What's news

Consumption becomes key economic driver

Domestic consumption surpassed investment to become the strongest driving force of the Chinese economy last year, indicating a new growth model has started forming as the country enters a new development era, the National Bureau of Statistics says.

Total consumption accounted for 51.2 percent of GDP growth last year, compared with 48.6 percent from investment. Net exports accounted for just 0.2 percent of the GDP growth, the bureau said.

Xie Hongguang, the deputy director, said: "It means that the consumption-driven growth model has started taking shape, and the economic structure has started improving."

Shandong Iron seeks control of Tonkolili mine

African Minerals Ltd said that Shandong Iron and Steel Group Co Ltd, its partner in the Tonkolili iron ore mine in Sierra Leone, is seeking control of the whole project, after taking on some of African Minerals' debt from banks and demanding immediate repayment last week. London-listed African Minerals, which owns 75 percent of Tonkolili, has been battered by costs related to the Ebola outbreak in West Africa and a rout in iron ore prices over the last year. This resulted in it having to shut its operations in Sierra Leone in late November over a lack of working capital and to default on repayment of a $250 million pre-export finance debt.

Financial sector FDI rises to $8.44b in 2014

Domestic financial institutions received 51.85 billion yuan ($8.44 billion) in net foreign direct investment in 2014, compared with 26.49 billion yuan in 2013, the State Administration of Foreign Exchange said. Net overseas direct investment by China's financial institutions, including banks, insurers and securities firms, was 38.26 billion yuan in 2014, down from 71.62 billion yuan in 2013. During the fourth quarter of 2014, net FDI into China's financial institutions climbed to 14.72 billion yuan from 11.68 billion yuan in the third quarter.

Plan to map leading global role for industry

A development plan for the manufacturing sector through mid-century will soon be submitted to the State Council for approval, Li Yizhong, deputy director of the National Committee of the Chinese People's Political Consultative Conference's Economic Committee, said on March 4. The Ministry of Industry and Information and the Chinese Academy of Engineering are formulating the plan. Under the draft plan, China will be a fully industrialized country by 2020 and a world-class industrial nation by 2050. The plan will focus on next-generation information technology, biomedicine and bio-manufacturing, advanced equipment and alternative energy.

Investment process to be simplified

Offshore investment and fundraising procedures for Chinese State-owned enterprises will soon be simplified, media reported on March 3. The People's Bank of China and related government bodies have submitted a proposal to streamline "going out" procedures for Chinese firms to the State Council, a central bank official told Securities News in Shenzhen. "Restrictions on overseas investment and financing by Chinese SOEs will be eased, and firms will not have to apply for permission to raise funds in foreign markets on a case-by-case basis," said Guo Jianwei, a deputy director of the central bank's renminbi policy department.

Service sector index shows expansion

Activity in China's services sector grew modestly in February as new orders rose at the quickest pace in three months, a private survey showed just a few days after the central bank cut interest rates to stimulate the world's second-largest economy. The HSBC Holdings Plc and Markit Economics Purchasing Managers Index picked up to 52 last month from January's 51.8 and remained above the 50-point level that separates contraction from growth. A sub-index for new orders rose to 52.2 in February from 51.2 in January.

UnionPay transactions surge in holiday period

Interbank transactions through China UnionPay cards totaled 238 billion yuan ($38 billion; 34 billion euros) during the week-long Chinese New Year holiday, up 16 percent from the previous year. The number of overseas transactions via UnionPay cards rose nearly 50 percent in the period, indicating cardholders are using their UnionPay cards more frequently when traveling abroad, the bank card operator said. Transaction volumes rose sharply in overseas markets including South Korea and the US, where UnionPay cards are widely accepted and cardholders can enjoy various discounts.

Insurer reports big rise in profit

AIA Group Ltd, the third-largest Asia-based insurer by market value, posted a larger-than-expected 22 percent increase in full-year profit, led by business growth in China. Net income rose to $3.45 billion (3 billion euros), or 28.73 cents a share, in the 12 months to November, from $2.82 billion, or 23.5 cents a share, a year earlier, the Hong Kong-based insurer said. The value of new business, a measure of future profitability of new policies, rose 24 percent to $1.85 billion. Mark Tucker, the chief executive officer, is credited with boosting the number of agents, improving their productivity and shifting toward more profitable products since taking over months before AIA went public in October 2010.

Finance house assets rise 13.9 percent

The total assets of China's financial institutions amounted to 170 trillion yuan ($27 trillion) at the end of January, up 13.9 percent year-on-year. Their total liabilities rose 13.4 percent to 157.18 trillion yuan during the same period, the China Banking Regulatory Commission said. The assets of large State-owned commercial banks were worth 68.04 trillion yuan on Jan 31, accounting for 40 percent of the total. The commission said commercial banks recorded non-performing loans of 842.6 billion yuan by Dec 31 as the ratio of such loans reached 1.25 percent, 25 basis points higher than at the beginning of last year.

Access threshold rules for engine makers

The government is likely to publish access threshold rules for the internal combustion engine industry soon, according to a China Securities News report, citing a source with the Ministry of Industry and Information Technology. A previous draft of the rules stipulated that the fixed-asset investment of an internal combustion engine maker in its R&D unit should be no less than 100 million yuan ($15.9 million; 14.2 million euros), and that for fuel system, pressurization system, and after-treatment system suppliers should be no less than 50 million yuan. Moreover, every year enterprises should spend more than 3 percent of their gross sales revenue on developing their products and improving their processes.

Lenovo charts plan to challenge Xiaomi

Lenovo Group Ltd plans to challenge Xiaomi Corp in the world's largest smartphone market by focusing more on online sales after demand from Web shoppers brought a successful return of its Motorola brand to China. "We're going head to head" with Xiaomi, Liu Jun, president of Lenovo's mobile business group, said in an interview at the Mobile World Congress in Barcelona. "They have the advantage that they did a very good job in the online market. Lenovo's advantages are hardware, supply chain and innovation."

China Daily

(China Daily Africa Weekly 03/06/2015 page18)