IN BRIEF (Page 20)

Media

Shanghai Media, Disney team up

Walt Disney Studios and Shanghai Media Group Pictures, a subsidiary of Shanghai Media Group, signed a multi-year agreement on March 7 to develop movies under the Disney brand. The films will be released in China and other markets.

Disney Studios, a unit of The Walt Disney Co, would pair writers from the United States who specialize in action, adventure and fantasy to work with writers and filmmakers from China.

The jointly produced films will feature Chinese elements, meaning they can be made locally while targeting international markets.

Cooking up a success story

High-end restaurant chain XE Flavor Group plans to turn into a cultural industry after it suffered a loss of 560 million yuan ($91 million) in 2013. XE Flavor said it plans to acquire 51 percent of shares in Beijing CCTV Splendid Film and TV Corp Ltd at a cost of 20 million yuan. XE Flavor said the expected acquisition is part of its attempt to exit the catering industry.

Huayi sets sights on Hollywood

Huayi Brothers Media Corp, one of China's leading entertainment conglomerates, is in talks with other investors about financing films produced by Jeff Robinov, the former film chief at Warner Bros Entertainment Inc, according to a media report.

Robinov, who served as president of the company's Warner Bros Pictures Group from 2007 to 2013, plans to set up a production company that would turn out about five movies a year with funding from Beijing-based Huayi and other potential investors.

Sony Pictures Entertainment Inc will most likely release these movies, according to people familiar with the deal, the report said.

If a deal is reached, it would be the largest of its kind in years and the most significant investment by a Chinese enterprise in Hollywood.

Deals

Nuclear firm to list shares

State-owned China National Nuclear Corp is preparing for an initial public offering in Shanghai as it accelerates its overseas expansion.

CNNC will list its "premium assets" initially, perhaps listing other assets later, Chairman Sun Qin said on March 7.

Another state-owned nuclear giant, China General Nuclear Power Group, is planning an IPO in Hong Kong.

The listing plans underscore how intense the race for overseas expansion has become, with the central government encouraging domestic companies to export technology and equipment.

On March 5, Premier Li Keqiang said in the Government Work Report that the government will promote the export of nuclear technology and equipment.

Finance

IPO reform should be done gradually

The reform of China's capital market requires strenuous efforts but should not be over-ambitious, the head of China's securities watchdog said on March 11.

"China's financial market is far from fully market-oriented. Our reform aims to further commercialize it, improve the legal system and make it more international," said Xiao Gang, chairman of the China Securities Regulatory Commission.

Xiao said the authority will push for a registration-based reform of the initial public offering system "step by step". The remark signaled a denial of rumors that the authority had called an end to the reform.

New businesses mushrooming

More than 146,000 new businesses have been set up in China after the corporate registered capital system was tweaked on March 1, the State Administration of Industry and Commerce said on March 10. The country's reform on business registration scrapped requirements on the minimum registered capital for business entities, as well as the limits on operating places and regulations on annual inspection.

Trading risks rise as RMB falls

The recent tumble in the yuan exchange rate has increased risks in money trading and triggered more hedging from investors in the currency futures market, economists and foreign exchange dealers in Hong Kong said.

The yuan slipped 0.03 percent to close at 6.1402 per dollar in Shanghai, according to China Foreign Exchange Trade System prices. The currency has fallen 0.4 percent in three days and 1.4 percent this year. The People's Bank of China on March 11 cut the daily reference rate by 0.02 percent to 6.1327, the lowest level since Dec 3.

Renminbi currency futures witnessed a record high of 1,461 contracts (US$146.1 million notional) in February, up 500 percent from the average daily volume in 2012, according to Hong Kong Exchanges and Clearing Limited (HKEx), signaling a greater need for foreign exchange and interest rate risk management.

Yuan fall mirrors export slump

The yuan fell by the most from March 10 since July 2012 amid reports that the nation's exports unexpectedly declined last month. The People's Bank of China, the central bank, lowered the daily reference rate by 0.18 percent to 6.1312 per dollar on March 10, the weakest level since Dec 3. Overseas shipments fell 18.1 percent in February from a year earlier, the biggest drop since 2009, customs data showed on March 8.

Policy

More tax reforms on the cards

China will bring more legitimacy and fairness to its taxation system in a bid to ensure the nation's economic health, Finance Minister Lou Jiwei said on March 6.

Expanding pilot reform to replace the business tax with a value-added tax, in order to avoid duplicate taxation and to encourage industrial upgrading, will remain a major task this year, Lou told reporters on the sidelines of the annual session of the National People's Congress in Beijing.

The trial, which started with transport and the service sectors, grew to include railway, post and telecom services in January, according to the Government Work Report delivered by Premier Li Keqiang on March 5.

Internet

Tencent gains more teeth

Internet giant Tencent Holdings Ltd is buying a stake in China's second-largest online retailer in order to boost its competitive advantage in mobile Internet against its rival Alibaba Group Holding Ltd, the country's dominant player in e-commerce.

Shenzhen-based Tencent said on March 10 it is injecting about $215 million in cash and its self-run e-commerce units into JD.com Inc for a 15 percent pre-IPO stake in the online retailer.

The deal, which comes ahead of JD's listing in the United States for $1.5 billion, is the latest in the rapidly growing Internet sector in China.

Energy

Coal tax revamp this year

The government will press ahead with a plan to assess the resource tax on coal in China on a price basis, instead of the current volume basis, the country's tax bureau chief said on March 10. Reform of the resource tax has long been on the agenda and is aimed at encouraging more efficient use of coal, which has been blamed for the country's air pollution problems.

Auto

Car sales strong in last month

Domestic passenger vehicle sales in China grew 18 percent year-on-year in February despite the Lunar New Year holidays, exceeding industry expectations.

Excluding commercial vehicles, total sales reached 1,312,200 units, including cars, sport utility vehicles, multipurpose vehicles and minivans, the China Association of Automobile Manufacturers said on March 10.

Combined sales in the first two months were up 11.3 percent to 3,159,000 units.  

China Daily Agencies

(China Daily Africa Weekly 03/14/2014 page20)