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Mobile technologies account for about 4 percent of China's gross domestic product, an industry report said on Jan 16.

The nation is now home to more inventors in mobile technologies than any other country except the United States and South Korea, according to the Boston Consulting Group, a research firm. The country is also seeing the rise of a vibrant application developer community, with about 1 million people working in the high-growth field - more than twice as many as in the United States.

"China has become a highly competitive place to import and assemble components into finished products, allowing the country to tap into its strong manufacturing base," the report said, adding the mobile sector now represents 3.7 percent of the GDP, with a 17.7 percent compound annual growth rate from 2009 through 2014.

Tougher rules for loans to reduce leverage

The China Banking Regulatory Commission has issued draft rules to tighten supervision of entrusted loans, a shadow-banking product, in a move seen as targeting excessive leverage used to speculate on stocks.

Entrusted loans, a form of intercompany loans in which one company serves as the ultimate lender and records the loan asset on its balance sheet while banks act as intermediaries and collect a fee, have become an alternative channel for margin lending from brokerages. Such loans are considered a potential risk to banks given the revolving nature of bank credit and borrowers.

Listing shares overseas will get easier

Approval procedures are being streamlined for companies wishing to list overseas, said Xiao Gang, chairman of the China Securities Regulatory Commission, at the Asian Financial Forum in Hong Kong on Jan 19. The commission has reduced the 17 requirements that formerly applied to just three. One requirement that was eliminated, for example, said that companies had to have a record of profitability before being listed in Hong Kong.

"Next, we will end the requirement for domestic companies to be profitable before they get listed in the Chinese mainland," Xiao said.

Regulator to reform IPO rules

China's securities regulator is committed to introducing a registration-based system for initial public offerings and would take necessary steps in this regard this year, a top official said on Jan 16.

IPO reform would be "the most important task" for the regulator this year and it would help clarify the role of government and the market. In addition, it also would solve some of the key problems in the nation's capital market, said Xiao Gang, chairman of the China Securities Regulatory Commission, in a speech at the regulator's annual work conference.

The long-awaited reform has been viewed as a crucial step for the capital market to become more market oriented. It also implies Beijing's desire to rein in the regulator's administrative controls and government intervention in the market.

Growth in number of mobile phone users

The total number of mobile phone users in China stood at 1.29 billion in 2014, an addition of about 56.98 million new users, the Ministry of Industry and Information Technology said on Jan 20. The country had 97.28 million 4G users at the end of last year, while the number of 3G users rose by about 83.64 million to 485.26 million. The total number of 2G users, however, decreased by about 124 million during the same period.

Tencent-backed bank starts trial operation

The first private bank in China, which is partly backed by Tencent Holdings Ltd, started trial operations on Jan 18. Shenzhen Qianhai Weizhong Bank, also known as Webank, said it had invited a limited number of potential customers for the test run. Those customers included its shareholders, employees and some target customers.

Among the approved private lenders in China, Webank was the first to start business. The bank attracted a lot of media attention when Premier Li Keqiang visited its headquarters in Shenzhen in early January.

Fuji says building cars in China unprofitable

Fuji Heavy Industries Ltd, the only Japanese automaker without Chinese government approval to start a joint venture, has suspended efforts to build cars in the country, where demand growth is slowing.

Sales in China would not be enough to guarantee profitability, Akira Mabuchi, executive vice-president in charge of the company's China project, said last week. The maker of Subaru cars would not start local production "even if the Chinese government approves" its planned car manufacturing venture with Chery Automobile Co, he said.

New electricity pricing system launched

The National Development and Reform Commission, the country's top economic planner, has unveiled a new electricity distribution pricing system as it looks to reform the sector. The new system will be launched in the southern city of Shenzhen, said the commission.

Increased tax revenue from tobacco industry

The tobacco industry generated 1.05 trillion yuan ($166 billion) in profit and taxation in 2014, a rise of 10.02 percent year-on-year, according to data from the State Tobacco Monopoly Administration. The industry handed over 911.03 billion yuan of profit, taxes and fees to government revenue officials last year, up 11.63 percent, said Ling Chengxing, head of the STMA.

Although China has been stepping up its efforts to control smoking in public places in recent years, the monopolistic sector remains a major contributor to government revenue.

JD.com to open 500 service centers

JD.com Inc, China's largest online direct-sales company, is expected to open 500 brick-and-mortar service centers in underdeveloped counties this year, aiming to tap the potential of e-commerce in rural parts of the country. The centers will be operated directly by the Beijing-based JD.com and company officials said the new centers are expected to create tens of thousands of jobs.

Delta to start direct flights to Shanghai

US carrier Delta Air Lines has announced plans to begin a daily nonstop service between Los Angeles International Airport and Shanghai Pudong International Airport starting in early July, pending approvals from the US Department of Transportation and Chinese officials. The new service will mark Delta's fourth daily nonstop flight to the Asia-Pacific region in addition to Tokyo-Narita, Tokyo-Haneda and Sydney.

China Daily

(China Daily Africa Weekly 01/23/2015 page18)