IN BRIEF (Page 18)

Deals

Chinese insurer to buy Lloyd's building

A leading Chinese insurer has agreed to buy the landmark Lloyd's building in London for 260 million pounds ($388 million; 302 million euros). It is believed to be the first large-scale property investment by a Chinese insurance company in London.

The building, home to the world's leading insurance market, was owned by German asset management fund Commerz Real.

Although Commerz Real did not identify the Chinese buyer, it is believed that Ping An Insurance (Group) Co of China Ltd, China's second-largest life insurer by policyholders, is the buyer.

Industry

Multinationals face increased scrutiny

Multinational companies belonging to the food, dairy and pharmaceutical sectors are likely to face more government scrutiny of their operations in China.

In the latest such instance, the State Administration for Industry and Commerce is believed to be investigating the Switzerland-headquartered food processing and packaging firm Tetra Pak International SA for possible abuse of market dominance.

The SAIC has asked more than 20 of its regional agencies to investigate the allegations, Zhang Mao, who heads the market regulator, said. It is also investigating 23 cases of possible monopoly violations.

Tetra Pak China said in a statement that it has received requests from the SAIC and will provide relevant information about its operations in China.

The National Development and Reform Commission had earlier said it would investigate Nestle of Switzerland, its unit Wyeth and other foreign companies for allegedly violating market competition laws by manipulating retailers to sell infant formula at inflated prices.

Technology

Microsoft Ventures set for first deal in China

The investment arm of global IT major Microsoft, which entered China recently, has said it will complete its first acquisition in the country soon.

Microsoft Ventures, launched last month by Microsoft, aims to provide support to start-ups through "mentorship, technology guidance, seed funding, joint selling opportunities and other benefits", said Rahul Sood, general manager of the company.

Lin Weiqian, China president of Microsoft Ventures, said the newly established company integrates the BizSpark program and the Bing Fund seed investment initiative under one umbrella to make things as easy as possible for entrepreneurs.

"We are close to completing our first acquisition in China," Lin said in Beijing earlier this month.

Auto

Passenger car sector outlook brightens

Passenger vehicle sales in China maintained stable double-digit growth during the first six months of the year, raising hopes of further improvement during the year.

First-half sales of cars, sport utility vehicles, multi-purpose vehicles and minivans jumped 16.7 percent year-on-year to 8,178,417, the China Passenger Car Association said on July 5.

In June, which is usually a slow time for the industry because of a lower number of working days, the Dragon Boat Festival and national entrance examinations for universities, 1,289,665 passenger vehicles were delivered to local consumers, up 12.3 percent year-on-year.

Dongfeng JV opens third plant in city

The joint venture between Dongfeng Motor Corp and French carmaker PSA Peugeot Citroen has decided to open its third manufacturing unit in Wuhan, Hubei province. With a designed capacity of 300,000 units, the new plant will increase the total output of the Sino-French joint venture to 750,000 units a year. The first model being produced in the new unit will be the new Elysee.

Volkswagen adds more models to recall

Volkswagen China started to recall 3,863 imported vehicles under its namesake marque and its luxury brand Audi on July 3 because of the same direct-shift gearbox defects that caused a large-scale recall of more than 380,000 vehicles in April, according to a notice from the Administration of Quality Supervision, Inspection and Quarantine. The recall includes some Scirocco, Golf Variant, Audi A1 and Audi A3 models made in 2011.

Finance

Tighter rules for interbank bond trading

China's central bank is tightening rules on interbank bond market trading by ordering all transactions to be conducted through the National Interbank Funding Center as it seeks to boost transparency.

Transactions including forward deals and repurchases can not be reversed or changed once they are agreed upon by the two parties, the People's Bank of China said in a statement posted on its website on July 9. Clearing agencies should not engage in settling trades outside the interbank market, the statement said. Alterations to bond ownership, such as inheritance that is not related to trading, must be supported by legal documents explaining the nature of the transaction, it said.

T-bond futures set to resume

Trading in Treasury bond futures in China will resume after 18 years, a move that experts said will spur interest-rate liberalization and deepen reforms of the nation's financial markets.

The China Securities Regulatory Commission said on July 5 that, with the State Council approval, it had authorized the Shanghai-based China Financial Futures Exchange to conduct transactions in T-bond futures.

The CSRC commission said it will coordinate preparations for the new contract, including the announcement of the investor eligibility system, the entry policies for financial institutions, the mechanism for opening bond settlement accounts and the examination and approval of the new contract. These preparations will take about two months.

Energy

Nuclear power pricing system launched

A new pricing system has been introduced for nuclear power in China featuring a national benchmark price that is expected to make the industry more market-oriented and promote technological innovation along with cost control, experts said.

The National Development and Reform Commission, the top economic planner, has informed all provincial governments, nuclear power generation companies and grid operators of the benchmark price for electricity from new nuclear power stations.

The price, which applies to any plant that begins operating after January 1 this year, is 0.43 yuan a kilowatt-hour. The aim is to achieve rational investment in nuclear power and healthier, sustainable development of the sector.

Data

Economic growth seen sliding further

Economic growth in China is expected to further slide from a 13-year low as credit tightening policies and overcapacity continue to weigh on the world's second-largest economy.

GDP growth is estimated at 7.5 percent in the second quarter, compared with 7.7 percent for January-March period, according to a forecast by analysts.

An economic slowdown may prompt the government to introduce more changes after the Chinese economy last year expanded at the slowest pace since the Asian financial crisis in 1997.

China Daily-Agencies

(China Daily Africa Weekly 07/12/2013 page18)