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Outbound mining projects on the rise

China's outbound investment in mining assets rose 83 percent to $24.8 billion last year on the back of the nation's growing appetite for commodities, industry experts said on Oct 20.

Ban Yongzhi, an official with the foreign investment and cooperation department at the Ministry of Commerce, said China's outbound investment in the mining sector totaled $106 billion by the end of 2013 and accounted for 16 percent of China's overall outbound investment.

During the first nine months of this year, China's outbound non-financial investment reached $74.9 billion, up 21.8 percent from the previous year, according to the ministry.

Copper prices set to weaken

Copper will continue to perform more poorly than most other base metals next year as demand from China slows and inventories rise, according to the Goldman Sachs Group. Demand from China, the biggest user of metals, will weaken due to a slowdown in property construction, the bank said recently. Inventories tracked by the London Metal Exchange will rise over the next six months on increasing supply, lower seasonal demand and a lack of appetite for the metal in China. Copper this year has been "substantially underperforming nickel, zinc and aluminum," said Roger Yuan, a Hong Kong-based analyst for the bank.

Economy

Commodities hit five-year low

Commodities dropped to a five-year low on growing concern that slower economic growth will cool demand in China, the world's top consumer of metals, grains and energy.

The Bloomberg Commodity Index of 22 raw materials fell as much as 1.3 percent to its lowest since July 2009. Copper futures dropped the most since March while hog prices posted their biggest loss in 25 months. Raw materials have slumped 7 percent this year and are headed for a fourth annual decline in the longest slump since at least 1991.

Energy

Summit to map out national energy strategy

The 2014 Beijing Energy Forum, scheduled to open on Oct 30, will hold discussions on China's energy strategy for the upcoming 13th Five-Year Plan (2016-20) through 2030, sources said. During the forum, participants will share views on the government's plan to enhance energy production and consumption capability, to accelerate industrial transformation and to improve air quality. The event, co-hosted by Beijing Energy Associates and the China Energy Research Society, will be attended by more than 300 business leaders and scholars from the country's energy sector.

Oil imports from Saudi Arabia fall

China reduced oil imports from Saudi Arabia even as the world's largest crude exporter cut prices to lure Asian customers amid intensifying competition from Colombia and Oman. Oil deliveries from Saudi Arabia fell 2.7 percent to 4.74 million metric tons last month from a year earlier, according to data released on Oct 22 by the General Administration of Customs in Beijing. Shipments from Colombia surged 389.6 percent, while Russian deliveries increased by 56.8 percent. Asian consumers are benefiting from a wider choice of suppliers offering cheaper crude, from Venezuela to Nigeria, as the highest US production in almost 30 years cut American demand.

Industry

National plan rallies growing sports industry

In a national plan for the development of its rapidly growing sports industry issued on Oct 20, China encouraged more companies in the sector to go public and attract foreign investment.

The industry's value may exceed 5 trillion yuan ($815.6 billion) by 2025, the State Council said in a statement. The industry is expected to account for about one percent of GDP by that time. It contributed 0.6 percent in 2012, analysts said.

Liu Fumin, director of the finance department at the State General Administration of Sport, said an increasingly mature sports market will offer "great opportunities" for foreign companies.

"There are great opportunities for foreign investors, particularly in areas such as sports events, overseas sports tourism and venue management," Liu said.

Company

Huawei, Accenture expand alliance

Huawei Technologies Co Ltd, China's largest maker of phone-networking equipment, is expanding its alliance with Accenture Plc to add cloud services as it targets $10 billion in revenue from enterprise computing by 2017. The companies said they will focus initially on clients in China, Southeast Asia and other emerging markets, although financial terms were not disclosed. Huawei is broadening its portfolio from networking equipment to smartphones, tablets, business-computing products and cloud services as it works to boost sales to $70 billion by 2018 from $39.5 billion last year. The expanded partnership builds on a 2010 agreement to provide software for business-support services to phone companies.

Alipay tool targets overseas retailers

Alipay, the online payment division of Alibaba Group Holdings Ltd, is launching a new tool that will help US and European retailers sell products directly to Chinese consumers.

The service, named ePass, can be integrated into Western retailers' websites as an alternative payment solution like eBay's PayPal and is expected to help overseas merchants tap into China's rapidly growing online shopping community without actually expanding their presence in the Chinese market.

Through ePass, US and European merchants would be able to give Chinese consumers comfortable with shopping online in English a way to purchase goods directly from retailers' existing, stand-alone e-commerce websites in their home markets, said Li Jingming, president and chief architect of Alipay US.

9-month profits for SOEs rise 6.6%

Profits for China's state-owned enterprises hit 1.1 trillion yuan ($179.17 billion) through the first nine months of the year, up 6.6 percent from the previous year. Total business revenue stood at 18.3 trillion yuan in the first three quarters, up 4.2 percent year-on-year, said the state-owned Assets Supervision and Administration Commission, while total taxes and dues totaled 1.5 trillion yuan, up 5.6 percent from a year ago. There were 155,000 SOEs in China by the end of 2013, up 5.8 percent from the previous year. About 52,000 were owned by the central government and the rest controlled by local governments.

Auto

Vehicle sales to see slower 2014 growth

Vehicle sales in China will likely miss revised growth targets for the year as demand slows in the world's second-largest economy, said Dong Yang, secretary-general of the state-backed China Association of Automobile Manufacturers. He said on Oct 21 that total passenger and commercial vehicle sales for the year would likely reach 23 million units, or an increase of about 4.6 percent. In July, the group lowered its projection for growth in Chinese vehicle sales to 8.3 percent, or 23.8 million units, down from a 10-percent growth rate it predicted in January.

China Daily - Agencies

(China Daily Africa Weekly 10/24/2014 page18)