

It said the man had been taken away by police for investigation. "Some unexpected things will happen on the road to artificial intelligence. However, our determination to move forward will not change," Baidu said.

Li was speaking about the AI-powered valet parking service when a man in a black T-shirt rushed up to the stage from the audience and upended a small bottle of water over his head.

"What's your problem?" Li said in English. About 20 seconds later, he continued his speech. "As everyone has just seen, there will be a variety of unexpected happenings on the road to AI."

A video of the attack quickly spread on Chinese social media and aroused public attention. A Sina Weibo user named Zhinanshangshu was suspected by Chinese netizens as being behind the attack on Li.

The user had been uploading photos to his Sina Weibo account detailing his plans, and had posted the caption he was "ready to go on stage" and "what will happen if I pour water over your boss' head "under a photo of the conference venue before the incident.

Baidu didn't confirm if that user and the man on stage were the same person, but said live-blogging the incident was "shameful" and "disturbing".

"If the person poured water on the speaker who was giving a speech, it will not only interfere with the normal progress of the conference, but also insult the speaker's personality and dignity to a certain degree," said Cao Lei, director of the China E-Commerce Research Center, adding that such behavior could be punished for disturbing public order.

Cao said the netizens should make comments on Baidu rationally, but don't take "extreme" actions and attack others.

"The incident has also exposed some problems such as inadequate security at large venues, which has also sounded alarm bells for other internet companies," Cao added.

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2019-07-05 08:06:09
<![CDATA[Seazen Holdings' chairman held in criminal custody for 'personal reasons']]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488574.htm

A black swan seemed to be looming in front of the property empire Seazen Holdings soon after its chairman was detained on suspicion of molesting a nine-year-old girl.

The Putuo branch of the Shanghai Public Security Bureau said in a notice on Wednesday night that a 57-year-old suspect surnamed Wang was accused of molesting a girl on June 30. The suspect has been held in criminal custody by Putuo police.

The A-share listed Seazen said in an exchange filing late on Wednesday that its chairman Wang Zhenhua - the company's actual controller - has been held in criminal custody for "personal reasons".

The scandal was first reported by the Shanghai newspaper Xinmin Evening News on Wednesday afternoon and instantly went viral on the internet. The two Hong Kong listed subsidiaries, Future Land Development Holdings Ltd, plunged by 23.86 percent and S-Enjoy Service Group shed 23.72 percent during the last hour of trading on Wednesday. Seazen Holdings was unaffected since the A-share market closed earlier.

But the fluke did not last long. Future Land's price dropped by the daily limit of 10 percent soon after the market started trading on Thursday. Future Land and S-Enjoy continued to report 10.57 percent and 13.11 percent slide respectively. With that, the Seazen companies have lost 30 billion yuan ($4.4 billion) within two days.

The company's related bonds were also heavily hit. Its two bonds issued at the Shanghai Stock Exchange both dropped more than 8 percent on Thursday. Its US dollar bond due by 2023 shed a 27 percent on Wednesday, hitting a record high.

Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution, said that the scandal of Wang molesting a girl can be defined as a black swan incident for the company. It has made a huge contrast to the steadily advancing business of the company over the past two years. It will be a harsh task for the company to retain its corporate image, he said.

Seazen was founded in Changzhou, Jiangsu province, in 1993. Gauged by sales revenue, Seazen entered China's Top 10 developers list compiled by real estate market tracker CRIC for the first time in 2018. Its turnover surged 74.8 percent to 221.1 billion yuan last year.

But the rapid expansion has resulted in Seazen's high debt level. According to the company's 2018 fiscal report, Seazen's total liabilities came at 279.4 billion yuan. Its asset liability ratio soared to 88.51 percent by the end of first quarter.

Seazen immediately appointed 32-year-old Wang Xiaosong, the scandal-hit chairman's only son, as the new chairman. The son started his career at Seazen in 2009 but resigned in 2016. But he returned as president of the company last August after his father stepped down from the post.

Hui Jianqiang, head of research with Beijing Zhongfang-Yanxie Technology Service Ltd, suggested to the new chairman that apologies should be made to the victim in public.

He also warned that the stock market plunge in the past two day is "just the prelude of greater losses. Seazen is likely to see more sells in coming days, and its financing, sales and partnership will feel the pinch of this incident, which poses a big challenge for the new head."

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2019-07-05 08:06:09
<![CDATA[BRI-related investments bring substantial benefits for Bangladesh]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488573.htm Bangladesh's presence in the Belt and Road Initiative has considerably expanded since 2016, said Sheikh Fazle Fahim, president of the Federation of Bangladesh Chambers of Commerce and Industry.

BRI-related projects in the South Asian country, which have reached a value of around $10 billion, are expected to create jobs, boost industrial development, contribute to gross domestic product growth, and make Bangladesh a more attractive destination for foreign investors, Fahim said in an exclusive interview with China Daily on Wednesday.

"For Bangladesh, BRI-related investment is spread across multiple sectors which will contribute to Bangladesh's rapid GDP growth, including infrastructure, connectivity and shipping," he added.

The $165 million Bangladesh Power System Upgrade and Expansion Project has benefited the country by helping provide electrical connections to more than 2.5 million rural people, significantly improving their lives, said Fahim.

In addition to infrastructure and manufacturing projects, the official said there is also great potential in the information and communication technology sectors as well as those yet to be tapped under the initiative.

"In the future, we could also focus on innovation-driven development with joint collaboration in the new generation of information technology such as artificial intelligence, big data, quantum information and biotechnology, in addition to the expansion of smart technologies including intelligent human computer interactions, industrial robots, smart factories and smart logistics," he said.

Fahim spoke highly of the economic cooperation between Bangladesh and China and said he believes it would become wider and deeper in the future.

China is Bangladesh's largest trading partner. Bangladesh has become China's second-largest trading partner in South Asia, with bilateral trade between the two countries having nearly quadrupled in the past 10 years to exceed $12 billion in the last fiscal year, the FBCCI said.

Around 400 Chinese companies are operating in Bangladesh in power, textiles, weaving, leather, footwear, construction, engineering and non-banking financial institutions, with a net investment of $1.03 billion in 2018, Fahim explained, adding that the number is gradually rising.

In addition, he said the cooperation between the two countries in finance and e-commerce is becoming increasingly active.

A consortium consisting of the Shanghai Stock Exchange and Shenzhen Stock Exchange acquired 25 percent of the shares of the Dhaka Stock Exchange last year.

Ant Finance has become the strategic partner to Bangladesh's biggest online payment company Bkash. And UnionPay International has cooperated with Mutual Trust Bank, a private commercial bank in Bangladesh, to jointly launch debit and credit cards with mobile payment services.

"It is encouraging. However, there is more to be done," Fahim said.

The official said that with China's further opening-up of its economy, the strongest sectors of Bangladesh such as leather, ICT and fast-moving consumer goods will have greater access to the huge Chinese market and this will boost the growth of Bangladeshi companies.

In fields such as the telecommunication and digital economy, the presence of Chinese companies and businesses in Bangladesh would grow substantially.

Fahim said the FBCCI will continue to play its role in helping Chinese investors in Bangladesh through policy advocacy and by providing services to make it easier to do business.

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2019-07-05 08:06:09
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-07/05/content_37488572.htm Robust growth seen in accommodation market

China has reported robust growth in the sharing accommodation sector as market transactions surged 37.5 percent year-on-year in 2018, data from the State Information Center (SIC) showed. Last year, the combined turnover of the domestic sharing accommodation market stood at 16.5 billion yuan ($2.4 billion), with second-and third-tier cities witnessing fast expansion, the SIC said in a report. As China steps up support for its tourism industry and as more people are using their smartphones to book hotel rooms, the public's acceptance for and willingness to partake in sharing accommodation is rising. From 2015 to 2018, the sharing accommodation sector contributed 2.1 percentage points to the annual growth of China's accommodation sector. About 70 percent of those offering sharing accommodation services are those born in the 1980s and 1990s, the report said.

Beijing posts 7.5%rise in foreign trade

Beijing saw its foreign trade increase by 7.5 percent year-on-year to 1.15 trillion yuan ($167 billion) in the first five months this year, local customs said on Wednesday. From January to May, its imports grew 8.9 percent year-on-year to 955.56 billion yuan while exports rose 1.4 percent to 198.94 billion yuan, Beijing Customs said. The city saw trade with the European Union rise 22.1 percent year-on-year to 156.53 billion yuan from January to May, trade with the Association of Southeast Asian Nations go down 2.1 percent to 103.06 billion yuan and trade with Australia increase 61.7 percent to 84.94 billion yuan.

Alipay to save big sums for smaller businesses

Alipay announced on Wednesday that it will provide small and micro enterprise owners with digital tools that are free of charge, helping them save at least 50 billion yuan ($7.3 billion) in operating expenses over the next three years. According to Ni Xingjun, president of the Alipay Business Group at Ant Financial, SME owners need to embrace technological transformation to capture the opportunities brought by the digital economy. "In the next three years, we will help SME owners in China embrace digitalized operations so that they can avoid being left behind in the digital era," Ni said.

Bank of Ningbo sets up wealth management unit

Bank of Ningbo, a city commercial bank based in Ningbo, East China's Zhejiang province, has been approved to establish a subsidiary focusing on wealth management. Bank of Ningbo is the second city commercial bank in the country with approval by the China Banking and Insurance Regulatory Commission (CBIRC) to conduct wealth management business after Bank of Hangzhou. The wealth management subsidiary of Bank of Ningbo will be established with a registered capital of no less than 1 billion yuan ($145.7 million), according to a source at the bank.

Tesla builds 1,700 super chargers in China

US electric carmaker Tesla said on Wednesday that it had expanded the charging network in China and built more than 1,700 super chargers in its biggest overseas market. With a supercharger, a vehicle can be fully charged within an hour. The company has also installed more than 2,100 regular chargers in cities and tourist destinations across the country. On Tuesday, the company launched a mobile app in China, which allows customers to make service appointments online.

Natural gas pipeline construction starts

The middle section of the China-Russia east-route natural gas pipeline started construction on Thursday and is expected to be completed next October, according to China National Petroleum Corp, the country's biggest oil and gas company. The construction starts from Jilin province to Hebei province. Upon completion, the pipeline is expected to ease the gas shortage in northeastern China and the Beijing-Tianjin-Hebei region.

Infrastructure funding shortfall in Australia

Australia is facing a major shortfall in funding for critical infrastructure, according to a report from the Group of 20. The report, details of which were released by Fairfax Media, found that Australia has to spend an extra A$230 billion ($161.8 billion) on infrastructure by 2040 to deal with its growing population. It said that the government, led by Prime Minister Scott Morrison, should significantly increase its infrastructure spending by 0.35 percent of gross domestic product, the equivalent of A$7 billion in 2019 alone. According to the report, Australia's spending on roads is at an appropriate level but there are significant shortfalls in that on ports and railways.

UK launches new green finance initiative

The UK government unveiled its green finance strategy on Tuesday, urging the financial sector to take the lead in developing a greener economy to help meet the ambitious greenhouse gas emission target the country has set for the middle of the century. Announced during the Green Finance Summit in London, the strategy sets out plans to increase investment in sustainable projects and infrastructure, while ensuring the United Kingdom remains an international leader in decarbonization and meets its net zero carbon emissions target by 2050.

US trade deficit widens to $55.5b in May

The US trade deficit widened to $55.5 billion in May, up $4.3 billion from the revised April reading of $51.2 billion, the US Department of Commerce said on Wednesday. US exports in May increased to $210.6 billion, $4.2 billion more than in April, while imports rose to $266.2 billion, up $8.5 billion from the previous month, the department said.

Vietnam's cloth import rises in first six months

Vietnam spent more than $6.7 billion importing cloth in the first half of this year, posting a year-on-year increase of 7.6 percent. Its largest import market of cloth was China, followed by South Korea and Japan, according to the Vietnamese Ministry of Industry and Trade on Thursday. Between January and June, Vietnam imported 826,000 metric tons of cotton worth over $1.5 billion, down 1.3 percent in volume and 2 percent in value.

IMF urges Lebanon to implement reforms

The International Monetary Fund urged Lebanon to implement major structural reforms in a bid to slow the increase in public debt, the National News Agency reported on Wednesday. "The government must implement reforms to secure growth and stop the public debt from increasing," an IMF delegation said. It added that the measures taken by the government in the new 2019 state budget will only lead to a drop in deficit from 11.5 percent of GDP to 9.75 percent instead of 7.6 percent predicted by the government.

China Daily - Agencies

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2019-07-05 08:06:09
<![CDATA[Domestic purchases boost economy]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488084.htm Consumption will continue to be the strongest driver of China's economic growth and the country's regulators are looking at ways to further liberalize its potential.

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Policies to enhance entrepreneurship, employment and consumption are encouraging people to spend

Consumption will continue to be the strongest driver of China's economic growth and the country's regulators are looking at ways to further liberalize its potential.

Immediately after the three-day Dragon Boat Festival at the beginning of June, during which, according to China's Ministry of Culture and Tourism, Chinese tourists spent 39.3 billion yuan ($5.72 billion) on domestic travel, the country's savvy internet users were busy arranging their shopping carts for the online sales day on June 18.

"It is the best time to stock up on those daily necessities of life for the whole year," said Hong Xin, a 28-year-old office worker in Suzhou, Jiangsu province, who had her eye set on a toilet paper and washing liquid value deal on Tmall, one of the country's biggest e-commerce platforms.

She said the sales day was not just about saving money, but also about enjoying better products. "For example, wet toilet tissue is quite expensive if you buy it in the supermarket one pack at a time, but it is much more affordable during the sales day if you buy in bulk," she said.

Consumers like Hong, who have a strong willingness to spend to make their lives easier, are adding impetus to national consumption, which achieved an eye-catching performance in the first quarter of 2019, according to Nielsen, the New York-headquartered information, data and measurement company.

Nielsen's report said that in the first quarter, China's consumer trend index, which measures perceptions of local job prospects, personal finance and willingness to spend, was close to a historical high.

Consumption has been the top driver of economic growth for six years in a row. In 2018, it contributed to 76.2 percent of economic growth, 18.6 percentage points higher than 2017, and it is expected to be a major force again this year.

"The government has been continuously deepening the reform of corporate taxes and fees to stimulate enterprises, as well as implementing policies to stimulate employment and encourage entrepreneurship," said Andy Zhao, president of Nielsen China. "Meanwhile, personal tax reform has also taken place ... consumers' willingness to spend has been further encouraged."

From home electronics to new energy cars, authorities have introduced policies to further stimulate domestic consumption.

In early June, the National Development and Reform Commission, the Ministry of Commerce and the Ministry of Ecology and Environment released an action plan to accelerate the upgrade of consumption goods and resource recycling, which addressed the production, application and innovation of new energy vehicles, green home appliances and the commercial use of 5G mobile phones.

The action plan also highlighted the potential for vehicle consumption in rural areas. In early January, the country issued an action plan to optimize consumption supplies, which also addressed subsidies for energy saving and new energy vehicles.

"The market size in China is not only huge, but is also undergoing a consumption upgrade," said Wang Qing, a research fellow at the Development Research Center of the State Council. "With the new round of policies being launched to stimulate consumption and companies diversifying their offerings, the consumption potential will be further liberalized."

Liu Xiangdong, a researcher at the China Center for International Economic Exchanges, said besides the policies launched to further stimulate consumption upgrade, the authorities needed to regulate the consumption environment in elderly care, healthcare and information while easing market entry in the healthcare, education and elderly care industries.

Foreign companies are also showing a positive attitude toward the Chinese market.

"The implementation of more opening-up policies in the field of consumption is contributing to the shift of China's economic growth model from investment orientation to consumption orientation, which is more sustainable," said Stephane Rinderknech, CEO of L'Oreal China, one of the world's leading beauty products makers.

"Today, we are more confident than ever in developing and seizing opportunities in China. With a continuously improving business environment, consumers' trust and our great China dream team, we are confident in making China the number one market for L'Oreal Group in the near future," he said. "We hope the joint efforts between the Chinese government and companies will further stimulate China's domestic consumption and benefit consumers."

Faced with trade friction with the United States, experts believe consumption will play a major role in offsetting the negative impact on trade and putting economic growth on a firm footing.

"China is a market with a population of 1.4 billion and 400 million middle-income earners, and there is a strong demand for consumption upgrade," said Wang Bin, an official at the Ministry of Commerce. "The domestic consumption market is full of potential and it is China's biggest advantage to maintain long-term stable development."

Rural areas offer more consumption potential, according to experts.

"The country's exports in the first five months (of 2019) had been increasing but at a slower pace... in the future, the trade surplus will inevitably narrow," said Xu Hongcai, deputy chief economist at the China Center for International Economic Exchanges, arguing that the degree of dependence on foreign trade will decrease.

He said the country needed to turn to domestic demand to power economic growth, and the country's ongoing urbanization offered large potential.

"The urban population is below 60 percent, but is expected to reach 68 percent by 2030," Xu said. "The ongoing urbanization will stimulate consumption upgrade and infrastructure demand. Domestic demand for investment and consumption is the major dividend."

Wang Huiyao, president of the Center for China and Globalization, agreed.

"The contract responsibility system in the 1980s, the privatization of urban housing in the 1990s, which has created 400 million middle-income earners, and membership of the World Trade Organization, have powered the high-speed economic growth of the past four decades," said Wang.

He pointed out that China is now home to 1 billion low-income earners, including 500 to 600 million farmers and 300 million migrant workers, and the current task was to liberalize farmers' homesteads - land previously allotted to farmers by the government to build homes, which cannot be transferred to urban residents.

He argued that if farmers are able to become middle-income earners by selling their homesteads, domestic demand could be largely increased.

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2019-07-04 07:09:14
<![CDATA[Outlook for Chinese tourism industry remains robust]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488083.htm Luxury holiday operators and airlines are positive about the outlook for the country's tourism industry as the sector has remained robust, said business insiders.

"Even with the slowdown of the global economy, China's economic growth and consumption power compared to other parts of the world are still way ahead, especially in the tourism industry," said Gino Andreetta, CEO of Club Med China, a world-renowned luxury resort brand.

"Especially during holiday and festive periods, we performed even better," Andreetta said. He added that even though the international situation might affect certain industries like import-export, the outlook for regional tourism in China is optimistic as demand for holidays as a means of escape and to explore new experiences was constantly increasing.

He said the group's business had not seen any trace of a negative impact of the trade war on Chinese tourists' consumption habits. On the contrary, high-end tourism is gaining popularity.

During the Labor Holiday in May and Dragon Boat Festival in June, the group saw 30 percent growth in the number of Chinese tourists visiting their resorts in China.

"High-end tourism is a new form of tourism that has emerged after the development of national tourism in China. It has resulted from the improvement of the overall economy, the improvement of people's living standards, and the individualization of consumption habits," he said.

He said the group is promoting getaways for the upcoming National Day holiday and Mid-Autumn Festival, as Club Med believes the trend for quality holiday experiences in China is encouraging and expected to grow further. The group also plans to open two new resorts in China, one in the 2022 Winter Olympics site and the other in the North of the country, he said.

Airline operators are also positive about the industry's outlook.

"Airline operators are always among the first to sense a change in the economy. If the economy is good, they'll operate more flights," said Li Ping, assistant manager of the business department of Juneyao Airlines, adding that the airline had confidence in China's outbound travel. The company recently announced a new route between Shanghai and Helsinki under a code-share cooperation with Finnair.

Joshua Law, Qatar Airways' North Asia vice-president, said that in 2019 the airline will further promote tourism to Doha and encourage Chinese tourists to go there for travel or transit.

"The company will also enhance the service provided to Chinese customers to meet their demands and win their approval," he said.

Akbar Al Baker, group chief executive of Qatar Airways, said: "China is the largest outbound tourism market in the world and in 2018, we saw a significant growth of 38 percent in the number of Chinese visitors from the previous year."

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2019-07-04 07:09:14
<![CDATA[Retailers eye big chances in small cities]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488082.htm

As China is keen to expand brick-and-mortar and virtual shopping infrastructure to further bolster the country's consumption potential, domestic players have begun to deploy resources in niche markets to maintain robust growth.

The government's combined measures to stimulate domestic consumption capacity, including creating new forms of brick-and-mortar and online shopping, and improving logistics facilities in the country's rural areas, are creating opportunities.

Gome Retail, a major retail chain operator in China, will partner with Germany-based kitchen retailer Ixina to open 200 stores in first-, second-and third-tier cities over the next three years.

Higher incomes have allowed many Chinese consumers to increase their purchases of high-end kitchen appliances such as smart cooking appliances, tea makers and other intelligent kitchen products to empower themselves by freeing up their time, said Wang Junzhou, president of Gome Retail.

He said China's ongoing consumption upgrade and the younger generation's strong purchasing power will continue to attract global companies to invest in product and services-related businesses in China in the long run.

The company has already opened stores in Beijing and Shanghai to sell such products and will open more stores in Wuxi, Zhejiang province, and Nanjing, Jiangsu province, in the second half of this year, assisted by its domestic retail networks.

Gome Retail selected 180 electric kitchen appliances from thousands of its supplier and partners for the initial run and the company said that the prices of kitchen cupboards are the same as those sold in Europe. Both sides have formed a team to provide after-sales service and measurement services for customers.

"Compared with consumers in other markets, we found that Chinese customers are incredibly inquisitive and hungry for information. They want to embrace new technologies and are fairly open to disruptive products," he said, stressing that with the rapid development of intelligent technology, the smart home has become an industry trend.

The home appliances market in China has already been reshaped by e-commerce, with shoppers spending 810.4 billion yuan ($117.8 billion) on goods in this category in 2018, up 1.9 percent year-on-year, according to a report released by the Beijing-based China Household Electric Appliance Research Institute in February.

Meanwhile, China's kitchen appliance sales outshone other segments in the household appliance market, which appeared gloomy in the past year as the real estate market has been reined in and prices of raw materials soared.

A number of measures were piloted in 11 commercial zones across the country late last year, including the areas around Chengdu's Chunxi Road and Beijing's Wangfujing Street. The annual visitors to these commercial zones are estimated to exceed 1 billion, according to the Ministry of Commerce.

"These moves are a practical response to the government's call to form a stronger domestic market and create a flexible environment for foreign investment," said Li Dongjin, a marketing professor at Tianjin-based Nankai University, adding that these pilot commercial zones will play a leading role in establishing a benchmark nationwide.

The Beijing-headquartered company currently operates more than 2,100 stores in over 630 Chinese cities and counties, and plans to open 500 New Retail stores and 200 stores in county-level markets, as well as 200 stores for selling home appliances to further enhance its supply chain throughout China.

New Retail refers to the integration, or interlinking, of online and offline shopping using modern technologies, data and customer engagement techniques.

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2019-07-04 07:09:14
<![CDATA[Amazon to further invest in China]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488081.htm Retail behemoth Amazon.com Inc will continue to increase investments in its cross-border shopping business Amazon Global Store in China and is bullish on the prospects of this segment, although the United States-based tech giant is now facing increasingly fierce competition from local e-commerce rivals.

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US retail giant to enhance speed of delivery, offer more global products in Chinese market

Retail behemoth Amazon.com Inc will continue to increase investments in its cross-border shopping business Amazon Global Store in China and is bullish on the prospects of this segment, although the United States-based tech giant is now facing increasingly fierce competition from local e-commerce rivals.

Somana Konganda, head of Amazon Global Store, said they have not set a limit for the investment amount in the Chinese market, emphasizing the company's focus on China's business has not changed.

"We are focused on providing a vast selection of high-quality international products and that focus will continue," he said.

Amazon Global Store covers top destinations of Chinese customers' cross-border shopping, including the United States, the United Kingdom, Japan and Germany.

"I am optimistic about the business in China," said Konganda, adding the company will double down on its presence in the Chinese market.

Sales revenue on Amazon Global Store in the first quarter of 2019 achieved double-digit growth.

But Amazon is struggling to contend with local leaders such as Alibaba Group Holding Ltd, JD and NetEase Kaola, which have been ramping up their efforts in cross-border shopping.

Chen Tao, an analyst at the Beijing-based consultancy Analysys, said: "Amazon has strong competitiveness and a good reputation in its global logistics, warehouses and supply chain, but it faces some challenges in its localization in China."

Chen added Amazon lags behind its rivals in marketing promotion and business operations in China. Compared with Amazon, domestic online retailers have a better understanding of local consumers' needs and how to operate under local market conditions.

Konganda noted Amazon will make full use of its global resources, enhance its speed of delivery and offer a wider range of global brands and more discounts to Chinese consumers in the future.

For instance, customers can now enjoy faster delivery of overseas products in as little as three working days for 82 cities in China due to Amazon's forward warehouses.

Amazon has also launched an artificial intelligence-enabled size guide widget for apparel products based on a leading algorithm.

Konganda said Amazon has more than 175 operating fulfillment centers and 100,000 robots in its warehouses across the globe.

"Chinese consumers' demands have become more and more diversified and personalized," said Gu Fan, vice-president of Amazon China, adding the company will step up efforts in the cross-border online shopping sector through Amazon Global Store and Prime membership.

Gu said starting from 11 pm on July 14 to 3 pm on July 17, Amazon's prime members in China will enjoy the longest Prime Day globally with 64 hours of shopping.

In April, Amazon said it plans to shut down its third-party seller services on its Chinese online marketplace in July, but emphasized it will not exit the Chinese market.

In addition, Amazon will continue to invest in its Amazon Global Selling business, which helps Chinese merchants sell products abroad, cloud service platform Amazon Web Services, Kindle devices and content, in China.

China's cross-border e-commerce sector has been growing exponentially over the past few years as the country's middle-and high-income shoppers are demanding increasingly diversified and personalized products and services.

Market consultancy iiMedia Research said the country's cross-border online shopping reached 9.1 trillion yuan ($1.3 trillion) in sales last year.

 

A woman walks past a refreshment counter at an Amazon Global Store in Hangzhou, capital of Zhejiang province. Shij Jianxue / For China Daily

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2019-07-04 07:09:14
<![CDATA[Lenders grant support to enterprises settled in Tianjin tech area]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488080.htm A group of banks have announced that they will provide up to 440 billion yuan ($64.2 billion) in financial support to companies in the Tianjin Economic-Technological Development Area (TEDA), the highest of its kind in the area's history.

A total of 10 banks, including BOC, ICBC and CCB, signed a strategic partnership with TEDA in the last two weeks, vowing to aid the area's growth in the next five years.

"Their funds will not totally and directly 'pour' into the area. Instead, the banks are extending a combined financial credit limit with a ceiling of 440 billion yuan," Zeng Li, head of the Finance Bureau of TEDA, said.

"When top projects are in place, they will inject the capital to support their growth, especially the industries' continuous upgrading, intelligent manufacturing, pharmaceuticals, and help with the growth of the emerging Nangang area, which has revealed an ambitious target to boost the petroleum sector."

Zeng said if there are not enough projects to meet the stringent standards set by the relevant authorities, the bank will not totally "burn the money" within the next five years.

Since TEDA released the news, some 50 companies have signed agreements with the 10 banks, getting support of up to 60 billion yuan, their agreements with the banks showed. The project with the highest investment is a new production line of FAW Toyota with 7.1 billion yuan.

"The banks' move indicated their confidence in the area's solid growth," said Zheng Weiming, director of the administrative committee of TEDA.

Statistics showed that during the first five months, the area saw its industrial output increase by 9.5 percent. A total of 3,828 companies registered there during the period, up 6.5 percent year-on-year, boosting the total number of companies in TEDA to 63,000.

Qi Lei, president of the Beijing Haian Parking Service Co, which was headquartered in Zhongguancun and moved to TEDA earlier this year, said his company has poured up to 200 million yuan into TEDA this year. It is one of the thousands of companies moving from Beijing's industrial cluster to TEDA and the Binhai New Area.

"More investment is in the pipeline," he said.

Zheng, however, is keenly aware of future challenges despite thriving development in TEDA.

"As the oldest development area, how to continue to boost the local economy is always my headache," he said.

TEDA is pinning high hopes on intelligent manufacturing industries, which Zheng believes would be "a new engine" for the real economy.

Liu Zhipeng, a professor at the Economics College of Nankai University, said to boost the intelligent manufacturing industries, the development areas, as well as Tianjin, must develop a much greater industrial cluster.

In a bid to meet the demand in accordance with the "Made in China 2025" strategy, the country must build world leading model industrial zones in intelligent manufacturing.

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2019-07-04 07:09:14
<![CDATA[Economist: Trade spats due to misunderstandings]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488079.htm Misunderstandings, especially at the governmental level, have been the root cause of the trade disputes between China and the United States, a leading economist said.

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Nations must drop confrontational attitude and find acceptable solutions

Misunderstandings, especially at the governmental level, have been the root cause of the trade disputes between China and the United States, a leading economist said.

Trade disputes could be resolved if governments drop their confrontational approach vis-a-vis one another and find amicable solutions that are acceptable to all stakeholders, said Paul Romer, who won last year's Nobel Prize in economic sciences for integrating technological innovation into long-run macroeconomic analysis.

"I think the fundamental problem is this misunderstanding about whether there was an agreement about the role of government," said Romer.

According to Romer, the fact that the US Administration is somehow asking China to change how its government behaves is partly due to widespread misunderstandings, where members of the WTO system seem to readily assume that all members have agreed to move to a system of minimal state (governance) over an economy.

But the truth is such an agreement was never reached, he said recently on the sidelines of the 2019 Beijing Forum of the Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University.

"We did not really agree on anything, because we just papered over the differences," Romer said, adding that while the United States has upheld the minimal state model, some other economies adopted more active and strong government roles.

Romer called this misunderstanding a "convenient fiction". To solve the trade dispute and continue free trade, the US Administration needs to "be realistic" about the truth that there is no agreement on government roles, he said.

"We can work out rules of trade that work for all of the different types of government ... I think different types of governments can coexist, and their nations can still trade with each other," Romer said.

Such rules will have some differences with the ones developed under the WTO system, and "it will take a little bit of time to get to that," Romer said.

According to him, the prolonged trade dispute in the past months is not only hindering the world from getting the full advantage of free trade but will hurt growth prospects by depressing international exchange of ideas.

In April, the International Monetary Fund downgraded the projection of global growth in 2019 to 3.3 percent, adding that a further escalation of trade tensions could further weaken growth.

As trade may not provide the same amount of stimulus to growth in the coming years as it provided in the past, each economy will have to focus on alternative growth drivers, especially elevating the productivity and skills of all workers, Romer said.

For China, the country should stick to its policy of making sure that everybody who wants to work is working, as learning opportunities come with employment, Romer said, stressing on the need for further urbanization.

Jobs that provide better learning opportunities tend to be in urban areas and larger establishments with more sophisticated management processes, according to Romer.

"So I think it is very important for the Chinese economy to keep creating opportunities for people to get those kinds of jobs in the modern sector, in the urban areas."

China has done a very good job of urbanizing so far, but there is still room to make more urban opportunities available to everybody, he added.

By the end of last year, China's urbanization rate - the proportion of population regularly living in urban areas - was 59.58 percent, versus less than 20 percent four decades ago when the country initiated reform and opening-up, said data from the National Bureau of Statistics.

The rate is estimated to rise to more than 70 percent by 2035, according to the Chinese Academy of Social Sciences. In developed economies, the rate is about 80 percent on average.

In the short run, the Chinese authorities have prioritized stabilizing employment in its policy mix in face of downside pressure this year. Over the first five months, NBS data showed the country's surveyed jobless rate in urban areas was 5.1 percent on average, well on track to achieve the government's annual goal of keeping the rate at about 5.5 percent.

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2019-07-04 07:08:53
<![CDATA[Baidu unveils chip to boost AI use in industrial applications]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488078.htm Internet search giant Baidu Inc launched an artificial intelligence chip named Honghu on Wednesday, which could be configured to accommodate vehicle-mounted voice control systems and intelligent home scenarios, as part of its broader push to speed up industrial application of AI technologies.

Baidu's open source deep learning platform, PaddlePaddle, will conduct in-depth cooperation with Huawei Technologies Co Ltd's Kirin chipsets, said Wang Haifeng, chief technology officer of Baidu at Baidu Create 2019, the company's annual developers' conference in Beijing.

"The two tech companies could exert their advantages in software and hardware sector," said Wang, describing Baidu's self-developed deep learning platform as the homegrown "AI operating system." He emphasized that the collaboration with Huawei will provide strong computing power and accelerate the commercial application of AI.

Last year, the Beijing-based tech behemoth launched its chip Kunlun, to accommodate the high performance requirements of a wide variety of AI scenarios, such as data centers, public cloud and autonomous vehicles.

"Baidu could make full use of the technological advantages it has accumulated in AI sector, and the semiconductors they make can be used on its own AI platform and applications, which will boost the development of the chip industry," said Ni Guangnan, an academician at the Chinese Academy of Engineering.

James Yan, research director at Counterpoint Technology Market Research, said Baidu hopes to provide comprehensive vehicle-mounted solutions and expand AI application scenarios for carmakers.

Chinese technology companies are intensifying efforts to develop their own AI chips, as the country aims to become self-reliant in key technologies and lessen its dependence on foreign microprocessors.

Alibaba Group Holding Ltd has announced the establishment of a dedicated chip subsidiary aimed at creating customized AI chips and embedded processors to further support the tech giant's cloud and internet of things businesses, as well as drive the development of industry-specific applications.

In addition, Baidu announced a strategic partnership with Chinese carmaker Geely on smart connectivity, intelligent driving, smart home and e-commerce, in a bid to accelerate the popularization of intelligent vehicles in China.

"The strategic partnership will empower AI to create more spontaneous and convenient interactions between humans and vehicles," said Robin Li, Baidu's chairman and chief executive officer.

Li added the move will also accelerate the intelligent transformation of the mobility industry, supporting China in its transformation to become a leader in the age of smart mobility.

Under the new partnership, Geely cars, beginning with the Geely Boyue Pro, will be equipped with the connected vehicle solution powered by Baidu's conversation-based AI system DuerOS for autonomous driving platform Apollo.

 

Robin Li, Baidu's chairman and chief executive officer, speaks at the Baidu AI developers conference on Wednesday in Beijing. Provided to China Daily

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2019-07-04 07:08:53
<![CDATA[Europe in no hurry to join US-led boycott of Huawei Technologies]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488077.htm With United States President Donald Trump agreeing to allow Huawei Technologies Co to resume purchase of some US components and software, the question of whether the United Kingdom will, or will not, join the boycott of the Chinese technology giant suddenly seems less important.

Trump's declaration followed a six-week period in which US companies were barred from purchasing Huawei components and, despite Trump's words, Huawei will remain blacklisted until it is officially removed from the list. Even then, it will continue to be prevented from selling its products to US companies and to those in nations supporting the US-led boycott.

London, until now, has refused to join the boycott, despite several months of pressure from Washington, which claims to have identified weaknesses in Huawei's kit that make it vulnerable to use by spies, a claim the company vehemently denies.

But, despite the importance of the evolving situation, neither Boris Johnson nor Jeremy Hunt, the two men vying to become the UK's next prime minister, have overtly said whether they plan to join the US-led boycott.

Theresa May's replacement will be named at the end of July, after the ruling Conservative Party's 160,000 members participate in a postal ballot. May had reportedly been leaning toward allowing Huawei to participate in noncore parts of the network but both Johnson and Hunt have hinted they may join the boycott.

Johnson, the bookmakers' favorite to win the leadership race, said on June 28 that the nation should not let its relationship with Huawei jeopardize intelligence-sharing with its allies, including the US.

Liu Xiaoming, China's ambassador to the UK, said any British ban on Huawei would send a "negative message" to other Chinese companies considering investing in Britain.

In a televised interview with the BBC, Liu said: "Will the UK still be a business-friendly environment for Chinese companies? It will send a very bad signal, not only on trade, but also on investment."

Huawei, which employs 7,000 people in the UK, opened its first local office 16 years ago. Between 2013 and 2017, it invested or procured more than 2 billion pounds ($2.54 billion) in the UK, and, in 2018 it pledged to spend a further 3 billion pounds on British technology and services during a five-year period.

A recent report commissioned by four of the UK's major mobile network companies - EE, O2, Three, and Vodafone - found that a ban on Huawei would delay the rollout of 5G technology in the UK by up to two years. The study, published by tech consultancy Assembly Research, said such a delay would cost the British economy between 4.5 billion pounds and 6.8 billion pounds.

Margot James, the UK's minister for the digital and creative industries, supports Huawei's participation in the UK's 5G rollout, and said the government should act on the recommendations of the UK National Cyber Security Centre, which has found no evidence to support the US' claims.

Huawei, meanwhile, is continuing to promote its products and services and will take its roadshow to the Goodwood Festival of Speed in Sussex, England, between July 4 and July 7.

The UK government is expected to reveal its Huawei decision when it publishes a telecoms supply chain review in the coming weeks.

Other EU nations are also considering their position but none has been quick to join the US-led boycott. The president of the German telecoms regulator said earlier this year that Huawei should not be excluded from the nation's 5G network. And the biggest Dutch carrier, KPN, has said it plans to use Huawei equipment. The European Union issued recommendations about 5G security in March in which it called on member states to review their networks by the end of June and report their findings to the EU Commission. As yet, no EU nation has joined the boycott of Huawei products.

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2019-07-04 07:08:53
<![CDATA[Clearance process at ports to be optimized]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488076.htm

China will further optimize the business environment in ports to spur cross-border trade, officials from the General Administration of Customs said on Wednesday.

Hu Wei, deputy director of the administration, said during a news briefing that continuous efforts to shorten the clearance process have yielded fruitful results.

The number of documents needed under the import and export regulations has been cut from 86 to 46, out of which 42 can be verified online, Hu said.

"By the end of this year, apart from certain confidential documents, all the documents required for imports and exports will be applied and processed online a year ahead of the schedule proposed by the State Council," he said.

Hu said improvements in the port business environment has boosted the volume of foreign trade, with steady growth seen in January to May, amid an optimizing trade structure.

According to GAC data, in the first five months of 2019, the total trade in goods amounted to 12.1 trillion yuan ($1.76 trillion), up 4.1 percent year-on-year.

Ports in Tianjin, Hainan and Shandong clocked trade volume growth far ahead of the national average, Hu said.

"Tianjin saw annual trade volume rise 46.5 percent at its water transport port," he added, saying the dramatic growth was the result of the local government's efforts to improve the business environment at the ports.

"According to a report by the World Bank, in 2012, the average time needed for imports and exports in China was nine days and seven days, and it was relatively longer than those in developed countries," said Pan Helin, a senior researcher at public policy think tank Pangoal Institution, adding that longer time needed meant more risk, more uncertainty and higher cost.

Pan said in recent years the government has poured continuous efforts to facilitate trade and addressed it, from the Government Work Report in 2017 to the 20 measures to improve the business environment in ports announced in 2018.

"Such policies have largely increased the efficiency in clearances, optimized business environment and facilitated trade," he said.

Bai Ming, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said to encourage companies to explore the international market, a good environment and political support is needed, such as the previous measures on export tax refunds and adjustments in value-added tax.

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2019-07-04 07:08:53
<![CDATA[PwC: 100 companies may get listed on the new tech board]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488075.htm

Nearly 100 companies will hopefully get listed this year on China's recently launched Nasdaq-style high-tech board known as the STAR Market, a forecast by PwC showed.

The Shanghai Stock Exchange had accepted 141 companies' applications for an initial public offering on the STAR Market by June 27.Most companies are in four sectors: information technology, biomedicine, high-end equipment manufacturing and new materials.

The first batch of companies are expected to be listed on the STAR Market in July, said PwC, a world leading accounting, auditing and assurance firm which released a review of the IPO market in the first half of 2019 on Tuesday.

"The introduction of the STAR Market and the trial implementation of the new registration system will promote the A-share IPO market in the second half of 2019. We expect over 200 A-share IPOs this year with a total size of more than 180 billion yuan ($26 billion)," said Geoffrey Wang, PwC CN/HK Assurance Markets Leader.

Since the regulator began allowing companies to file their STAR Market IPO applications, some market participants and the media raised doubts on the authenticity of the information filed by certain companies.

"I think it is unavoidable to hear negative comments. But on the other hand, supervision by public opinion will give market participants and the regulators an opportunity to learn how to do better in terms of information disclosure and how to set more targeted requirements on information disclosure. It will promote the benign development of capital markets and the STAR Market in China," said Wang.

The quality of information given by listed firms will largely determine the development prospects of the new market as investors will need accurate and adequate data to judge the investment value of risky high-tech companies, said Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology.

"Generally speaking, information disclosure of companies going public on the STAR Market is rather adequate and complies with related requirements, as the SSE would conduct several rounds of inquiries about any suspicious information," Dong explained.

Securities regulators and the SSE should be able to deter applicants for IPOs on the STAR Market from breaching information disclosure regulations by ratcheting up punishments, he added.

PwC also noted that in the first half of 2019, China's A-share market recorded 64 IPOs, roughly the same as the number in the same period of last year.

The firm projected that the number of IPOs in the A-share market will rise from 105 last year to 200 this year, and the money raised will increase to 180 billion yuan from 138.6 billion yuan.

Among the 64 IPOs, there were four A-share IPOs of banks. They are the Zijin Rural Commercial Bank Co Ltd, Bank of Qingdao Co Ltd, Bank of Xi'an Co Ltd and Qingdao Rural Commercial Bank Corp.

Recent events at a few banks raised investors' concerns about the asset quality, profitability and corporate governance of small-and mid-sized banks. Despite those cases, the spokesperson for China's banking and insurance regulator said on June 9 that the overall risks of small-and mid-sized banks are manageable.

"Regulators, intermediary agencies, companies and banks all hope to see sound corporate governance at banks. In a mature economic environment, listed companies can stand up to the panoramic scrutiny regarding corporate governance. Personally speaking, I welcome the listing of compliant banks and non-banks so that they will play a better role in offering corporate financing by building healthier platforms and improving their corporate governance capabilities," said Jean Sun, a corporate services partner of PwC China.

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2019-07-04 07:08:53
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-07/04/content_37488074.htm  

HK regulator to view audits of mainland firms

The Ministry of Finance, the China Securities Regulatory Commission, and the Securities and Futures Commission in Hong Kong agreed on Wednesday to allow the SFC to view audit records of mainland companies listed in Hong Kong. The audited working papers are provided by Hong Kong accounting firms. The agreement is part of the regulation cooperation mechanism between the mainland and Hong Kong, which aims to protect investors in both onshore and offshore markets and to promote the healthy development of the accounting profession, a statement on the Ministry of Finance website said.

Li Daokui named NDB director-general

Li Daokui has been appointed director general and chief economist at the New Development Bank on Monday, according to an announcement released on the bank's official website. Li will be in charge of the research and analysis of economic, financial, infrastructure and development issues across BRICS member countries on a global scale. Li is a leading Chinese economist in academic and policy research. He has been a Mansfield Freeman professor of economics at Tsinghua University since 2006.

Vanke sees contracted sales rise 9.6% in H1

China Vanke Co Ltd, a leading property developer, reported its contracted sales amounted to 334 billion yuan ($48.69 billion) in the first six months of this year, up 9.6 percent from the same period last year. From January to June, the company achieved a total contracted sales area of 21.5 million square meters, up 5.6 percent year-on-year, according to a statement issued by the company on Tuesday. In June, the company realized a contracted sales area of 4.89 million square meters, with a contracted sales amount of 66.39 billion yuan.

Lending company cuts revenue growth forecast

British peer-to-peer lending firm Funding Circle announced on Tuesday that it expected revenue growth of 20 percent for 2019, half of its previous forecast of 40 percent. "The increasing uncertain economic outlook has reduced demand for loans and the company has proactively further tightened lending to higher risk band businesses," Funding Circle said on Tuesday in a financial report for the first six months of this year and 2019 outlook. "This affects overall origination volumes, but protects net returns for investors on the platform," the company said.

India's Maruti Suzuki feels the pinch in June

India's largest car manufacturer, Maruti Suzuki India Ltd, has reported a 14 percent drop in its sales in June, an official statement said. The company sold a total of 124,708 units in June which included 113,031 units in the domestic market, 1,830 units of domestic original equipment manufacturer sales and the export sales stood at 9,847 units. In the April-June quarter of the financial year 2019-20, the company sold a total of 402,594 units. This includes 369,985 units in the domestic market, 4,496 units of domestic OEM sales and 28,113 units of exports.

British construction PMI falls to 43.1 in June

Britain's construction index fell to 43.1 in June, hitting its lowest point since April 2009, showed a survey released on Tuesday by IHS Markit/CIPS, a London-based global information provider. Data showed that the IHS Markit/CIPS Construction Purchasing Managers' Index plunged to 43.1 in June, down sharply from 48.6 in May, hitting its lowest level since April 2009. The survey stated that all three broad categories of activity posted a decrease in output in June due to political and economic uncertainty.

German retail sector set to gain momentum

Retailers in Germany saw a slight drop in sales in May, according to provisional data published by the Federal Statistical Office (Destatis) on Tuesday. Revenues in the German retail sector fell by 0.6 percent in real terms and by 0.4 percent in nominal terms in May after adjusted for inflation compared to the previous month, Destatis announced. Nonetheless, German retailers saw better sales in May than in the same month last year, according to the figures. Adjusted for price increases, sales in real terms were 4 percent higher than in May 2018, while the nominal increase was 4.8 percent higher.

S. Korea's headline inflation stays below 1%

South Korea's headline inflation stayed below 1 percent for six straight months to June on lower oil product price and the expanded welfare policy such as free school meal and school uniform, a government report showed on Tuesday. The consumer price index stood at 104.88 in June, up 0.7 percent from a year earlier, according to Statistics Korea. The consumer price inflation hovered below 1 percent for six months since January, posting the longest low inflation since 2015 when the headline inflation stayed below 1 percent for 10 months through November of that year.

Iraq exports over 105m barrels of crude in June

Iraqi Oil Ministry said on Tuesday that it exported more than 105 million barrels of crude oil in June, bringing in revenue of more than $6 billion. "Iraq's total exports of crude oil in June reached about 105.6 million barrels, at an average of 3.520 million barrels per day, with revenue of $6.3 billion," a ministry statement said, citing statistics of State Organization for Marketing of Oil, an Iraqi national company responsible for marketing Iraq's oil. The average selling price was $60.5 per barrel in June, the statement said. "Iraq exported 101.7 million barrels from the country's central and southern oil fields, and 3.16 million barrels from the northern province of Kirkuk, in addition to 735,548 barrels of oil from Qayyara Oilfield in the northern province of Nineveh," it added.

Vietnam's seafood shipments decline

Vietnam reaped more than $3.9 billion from exporting seafood, mainly prawns and catfish in the first half of this year, witnessing a year-on-year decline of 0.8 percent, according to the Vietnamese Ministry of Agriculture and Rural Development on Tuesday. In June alone, the country's seafood exports stood at $750 million, down 1.2 percent against the same period last year. Its main markets included the United States, Japan, South Korea and China.

Brazil's trade surplus falls in first 6 months

Brazil's trade surplus in the first half of 2019 reached $27.1 billion, down by 9.6 percent year-on-year, the Brazilian Ministry of Economy said. Despite the decrease, the figure remained the third highest for the period in Brazil after figures in 2018 and 2017, the ministry said. Exports totaled $110.9 billion in the first half of the year, down by 2.63 percent year-on-year. Imports amounted to $83.77 billion, remaining stable compared to the same period last year. The decrease in the trade surplus was mainly due to a fall in the price of Brazilian exports.

China Daily - Agencies

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2019-07-04 07:08:53
<![CDATA[Substitutes changing appetite for pork]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487585.htm The Year of the Pig has failed to offer much comfort to the hog industry on the Chinese mainland, which has been ravaged by African swine fever, and some are betting big on making it the year plant-based meat substitute takes off in the world's second-largest economy and throughout Asia.

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Plant-based protein makers are hoping to take a bite out of the massive meat market in China and throughout Asia

The Year of the Pig has failed to offer much comfort to the hog industry on the Chinese mainland, which has been ravaged by African swine fever, and some are betting big on making it the year plant-based meat substitute takes off in the world's second-largest economy and throughout Asia.

David Yeung, founder of social enterprise Green Monday, plant-based concept store Green Common, and Right Treat, hopes to take a bite out of the massive meat market in China, the world's biggest producer and consumer of pork, with "Omnipork."

Concocted by a research team in North America and produced in a factory in Thailand, Omnipork is made from soy, peas, shiitake mushrooms and rice protein, but it tries to mimic the taste, feel, texture and color of real pork. What it also looks to replicate is the runaway success of US-based plant-based meat substitute companies Beyond Meat and Impossible Foods, whose stunning trading debut in Nasdaq and latest round of funding respectively have sent a strong message that plant-based alternatives are now a nationwide, or even worldwide, trend.

The meatless craze has what it takes to succeed in Asia, a region known for its appetite for pork and a dazzling array of ways to cook it.

Impossible Foods, a Silicon Valley startup, has lost no time in joining the fray. It has its eyes trained on Asia, which contributes 44 percent of global demand for meat, as the first market after its home turf, the United States, to have the greatest impact.

The company, whose offerings include cow-free burgers and sausages with vegan pork and chicken products said to be next on the agenda, expanded its footprint to Singapore in March after entering Hong Kong and Macao last year, said Nick Halla, vice-president international at Impossible Foods.

Its recent Series E funding round of $300 million, which has brought the firm's total funding to more than $750 million, offers a glimpse of how alternatives to meat are taking the food industry by storm.

Since its launch in Singapore, sales have increased in Asia more than fourfold within just a few months, pointing to the continent's craving for plant-based substitutes for meat. The company's product Impossible Meat is currently available in more than 180 restaurants across Hong Kong, Macao and more than 80 in Singapore, Halla said.

The plant-based meat substitute aims to please both meat-lovers and vegetarians by re-creating the experience of eating animal-derived meat without the environmental or ethical drawbacks, is not just for herbivores or carnivores.

The prefix omni indicates that the product is designed to go beyond a small, vegan niche, and that it can be used in many ways - steam it, fry it, pan fry it, and stuff it in dumplings and meatballs, Yeung said.

"This is something ready for all purposes and for everyone everywhere," Yeung said.

Likewise, Impossible Foods highlights its product's ability to make the leap from pizza to burgers to Vietnamese pho and Italian Bolognese with no compromise on taste and satisfying the most discerning foodies and trendsetting chefs the world over.

"When it comes to sustainability, there is a lot of talk revolving around renewable energy and green transportation. However, food stands as a component that should not be overlooked.

"The food itself is innovative. And how chefs cook it is also innovative," he said. "Today, sustainability cannot just purely be a charity. Instead, it must come with innovation," Yeung said.

The high-tech approach really stands as the answer behind the aim of makers of animal-free products to revolutionize the idea of meat.According to Halla, the "magic ingredient" is an iron-containing molecule called heme, found in animals and plants, which gives meat its flavor.

The sheer power of technology gives the company's "bleeding "vegan meat patties a flavor, color and texture close to real meat, and even enables it to become a juicier and meatier version, he said.

Since Omnipork's debut in Hong Kong last year, it has been put on the menus of hundreds of restaurants around the city. It is now on sale in Hong Kong, Macao, Taiwan, Singapore and Thailand. Right Treat, which developed Omnipork, plans to make inroads into the Chinese mainland by the end of the third quarter of this year.

As the world's biggest producer and consumer of pork, the Chinese mainland is a market where plant-based protein makers like Right Treat cannot afford to miss the boat, Yeung said. The sheer size of its vegan population and younger generation who care about "conscious consumption", make for a major driving force for a nationwide dietary shift.

"Fundamental change comes from two sources - what people want and what people fear. They are the pull and push," he said.

Yeung believes the desire for dietary change is already there. And fear has its roots in mounting concerns over food safety and African swine fever, which place the country's supply chain of protein in jeopardy and push the traditional animal husbandry industry to breaking point.

Initially, Omnipork will be rolled out in first-tier cities, where people tend to be more open-minded, more ready to try something new, and more connected to global trends, Yeung said.

But the nation's burgeoning e-commerce means geographical location is not really an issue for Right Treat, enabling the company to reach out to consumers in the smaller cities, towns and villages that more than a billion Chinese call home, he said.

Yeung has no doubt that the plant-based product will catch on in China.

"For 5,000 years, China was not a coffee drinking country. But today, coffee shops are everywhere," Yeung said. "In the past, Chinese people were not steak lovers. But now, McDonalds is everywhere."

"China is absolutely on our radar," said Halla, who, however, did not reveal specific timelines.

Yeung, an early investor in Beyond Meat and a longtime vegetarian, said Right Treat's mission is not narrowly defined as bringing veganism to the meat-eating masses. It creates a harmonious way that everyone can eat and go green together without much sense of personal sacrifice.

Price might be an issue. A 230-gram pack of Omnipork now retails for about HK$43($5.5). But an outbreak of African swine fever has already pushed up retail pork prices in China and Nomura forecasts prices of the staple meat will hit a peak of 33 yuan ($4.8) per kilogram in January 2020, from the 18.5 yuan-per-kilogram price point in February this year, representing a roughly 78 percent surge.

As production expands, Yeung believed economy of scale would help reduce Omnipork's price. The price is underscored by the plant-based meat substitute's nutritional benefits, he said.

Omnipork is 71 percent lower in saturated fat and 62 percent lower in calories than pork, while 233 percent higher in calcium and 53 percent higher in iron, according to Yeung.

But not everyone agrees with this argument. Despite alternatives to meat heralding a new era of food technology and being the mainstay of a brand new business projected to be worth $140 billion over the next 10 years, former US Agriculture Secretary Dan Glickman said there is a lack of nutritional science to support producers' claims.

The question of whether plant-based meat substitutes are better for consumers than meat remains open, Glickman said in an interview with CNBC recently.

"It certainly won't hurt you. It can be tasty. But it doesn't mean it's better for you," he said.

For people who worry about food shortages and climate change, the importance of meat as an integral part of the diet still cannot be denied, he said. More research needs to be done before jumping to conclusions that plant-based products are better nutrition providers.

 

Omnipork, a product of Hong Kong company Right Treat made from soy, peas, shiitake mushrooms and rice protein, mimics the taste, feel, texture and color of real pork. Photos provided to China Daily

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2019-07-03 08:02:16
<![CDATA[Fast-paced lives pave way for alternative food]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487584.htm From biscuits containing insect protein and egg-free mayonnaise to meal replacement powder and pork chops grown in a lab, as technology advances, foods that once only existed in science-fiction movies are appearing more frequently on dinner tables.

Chinese people are food lovers who take their meals seriously. But some people would happily trade the pleasure of culinary exploration for efficiency.

"In our fast-paced lives, working overtime and working over night have become normal. Not everyone has the luxury of being able to cook for themselves, and constantly ordering takeout food has health issues," said Shao Wei, founder of Ruofan, a food-tech company that develops powders and drinks to replace meals.

Shao, an engineer, thought if there wasn't time for a proper meal, it wasn't worth taking up too much time eating. Instead, absorbing nutrition and energy should be done as quickly and simply as possible.

Shao said what surprised him was that the major users of his products were not IT workers as he predicted, but government employees, police officers and doctors.

"Those communities usually can't eat their meals at regular times, or just eat instant noodles," he said, adding that these groups know what their bodies need and would rather sacrifice taste for efficiency and sufficiency. Currently, the product has about 10,000 users.

While Shao was trying to substitute traditional meals with nutritional powder, Just, a US company that has just entered the Chinese market, was aiming to substitute traditional protein sources for ones that the company believes are more efficient, safer and more environmentally friendly.

In May, the company's egg-free mayonnaise was launched in China's e-commerce channels as well as some supermarkets and restaurant chain Hunter Gatherer.Instead of using eggs, the company uses green peas to create the texture of eggs.

Josh Tetrick, the company's CEO, said its "vegetable egg" has a bright future in the Chinese market, which produces about 435 billion eggs a year.

As the population grows and urbanization speeds up, Tetrick said the demand for protein resources such as eggs will grow - while the amount of usable agricultural land is not keeping pace. By using green peas, land use, water and carbon emissions can be significantly reduced, Tetrick said.

Tetrick said China will become the top market for its product in the next five years - not only in terms of consumption potential, but also because of rising awareness among younger Chinese toward sustainability.

"Behind the rise of artificial protein is the change in the way people eat and consume, it is also a sign of the rise of alternative food," said Li Jian, a professor of the School of Food and Chemical Engineering at Beijing Technology and Business University. "Whether and how much consumers can accept such artificial protein and how much it will cost are key if such technology can secure future market."

Li Mingcheng, a cafe owner in Ningbo, Zhejiang province, who tried a sample of Just's mayonnaise, said the idea was attractive.

"It was awesome - not so much taste-wise, it tastes like normal mayonnaise, but the whole concept," he said. "I'm always into odd things and love to try them. If one day we can grow meat in a tank, I would definitely try it."

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2019-07-03 08:02:16
<![CDATA[BRI to bring huge benefits for nations]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487583.htm Investment cooperation under the Belt and Road Initiative is close to fulfilling its potential of bringing huge mutual benefits, with better understanding and communication set to create more growth opportunities for participating companies in the growing trade, experts said.

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Investment cooperation to open new growth avenues for participating firms

Investment cooperation under the Belt and Road Initiative is close to fulfilling its potential of bringing huge mutual benefits, with better understanding and communication set to create more growth opportunities for participating companies in the growing trade, experts said.

"Chinese investment in the BRI economies is expected to register steady growth this year and may even accelerate, as the initiative has become more mature and gained support and positive attention from the international community," said Li Qiang, regional co-managing partner of Asia at global law firm DLA Piper.

For instance, Italy has joined the initiative as the first member from the Group of Seven, the seven largest developed economies in the world, signaling the rising power of the initiative, Li said. China has also recently signed a memorandum of understanding with the United Kingdom to carry out infrastructure cooperation in third-party economies, including those involved in the BRI.

Proposed by China in 2013, the BRI has boosted investment cooperation across Asia, Europe and Africa. From 2013 to 2018, Chinese corporates' direct investment in economies involved in the BRI exceeded $90 billion, with an average annual growth rate of 5.2 percent, said data from the Ministry of Commerce.

These Chinese investments, with a focus on transportation and communications infrastructure, have been win-win stories and helped the host economies enhance efficiency of all kinds of economic activities, Li said.

BRI has helped participating companies gain new markets, elevated international brand awareness, and created a solid foundation for Chinese enterprises to do business in global markets, Li said.

For Chinese companies, their ability to communicate with local communities - which is critical for fluent project implementation - has also gradually improved, according to Li.

"But there is still much to be done," Li added, citing it is important for Chinese companies to conduct efficient communication with the local communities, especially clarifying the purpose of investment and clearing other doubts.

It is advisable for Chinese companies to partner with international consultants with a strong local presence, such as investment banks and law firms, Li said. "This could help Chinese companies better comply with international and local rules, as well as deliver a transparent image to local communities."

Alan Wang, partner at Freshfields Bruckhaus Deringer LLP, a multinational law firm headquartered in London, shared similar views.

The BRI is a long-term initiative with huge potential of bringing mutual benefits, while at present "both Chinese companies as well as host country partners are in the process of getting to know each other better and are working together to find better ways to achieve mutual benefits," Wang said.

Wang specified the need for Chinese companies to better understand business environments in the host economies, where laws, politics and customs can be very different from those in China.

Based on those understandings, Chinese companies should undertake more robust long-term commercial viability assessment before embarking on investment projects, bearing in mind risks brought by political change, labor and safety laws, capital controls and other factors, Wang said.

"As Chinese companies continue to mature, we foresee Chinese investments in economies taking part in the BRI will keep growing this year and beyond, particularly through greenfield infrastructure projects, such as energy and mining, and the consumer products sector," Wang said.

"These are sectors where Chinese companies have the relevant construction or manufacturing expertise, which are complementary to the need for investments in infrastructure and growing consumer population in economies participating in the BRI, such as in Southeast Asia and Africa," said Wang.

"As Italy and certain countries in Central and Eastern Europe have also signed up to the initiative, we expect to see more Chinese investments into these countries as well," Wang added.

During the first five months, Chinese companies' direct investment in nonfinancial sectors of economies involved in the BRI reached $5.63 billion.

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2019-07-03 08:02:16
<![CDATA[Consumers take a shine to diamond jewelry]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487582.htm Shifting relationship dynamics, changing perceptions of femininity and the fast adoption of e-commerce channels are paving the way for increased diamond jewelry consumption in China, according to an industry expert.

Expanded symbolism for diamond jewelry indicating a wider range of "moments" in life will give rise to more discretionary purchases especially among the country's Generation Z, or those born after 1995, said Mabel Wong McCormick, managing director of Diamond Producers Association in China.

"Diamonds are increasingly being bought to celebrate occasions such as landing a new job, securing a promotion or other personal achievements in a broader sense," McCormick told China Daily in a recent interview.

A survey conducted last year by the trade group on consumers in Beijing and Shanghai revealed that people's perceptions toward love have seen a departure from traditionally-held beliefs like "eternity and everlasting". While the younger generation still uphold love, they are increasingly embracing the idea to "seize the moment" and feel comfortable spending on iconic items like diamonds for more instant gratifications and self-motivation.

Her words echoed a study conducted by De Beers last year, which showed that Chinese millennials and Generation Z bought nearly 80 percent of all diamond jewelry in China sold in 2017, compared to 60 percent for the United States.

While the giving of diamond jewelry as a token of love and commitment continues to constitute the majority of purchases, it's encouraging to see these additional sources of demand emerge, according to De Beers Chief Executive Officer Bruce Cleaver.

"Apart from marriage - the traditional occasion for diamond gift-giving, a new perception of personal meaningfulness is emerging that is closely associated to joy, confidence and pride in themselves, especially among women. These would lead to greater interest in purchases that can reflect these characteristics," McCormick said.

Formed in May 2015 by seven of the world's leading diamond companies, including De Beers and Dominion Diamond, the Belgium-based DPA promotes the integrity and reputation of diamonds by enhancing consumer demand for, and confidence in the natural stone.

Thanks to e-commerce, in which McCormick believed China "is well ahead of the world", consumers are looking at tangible qualities rather than the brand per se when placing jewelry orders.

"That's really a game changer.With Chinese consumers becoming more pragmatic, it's easy to understand how they are getting more demanding on quality, which will ...make the market healthy and optimistic."

While digital space is far from being the main norm for shopping diamonds, a lot of Chinese would go online to look for information on multiple dimensions of the stones before trying on multiple times in physical stores. And China's advanced seamless online-to-offline scenarios would allow consumers to still place orders through digital means if certain types remain exclusive via internet channels, she noted.

In 2017 China's diamond industry accounted for 16 percent of the $82 billion global market, up from nonexistence two decades ago, according to De Beers.

McCormick believed transparency is important to the industry traditionally perceived to be "shrouded in secrecy" at least in the eyes of the end consumer. Therefore her association has just released the first-ever Socioeconomic and Environmental Impact of Large-Scale Diamond Mining report in May, which found out that major diamond producers represented by the group have created net benefits of $16 billion, outweighing environmental and socioeconomic impacts by 17 times.

 

Attendees check out diamond rings at the Beijing Wedding Expo. A Jing / For China Daily

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2019-07-03 08:02:16
<![CDATA['Internet of credit' to boost economic development]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487581.htm Establishing an "internet of credit" that supplements the Belt and Road Initiative will help spur regional cooperation, especially in the Central Asian region, experts said.

According to Zhang Yunqi, a professor at the Business School of the Central University of Finance and Economics, the BRI development, especially in the Central Asian region, hinges largely on the success of credit-based international trade.

"Without credit, business cannot be undertaken. It is the essence of policy communication, trade circulation and funding between the 11 countries in the Central Asian region. Hence it is necessary to build a business credit network within the region," he said in his address to the Belt and Road New Economy Forms Development Forum, jointly organized by the Circulation Expert Committee of China, and the Central Asia Regional Economic Cooperation Institute, in Beijing. It was aimed at boosting Belt and Road construction, as well as offering suggestions to China in the new era.

"The new economy serves as new momentum for economic growth, representing the latest trend of scientific development," said Liang Ziqian, deputy director of the Central Asia Regional Economic Cooperation Institute.

Ai Jiakai, director of the Circulation Expert Committee of China Marketing Association, said: "The new economy, with the form of the sharing economy, experience economy and new retail, is gradually replacing the old economy. Industrial chain reform and model innovation have become major issues at the national strategic level, and many problems should be addressed."

"The 'internet of credit' interconnects credibility within the Central Asian region, so that business communication and trade circulation become smoother," Zhang said.

Hu Biliang, director of the Belt and Road School at Beijing Normal University, said: "China, as other Central Asian countries, is a developing country. Developing economy is the priority. The economic cooperation between Central Asian countries within the BRI framework helps to solve bottleneck problems that restrict economic development."

He said that Central Asian countries should cooperate in fields including manufacturing, specialty trade and tourism, and accelerated regional economic development will unlock huge growth potential.

Akram Zeynolli, Azerbaijan's ambassador to China, said: "Azerbaijan is among the first batch of countries supporting the BRI. The initiative brought us economic benefits in many areas, such as infrastructure construction, tourism and cultural exchanges."

Archi Kalandia, Georgia's ambassador to China said: "We are fully supportive of the BRI implementation and will continue to reinforce the cooperation with other Central Asian countries. We are now constructing a railway that connects Central Asian countries. Once completed, the railway will greatly decrease transportation time and cost and bring economic benefits to the region."

As an intergovernmental organization contributing to regional economic cooperation in Central Asia, the Central Asia Regional Economic Cooperation Institute works on BRI-related programs to help foster cooperation between Central Asian countries.

Sanjaasuren Bayaraa, director of the institute, said that the interconnectivity of people, policy and projects within Central Asian countries is important.

"Through field research, capacity building service, knowledge dissemination, and cooperation with other organizations, the institute will continue to serve as a platform to boost shared regional prosperity and sustainable development," he said.

Experts also suggested enterprises' and consumers' information rights should be protected during digital transactions.

Li Xiaoyong, deputy secretary-general of the block chain branch under the Circulation Expert Committee of China Marketing Association, said: "As China is taking a leading role in the digital economy, massive data are exposed through the internet every day. Protecting the data assets of both consumers and e-commerce enterprises is in urgent need."

According to Li, the fact that institutions within a certain industry exchange user data to make money has become a common phenomenon. For example, some medical institutions sell patients' information to insurance companies for them to develop long-term life insurance; while e-commerce platforms sell users' bank account information to banks to explore clients.

Wu Miao, deputy director of the China Blockchain Economic Research Institute, said: "Our research showed that granting consumers and e-commerce enterprises the rights to collect and use data, creates greater room for sales growth of e-commerce platforms, while restructuring the current e-commerce system."

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2019-07-03 08:02:16
<![CDATA[Two shipbuilders mull merger]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487580.htm The possible merger of China State Shipbuilding Corp (CSSC) and China Shipbuilding Industry Corp (CSIC), the country's two biggest State-owned shipbuilders by production capacity, will allow them to compete against established rivals in South Korea and Europe, industry experts said on Tuesday.

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Move will enhance CSSC, CSIC's global competitiveness, earnings prospects

The possible merger of China State Shipbuilding Corp (CSSC) and China Shipbuilding Industry Corp (CSIC), the country's two biggest State-owned shipbuilders by production capacity, will allow them to compete against established rivals in South Korea and Europe, industry experts said on Tuesday.

The listed companies announced in stock exchange filings late on Monday the two shipbuilding groups are planning a strategic restructuring, but they said the plan needs to be approved by the relevant authorities.

Dong Liwan, a professor of shipbuilding at the Shanghai Maritime University, said the merger will bring advantages for the country to enhance its global competitiveness because Chinese players want to complete on the global stage, especially in the area of military vessels, liquefied natural gas carriers, luxury cruise liners, icebreakers, and offshore engineering equipment among others.

"It's time for capable Chinese shipyards to make complex, high value-added vessels to reach buyers in new segments through asset restructure, international collaboration and research and development activities," said Tan Naifen, deputy secretary-general of the China Association of the National Shipbuilding Industry.

If the merger goes through, the two Chinese shipbuilding groups will have more sales volume than their South Korean competitors, as well as other shipbuilding conglomerates across the world, Tan added.

South Korean shipbuilders such as Hyundai Heavy Industries Co and Samsung Heavy Industries Co gained 86 percent of the world's total orders for LNG carriers in 2018.

The merger will give the new Chinese group the scale to match Hyundai Heavy Industries' proposed acquisition of Daewoo Shipbuilding and Marine Engineering Co Ltd, Dong said.

The merger is a solid move to strengthen the earning ability of the State-owned enterprise sector, many of whom have been affected by overcapacity and limited market channels, such as those in steel, shipping and construction material industries, said Zhou Lisha, a researcher at the research institute of the State-owned Assets Supervision and Administration Commission.

China's shipbuilding business must move from quantity to quality, as the industry has become more intelligent, digitalized and environmentally friendly, she said.

Both groups were founded in 1999.

CSIC's major shipyards are located in Dalian, Qingdao and Wuchang, along with a large number of associated suppliers and research labs. Its sales revenue amounted to 305 billion yuan ($44.5 billion) in 2018, with profit of 6.9 billion yuan. It currently manages five listed companies.

CSSC's core assets include the Shanghai Waigaoqiao Shipbuilding Co Ltd, Jiangnan Shipyard (Group) Co and Hudong-Zhonghua Shipbuilding (Group) Co and the Longxue shipbuilding base in Guangzhou. It had annual sales of 114.4 billion yuan in 2018, with 2.4 billion yuan in profit. The group to date has three listed companies.

In addition to constructing conventional ships such as bulk vessels, container ships and oil tankers, both CSSC and CSIC have already begun to deploy more financial resources in developing ships such as mega-container vessels, LNG carriers, hospital ships, semi-submerged ships and ocean farms, as well as dual fuel ships and gas-fueled ships with the latest wind-power technologies.

 

A visitor takes photographs of a model ship at CSIC's booth during a maritime exhibition in Dalian, Liaoning province. Nangong Aoqing / For China Daily

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2019-07-03 08:02:16
<![CDATA[Education giant Pearson to expand vocational training in China market]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487579.htm The world-leading educational group Pearson Plc is expanding its business in the vocational training sector in China, boosted by the rising demand for skilled professionals needed both in China and in economies participating in the Belt and Road Initiative.

Pearson CEO John Fallon said that as a global learning company and the largest awarding body for academic and vocational qualifications in the United Kingdom, Pearson's professional qualification training courses for BTEC assists learners by combining knowledge and skills, and applying both to real life scenarios to enable students to progress through university, further their education and gain employment.

BTEC stands for Business and Technology Education Council, a British organization formed in 1984 that provides various qualifications for a wide range of vocational courses.

Fallon said Pearson has made efforts to introduce and localize the BTEC content for the needs of local employers.

"We've taken what we have learned and adapted it for specific needs in China," he said.

Pearson said the courses will be provided partly online given the popularity of mobile terminals, and help Chinese vocational talent expand their job-seeking opportunities in BRI countries and regions in various sectors.

Fallon said it is important how to learn throughout a career as many jobs and skills now can be replaced by artificial intelligence or automation.

"Current jobs will continue to change and will be different," he said.

The National Center for Schooling Development Program, a vocational development center under the Ministry of Education of China and Centers of Excellence of UK, have established a Skills Belt and Road International Talent Hub Program in 2018 to serve bilateral cooperation in skills education between the two countries.

The goal of the program is to set up more global talent hubs by partnering with vocational educational institutions in China. These hubs will provide students with global educational content and services.

Fallon said he is impressed by the efforts of the Chinese government in vocational and technical education.

"Favorable policies, funds and inclusiveness in better global practices will lead to the success of vocational education reform in China," Fallon said.

Vocational education is playing a major role in expanding employment in China, a report said.

The report co-released by the Shanghai Academy of Educational Sciences and MyCos found the employment rate of Chinese students graduated from vocational schools remained stable at 92 percent six months after their graduation. The monthly salary of vocational graduates increased 76.2 percent three years after their graduation.

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2019-07-03 08:02:16
<![CDATA[Li: Tax, fee cuts are crucial]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487578.htm Premier Li Keqiang promised on Tuesday to reinforce existing macroeconomic policies, amid great determination to achieve the $300 billion tax and fee reduction goal, in response to risks accumulating in a slowing global economy.

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Premier calls for more coordination of macroeconomic policies globally

Premier Li Keqiang promised on Tuesday to reinforce existing macroeconomic policies, amid great determination to achieve the $300 billion tax and fee reduction goal, in response to risks accumulating in a slowing global economy.

Letting people have a better life, the government has to tighten its belt because of the rising fiscal deficits, but "we have the solutions", Li said in a keynote speech at the Summer Davos Forum, organized by the World Economic Forum in Dalian, Liaoning province.

Li took tax and fee cuts as the crucial measure to motivate enterprises, which can reinvest the savings into technological innovation and stabilize employment. More measures will be taken to improve the business environment and boost investment and consumption.

"It is substantive progress to achieve the 6 to 6.5 percent GDP growth this year," said Li, adding that the slowing global economy will add downside pressure to China's growth.

Data showed that the world's second-largest economy largely stabilized in the first half, given the still robust industrial production and retail sales. The surveyed urban unemployment rate remained stable at about 5 percent, despite headwinds such as the escalation of trade tensions with the United States, according to data from the National Bureau of Statistics.

In face of the external challenges, Li called for the international coordination of macroeconomic policies, noticing that some countries have cut interest rates or released signals of carrying out quantitative easing.

"We are all passengers in the same boat," he said. "We should assess the results of previous quantitative easing and excessive money issuance - the policies for tackling the global financial crisis."

Li said China would avoid competitive devaluation of the renminbi, and keep the currency's exchange rate "at a reasonable equilibrium level." The monetary policy will remain prudent, without aggressive easing.

The authorities will not take measures that could have a negative impact on future growth, and keep seeking new growth potential, according to the premier.

It is time for Chinese enterprises to reconsider the changes in the business environment at the moment, as the trade difficulties may continue this year, Ning Gaoning, chairman of Sinochem Group, said at the Summer Davos Forum.

"With warnings from the trade disputes, Chinese companies have to change their modes of business operation, focusing on technological upgrading and long-term strategies," Ning said, adding that he was optimistic over the country's economic growth this year.

For small-and medium-sized enterprises, Premier Li said their financing costs will be reduced through cutting the banks' reserve requirement ratios and lowering the actual lending rates.

"A fair competition environment should be built for small-and medium-sized enterprises, and supportive measures will be launched. The financing situation should be remarkably improved this year," he added.

China's central bank is pushing forward interest rate reform, targeting further liberalization of lending rates and letting the market decide funding prices, according to central bank officials.

One of the key issues to improve SMEs' access to bank lending is to reasonably price the loans based on risk assessment, said Huang Yiping, deputy dean of the National School of Development at Peking University.

Huang said further monetary policy easing, if necessary, will help to achieve interest rate liberalization. In addition, the transformation of private business, from a resource-driven to an innovation-led growth mode, will boost China's economy. The private sector accounts for around 70 percent of the country's growth.

The truce in the Sino-US trade dispute and their decision to go back to the negotiation table will support the near-term economic growth and reduce risk-aversion sentiment in the market, said Michael Taylor, managing director and chief credit officer for Asia-Pacific at Moody's.

"We expect China will continue to ease policy in an effort to offset the impact of the existing tariffs and that major central banks will maintain their bias toward more accommodative policy," Taylor added.

 

A guest to the Summer Davos Forum in Dalian, Liaoning province, interacts with a robot on the sidelines of the event on Tuesday. Zou Hong / China Daily

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2019-07-03 08:01:50
<![CDATA[$3.44b in deals won on sidelines of Dalian meeting]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487577.htm Agreements for 16 projects with a total investment of 23.6 billion yuan ($3.44 billion) were signed on Tuesday on the sidelines of the ongoing Annual Meeting of the New Champions 2019, also known as the Summer Davos Forum, in Dalian, Liaoning province.

"The Summer Davos Forum has brought many international opportunities to the city," said Jin Guowei, vice-mayor of Dalian.

He said these key projects will further promote the continuous improvement of the scale and quality of foreign investment in Dalian.

Among the projects, 10 investors were from other countries and regions including Japan, the United States, and Israel.

James Zhao, president of Jiachem Inc, a US company based in California, said the company will invest $50 million to set up a manufacturing base and research center of oral healthcare products in Dalian Jinpu New Area, China's 10th national-level development area.

"There are three major reasons for us to choose to invest in Dalian. First, as a port city, it is convenient to ship our products to other regions around the world. Second, it is easy to find suppliers for industrial molds or electrical motors in the city with complete industrial categories. Third, the city has plenty of talented people with so many high colleges and universities," said Zhao.

The newly signed projects cover several fields like information technology, biological medicine, intelligent equipment and cultural creativity.

"We will give preferential policies to support the good operation and development of these projects, keep the promises while attracting investors and help put them into operation as soon as possible," said Jin.

Since 2007, the Summer Davos Forum has been held in China for 13 years, seven in Dalian and six in Tianjin.

This year, more than 2,000 participants registered to attend the meeting, two-thirds are business people, said Jin, adding that many of them are interested in starting business and trade cooperation with China.

Foreign-funded enterprises have become the new engine of Dalian's economic development. Since 2007, Dalian has realized imports and exports worth $663.9 billion, 4,075 foreign-funded projects, and actual utilization of foreign capital of $68.79 billion.

So far, 115 Fortune 500 companies have invested in 275 projects in Dalian.

In the first six months of this year, the city's actual domestic investment increased by 10.1 percent, the actual utilization of foreign capital increased by 114.6 percent, and the number of reserve projects increased markedly, said Jin.

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2019-07-03 08:01:50
<![CDATA[What they say]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487576.htm China's further opening up is providing win-win benefits. Further opening up will help improve the efficiency of capital allocation and can reduce financial risks in China's economy, and ultimately help build a more stable and sustainable economic and financial system. In a broader context, China's long-term growth will also benefit other nations, particularly with regard to overseas investors who seek to achieve long-term returns and manage short-term risks.

As the real economy and financial sector further open up, related structural reforms and ongoing technological innovation will continue to drive productivity toward higher quality, and long-term economic growth. These measures will promote the development of China and the world economy, so that China will continue to be the growth engine of the global economy and provide a significant market for the development of the world economy.

Jeffrey Wong, head of advisory, KPMG China

Improving the business environment, high-quality growth and development which underwrites economic vitality and new emerging needs make Chinese market more attractive. With the enhanced attractiveness, Johnson Controls will be more resolute in our dedication to creating smart buildings and smart cities.

China is one of the most important strategic markets for Johnson Controls globally, and a strong engine for our business growth.

Foreign investment in China will, in the future, focus on high-end industries including advanced manufacturing, new high technology, energy-saving and environmental protection, and modern services. They will also pay greater attention to China's development process and provide products and services that are most suited to China.

Visal Leng, president, Asia-Pacific, Johnson Controls

We're excited to see the acceleration of the dates for relaxation of the foreign ownership stake limits for securities firms and insurance businesses in China. While the practical changes will be small - as many firms have started the process, but it will take time - this is a clear further demonstration of China's commitment to opening up more broadly.

All major firms see the opportunity in China, but clearly need a carefully tailored strategy given the strength of the incumbents. No longer is "being in China" enough to guarantee growth... a clear customer value proposition and carefully tailored strategy to tap into the right pools where firms have a competitive advantage is needed.

The growth of the securities market and overall transition away from a lending-dominated funding market in China will clearly also be helped by this news. This is great not only for foreign banks, but also for Chinese corporates seeking diversified sources of funding through the capital markets.

Peter Reynolds, partner and head of Oliver Wyman Greater China

Premier Li Keqiang mentioned in his speech that China will further its reform and opening-up and will extend its national treatment to foreign companies as soon as possible. He also said that more efforts will be done to protect intellectual property rights. All these words have brought legal protection to foreign companies in China and will boost their confidence in investing in the country.

IBM is very much looking forward for the Chinese government to create such a long-term, stable and consistent legal and policy environment for foreign enterprises. We also expect further efforts to strengthen the protection of the legitimate rights and interests of foreign firms, including the protection of IPR and the optimization of the foreign investment environment.

Chen Liming, chairman of IBM Greater China Group

Premier Li Keqiang stressed in his speech that China would further open up the market for value-added services in the telecommunication industry. This is great news for us.

Since we are at the beginning of the commercial deployment of fifth-generation wireless technology or 5G, the Chinese government's policies will help drive the healthy growth of our industry and will accelerate 5G applications in different vertical areas.

Zhao Juntao, president of Ericsson China

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2019-07-03 08:01:50
<![CDATA[Expanded Shanghai Pilot Free Trade Zone to boost scale of opening-up]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487575.htm The planned addition of a new area to the China (Shanghai) Pilot Free Trade Zone aims at a higher level of opening-up and deeper reform in broader fields, and is not just a simple expansion in space or a duplication of FTZ policies, a top official from Shanghai said on Tuesday.

"The new area will compare itself with the most attractive FTZs in the world, to explore new policies and institutions that will see more opening-up and more market competitiveness," Shanghai Mayor Ying Yong said at a media conference in Beijing.

"We are to try on different pilots and carry out greater risk assessments, to build a special economic function zone with stronger international influence and competitiveness."

To fulfill that, the new area will focus more on promoting free investment and trade, while exploring investment and trade facilitation, he said.

More institutional and policy innovations will be made to achieve breakthroughs, especially in fields such as trade and investment facilitation, free entry and exit of goods, convenient flow of capital, greater opening-up of the transportation industry, freedom in obtaining employment, and the fast and easy transmission of information, he said, adding that optimization of the tax system to make it more competitive compared with international standards will also be a focus.

Shanghai is also to take specific measures to further improve its business environment and services, to attract more foreign investment and foreign companies to Shanghai and whole China, he said.

According to Ma Chunlei, director of Shanghai's municipal development and reform commission, around 220 manufacturing projects will kick off in the city within the year, which will make Shanghai's service-industry-leading economic structure more optimized with stronger support from the manufacturing sector.

He said the fast approval of Tesla's vehicle assembly facility reflected Shanghai's ever-optimizing business environment.

With first-round investment of 14 billion yuan ($2 billion), and a designed production capacity of 150,000 vehicles annually, the factory is the largest foreign-invested manufacturing project in Shanghai's history.

Ma said the factory has started installation of equipment, and plans to start production at the end of this year, with total output increasing to 3,000 cars per week gradually.

Within the year or early next year, the Chinese people will probably be able to buy the Tesla Model 3 produced in Shanghai, he said.

The cumulative paid-in foreign investment to Shanghai since the start of the reform and opening-up has reached $240 billion, and in the first five months of 2019, the number of new foreign-investment projects and the value of paid-in foreign investment respectively registered year-on-year growth of 62.8 percent and 19.5 percent, according to Ying.

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2019-07-03 08:01:50
<![CDATA[Second China International Import Expo this year to be bigger and better]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487574.htm

The second China International Import Expo (CIIE) will be carried out on a larger scale and a higher level, aiming for better quality and stronger innovation results, Shanghai Mayor Ying Yong said at a news conference on the city's core competitiveness on Tuesday.

Scheduled to be held in Shanghai from Nov 5 to 10, this year's CIIE will see its exhibition area expanded to 300,000 square meters from 270,000 sq m last year, said Ying. Similar to the first CIIE, exhibitions at the country pavilion, business exhibitions and international economic forum will be the three key aspects of the CIIE.

So far, more than 50 countries have confirmed their presence at the country exhibition pavilion. While 200 Fortune 500 companies took part in last year's show, the number will increase to at least 250 this year.

According to Ying, the municipal government of Shanghai will make more efforts to exert CIIE's impact in a wider area. With this expo, the city will build the Hongqiao area - where the CIIE exhibition hall is located - into an international open hub serving as a central business area and a new platform for international trade.

Meanwhile, the Hongqiao area will be built into a demonstration and trading center for bonded import goods. Therefore, more exhibits will be turned into commercial goods. Quality products and services from all over the world will be further facilitated to enter the Chinese market, he said.

More importantly, Shanghai will be built into an import and export products distribution center that connects the rest of the Yangtze River Delta region, serve the whole country and sees its impact radiating across the entire Asia-Pacific region, added Ying.

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2019-07-03 08:01:50
<![CDATA[JPMorgan to get controlling stake in Chinese joint venture]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487573.htm

The Chinese market will soon witness the first joint venture firm where a foreign company will take an absolute controlling stake as part of the deeper opening up of the country's financial sector.

According to information from the Shanghai United Asset and Equity Exchange, Shanghai Trust Co Ltd announced on Monday the transfer of its 2 percent stake in CIFM, its joint venture with JPMorgan Asset Management. The transfer price is 241.3 million yuan ($35.1 million).

CIFM was founded in May 2004 with Shanghai Trust holding a 67 percent stake and JPMorgan with a 33 percent share. In August 2015, the stakes of the two companies were adjusted to 51 percent and 49 percent respectively in the joint venture.

Once the stock right transfer is finalized, JPMorgan Asset Management will become the controlling stake holder of the fund company.

Shanghai Trust said the stock transfer is in response to the call for China to further open up the financial sector and it also addresses the group's strategic development goals.

By the end of last year, CIFM managed assets worth 160 billion yuan.CIFM saw its turnover reach 434.4 million yuan and net profit hit 121.5 million yuan at the end of May 2019.The fund company's net profit stood at 336 million yuan in 2018 and 335 million yuan in 2017.

In April 2018, the China Securities Regulatory Commission for the first time allowed a foreign company to hold the controlling stake in a Chinese fund company.

Public data showed there are 45 joint venture fund companies in China. About 20 of these fund companies have foreign investors holding a 49 percent stake, while another 10 joint ventures have foreign investors with a 30 percent stake in those companies.

A report jointly released by investment bank Morgan Stanley and consulting firm Oliver Wyman predicted the size of the Chinese public fund sector will surge to $7.5 trillion by 2025, quadruple the number registered in 2018.

The huge potential of the Chinese market is extremely attractive for international asset management companies which face pressure in their domestic markets, the report said. With this in mind, leading international asset management and fund companies have accelerated their attempts to get into China.

In late April, the world's top asset management company BlackRock appointed Tang Xiaodong as its China head. Tang used to be the deputy general manager of Guangzhou-based GF Securities.

BlackRock Chief Executive Officer Laurence Fink stressed at Tang's appointment that China is a strategic priority for the company and it plans to remain very engaged in pursuing its long-term strategy in this key market. BlackRock has $6.5 trillion in assets under management worldwide.

Industry insiders said that Black-Rock is negotiating with China International Capital Corporation Limited to acquire a majority stake in the latter's affiliated public fund company.

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2019-07-03 08:01:50
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-07/03/content_37487572.htm  

Five regions mainstay of nation's total exports

China's top five exporting provincial-level regions in the first five months of the year reported combined exports of $660.6 billion in the period, or 68.9 percent of the national total, said the top economic regulator. Zhejiang and Shandong provinces saw their exports rise 2.6 percent and 0.6 percent year-on-year, respectively, to reach $127.2 billion and $62.8 billion, data from the National Development and Reform Commission showed. Exports from Guangdong and Jiangsu provinces and Shanghai stood at $240.1 billion, $154.6 billion and $76 billion, down 1.5 percent, 0.9 percent and 6.4 percent, respectively.

Renminbi strengthens against greenback

The central parity rate of the renminbi, or the yuan, strengthened 203 basis points to 6.8513 against the US dollar on Tuesday, according to the China Foreign Exchange Trade System. In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day. The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

Regulator approves Shanghai IPO of PSBC

Securities regulator has approved an application for an initial public offering by the Postal Savings Bank of China, one of China's State-owned commercial lenders. The company, already listed in Hong Kong, applied to issue up to 5.17 billion shares on the Shanghai Stock Exchange, according to the company's prospectus filed with the China Securities Regulatory Commission. In February, the bank was included as one of China's large State-owned commercial banks by the country's banking regulator. The IPO is expected to raise at least 20 billion yuan ($2.9 billion), according to analysts.

ADBC lowers service fees for 14 items

Agricultural Development Bank of China lowered service fees for 14 items and canceled fees for another 12 items in a bid to alleviate financial burdens on companies and support the real economy. After the adjustment, the bank now charges for 97 service items, down from 109 items. The bank has cut its service fees by more than 2.7 billion yuan ($392 million) since 2015. The lender, a policy bank under the People's Bank of China, is responsible for funding projects related to China's agricultural development.

Amazon plans to create 1,800 jobs in France

The world's largest online retailer Amazon will create 1,800 permanent posts this year in France as part of its plan to consolidate expansion in one of its key market in Europe, RTL radio reported on Tuesday. The report said the e-commerce giant will offer 1,800 permanent contract positions "in the coming months". That includes 500 jobs at a new site it will open over the summer in Bretigny-Sur-Orge, near Paris. The recruitment plan is set to bring Amazon's total number of permanent staff to 9,300 in the 20 centers it has already established across France, according to RTL.

Smart card producer plans E. Africa foray

Chinese smart card manufacturer XH Smart Tech (China) Co Ltd said on Monday that it plans to roll out its innovative financial digital platforms in East Africa. Jack Chen, managing director of XH Smart Tech, said in a statement released in Nairobi that it will partner with technology firm Compulynx to deploy its payment technologies for instant card issuance, EMV cards and QR code enabled payment systems in the region. "The collaboration will offer African banks, insurance and microfinance companies an opportunity to leap frog the most advanced payment technologies utilizing existing infrastructure without the transitional phases and accompanied costs," Chen said.

OPEC agrees to extend output cut

The Organization of the Petroleum Exporting Countries (OPEC) agreed in Vienna on Monday to extend the output cut till the end of March 2020. "In view of the current fundamentals and the consensus view on the outlook for the remainder of 2019, the conference decided to extend the voluntary production adjustments agreed at the 175th Meeting of the OPEC Conference for an additional period of nine months from 01 July 2019 to 31 March 2020", OPEC said in a news release after its 176th meeting. It was observed that the oil demand growth for 2019 has been revised down to 1.14 million barrels per day, while non-OPEC supply in 2019 is expected to grow at a robust pace of 2.14 million barrels per day year-on-year, said the statement.

Italy trims budget deficit target by 0.3%

The Italian cabinet on Monday agreed to reduce the country's budget deficit target by 0.3 percent in 2019, according to a statement by the Italian Finance Ministry. The measure was seen as a necessary step for Italy to negotiate with the European Union and avoid the bloc's possible deficit infringement procedure for high debt. Italy's deficit target in 2019 would now be at 2.1 percent of gross domestic product (GDP), down from a 2.4 percent goal set in April.

Mexican remittances hit record high in May

Remittances sent to Mexico totaled $3.203 billion in May, the highest monthly level on record, the Central Bank of Mexico (Banxico) said on Monday. The figure was 1.5 percent higher than that registered in May 2018, when remittances totaled $3.156 billion, according to Banxico's remittances monthly report. During the first five months of this year, remittances registered an increase of 4.74 percent against the same period of 2018, totaling $13.724 billion.

Mongolia's central bank buys less gold

The Bank of Mongolia, the country's central bank, said on Monday that its purchases of gold decreased by 12 percent in the first half year over the same period last year. The Bank of Mongolia has purchased a total of around six metric tons of gold from legal entities and individuals in the January-June period. The decline was mainly related to the expiration of the effective period of low royalty taxes on gold with the 2014 amendments to the Minerals Law, according to experts from the central bank.

Kenya, South Sudan shore up trade ties

Kenya and South Sudan on Monday inked agreements aimed at deepening trade ties between the two neighboring countries. The deals, which were signed in Nairobi between visiting South Sudan President Salva Kiir and his host Kenya President Uhuru Kenyatta, will also see the two countries set up a joint border commission for the management of the common border. Under the agreements, Kenya will hold a trade expo in Juba in November to help deepen trade ties between the two nations and also work as a show of confidence in South Sudan's economy.

China Daily - Agencies

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<![CDATA[Manufacturing contracts slightly]]> http://www.chinadaily.com.cn/kindle/2019-07/02/content_37486936.htm China's manufacturing sector contracted slightly in June according to the latest purchasing managers indexes, but factory activity may pick up later given the indexes' structural improvements and potential policies to boost consumption, analysts said on Monday.

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Consumer goods buck trend as only category to see production growth

China's manufacturing sector contracted slightly in June according to the latest purchasing managers indexes, but factory activity may pick up later given the indexes' structural improvements and potential policies to boost consumption, analysts said on Monday.

The manufacturing Caixin/Markit PMI, released on Monday, slid to a five-month low of 49.4 in June, down from 50.2 in May and below the 50-mark that divides expansion from contraction.

The official manufacturing PMI reading for June also came in at 49.4, unchanged from May, the National Bureau of Statistics said on Sunday.

"Overall, China's economy came under further pressure in June," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin.

Demand weakened and production lowered as trade tensions put a strain on business confidence, Zhong said, citing that the gauges for new domestic orders, new export orders and output declined into contraction territory in June.

"It's crucial for policymakers to step up countercyclical policies. New types of infrastructure, high-tech manufacturing and consumption are likely to be the main policy focuses," Zhong added.

Despite the overall weakening in Caixin PMI data, consumer goods bucked the trend and became the only category to record production growth in June.

The NBS figures also showed that consumption kept strengthening its role as the new growth engine, with the gauge of consumer goods production up month-on-month to 52.2 in June, outpacing manufacturing production as a whole by 0.9 percentage point.

"With the drive from individual income tax and value-added tax cuts, consumer goods demand represented by retail sales is expected to pick up continuously in the second half of the year," said a report from Shenwan Hongyuan Securities on Monday.

Rallying consumption, in tandem with steadily recovering infrastructure investment, could help shore up manufacturing demand and revitalize production, the report said.

In May, retail sales increased by 8.6 percent year-on-year, up from 7.2 percent a month earlier, according to the NBS.

Cheng Shi, chief economist with ICBC International, agreed that consumption may moderately quicken in the second half and cement growth, as more policies to unleash consumption potential may be on the horizon.

Cheng exemplified that infrastructure investment may focus on improving consumption infrastructure in lower-tier cities and county areas, and subsidies for vehicle and home appliance consumption can also be expected.

Besides a robust production of consumer goods, structural improvements in official PMI data may also signal a stronger economy in the second half of this year, said Zhu Jianfang, chief economist with CITIC Securities.

The improvements in the sub-indexes of raw material inventories and delivery time indicated that enterprises actively prepared for production in June, while the operating conditions of mid - and small-sized enterprises, who are sensitive to changes in the economic climate, recovered in June, Zhu said in a report.

The PMI of medium-sized enterprises increased by 0.3 percentage point to 49.1 last month, and that of small businesses rose 0.5 percentage point to 48.3, according to the NBS.

 

Employees make intelligent vibratory mixing equipment at a factory in Xuchang, Henan province. Niu Shupei / For China Daily

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2019-07-02 07:34:28
<![CDATA[Trade talks restart gives financial market reasons to be cheerful]]> http://www.chinadaily.com.cn/kindle/2019-07/02/content_37486935.htm Optimism is on the rise in the financial market after the leaders of China and the United States agreed to resume trade talks during the weekend. Policy observers said that it eased negative sentiment among investors and was an opportunity to reheat the global economy.

The message that the US decided not to add new tariffs on Chinese exports cheered investors in China's financial market on Monday. The CSI 300 index, a tracker of major Shanghai and Shenzhen-listed stocks, rose by 2.88 percent on Monday.

The onshore renminbi spot exchange rate gained more than 0.56 percent to 6.8286 per dollar during trading, its strongest since May 10. The offshore renminbi became the best performing currency in Asia on Monday morning.

The "good result" is actually very important to stabilize the financial market, as well as to stabilize economic growth, according to Zhu Min, head of Tsinghua University's National Institute of Financial Research.

At the ongoing "Summer Davos", an annual event organized by the World Economic Forum in China, Zhu shared his projection that the result of the Sino-US meeting may slow down the US central bank's steps in cutting interest rates, although one reduction is still possible this year.

Earlier, the global market speculated that the US Federal Reserve is likely to lower its policy rates by the end of July, as the escalated trade tensions have strained the world's already bumpy growth.

Uncertainties are still there, however, as significant obstacles remain to obtaining a long-term agreement between the world's largest two economies. In addition, an agreed mechanism for dispute settlement is waiting to be achieved, said experts.

Mari Elka Pangestu, a professor of international economics at the University of Indonesia, said uncertainty could be the most remarkable downside risk at the moment. Uncertainty will delay investment decisions and raise business costs, and consumers will finally pay for that. But at least some of the near-term concerns have been eased a little, she said.

Timothy Stratford, the former assistant US trade representative and the former chairman of AmCham China, said that the temporary truce of the China-US trade war has pleased the business community, which was the "best case scenario".

"We are glad to see that the two countries are going back to the negotiation table," said Stratford, adding that difficulties are still there to achieve a comprehensive agreement between China and the US.

He added that difficult issues between the two countries, far more than just trade topics, should be solved through further bilateral dialogues. And the World Trade Organization has to see breakthrough in reforming its 25-yearold multilateral mechanism, and take greater steps toward resolving trade tensions in rules-based ways.

This year, even amid trade tensions, China is able to maintain the world's strongest economic driving force this year, with a 35 percent contribution to global GDP growth, said Jing Ulrich, vice-chairman of global banking and Asia-Pacific at JPMorgan Chase. The world's second-largest economy will reach a total GDP of $29 trillion before 2030, accounting for 90 percent of US GDP, she said.

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2019-07-02 07:34:28
<![CDATA[Foreign firms welcome greater access]]> http://www.chinadaily.com.cn/kindle/2019-07/02/content_37486934.htm

The government's widening market access for foreign investors in mining and the cancellation of restrictions on the exploration and development of petroleum and natural gas represent a precious opportunity for foreign oil, gas and mining companies, and have been well received by multinational corporations.

The National Development and Reform Commission and the Ministry of Commerce released two updated negative lists for this year on Sunday, which are expected to take effect on July 30. According to the lists, restrictions on the exploration and development of petroleum and natural gas by Chinese-foreign equity joint ventures or non-equity joint ventures will be canceled.

This is part of the government's efforts to improve international cooperation as well as boost the country's development. China's policy will remain unchanged with respect to opening up and it will continue to ease market access, according to the nation's top economic regulator.

The move has been well received by multinational energy corporations.

"Shell finds progress in the opening-up in upstream sector very encouraging, as it means more choices and more options for us to invest in the sector and in the nation," said Zhang Xinsheng, executive chairman, Shell Companies in China.

British multinational oil and gas giant BP also applauded the move.

"After a year, the Chinese government once again revised the negative list of foreign investment, which demonstrates the nation's determination to unswervingly expand its opening up. We are greatly encouraged by this," said BP China Chairman and President Yang Xiaoping.

"Eliminating the restrictions on joint ventures and cooperation in oil and gas exploration and development, plus introducing multi-market entities (including foreign companies) in domestic oil and gas resource exploration and development, will enhance market activity, create a fair and open access environment, and help to further enhance the exploration and development efforts and technological advances of domestic oil and gas resources."

Meanwhile, the opening up of access to natural gas related fields will further promote the development of natural gas in China, to support the nation's low-carbon transformation, and bring more clean energy to the public, she added.

China's oil and gas exploration sector has been long dominated by State-owned enterprises, including China National Petroleum Corp, the country's biggest oil and gas company, and China Petroleum and Chemical Corp, the world's largest refiner by volume.

Exploration and development of petroleum and natural gas has long been limited to Chinese-foreign equity joint ventures or non-equity joint ventures of foreign companies. Foreign oil and gas companies' presence in the country so far include the tight gas development project between French oil giant Total and China National Petroleum Corp in the Erdos Basin and oil giant Royal Dutch Shell's tight gas project in Shaanxi province in cooperation with China National Petroleum Corp.

In addition to the lifting of restrictions in the fields of oil and gas exploration, the government has also lifted curbs on foreign investment in the exploration and exploitation of molybdenum, tin, antimony and fluorite.

Zhu Yi, a senior metals and mining analyst with Bloomberg Intelligence, said this is a significant move which will allow more foreign investors to run majority shareholding or wholly owned businesses in the mining sector and help China foster high-quality growth and a better business climate for foreign investors.

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2019-07-02 07:34:28
<![CDATA[New catalog sets out path for further opening]]> http://www.chinadaily.com.cn/kindle/2019-07/02/content_37486933.htm

The new industry catalog encouraging foreign investment shows China's determination to further open up its economy and bolster international cooperation, which will help the nation to achieve high-quality development, experts said.

The National Development and Reform Commission and the Ministry of Commerce on Sunday jointly released a revised catalog of industries that encourage foreign investment.

More than 80 percent of the newly added or revised items in the nationwide catalog are related to manufacturing industry. Foreign investment is more encouraged in sectors such as high-end manufacturing, intelligent manufacturing and green manufacturing.

New items have been added to encourage foreign investment in 5G core components, etching machines for integrated circuits, chip packaging equipment and cloud computing equipment.

Other newly added or revised items include industrial robots, new energy vehicles, key components of intelligent cars, key raw materials for cell therapy drugs, and new materials for aerospace and monocrystalline silicon.

The move is expected to give better play to the positive role of foreign investment in China's industrial development, technological progress and structural optimization, said a news release from the NDRC.

"It shows China's determination regarding greater opening-up. Encouraging more foreign investment in the manufacturing industry will boost the transformation and upgrading of traditional industries," said Liang Ming, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

"No country can develop without international cooperation," Liang noted, adding that China hopes to work with other countries to raise its innovation capacity and enhance competitiveness.

Tao Lin, vice-president of Tesla Inc, said the new industry catalog is of great importance for the company as its project in Shanghai has just entered the equipment manufacturing and installation phase. She added that encouraging foreign investment in the key components of intelligent cars will help the company cut costs and enhance its operational efficiency.

In January, Tesla officially started construction of a manufacturing plant in Shanghai, its first overseas plant.

Wang Xiaosong, a researcher with the National Academy of Development and Strategy at Renmin University of China, said manufacturing industry is an important driving force of technological progress. At present, China has become a manufacturing power.

"China still lags behind developed economies in the high-tech sector, so encouraging foreign investment is of strategic significance to catch up with globally advanced technology, as well as promote the development of cutting-edge technology in the manufacturing industry," Wang added.

Ren Wanfu, an auto industry analyst, said it is noteworthy that more foreign companies will be encouraged in the new energy vehicle industry, which will promote competition in the battery and key components sectors.

Li Fusheng contributed to this story.

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2019-07-02 07:34:28
<![CDATA[Siemens to provide propulsion system for Beijing subway line 19]]> http://www.chinadaily.com.cn/kindle/2019-07/02/content_37486932.htm

Siemens Mobility, the transportation unit of German industrial conglomerate Siemens AG, announced on Monday it will provide the fully automated propulsion system solutions for the first phase project of Beijing's mass transit subway line 19.

It will work with local partner Beijing Zongheng Electro-Mechanical Technology Co Ltd (ZEMT), to provide propulsion systems for 25 fully automated trains on the line.

"Beijing's mass transit line 19 is the first propulsion system project in Beijing won by Siemens Mobility and ZEMT, marking a big breakthrough for us," said Juergen Model, CEO of Siemens Mobility for China, adding the company will offer tailor-made services for Beijing Metro.

Starting from Mudanyuan station in Haidian district in the north and ending at Xingong station in Fengtai district in the south, the phase one project covers a distance of around 22.4 kilometers across 10 stations with a designated speed of 120 km/h.

Its southern section is connected with the new airport railway service in Beijing, which is scheduled for operation at the end of 2020.

The line is expected to employ the highest level of GOA 4(Grade-of-Automation 4) fully automatic operation and ethernet-based train control system to make the propulsion system intelligent to the maximum possible extent. As a north-south fast line with large passenger capacity, it will effectively help relieve the north-south transportation pressure in the city.

Since the first fully automatic operation line was put into operation in 1983, Siemens Mobility has provided such systems for over 13 countries and regions globally. It posted revenue of 8.8 billion euros ($9.97 billion) in its 2018 fiscal year and has around 34,200 employees globally.

Against mounting urban transportation pressure, fully automatic operation has become the new trend in China's mass transit market, with a growing number of cities such as Chengdu and Nanjing planning such lines, which can run a train's startup, stop, door opening and closing, as well as operations under emergency situations without the involvement of any staff member.

To avoid accidents, the unmanned self-driving system considers not only the safety of the running train to prevent tailgating, front and side collisions, derailment, and obstacle collision. It will also watch for the safety of passengers and operators under both normal and abnormal conditions, said Feng Hao, a researcher at the Institute of Comprehensive Transportation at the National Development and Reform Commission.

"It also represents the future direction of rail transit technology development," he said.

In addition to Beijing, Shanghai Metro's lines 14, 15 and 18, which currently are under construction and scheduled to be operational in 2020, are also being built in accordance with the fully automatic operating standards system.

In comparison with manual driving, fully automated train technology makes use of modern communication, automatic control and computer skills, said Feng, stressing such technology can sharply improve the reliability, safety, availability, maintainability of rail transit, and upgrade the operating efficiency and overall automation level in an urban rail transit network.

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2019-07-02 07:34:28
<![CDATA[Shanghai's a global financial hub Shi Jing in Shanghai]]> http://www.chinadaily.com.cn/kindle/2019-07/01/content_37486479.htm The launch of technology-focused STAR Market by the Shanghai Stock Exchange on June 13 marked yet another step of the metropolis toward transforming itself into an international financial hub.

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STAR Market is the latest achievement after stock and bond connects, renminbi-priced products, futures, big banks, ETF link and fintech to burnish the city's pioneering role in China's opening-up

The launch of technology-focused STAR Market by the Shanghai Stock Exchange on June 13 marked yet another step of the metropolis toward transforming itself into an international financial hub.

On June 19, Suzhou-based automatic detection equipment maker HYC Technology became the first company to make its initial public offering on the Nasdaq-like STAR Market.

The tech board, whose launch was highly anticipated, also marks the advent of a pilot registration-based IPO system. It is one of the three decisions that President Xi Jinping highlighted in his keynote speech at the opening ceremony of the China International Import Expo in Shanghai in November last year.

Shanghai's Party secretary Li Qiang said at the Lujiazui Forum last month that the launch of the STAR Market has not only brought together financial capital and technological innovation but provided a key opportunity to build the city into an international financial center.

Efforts in that direction started early this year. Approved by the State Council, eight regulatory bodies led by the People's Bank of China issued an action plan in late January. The gist of their plan was to build Shanghai into a global financial market leader and a go-to market for renminbi trading by 2020.

A legal, innovative, transparent, open and highly efficient financial system is expected to be in place by that time.

The presence of foreign financial institutions in Shanghai speaks volumes of the municipality's increasing importance as a financial hub, market mavens said.

Data from the Shanghai Financial Services Office showed 1,605 licensed financial institutions were registered in Shanghai by the end of last year, more than double the number a decade ago. Among these FIs, 501 were financial service providers from other countries and regions.

By March 31, there were 21 Shanghai-registered legal person banks, more than half of the country's total. There were 227 profit-making foreign banking institutions with a solid base in Shanghai, a figure that more than quadrupled since 2001.

Nicolas Aguzin, chairman and CEO of JP Morgan Asia-Pacific, said the financial services industry in Shanghai developed rapidly over the past five years, which has encouraged more and more foreign financial institutions to consider setting up shop quickly in the metropolis.

What heightened the positive mood were the bond connect program, which launched in mid-2017, and the stock connect mechanism that began operations from Shanghai in 2014. The China-Japan ETF Connectivity scheme was launched on June 25, allowing investors in both countries to invest in each other's exchange traded funds market.

The STAR Market now promises to improve the operational efficiency of the capital market in Shanghai and make China more attractive to international investors, according to Aguzin.

JP Morgan, he said, will continue to invest in China, and in Shanghai especially, given the huge room for development in the city.

In a developed economy, the size of its stock market is usually 1.5 times or double the country's GDP. In JP Morgan's estimates, the size of China's stock market, or its fixed income market, is likely to be triple the size of the GDP in the next 15 years, if China maintains the speed of the ongoing opening-up. By then, the size of Shanghai's capital market could reach up to $100 trillion, which will be unprecedented all over the world.

Trading in Shanghai is as open and transparent as in any other developed country's markets, said Aguzin. The adoption of global benchmarks in Shanghai is a positive message to international investors and FIs, he said.

Shanghai has pioneered China's opening-up of the financial sector. In November last year, German insurer Allianz was approved by the China Banking and Insurance Regulatory Commission to set up the country's first foreign-controlled insurance company in Shanghai.

The joint venture insurance company ICBC-AXA set up its asset management company in Shanghai last May, the first of its kind in China.

At the same time, a large number of international FIs have set up their global or regional headquarters in Shanghai. For instance, the New Development Bank, which was conceptualized during the fourth BRICS Summit in 2012, is headquartered in Shanghai. The NDB became fully operational in 2016, and serves the BRICS members of Brazil, Russia, India, China and South Africa.

K. V. Kamath, president of the NDB, said it is much easier now for Shanghai to attain the goal of an international financial hub than it was 10 years ago, for the city has fully embraced the latest technologies and built up an infrastructure required for top-notch providers of financial services.

Shanghai has also strengthened its capabilities in the fields of investments and financing. Data from the Shanghai Financial Services Office showed that the city's total amount of direct financing surged 25.8 percent year-on-year to reach 9.6 trillion yuan ($1.4 trillion) in 2018, suggesting the figure quadrupled from the level 10 years ago. What's more, Shanghai accounted for over 85 percent of China's total direct financing last year.

Fittingly, the international community has shown its appreciation of Shanghai's achievements. The global financial centers index compiled by UK's independent think tank Z/Yen has given fifth place to Shanghai for the second time in running this year. The think tank's director Mark Yeandle said Shanghai's strong positioning worldwide is a result of the city's booming fintech service providers.

Zheng Yang, director of the Shanghai Financial Services Office, said as an international financial center, the city has enviable capabilities in the area of renminbi pricing. Apart from the overnight Shanghai Interbank Offered Rate, better known as Shibor, which has been used for 12 years now, a number of products priced in renminbi have been introduced in the city, exerting greater influence on the global market.

The cross-border interbank payment system, which was launched in Shanghai in 2015, saw an updated second phase put into use in May last year, with its daily transaction capability topping 100 billion yuan.

In April 2017, the Dubai Gold and Commodities Exchange became the first foreign exchange to list Shanghai Gold Futures outside China. Yi Gang, governor of China's central bank, said at the Lujiazui Forum that the PBOC will support the launch of derivatives at the Chicago Mercantile Exchange based on the pricing contracts provided by the Shanghai Gold Exchange.

The yuan-denominated crude oil futures contracts were unveiled in Shanghai in March last year, which was the first of its kind open to overseas investors. Jonty Rushforth, senior director of the energy price group at S&P Global Platts information service, said that it could consolidate renminbi's position in the international oil market as more traders from outside China choose to trade on the Shanghai Futures Exchange.

"The internationalization of renminbi is essential when it comes to Shanghai's goal of becoming a world-class international financial center. To that end, more trading of capital projects should be opened and the circulation range of renminbi should be further expanded, especially in the countries and regions participating in the Belt and Road Initiative," said Yasuhiro Sato, chairman of Mizuho Financial Group.

 

Travelers from home and abroad enjoy the sights of the Bund in Shanghai on May 29. The metropolis is fast transforming into a global financial hub, and financial services like digital payments and easy currency conversions are also promoting tourism in a variety of ways. Ang Yi / For China Daily

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2019-07-01 08:00:58
<![CDATA[To be sure, the city is not yet in the league of New York, London, Singapore]]> http://www.chinadaily.com.cn/kindle/2019-07/01/content_37486478.htm

Great efforts have been made by the central regulators and the municipal government of Shanghai to narrow the gap between the city and other leading financial centers such as New York, London and Singapore. The spectacular results of their efforts are now evident in the form of Shanghai's rising stock among the world's best financial hubs.

Although its global standing is much brighter now that it was a few years back, it is probably a bit premature to claim that the metropolis is on its way to becoming the world's best financial hub.

One of the issues that industry insiders and experts have highlighted time and again is the openness of the financial market. Central regulators have understood very well the importance of that by coming up with a number of opening-up policies in banking, securities and insurance. But it will certainly take some time to see the difference here.

It is true that the trading volume registered here by financial institutions and companies every year is paramount, but Shanghai has not yet played a decisive role in the global financial community.

Take New York for example, where its onshore business is a major driver. New York is home to the world's largest stock trading house. According to the World Federation of Exchanges, the total market value of the stocks listed on the New York Stock Exchange topped $20.68 trillion in 2018, accounting for 23.02 percent of the world's total.

On the other hand, the total market cap of the 1,450 companies listed on the Shanghai Stock Exchange was about $4 trillion. The Shanghai bourse has a lot of catching up to do for sure.

Different from New York, London has taken its leading position among the global financial markets in terms of the offshore business. It has long been the world's largest foreign exchange market, taking up more than 40 percent of the world's foreign exchange transactions.

Ever since the British government lifted its control on foreign exchange in 1979, the London foreign exchange market has been galloping, with more than 30 currencies frequently traded in London at present.

The long history of London's financial industry, and the complete financial system there, have made the UK capital a magnet that attracts the best financial talent. This is one area where Shanghai should make more investment, experts said.

According to recruitment platform Boss Zhipin, Shanghai is still short of financial talent with interdisciplinary knowledge background. While fintech is flourishing and has become a new impetus for the city's financial industry, candidates with knowledge in big data, artificial intelligence or blockchain technologies are still in short supply.

Similarly, there is inadequate supply of candidates with international qualifications such as CFA (certified financial analyst) or FRM (financial risk manager) in Shanghai's job market. Even though there has been a gradual increase of such talent since 2010, the supply has been far from being able to meet the demand, said Boss Zhipin.

The scenario is further complicated by strong demand for talent from internet-based businesses and technology companies, according to Boss Zhipin.

Between 2017 and 2018, about 34 percent of the financial professionals switched their career paths to the internet industry. As emerging industries like artificial intelligence and blockchain are offering more competitive remuneration, it is high time for financial institutions to come up with solutions to tackle the talent challenge.

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2019-07-01 08:00:58
<![CDATA[Safeguarding health, saving lives]]> http://www.chinadaily.com.cn/kindle/2019-07/01/content_37486477.htm When some north Indian states were rocked yet again by deaths of hundreds of children due to Japanese encephalitis, or JE, last month, executives of China National Pharmaceutical Group Co, or Sinopharm, the largest healthcare company in China, realized the lifesaving role the company's vaccines could play not just in China but all over the world.

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Sinopharm, its arms expand their drug, vaccine and medical services businesses

When some north Indian states were rocked yet again by deaths of hundreds of children due to Japanese encephalitis, or JE, last month, executives of China National Pharmaceutical Group Co, or Sinopharm, the largest healthcare company in China, realized the lifesaving role the company's vaccines could play not just in China but all over the world.

JE is a lethal brain infection common in Asia and the western Pacific that can, however, be prevented using vaccines. As the world's largest JE vaccine provider, Sinopharm accounts for 80 percent of global JE vaccine consumption, they said.

The company is sewing up plans to expand its global footprint, especially in economies participating in the Belt and Road Initiative, they said.

"We ranked 194th on the Fortune Global 500 list last year, and will certainly rank higher this year," said Zeng Bing, Sinopharm's vice-president and secretary to the board of directors.

"Our exports growth has been outpacing that of imports significantly in recent years, although imports remain robust."

Work related to technological innovation, overseas investment, foreign markets accessibility, and international talent recruitment will be the focus of Sinopharm next.

The goal is to further increase exports and achieve high-quality development in overseas markets, Zeng said.

Earlier this year, a team of high-ranking officials of Indian health and family welfare ministry paid a visit to two subsidiaries of Sinopharm. They thanked the company for its help in controlling JE during the earlier outbreaks.

Sinopharm has been exporting such vaccines to India for 12 years, and supplied 2.1 million doses of free vaccines in early 2018, when shortages raised concerns of an outbreak of JE.

The company estimates it will have provided 410 million doses of JE vaccines to India by this year-end.

Its subsidiary for vaccine and biological medicine sector, China National Biotech Group Co Ltd, said more than 450 million doses of the JE vaccine have been exported to 12 countries and regions since receiving the World Health Organization's pre-qualification in October 2013.

The certificate means that the vaccine is up to international standards in terms of quality, safety and efficacy.

The subsidiary has registered eight of its products in 33 countries and regions for 54 certificates. Apart from JE vaccines, its other vaccines for pneumonia and polio are part of its export items.

In China, Sinopharm has more than 1,100 subsidiaries, including six listed ones, and more than 110,000 employees. Its core businesses span a wide range from distribution and retail of healthcare and pharmaceutical products to scientific research, manufacturing and sector financing.

Its compound annual growth rate of total assets in the 2009-2018 period was 30.5 percent and revenue's CAGR was 24 percent in the same period. In 2018, the company's revenue was 400 billion yuan ($58.16 billion).

Last year, the company imported products and materials worth $671 million, and exported products worth $4.06 billion. Its industrial products worth $383 million were exported to 88 countries and regions. Exports of industrial products to 38 BRI economies accounted for $266 million, or 69 percent of the total. Chemical and biological drugs, and traditional Chinese medicine remedies, were its main exports.

Outside China, Sinopharm has 19 subsidiaries and facilities in 10 countries, including Germany, India, Egypt, Vietnam and Ukraine, which operate in various businesses like international trade, pharmaceutical manufacturing, engineering contracting, medical technology support and services.

Zeng said the company has been doing business with more than 60 BRI economies, and will build more overseas offices. It will also strengthen business and trade cooperation with foreign and local companies by establishing joint ventures.

Within the next five to 10 years, the company aims to export eight to 10 more products to international markets, making itself an important and reliable vaccine provider, according to Chen Jian, a publicity executive with National Biotech.

Beijing-based China Sinopharm International Co, Sinopharm's fully-owned subsidiary and its main platform for overseas healthcare and pharmaceutical business, adopts a whole-industry-chain approach for overseas markets.

Its operations in the pharmaceutical sector cover project investment, construction, supply of active pharmaceutical ingredients, and pharmaceutical factory operations.

In the healthcare sector, its business covers medical project design, construction, medical device and equipment installation and maintenance, staff training, hospital operation, and medical transport and delivery.

It has helped many developing countries improve their medical services. A shining example in this regard is a project in Ecuador.

The subsidiary signed a contract with Ecuador's health authorities in 2014 to provide new equipment and devices to 120 hospitals and medical centers in the country, the first such project between a Chinese company and the country's government.

The company provided and installed more than 20,000 sets of medical equipment and devices at those medical facilities.

The company accomplished the project in about 300 days. Most remarkably, it installed and adjusted more than 1,000 sets of medical devices and equipment in a large hospital in the country's capital Quito within 40 hours.

"Our speed surprised the whole country, and further promoted the image and credibility of Sinopharm and Chinese companies," said Zhang Liqiong, vice-president and secretary to the board of the subsidiary.

Sinopharm's subsidiary China Traditional Chinese Medicine Holdings Co Ltd, or China TCM, established its own subsidiary in Penang, Malaysia, in 2014, to import raw medicine materials from the BRI countries and regions and then process them to sell.

The "dragon's blood", a natural tree resin, and "bird's nest", a restorative and remedial food in TCM, are imported from Southeast Asia, while other materials, such as frankincense and myrrh are imported from Ethiopia, Kenya and other East African countries.

Besides, its exports of TCM concentrated granules in 2018 increased almost 24 percent from 2017 to 60 million yuan, a record high.

The company expects the TCM concentrated granules exports will reach 80 million yuan this year, and increase to 130 million yuan within three years, according to Lan Qingshan, vice-president of the company.

Zhou Lisha, a researcher at the research institute of the State-owned Assets Supervision and Administration Commission, said it is commendable that Chinese companies are participating in the shared development of the economies participating in the BRI.

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2019-07-01 08:00:58
<![CDATA[Banks, insurers eye Yangtze River Delta for future moves]]> http://www.chinadaily.com.cn/kindle/2019-07/01/content_37486476.htm While the integrated development of the Yangtze River Delta region has progressed steadily ever since it was elevated to a national strategy in 2018, financial institutions have been evaluating the potential in this land for future growth.

Ma Chunlei, director of Yangtze River Delta Regional Cooperation Office, said at the Lujiazui Forum in Shanghai in June that the provinces and the municipality included in the strategy - Jiangsu, Zhejiang, Anhui and Shanghai - will release their respective detailed action plans by the middle of this month latest.

Some 320 key projects will be carried out in the next three years to lay a better groundwork for the integrated development of the delta region, said Ma.

These will include connecting dead-end roads and proliferating the use of QR codes at major subway stations in the area.

Bank of Communications see one-third of its 10 trillion yuan ($1.45 trillion) assets coming from the Yangtze River Delta region, said the bank's vice-chairman Ren Deqi. He further said the bank was advancing innovation in its financial management mechanisms.

Since the area features two free trade zones in Shanghai and Zhejiang, Bank of China will come up with more offshore FTZ businesses in the near future.

Kong Qingwei, chairman of China Pacific Insurance (Group) Co Ltd, said the Yangtze River Delta region is a key driver of the group's annual income and innovative development. Of the insurer's 126 million customers in China, 30 million live in the region, and account for 80 billion yuan, or 25 percent, of the insurer's 320 billion yuan in total premiums.

As Kong understands, there are plenty of opportunities for insurance companies in the integrated development of the Yangtze River Delta region, with transportation as a top priority.

"Insurance capital can help the government to boost domestic consumption. A comprehensive transportation network connecting railway, subway, ports and even airports has been a longstanding goal of many cities in this area. This is where insurers can play a big role," he said.

Elderly care is another sector where insurance companies can find big opportunities, said Kong. In early June, CPIC opened an elderly care community in Hangzhou, and is about to launch a new one in Nanjing.

"The idea is to let the senior citizens in Shanghai enjoy quality elderly care services in other parts of the Yangtze River Delta region. More room in Shanghai can thus be given to ambitious young entrepreneurs to set up their own businesses," he said.

The integration of risk prevention schemes for peasants in the Yangtze River Delta region is one more area where insurers can focus on, said Kong.

Peasants' income can be largely increased via products such as cost insurance, yield insurance, income insurance or one-stop insurance service.

He Haifeng, director of the Institute of Financial Policy, which is a part of the Chinese Academy of Social Sciences, said the integrated development of the delta region presents many latent challenges. So, more efforts should be made to reform finance and tax areas, to reduce fees in various fields, and improve the overall business environment.

SHI JING in Shanghai

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2019-07-01 08:00:58
<![CDATA[Merck Sharp & Dohme Corp to augment HPV vaccine supplies to China]]> http://www.chinadaily.com.cn/kindle/2019-07/01/content_37486475.htm The supply of much-sought-after human papillomavirus or HPV vaccine to China will be "remarkably "increased within this year to meet unfulfilled demand in the Chinese market, executives of Merck Sharp& Dohme Corp, a US-based pharmaceutical company, said.

The firm is known as Merck& Co Inc in the United States and Canada. Merck has been proactively cooperating with "internal and external partners", and has adopted a range of strategies to increase HPV vaccine supplies.

It will leverage its global distribution network and expanding production to serve the Chinese market better, according to its China branch.

Merck also said it will continue its efforts in raising public awareness about HPV-related disease prevention, and will keep promoting knowledge about HPV vaccines, as well as providing professional training to medical persons in China, especially those in underprivileged areas.

Internationally, HPV vaccines are among the top three major vaccines by market. In 2016, sales of Merck&Co's HPV vaccines reached $2.17 billion in the US, according to a report published last year by the Guosen Securities Economic Research Institute.

In many other countries that include HPV vaccines in government-funded vaccination programs, the major consumers of the vaccines are a vast number of teenagers, but not in China, where the major consumers are young women, according to the report.

It predicted the 9-valent, protecting against nine types of HPV, will be most popular, because it is relatively more economical.

It also estimated that in China's developed areas, less than 10 percent of females falling into the age group recommended for anti-HPV vaccination will have the vaccines, with reference to the situation in Japan, where people's lifestyles are similar to those in Chinese big cities, and the vaccines are not on public vaccination programs either.

Merck's 9-valent HPV vaccine was introduced to the Chinese mainland in May 2018. Ever since, there has been media coverage that demand for it outstrips supply. Shenzhen health authorities in Guangdong province even adopted a lottery system last year to decide who would get the vaccine.

Shortages of all the types of HPV vaccines are expected throughout 2020 in China because of the huge existing demand that cannot be met in a short period, according to a report published earlier this year by Horizon Insights, a consultancy based in Shanghai.

About 300 million people on the Chinese mainland belong to the recommended age group for 2-valent HPV vaccine, 130 million for the 4-valent, and 90 million for the 9-valent, it said.

The Horizon report estimated that market value for the 2-, 4-and 9-valent vaccines would reach 1 billion yuan ($144.6 million), 7.2 billion yuan and 10 billion yuan respectively at peak time.

Chen Qiulin, deputy director of the health industry development research center of the Chinese Academy of Social Sciences, said the severe HPV vaccine demand-supply imbalance, especially for the 9-valent, is mainly caused by the huge demand accumulated in all the past years before the vaccines were available in China.

The country approved the 2-valent HPV vaccine in 2016, followed by the 4-valent in 2017, and the 9-valent in 2018, while the world's first HPV vaccine, the 4-valent, was approved in the US in 2006. The 2-valent vaccine is from GlaxoSmithKline, and the 4-and 9-valent vaccines are from Merck.

He said the booming demand is due to people's fear of contracting HPV-related diseases, especially cervical cancer, as well as Chinese people's increasing ability to pay for such nonrigid healthcare services due to higher incomes and consumption upgrade.

Once people could get the vaccination on a regular basis, the demand-supply imbalance will be gradually eliminated, he said.

Besides, domestic vaccines are also under development.

More than a dozen of Chinese pharmaceutical companies are developing their own version of HPV vaccines, which range from 2-valent to 14-valent. Some of the companies have started phase-3 clinical trials while some have just received approval for clinical trials, according to the Horizon Insights report.

In China, cervical cancer, related with persistent infection of highrisk HPVs, is one of the most common and lethal cancers among women.

Apart from cervical cancer, HPV infection is also closely related to 90 percent of anal cancers, 40 percent of vulvar or vaginal cancer, and 12 percent of head and neck cancer, according to an article on DXY, a leading online healthcare platform in China.

The 2-valent vaccine is recommended for vaccination to females aged 9 to 45 on the Chinese mainland, and the 4-valent is for females aged 20 to 45. The 9-valent is for females aged 16 to 26. All the three types of vaccines require three shots over a span of six months.

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2019-07-01 08:00:58
<![CDATA[How to prepare for competition amid globalization]]> http://www.chinadaily.com.cn/kindle/2019-07/01/content_37486474.htm Since World War II, globalization came in two stages. From 1945 to roughly 1975, the United States, Western Europe, and Japan achieved steady economic growth, with the benefits of that growth spread widely throughout the population. In France, this period is called"30 glorious years" and in Germany it is known as the "economic miracle".

The second stage of globalization started in the late 1970s and has continued until today with a process of reform and opening-up not only in China but in countries of the former Soviet Union and in India.

This has been great for the world. China alone has lifted more than 850 million people out of dire poverty. But it has also increased competition faced by workers and companies.

The partial globalization of 1945-1975 worked great for average workers in the West. For much of this period, a young person could get a high-paying and apparently secure job in a factory that would allow him to live a middle-income lifestyle.

It's very hard to believe now, but in 1980, the US city with the highest average wage was Flint, Michigan, followed closely by Detroit. Other leading cities in terms of wages were Chicago, Houston, Milwaukee, Youngstown and Cleveland - all of which were centers of industry and manufacturing. At that time, San Jose, the center of then quite small Silicon Valley was fourth, San Francisco sixth, and capital Washington was eighth. New York City did not make the top 10.

Many people in the US and Western Europe look back nostalgically on those 30 years after WWII when artificial limits on global competition protected extremely high-paying manufacturing jobs. It is very sad to see only empty, rusting factories where thousands of people used to work.

It's tempting to use tariffs or other protectionist measures to try to retain the companies that provide these high-paying manufacturing jobs. But, most often the protections just lead to unproductive companies, declining innovation, and slowing GDP growth.

In the 1950s, the American car industry was seen as the prototype of how business should be run. Car company executives were seen as the most capable managers. In 1953, president Eisenhower chose Charles Wilson, known as "engine Charlie," to be his Secretary of Defense.

Then, in 1961, president Kennedy chose Ford president Robert McNamara for the same position. (Of course, McNamara's incredible mismanagement of the war in Vietnam reduced any confidence that car company executives were especially competent.)

By the late 1960s, the "big three "car companies in the US - General Motors, Ford, and Chrysler - formed a virtual oligopoly and turned lazy.

I remember American cars my father bought in these years often overheating and breaking down by the side of the road. Dad would have to stay by the car with my mother and sisters while I walked a long way to find a service station and arrange a tow. (This was long before mobile phones.)

So, American consumers were ready for more competitive Japanese-made cars, which had consistently higher quality, to enter the market. My father switched to Japanese cars in the 1970s, and never bought another American-made car.

American car companies saw their profits fall and were not able to pay their workers the very high wages made possible by a closed, non-competitive market. The US government responded by imposing quotas on the import of Japanese cars and by pushing Japan to rapidly raise the value of the yen.

Obviously, there was a conflict. American consumers benefitted from the cheaper, better cars while workers at the big three saw their jobs become less secure and their wages fall. Fortunately, the protection was only partial and temporary, so the competition eventually forced US carmakers to improve.

Competition is at the heart of the current disputes over globalization and technology. On net, the spread of economic opportunities around the world has been a great boon. Many products are more widely and cheaply available than ever before.

Many countries, including China and India, have greatly reduced poverty and given opportunities to their people that would have been undreamed of by earlier generations. American and Western European companies and consumers have greatly benefitted.

But nobody really likes competition against themselves. Most people like some degree of stability and protection. A worker who has put in 20 or 30 years in an industry will definitely feel that it is unfair to have to move to a much lower-paying service job. A company facing new competitors will try to convince its home government to stop the competition.

Americans saw many benefits from the second globalization period. As Japanese and, later Chinese, manufacturers began to export to the US, many consumer goods became a lot cheaper in US stores. Many American companies made good profits by exporting to the newly open markets or by outsourcing manufacturing to cheaper and/or better factories outside the US.

In 1945-1975, workers in the US and Western Europe became used to steadily rising real wages. But those wages have been stagnant since the 1970s. Why should a worker in the US or Western Europe be paid more than an equally skilled person in China, or India, or Ethiopia?

The lack of wage growth is not all due to globalization. The access of women and minorities to jobs, which was absolutely a needed and just change in policy, increased the domestic supply of labor. A boom in building infrastructure and houses in both the US and Western Europe had largely played itself out by the 1970s.

Some technological changes reduced the need for even highly skilled labor. For example, radiologists - doctors who read X-rays - are among the highest-paid professionals in the US. But, recent studies have shown that AI is able to make correct diagnosis much more often than human radiologists.

Nevertheless, the radiologists are lobbying the government to pass laws preventing competition from AI. If they succeed, the radiologists will keep their very high incomes, but Americans will face higher healthcare costs and worse outcome than people in countries that allow the competition.

Many of the things that have people upset in the West have nothing to do with trade - though they are lumped into a general feeling that things aren't fair. Many of the current high-income jobs in the US are in fields that have found ways to protect themselves against either foreign or technological competition.

Government workers and contractors make significantly more than an equivalent worker in the private sector. Lawyers and financiers in New York are protected from competition. High-tech sector salaries are protected by the monopolization of the software industry, in much the same way that the big three carmakers once made oligopolistic profits that allowed them to pay their workers more than the market wage.

So, according to 2016 income data, the top three highest per-household counties in the US, and four of the top six, are suburbs of Washington - an almost purely government center that produces little of commercial value.

Other high-income counties are based on monopolistic income from tech companies in the San Francisco region and on big banks in the New York area. The manufacturing centers of the Midwest are now nowhere near the top 10.

Many of today's young adults will live to see the start of the 22nd century, which seems to me to be a science-fiction date. Of course, no one can predict what the next 100 years will bring, but it does seem clear that we'll see further globalization - the spread of economic competition around the world.

Some currently high-paying jobs will go away. The only way a young person today can prepare for this competitive world is to learn new skills and be adaptive.

For good reasons, people also need some stability. Governments will try to provide this stability, but must be careful to provide industrial protection only for a transition period. Competition is tough, but the only long-term alternative is declining incomes and stifled innovation.

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2019-07-01 08:00:58
<![CDATA[Expectation of Fed rate cut seems an over-reaction, so reality may be different]]> http://www.chinadaily.com.cn/kindle/2019-07/01/content_37486473.htm Herd instinct is the human nature to follow the crowd and act collectively - and market expectation always does not change smoothly but tends to over-react to new information. The current market expectation of the US Federal Reserve's rate cuts is a case in point.

On June 20, the latest meeting of the Fed's policy-setting Federal Open Market Committee shrugged off the market's high expectation of rate cuts and gave no clear policy signal confirming a cut.

We believe the market had overreacted in forming its expectation of rate cuts after the Fed swiftly adopted a dovish tone from the end of last year. Specifically, we believe market expectation - it has formed since May - of a change in policy stance, as well as the timing and degree of rate cuts, may not fully materialize.

We will elaborate on this now. It should be noted the misconceived expectation of Fed rate cuts could induce a drastic reversal in investor sentiment and asset price fluctuations, if the Fed's moves miss expectation.

Firstly, the market may have overestimated the degree of the Fed's policy stance change. A clear rate cut signal may not emerge until the end of this month.

According to Bloomberg, the Fed funds futures market has recently priced in a 98.5-percent chance that the Fed will lower rates at least once this year.

However, the Fed's earlier forward guidance only indicated the end of monetary policy normalization, which does not necessarily point to the beginning of a rate cut cycle. Also, the Fed has removed the word "patient" from the latest FOMC meeting statement but did not confirm a rate-cut stance.

We believe that because of the following two reasons, the Fed is still on cautious lookout, and there will not be any clear rate cut signal or plan until the next FOMC meeting at the end of this month.

Externally, the Fed is expected to stand pat until trade dispute uncertainties ease, to give itself an advantage in its game with the US Administration.

The Fed would put itself in an unfavorable position if it initiated a rate cut before major uncertainties over the China-US trade dispute are removed, because the pre-emptive move may encourage the US Administration to escalate the trade dispute, which will in turn pose a dilemma to the Fed.

That's because any escalation in trade tensions will, on the one hand, dissipate and even offset the easing boost from rate cuts and force the Fed to accelerate the rate cut pace. On the other hand, the escalation could further fuel imported inflation, which will significantly reduce the Fed's room for rate cuts. The Fed will then face a policy-making dilemma of whether to further cut rates.

To avoid this dilemma, the best option for the Fed is to consider the timing and degree of rate cuts after trade friction uncertainties are eased after the G20 summit, which ended last week.

Internally, US economic data that will be released in the middle of this month may cement the Fed's determination to cut rates.

Since 2011, whenever the actual US GDP growth rate exceeded the endogenous growth rate by more than 1.5 percent, the actual figure underperformed the theoretical figure in the next quarter. That's because a significant departure from endogenous growth can hardly sustain.

In the first quarter of this year, the actual growth rate outpaced the theoretical rate by 2.09 percent, the highest level since the fourth quarter of 2011. If the historical pattern still works, this strong economic data could mean a sharp plunge in the second quarter.

As the Fed said it will closely monitor the implications of incoming information for the economic outlook, disappointing economic data to be released later this month may become the last straw for the Fed to act. Therefore, a clear rate cut sign and path may emerge at the FOMC meeting at the end of this month after the Fed digests the data.

Secondly, the market may have forecast the timing of rate cuts earlier than the Fed's actual plan. The rate cut window is expected to open as late as in the fourth quarter.

Before the latest FOMC meeting, traders saw a more than 70-percent chance that the first rate cut will take place this month, as well as a 96-percent chance that at least one rate cut will take place by the end of September.

However, this estimation may excessively go ahead of the Fed's actual moves. We expect that the rate cut window will open in the fourth quarter, with the first cut likely to come in December or January.

Looking back in history, the average time the Fed took to switch their rate policy - or the time interval between last rate hike and first rate cut and vice versa - has been 11.7 months since 2000, even excluding the post-2008 prolonged low-rate period. Based on this pattern, the rate cut is unlikely to come this month but more likely to come after September.

Besides the historical pattern that probably continues, two new factors will also delay the timing of the first rate cut.

On the one hand, the current US policy rate is the lowest among those in all the periods when the Fed planned to start a round of rate cuts, indicating the limited room for rate cut. This makes it necessary to use the limited rate cut capacity at an appropriate timing, which may occur later than the market expects as the US growth pressure will not peak this year but in 2020, according to IMF estimates.

On the other hand, unlike in the past, the Fed now has to take the delayed effect of balance sheet reduction conducted earlier into its consideration of rate cuts. The current phase-out of balance sheet reduction already has some easing effect, and only after the balance sheet reduction ends in September, can its impact become clearer.

By incorporating that impact into consideration, the Fed can draw up a better rate cut plan that maximizes effects of the policy mix.

Thirdly, the market may have overestimated how much the Fed will cut the rates. There may be no more than three rate cuts by the end of 2020.

St. Louis Fed President James Bullard - the major advocate of this round of rate cut - has suggested the use of the modern-day Taylor rule, which fairly well explains the Fed's interest rate decisions. Even based on this model adopted by dovish Fed officials, we found that the degree of rate cuts may be weaker than market expectation for quite some time going forward: at most one cut by the end of this year and likely two or three cuts by the end of 2020.

By contrast, before the June FOMC meeting, the market expected a higher-than-85-percent chance of more than one rate cut by the end of this year as well as an about 60-percent chance of more than three cuts by the end of 2020, according to Bloomberg data.

In conclusion, we think as economic downside pressure gradually emerges, the Fed will have to kick off the rate cut cycle. But the rate cut signal, timing and degree may not measure up to the market expectation. Therefore, two future developments appear possible:

First, investor sentiment can reverse drastically if the Fed's action fails to meet market expectation. Considering the market has fully priced in the unrealistic expectation of rate cuts since early June, any reversal of expectation can lead to short-term fluctuations of key price signals such as the US Treasury yield curve, the US Dollar Index, and the gold price, which may pose extensive spillover shocks to asset portfolios.

Second, the long-term trend of rate cuts will continue even if the market expectation reverses. In the long run, the Fed is expected to proceed with rate cuts in a fairly slow and smooth way. This will enlarge the monetary policy room of other major economies and expedite the shift toward an easing global monetary environment, which may in turn lift the sentiment of global stock markets and ease any currency risk of emerging markets gradually.

Cheng Shi is the managing director, head of research and chief economist of ICBC International Holdings Ltd.

Qian Zhijun is a senior economist of ICBC International Holdings Ltd.

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2019-07-01 08:00:58
<![CDATA[No let off for fame or fortune]]> http://www.chinadaily.com.cn/kindle/2019-07/01/content_37486467.htm JAMES HARDEN, a basketball player for the Houston Rockets, who is in China on a promotional tour for a sportswear brand, was photographed being punished by the local traffic police in Shanghai because he rode an electric bicycle in an illegal way. China Daily writer Zhang Zhouxiang comments:

Details of the incident have not been officially released yet. However, according to some photos and reports posted online, Harden and his friends rode electric bicycles where it was forbidden to ride, and he had a woman sitting behind him. According to the law, it is illegal for anyone aged above 14 to be a pillion passenger.

That incident shows that everybody is equal when it comes to the law. No one, whatever his/her influence or social status, has any privilege.

Harden is a basketball star with millions of followers. When a famous person is punished for breaking the law, people will have more confidence in the law, because they know no one can easily escape the legal penalties for any wrongdoing.

On Saturday, Harden apologized via his official micro blog account for "violating the traffic regulations" and promised to abide by the rules next time. Many of his fans expressed their thanks and support for his apology.

The Shanghai police forwarded Harden's apology, stressing that the law is the law and must be followed. They also wished Harden good performances in the future. So the case has realized the best solution, with the law enforcers spreading the sense of rule of law among the public, and the star mending his public image via apology.

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2019-07-01 07:34:06
<![CDATA[Further opening-up of great significance to nation, the world]]> http://www.chinadaily.com.cn/kindle/2019-07/01/content_37486465.htm

Editor's note: At the G20 Summit meeting, held in Osaka, Japan, on Friday, President Xi Jinping delivered a keynote speech and unveiled plans for greater opening-up. An article in the journal Quishi comments:

Since the launch of reform and opening-up policies in 1978, China has been constantly opening its doors to the outside world and sought to boost its exchanges with the world. In 2001, China joined the World Trade Organization, which has helped both its own economy and that of the world.

In the first 10 years after joining the WTO, China realized double-digit annual growth, and became the second largest importer as well as the biggest exporter in the world. The facts show that opening-up has already become a valuable experience of China, as well an important way for it to make greater contributions to the world. That applies in both the high-speed growth period and the high-quality growth period.

In today's new era, which features higher quality growth, greater opening-up is still of the utmost importance. First, it is the driving force for accelerating the optimization of the country's economic structure. The core of high-quality growth is shifting the economy from its reliance on large investments of low-cost production elements to relying on innovation. That shift would be impossible without the ample support of opening-up.

Second, greater opening-up can constantly deepen the ongoing reform. High-quality growth means a fundamental change in the economic development mode, for which the prerequisite must be administrative reforms. For example, high-quality growth needs rule of law, transparent and expectable business environment, which in turn requires the leadership to take all measures to reform. The greater the opening-up is, the deeper the reform.

Third, greater opening-up allows China to better cope with external challenges. As China gains increasingly greater influence in the world, the resistance and challenges it meets are growing, too. Especially over the past few years, some anti-globalization forces, combined with trade protectionism and unilateralism are rising. In order to cope with these challenges, China needs greater opening-up.

Last but no less important, with greater opening-up, China will be an important driving force for the high-quality growth of the global economy. The majority of problems the world faces are related to development gaps, China can help narrow these with greater opening-up, as well as set an example to the rest of the world.

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2019-07-01 07:34:06
<![CDATA[China-US trade ties need dialogue, equality]]> http://www.chinadaily.com.cn/kindle/2019-06/30/content_37486296.htm China on Thursday urged the United States to cease its wrong practices and resolve existing problems through dialogue and cooperation on an equal footing with China.

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Commerce Ministry says Washington should lift its curbs on Chinese firms

China on Thursday urged the United States to cease its wrong practices and resolve existing problems through dialogue and cooperation on an equal footing with China.

This came as 96 percent of 314 business representatives stated their opposition to the US' proposed tariffs on $300 billion worth of Chinese goods. They testified during hearings in Washington, which concluded on Tuesday.

Gao Feng, spokesman of the Ministry of Commerce, said the US side should listen carefully to the voices of the industry and end its wrong practices.

The US side should address problems through equal dialogue and cooperation with China, which is in the interest of the two sides and the rest of the world, Gao said at a regular news conference.

He said that China also urges the US to immediately lift the measures that contain and sanction Chinese companies, in order to promote the steady and healthy development of China-US economic and trade relations.

China and the US have been locked in a trade dispute for months, exchanging hefty tariffs on each other's imports.

After reaching an impasse, negotiators agreed on Monday to resume their consultations. Top leaders of the two countries are expected to meet during the G20 summit in Japan.

Geng Shuang, spokesman of the Foreign Ministry, said China has always called for resolving trade tensions with the US through dialogue and consultation, but it will firmly safeguard its own legitimate interests.

US threats to impose more tariffs on Chinese imports cannot intimidate the Chinese people, Geng added.

Gao said China's stance toward tariffs is clear, that the country has always opposed unilaterally imposed tariffs. "The US trade bullying eventually hurts its own businesses and consumers," he said.

The "unreliable entities" list - a blacklist of foreign parties that, for noncommercial reasons, harm the interests of Chinese companies, will be released soon, Gao said. Companies that abide by Chinese law and the spirit of contracts have nothing to worry about, he said.

Zhou Mi, deputy director of the Institute of American and Oceania Studies of the Chinese Academy of International Trade and Economic Cooperation, said it is necessary for China to push forward with the list of "unreliable entities," and export restriction measures.

"These moves will bring about institutional improvement," Zhou said. "They are not meant to punish any company, but to guide all market entities to abide by the laws, regulations and commercial contracts. They can further level the playing field for both homegrown and foreign companies."

In a recent survey, a majority of US and Chinese consumers expressed strong support for bilateral trade due to a belief that both countries benefit from the exchange of goods, said Mei Yan, senior partner and China chair at advisory firm Brunswick Group.

The online survey was conducted among 1,000 US consumers and 1,000 Chinese consumers in early June.

jingshuiyu@chinadaily.com.cn

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2019-06-30 14:16:25
<![CDATA[Huawei says don't politicize intellectual property]]> http://www.chinadaily.com.cn/kindle/2019-06/30/content_37486295.htm Huawei Technologies Co on Thursday warned that politicizing intellectual property would break the foundation of global innovation, as part of the company's broader push to safeguard its legitimate rights via open and transparent dialogue on complex issues including patents.

Song Liuping, Huawei's chief legal officer, said: "If politicians use IP as a political tool, they will destroy confidence in the patent protection system. If some governments selectively strip companies of their IP, it will break the foundation of global innovation."

The comments came after United States Senator Marco Rubio filed legislation to prevent Huawei from suing for patent fees in US courts.

"If such a legislative proposal was to be passed, it would be a catastrophe for global innovation. It would have terrible consequences," said Ding Jianxin, head of Huawei's intellectual property department.

According to him, intellectual property is private property and protected by the law. Disputes should be resolved through legal proceedings.

Since 2015, Huawei has paid more than $6 billion in royalties to legally implement the IP of other companies, with nearly 80 percent of that paid to US companies. At the same time, the company has received over $1.4 billion in patent licensing revenue since then, data from Huawei show.

Media reported earlier this month said that Huawei asked US telecom carrier Verizon Communications to pay $1 billion for licensing the rights to Huawei's patented technology.

"We have no intention of weaponizing our IP, and we are against charging exorbitant royalties," Ding said, adding that the fees Huawei charges are "within reasonable range."

"It's not just Verizon or the US. We also have negotiations of licensing and cross-licensing with other telecom operators - including those in Europe and other regions around the world. Such activities are ongoing practices among telecom companies," Ding added.

According to the company, Huawei adopts an open and cooperative attitude and follows the principle of fair, reasonable and nondiscriminatory on patents licensing.

As of the end of 2018, Huawei has been granted 87,805 patents, of which 11,152 are US patents.

The data were revealed as Huawei released a white paper on intellectual property on Thursday, which highlighted that many of its technology breakthroughs are incorporated into the open standards that govern 3G, 4G and 5G, demonstrating the company's collaborative and respectful approach to IP.

As a result, even though some countries do not buy products directly from Huawei, they still use the essential patents of Huawei, and share in the benefits of the technology Huawei creates, the company added.

Wang Yanhui, secretary-general of Mobile China Alliance, said the white paper on patents marks a new push for the Chinese company to better elaborate its attitudes and history through an open and transparent attitude.

"Protecting patents is global common sense with no regard to boundaries. Any endeavor to selectively strip companies of their IP is an outrageous disrespect and violation of relevant laws," Wang said.

Contact the writers at masi@chinadaily.com.cn

Visitors try out Huawei smartphones at an industry expo in Shanghai. Gao Yuwen / For China Daily

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2019-06-30 14:16:25
<![CDATA[HYC kicks off IPO proceedings on new STAR technology board]]> http://www.chinadaily.com.cn/kindle/2019-06/30/content_37486294.htm Investors' enthusiasm for technology companies was focused on the STAR Market at the Shanghai Stock Exchange on Thursday, as HYC Technology, which was the first company to start its initial public offering at the new tech board, started its online subscription.

The online and offline subscription for the Suzhou-based manufacturer of automatic detection equipment for industrial equipment was available on Thursday.

HYC Technology said in an announcement released on Tuesday that the company's issue price is set at 24.26 yuan ($3.53) per share. About 7.6 million shares were available for online subscription. An individual investor could subscribe to a maximum of 7,500 shares.

The result of the subscription will be announced on July 1.

Public information from China Securities Regulatory Commission showed that there are more than 2.7 million individual investors who have obtained access to invest in the new tech board.

Peng Hai, an analyst who tracks the new tech board at Lianxun Securities, said that the success rate will come at 0.057 percent if all the 2.7 million investors applied for the subscription, which is similar to the average 0.06 percent success rate of the A-share market recently.

Based on its earnings per share registered in 2018 and its net profit, HYC's price earnings ratio is 41.08 times, which is higher than the 31.11 times average static PE ratio over the past one month.

Information from Huatai United Securities - the major underwriter for HYC Technology - showed that initial quotation came between 10.65 yuan and 31.76 yuan per share.

Meanwhile, a total of 52 securities firms and their affiliated asset management companies took part in the price inquiry.

According to Zhou Wenqun, portfolio manager at global investment company Fidelity International, the marketized pricing system is one major breakthrough of the STAR Market.

For the companies listed on the main board of the A-share market, their pricing is set at 23 times their respective historic price earnings ratio, regardless of the type of the company, the profitability, growth rate or size. The only one pricing standard applied for all companies has become increasingly unreasonable over time, Zhou explained.

"But for the STAR Market, the inquired price is based on the coordinated result between the buyer and the seller, which can truly reflect the company's value," she added.

"On one hand, a STAR Market listed company will be able to seek more financing if the PE ratio comes above 23 times. But that is just a good example. For the less qualified companies, they might see their PE ratio come even under 10 times. But on the other hand, it is more helpful for investors to discover the companies with real value," she said.

Initiated in early November and officially launched on June 13, the STAR Market has so far received applications from 131 companies by Thursday, among which six have passed the revision of the SSE.

SHI JING in Shanghai

shijing@chinadaily.com.cn

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2019-06-30 14:16:25
<![CDATA[Liquor firm Kweichow Moutai's shares break through 1,000-yuan barrier]]> http://www.chinadaily.com.cn/kindle/2019-06/30/content_37486293.htm Kweichow Moutai Co Ltd, China's iconic high-end spirit maker, saw its share price exceed 1,000 yuan ($145) per share during Thursday trading, making a historical breakthrough and becoming the most expensive stock in the A-share market, aided by continuously growing demand and its good earnings.

Most investors are not surprised by the robust performance of Moutai. Earlier this year, many investment firms, including Goldman Sachs and China International Capital Corp Ltd, were bullish on the growth potential of the stock.

They set the target price of Moutai at more than 1,000 yuan per share, attributing it to China's sustained supply-side reforms and consumption upgrade, which have boosted investor sentiment toward such consumer stocks.

Moutai, a distiller from Maotai town in southwestern China's Guizhou province, has made substantial gains this year. On Jan 1, it closed at 598.98 yuan per share. On Thursday, it closed at 996.35 yuan per share, and its share price has surged 66 percent so far this year. Its performance has been better than 90 percent of the A-share listed companies.

Now, its market value stands at 1.24 trillion yuan. Previously, it became the first consumer stock with a market value exceeding 1 trillion yuan. Last year, the overall GDP of Guizhou province reached 1.48 trillion yuan, meaning the market value of Moutai accounts for nearly 85 percent of provincial GDP.

Moutai became the first stock that exceeded 1,000 yuan per share after 27 years. More than two decades ago, there was a stock - now named INESA Holding Group - which once exceeded 1,000 yuan per share. The company has experienced multiple structural changes and now its market value is less than 10 billion yuan.

Other major liquor makers are reporting solid sales and also saw outstanding performance during Thursday trading. They include Sichuan province-based Wuliangye Yibin Co Ltd and LuzhouLaojiao Group, which led the advance of the spirits and consumer sector.

Last year, Moutai achieved whole-year sales revenue of 75 billion yuan, up 23 percent year-on-year. Its net profit totaled 34 billion yuan, jumping 25 percent over the previous year, its earnings report said.

This year, Moutai aims to achieve sales revenue of 100 billion yuan, growing 14 percent year-on-year, and reaching a net profit of 45 billion yuan. The company said it is strong and confident enough to drive further growth.

"The stock market now shows a prominent problem of polarization. Leading white-horse stocks have seen continued steady growth. The climbing share price of Moutai definitely gave a boost to many white-horse stocks, with the prices of several stocks reaching their new high, while some other themed stocks are being marginalized," said Yang Delong, chief economist at the Shenzhen-based First Seafront Fund.

Market demand for liquor products will likely remain strong, and major spirit makers are expected to witness more steady and structural growth and continue to remain competitive, Zhongtai Securities said in its report.

zhuwenqian@chinadaily.com.cn

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2019-06-30 14:16:25
<![CDATA[Regulators to modify credit profile system]]> http://www.chinadaily.com.cn/kindle/2019-06/30/content_37486292.htm Financial regulators are coming up with new methodologies to evaluate the credit profile of small and medium-sized enterprises and improve their access to bank loans, as part of the nation's ongoing efforts to create a trustworthy society.

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Efforts strengthened to improve funding access for small, medium-sized enterprises

Financial regulators are coming up with new methodologies to evaluate the credit profile of small and medium-sized enterprises and improve their access to bank loans, as part of the nation's ongoing efforts to create a trustworthy society.

China is setting up a national credit score database, managed by the People's Bank of China - the central bank - to improve information asymmetry of commercial banks and expand loan availability for SMEs with qualified credit scores.

The government is planning to use big data to strengthen the credit assessment capacity, ease funding constraints for local banks and support private and small companies as the economy slows in growth rate. Big data can also be used to evaluate individual citizens' creditworthiness, said Wan Cunzhi, director-general of the PBOC's Credit Information System Bureau.

The central bank will augment the national credit information system with databases set up by local governments for SMEs, said Zhu Hexin, vice-governor of the PBOC.

The local information platforms have included more than 2.6 million small-and medium-sized companies so far, through which bank loans worth 11 trillion yuan ($1.59 trillion) have been disbursed to 550,000 entities, according to official data.

Some newly established and non-government credit service agencies can now provide small and micro businesses' credit information to commercial banks, letting these borrowers access bank loans without pledges or guarantees, according to officials with the central bank.

For example, a credit information platform based in Suzhou, Jiangsu province, is helping SMEs get unsecured bank lending approvals. Credit ratings of these enterprises are based on information registered in the local government databases, such as utility bills.

The platform has also cooperated with 95 financial institutions, through which about 1,900 small and micro companies received loans for the first time. Through that platform, more than 500 billion yuan has been disbursed to more than 8,600 companies, said Zhu from the PBOC.

The PBOC official expressed appreciation for the "Suzhou model", hinting that the pilot could be copied by more local credit service agencies.

Sun Quan, associate dean of China UnionPay's Electronic Payment Research Institute, said recently that UnionPay, the world's biggest card issuer, is working with the Baihang Credit Scoring, China's first unified private personal credit information service platform, to complement the established government-run credit reporting service, known as the Credit Reference Center under the PBOC.

"We have the world's largest credit information system, covering 990 million individuals and 259 million enterprises, which is playing a significant role in preventing financial risks and promoting financial resilience," said Zhu.

"For smaller loan applicants, the major difficulty is the information asymmetry," he said. "How to reduce default risks of unsecured loans by monitoring the cash flows of companies is also a challenge, because small and micro enterprises are asset-light and short of pledges."

SMEs without any history of borrowings are usually refused loans by bank officials. The Suzhou pilot program, however, provides a solution wherein private credit agencies can draw upon a pool of nontraditional ratings data from various sources - ranging from tax payments, social security payments to administrative penalties - for assessing small companies' behavior, according to experts.

With the "alternative data", other than the loan repayment history, the lenders may also be able to predict whether the small companies will default on a loan in the future, some of them said. But others disagreed as they thought banking and transaction data are still the core information to predict credit scoring rather than records of paying electricity bills.

The PBOC released a statement in April, indicating that more credit information will be included into the national credit information system, in order to accurately assess credit risks and minimize defaults.

The updated credit information system will help improve accuracy of information used by banks in their credit decision-making processes, said Nicholas Zhu, a vice-president and senior banking analyst at Moody's, a global ratings agency.

chenjia@chinadaily.com.cn

A visitor checks her credit profile on the People's Bank of China database during the 2018 China International Financial Exhibition in Beijing. Xinhua

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2019-06-30 14:16:25
<![CDATA[Fresh tariffs to hurt US model train industry]]> http://www.chinadaily.com.cn/kindle/2019-06/30/content_37486291.htm ORMOND BEACH - Washington's threat for more tariffs on Chinese imports would decimate the United States model train industry and see bread winners in hundreds of families lose their jobs, the CEO of a US import company warned.

"If we were to have 25 percent tariffs imposed on this product, if we couldn't find a way around that, it would probably put us out of business," Bob Grubba, president and CEO of Broadway Limited Imports, said in a recent interview at his office in Ormond Beach, Florida.

The US in May raised additional tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent, and threatened to levy extra duties on more Chinese products.

"This whole industry, almost everything in the industry, is manufactured in China," said Grubba, who has been working with his partners in the coastal city of Qingdao in China's Shandong province for almost 20 years.

Most of these companies have a "profit margin in the range of 30 percent", and if they were to pay a 25 percent tariff, the remaining 5 percent will not be enough for them to pay rent, insurance and other bills, Grubba said.

"We would have to raise prices. A certain number of people just can't afford it anymore. That will be a big problem for us," he said.

The model train industry in the US is a fairly small business but a lot of companies and people are involved, Grubba said.

"Around 500 people work for manufacturers like us, the importers and manufacturers, but that doesn't include all the hobby stores," he said.

"There are probably 1,000 hobby stores in the US that sell this type of product. Each of those, maybe, has five to 10 employees, so that's another 5,000 people. I think those hobby stores would probably close."

The idea to relocate production out of China is also unrealistic, Grubba said, noting that it is hard for toy industry businesses to find another country with the comparable infrastructure, skilled workers, and research and development capabilities.

"It's difficult to move a factory (out of China) because our product is very specialized. It took us a long time to train the workers at the factories and train the engineers and get the quality the way it's supposed to be," he said.

"And if we try to move to another country, then you have to develop that expertise all over again," he said. "That takes a long time (and) a lot of money."

Xinhua

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2019-06-30 14:16:25
<![CDATA[UK design firm finds its groove in China]]> http://www.chinadaily.com.cn/kindle/2019-06/30/content_37486290.htm The groundbreaking work, which started in April at the 100,000-square-meter Chengdu Westminster School in Southwest China's Sichuan province marks not only the first of the six campuses of the nearly-900-year-old UK private school in China, but also the largest expansion of a Western school brand into the Chinese education market.

It has also spawned unparallel business opportunities for Broadway Malyan, a London-headquartered architecture firm that has been in charge of the design of the Chengdu school, to make a smooth transition and sustain, if not further accelerate, its growth in China.

As the country's retail landscape has been heavily impacted by the booming e-commerce market, leaving a number of investors wavering in the idea of building more shopping malls, the architecture firm, which established its China office in Shanghai in 2008, is seeing the majority of its work shifting from design for retail to the education sector over the past decade.

In 2018, nearly 70 percent of the revenue generated by its China office, staffed by a total of 45 employees, came from design work in the education sector. That compares with 2014, when shopping malls and buildings contributed to upward of 80 percent of the revenue.

"The aspirations in China are much greater than anywhere else in the world, and the facilities of international schools both in operation and in pipeline are fantastic," said Stuart Rough, chairman of the global design practice with 16 offices around the world.

"There are theaters, Olympicsize indoor swimming pools... In the UK, a school has on average 500-800 students. While in China, we are building schools for 3,000 kids. It's such a huge task, and always gets completed before deadline," he said.

In the case of Chengdu Westminster School, which is scheduled to open in the autumn of 2020, the all-through boarding school will include a "West End" standard theater with a seating capacity of 1,000 people, and a total of 70 music practice rooms distributed between teaching and boarding blocks.

With a particular focus on STEAM subjects (science, technology, engineering, arts and mathematics), the school will enroll kids ranging in age from three to 18 years old.

In total area, Broadway Malyan has designed 350,000 square meters of schools in China, with another 500,000 square meters of schools on the "drawing board," which are to be completed by the end of 2020. The percentage of the education sector contributing to the company's total business is the highest among its global offices.

China has overtaken the United Arab Emirates to be the world's largest market for international schools since 2016, home to 597 establishments, according to a report by the Center for China and Globalization, a Beijing-based independent think tank.

A number of real estate developers including Vanke and Country Garden are trying to take a share of the market either by creating their own brands or collaborating with prestigious international ones.

"As the Chinese economy is transitioning to a quality-growth path, we are also reinventing ourselves in the market to stay ahead of competition. Chinese consumers today are no longer satisfied with just getting better clothes or meals. They are investing in the future, like education for kids, leisure, welfare and health," said Rough.

XU JUNQIAN in Shanghai

xujunqian@chinadaily.com.cn

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2019-06-30 14:16:25
<![CDATA[IT'S NOT JUST ALL POP, YOU KNOW]]> http://www.chinadaily.com.cn/kindle/2019-06/29/content_37486232.htm The country's music scene is dominated by good-looking pop idols who are chart-toppers, give sold-out concerts and bathe in the adulation of screaming fans. All very good for them, but it means rock bands that tend to be associated with bad boy images are often overshadowed.

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Reality show ensures rock bands get their just recognition

The country's music scene is dominated by good-looking pop idols who are chart-toppers, give sold-out concerts and bathe in the adulation of screaming fans. All very good for them, but it means rock bands that tend to be associated with bad boy images are often overshadowed.

However, with summer in full swing, indie bands are set to prove that the spirit of rock 'n' roll lives on, and some of the thanks for that can go to a reality show, The Big Band, produced by the online streaming service iQiyi that premiered on the platform on May 25.

With the first group of 31 Chinese bands - both established and new - taking turns to display their songs and techniques, the reality show introduces this particular indie culture, which engenders passion and zeal.

For this feature story China Daily talked with a handful of Chinese bands and people who have experienced the golden days of Chinese rock music and who have helped indie music and bands find their own voices. They are the established Beijing-based rock band The Face, two Chinese rock bands that combine their local dialects with rock beats: Black Head from Xi'an, Shaanxi province, and Jiulian Zhenren from Lianping county in Guangdong province and the indie music promoter Liu Fei.

For an older generation of Chinese rock music fans, when the veteran rock band The Face appeared in the reality show they were awash in '90s nostalgia.

The Face, founded in 1989 and comprising lead vocalist Chen Hui, the guitarists Liu Jingwei and Wu Jindi, the bassist Ou Yang and the drummer Liu Zhong, performed a song titled Dream in the first episode of the reality show. The song was released in 1994, during a period often regarded as a golden era for the Chinese rock scene.

"This song is even older than some of the people who are watching the show," the bassist Ou says in the show. "Witnessing the evolution of Chinese rock music is a fascinating experience. We are proud that we are part of it as The Face."

Western rock music first gained popularity in China in the 1980s with a performance given by the rock singer-songwriter Cui Jian on May 9, 1986, during a concert at Beijing Workers' Stadium. At the packed venue, the then 25-year-old Cui performed his most well-known song, Nothing to My Name, which opened a chapter in China's rock music story at a time when few Chinese knew what rock 'n' roll was.

The song also marked the start of a journey that would later make Cui China's godfather of rock 'n' roll. It also ushered in a golden era of original Chinese rock bands influenced by the Western music genre and expressing themselves in their mother tongue. The first rock bands included the heavy metal band Tang Dynasty, founded in 1988, the pop-rock band Black Panther, formed in 1987, and The Face.

"Material possessions like big houses and fast cars were the last things on our mind," Ou says. "Instead, we were hungry for rock music and found any possible way to get the latest music from Western bands. Compared with young bands today, we had few opportunities to perform onstage because the audiences were smaller and there were few live house venues. But we were very happy because we truly loved the music."

In 1994 Ou, then 23, performed as a bassist at the Chinese Rock Power concert at the Hong Kong Arena. Bringing together He Yong, Dou Wei, the former lead vocalist of Black Panther, Zhang Chu and Tang Dynasty, the concert was the first showcase for musicians from the mainland to perform in Hong Kong. It stunned Hong Kong audiences and created the momentum for a wave of rock music to wash across the country.

"Looking back, those legendary musicians and their works are still inspiring for the young bands," Ou says. "They shaped the golden era of China's rock music. The band members are different people and enjoy different music styles. They come together and contribute to the band as one person. That's the most interesting part of being in a band."

Then with the birth of Modern Sky, one of the country's biggest indie labels, which former rock singer-songwriter Shen Lihui founded in 1997 in Beijing as a way to distribute both his own and his friends' music, more and more indie bands emerged in the country while developing their own unique styles. The punk-rock band New Pants, the pop-rock band Queen Sea Big Shark and the heavy rock band Miserable Faith were among the most-watched bands then.

The company is now home to more than 100 indie bands and has expanded into the United States and Britain by signing Western bands. It also promotes one of the country's most popular outdoor musical events, the Strawberry Music Festival, which was launched in Beijing by the company in 2009 and has since expanded into dozens of Chinese cities.

"The first reason to form a band was to attract more girls," says the singer-songwriter Gao Xiaosong, who formed his own band in 1990 while he was studying radar engineering at Tsinghua University in Beijing. "But the most important thing was that when I learned to play guitar I wanted to explore more beautiful sounds of the instruments, so I was eager to find people who shared my interests and who wanted to play music together with me."

Gao is credited with creating a music genre during the 1990s called "campus folk music", which won a large fan base in China then with poetic lyrics about youth, romance and friendship, accompanied by guitar.

One of the major contributors to indie music' development in the country is the emerging live house venues and small bars, which offer the indie rock bands stages to perform.

A live bar called School is among the most popular places for indie music bands and music fans.

School, tucked in a narrow hutong in downtown Beijing, was co-founded by Liu Fei, a former band agent and music festival organizer, about nine years ago.

"We wanted to have a place to enjoy music and drink together so we decided to launch School," says Liu, 36, a Beijing native. "The place connects like-minded people."

As Liu sat in the two-floor venue he was accompanied by a black dog that he adopted last year. He spotted the stray sitting outside the live bar and decided to take it in. It was the Year of the Dog, so Liu considers her as an omen of good things and named her School, after the club.

"Like us, she really enjoys crowds and loves to listen to music," Liu says.

Among the young bands that started to give performances at School and gained a fan base is Penicillin, an indie rock group whose members were all born after 1990.

"They started with performing in front of fewer than 10 people and now they have a stable fan base with about 100,000 followers on their Sina Weibo account," says Liu, adding that the lead vocalist and guitarist, nicked-named Xiaole, has the natural charisma of a rock star with his solid technique, songwriting talent and onstage composure.

Music fans are more diverse in their tastes than they were 10 years ago, he says, enjoying a wide range of styles, young bands and musical influences.

"I'm keen on putting together a group of good-looking young singer-songwriters, guitarists, bassists and drummers to form a rock band," Liu says. "They could compete with the pop idols not only with their looks but also by winning a large following with their great songs and technique. I've been dreaming of this for 10 years, and now with the many ways you can help new talent stand out, such as reality shows, that dream can finally be realized."

 

 

 

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2019-06-29 06:52:42
<![CDATA[A lot at stake when Xi and Trump meet]]> http://www.chinadaily.com.cn/kindle/2019-06/28/content_37485844.htm

Since both Beijing and Washington understandably want to hold their cards close to their chests until Xi Jinping and Donald Trump actually sit down to talk, it remains difficult to foretell exactly how the widely anticipated Saturday meeting between the two presidents on the sidelines of the G20 Summit in Osaka will play out.

Both sides appear intent on seeking the best possible outcome, while being prepared for the worst. For all the harshness in their respective rhetoric, both parties need some kind, or at least degree, of truce. Because both are beginning to feel the pain.

Yet ironing out the obviously substantial divergences between the two governments and sealing a wholesale deal will take time.

So both have come with a Plan B.

"My Plan B with China is to take billions and billions a month ...and we'll do less business with them," Trump said on Wednesday. Which is unrealistic.

Beijing's, as both the Foreign Ministry and official media are vowing, is to "fight till the end" in that case. Such a scenario would be lose-lose, as it would mean diminishing returns for both.

Global investors are pinning their hopes on the upcoming meeting producing a breakthrough in the current impasse. The yet-to-be-confirmed report that China and the United States have reached a tentative agreement to avert the threatened tariffs helped Asian stock markets turn higher on Thursday.

If some kind of truce cake has indeed been baked, as some assume, it certainly would be something worth celebrating.

After all, tense as they are, the trade frictions are the fuse of a broader and more dangerous standoff that may not only pit the world's two largest economies against each other, but also lead to the fragmentation of the global market and the international community.

Former US treasury secretary Henry Paulson may have over-estimated the impacts of US sanctions on Huawei in his latest Financial Times piece. Because they do not work like a "death sentence" at all with Huawei raking in 5G contracts at home and abroad.

But he made a critically important point in warning that "we now face the very real prospect that an economic iron curtain may descend".

The US approach that threatens to "Balkanize" technology and "decouple" it from China, as Paulson suggested, risks dividing the global technological and economic landscape, isolating the US itself, and undermining US capabilities for innovation.

His observations deserve a broader audience, especially those whole-heartedly trumpeting an all-round trade war.

But as Paulson also pointed out, what is at stake goes far above and beyond a trade war.

Which is why, despite their continuing differences, Beijing and Washington should work together to make the upcoming Xi-Trump meeting a success.

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2019-06-28 07:32:29
<![CDATA[Push to sort out household waste]]> http://www.chinadaily.com.cn/kindle/2019-06/28/content_37485843.htm ON MONDAY, Shanghai's first regulation on domestic waste management will come into effect, which requires residents to sort their garbage before putting it into garbage cans. There are potential fines of up to 200 yuan ($29) for individual violators and up to 50,000 yuan for offending organizations. China Daily writer Zhang Zhouxiang comments:

There are still days to go before the regulation officially comes into effect, yet jokes about which bit of an item goes where have already been gaining popularity online. In some sense, they contain complaints from local residents because sorting their waste means more work.

But it is something that should be rolled out nationwide, as it is for the common good of all. Sorted garbage is a resource - paper and metal can be recycled, and kitchen waste can be fermented to produce energy.

However, unsorted garbage can only be piled up.

Scientists predict that the whole Earth might be covered by garbage by the end of the century. We need to act, and act now. And one of the things we can do is to sort our garbage.

Some argue that there are professional garbage collectors who can do the job. It should be noted that the working environment for garbage collectors can be hazardous to health. For instance, there are often glass or metal pieces hidden inside unsorted garbage, which cut their hands and might cause fatal infection in the dirty environment. So by sorting garbage, we are also honoring our social responsibility by avoiding making life harder for those who struggle to make a living.

Garbage sorting is nothing new. Many cities in China have tried to encourage residents to sort their waste. However, none made substantial progress. But on June 5, the State Council, China's Cabinet, approved a draft law for curbing solid waste pollution. One day later, the Ministry of Housing and Urban-Rural Development issued a draft plan to implement garbage sorting in cities across the country. And Shanghai has taken the lead.

Let's hope garbage sorting can become the daily habit of all as soon as possible.

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2019-06-28 07:32:29
<![CDATA[G20 coping with crisis of credibility]]> http://www.chinadaily.com.cn/kindle/2019-06/28/content_37485842.htm For the second time in a row, the global focus, rather than being on the G20 Summit, is on the sidelines of the summit. The escalating trade war between the United States and China has made the meeting between President Xi Jinping and US President Donald Trump on the sidelines of the summit the most anticipated global event.

On the sidelines of the G20 Summit in Osaka, Japan, "mini summits" such as the BRICS (Brazil, Russian, India, China and South Africa) leaders' meeting and the Japan-US-India meeting which began last year are also likely to be held. And the Indian prime minister has proposed that a Russia-India-China (or RIC) "mini summit" be started in Osaka.

The RIC "strategic triangle" has been in the works since 1999; and in terms of global governance vision, it is in great variance with that of the United States and its allies. The RIC meeting, if held, will mark the upgrading of their decade-long foreign ministers' trilateral meeting. Many other important bilateral meetings are also expected to be held in Osaka. The shared focus of these meetings is expected to be on managing multiple imminent crises triggered by the US' economic sanctions and tariff hikes, which are pushing the global economy on a downward slide. Worse, this trend threatens to gather speed as the US moves closer to the presidential election.

The main G20 Summit and its agenda seem to lack luster, undermined by myriad conceptual and operational conflicts and convulsions.

First, the last two decades saw the G7 very reluctantly co-opting emerging economies and expanding gradually from G8 to G8+5 to G20.

Second, thanks to the global economic slowdown since 2008 and the more recent differences in the G7(represented by Brexit and the US' isolationist impulses), the West was compelled to make room for Asian countries to play a bigger role in global governance. Led by China, the new trendsetters include India, Russia, Japan, and the Republic of Korea. But they are yet to develop a collective voice or vision.

In this rapidly changing G20 landscape, the birth pangs of an emerging new system can be felt in the trade disputes between the US and China. As such, the three main issues on the agenda of the Osaka Summit - promoting free trade and globalization; removing restrictions on free transmission of data among states; and evolving shared innovations for mitigating the negative impact of climate change as well as their ongoing debates on reforming the World Trade Organization - may not receive due attention.

What is most expected of the Osaka Summit to do is to stop the US from intensifying the trade war with China, because it has had serious global implications.

The Trump-Xi meeting on the sidelines of the G20 Summit in Buenos Aires last year had managed to reach a 90-day truce. That promise was broken by the US soon, as it slapped additional tariffs on $50 billion of Chinese goods, extending it last month to another $200 billion of Chinese goods. And the 11th round of trade talks between China and the US in May broke down because Washington insisted on ludicrous agreements that, obviously, were unacceptable to Beijing.

But the US has not targeted China alone. All the other G20 members have also been targets, although to a lesser extent, of US "firepower". The fissures in the G20 widened at the G20 Summit in Hamburg, Germany, in 2017 when the US withdrew from the Paris climate accord, which made French President Emmanuel Macron exclaim: "Our world has never been so divided."

The US has since continued to undermine several other global governance norms and structures. This calls for the other 19 members of the G20 to explore strategies to rejuvenate the grouping and strengthen it through other mechanisms such as the Regional Comprehensive Economic Partnership - the proposed largest trading bloc minus the US - which should be finalized early by accommodating the members' mutual strengths and limitations.

The author is a professor at Jawaharlal Nehru University (New Delhi) and adjunct senior fellow at The Charhar Institute (Beijing). The views don't necessarily represent those of China Daily.

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2019-06-28 07:32:29
<![CDATA[Hegemonic anxiety disorder of US has resulted in 'Chaos Americana']]> http://www.chinadaily.com.cn/kindle/2019-06/28/content_37485841.htm

WASHINGTON SEES THE COLLECTIVE rise of the developing world as a threat. That bodes trouble for all, Xinhua News Agency commented in an article published on Wednesday. Excerpts:

Three decades of unrivaled hegemony has induced a historically ill-founded but deeply entrenched belief in Washington that the United States is an exceptional country above all others. Its past success in nipping in the bud any serious challenger to its dominance has only reinforced this belief.

In the eyes of incumbent US policymakers, global rules are in place to serve it, and any country that has a trade surplus with the US is ripping it off.

They have waged waves of tariff offensives against not only China, but also US allies such as the European Union, Japan, the Republic of Korea and Canada, regardless of the rising financial burdens on domestic consumers and businesses, and the rules of the World Trade Organization.

The high-tech realm has also witnessed the US scrambling to secure its supremacy. However, it is trying to do so not by sharpening its own edges in fair competition, but by employing state power to drive out competitors.

Its unjustified attacks on Chinese telecommunications equipment provider Huawei and other Chinese high-tech companies under the excuse of national security are reminiscent of its erstwhile plot against Japan's once booming semiconductor industry, and being widely interpreted as an attempt to sabotage China's standard-setting capabilities.

In the realm of geopolitics, Washington's hegemonic anxiety disorder has become even more conspicuous, especially in its policies on the Middle East and Latin America.

Meanwhile, the current US government is seeking to reap the benefits of being a "rogue superpower" while refusing to bear its due global responsibility. Its withdrawal from the Paris climate accord and the Iran nuclear deal has breached global efforts to address many of the world's most pressing challenges.

Western countries are disappointed to discover that it has become a big bully pushing the world toward "Chaos Americana".

Hopefully, the G20 Summit in Osaka, Japan, on Friday and Saturday can awaken Washington to the disservice it has done to the world, and prompt it to regain its senses.

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2019-06-28 07:32:29
<![CDATA[It's another fine mess Washington has got us into]]> http://www.chinadaily.com.cn/kindle/2019-06/28/content_37485840.htm

Editor's note: The US administration appears to have no qualms about the trouble its unilateral policies have caused for the world, and confident with its already outdated outlook on national security, comments Zhong Sheng, a columnist of People's Daily, in an article published on Thursday. Excerpts:

Washington pretends to be blind to the fact that its "maximum pressure" tactics, which ignore international rules and conventions, have only made the global situation more complicated, and turning "national security" into a business has only led to it being caught in its own trap. In history, no country has ever become safer by pitting itself against people everywhere.

If there is anything positive to take from Washington's wheeler-dealer moves, it is that the world is now well aware of the source of global instability and unrest. While the United States hypes up its security being threatened, its interests being encroached upon and its jobs and know-how being stolen, multiple surveys have yielded the same finding that the number of the people deeming the US as a threat to the world has reached a record high.

Economic globalization, boosted by the collective rise of emerging market economies and the collaboration between developed and developing countries, means that economic and trade relations are no longer winner-take-all.

As China stresses, the security of a country rests with its cooperation and openness to others, rather than seclusion and self-imposed isolation.

Now is the time for Washington to adapt its national security outlook that dates back to the pre-globalization era to the changed circumstances of today.

Perched on the top of the global value chain, the US has been, and will continue to be, the largest beneficiary of lasting peace and stability of the world.

No tree of peace can grow on barren land. Only peaceful cooperation can ensure global stability. Washington's Cold War mentality and belief in zero-sum games for so-called absolute security at the expense of the security of other countries are not conducive to world peace and security. The wise know it is better to be kind, while the fool indulges in quarrels and wars.

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2019-06-28 07:32:29
<![CDATA[Time to douse the wildfire of hate speech]]> http://www.chinadaily.com.cn/kindle/2019-06/28/content_37485839.htm Around the world, hate is on the march.

A menacing wave of intolerance and hate-based violence is targeting worshippers of many faiths across the globe. Sadly, and disturbingly, such vicious incidents are becoming all too familiar.

In recent months, we have seen Jews murdered in synagogues, their gravestones defaced with swastikas; Muslims gunned down in mosques, their religious sites vandalized; Christians killed at prayer, their churches torched.

Beyond these horrific attacks, increasingly loathsome rhetoric is being aimed not only at religious groups but also minorities, migrants, refugees, women and any so-called "other". As the wildfire of hate spreads, social media is being exploited for bigotry. Neo-Nazi and white supremacist movements are growing. And incendiary rhetoric is being weaponized for political gain.

Hate is moving into the mainstream in liberal democracies and authoritarian regimes alike - and casting a shadow over our common humanity.

The United Nations has a long history of mobilizing the world against hatred of all kinds through wide-ranging action to defend human rights and advance the rule of law. Indeed, the very identity and establishment of the UN are rooted in the nightmare that ensues when virulent hatred is left unopposed for too long.

We recognize hate speech as an attack on tolerance, inclusion, diversity and the very essence of our human rights norms and principles. More broadly, it undermines social cohesion, erodes shared values, and can lay the foundation for violence, setting back the cause of peace, stability, sustainable development and human dignity.

In recent decades, hate speech has been a precursor to atrocity crimes, including genocide, from Rwanda to Bosnia to Cambodia.

I fear that the world is reaching another acute moment in battling the demon of hate. That is why I have launched two UN initiatives in response. First, I have just unveiled a Strategy and Plan of Action on Hate Speech to coordinate efforts across the whole UN system, addressing the root causes and making our response more effective.

Second, we are developing an Action Plan for the UN to be fully engaged in efforts to support, safeguard religious sites and ensure the safety of houses of worship. To those who insist on using fear to divide communities, we must say: Diversity is richness, never a threat.

A deep and sustained spirit of mutual respect and receptivity can transcend posts and tweets fired off in a split second. We must never forget, after all, that each of us is an "other" to someone, somewhere. There can be no illusion of safety when hate is widespread.

As part of one humanity, it is our duty to look after each other.

Of course, all action aimed at addressing and confronting hate speech must be consistent with fundamental human rights. Addressing hate speech does not mean limiting or prohibiting freedom of speech. It means keeping hate speech from escalating into something more dangerous, particularly incitement to discrimination, hostility and violence, which is prohibited under international law.

We need to treat hate speech as we treat every malicious act: by condemning it, refusing to amplify it, countering it with the truth, and encouraging the perpetrators to change their behaviour.

Now is the time to step up to stamp out anti-Semitism, anti-Muslim hatred, persecution of Christians and all other forms of racism, xenophobia and related intolerance. Governments, civil society, the private sector and the media all have important roles to play. Political and religious leaders have a special responsibility to promote peaceful coexistence.

Hatred is a danger to everyone - and so fighting it must be a job for everyone. Together, we can put out the wildfire of hate, and uphold the values that bind us together as a single human family.

The author is the secretary-general of the United Nations. The views don't necessarily represent those of China Daily.

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2019-06-28 07:32:29
<![CDATA[G20 must uphold multilateralism]]> http://www.chinadaily.com.cn/kindle/2019-06/28/content_37485838.htm The G20 rose to prominence in 2008 when leaders of the world's 20 leading economies gathered for the first time amid the fear and panic of the global financial crisis.

Through multilateral cooperation, they helped get a beleaguered world economy out of the woods and bring it onto the track of recovery.

But the global economic recovery remains fragile, and it has encountered a surge in protectionism from the world's largest economy that threatens to upend the rules-based multilateral trading regime.

As G20 leaders meet in the Japanese city of Osaka to discuss global economic governance, they face the urgent task to prevent the world economy from being derailed by the unilateralism and protectionism of the United States.

To that end, the G20 Summit needs to send a clear and strong message that there is the shared will to uphold multilateralism and an open world economy so as to renew global confidence in trade liberalization and economic globalization.

As the increasing trade frictions risk dragging the global economy back into crisis, the G20 members need to adhere to the principle of a consensus-based approach to properly handle differences.

The global trading system with the World Trade Organization at the core is standing at a new crossroad. China has, on many occasions, reaffirmed its support for the necessary reform to the WTO to enhance its authority and effectiveness.

Beijing has been a staunch defender of the rules-based global trading system, as its embrace of global rules along with its opening-up policy over the past 40 years has helped China achieve staggering economic development. Only by opening up further and being integrated more deeply into the world can China make even greater strides in achieving high-quality economic growth.

Recently, China has unveiled and pledged its earnest endeavor to implement new opening-up measures, including significantly easing market access, creating a more attractive investment environment, strengthening protection of intellectual property rights and expanding imports.

Along with the China-proposed Belt and Road Initiative, all these measures reflect China's determination to open up wider and make greater contributions to an open world economy.

As China goes forward to fulfill its promises to the world, it stands ready to support multilateralism and uphold the multilateral trading system. For the sake of the well-being of all humanity, the G20 should assert that multilateralism is a must rather than an option.

 

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2019-06-28 07:32:29
<![CDATA[Quality infrastructure for quality development]]> http://www.chinadaily.com.cn/kindle/2019-06/28/content_37485837.htm

Quality infrastructure is one of the key topics on this year's G20 agenda under Japan's presidency. The concept, first mentioned in the Leaders' Communiqu�� of the G20 Summit in Hangzhou, Zhejiang province, in 2016, emphasizes the importance of quality infrastructure to sustainable development and inclusive growth.

Its key elements, inter alia, include "ensuring economic efficiency in view of life-cycle cost, safety, resilience against natural disasters, job creation, capacity building, and transfer of expertise and know-how on mutually agreed terms and conditions, while addressing social and environmental impacts and aligning with economic and development strategies".

Guided by this definition, continuous progress has been made since then. In this regard, the Global Infrastructure Connectivity Alliance (formed in 2016), the Roadmap to Infrastructure as an Asset Class (2018) and the G20 Principles for Quality Infrastructure Investment (2019) have contributed to the global efforts to promote infrastructure development. And China is an active and constructive player in all these endeavors.

Quality infrastructure has become a key term on other platforms, too. For example, the more than 6,000 foreign guests from 150 countries and 92 international organizations, who participated in a variety of events at the Second Belt and Road Forum for International Cooperation in Beijing in April, forged a broad consensus on high-quality Belt and Road cooperation and partnerships on connectivity.

With quality infrastructure becoming increasingly popular, and the G20, Belt and Road forum and other multilateral platforms paying special attention to it, there is a need to ensure synergy.

Quality infrastructure should be "pro-growth". Since inadequate infrastructure and lack of financing remain serious hurdles to development for many developing countries, quality infrastructure should facilitate free movement of people, goods, services, knowledge and capital, and help more countries participate in and benefit from the global supply and industrial value chains, thus facilitating strong, sustainable, balanced and inclusive growth.

And quality infrastructure should be "people-centered". Quality infrastructure should make it its priority to help alleviate poverty, create jobs and improve livelihoods, in order to fulfill the UN 2030 Agenda for Sustainable Development. This is why, with China's strong position and G20 members' broad support, the G20 Principles for Quality Infrastructure Investment listed sustainable development as the first of its six principles.

Quality infrastructure should be "practical". There is a need to adopt applicable international standards and good practices, so as to effectively help developing countries promote quality infrastructure and avoid failures, while recognizing that different countries have different conditions and respecting local laws and regulations.

Quality infrastructure should facilitate "partnership". Concerted efforts should be made to maximize synergy among various global and regional infrastructure cooperation initiatives in the spirit of extensive consultation, joint efforts and shared benefits.

And countries should work together to develop affordable, accessible, inclusive and broadly beneficial infrastructure facilities, and improve the "soft connectivity" of policies, rules and standards with the aim of further promoting a global partnership of connectivity.

Keeping the above four factors in mind, the on-going G20 Summit is expected to deepen cooperation on quality infrastructure for quality development.

The author is a Beijing-based expert on international studies. The views don't necessarily represent those of China Daily.

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2019-06-28 07:32:29
<![CDATA[EU must speak up loud and clear against the US' unilateral moves]]> http://www.chinadaily.com.cn/kindle/2019-06/28/content_37485836.htm The on-going G20 Summit in Osaka, Japan, is a crucial moment for the world to uphold multilateralism and rules-based world order that are under the grave attack by US unilateral and protectionist behaviors.

European Union leaders highlighted their goals for the summit on Wednesday in a joint letter issued by European Council President Donald Tusk and European Commission President Jean-Claude Juncker. They include upholding the rules-based world order and multilateral institutions that underpin it and calling on the G20 leaders to step up action to mitigate the existential climate threat and safeguard free and fair global trade.

These are goals that leaders of China and many other countries have also been advocating, in total contrast to the United States administration which has been withdrawing from and ignoring international organizations and multilateral agreements, and resorting to unilateral and protectionist "America First" policies.

The EU leaders, however, have not been vocal enough to call out these disruptive actions largely due to an unequal relationship with the US since the end of World War II.

The EU and its member states, for example, are among the most active in pushing for implementation of the Paris climate accord. But they have not censured the US severely enough for pulling out of the 2015 Paris Agreement. Also, they did not express any shock publicly when US Vice-President Mike Pence refused to admit climate change is a threat to the US in a CNN interview on Sunday.

According to the Financial Times, which saw the draft G20 communiqu�� prepared by the Japanese government, the document avoids phrases such as "global warming" and "decarbonization" as an apparent capitulation to the demands of the White House.

If it were indeed the case, would the EU endorse such a watered-down version on climate change that contradicts its ambitious goals, in order to appease the US?

On Iran, the EU and its key member states, Britain, France and Germany, have remained co