Huawei Technologies Co aims to stand out among this string of firms, with its years of technological prowess.

Sitting on its more than three decades of R&D and experience of working with different vertical sectors, Huawei aims to turn the idea of a smart city into reality.

Yan Lida, president of the enterprise business group at Huawei, said the goal of smart cities is to facilitate governance, serve the people and boost business growth.

"In the process of building smart cities, Huawei aims to construct the essential and fundamental platform, or the soil, for all partners to thrive, and to bring in all their capacities so as to help drive digital transformation forward," Yan said.

According to him, Huawei has already participated in the construction of more than 200 smart cities, and with more than 16,000 partners around the world, the Shenzhen-based company will step up its push to construct an open platform and lure more companies in.

Huawei's intensified push into the smart city arena came as a clutch of tech heavyweights such as Alibaba Group Holding Ltd, Tencent Holdings Ltd and Baidu Inc are upping their ante.

A McKinsey research report forecast that the global smart city industry covering 600 cities worldwide is projected to spawn a $400 billion market by the end of 2020. These cities are expected to generate 60 percent of the world's GDP by the end of 2025.

"In comparison with rival products, our platform's edge lies in our full stack of technology support, the capacity to serve all industries and our open attitude toward all partners," said Lu Qi, president of marketing and sales at Huawei's enterprise business group.

Different from most players that focus only on offering the platform as a service, or PaaS, Huawei has a sprawling presence across hardware, infrastructure as a service, and PaaS.

The company is also in a good position to serve all sectors, with a focus on public governance, transportation, finance, energy and manufacturing at the moment, Lu said.

According to him, clients who choose Huawei's platform have a choice to adopt technological solutions for specific application scenarios from other companies. Such freedom has enabled Huawei to stand out from the competition.

In 2018, Huawei announced it was partnering with the Tianjin municipal government to build a smart platform, or digital twin, for the Binhai New Area.

The platform will be able to help government officials deal with daily routines related to tasks like reducing unemployment, and emergencies including floods and fires.

"Huawei has helped us design over 4,000 parameters such as education indexes and health indexes to gauge the status of urban citizens. We will use such data to develop a slew of models to conduct intensive analysis, which will allow officials to predict what will happen and how to respond to them," said Chen Song, an official in Tianjin in charge of smart city construction for the Binhai New Area.

"Without a good platform, it is impossible to coordinate and integrate mounting cross-system resources. Huawei's full package of products has put it in a good position to help us build such a platform," he said.

Ma Jionglin, a senior partner at Deloitte, said in an earlier interview: "China is one of the most active countries in the world in building smart cities. With the advancement of urban management and the increasing emphasis on people's living and working styles, smart cities will enter a new stage of development."

Already, China has included the smart city initiative in its national strategy and made significant investments in these projects. Both first-tier cities and small and medium-sized cities are home to smart city projects and they have formed many smart city clusters across the eastern and southern coastal areas of China, according to a Deloitte report.

Powered by the next-generation information technologies such as 5G, mobile internet, internet of things, artificial intelligence and cloud computing, China is gearing up to develop smart cities nationwide.

In China, improving cities, especially metropolises, is an urgent and pressing demand as the urban population is growing amid rapidly increasing urbanization, experts said.

In 1949, just 10.6 percent of people, or 57 million residents, lived in 132 cities in China. But, by the end of 2018, nearly 60 percent of the country's population, or 830 million residents, lived in 672 cities. The figures continue to grow.

"As the population grows and we become more urbanized rapidly, the carrying capacity of the cities cannot sustain the pressure of population explosion. Diseases could emerge as new problems in cities due to resource shortages, traffic congestion and pollution, raising new concerns for the government's public management capabilities," said Shan Feng, deputy head of the Digital City Engineering Research Center, which is part of the Chinese Society for Urban Studies, at a meeting on smart cities in November in Beijing.

By the end of 2018, more than 500 Chinese cities proposed to build smart cities in their respective local government work plan, according to Shan.

Today, China has also become a key force in the development of smart city technologies and the industrial innovation globally.

A new report from market research firm MarketsandMarkets estimated the smart cities market in China is projected to reach $59.9 billion by 2023 from $30.4 billion in 2018 with a compound annual growth rate of 14.5 percent.

According to the report, the growth is mainly driven by the increase in population, the need for rapid urbanization and the government's investment and policies to speed up the implementation and development of smart city projects.

MarketsandMarkets noted China is the biggest marketplace in the Asia-Pacific region in terms of development of smart cities, and the APAC region is set to emerge as the main revenue contributor to the smart cities market globally.

By 2023, the global market for smart cities is estimated to grow to $717.2 billion from $308 billion in 2018, at a compound annual growth rate of 18.4 percent, the company said.

In fact, the adoption rate of smart cities solutions is growing rapidly in China. Not only some big cities but small and mediumsized cities are actively embracing the digital solutions.

For instance, Yingtan, a city in Central China's Jiangxi province, is accelerating the push for building an internet of things-enabled digital economy.

By 2018, Yingtan's 1.1 million people had connected to the internet of things. And more than 200 internet of things companies have been set up in the city, helping Yingtan to better embrace the digital transformation.

So far, the city has officially provided more than 40 kinds of internet of things services, including 5G services, smart transportation, smart water utilities, smart streetlights and smart parking.

For instance, 95 percent of the local families have installed smart water meters, which help save 2.4 million metric tons of water a year.

Yao Yao, head of property investment and management consultancy JLL's research in China, said smart cities' construction plays a more important role in China when compared to other markets.

"On the one hand, the practice of smart cities will help alleviate the increasing burden on traditional infrastructure systems caused by the rapid increase in urban population. On the other hand, intelligent application in fields including travel, safety, health and energy will improve the quality of all aspects of the residents' life. And the key issue is how to meet people's growing need for a better life," Yao noted.

Seeing the growing potential in smart cities development, an increasing number of tech companies are ramping up the efforts to carve out a stake in the rapidly expanding sector.

Beijing Percent Information Technology Co Ltd has seen huge potential in the market. So far, it has served more than 10,000 clients both at home and abroad, including a number of government customers.

"In the era of data intelligence, data has become a new and most important means of production, while data intelligence has become a key infrastructure in the cities," said Su Meng, chairman and CEO of Beijing Percent Information Technology.

According to Su, China has seen a growing number of digital cities and e-government projects on the ground.

"The digital cities market is really huge," Su noted. "The government is aware of the importance of data assets and the social benefits brought by the data sharing and exchanges. And now, we are at a very early development stage."

The company mainly provides e-government, digital cities and safety services for governments.

Powered by Percent's AI and big data technologies, governments will be able to access more data related to citizens, cars and other details in the cities. With a comprehensive big data governance and sharing platform, the government will be able to better operate in areas like market supervision, social governance and offering public services.

In fact, Percent has expanded its services globally. The company has built a visual national center data analysis and decision-making system for the Angolan government.

Previously, most of Angola's population information was recorded on paper, which was difficult to access and manage. With the new platform, the Angolan government can accurately and dynamically record entire data of local population in terms of birth, education, marriage, social security, fingerprint, faces and more.

A firm called G7 (not to be confused with G-7, or the Group of Seven, the leading industrial nations) is another example of Chinese companies actively engaging in the construction of smart cities. Unlike most tech firms eyeing the digital government solutions, G7 aims to empower traditional industries to embrace the digital transformation, which will not only help boost the productivity of the companies, but help create a better life for local citizens.

"Technology is having a profound impact on various industries," said Zhai Xuehun, founder and chief executive officer of Beijing-based internet of things company G7. "Based on the IoT, big data and artificial intelligence, G7 has already helped connect 98 percent of logistics factors to the internet in China. It is just a small step. We are also using the internet of things to inter-connect traditional industries, injecting new impetus into those industries."

Powered by its own internet of things technologies and algorithms, G7 is able to access the truck driver's real-time conditions. With AI and artificial means, G7 helps reduce the number of driver deaths to one-sixth of the previously reported number.

The company also offers a whole batch of services to drivers. With the support of the internet of things, drivers can make oil and gas payments online.

Shan Feng from the Chinese Society for Urban Studies said next-generation technologies such as the ultrafast 5G and smart cities will see rapid development, and new applications will pop up gradually.

"However, we are still facing some challenges in the development of smart cities," Shan said. "Some cities only focus on software and hardware investment, while local people seldom engage in the process and lack the sense of gain. More efforts are needed to shift the focus to residents, innovation, integration of different sectors and refined management."

The company said on Thursday it has submitted an application to the Monetary Authority of Singapore for a wholesale license, which would allow it to serve corporate clients.

"Ant has long been committed to the development of inclusive finance globally. We look forward to contributing to the development of digital banking in Singapore," a spokesperson said in an emailed statement.

MAS announced in June that it would offer up to two digital full bank licenses and three digital wholesale bank licenses in a bid to liberalize its banking sector, making it more "resilient, competitive and vibrant", according to its website.

Ant, the financial arm of Alibaba Group Holding Ltd, stands to benefit from the e-commerce giant's presence to support the development of Lazada, its newly acquired e-commerce counterpart in Southeast Asia, said Vey-Sern Ling, an analyst from Bloomberg Intelligence.

Gaming company Razer Inc also said it was leading a consortium that has applied for a license, while earlier this week Singapore Telecommunications Ltd and Southeast Asian ride hailing firm Grab said they were teaming up for a bid of their own.

Southeast Asia's digital lending market is expected to more than quadruple to $110 billion by 2025, according to a report by Bain, Google and Temasek Holdings.

Last year, Hong Kong offered digital banking licenses to companies including Alibaba, Tencent Holdings Ltd and Xiaomi Corp. Ant has been developing and fostering local digital wallet solutions in nine economies, the majority of which are in Southeast Asia, whereas Tencent is also heavily invested in supporting payment in local currencies in the region.

The likes of Alibaba, Ping An and Tencent are "increasing their investments as consumers from India to Japan to Malaysia turn to digital channels for retail purchases－both online and offline", said Jacob Dahl, a senior partner of consultancy McKinsey.

"These moves pose significant threats for incumbent banks, as these attackers have momentum in scaling innovative business models centered on data collection and the application of advanced analytics to identify new revenue opportunities and make smart lending decisions," he said.

As a result, incumbent banks like DBS have embarked on digital transformation inspired by platform players like Alibaba and Tencent, according to a McKinsey report on the importance of ecosystems. Over the past five years, DBS has invested S$1 billion ($741 million) annually in its transformation, resulting in a substantial increase in digital customers from 33 percent in 2015 to 48 percent in 2018.

IMF data showed that in 2017, roughly 39 percent of the adult population in low-and middle-income countries did not have a bank account, 55 percent of whom live in Asia. However, with an extremely high rate of mobile penetration over the past few years, this trend is improving, said Arunkumar Krishnakumar, a venture capital investor at Green Shores Capital.

"With technology firms joining the digital and financial inclusion wave, Asia (not just China) could be the new consumer fintech hub of the world," he said.

]]> 2020-01-05 14:37:13 http://www.chinadaily.com.cn/kindle/2020-01/05/content_37531129.htm China will improve the supply of commercial insurance products for people aged 60 years and above by stepping up research and product innovation in this field, to satisfy the growing insurance demands of an aging population.

Liu Hongjian, deputy director of the life insurance supervision department of the China Banking and Insurance Regulatory Commission, said the regulator will further promote the insurance sector to optimize product supply, accelerate the launch of insurance products specially designed for the elderly, and provide the elderly with products that offer more comprehensive coverage at lower premiums.

"The CBIRC will improve regulations, deepen supply-side structural reform in the financial sector, and make guidelines for enriching insurance product supply targeting the elderly and encouraging innovation of such products. We will also urge insurance companies to develop products that are specially designed for the elderly based on their risk features and demands for insurance services, and to further increase product supply mainly in the areas of sickness insurance, medical insurance, long-term care insurance and accident insurance," said Liu during a media conference held by the State Council Information Office on Thursday.

Besides, the banking and insurance regulator will develop actuarial mechanisms for insurance products targeting the elderly, make rules on how to price these products, and launch relevant regulatory measures, in an effort to guide insurers to price their products scientifically and reasonably, she said.

Among the existing products offered by commercial insurance companies, more than 1,000 products are available for purchase by Chinese people aged 60 years and above. However, these still cannot meet the senior people's robust demand for insurance products.

Currently, most of the products are not specially designed for the elderly. Instead, they just relax the restrictions on the age and conditions of insurance policies that are made for younger customers. The premiums are much higher for the elderly who may be charged 10 times the premium paid by the young and middle-aged people for accident and health insurance products. Not to mention that some elderly who are in poor health cannot find insurance products that are suitable for them, Liu said.

To solve these problems, domestic insurers must improve their risk management capability, service awareness and product innovation, she said.

Huang Hong, vice-chairman of the CBIRC, pointed out that these problems also show that insurance companies did not accumulate enough data on the elderly in terms of health and old age care, nor did they conduct enough research on the law of risks for elderly insurance.

"As the population of Chinese elderly aged 60 years and above reached 250 million at the end of 2018, we must strengthen the efforts to develop insurance products for the elderly," Huang said.

The CBIRC will make regulations and rules urging insurers to support the elderly insurance market, he said.

Beidou has had great applications in a string of areas including transportation, electrical power, fisheries, mining and agriculture, said Wang Yanyan, deputy general-secretary of the Global Navigation Satellite System and Location-Based Services Association of China.

Official data showed that the direct output of domestic satellite industries exceeded 300 billion yuan ($43 billion) by the end of 2019, with Beidou contributing 70 to 80 percent of the total.

"In addition to the navigation function that is well-known to the public, Beidou's applications in areas like pipe leakage detection has also made substantial progress," Wang said.

She noted that Beidou's technology in pipe network detection has already been applied in at least 600 cities, counties and towns across China.

Beidou has recently cooperated with Swiss industrial giant ABB in launching the world's first gas leakage detection system with an accuracy as fine as ppb or parts per billion, overturning the traditional accuracy of parts per million seen worldwide.

"With the new move, Beidou can not only position accurately the gas leakage points but is also able to analyze data, for example, to offer solutions," Wang said.

Zhang Yijin, head of analysis meter of ABB China, said that such an application has come into the forefront of global high-accuracy gas leakage detection, which has exceeded that of the global positioning system and Google.

"It is of great importance and also business potential given that the gas network in China alone has grown from 400,000 kilometers to 800,000 kilometers in the past five years," she said.

Zhang said that such technology is prepared to go into the foreign markets soon with the Beidou system set to be complete by 2020.

Currently, there are 46 operational Beidou satellites and China plans to send two more satellites in geostationary orbit in the first half of 2020 to finish the deployment of all of Beidou's space-based assets.

China began to construct its Beidou navigation system, named after the Chinese term for the Big Dipper constellation, in the 1990s and started to serve the Asia-Pacific region since 2012. It is currently one of the four largest space-based navigation networks operating globally, along with the US GPS system, Russia's GLONASS and the European Union's Galileo.

Such progress also dovetails with China's determination to step up the application of Beidou systems in a wide range of sectors as well as various regions.

Statistics from the China Satellite Navigation Office showed that as of April, the Beidou system had been put into use in more than 6.2 million taxis, buses and trucks as well as at least 40,000 fishing ships across the country.

By the end of last month, Beidou's solutions were exported to more than 120 countries and regions, according to the China Satellite Navigation Office.

The system is now being applied in more international sectors including precision farming, digital construction and smart port construction, the office said.

"It is beneficial for the Association of Southeast Asian Nations, South Asia, Eastern Europe, West Asia and Africa," the office said.

With the 5G era, Beidou is also integrating with the new technologies including blockchain and artificial intelligence, according to the office.

In December, the Civil Aviation Administration of China released a roadmap for the application of Beidou, which pointed out that the civil aviation sector should gradually see full coverage from Beidou by the end of 2035.

"The application of Beidou in the segment will make up for the inadequacy of traditional navigation systems as the new application will greatly enhance safety and efficiency," said Liu Lianxi, an official at the CAAC.

The launch of the toys follows on from the success of popular sets Dragon Boat Race, Dragon Dance and Chinese New Year's Eve Dinner, which were also created to mark Chinese festivities.

The sets also come complete with eight figures including lion dancers and a man in a rat costume.

The new Lego sets, featuring Chinese traditional cultural elements, which were rolled out in China and Asia-Pacific markets on Dec 26 and globally available this month, are part of the Danish company's efforts to get closer to young Chinese consumers.

"Playing helps children acquire some of the skills and personal characteristics they need to be successful in the future, including creativity, problem-solving, collaboration and resilience," said Lego CEO Niels Christiansen.

"Ideally, you can acquire those skills through play. We can play a big role in that," he added.

Lego invests heavily in innovation, with at least 60 percent of products renewed every year, which is quite a challenge and hard to achieve for an established toymaker, said Christiansen.

But strength and capacity to excite kids are at the heart of Lego. "It keeps us fresh because it is new," he said.

The priority for Lego in China is to enhance its brand presence and make it more accessible to Chinese families.

Since the launch of its first flagship store in Shanghai in 2016, the group has set up three flagship stores and 140 certified stores in more than 20 cities on the Chinese mainland, according to Lego's data.

In 2019, Lego opened 73 new stores in 16 cities in China and will open 80 new stores this year. The company opened its first certified store in Northwest China in July last year.

About 42 percent of its certified stores are located in emerging first-tier cities such as Chengdu in Sichuan province and Wuhan in Hubei province. About 12 percent are in second-and third-tier cites including Hefei in Anhui province, Changchun in Jilin province and Wuxi in Jiangsu province.

By the end of 2020, Lego expects to operate 220 stores in China, a pace that shows the toy retailer's ambition to penetrate further into the country's second-and third-tier cities.

The Chinese market achieved double-digit growth in the first half of 2019 for the private, family-owned company, which had stores in 35 cities in China by the end of last year.

Revenue for the period grew 4 percent to 14.8 billion Danish krone ($2.18 billion) compared with the same period of the previous year, according to Lego's financial returns for the first half of 2019 released earlier last month.

The CEO said Lego's global e-commerce will double over the next four years. But in China, the growth will come from both physical stores and digital channels.

"For us, physical bricks will always be at the center. When kids come to toy stores, magic happens. We can use digital channels to enhance that, but we always know it all starts with a brick," he said.

Generating more than 3 billion clicks on the Tencent Video platform, the esports themed series The King's Avatar has become one of the most viewed online dramas, gaining a huge following among young audiences.

Adapted from the hit novel of the same title, The King's Avatar tells the story of a top-level professional esports player, Ye Xiu, who has been forced to retire from the team and then rise again with a new team to win back lost glory.

Notably, the popular online drama for the first time features pure esports related plots instead of romantic themes.

"When I finished the first volume of the The King's Avatar novels, I was deeply impressed by the sportsmanship and the spirit of teamwork shown by the characters engaged in the esports," said Yang Xiaopei, the drama's chief producer and vice-president of Shanghai-based studio Linmon Pictures.

"I'm really interested in such a new theme, which allows me to build brand-new characters and innovation in the way to build up scenes in the drama."

Yang added the drama caters particularly to younger generations born in the 1980s and 1990s, who are in some degree enthusiastic esports fans.

"In fact, we were making something that had no reference before," Yang said. "The story mainly focuses on esports plots and highlights teamwork, friendship, brotherhood as well as sportsmanship. The difficulty lies in the connection of the online virtual world and the offline real world. To make a good esports story, we need to combine refined management and top technologies."

To offer the audience immersive experiences, the new drama has used a wide range of world-leading technologies, including motion capture, face capture and unreal engine real-time rendering, which are commonly used in movies like 'The Jungle Book' and 'Rise of the Planet of the Apes.'

Those technologies help build up a complete world outlook well stocked with virtual and real life stories. Yang said she hopes more audiences will have a better understanding of esports through the new series.

"Esports actually combines gaming and competitive sports and has created many jobs chances as the sector has been upgrading in recent years," Yang added.

"With the rising government support, esports is booming in China, generating a series of new businesses. We do see the huge potential in this emerging sector. More efforts are needed to add more innovation to related entertainment products and offer audiences better experiences."

Li Yiyang, an analyst at consulting firm iResearch, said esports have already become a red hot field in terms of market size and popularity.

In fact, Chinese gamers' rising enthusiasm has created a huge market worth 233 billion yuan ($33 billion) in 2019, up 8.7 percent on a yearly basis, a report released by Chinese gaming database Gamma Data Corp said.

Revenues generated from the esports industry jumped 16.2 percent to 96.96 billion yuan in 2019, growing faster than the overall gaming sector, the report added.

"With young gamers' growing purchasing power, they have already become the key driving force to drive esports-related consumption, and they are willing to pay for beloved stuff," Li said. "Looking ahead, the future esports industry will be able to boost the development of various sectors, such as the esports themed online dramas and other derivative products."

Generating more than 3 billion clicks on the Tencent Video platform, the esports themed series The King's Avatar has become one of the most viewed online dramas, gaining a huge following among young audiences.

Adapted from the hit novel of the same title, The King's Avatar tells the story of a top-level professional esports player, Ye Xiu, who has been forced to retire from the team and then rise again with a new team to win back lost glory.

Notably, the popular online drama for the first time features pure esports related plots instead of romantic themes.

"When I finished the first volume of the The King's Avatar novels, I was deeply impressed by the sportsmanship and the spirit of teamwork shown by the characters engaged in the esports," said Yang Xiaopei, the drama's chief producer and vice-president of Shanghai-based studio Linmon Pictures.

"I'm really interested in such a new theme, which allows me to build brand-new characters and innovation in the way to build up scenes in the drama."

Yang added the drama caters particularly to younger generations born in the 1980s and 1990s, who are in some degree enthusiastic esports fans.

"In fact, we were making something that had no reference before," Yang said. "The story mainly focuses on esports plots and highlights teamwork, friendship, brotherhood as well as sportsmanship. The difficulty lies in the connection of the online virtual world and the offline real world. To make a good esports story, we need to combine refined management and top technologies."

To offer the audience immersive experiences, the new drama has used a wide range of world-leading technologies, including motion capture, face capture and unreal engine real-time rendering, which are commonly used in movies like 'The Jungle Book' and 'Rise of the Planet of the Apes.'

Those technologies help build up a complete world outlook well stocked with virtual and real life stories. Yang said she hopes more audiences will have a better understanding of esports through the new series.

"Esports actually combines gaming and competitive sports and has created many jobs chances as the sector has been upgrading in recent years," Yang added.

"With the rising government support, esports is booming in China, generating a series of new businesses. We do see the huge potential in this emerging sector. More efforts are needed to add more innovation to related entertainment products and offer audiences better experiences."

Li Yiyang, an analyst at consulting firm iResearch, said esports have already become a red hot field in terms of market size and popularity.

In fact, Chinese gamers' rising enthusiasm has created a huge market worth 233 billion yuan ($33 billion) in 2019, up 8.7 percent on a yearly basis, a report released by Chinese gaming database Gamma Data Corp said.

Revenues generated from the esports industry jumped 16.2 percent to 96.96 billion yuan in 2019, growing faster than the overall gaming sector, the report added.

"With young gamers' growing purchasing power, they have already become the key driving force to drive esports-related consumption, and they are willing to pay for beloved stuff," Li said. "Looking ahead, the future esports industry will be able to boost the development of various sectors, such as the esports themed online dramas and other derivative products."

Today, buying hanfu for their pet cats is increasingly popular as a growing number of millennials largely born in the 1980s and 1990s have started to raise cats in their homes.

A recent report by Alibaba's e-commerce platform Taobao said sales of hanfu for cats jumped tenfold in early December from the year earlier.

Taobao noted in the report that almost half of the pet owners in cities are those born in the 1990s, and they usually take their responsibilities as pet parents very seriously.

"I love my cat so much, and it has become a full-fledged member of my family," said 28-year-old Cathy Liu, who lives in Beijing. "I just want to do my best to provide it a high-quality life."

Liu has spent more than 6,000 yuan ($860) on her cat in the past six months. Pet food gets the lion's share of this spending, or about 300 yuan per month. Other expenses include medicines, snacks, toys, vaccines, a cat climber and a bed.

"My cat provides me companionship and teaches me responsibility," Liu said. "My cat takes up most of my spare time. In fact, I would rather snuggle up with it than people around me. And I will suffer anxiety when separated from my pet. Once I have to leave for holiday travels or business trips, I need to watch it and even talk to it via pet cameras every day."

She's not alone. A growing number of young people in China are spending their time and money on raising cats. They are willing to purchase high-quality items for their precious pets.

By the end of 2018, there were approximately 67 million pet cats in China, a report by consulting firm Frost & Sullivan said. It noted that the love for cats by Chinese consumers has created a market worth 60.2 billion yuan in 2018.

The annual average spending on each pet cat was 3,117 yuan. Of that amount, the largest share is 1,340 yuan on average which was spent on food.

Experts believe China's pet industry will further develop along with the increasing number of pets and the growing purchasing power of pet owners. Frost & Sullivan estimated the market size of China's pet industry would reach 472.3 billion yuan by 2023, up from 172.2 billion in 2018.

Peng Kunyi, a researcher at Qianzhan Industry Research Institute, noted that cat-owning households are becoming more willing to pay for their cats, leading to greater prosperity in the cat economy.

"China has witnessed a significant surge in the number of pet cat owners," Peng said.

"The country has a unique family structure, namely the elderly, office workers and the only children. For the elderly, raising pet cats is playing a key role in easing their loneliness and enriching their spiritual life. And raising cats also can teach the only children responsibility. For office workers leading fast-paced lives, pet cats can provide companionship and help relieve stress."

The new trend is also backed by a new report released by e-commerce giant JD and global data analytics company Nielsen.

The report said young people born in the 1990s, especially those who live alone, are now the core group of pet owners.

"Those young working groups lack time and energy to walk the dogs. Many of them love cats for their independence. Compared with dogs, cats don't take up space and is not time consuming," the report noted.

Cat owners are mainly young females who are more likely to purchase some expensive high-quality items for their pet cats, the report added.

JD said that high-end and high-tech pet products were very popular during the recent Singles Day shopping event in 2019.

For instance, sales revenue for insect repellents for pets surged 243 percent year-on-year, and sales of litter boxes for cats increased 232 percent.

Peng from Qianzhan said a whole bunch of cat-related businesses are booming in China such as pet foods, pet clothes, supplies, medical care, insurance, hotels and services.

"Currently, China is still at the very early development stage of a cat economy," Peng added. "More efforts are needed to tackle problems, such as expensive medical bills and low-end food processing."

 

 

 

China's success in poverty alleviation and its massive middle-income group have brought huge opportunities for business cooperation, said Chan. His organization boasts around 200 members from the Midwest that all have economic ties with China.

"We're glad to see Chinese achievement in poverty alleviation, education and healthcare in the last decades and we wish more could be done in this regard in 2020," he said.

"We hope more Chinese enterprises will go global and land in the United States, bringing in capital, technologies and even manpower," Chan said, adding that Chinese Americans can play a more active role in deepening exchanges between the two sides.

Business cooperation between the two countries has also contributed to world peace, stability and economic development, he added.

According to Chan, local-level cooperation such as those between sister cities should be put into full play, and his organization has been promoting such economic and trade ties as well as investment.

The Midwest USA Chinese Chamber of Commerce will have a 150-square meter booth to promote US enterprises at the third China International Import Expo (CIIE) in Shanghai, he said.

The second CIIE, held in November 2019, concluded with $71.13 billion worth of tentative deals reached for one-year purchases of goods and services, a 23-percent rise from what was recorded in the first CIIE.

"A world-class enterprise and a number of small-and medium-sized enterprises on technology, food processing and others from the Midwest will join the next CIIE," he said.

Chan also called on the two countries to build a platform that could help channel limited resources into important areas like people's welfare, infrastructure and innovative social governance.

]]> 2020-01-04 00:00:00 http://www.chinadaily.com.cn/kindle/2020-01/04/content_37531229.htm Bayer Pharmaceuticals sees great potential in the Chinese market to foster innovation and digitalization, and has singled out China as one of its priorities, according to a top executive of the company.

Its president Stefan Oelrich said the company has a particular position of strength in China that is linked to its extensive history in the country, and is looking to further sustain and strengthen its position in the nation through strong innovation and digitalization.

"We have our research and development base in China. We hope to strengthen that in the future and to bet more on Chinese innovation," he said.

China's pharmaceutical demand has been booming in recent years due to the rapidly aging society with burgeoning purchasing power. It has become the world's second-largest market for pharmaceuticals, and the biggest emerging market with growth tipped to reach $145 billion to $175 billion by 2022, according to healthcare information company IQVIA.

The Chinese authorities have rolled out a series of policy reforms for drug registration, regulation, reimbursement, and public procurement process, with focus on innovation and homegrown research and development.

Experts said such a move aims at reconstructing and upgrading China's pharmaceutical market and will stimulate cooperation between domestic and foreign companies.

"China's pharmaceutical market has the greatest potential in the world, due to its tremendous population, even though it is now second to the United States," said Shi Lichen, founder of medical consultancy Beijing Dingchen Consultancy.

"Besides, opportunities arising from the restructuring of the market matter even more than the huge market size itself to multinational pharmaceutical firms eyeing the alluring market."

He explained that in the US, a typical mature pharmaceutical market, about 70 percent of the medicine expenditure paid by medical insurance are for original, innovative, or rare drugs, while in China about 80 percent of the payments from the public medical insurance funds are on generics, causing great financial burden to both patients and society.

That drives the authorities to reform related regulations and mechanisms to restructure the domestic market, with a focus on development and procurement of high-quality generics and novel drugs, which is creating room for further cooperation between domestic and foreign companies to explore new opportunities on R&D and marketing of high-quality generics and new drugs, he said.

Bayer Pharmaceuticals, the first to market in certain areas with advanced technologies, is increasingly envisaging to deepen its local cooperation with Chinese companies and Chinese academia, and also hopes to play a role in digital solutions for patients, an area China is very advanced with, according to Oelrich.

As Chinese digital giants, including big names such as Baidu, Tencent and Alibaba, have been betting on the healthcare industry in both consumer and business sectors, Oelrich said the combination of digital companies and traditional healthcare companies complements each other.

Digital companies have an advantage that the traditional players in healthcare may not have, coming from their use of big data technologies and smart algorithms that can connect across all sections of healthcare system, he said.

"Healthcare is very much structured in silos. You have the hospitals, you have other people that pay for it, and then you have the industry that provides medicines, devices, or solutions," he said.

Besides, as China is speeding up innovation in line with the Healthy China 2030 Initiative and improving patients' access to medicines and affordability, the company can bring innovations faster to Chinese patients, which means not only record-setting access for patients but also reimbursements that benefit the company, he said.

With deep roots in China's scientific community, the company also hopes to start exporting Chinese science to the rest of the world at some point, a new and upcoming trend in healthcare, he said.

Oelrich estimated China must have become the company's largest market in 2019 in terms of revenue, for the first time, despite the absence of any full-year data.

Bayer said its sales revenue in the Chinese mainland, Hong Kong special administration region and Taiwan province reached 3.13 billion euros ($3.47 billion) in 2018.

Local governments of Sichuan and Henan provinces offered a combined 87.6 billion yuan ($12.6 billion) of special bonds on Thursday. Authorities in the city of Qingdao, Hunan and Zhejiang provinces also released the special bond issuance plans for January. The total amount of special bonds may exceed 800 billion yuan in the first quarter, according to analysts and data from the China Central Depository and Clearing Co Ltd.

The capital raised from the special bonds will be invested into municipal infrastructure projects, environment protection and transportation. About 89.7 percent of the first batch of special bonds in Sichuan and Henan have maturity periods of more than 10 years, the Ministry of Finance said.

The earlier-than-ever local government bond issuance came after the People's Bank of China, the central bank, announced plans to inject 800 billion yuan in the financial sector by cutting the reserve requirement ratio (RRR) for banks by 0.5 percentage point on Wednesday.

The PBOC said the RRR cut will save about 15 billion yuan in funding costs for banks this year, and the injected funds may help to lower the new benchmark interest rate－the loan prime rate (LPR) when banks will report the rate later this month.

The central bank's move was to coordinate with the local government bond issuance, to prevent liquidity tightening when the bond sales rise in January, said Wen Bin, chief economist with China Minsheng Bank.

Local government bonds are more attractive for banks because of the lower risk and higher returns compared with corporate bonds, said analysts. For example, for the 10-year special bond for toll roads in Sichuan, the coupon rate was 3.38 percent, compared with 3.1956 percent for the 10-year treasury bond on Thursday.

Liu Yu, an analyst with Guosheng Securities, said on Friday that the quota for newly-issued special bonds in 2020 may reach 2.95 trillion yuan, 800 billion more than the new quota in 2019, as the local governments have to increase financing resources to strengthen investment but with a limit in the budgeted fiscal deficit. Her prediction was in line with many experts.

The Ministry of Finance released a statement on Friday, indicating that the local government bond issuance work of 2019 was "successfully" completed. A total of 4.36 trillion yuan of such bonds were issued, including 2.15 trillion yuan of special bonds.

To prevent local government debt risks, at a two-day annual meeting that concluded last week, Finance Minister Liu Kun asked local government officials to carry out debt dissolving plans "in a practical and detailed way", accelerate the market-oriented reform of local government financing platforms, most of which are indebted State-owned companies guaranteed by the local governments, and strengthen supervision to curb growth in implicit debt.

Individual investors have been allowed to buy local government bonds since March 2019, and this group accounted for 37 percent of all types of investors by the end of last year, the finance ministry said. The average coupon rate of local government bonds was 3.47 percent last year, 42 basis points lower than a year earlier, the statement said.

"With the deceleration in economic growth, policy support is still needed. We continue to expect a 20 to 30 basis points decline in the official one-year loan prime rate for this year and think the PBOC will also reduce the interest rate for its medium-term lending facilities," said David Qu, China economist of Bloomberg.

A research from Citigroup Inc said that the monetary authority is expected to keep an easing bias by maintaining a measured pace in the rate cut cycle, and policy rates, such as the medium-term funding rate, will likely drop by 5 to 10 basis points in the first quarter this year.

]]> 2020-01-04 00:00:00 http://www.chinadaily.com.cn/kindle/2020-01/04/content_37531249.htm Suspension of stock connect denied

China's top securities regulator on Friday denied media reports about the suspension of the stock trading connect between Shanghai and London. Reports saying that China has suspended the Shanghai-London stock connect are untruthful," said Chang Depeng, spokesman of the China Securities Regulatory Commission, at a regular news conference. Chang said that the stock connect is an important effort by China to open its capital market and to expand cross-border investment and financing. Reuters reported on Thursday that China had suspended the Shanghai-London stock scheme over political tensions with Britain.

Refined oil import quota unchanged

China will keep the quota for refined oil imports by non-State companies unchanged at 16.2 million metric tons for 2020, according to the Ministry of Commerce. A statement by the MOC listed the detailed application requirements for the import quota, including the scale of oil storage tanks and bank credit lines. China is one of the world's largest oil buyers. Customs data showed its imports of refined oil amounted to 27.25 million tons in the first 11 months of last year.

Employment up in Germany last year

Roughly 45.3 million people were in employment in Germany in 2019, an increase of 0.9 percent compared to the previous year, according to the Federal Statistical Office (Destatis). The increase was lower than the relevant growth of 1.4 percent in 2018. According to Destatis, the employment growth observed in Germany for the past 14 years continued but with less momentum. A higher labor force participation of the German population as well as immigration of foreign workers more than offset the effects of demographic change, Destatis said. The number of people in employment last year was the highest since German reunification in 1991.

]]> 2020-01-04 00:00:00 http://www.chinadaily.com.cn/kindle/2020-01/03/content_37531116.htm The People's Bank of China's decision to reduce the reserve requirement ratio, or the amount of cash banks have to set aside as reserves, will ease credit pressure for homebuyers but may not spur huge spikes in home sales, as the broad sentiment that housing is for living instead of for speculation remains unchanged.

The central bank cut the RRR on Wednesday for most financial institutions by 0.5 percentage point effective on Jan 6 to support the development of the real economy and lower social financing costs.

The across-the-board RRR cut on the first day of this year will help increase liquidity and lower social financial costs, with indications that more adjustments in loan and interest rates are in the offing, said Yan Yuejin, research director at the E-House China R&D Institute.

"The RRR cut, the first this year after three instances in 2019, indicates that the monetary environment is shifting from tight to loose, and will be positive for the real estate sector in terms of financing," said Yan.

Reasonably ample liquidity and social financing will open up more lending avenues for homebuyers in the first quarter, but property developers may continue to see crimped financing conditions, said Zhang Bo, chief analyst of Anjuke, a leading Chinese property portal.

Analysts said the application of the loan prime rate introduced by the central bank will possibly bring down home purchase costs.

The central bank had last Saturday decided to scrap the traditional benchmark lending rate for new loans starting from this year, and made the loan prime rate (LPR) the only benchmark rate for fresh lending starting this year.

Financial institutions and their clients can negotiate a floating rate higher or lower than the benchmark, and for those loans already issued but yet due, new contracts will be signed between banks and borrowers between March and August to shift to the LPR.

"The increased liquidity will likely lead to a cut in the LPR, which means the interest rate for homebuyers will be marked down too," said Zhang Dawei, chief analyst at Centaline Property Agency Ltd.

Despite the positive impact for homebuyers, industrial analysts said demand for homes will remain steady, as the annual Central Economic Work Conference has earmarked stabilizing land and home prices as well as market expectations as one of the key tasks to ensure steady and health development of the property market this year.

"The key target for the real estate market is to prevent risks, so that the financing environment for the property sector will remain stable in the future," said Xu Xiaole, chief market analyst with Ke Research Institute, a research organization under real estate brokerage platform Ke.com.

"It is highly likely that the central government will take steps to ensure adequate liquidity and lower financing costs this year, but such decisions will not be a stimulus for the property market. We have to bear in mind that housing is for living in, and not for speculation," said Ding Zuyu, CEO of E-House (China) Enterprise Holdings Ltd.

Xu said the consistent reserve ratio reduction since 2018 is a response to ease the financing difficulties of medium-and small-sized enterprises in particular as China's economic development is shifting from high growth to quality growth. The RRR cuts will not increase demand for home purchases, he said.

 

 

 

Moutai, a distiller from Maotai town in southwestern China's Guizhou province, closed at 1,130 yuan ($162) per share on Thursday after opening the day at 1,128 yuan. Though the company's share prices have declined from the high levels seen in May last year, it is still the most expensive stock in the A-share market with a valuation of more than 1.4 trillion yuan.

Other major liquor makers also saw lackluster stock performances on Thursday. Shares of Sichuan province-based Wuliangye Yibin Co Ltd and LuzhouLaojiao Group dropped by 0.7 percent and 1.42 percent.

Moutai said it expects to achieve full-year sales revenue of 88.5 billion yuan in 2019, up 15 percent year-on-year. Net profit during the same period was forecast to reach 40.5 billion yuan, up about 15 percent year-on-year, a slower growth rate for sales and net income from the previous two years, according to the company's estimates.

Last year, the distiller produced 49,900 metric tons of liquor, and 25,100 tons of series wines. This year, the company plans to sell 34,500 tons of liquor, which is 11 percent higher than its plan for 2019, and it aims to achieve an annual sales growth of 10 percent in 2020, according to the company.

In 2017 and 2018, Moutai achieved sales revenue of 58.2 billion yuan and 73.6 billion yuan, jumping 49.61 percent and 26.46 percent over the previous year. Its net profit reached 27.1 billion yuan and 35.2 billion yuan, surging 62.28 percent and 29.89 percent year-on-year.

Moutai, one of China's most prominent consumer brands, earlier became the first consumer stock with a market value exceeding 1 trillion yuan. As one of the leading stocks in the A-share market, Moutai has seen continuous steady growth and its rising share prices have been a trigger for several other peers. Once such companies report lower-than-expected sales, their share prices are likely to drop significantly, industry observers said.

This year, Moutai plans to establish its own e-commerce platform and further promote overseas sales of its products.

"Moutai plans to increase its self-operated product volumes and adjust its sales channels. The company's sales are expected to maintain steady growth. The distiller also might raise its ex-factory price to dealers to maintain good performance," said a research report from Sealand Securities.

The benchmark Shanghai Composite Index rose by 1.15 percent to close at 3085.2 points, the highest level since late April. The Shenzhen Component Index gained 1.99 percent to close at 10,638.82 points.

The market rally was led by internet and technology firms, financial companies, machinery and semiconductor manufacturers. The rise reflected investors' expectation of the monetary loosening by the central bank to help ensure reasonably ample liquidity in the market and reduce financing costs for companies to stabilize the country's economic growth, analysts said.

The People's Bank of China said on Wednesday that it will lower banks' required reserve ratio by 0.5 percentage point, which will be effective from Monday. The RRR cut is expected to release about 800 billion yuan ($115 billion) into the financial sector.

Zhang Yulong, chief strategist at China Securities, said that the latest RRR cut by the central bank will help ensure the stability of China's financial sector and maintain ample liquidity in the market ahead of the Lunar New Year holiday.

"It is also beneficial to the stock market and the A shares are likely to continue to rise with stocks in sectors like property, construction and finance being the preferred picks of investors," Zhang said in a research note.

Market confidence was also boosted by the stabilizing trend of the Chinese economy. The official purchasing managers index of the manufacturing sector, a gauge of factory activity growth in China, stood at 50.2 last month. It is the second consecutive month that the index has remained in the expansion territory.

Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, said that the Chinese economy continued to stabilize in December as business owners' confidence has been improving and there is a stronger willingness among them to expand production and increase stocks.

Economists expect more monetary loosening to come, but China's policy easing will be modest as policymakers intend to avoid using massive easing to stimulate the economy. They said that the monetary easing could help boost China's infrastructure investment and credit growth this year.

"More monetary easing should help boost credit growth from 10.8 percent in 2019 to 11.4 percent this year, although this rebound would be much more modest than previous episodes of policy easing," Wang Tao, chief China economist at Swiss bank UBS, said in a research note.

Wang expected another RRR cut by 0.5 percentage point over the rest of this year and a 0.1 to 0.15 percentage point cut of the medium-term lending facility rate after inflation peaks in the first quarter.

"Overall, we continue to expect sequential growth momentum to rebound in the first and second quarters and maintain our 2020 GDP growth forecast at 6 percent," Wang said.

The champion in terms of revenue was Pop Mart, a Beijing-based lifestyle retailer, which in nine seconds sold 55,000 toys in mini blind boxes－small, sealed packages containing collectible toys that are part of a series. It also sold more than 2 million art toys－designer toys normally designed by artists－worth 82.12 million yuan ($11.8 million).

The growth compared with the previous year's event is 295 percent, and it was only the third time Pop Mart had participated in the Singles Day shopping spree. All the other top four toy brands were foreign. According to Tmall, about 80 percent of the art toys sold on Tmall during the 2019 Singles Day were from Pop Mart.

The company said its victory over international leading toymakers did not come from low costs and large quantities, a stereotype of Chinese toymakers.

"We beat them by selling at decent prices and relying on our own brands," said Wang Ning, founder and CEO of Beijing Pop Mart Culture and Creative Co Ltd. "We are not selling copies of popular toys. We won by innovating a completely new toy category."

Compared to the brick toys and robots, Wang's toy empire is founded on art toys, and Pop Mart's toys are targeting mostly at teenage and adult consumers aged between 15 and 35－people they refer to as art toy collectors. The company has 2 million active registered customers.

"The growth in demand for toys from adult consumers is probably bigger than that from children and parents," he said. "And this has immense potential."

Walking into his Beijing office with its views of the central business district, one might mistake it for that of an artist. Filled with displays of collectibles, paintings and sculptures, the center piece is an electronic drum set that Wang occasionally plays.

Wang opened a store in 2008 in his sophomore year at university, renting out small spaces in the store to individual sellers. In 2010, he founded Pop Mart to sell arty designer products including accessories, makeup and digital products.

While the business was largely unsuccessful, Wang discovered one toy, SonnyAngel, was a big hit. In 2015, Wang took a risk and dropped many categories and focused on selling art toys, notably securing the licensing rights for the character Molly by Hong Kong toy designer Kenny Wong, founder of Kennyswork Co Ltd. His risky move proved successful.

Now defined as an integrated intellectual property operation service provider, Pop Mart is engaged in retailing art toys, acting as a broker for artists, developing new media entertainment and organizing large-scale exhibits.

In China's first-and second-tier cities like Beijing and Shanghai, Pop Mart has about 130 retail stores and more than 700 machine terminals, making it the largest art toy retailer in China. It has cooperated with well-known brands and artists around the world and launched a variety of popular art toys.

In 2017, Pop Mart publicly listed on the National Equities Exchange and Quotations, known as the "new third board", with a loss of 30 million yuan. In the following year, the company made a profit of 8 million yuan. In the first half of the third year after listing, Pop Mart reached a profit of 25 million yuan. The company went private in March 2019.

A total of 65 percent of Pop Mart's business comes from brick-and-mortar stores and the rest comes from online sales. Wang believes offline stores serve as a channel to not only sell products, but also create a space to cultivate a sense of culture.

According to global asset ranking firm Hurun, Pop Mart's capacity in building its own intellectual property supply chain－designing, manufacturing and retailing－has contributed to its sudden surge in the retail and entertainment sector.

"Our business is to commercialize and industrialize what artists have created," Wang said. "It is a pity that an artist can sell only 200 pieces of artwork. I want to bring them to a mainstream audience through our platforms and the ecology we have built."

Speaking about what makes art toys popular in China, Wang said it sometimes requires decades of cultivation for major international intellectual property such as Star Wars to make an impression on Chinese people. But art takes less time and effort, he said. "You could be moved to tears just by looking at a painting simply because it moves you," he said. "That is probably the charm of Molly."

According to Wang, art toys are popular with adults because they meet their desire to preserve rare and collectible figures, especially those hidden in blind boxes.

"Collecting is a natural human desire," said Wang. "Collecting art toys is similar to older generations collecting stamps, or rich people collecting paintings and antiques, girls collecting bags and boys sneakers."

Besides encouraging collecting, Pop Mart has cashed in on the popularity of its products in the secondhand trade market.

According to Xianyu, Alibaba's online platform for secondhand goods, since the second half of 2018, more than 300,000 blind boxes have been traded, with Molly toys traded more than 230,000 times.

Wang said the reason people want to trade and collect art toys such as Molly is the strong demand for the toys. "What has been revealed from the secondhand market is the tip of the iceberg," Wang said.

The desire for individuals to please themselves is also a market opportunity. Wang compares buying blind box toys to sending gifts to yourself. Opening a blind box and finding a rare figure involves anticipation, surprise and delight, he said.

In addition to retail, Pop Mart also engages in intellectual property operations, working with renowned organizations including The Walt Disney Company.

It collaborates with leading artists and nurtures young artists through courses at art academies around the country. Exhibitions attract hundreds of artists and serve as a talent show for Pop Mart to select partners.

Wang's vision is to be inclusive, and to nurture the entire market.

"If we want to become a company that creates something like Hello Kitty, it would make us a rival to all the toymakers," he said. "But working closely with those toymakers with influential intellectual property, we've become a distributor and collaborator."

Pop Mart has plans to become an incubator for global artists amid its fast expansion to overseas markets. With a presence in 20 countries and regions, Pop Mart's sales have achieved growth worldwide, Wang said.

He hopes overseas sales revenue will eventually contribute half of the company's total revenue, though at present it's below 10 percent.

"China has for so long been a top toy manufacturer, but never a leading toymaker," Wang said. Pop Mart now works with more than 30 domestic top toy manufacturers in Dongguan, Guangdong province, where it has manufactured toys for leading toymakers in the United States and Europe for decades.

"Our orders have taken up more than half of the manufacturing capacity of many such factories," Wang said. "High-end toy orders with more profitability and respect for internationalized manufacturing procedures are incentives to turn Chinese manufacturing capacities to producing toys for Chinese brands."

Art toy sector is still a niche market therefore is challenging to expand to mainstream consumers, said Jason Yu, general manager of Kantar Worldpanel China. However, Pop Mart's capacity to empower art toys with social features and to define them as trendy toys with popular IP and affordable prices have contributed to its high repeating purchase rate, he added.

In addition, Pop Mart's collaboration's and cross-over with other renowned IP have further widened its access to consumers, Yu said.

An art major, Wang said his vision is to make Pop Mart a company that spreads warmth and happiness, and a company that could become the Chinese equivalent of Disney or Netflix.

"We want to stand for well-known intellectual property. When consumers think of our logo, they feel happy," he said.

Nomura Holdings Inc's majority-owned securities joint venture in China, Nomura Orient International Securities Co Ltd, opened for business in Shanghai on Dec 20. It became the first newly formed securities joint venture, in which the foreign side holds a controlling interest, that has opened for business in China.

Nomura owns 51 percent of the outstanding shares of the joint venture, whose registered capital is 2 billion yuan ($287 million), Orient International (Holding) Co Ltd 24.9 percent, and Shanghai Huangpu Investment Holding (Group) Co Ltd 24.1 percent.

"It was beyond market expectations that China made strong efforts to push further opening-up in the financial sector last year, bringing a number of business opportunities for foreign institutions," said Tang Shengbo, head of China financials research at Nomura.

The country will lift foreign ownership limits on securities, fund management and futures companies by 2020, a year ahead of schedule, said the State Council's Office of Financial Stability and Development Committee on July 20 when it announced 11 measures to further expand the financial sector's opening-up.

Encouraged by policies, foreign shareholders of a joint venture in China may hope to take a controlling interest in the company or even hold 100 percent of its shares. Besides, some foreign financial institutions, which either withdrew from joint ventures they previously formed with Chinese partners or have not yet conducted business in the country, may apply for new business licenses or re-enter the Chinese market through mergers and acquisitions, analysts said.

"Foreign investors are now willing to invest in China's financial market, and the country is removing regulatory barriers to foreign investment. As the financial market is comprehensively opening up in many sectors including insurance, asset management and mutual funds, there is a lot to do for foreign investors in different business segments," Tang said.

Tang noted that foreign insurers holding a controlling ownership interest in joint ventures in China can set up asset management companies later, just like their Chinese counterparts.

"Recently, regulators have kept highlighting the principle of equal treatment for foreign and domestic investment. Many foreign-invested companies will think of ways to take the opportunity," he said.

"Policymakers and regulators need to make detailed rules for the implementation of these policies. They may even allow some existing regulatory frameworks of Chinese investment to be applied to foreign investment," Tang added.

China's accelerated opening-up of its financial sector since April 2018 will also bring development opportunities for the country's commercial real estate market, said Cushman& Wakefield, a global real estate services firm, in a report issued on Dec 18.

"As overseas financial institutions keep coming to China, they will bring business opportunities to the office market in first-tier cities and certain core second-tier cities. Meanwhile, overseas insurers will enter the Chinese market continuously and will hopefully give strong support to the bulk properties investment market," said Wei Dong, head of North China research at Cushman& Wakefield.

CG Lai, CEO of BNP Paribas (China) Ltd, said: "The year 2019 marked a set of milestones for China's further reform and opening-up of its financial sector, sending a strong signal of the country's determination to uphold an even more open economy, laying solid groundwork for further market liberalization and injecting confidence into all foreign financial institutions in the Chinese market.

"We believe that the policies toward liberalization are enabling foreign subsidiaries and branches in China to be more connected with their international franchise network, easing the procedures to leverage resources from parent companies, which ultimately address the growing and robust demands from both foreign and domestic clients."

BNP Paribas is one of the first two foreign banks that have received a Type A Corporate Bond Lead Underwriting License from the National Association of Financial Market Institutional Investors after China announced 11 measures in July to promote the further opening-up of the financial sector, allowing foreign banks to apply for such licenses.

"For all foreign financial institutions in China, the world's second-largest credit market is definitely appealing and will inspire a wider array of cooperative models and tailored products among domestic and local players," Lai said.

"Alongside a deepened engagement of foreign institutions in China over the past few years, market governance will be enhanced, driven by the participation of all, and we are confident it will reach new heights through an even more open financial environment in the near term," he said.

Further opening-up of China's financial sector will particularly benefit foreign asset managers, life insurers and securities brokerages, for some of the skills they have in these niche markets are not yet mastered by their Chinese counterparts, said Nicholas Zhu, vice-president and senior credit officer at Moody's Investors Service.

US-based asset manager Vanguard and Ant Financial Services Group announced on Dec 14 they had established a joint venture to provide a fund investment advisory service to Chinese individual investors, as approved by the China Securities Regulatory Commission. Ant Financial holds a 51 percent stake in the joint venture whose registered capital is 20 million yuan, and Vanguard holds 49 percent.

Back in 2017, Vanguard launched its wholly foreign-owned enterprise in China－Vanguard Investment Management (Shanghai) Ltd－in Shanghai free trade zone.

Charles Lin, chief executive officer of Vanguard Asia and chairman of Vanguard Investment Management (Shanghai) Ltd, said: "China's new round of opening-up of its financial sector provides foreign asset managers a rare opportunity to enter the Chinese market. Following the launch of a series of policies, the country will make big progress in its asset management industry, which will help the industry to keep up with international standards and practice."

In the past, many domestic asset managers took distribution channels and sales capability as the core of the asset management business. They built their resources, experience and abilities mainly in terms of looking for credit assets and designing financial products that were nested in multiple layers. However, as far as Vanguard is concerned, investment and asset management capabilities lie at the core of asset management, Lin said.

"As foreign asset managers, we think the road map for China's opening-up of its financial sector is crystal clear, and we believe the Chinese market will open up continuously. This has further consolidated foreign institutions' long-term confidence in China and has also given us clearer directions," he said.

"We hope that our company and the Chinese market and financial system will learn from each other, become accustomed to each other, and grow together. Only by building a better financial market and business environment through multi-party efforts, could we provide higher quality services to investors more efficiently."

Vanguard is looking forward to bringing its experience and advantages in mutual fund product investment, research and development in the US and other developed countries to China, promoting practices to develop an enduring investment philosophy, and launching mutual fund products, which are suitable for long-term investment by individual and institutional clients, he said.

 

 

 

 

 

Goat milk formula has been popularized and is better recognized by consumers after a decade of growth and more dairy makers are making investments in the product, given the increasingly fierce competition in the milk formula market.

Chinese dairy giant Inner Mongolia Yili Industrial Group launched its first goat milk infant formula product in the high-end segment in December. The product uses goat milk which is originated from the Netherlands. It is meant for babies till the age of three.

Yili said goat milk infant formula will be easier to digest and absorbed by babies and will help to enhance the resistance of infants to diseases. The launch of the new product will help the company to enrich its high-end product portfolio. Yili is the largest dairy maker in Asia.

"The market of goat milk infant formula has been growing rapidly in China. With scarce output and richer nutrition, the category is seeing good growth prospects," said Zhao Xin, vice-president of the Yili Group.

"With increasingly specialized nutritional demand from young mothers, the goat milk formula we have launched is expected to help revive domestically-made infant formula products," he said.

The goat milk formula market in China is forecast to hit 10 billion yuan ($1.4 billion) this year. The figure was 5 billion yuan in 2015 and 300 million yuan in 2008, said an industry report issued by the China Academy of Social Sciences.

Dutch dairy provider Kabrita, a sub-affiliate of Chinese dairy maker Ausnutria Dairy Corp, has taken a commanding 60 percent share in the imported goat milk formula market in China. The company said it plans to launch more diversified kinds of goat milk formula goods in the next few years.

A bottle of 800 grams of goat milk formula costs 274 yuan on Tmall, an e-commerce platform under Alibaba Group, higher than the similar size of traditional milk infant formula brands.

In the first half of 2019, sales of goat milk formula products under Ausnutria reached 1.32 billion yuan, surging 45.3 percent year-on-year. During the period, sales of milk powder jumped 20.7 percent year-on-year, according to the company.

"Compared with normal milk, the digestion rate of goat milk infant formula is closer to that of breast milk. Goat milk formula also contains more protein, fat, minerals and vitamins," said Wang Junbo, a professor at the School of Public Health of Peking University.

"With increasingly higher recognition of the nutritional values of goat milk by the public, goat milk has been more widely applied to dairy products and skincare products, and it is seeing ample growth potential in China," Wang said.

Some other domestic brands such as Guangdong Yashily Group and Synutra Dairy Group have become major industrial players in the goat milk formula market in China.

The new generation of young mothers have recorded higher and more personalized demand, so dairy makers have to conform to the trend and keep enriching their product portfolios to meet those requirements, industry experts said.

Song Liang, a dairy industry analyst, said the growth rate of goat milk formula has actually slowed down in recent years, with an increasing number of big companies promoting the category, and some small-and middle-sized companies will suffer a loss as a result.

"Yet, big brands can promote new products with their sales and marketing advantages, and the bonus from brand imaging still exists for major players," he said.

The benchmark Shanghai Composite Index gained 22.3 percent in 2019, its best annual performance since 2014. The Shenzhen Component Index also rallied 44.08 percent in the past year, the biggest annual gain in nearly 10 years.

Analysts believe that market sentiment will continue to be supported by investors' expectation of more capital market reforms this year, which will help boost the quality of the listed companies, improve the efficiency of the Chinese stock market and make it more market-oriented.

China's top leadership pledged at the Central Economic Work Conference in December to speed up financial sector reforms and continue improving the underlying framework of the capital market.

From diversifying financing channels for the country's private and smaller firms to further liberalizing the financial market to foreign investors, the reform measures have helped facilitate China's economic upgrading and defuse financial risks, analysts said.

The recently adopted revision of the Securities Law has also set the legal basis for China to expand the pilot registration-based system for initial public offerings to the whole A-share market. It means that the country's new share sale system will be market-based and administrative approval will no longer be required.

The capital market reforms have helped create more policy consistency and improved market transparency, which will boost investors' confidence and draw more institutional capital from home and abroad into the A-share market this year.

Analysts at Guosheng Securities said in a research note that foreign capital, insurance funds and wealth management money will continue to flow into the A-share market this year and they will be the most important supporting factor for any possible rise of the Chinese stock market this year.

This view was echoed by analysts at Industrial Securities who believe that institutional investors including insurers and pension funds have been flowing into the A-share market in a faster pace and the Chinese stock market will likely appear attractive to some investors as the global market has entered a period of negative interest rates.

Yang Delong, chief economist of Shenzhen-based First Seafront Fund, said that the valuations of the A-share market remain attractive compared with global equities markets and the trend of the stabilizing and steady growth of the Chinese economy in the mid and long-term has not changed, which will continue to draw global capital into the Chinese market.

Possible recovery of corporate profitability as a result of the government's pro-growth policies this year will also bring structural opportunities in the A-share market, analysts at BOC International said.

The China Securities Regulatory Commission, the country's top securities watchdog, is scheduled to hold its annual work conference this month. The CSRC is expected to lay out its work priorities and reform objectives at the meeting.

In September, the CSRC listed 12 priorities for deepening the reform of the capital market, charting a clear roadmap for the sector.

The key tasks include giving full play to the role of the STAR Market, the high-tech and innovative board on the Shanghai Stock Exchange, as an experimental field, encouraging listed companies to enhance their quality, further promoting the reform of the Nasdaq-style board ChiNext, and pushing faster improvement in China's National Equities Exchange and Quotations, or the "new third board".

In a bid to accelerate the high-level opening up of the capital market, China will implement opening-up measures and safeguard financial security in an open environment, the regulator said.

"With the implementation of the reform measures, China's capital market will see fundamental improvement to better play its role in facilitating economic transformation and high-quality development," said Han Qian, a professor at the School of Economics at Xiamen University.

Xinhua contributed to this story.

The futures market became the first sector in the Chinese financial industry in which foreign companies can have full control of their business entities as the country removed ownership restriction on futures companies on Jan 1.

An official at the China Securities Regulatory Commission said the regulator is keen to give foreign investors greater market access in a hope of consolidating and energizing the industry, which is less developed compared with the country's securities and fund industries.

The regulator is expected to issue a revised regulation soon on qualified foreign institutional investors, which will substantially expand their investment scope and allow them to trade in the derivatives market including financial and commodity futures and options.

Meanwhile, more types of commodity futures and options contracts will be made available for overseas investors this year. The Shanghai Futures Exchange will launch the trading of low-sulfur bunker fuel oil futures contracts and container freight index futures contracts this year, which will allow foreign investors to participate in trading. The exchange will also open copper futures trading to foreigners this year.

China has been accelerating the opening of its derivatives market since 2018 when the country launched the trading of crude oil futures contracts and opened it for the first time to foreign investors, a milestone development of the country's futures market. Following crude oil, three more products－iron ore, pure terephthalic acid and technically specified rubber 20 futures contracts－became available to foreigners.

The efforts underscored China's intention to boost its pricing power in the international commodity markets as the country has been a major importer of raw materials and commodities but has had limited pricing influence in the international markets.

The liberalization of the futures market will also help raise the global profile of the Chinese currency as the contracts of commodity futures and options contracts that are open to global investors are denominated in renminbi, or the yuan.

"The opening of the futures market is line with the development of China's international trade. It is also a necessary way to boost the international pricing capability of the Chinese futures market," Fang Xinghai, vice-chairman of the CSRC, said at a derivatives forum recently.

"The trading of both domestic and foreign investors in the futures market will help create a more consistent, transparent and fair market pricing … and the yuan-denominated contracts will help push the internationalization of the renminbi," Fang said.

Fang said the securities regulator will continue to enrich the derivatives market by approving and offering more products to investors at home and abroad this year. In December, two new option products, the gold option and CSI 300 stock index option, debuted in the market and more are expected as the regulator aims to strengthen the functions of the country's commodity and financial derivatives markets to offer companies and investors more tools to manage risks amid a slowing economy.

Wang Wei, director at the market economy research institute of the Development Research Center of the State Council, said promoting the two-way opening of the futures market will allow China to better participate in the allocation of global resources and ensure the national economic security and stable growth while enhancing the country's global competitiveness and pricing influence.

Li Zhengqiang, chairman of the Dalian Commodity Exchange, said the financial industry should serve the economy by providing not only necessary funding but also efficient risk management products and services, which include important tools such as forward contracts, futures and option contracts.

The view was echoed by Xiao Gang, former CSRC chairman and now a national political adviser. He urged the country to fully unleash the risk-hedging function and accelerate the internationalization of the derivatives market, an indispensable part of the country's financial sector.

The development and liberalization of China's derivatives market has been welcomed by global investors who will gain more access to hedging and risk management tools for their exposure in the onshore capital markets.

"I think what is welcome is the continued ability to allow investors to innovate in terms of hedging tools and derivative trading. The expansion of derivatives in the Asian financial markets has been an important step for overseas investors to gain confidence in the ability to access the market in a more liquid fashion," said Kevin Anderson, head of investments for Asia-Pacific at State Street Global Advisors.

Christine Lam, chief executive officer of Citi China, said the US bank Citigroup is seeking opportunities to develop new types of business and obtain new licenses as China will remove foreign ownership restrictions for futures.

"We are interested in this type of business. As foreign investors are increasingly taking part in China's financial markets, our clients' demand for risk hedging and mitigation products such as futures is also on the rise. We look forward to the opportunities to develop new business," Lam said.

Another positive development is that the country's lawmakers are accelerating futures market legislation. The first Futures Law is already in the national legislative process and lawmakers are reviewing the draft.

While China's futures market came into existence in the early 1990s, there has not been an industry law that governs and regulates the sector. Investors are hoping that the first Futures Law can be approved by national lawmakers as soon as possible.

Fang, the CSRC vice-chairman, said the legal process of the futures market has lagged behind the market's fast development.

He noted that China should carefully study the mature legal and regulatory systems in international markets and borrow useful experience and expertise to push the domestic rules and regulation to be consistent with international standards and practice.

It is precisely this aspect that has kept Chen Haibo, founder and CEO of DeepBlue Technology, a Shanghai-based AI company, occupied in the past year by sharing his understanding of the topic through intensive writings and lectures.

So when his new book Talk About AI to Government Leadership made its debut last week in the Party School of the Central Committee of the Communist Party of China, responses were exceptionally popular.

"The subject has always attracted tons of attention and inquiries," said Chen, whose firm offers an array of AI-backed services. "You can easily sense the enthusiasm from government and State-owned enterprise representatives of all levels about utilizing this cutting-edge technology."

China has upheld AI as a key cornerstone to drive the next phase of growth, unleashing a series of policies in the past two years to bolster the sector's development. The guiding "New Generation AI Development Plan" has set 2030 as the year for accomplishing the global AI lead, with a bevy of milestones to be reached by the end of 2020.

"The pursuit of AI-related knowledge shows their eagerness for strategically emerging industries, and how they want to drive economic growth using technologies in a sustainable manner," he said.

Chen's book starts with a historical retrospect on the different impetuses driving growth worldwide, and pinpointed AI as the next engine that will revolutionize industries and power economic transformation. He has taken care to avoid technical jargon and keep the language straightforward and easy to comprehend.

"While internet represents explosion in scale and innovation in business models, the core game changer is so-called 'hard-core technologies'," he said. He said the foreseeable abundance of AI-related graduates, the wealth of data, as well as the government's determination in driving AI initiatives, are conducive to China's goal of leading the global AI pack.

It is imperative that government officials follow the AI trend, riding the next wave of information technology and swimming with the tide, said Xu Weixin, former vice-president of the school, on the same occasion when the book was unveiled.

To this end, the school held a one-day seminar with a particular focus on how smart cities should be developed with the aid of new technologies like AI and blockchain.

"We need to understand the technology and its law of development, and optimize relevant laws and regulations so as to bolster the healthy development of such emerging technologies," Xu said.

It is critical for people in leadership positions to understand the relationship between AI and the Fourth Industrial Revolution, the role of the digital economy and how technologies can be integrated into the manufacturing sector, all of which are properly addressed in the book and relevant lectures, said Ni Guangnan, an academician at the Chinese Academy of Engineering.

"And it's important to share concrete examples and case studies in the application of such technologies, making it the profound and seemingly-distant technology relevant for decision-makers at all levels," Ni said.

DeepBlue's Panda Bus fleet is an example of how AI could ensure a safe and smooth public commuting experience. The smart vehicle uses a combination of AI technologies including computer vision, biometrics, autonomous driving and voice recognition to give buses a digital makeover.

"Our deal in Tianjin is the first government procurement of self-driving buses of its kind worldwide," Chen said. "It shows the boldness and determination of how the government wants to improve people's livelihood leveraging technological leaps."

A recent report by global consultancy Accenture pointed out that AI has the potential to add as much as 1.6 percentage points to China's economic growth rate by 2035.

"Policymakers should prepare the next generation for the AI future … and advocate a code of ethics for AI," wrote Mark Purdy, managing director Accenture Research and lead author of the report.

Not having enough access to efficient charging piles remained problematic for EV drivers in China, according to a McKinsey survey.

With the total number of EV chargers climbing dramatically by 61.2 percent year-on-year to 1.17 million units by November, services bridging between charging stations and drivers have emerged as a top concern.

Buoyed by increasing demand for charging services, a rising number of EV charging infrastructure operators in China are exploring new business potential through information sharing, mapping, battery maintenance, and many other sectors, an expert said.

"As the total number of EV charging piles increase, EV drivers' demand for charging services like information and battery maintenance will soar," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

China's EV charging service market is estimated to create an industry value worth 2.2 billion yuan ($315.9 million) by 2020, a report by industry association China EV100 and the Natural Resources Defense Council said.

The boom in China's EV charging service sector came as the government is extending its financial support to the operation of charging stations.

As a result, subsidies will be offered to EV charging operators that are commercially viable and able to guarantee a minimum usage and will no longer be easily available for electric vehicle charging infrastructure makers, Lin said.

"It is natural that an increasing number of companies are rushing into the sector and trying to take a share in the promising business. For them, it (developing EV charging services) is also a good opportunity to have businesses with added value and generate new growth points. Currently many of them fail to make ends meet," said Lin.

China's largest charging infrastructure provider Qingdao TGOOD Electric Co Ltd with 2 million kilowatt-hour annual charging capacity and about 190,000 charging piles, has joined hands with the second player State Grid Corp of China, the third-ranked Star Charge, as well as China Southern Power Grid to launch a website and app for classifieds for EV drivers, named Uniev, to tap the growing market.

By November, Uniev has its platform connected to over 390,000 public charging piles which make up about 85 percent of China's total. The platform covers information about the locations of the piles, availability such as whether it's fully occupied, prices, and user ratings.

The platform has also been developed for adaptation into various platforms like mobile phones, a mini app on WeChat, government platforms and in-car systems.

Huang Shan, general manager for charging services at Uniev, said the company has partnered with nearly a hundred charging operators and NEV manufacturers. It will continue offering products and solutions for NEV drivers, charging infrastructure providers, and NEV manufacturers.

The technology, media and telecom business has been the fastest growing business in Citi's China franchise in recent years. Its TMT business has grown by double digits every year since the bank set up a team specializing in the TMT sector at the end of 2016, said Jianxun Toh, head of technology, media and telecom of Citi China Corporate Banking.

Gerald Keefe, head of Citi Asia-Pacific Corporate Banking, said, "We see the innovations that the Chinese new economy players have created and probably perfected here in China as very attractive to the rest of the world, and that attraction is promoting their expansion."

Keefe further explained that the innovations which have made commerce more accessible to people, and which have promoted financial inclusion by enabling people who did not have access to banking to make and receive payments, are easily identifiable examples of innovations from the Chinese new economy that are spreading globally.

"Our role in this is to support these Chinese new economy champions as they expand globally by making our global network available to them, which provides rails for their systems to run on," he said.

Being physically present in almost 100 countries and regions, Citi provides financial services in more than 160 markets. The bank maintains 13 China Desks around the world, out of a total of 32 Asia Desks it has globally, to support its global clients as they go out and invest, and develop their business worldwide.

Within each country, Citi has banking teams that cover financial institutions, the public sector, subsidiaries of multinational corporations, and locally headquartered corporates. Within each of those teams, it has groups specializing in certain industries, namely TMT, energy, power and construction, consumer and healthcare, and diversified industrials.

"The desks where we send people out overseas are typically staffed by mainland residents whom we hire and train here (in China) and then give them an opportunity to go out into the Citi network and be global bankers," Keefe said.

"Our Chinese clients have a very high standard for turnaround time and a very high expectation of how hard their bankers are going to work. So we send bankers out to meet those expectations in local language because it makes the whole interaction of the Citi network with those clients more effective," he said.

Bob Zhang, Citi's China Desk head in Europe, said, "New economy companies make decisions quickly and require banks to respond much faster than they do to companies in traditional sectors… This has raised new challenges for us in terms of product innovation and customer responsiveness, forcing us to optimize our internal procedures and make decisions more quickly."

It is worth noting that in recent years, the types of Chinese TMT companies that are going global are evolving from hardware manufacturers and large technology companies to technology platforms in a horizontal market, as well as small－and medium-sized payment service providers. Citi provides TMT companies with wide-ranging financial services including on-the-ground support as they enter new markets, cash management, supply chain financing, and strategic advice on industry developments, Toh said.

The number of fintech companies, especially third-party payment processors, that enter the European market, keep rising because Europe has higher standards for personal privacy protection and information safety than any other continent. Many companies believe that once they successfully enter the European market, it will be easier for them to enter other markets. Emerging fintech companies are using Citi's platform to help merchant clients expand their business overseas, collect cross-border payments, and send the money back to their bank accounts in China as quickly as possible, and settle a payment in renminbi at the best exchange rate, Zhang said.

Alibaba Group Holding Ltd is scheduled to launch its annual sales campaign for the upcoming Chinese Lunar New Year from Thursday, with a goal of helping farmers sell over 150 million kilograms of agricultural products during the monthlong festive season.

Alibaba plans to maximize public exposure of local produce from impoverished regions by linking customers with a dedicated, onestop landing page via Taobao's home page.

"Our purpose is to help farmers increase their income and make quality, yet affordable, agricultural produce more accessible to the vast consumer group," said Li Shaohua, vice-president of Alibaba and general manager of its rural business unit Rural Taobao.

Dubbed "Rural Produce and Fresh Food", the channel hosts e-shops from 832 poor counties across China. Local products are displayed and introduced through vivid story telling in a variety of media formats.

Prospective buyers are also expected to be drawn by livestreaming shows, which exhibit farmers and local government officials coming together to promote goods and discuss opportunities and challenges of local interest.

During the last Nov 11 shopping festival held by Alibaba, agricultural product sales jumped 64 percent year-on-year to 7.4 billion yuan ($1.06 billion). A total of 370,000 livestreaming shows were conducted in September alone, which offered 1 billion agricultural items via online channels.

Li said the platform will look to cultivate 1,000 livestreaming hosts from poverty-stricken areas in 100 counties and help them each generate more than 10,000 yuan in monthly income. The platform will also work with media outlets such as China Central Television to curate professionally-produced content about fresh produce as well as the farms themselves.

Encouraging self-development and empowerment of the poor population through novel measures has proved to be an effective approach as China aims to achieve total poverty eradication by this year, according to experts.

"Multisectoral approaches, targeted strategies, leadership, constant innovation such as using e-commerce to connect farmers to markets have been core enablers of poverty alleviation in China, by adding income and enhancing commitment," said Ehizuelen Michael Mitchell Omoruyi, executive director of the Center for Nigerian Studies at the Institute of African Studies, Zhejiang Normal University.

Other platforms have also upped the ante. Shanghai-based social commerce site Pinduoduo said a dedicated project that sells farm produce from poverty-stricken regions earned "record revenue" and is on course to make the endeavor into a regular poverty relief initiative with the assistance of information technology.

E-commerce major JD said in the first half of 2019 people spent 6.6 times that of the previous year on agricultural produce from poor counties via its platform. In just three years' time, sales of dragon fruit, pineapple and avocado from rural regions surged 8, 3.3 and 3.4 times by the middle of last year, JD's data showed.

"E-commerce-powered poverty elimination is expected to gain bigger momentum this year, as the internet facilitates not just the consumer end (i.e. making it easy for people to purchase) but the industrial end, meaning research and development, manufacturing and logistics for agricultural produces can be customized and automated through the adoption of artificial intelligence, big data and cloud computing," said Li Yongjian, a researcher of the internet economy at the Chinese Academy of Social Sciences.

China has vowed to eradicate poverty in all poor counties and regions by this year to build a moderately prosperous society in all aspects.

The launch came as Wanda Film is seeking ways to reverse its fortunes after it saw net profit drop by 57.25 percent year-on-year to 829 million yuan ($118.68 million) for the first three quarters of the year.

The Prime line cinemas of Wanda will have RealD Ultimate Screens which are expected to bring in an enhanced visual experience, high frame rates, and Dolby Atmos, according to the company.

Wang Qi, chief technology officer of Wanda Film, said the company is working to offer top-notch technologies and individualized services for an enhanced film watching experience.

High technologies have been a focus of efforts by Wanda to lure back moviegoers.

Earlier this year, Wanda agreed to install 20 Cinity Cinema Systems in its cinemas. The system offers film screenings in 4K stereoscopic 3D at 120 frames per second, which is considered superior compared to the often-used 24 frames per second.

Wanda was not the only one to bet on high-tech embedded film screenings to boost profits.

Major cinema chain Guangzhou Jinyi Media Corp also agreed to install 20 Cinity Cinema Systems in its cinemas earlier this year after seeing its net profit drop by 24.17 percent year-on-year to 105 million yuan for the first three quarters of this year. So did Bona Film Group Ltd.

"There are many reasons. Viewers' enthusiasm was cooling. Consumers' spending on entertainment was weakening due to economic slowdown. Supercheap film tickets (sold at 9.9-19.9 yuan per ticket) were rare on the market," said Chen Shaofeng, a professor of culture and entertainment at Peking University.

Chen said the booming home cinemas and rapidly-developing online streaming services are also part of the reason for the changes.

"Many industry people hold the view that current film screening services had outstripped movie going demand," he said.

In the first half of 2019, the total box office revenue stood at 31.17 billion yuan in China, down 2.7 percent year-on-year, data from National Radio and Television Administration showed. Total cinema visits were 808 million during the same period, a decline of 10.3 percent year-on-year.

"As film giants are betting on tech-embedded enhanced film screening services, film technology companies like Imax and Dolby are enjoying great popularity among cinema chain companies," Chen said.

Imax China has posted a double-digit growth in box office revenues from cinemas supported by its systems in the first half of this year.

"Aside from tech-embedded film screenings, cinemas are also eyeing non-box office sectors to boost new revenues," Chen said.

A report from industry analysis website Forward the Economist said revenue from ads shown before a film's screening is expected to create a 20 billion yuan market in 2020.

"In addition, sectors like film-related accessories and dining are also growing," Chen added.

Wanda Film's merchandise sales and dining had a 67.43 percent profit margin in the first half of 2019. Its ads business had a 65.43 percent profit margin in the same period. Its businesses leading to box office revenue, which accounted for 80 percent of Wanda Film's operation cost, only had a profit margin of 6.07 percent.

Talking about future potential of those sectors, Chen made a reference to Disney. In 2018, Disney reaped big bucks from its parks and resorts business, having netted $20.3 billion out of total revenue of $59.43 billion. Earnings from consumer products and interactive media contributed $4.65 billion to the total revenue.

"Although Chinese cinema companies are still at a very early stage in developing businesses in non-box office sectors and are facing challenges like copyright protection, many companies are on a fast track exploring this field," Chen said.

Thanks to direct freight train service between China and Europe, Chinese businesses with an intimate knowledge of the European market have stepped up their game in Europe's Christmas economy by means of innovation and new designs.

The latest data from Germany's Federal Statistical Office showed that in 2018, the country imported 17,720 tons of Christmas items worth around 143 million euros ($159 million). Nearly three quarters of the items were from China.

In fact, from decorative LED lights to automated Santa toys, more than 60 percent of the world's Christmas-related merchandise come from the eastern Chinese city of Yiwu, around 260 km south of Shanghai. The great variety of holiday products there have earned the place a nickname: "China's Christmas Village".

"European customers prefer simple and elegant designs for Christmas trees, green pine trees with snow, and a couple of jingle bells would be enough," said Zhu Zhijuan, who discussed different regions' preference regarding the choice of a Christmas tree.

Based in Yiwu, her company Xintean Arts and Crafts have been making artificial Christmas trees for 15 years. Its annual revenue amounts to 100 million yuan ($14.3 million), and is expected to grow 10 percent this year, Zhu said.

In Yiwu, the Christmas goods section alone boasts 15,000 varieties. The manufacturers have their own organization－the Yiwu Christmas Products Industry Association－and follow regularly published market indicators.

The local commerce bureau has listed 333 exhibitions around the globe as recommendations for local businesses to attend. Shortly after the holiday season, in January or February each year, for example, Zhu will go to Frankfurt Consumer Goods Trade Fair in Germany to get prepared for the coming year.

More and more Chinese products have made their way onto the shopping lists of European households in the holiday season.

In downtown Brussels, local residents were busy with Christmas shopping at Kam Yuen Supermarket, the largest Asian supermarket in Belgium.

"Kam Yuen used to be a small shop for Chinese people, now 70 percent of the customers are non-Chinese," said Liu Jingrui, CEO of Kam Yuen Investment.

In Warsaw, Chinese retailer MINISO has become one of the most popular places for Christmas gift shopping, and their best-seller this year is a stuffed snowman imported from China.

Piotr Piorkowski, the shop's manager, said that the customers like the original design of the Christmas products sold there and the quality they get for the price they pay.

For Anna Godlewska, co-owner of Amko Toy Store in central Warsaw which imported 90 percent of its customers' goods from China, its love for Chinese toys is obvious: Two days before Christmas, all the products in the store like dollhouses, stuffed animals and baby shoes were sold out.

"People love to buy products from China for Christmas because they have a reasonable price and really good quality," said Godlewska.

In Budapest, a lot of Hungarians turn to Chinese tech products for Christmas gifts for their loved ones.

According to Extreme Digital, a leading Hungarian online marketplace, their best-selling products during Christmas this year were the Chinese sandwich maker and a smart fitness watch produced by Huawei.

Total retail sales of consumer goods is likely to reach 41.1 trillion this year, up 8 percent on a year-on-year basis, said Wang Bin, deputy director-general of the ministry's department of market operations and consumption promotion.

Thanks to emerging business models such as fresh food and broadcasting-themed e-commerce, as well as the expansion of global firms including the US warehouse club chain Costco and German supermarket chain Aldi in China this year, the country's online retail sales amounted to 7.6 trillion yuan between January and November, up 19.7 percent from same period a year earlier.

The strong growth has also been driven by the diversified import channels, service sector, daily living expenses, the nighttime economy and strong purchasing power from China's central and western regions this year, Wang said at a media briefing during the ministry's year-end meeting from Sunday to Monday.

Boosted by cross-industry cooperation, digital tools and e-commerce related business models, Wang said China's booming consumption sector has created a large number of jobs and built better infrastructure network in the country's lower-tier cities, counties and rural areas.

For instance, the number of deliverymen at Meituan-Dianping, one of the country's largest on-demand service platforms by sales revenue, surged from 2.7 million in 2018 to 4 million this year.

"With digitalization being one of the trends of China's takeout business, the delivery options have also expanded. In addition to food and beverage, orders for flowers, green plants, cosmetics and daily necessities have grown in recent years," said Hu Jianping, deputy director-general at the ministry's department of market system development.

She said that meeting the daily needs and festive demands is a new consumption trend across China. Consumption potential can be further unleashed by increasing residential incomes and improving product quality to build a strong domestic market.

Though many parts of the world are confronting downward economic pressure, a strong domestic spending power with many emerging service and business modes is key to attracting foreign direct investment in the long term, said Zong Changqing, director-general of the department of foreign investment administration development at the Ministry of Commerce.

For the next step, the ministry will accelerate the upgrading of pedestrian streets in the country's major cities, and further release consumption potential in the country's rural areas via e-commerce, modern agriculture, tourism projects and infrastructure development.

Apart from building a sound domestic consumption environment, Xian Guoyi, director-general at the ministry's department of trade in services and commercial services, said the government will study and formulate a negative list for cross-border service trade in 2020.

He said China will expand service exports, cultivate new growth points in service trade and further enlarge the global market for service trade next year, as well as import more quality services to meet domestic demand.

These moves target short-and long-term consumption, and focus on stabilizing products such as passenger vehicles and digital goods, while also cultivating new drivers from service sector and 5G technology, said Ma Yu, a researcher at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.

In their eyes, doom and gloom seemed the only possible scenario for the country amid trade disputes and mounting external uncertainties. However, the resilience and vigor of the Chinese economy have proved quite the opposite.

Here is a fact-check on how at least six claims about China's economy have fallen apart.

Natural slowdown or bleak growth?

Some scaremongers have long tried to sell the message of a "hard landing" of the Chinese economy, whose resilient growth this year made this theory all the more flimsy.

China's GDP expanded 6.2 percent year-on-year in the first three quarters of this year, data from the National Bureau of Statistics showed. The growth, in line with the government's annual target of 6-6.5 percent set for 2019, still outpaces other major economies including the United States, Japan, Germany and India.

A slowdown, rather than a steep fall, is "to be expected and is not surprising or alarming in any sense", as the economy is moving along an expected natural path of maturing growth following its unprecedented growth pace over four decades, said Ahmed Saeed, vice-president of the Asian Development Bank.

Global ratings agency Fitch in November maintained its A+ credit rating on China, affirming its stable growth outlook supported by the country's robust external finances and strong macroeconomic performance.

Stable job market or employment crisis?

Navigating headwinds, China has delivered robust job gains with a stable unemployment rate instead of the massive layoffs predicted by some. NBS data showed that 12.79 million new urban jobs were created in the first 11 months of this year, exceeding the annual goal of creating more than 11 million new jobs.

As China's economic structure has shifted from being industry-led to service-led, the growing service sector, new business models and multiple support policies are also generating more opportunities.

Every percentage point growth of the country's economy can be translated into about 2 million new jobs, said Liu Aihua, spokesperson of the NBS, adding that the job market is kept stable as steady economic growth, structural adjustments and entrepreneurial innovation continue apace.

Made-in-China: Boom or gloom?

In another sign of economic resilience, made-in-China continued to display dynamism despite increased downward pressure. NBS data showed that the purchasing managers' index for China's manufacturing sector re-entered the expansion zone by firming up to 50.2 in November from 49.3 in October.

Analysts suggested that China, as the only country that possesses all the industrial categories in the United Nations industrial classification, has the competitive edge of a complete and efficient supply chain.

As the country continued its structural shift to quality-oriented growth, high-tech manufacturing has also been forging ahead, with an output increase of 8.9 percent in November, and investment surging 14.8 percent year-on-year in the first 11 months of this year, far outpacing the manufacturing sector's average growth of 2.5 percent, official data showed.

Foreign trade: Firming up or faltering?

At odds with what some market observers may have surmised, China's foreign trade remained steady this year, climbing 2.4 percent year-on-year to 28.5 trillion yuan in the first 11 months with exports of high-tech, high-quality and high value-added goods expanding at a faster-than-average rate.

The scope and scale of foreign trade has kept growing as China opens wider to the world. In the first 11 months of this year, China's trade with the European Union and ASEAN expanded, while trade with countries involved in the Belt and Road Initiative reported faster growth than the overall average to account for 29.3 percent of the total trade.

China's commitment to increasing imports is evident in hosting the China International Import Expo and adjusting import tariffs for a range of products starting next year, allowing other countries and regions to share in China's development.

Foreign firms: Investing or retreating?

Misgivings about foreign firms faced with trade tensions and rising costs withdrawing from China are overblown, as the country saw foreign direct investment utilized in the first 11 months of this year rising 6 percent year-on-year, and more than 100 new foreign-invested firms set up every day.

China remains the second-largest recipient of FDI and the largest among developing economies, according to a report by the United Nations Conference on Trade and Development.

The country has taken concrete policies and legislative measures to improve its business environment that grants equality of rights, opportunities and rules for domestic and foreign companies alike, ascending 15 places to rank 31st globally this year on the World Bank's ease of doing business list.

Capital market: Improving or imploding?

Defusing risks and improving the market system, China saw its capital market make a bullish run this year, with the Shenzhen Component Index rising almost 40 percent and the Shanghai Composite Index up nearly 20 percent from closing on the last trading day of 2018.

China's financial opening-up efforts, which include stock connect schemes and scrapping QFII and RQFII quotas into the country's capital market, as well as its strong and increasingly international currency, made yuan-denominated assets more attractive to investors worldwide as foreign holdings of Chinese stocks and bonds jumped 53.56 percent and 27.6 percent respectively in the first nine months of this year.

Inclusion to and increased weighting of China's stocks and bonds in global benchmarks like the MSCI, FTSE Russell, S&P Dow Jones and Bloomberg Barclays index are expected to channel more foreign capital into China's financial market, while ongoing reforms including the registration-based IPO system and spin-off listings bode sustainable growth.

En route to high-quality and more sustainable growth, China is yet to dazzle the world as it stands poised to finish building a moderately prosperous society in all respects next year and turn its institutional strength into better governance in the long run.

 

 

 

 

 

Shanghai-listed Chongqing Iron and Steel announced on Friday in a statement that its actual controller, Four Rivers Investment Management Co Ltd, had signed a letter of intent with China Baowu on transferring the controlling stake in the steelmaker.

According to the statement, China Baowu would take the controlling stake in Chongqing Iron and Steel through a share purchase. The deal is expected to be completed by the end of next June.

"Taking a controlling stake in Chongqing Iron and Steel is one of the latest acquisitions and consolidations China Baowu has made in the past few years since it unveiled the target of expanding its capacity to 100 million tons by 2021," said Wang Guoqing, director of the Lange Steel Information Center.

In its development scheme published in November 2017, China Baowu set a goal of expanding its output from 80 million tons to 100 million tons between 2019 and 2021.

China Baowu, a monolith formed by the merger of Shanghai-based Baosteel Group and Wuhan Iron and Steel Group in Central China's Hubei province in December 2016, is the nation's most competitive steelmaker with a production capacity of 70 million tons, second only worldwide to the Luxembourg-based ArcelorMittal.

The steel mill keeps expanding its scale. In June this year, it announced it would acquire Maanshan Iron and Steel Co Ltd (Magang), whose output of crude steel totaled 19.64 million tons in 2018.

"Magang has 20 million tons of steel capacity, and its unique product portfolio will extensively consolidate Baowu's strengths and increase its output to more than 90 million tons," said Chen Derong, chairman of China Baowu.

Chongqing Iron and Steel, established in 1997, went through a mixed ownership restructure at the end of 2017, according to ThePaper.cn report. Four Rivers is a fund launched in 2017 committed to forwarding the steel industry's restructuring and upgrade.

Baowu's Hwabao Investment Co Ltd and US-China Green Fund originally held 25 percent each in the fund. WL Ross & Co owned 26 percent and China Merchants Finance Holdings Co Ltd held the remaining 24 percent.

"Based in southwestern China, Chongqing Iron and Steel will also complete China Baowu's nationwide presence, as the steel giant already has a presence in the East, South, Northwest and most recently the North by Shougang Group transferring 15 percent of its listed arm stake to Baowu in November," said Wang.

"We are going to see more mergers and acquisitions in the future as an industry-wide restructuring and upgrade continues to roll out," she added.

By 2025, the country's top 10 steel enterprises will have their combined output contribute between 60 percent and 70 percent of the nation's total, among which, the top three or four companies' annual capacity will reach 80 million tons each, according to the target set by the State Council.

 

SMEs play important role in fostering economy

China's medium-sized, small and micro enterprises made important contributions to the country's economic development during the 2014-18 period, official data showed. At the end of 2018, the number of medium-sized, small and micro enterprises rose 115 percent from 2013 to 18.07 million, making up 99.8 percent of all legal entities, according to a report on China's fourth economic census released by the National Bureau of Statistics. Those enterprises employed around 233 million people, accounting for 79.4 percent of all enterprise employees nationwide, the report said. Total annual operating revenue of those enterprises stood at 188.2 trillion yuan ($26.9 trillion) in 2018, accounting for 68.2 percent of that from all companies in the country.

CDB transfers $14.29b to small businesses

The China Development Bank, a major policy bank, has so far transferred 100 billion yuan ($14.29 billion) of loans this year to boost the development of small and micro firms and spur industrial growth in poverty-stricken areas. Since the beginning of this year, the loans have been channeled to 322 banks, benefiting more than 120,000 small and micro-sized firms. Of the total, loans worth 10.5 billion yuan have reached some 100 impoverished counties and helped lift tens of thousands of people out of poverty. The CDB will continue to give full play to the vital role of development finance institutions and provide high-quality and effective financing services for real economy.

Coking coal imports increase in November

China's imports of coking coal saw steady growth in November, according to data from General Administration of Customs. Last month, the imports of the coking coal surged 16 percent year-on-year to 6.18 million tons, customs data showed. The import turnover reached $7.89 million, decreasing 3.9 percent year-on-year. From January to November, a total of 72.8 million tons of coking coal was imported, up 17 percent from the previous year, according to the GAC. The main use of coking coal is to refine coke, material for making steel.

COMPANIES AND MARKETS

China sees record daily number of startups

China's market vitality has been further boosted this year due to easing market access and streamlining approval procedures, according to the country's top market regulator. Around 21.79 million new market entities were established in 2019. A record 20,000 new firms were set up every day on average, data from the State Administration for Market Regulation showed. China has long been ramping up efforts to improve business environment to unleash market vitality and boost high-quality economic growth. The country started the pilot reform to separate business operation permits from business licenses in all 18 pilot free trade zones on Dec 1. The reform is expected to cover the whole country in 2020.

Regulator clears 3 new floats on sci-tech board

China's securities regulator has given the nod to the registration-based initial public offerings of three companies on the science and technology innovation board. UCloud Technology Co Ltd, Willfar Information Technology Co Ltd and Guangzhou Jet Bio-Filtration Co Ltd will be listed on the Shanghai Stock Exchange's sci-tech innovation board, commonly known as the STAR Market, according to the China Securities Regulatory Commission. The companies and their underwriters will confirm the IPO dates and publish their prospectuses following discussions with the stock exchange.

Volkswagen to produce more electric cars

German automaker Volkswagen AG said that it is ahead of schedule in producing electric cars and announced a new overall plan to produce 1.5 million electric cars by 2025. The previous strategic target of 1 million electric cars is expected to be reached by the end of 2023－two years earlier than anticipated, the company said. In September this year at the Frankfurt Motor Show, Volkswagen unveiled the new all-electric ID. 3 model and vowed to become a world market leader in e-mobility. Over 37,000 customers have reserved an ID. 3 and paid a pre-booking deposit, the company said, adding that the model is expected to appear on the market from summer 2020.

Toyota to recall 1,380 defective vehicles

Japanese automaker Toyota will start recalling 1,380 vehicles on Jan 10, from the Chinese market, according to China's market regulator. Filed by Toyota Motor (China) Investment Co Ltd, the recall involves 723 imported Alphard Hybrid models manufactured between Aug 19, and Sept 10, as well as 657 imported Vellfire Hybrid produced between Aug 19, and Sept 6, the State Administration for Market Regulation said in a statement. Due to a defective emergency locking retractor, the safety belts may fail to take effect when vehicles are involved in collisions, said the statement.

AROUND THE WORLD

Japan's jobless rate drops to 2.2% in Nov

Japan's unemployment rate improved in November for the first time in four months, the government said in a report. According to the Ministry of Internal Affairs and Communications, the unemployment rate stood at 2.2 percent in the recording month, dropping 0.2 percentage point from October. Unadjusted for seasonal factors, the number of unemployed people was 1.51 million in the recording month, down by 170,000 from a year earlier and still hovering near the lowest levels since the early 1990s amid the nation's ongoing labor crunch. The statistics bureau also said that 630,000 people left their jobs of their own volition, a decline of 120,000 from the previous year, while those laid off stood unchanged at 220,00 people in the recording period.

Brazil reports primary deficit of $19.8b

The Brazilian central government registered an accumulated primary deficit of $19.8 billion from January to November, which represents the best result since 2014, said the National Treasury Secretariat. The figure declined slightly from $21.8 billion in the same period last year. The primary balance of the central government is influenced by that of the National Treasury, the Central Bank and the social security system. From January to November, the National Treasury and the Central Bank had a primary surplus of $29.8 billion, while the social security system accumulated a primary deficit of $49.6 billion.

Malaysia to issue five digital banking licences

The Malaysian central bank said that it would issue up to five licences to qualified applicants to establish digital banks to conduct either conventional or Islamic banking business in Malaysia. Bank Negara Malaysia said in a statement that it had issued the exposure draft on licensing framework for digital banks, which allowed digital banks to offer banking products and services to address market gaps in the underserved and unserved segments. "Such digital banks are expected to offer meaningful access to and promote responsible usage of suitable and affordable financial solutions to financial consumers," said the central bank.

"I fear that I would lose money if the disease continues to spread even after I expand my farm," said Zhu, who owns the Changchun Topigs Animal Husbandry Co Ltd in Dehui.

"If prices continue to stay at such high levels, I will consider expanding my farm then," he said.

According to the Ministry of Agriculture and Rural Affairs, China's pork prices in surveyed markets averaged 51.22 yuan ($7.3) per kilogram in the last week of November, the fourth consecutive week of falling prices. In some cities, pork prices peaked at more than 60 yuan per kilogram in October.

In June, pork prices were only about 20 yuan per kilogram. Then they started to surge and more than doubled in October, pushing the national consumer price index above 3 percent to hit 3.8 percent, and further lifting it to 4.5 percent in November.

Facing the continual and strong spikes in pork prices, the authorities have adopted a slew of policies to increase market supply and encourage hog farming.

Governments at all levels have vowed to support the building of pig farms and fiscal subsidies are given to those who raise pigs.

In Jilin province, for example, the provincial government has provided subsidies and loan interest discounts for raising pigs. It has also encouraged the expansion of insurance coverage for raising of pigs and sows to alleviate risks to farmers and enterprises.

"We will implement relevant policies from the central government," said Lu Guoping, an official of the Jilin Animal Husbandry Bureau.

Imports have been increased to fill the gap in the domestic market. And the authorities have taken out pork reserves to increase market supply and stabilize prices.

Moreover, as China and the United States signed the Phase One trade deal, the country is set to increase imports of pork from the US, which will help increase domestic supply.

"Prices of live pigs hit 40 yuan per kilogram in the wake of the seven-day National Day holiday, the highest level this year," said Wang Dali, head of a pig farm owned and operated by Jilin University in Changchun, Jilin province. However, consumers could not afford such high prices and the demand decreased, leading to price falls, he said. "Even without the government measures to control prices to make pork affordable, prices will drop."

He said the State's release of pork reserves into the market is not on a large scale and cannot satisfy market demand. "But the move sends an important signal to the market: the State will not allow pork prices to continue to rise; then pig farmers will not wait for higher prices and increase sales of pigs, leading to more supply and lower prices," he said.

On Dec 27, 2 million tons of pork reserves were released into the market, the seventh such move this year. Some local governments have also taken similar measures to increase pork supply. China's output of pork amounted to 54 million tons in 2018.

But given the advent of the Lunar New Year, which falls on Jan 25, pork prices may not drop significantly and may even rise moderately during the Spring Festival holiday, analysts said.

Traditionally, demand for pork increases seasonally in the month before Spring Festival, said Zhang Ming, an economist of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences. The rising demand may bring extra pressure on pork prices, although the authorities would also take measures to intervene, he said.

With all these factors taken into consideration, he said, pork prices may hover at high levels until March 2020 and start to moderately fall starting from the second quarter of 2020.

"Given the expected increases of supply and high base effect, pork prices may decline sharply in the third quarter of 2020," he said.

If that happened, China's consumer inflation measured by CPI may peak in the first half of 2020 and fall sharply in the third quarter, which would provide room for China to cut its interest rates to boost growth, Zhang said.

While falls in pork prices, which are expected to happen after the summer of 2020, will benefit consumers and the country's inflation controls and monetary policy maneuvers, they will not be good news for pig farmers.

"For pig farmers, the profit margin is high, but things are not always so promising," said Zhu.

This year, following price rises, profits are on the rise. "But costs are also rising," Zhu said, adding that the salaries of his workers rose by more than 30 percent this year. "As prices rose, there are more investors building new pig farms and they hire new hands, which leads to a shortage of labor."

Although he made a lot of money this year, the profits cannot cover his losses last year, when prices were extremely low, Zhu said, adding that if the current high prices continue, his profits would cover losses by January 2020. "We sold live pigs at about 6 yuan per kilogram at the lowest level last year and the more we sold, the more losses we suffered."

Before this round of pork price surges, China's pork prices had flattened out at low levels for more than two years and farmers were forced to reduce the scale of hog raising because it was not profitable.

"This round of pork price rises has also come from external factors that pig farmers and enterprises cannot control," said Zhang, referring to the spread of African swine fever and the environmental control policies by some local governments. "The combination of the two factors has led to sharp decreases in the numbers of pigs and sows."

As African swine fever spreads, pig farmers and enterprises have become more alert and taken measures to prevent it.

"The government, industrial associations and ourselves have taken time to learn how to control the spread of the disease and now we are more experienced and more capable, both in terms of methodology and equipment, to control it," said Wang of the Jilin University pig farm.

Wang said his farm has increased frequency of disinfection and keeps more disinfection equipment in store so that the procedure will not be interrupted by dysfunctional equipment.

Many newly built pig farms have had equipment, such as that used for ventilation and automatic dung clearing, installed so that the improved living environment would help improve the immune systems of the pigs to help prevent infection, Wang said.

Some local governments that had forbidden pig raising in the name of environmental protection, meanwhile, are revising their policies, Zhang of the CASS said.

Though Realme is still relatively new to the smartphone game, its meteoric rise has been raising eyebrows. It was created by employees from Chinese smartphone vendor Oppo in the middle of 2018 to take on rivals, including Xiaomi, in smartphone markets like India.

Now, as an independent brand, Realme is the fourth-largest smartphone vendor in India. Riding on its instant popularity with young online consumers, the company is eyeing a bigger offline presence with plans for more brick-and-mortar retail ventures. The company plans to expand offline sales to 150 Indian cities this year.

Wang Shuo, head of marketing at Realme India, said in an interview with China Daily that the company already has made significant progress in shifting from the online-sales model. Currently about 30 percent of its sales come from offline stores.

"We will tap more resources to accelerate our offline expansion next year. Demand for upgraded smartphones is burgeoning in third-and fourth-tier cities of India. That is a huge opportunity," Wang said.

According to him, the company will soon offer tailor-made smartphones for offline consumers. "Users buying smartphones online are highly sensitive to technical parameters. They demand the latest processors and the best image pixels. They assess all the differences through data," Wang said, "But when it comes to offline sales, aspects like retailing, design, selfie capability and storage matter more, because consumers can feel and touch the smartphones with their own hands before they decide to buy or not."

Realme is currently the world's fastest growing smartphone brand. Six months after its launch, the brand became the No 4 vendor in India during the fourth quarter of 2018. Little over a year since its inception, Realme said it has joined the big league with more than 10 million units shipped. To be more accurate, 10 million smartphones in 14 months, which translates to 22,000 units sold per day since its debut.

During the third quarter of this year, Realme continued to be the fastest growing vendor in India with a 401.3 percent year-on-year growth in sales. The company now controls 14.3 percent of the smartphone market in India, according to data from market research company International Data Corp.

Wang attributed Realme's rise partly to its accurate product positioning strategy. "We sensed an unmet demand. Online consumers also have desire for smartphones that can combine good performance, design and quality. But back then, no one was here to offer such an option, so we came," Wang said.

In 2018, the Indian online market was dominated by Chinese smartphone brand Xiaomi, which prioritized cost-effective products. Other players including Huawei Technologies Co's Honor brand started to lose traction online, which created a market vacuum that no alternative player can fill, said Xiang Ligang, CEO of telecom industry website Cctime.

"When companies put heavy emphasis on lower prices, they have to make sacrifices on the performance of the smartphones to some extent," Xiang said.

Wang said Realme, overtook Chinese smartphone company Vivo as the No 3 player in India in terms of smartphone shipments in September this year.

To resonate with the younger generation and better build its brand image, Realme has hosted a string of campus concerts and activities for fans. In October, the company hosted four multicity music concerts with famous Indian singers and 11 campus festivals.

During India's festive season, Realme sold more than 5.2 million smartphones between Sept 30 and Oct 31.

Madhav Sheth, CEO, Realme India, said; "We are delighted to once again emerge as the No 1 preferred choice on Flipkart during festive days. Our 5.2 million smartphone sales figure is an actual and credible sellout data that is different from the usual sell-in numbers, which the other brands have been promoting. Realme offers the most blockbuster products that are high on features, style, and performance and is available across price segments."

Recently, Realme unveiled its new payments platform, Realme PaySa, which is designed to help individual customers and small－or medium-sized businesses financially. It is also part of the company's broader push to offer more internet services and direct more revenue from a growing pool of consumers who use its smartphones.

The move came after Xiaomi announced its Mi Credit lending service (and Mi Pay) to make its mark in the fintech space a few months ago. Another Chinese smartphone vendor OnePlus also revealed its plans to get into the payments services next year.

Clearly, the competition in India is still intense, with Xiaomi maintaining the leading position among smartphone vendors and Samsung the second position.

But Wang from Realme said, "Our biggest edge always lies in our products."

Antibiotics have long been used to kill harmful bacteria in both animals and people. But the continued overuse of the drugs has led to the serious problem of resistance. The European Union decided in 2006 to eliminate antibiotic growth promoters from animal feed and China has announced that it will follow suit starting from next year.

The move is in line with the requirement of the 19th National Congress of the Communist Party of China held in October 2017, that China should "push green development" and "implement food security strategy to ensure people have access to safe food".

Statistics from the Chinese Academy of Sciences show that in 2013, China used more than 16 million tons of antibiotic products, and half are used for animals, leading to the release of 5 million tons of antibiotic residues into water and soil.

"The State will no longer allow the use of antibiotic growth promoters next year and what we can do is improve the immune systems of animals in a more healthy manner," said Zhang Jing, an animal science professor of Jilin University.

To that end, some provinces, such as Jilin, Liaoning and Guangdong, have formed industry associations to promote use of feed free of antibiotics.

Meanwhile, to solve the problem of disease prevention and treatment, some researchers and enterprises are experimenting with using traditional Chinese medicine to meet the requirements not to use antibiotics.

"Many livestock farms and enterprises want to find products to promote animal growth without antibiotics, but it is a challenging task," said Du Yunsheng, head of the Kangfa Animal Drug Institute in Changchun, capital of Jilin.

"We have been experimenting with TCM to improve the immune capability of animals and prevent and cure animal diseases for 15 years and have achieved satisfactory results," said Du.

Du said he became a veterinarian in 1993 after graduating from an agricultural school, and at that time, antibiotics were widely used.

"I felt that antibiotics had been overused and had become harmful, and therefore I began thinking about ways to replace them," he told China Daily.

He later formed a research institute for companies testing and promoting the use of TCM in animal treatment.

By 2016, Du had developed 10 corporate standards and 11 patents on use of TCM in raising livestock.

"National standards are yet to be established in this respect," Du said.

The local government has also selected 40 pig raising farms with more than 10,000 sows to promote his TCM-based solution.

Du's solution mainly involves the combination of different TCM herbs in accordance with different growth stages of the animals.

"We conducted experiments on tens of thousands of pigs, chickens and other animals over a period of 15 years," he said.

Correctly used, TCM herbs are effective and quick in curing diseases and promoting growth of animals."

The use of TCM herbs can reduce stress and inflammatory response, increase feed intake and weight, reduce mortality, and increase feed conversion, he said.

The cost of TCM herbs is the main bottleneck for many livestock farmers and enterprises that want to use them to replace antibiotics. But Du said costs are high due to incorrect selection of herbs.

"There are numerous herbs in nature and many of them can work to solve the same problem; so we can select herbs that are seldomly used to treat people to form our low-cost herb combinations," he said.

Since those types of herbs are not used to treat people, generally they are not in tight demand and are therefore not expensive, he explained. "Actually, the herbs we use are cheap and will not increase costs for livestock farmers much."

Through improving the immune systems of animals, TCM herbs may hopefully provide some clue for preventing and curing the spread of the African swine fever virus, he said. "Research should be conducted to find out whether TCM herbs can play a role."

Most of the pecan growers in the US had suffered substantial losses since the start of the US-initiated trade friction against China, the largest market for the US pecan industry.

Randy Hudson, a pecan grower in Irwin County, Georgia, said he and his fellow pecan farmers were "encouraged" by the fact that leaders of the two countries are working on the tariff issue.

The Chinese side announced on Dec 13 that China and the US have agreed on the text of a phase-one economic and trade agreement based on the principle of equality and mutual respect.

While waiting for the details of the trade deal, Hudson said, "we would have hoped that all tariffs would be removed, at least back to the original level."

China was the top market for US pecans. In 2017, US in-shell pecan exports reached more than $300 million, and a staggering 76.37 percent were sold to China, according to pecanreport.com.

Hudson was among the first pecan growers to enter the Chinese market and has maintained a close business relationship with his partners in China.

Since he brought the nuts to the Chinese market in 1999, Hudson and his fellow pecan growers and exporters, as well as their Chinese partners, have managed to grow the business in China, with an increasing number of consumers interested in the nuts' health benefits and rich flavor.

Before the latest trade tensions, Hudson's company exported 4,500 to 9,000 tons of pecans every year, accounting for about 20 to 30 percent of Georgia's total annual output of pecans.

To satisfy Chinese demand, the company bought pecans from other growers. The Chinese market accounted for 90 percent of the company's total sales revenue.

However, increased tariffs had been eroding Hudson's business expansion in China, costing him tens of thousands of dollars in losses and the whole pecan industry more than $10 million.

Irwin County exported nearly $50 million' worth of pecans to China in 2017, but the volume dropped to zero after US-China trade tensions began. In 2018, the county's pecan exports plunged to a record low of less than $10 million.

Pecan prices declined about 40 percent due to oversupply caused by trade tensions, according to Hudson's estimation. This means the local industry suffers more from trade tensions than from damage caused by hurricanes.

The US government provided pecan growers subsidies equal to $146 an acre to help them recover from losses due to trade friction. But that was far from enough.

"It's been very, very difficult to be able to balance our income with our expenses under the burden of the tariff," said Hudson.

Like many of his fellow growers and exporters, Hudson still tries to maintain a good relationship with his Chinese clients.

Although business has paused for the moment, both sides exchange information and keep each other updated about their businesses, hoping to resume cooperation soon. Keeping the relationships afloat is key and often personal.

"We are friends first," he said.

Related countries are expected to complete legal reviews by June next year, Zhang Shaogang, director-general of department of international economic and trade affairs, said at the Ministry of Commerce's year-end meeting.

The RCEP, a proposed free trade agreement among 16 nations, is hailed as what would be the world's largest trade bloc.

During the meeting, Zhang identified three steps to advance RCEP consultations. "The first step is to finalize the remaining talks. At present, what remains are bilateral negotiations, and most of them are technical details that won't affect the final conclusion of the agreement," Zhang said. "Relevant countries will complete legal reviews by June next year."

For the second step, governments or parliaments of related countries may take about three to four months to review the pact, Zhang said.

Finally, the parties are expected to sign the agreement at the RCEP leaders' meeting in November next year. "China is confident about the official signature as planned," he said.

The RCEP is a proposed free trade agreement between the 10 member states of the Association of Southeast Asian Nations: Indonesia, Thailand, Singapore, the Philippines, Malaysia, Vietnam, Brunei, Cambodia, Myanmar and Laos, as well as Australia, China, Japan, New Zealand, India and the Republic of Korea. Negotiations were formally launched in 2012.

On Nov 4, 15 member states of the RCEP essentially concluded all negotiations on market access. India did not sign the agreement on that day. Analysts said India was worried that opening its economy would undermine its already fragile domestic manufacturing base.

Zhang said all parties of the RCEP understand the concerns of India, and the door was always open to the Asian country for consultations. "China is willing to resume talks with India at any time and at any place, in an effort to reach a mutually satisfactory agreement," he said.

Liang Xi, an analyst with Haitong Securities, said: "Once the RCEP is signed, tariff and non-tariff barriers will be removed, which will help stabilize foreign trade and investment."

The move will be beneficial for many enterprises, for instance textile manufacturers, as material costs would decline, Liang said.

In another development, the ministry said that China's foreign trade volume is likely to hit a new high of over 30 trillion yuan ($4.3 trillion) for the whole year.

Li Xingqian, head of the ministry's foreign trade department, said China's export growth rate is higher than the overall level of major global economies.

Private enterprises have played a prominent role, with the proportion of exports going up by 3.5 percentage points to 51.5 percent in the first 11 months, Li said.

China's trade with the Belt and Road economies accounted for 29.3 percent of the total, according to Li.

While external uncertainties are likely to persist, he said the ministry is confident in ensuring steady and quality development of the country's foreign trade.

The comments came after China adopted the revised Securities Law over the weekend and made systemic amendments to enable a phased-in replacement of the approval-based system by the registration-based system for initial public offerings across the whole market.

The revised law, set to take effect on March 1, has signaled a faster capital market reform agenda, especially in terms of implementing the registration-based system in Shenzhen's innovation-enterprise heavy ChiNext in the first half of next year at the earliest, they said.

Higher reform expectations have boosted investors' confidence in securities firms, whose investment banking business should benefit from the registration-based reform that is expected to quicken the pace of IPOs.

A subindex tracking the sector rose by 5.72 percent on Monday, while the benchmark Shanghai Composite Index went up by 1.16 percent to close at 3040.02 points, according to market tracker Wind Info.

"The registration-based reform entails not only enabling more firms to get listed, but a series of reforms in fundamental market institutions," said Wang Tingting, an associate professor of finance at the Central University of Finance and Economics.

"If it succeeds, it will strengthen the market's role in resource allocation and help companies with strong competence to thrive and get the weak out of the market, leading to higher quality of listed firms and market returns," he said.

In the short term, less administrative controls on the pace of IPOs and therefore more financing activities under the reform, however, may put some pressure on market liquidity and lead to a divergent stock performance, Wang said.

Particularly, the market value of "shell companies"－or dormant, low-value listed firms that have the potential of being acquired by a nonpublic company seeking to get listed through the deal－may decline as more companies may choose IPOs as a handier channel to go public, said Wang.

A report from Sealand Securities said that the valuation of large-cap companies may rise in 2020 but that of small-caps may drop.

More small-cap firms may get listed under ChiNext's registration-based reform, while money flowing into the market may instead favor large-cap industry leaders, because the money will mainly be foreign capital and funds from the social security system that pursue long-term stable returns, it said.

Stock connect programs between mainland and Hong Kong bourses have seen net foreign inflows into mainland stocks for 30 consecutive sessions of over 110 billion yuan ($16 billion) in total as of Monday, according to Wind Info.

"The market in 2020 will test investors' ability to select stocks and manage risks. To elevate investors' awareness of risks, as well as of their rights and obligations, is a crucial part of the registration-based reform," Wang said.

We should bear in mind that the period from 2018 to 2020 marks a peak of debt redemption faced by Chinese borrowers, which means an adequate supply of funds must be ensured to shield any risks of large-scale defaults and even a financial crisis.

Conditions of the housing market, meanwhile, have significant impacts on the supply of funds and the overall financial situation. Sharp rises and drops in property prices could both be dangerous.

If property prices rise so much that more money floods the real estate sector through trusts and other financial instruments as well as individuals' speculative investments, the sector will strain the supply of funds for other sectors.

On the contrary, if property prices drop too sharply, real estate developers may see weaker solvency and individuals may default on mortgages, let alone other potential chain effects.

Therefore, if property prices can be stabilized so that the real estate sector can tide over any potential financial stress, the world's second-largest economy may face a much easier situation of financial risks in 2020.

Beijing's pre-owned home market seems to be facing a trend where prices remain high but people are reluctant to buy. When I worked at a real estate agency last year to observe the attitude of property sellers and buyers, I found that though property owners asked high prices on agency platforms, they mark the prices down when it finally comes to a deal.

This phenomenon has alerted me to a question: who will pay for the highly priced properties?

Whether or not drops in property prices could be within a tolerable range－that will be a crucial issue in 2020. If property prices fall too quickly, the authorities should postpone policies to curb the property price bubble, such as the real estate tax, to ensure a stable financial situation.

Given the significance of the property sector for financial stability, we can understand the tone-setting annual Central Economic Work Conference's requirement of property sector policies: to stabilize land prices, home prices and market expectations, and carry out policy adjustments based on each city's actual market condition.

Another important precondition for adequate supply of funds in 2020 is a stable stock market, which in turn entails a better rule of law in the market. Given the current speed of law-based reforms, China's A-share market may welcome an inflection point, or upside potential, in 2020.

The stock market matters in terms of guaranteeing supply of funds because many listed companies have outstanding loans using their stocks as collateral. This means that, on deep stock price declines, listed firms may be forced to sell their stocks to redeem the loans, which will constrain funds available for normal uses.

To prevent such risks associated with stock price plunges, regulators should promote improvements in fundamentals and governance of listed firms, reduce administrative controls, and encourage more mid－to long-term funds such as those from insurers and the social security system to enter the market.

The Central Economic Work Conference called for efforts to improve fundamental institutions governing the capital markets and to improve the quality of listed companies, as well as to complete delisting mechanisms, which will get more low-quality listed firms out of the market.

From the perspective of economic growth, a slowdown in the property sector also mirrors the contraction of old engines of China's economy. I expect that 2020 will still be a key year of economic restructuring, so it is necessary to boost emerging industries, to counter downward pressure from weaker old engines.

Besides the real estate sector, traditional manufacturing sectors such as auto and construction may continue to see contraction and adjustments in 2020.

Meanwhile, strategic emerging industries such as new energy and new materials, the services sector, and modern manufacturing industries such as aircraft and high-speed train manufacturing will strengthen their role of new growth engines in the next year. We need to promote development and even breakthroughs in all the three sectors to maintain a reasonable economic growth.

Also, it is necessary to speed up optimizing the business environment and continue reducing taxes and fees charged on enterprises, to re-vitalize enterprises by reducing all kinds of burdens on them.

Based on our estimations, the government has cut 1.5 trillion yuan ($214 billion) worth of value-added tax and 500 billion yuan worth of fees on enterprises in total for 2020. This could ease the pressure of rising costs on many businesses.

But more could be done. I suggest that the government continue the tax cut campaign in 2020 by reducing number of the value-added tax brackets from three to two.

I would argue that downward pressure in 2020 will mainly arise from domestic factors, especially restructuring, while the trade friction with the United States may exert a weaker negative impact on the Chinese economy.

This is not only because that the two countries have agreed on the text to the much-anticipated phase one trade deal, but because that a large portion of impacts of the trade friction on the Chinese economy has been digested.

In the longer run, external uncertainties may remain, but this should not obstruct China's pace toward a steady and quality development if the three tasks discussed below could be completed.

First, the country should strengthen its advantages of manufacturing and large-scale market by addressing weak links in its manufacturing sector and opening its markets of production resources, services and investments.

Second, China needs to further facilitate technological innovation and motivate more people to engage in innovation.

Third, a more comprehensive trade and investment system, including better financial and legal frameworks, is needed to serve the Belt and Road Initiative.

Popcorn, a variety of snacks, beverages, plush toys, on-screen and off-screen advertisements… believe it or not, such products and services are generating more (non-box office) revenue than ticket sales for some, if not all, cinemas.

Non-box office revenue is the new growth point for cinema chains in China. It is not uncommon for some cinemas to turn profitable in a sluggish market on the back of non-box office revenue.

According to a report from consulting firm Forward the Economist, revenue from non-box office sales is driving growth of cinema companies in China. Among all sectors of non-box office businesses, ads shown before a film's screening is a major revenue earner, and is expected to hit 20 billion yuan ($2.86 billion) by 2020.

Wanda Film Holding Co Ltd reported the operating cost of the box office business accounted for more than 80 percent of Wanda's total, but its profit margin ratio was only 6.07 percent in the first half of 2019. However, Wanda's merchandise sales and dining contributed 67.43 percent profit margin in the first half of 2019. That was followed by ads, which had a 65.43 percent profit margin in the same period.

Chen Shaofeng, head of the Fenghuo Cultural Research Center at Peking University, said: "An increasing number of Chinese cinema chains are betting on non-box office revenue to boost growth amid a market slump."

Among all categories of non-box office revenue streams, film-related derivatives are likely to generate long-term profit, Chen said.

"On-screen appeals, accessories, conventional toys, and plush toys are important revenue sources as they can be sold even after a film's theater release. China is still at a very early stage in the business. Most Chinese cinemas are still betting heavily on ads aside from box-office receipts.

"But take a look at the world's leading film studios. Sales of film-related derivatives can contribute up to 70 percent of their annual revenue."

Chen said Disney's revenue from studio entertainment, including box-office sales, was only $9.99 billion in 2018, accounting for only about 17 percent of its total $59.43 billion revenue.

Instead, Disney earned a large part of its business from media networks, parks and resorts, and consumer products. Among those, revenue of consumer products and interactive media was $4.65 billion, and parks and resorts netted $20.3 billion in 2018.

"Film-related derivatives' development is on the rise in China with the success of animation hit Monkey King: Hero is Back and Ne Zha. It is also a good thing that Chinese audiences have increasing awareness of intellectual property of film-related derivatives," Chen said.

My friends and I can relate to that. Despite many merchandise stores on Taobao starting to sell Ne Zha-related products at very low prices after the film's success, my friends and I would tend to buy only from authorized merchandise sellers.

"There is a great potential for the development of Chinese cinemas' non-box office businesses," Chen said.

Farfetched as it may sound, such an experience could soon be reality, given the fast-evolving technologies like virtual reality and 5G that are "coming soon" to a cinema near you, promising to enhance viewing experiences of moviegoers and boost revenues of film exhibitors in a sluggish market.

"An increasing number of cinemas in China are betting on advanced technologies to attract filmgoers, as Chinese audiences today spend more money on tech-embedded film watching experience," said Chen Shaofeng, head of the Fenghuo Cultural Research Center at Peking University.

A film trade report from PwC said tech-embedded auditoria top the priority list of Chinese cinema companies. The latter are struggling with a range of challenges. For one, fewer tickets were sold this year. For another, rapidly developing online streaming services and rising number of home cinemas are offering stiff competition.

China's cinema companies boast over 60,000 screens in all, which generated almost 61 billion yuan ($8.7 billion) in revenue last year. But this year, box-office receipts slumped, sparking concerns as well as moves to reverse the industry's fortunes.

Data from the National Radio and Television Administration showed box-office revenues in the first half of this year were 31.17 billion yuan, down 2.7 percent year-on-year. Total visits to cinemas also fell 10.3 percent year-on-year to 808 million in the same period.

But not so long ago, moviegoers' demand had outstripped supply of cinema screens. However, supportive government policies and subsidies encouraged film exhibitors to expand rapidly. But, an unintended consequence of that frenetic expansion was that supply exceeded demand.

Combined with fewer blockbusters, weakening consumer spending on entertainment due to slowing economic growth, and super-cheap film tickets on mobiles apps becoming rare, overall box-office receipts as well as profits fell.

Take Wanda Film. The cinema company saw its net profit drop by 57.25 percent year-on-year to 829 million yuan for the first three quarters this year. Jinyi Media's net profit was down by 24.17 percent year-on-year to 105 million yuan.

This prompted cinema owners to explore various ways of luring back moviegoers, with focus on high-tech, although almost all film exhibitors are also actively exploring nonbox office revenues.

At the 28th Golden Rooster and Hundred Flowers Film Festival, which closed on Nov 23 in Xiamen, Fujian province, telecom carrier China Mobile's entertainment branch Migu announced cooperation with the film festival. The two decided to launch an innovative service with technologies like 5G, 4K (screening with high-definition images and sound), VR, and AR (augmented reality) embedded in it. The goal is to provide immersive viewing experience to viewers at the festival.

Although there is no full-length film that has used VR technology yet, a few cinemas have adopted the technology to screen short videos, to give a taste of emerging technologies to moviegoers in some first-and second-tier cities.

Chen said further research and development are needed to adopt the technology in cinemas. Aspects like how to avoid dizziness while watching VR content need to be sorted out. As a trend though, VR cinema has the potential to reshape filmgoers' viewing habit, he said.

Details on adapting 5G to cinema operations are still sketchy but many exhibitors have already taken their first step in that direction.

Cinemas are also embracing the latest technologies in conventional projection systems and acoustics, besides investing in upgrades of revolutionary viewing experiences like Imax.

Richard Gelfond, CEO of Imax Corp, Imax China's parent company, said Chinese audiences' demand for Imax experience has never been stronger as it is now, prompting the company to expand its footprint in China.

Imax China reported box-office revenue of $236 million on the Chinese mainland for the first half of this year, up 24 percent year-onyear.

That contrasts with the Chinese mainland's sluggish box-office performance in the same period.

The market-defying success of Imax has encouraged more cinemas to bet on advanced technologies to boost their profits.

Korean cinema chain CJ CGV Co Ltd partnered with Imax China earlier this year to open 40 new Imax screens. Till Sept 30, the Imax screens were installed at 666 cinemas across China.

Since cinemas are all about audiovisual wizardry, film exhibitors are paying equal attention to sound. For instance, US audio technology company Dolby Labs saw steady expansion in China with the growing uptake of the company's imaging and sound technologies.

Dolby partnered with local cinema giants like Wanda Film. By July, ahead of the release of The Lion King, the number of Dolby-fitted cinemas expanded to 51 across the country.

"Dolby cinemas' rapid expansion ... and the ongoing release of new cinema products reinforce the strong demand for spectacular cinema experiences," Doug Darrow, senior vice-president of Dolby's Cinema Business Group, was quoted by a Xinhua report as saying in July.

Chinese cinema chain Wanda Film Holding Co Ltd, which reportedly has about 13-percent market share in China's cinema business, owned or operated 595 cinemas that had in all 5,279 screens by the end of 2018. Wanda has since set up its premium film viewing cinema chain Prime to attract tech-loving, experience-conscious moviegoers.

Huaxia Film Distribution Co Ltd, another Chinese cinema chain, introduced CinemaCon's Cinity Cinema System earlier this year. Oscar-winning director Ang Lee used the system to produce his latest film Gemini Man in 4K stereoscopic 3D at 120 frames per second (which is considered superior to the standard of 24 frames per second).

Domestic firms Guangzhou Jinyi Media Corp, Bona Film Group Ltd and Wanda have agreed to install 20 Cinity Cinema Systems in their cinemas across China.

In addition to high-tech, popular technologies like smartphone apps are boosting box-office receipts in China. Moviegoers find it convenient to pick and choose their seats and book combo deals online in advance at cheaper prices, although such discounts appear to be ebbing of late.

A film industry report from iiMedia Research said online film ticketing now accounts for 85.7 percent of the total film ticketing market. In the first quarter of this year, Maoyan mobile app alone accounted for 42.6 percent of total film tickets sold, while its competitor Taopiaopiao had 31.5 percent.

Now that they have stopped offering deep discounts on film tickets, thus contributing to slack box-office sales, which in turn added to the factors that squeezed profits of cinema firms, film exhibitors can no longer expect to boost profits merely by setting up more cinemas, Chen of Peking University said.

Agreed Neil Wang, president of consulting firm Frost & Sullivan China. He said in the past, whenever cinema companies found demand outstripped supply of screens, their reflex was to simply set up more cinemas. But that strategy would not work in the current market situation. For, as Chen explained, profits and policy support had enabled rapid expansion in the past.

"Now, the market is heading to saturation. Fewer cinemas are betting on filmgoers' habitual visits to boost profit. Instead, they are seeking new revenue growth through technology-embedded film screenings," Wang said, adding such shows can help attract big audiences even if tickets are priced higher.

"Many leading Chinese cinema chains are shifting their focus from box office-led revenue to non-box office-led revenue."

Chen of Peking University said many cinema companies have started seeing derivatives as a new revenue stream, though the sector still lacks a well-developed industry chain. "Intellectual property protection, copyright licensing… these are all challenges that need to be tackled to develop film derivatives into a sector.

"Going forward, there might be more tech innovations for cinemas to better deliver film content. Tech advancement has always been important to boost China's film market."

 

 

 

 

 

Widespread rapid economic growth has raised more than 750 million people out of poverty during the 40 years of reform and opening-up. But, the last group of extremely poor people still are located in some rural villages, often in remote mountainous regions, who were not able to participate in the general economic transformation.

In 2013, during a visit to Hunan province, President Xi Jinping announced a strategy of "targeted poverty alleviation" that focused on providing the specific infrastructure, education and social support needed by these rural villages. The new programs also shifted focus from the regional and county levels to villages and households.

Especially since 2013, there has been great progress in reducing poverty in rural areas. The number of rural people living in poverty declined from an estimated 99 million rural poor in 2012 to 16.6 million in 2018.

A further 10 million-plus of the remaining extremely poor people are estimated to have been lifted out of poverty this year. The government allocated 91 billion yuan ($13 billion) to poverty alleviation funds this year and the China Development Bank has allocated 400 billion yuan.

Annual income in impoverished rural areas rose from less than 5,000 yuan in 2012 to 10,371 yuan in 2018, which is an inflation-adjusted average annual growth rate of 8.3 percent. Rural areas are slowly narrowing the large disparity in incomes versus city dwellers.

Still more work needs to be done, especially in areas suffering the most intransigent poverty. The two-day Central Rural Work Conference in Beijing on Dec 20-21 concluded that, in order to achieve the goal of eliminating extreme poverty in rural areas by next year, emphasis needs to be put on improving the living environment in those areas－including infrastructure, water supplies, sanitary toilets, education, medical services, social security, cultural activities and ecology.

I recently had the opportunity to visit a small village of about 60 families, mostly of the Yao ethnic group, in mountainous rural Yunnan province to see the ideas of targeted poverty alleviation put into practice.

Hebian Village in Mengla county, Xishuangbanna Dai Autonomous Prefecture of Yunnan province, about 40 kilometers from the border with Laos, is in a fantastically beautiful location－surrounded by mountains and rainforest. But, this isolated location has, until recently, condemned its people to extreme poverty.

Villagers said that earlier they often did not have enough to eat, their health was bad, and their houses lacked modern sanitation, water, and heat. With only an often-muddy dirt track to the outside world, children had to walk at least half a day to school, so many got only a primary education or less.

An all-weather concrete road to the village, completed in 2017, has been one key part of transforming people's lives.

Zeng Kaijun, an official with the Yunnan provincial department of transportation, in a 2018 interview with Xinhua, said: "For years, poor infrastructure has impeded development in several mountainous areas in Yunnan province … All-season roads bring more exchanges with the outside world for people living in remote areas. They also bring health, education and information services to them."

Since the 18th National Congress of the Communist Party of China in 2012, President Xi has often called on government at all levels to ensure rural roads are well-constructed, well-managed, well-maintained and well-operated. From 2012 to 2017, China built or renovated 1.28 million km of rural roads, with 99.24 percent of the townships and 98.34 percent of villages connected by asphalt or cement roads by 2017.

Xi said it was important for poverty-hit areas to improve their transportation conditions and infrastructure in order to shake off poverty and set out on a road to prosperity. Governments at all levels should increase support in this regard.

Villagers in Hebian say that similar roads have been built to all the villages in the area, so the lives of all the people in the surrounding areas have also been greatly improved.

Poverty was earlier greatly reduced in the United States by similar infrastructure programs. For example, the farm-to-market road system started in 1949 by the state of Texas was instrumental in transforming that state from a poor region into what is now the nation's most dynamic economy.

And, the Tennessee Valley Authority, a federal government program to build dams and provide electricity to rural areas, helped raise much of the South out of poverty and backwardness.

A team of researchers from Beijing's China Agricultural University, led by Professor Li Xiaoyun, has lived and worked in Hebian since March 2015 to help the villagers and to demonstrate and research programs that can succeed in reducing poverty in Hebian and similar villages. The team helped villages build new houses with modern facilities, to improve agricultural techniques, and to develop businesses consistent with the comparative advantage of the village. Their work was all under the auspices and leadership of the local government.

Li, who is a well-known national-level advisor for poverty reduction policy, said that CAU's work in the village is part of the ongoing national poverty reduction program. Most of the funds for the project come from the national government, with additional funding from local government and charities－partnered with university technical experts.

He has worked closely with the local government to use the poverty reduction funds and resources more effectively. It was a combined effort of local government, experts, NGOs and philanthropists, and involved partnership with university technical experts.

Some relatively simple steps have transformed lives. For example, the CAU team taught the villagers to separate pigs and chickens from the human houses. An elderly villager said that since this change was made he gets sick much less often.

Hebian is located adjacent to a national forest reserve and is also in the national elephant reserve. So, great care had to be taken to find business opportunities that protected environment.

So the people of Hebian built gorgeous traditional-style houses, designed by Li, each of which has a high-quality guest room. The village business strategy concentrates on becoming a venue for conferences and meetings. For example, a conference of ASEAN village officials recently met in Hebian. For weeks each summer, children from around China come to the village to enjoy the environment and to form bonds with local children.

The people of Hebian, who only recently escaped extreme poverty and isolation, still have a long way to go to take advantage of all their opportunities.

The December Central Rural Work Conference stressed that industries capable of increasing rural people's incomes should be developed and all kinds of skilled workers should be encouraged to set up businesses. Local officials are barred from merely handing out State benefits to farmers. Instead, they are required to set targeted measures to develop local industries and create jobs.

However, the villagers of Hebian have very little experience building businesses. "The villagers are very far away from real market-oriented activity. They don't have any concept, they have no capacity, nor technical skill, and no idea how to proceed," said Li.

They need help from the government and from expert teams. The infrastructure and help provided to them are just the first steps on a longer road to building capacity and prosperity.

Yet, much has been accomplished in just a few years. Huang Yuanzhou, a former village leader in Hebian who is 65-years-old, said that he has dreamed all his life of seeing a civilized rural life. Now, his dream is finally coming true.

In November, jewelry pieces valued at more than 1 billion euros ($1.1 billion) were stolen from the Green Vault of Dresden Castle in Germany.

In April, the oak-framed roof of Notre Dame Cathedral in Paris was burned to the ground in a blaze, causing immeasurable loss.

China also reported several fires at some historic relic sites in Sichuan, Fujian, Jiangxi and Zhejiang provinces in the first half of this year.

Art pieces, while in storage, transit, exhibition, loading and unloading, face multiple risks, from natural disasters to accidents such as fire, explosion, flood, robbery, collision and breakage.

Art insurance is regarded as the most direct and efficient way to control such risks and help policyholders gain economic compensation afterwards, according to Yang Hongbo, general manager of property insurance business of TK.cn, a subsidiary of Chinese major insurer Taikang Insurance Group.

Last year, China had more than 5,000 museums, which organized over 26,000 exhibitions that attracted about 1.1 billion visits, data from the National Cultural Heritage Administration showed.

China was also mentioned in a report of the Hurun Research Institute as the second-largest artwork auction market in 2018 with 29 percent market share globally, trailing only the United States.

The frequent exposure and trade of art suggest a strong demand for related insurance services.

"It's a promising business. Besides museums, galleries, agents, logistic companies and individual collectors are potential clients for artwork insurance," said Wang Guojun, a finance professor at the University of International Business and Economics in Beijing.

"China's artwork market develops fast. It is no exaggeration to say that insurance for fine arts is in high demand."

However, only a few insurers in China have provided such services so far due to the high premium, ordinary awareness levels among art collectors and lack of related talent, laws and regulations, experts said.

Besides, to do such business, insurers have to be able to tell the authenticity of the artwork, asses its value, review risk factors, assess the loss and give solutions for restoration and compensation, which makes the entry barriers high, said Yang.

That's why, some policyholders seek the help of foreign insurers, and some give up on the idea of getting their artworks insured, he said.

TK.cn released its artwork insurance product in late 2018 to target both companies and individuals, according to Yang.

The services include delivery of exhibits, tracking of transportation, survey of the exhibition hall and training of the audience to observe the artwork in a proper way, to conduct risk assessment and control from the preparatory stage of the exhibition, he said.

It provided services to British artist David Hockney's first exhibition in China, which was held in Beijing from August and will be concluded in January; exhibitors and collectors of the 2019 Guardian Fine Art Asia, one of the top antique and design art fairs in China; and the Jupiter Museum of Arts in Shenzhen, which displayed 104 works from 60 modern Chinese artists from December this year to April.

In November, the horse head bronze statue from Beijing's Old Summer Palace was exhibited at the National Museum of China. Wang Lu, manager of non-automobile insurance underwriting department of the Beijing branch of Huatai Insurance Group, told Beijing Youth Daily that the company's insurance products covered risk during the transportation of the exhibit and the exhibition period.

He Hongkai, head of underwriting of cultural relics and artworks of Switzerland-based insurance company Chubb, said as China is actively participating in the global artwork development, more Chinese collect and invest in artworks, and the fine arts insurance is being accepted by more people.

Wang said the business, though with high premium and revenue, carries high risk. He suggested insurers should employ more experts in both insurance and art, and adopt technological tools to enhance risk management.

"The circumstances for each artwork can be quite different. For example, porcelain is susceptible to damage from vibrations; calligraphy and painting should be protected from water or improper lighting; sheepskin is affected by coldness and dryness," he said, adding insurers need to have a professional team to provide targeted services each time.

He said premiums for art insurance policies are defined by the value of artworks and the difficulty involved in safeguarding them.

It's a big deal because the US market is massive. And BeiGene's achievement could inspire many other Chinese drug companies to confidently go global.

Wu Xiaobin, 58, BeiGene's president, is aware of the implications. As one who oversaw the rise of BeiGene to global spotlight, he feels he is on the right track to realize his career dream－contributing to the rise of innovation forces in the Chinese pharmaceutical industry.

The USFDA's accelerated approval for BeiGene's Brukinsa (zanubrutinib) capsules, for the treatment of adult patients with mantle cell lymphoma who have received at least one prior therapy, received positive media coverage in China and elsewhere.

For, it marked a milestone in the Chinese pharmaceutical industry. The drug is the first compound discovered in China to have received the FDA's Breakthrough Therapy designation, representing a significant milestone for not only BeiGene but China's pharmaceutical industry.

Wu said the company decided to focus on independently developed therapies because it does not make much sense any more to be on the sidelines as the forces of innovation gather momentum across industries, especially in innovative drugs and biomedicine.

The fillip for this trend, Wu recalled, came from China's medicine regulatory reforms that started in 2015.

In Wu's view, foreign companies' entry into the China market on the back of the reform and opening-up policy changed the landscape of the Chinese pharmaceutical and healthcare industry.

The policy brought in new concepts and practices to the academic, clinical and business communities, and helped ignite pharmaceutical innovation and boosted generic drug quality in China.

However, China must rely on innovative and patented drugs independently developed by its own pharmaceutical companies to ensure that its people could have easy access to affordable and high-quality medication, he said.

"It is okay for a small country to rely on drug imports, but (it's) not okay for a big country as China with 1.4 billion people," he said, adding he is very excited about the latest developments in China's pharmaceutical industry, which is evolving at a high speed, surprising everyone.

"Both the medical community and the regulators are quite open-minded to changes and reforms," he said.

"From the central government to different levels of local governments, and to industry, people are very keen to develop China's own innovative drugs."

Although China started from almost scratch to establish an industry chain for innovative drugs, it is catching up very fast in related fields such as basic research, clinical trial, factory production, commercialization, and quality control.

Chinese innovative drug companies have been developing very fast with increasing innovation capabilities, he said.

In 2017, China became a full member of the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, an organization that standardizes global drug regulations.

In a recent report, global consultancy McKinsey also concluded China's pharmaceutical industry is undertaking a critical transformation toward high-quality and innovation-focused development, as reflected by the explosion of new drug and clinical trial approvals in recent years. An increasing number of approvals are for drugs or therapies from Chinese companies.

Since late 2018, Chinese biomedicine companies have shown the world their capabilities in PD-1/PD-L1 inhibitors with two homegrown treatments, which is a field where both domestic and foreign pharmaceuticals are still in a race. The emerging therapeutics revolutionize cancer treatment as they help the immune system to target and kill tumors.

The two drugs were approved only six months later as two foreign anti-PD-1 treatments entered the China market, and followed shortly by a third domestic PD-1 treatment early this year.

BeiGene's anti-PD-1 treatment is also pending approval from the Chinese drug regulatory authorities.

The company has been also implementing about 20 clinical trial programs globally on Brukinsa's efficacy on other types of blood or lymph tumors, with high hope to get more market approvals in the near future.

The company, which has nearly 10 new drug candidates in pipeline, is a partner in a global strategic oncology collaboration with Amgen, a California-based biopharmaceutical company that is a global leader in this niche.

Chinese biotech firms are increasingly offering China-developed high-quality treatments to Chinese patients, which will help challenge the expensive prices of imported drugs, Wu said.

With innovative drugs such as anti-PD-1 and Brukinsa, Chinese drug companies also have the ability to offer treatment options for patients abroad, especially those in the Belt and Road economies, he said.

Wu joined the Beijing-headquartered company in 2018 from Pfizer China, which he headed since 2009.

His jump to the Chinese biotech startup founded in 2010 surprised many as he had more than 26 years of rich experience in the pharmaceutical industry, including 17 years leading China operations of big-name multinational pharmaceuticals such as Wyeth and Bayer.

He returned to Beijing in 1996 to co-build Bayer's China branch as marketing head. Prior, he was in Germany where he received a master's degree in molecular biology and a PhD in biochemistry and pharmacology from the University of Konstanz. He started his career at Bayer's sales and marketing in 1992.

In 2004, he rose to general manager of Wyeth China. In 2009, as Pfizer acquired Wyeth, he was named head of the combined group.

He also served as vice chairman of the R&D-based Pharmaceutical Association Committee of the China Association of Enterprises with Foreign Investment since 2008.

Under his belt are numerous industry awards, including the "Person of the Year" in Healthy China Awards 2017, "2017 Top 10 Most Influential Persons in the Chinese Healthcare Industry" and the "2017 Social Responsibility Eminent Person Award".

 

 

 

 

 

Traditionally, the cultural products industry had been ridden with high uncertainty, risks and low level of stability. Hence, investors tended to steer clear of it.

But, as the country is mulling more supportive policies to give a fillip to the cultural products industry, a host of sectors are now looking at it. They include investors, financiers, insurers, consumer finance providers and tax policy experts.

The draft first cultural industry promotion law, which began to take shape with a request for public opinion this month, suggests more opportunities may be awaiting the sector, they said.

The cultural industry has wide scope spanning fields like news, publishing, televisions, films, performance, animation, online games, music, relics, crafts and design.

As per-capita GDP of China is about to surpass $10,000 this year, the consumption structure of Chinese people is expected to see a significant change, increasing the demand for spiritual products as people pursue a better life, in line with the all-round consumption upgrade, said Fan Jianping, chief economist of the State Information Center.

He made the remarks at a forum organized by the PBC School of Finance at Tsinghua University and Dongcheng district of Beijing.

Zhou Yanli, former vice-chairman of the China Insurance Regulatory Commission, said at the forum that most of the cultural firms are small and micro players with less than 50 employees or annual revenue of less than 5 million yuan ($710,000), while some are no more than personal studios or individuals.

"They are asset-light and rely much on creativity, which means they don't have a stable profit model and life cycles are relatively short," he said, adding more financial support should be given to such small and micro businesses.

Mature financial tools can help de-risk investments in, and other forms of association with, cultural companies.

Insurance, for example, can provide risk management and economic compensation services, as well as enhance their credit to get more financing elsewhere, he said.

It is common for Hollywood filmmakers to apply for bank loans by cooperating with insurance and guarantee services providers, he said.

Financial technologies, or fintech, can also help reduce uncertainty of returns on investments, so that the cultural field can attract more capital. Blockchain, for example, can help in authentication of artworks, Zhou said.

Wang He, former vice-president of the People's Insurance Company of China, said finance firms tend to expect their clients to be controllable and whose value can be specifically defined, but the cultural industry is full of uncertainty. "We can only know the value of a film through its box-office data after its release.

"Financial firms should understand, accept and respect the nature of the cultural industry, and enhance risk management by various technological methods."

Wang further said such services are already available in the market. Beijing-based tech company Trinity Earth, for instance, is able to assess a play or film and predict its popularity in advance using big data.

He said cultural content producers can also use the intellectual property as mortgage.

At the event, Dongcheng district of Beijing was approved by the Ministry of Culture and Tourism, the Ministry of Finance and the People's Bank of China to construct a national demonstration zone for cooperation between the cultural industry and finance.

The district will work on establishing a credit rating system for cultural enterprises, expanding direct financing and innovating in related financial products and services, to ease the difficulty and lower the cost of financing for private, small and micro cultural firms, according to Ma Feng, deputy director of the industrial development division of the Ministry of Culture and Tourism.

Zhao Lei, deputy director of Beijing municipality's publicity development, said culture and finance are two pillar industries of the city economy. Revenue of the cultural industry in Beijing grew 11.9 percent to reach 1.07 trillion yuan in 2018, data from the local government showed.

Su Zhong, chairman of Daye Transmedia Group, a Beijing-based firm specializing in film, TV opera and animation, said investors often show more interest in tangible assets and the lack of funds has hindered the development of culture.

"Intangible assets are of great value, which has huge potential and will benefit the whole society in the long run," he said.

Liu Shaojian, director of Beijing's State-owned cultural assets administration center, said the city is working on establishing a cultural development fund, a risk compensation fund, a credit rating system and appraisal system for intangible assets, to help more cultural companies get financing and lower the risk of investment firms.

Jim Athanasopoulos, chief financial officer of Imax China, said: "We are continuing to push the envelope, differentiating our (film screening) experience, and to offer consumers something different.

"A growing number of Chinese consumers are seeking premium film-watching experiences, and we are working to deliver quality and differentiated content－things Chinese audiences want to see and enjoy … and we see that continuing in the future."

To date, Imax has introduced some of its advanced technologies, including Imax Film Camera, Aiexa Imax Camera, and Imax with Laser, in China.

According to the company, an increasing number of Chinese filmmakers are using Aiexa Imax Camera. It is a two-dimensional digital camera with a high level of digital image capture and playback, producing lifelike images defined by enhanced clarity, details, colors and a higher dynamic range for contrast.

The upcoming Detective Chinatown, which will be released during the Spring Festival peak movie-going season, was shot entirely with Aiexa Imax Camera, Imax China said.

Imax with laser is a laser projection system with 5.1 or 12.1 channel sound system. The technology is designed to offer an immersive cinematic experience with Imax's big screen to moviegoers.

"We are continuing to roll out our theaters. We give guidance to around 90 percent of new theaters this year," Athanasopoulos said.

"We saw strong demand (for technologies) in (shooting and screening) blockbusters, not only those (from) Hollywood but films in Chinese language, which are increasingly welcomed by Chinese audiences."

His remarks follow Imax China's strong box-office performance in a sluggish market.

Imax theaters earned $236 million in ticket sales on the Chinese mainland in the first half of this year, up 24 percent year-on-year.

While China's overall market sales were lower than expected, data from the National Radio and Television Administration showed box-office receipts were 31.17 billion yuan ($4.46 billion), down 2.7 percent year-on-year.

"The contrast shows audience's growing interest in quality content and enhanced watching experience, despite China's box-office receipts and total cinema visits both dropping in the first six months of this year, a possible result of consumers' weakening spending," said Wang Yi, a senior analyst from the Maoyan Research Institute, which tracks box-office trade.

Despite the market downturn, Athanasopoulos said Imax China will continue to focus on expanding in the Chinese market.

Imax China has partnered with South Korean cinema chain company CJ CGV Co Ltd to open up to 40 new Imax theaters featuring Imax with laser projection systems in July.

Till Sept, Imax has 666 commercial theaters in China.

The company has been implementing a "brand globalization" strategy since 2006, and maintained a rapid development worldwide, with its compound annual growth rate reaching over 20 percent in overseas markets.

"Hisense is counting on overseas markets for future growth," said Zhou Houjian, the company's chairman, adding it is targeting the middle and high-end segments of the market.

Zhou noted the revenue from overseas markets rose 30 percent year-on-year to 37.8 billion yuan ($5.4 billion) last year. Sales of its self-owned branded products in the United States and Canada increased by 57.5 percent and 106 percent year-on-year, respectively.

The European market is a key area for Hisense's internationalization layout, the company said in a statement. Its sales in the European market increased 19.4 percent from January to July this year, compared with the same period of last year, and the growth rate in some key markets such as Germany and the United Kingdom surpassed 20 percent.

Meanwhile, the Qingdao, Shandong province-based company has accelerated its entry into Europe through mergers and acquisitions. In August 2018, Hisense completed the acquisition of Slovenian appliances producer Gorenje.

Founded in 1950, Gorenje had been one of the leading manufacturers of home appliances in Europe and owned high-end brands such as Atag and Asko. It had about 30 percent market share in the household appliances market in East Europe. With Gorenje, Hisense has established full-scale products portfolio and a complete system covering research, production and sales.

Apart from the traditional home appliances sector, Hisense is tapping into the mobile phone industry in Europe. The company launched two new types of smartphones to lure consumers from Russia.

"Russia is of great significance in Hisense's international push. We will continue to expand our presence in overseas markets, with a focus on Europe, Africa and the Americas," said Fang Xueyu, deputy general manager of Hisense Communications Co Ltd.

The company's overall sales surged 274.4 percent year-on-year during the 2018 FIFA World Cup in Russia. In Europe, Hisense has built a sales network covering Spain, Italy, the UK, France and the Czech Republic, with its regional head office in Germany.

In addition, Hisense has announced its global partnership deal with the Union of European Football Associations for men's national team football competitions ahead of the UEFA Euro 2020.

The company will engage in various global marketing and advertising activities. Hisense will be the official television supplier to the competition. It is expected that the partnership will see the brand reach over 200 territories and greatly enhance its international brand exposure.

This is the second time the Chinese giant has filled the position of a global partner among other UEFA sponsors. The company's brand awareness has already increased significantly in Europe through sponsorship of the UEFA Euro 2016 and 2018 FIFA World Cup. It is also a team supplier to Red Bull Racing and sponsor of the Australian Open in 2014.

Zhou said sponsorship of such top sports events will increase the brand's awareness and influence, and let the consumers recognize the products more quickly.

Being at the forefront of electronics and the home appliances industry, Hisense is banking on new technology, which will fuel business growth and power its global brand awareness.

It is doubling down on the cutting-edge laser TV and has unveiled several large-sized and hi-tech TV products at the IFA Electronics Show in Berlin and the Consumer Electronics Show or CES in Las Vegas.

It started to actively lay out the laser display field in 2007, and officially launched the first ultra-short laser TV globally in 2014. Currently, Hisense has more than 600 international patents related to laser displays.

Founded in 1969 as a small radio factory in China, Hisense has grown into a multibillion-dollar global company with a workforce of over 75,000 worldwide.

Its sales revenue in the overseas markets reached $37.9 billion in the January-October period this year, an increase of 28.71 percent year-on-year, according to the company.

It has established 54 overseas branches in Europe, the Americas, Africa, the Middle East, Australia and Southeast Asia; has five overseas production bases to ensure it has its own supply chain and 12 research and development institutions worldwide.

In 2015, Hisense purchased Sharp's TV business in Mexico and acquired Sharp America's TV line for the North and South American markets. In 2017, the company acquired a 95-percent stake in Japan's Toshiba Visual Solutions Corporation, as part of its efforts to expand globally.

"Acquiring local companies is the easiest way for Chinese household appliances producers to expand their presence in the global market," said Zhang Yanbin, an independent researcher in the home appliance sector, adding the European market is of great significance to Chinese appliance manufacturers.

The Chinese home appliance market is almost saturated, so domestic makers are looking overseas to find new business growth points, Zhang explained. "The acquisition will allow the Chinese company to obtain local customers quickly and reduce production costs."

Industry data showed sales of Hisense refrigerators in South Africa ranked first in both 2017 and 2018, while its market share of TVs in Japan reached 20 percent in the first half of this year and ranked third, surpassing Japan's local brand Sony.

"We are processing the fish head with newly-introduced fresh-freezing equipment to cater to the Chinese community, and we are also developing items including fish patties, dumplings and sausages to target US customers," said Yu, president of Two Rivers Fisheries, a company dedicated to carp processing located in Wickliffe City, county seat of Ballard in the US state of Kentucky.

The lineup of fish products, ranging from fish meat to fish sausages, is her answer to the invasive Asian carp－a radical plan to battle the notorious carp plague with knives, forks and chopsticks.

Following their introduction to the United States in the 1970s for algae and waste treatment purposes, the Asian carp have multiplied rapidly and have been crowding out indigenous fish species in the Mississippi River and surrounding waters.

US authorities and the fish industry fear that the Asian carp's northward proliferation, if not curbed, spells disaster for the $7 billion fish industry of the Great Lakes region.

Yu, who has been in the seafood business for over 15 years, acutely sensed opportunities when she read reports about the troublesome fish back in 2010.

She then relocated from California to the obscure Kentucky county on the Mississippi River to start her business in 2012. "Our mission is to reduce, reuse and redefine Asian carp," said Yu, whose operation hires more than 20 local people.

The entrepreneur prides herself on her choice of location. As the name Two Rivers Fisheries indicates, her plant sits on the confluence of two rivers－the Mississippi and its major tributary, the Ohio. Unlimited supply of Asian carp and agreeable climate in middle Mississippi the whole year round have guaranteed her company's smooth operation.

After receiving carp from local fishermen, the plant processes, flash-freezes and boxes up the fish before shipping them out to destinations across the globe.

"The yield varies a bit with the season. We have seen rapid growth in production recently, with about 1 million pounds in October alone," said Yu, adding about 80 percent of the output was exported to Eastern Europe and the Middle East.

Over the past seven years, the company has taken 10 million pounds (450,000 metric tons) of Asian carp out of the Mississippi River, which were sold to a total of 11 countries.

While making headway in fulfilling her business ambition, Yu said the journey has never been without challenge. A lack of commercial fishermen used to be one of them, as most locals deemed there was no market for carp.

Because of the complex bone structure, US consumers showed little appetite for the fish, according to Yu. However, the growth of her business, driven by an export-oriented vision as well as a bold attempt at innovation, has been helping transform the landscape.

"When we first came here, there were only three groups of fishermen in the neighborhood. Now, the number has jumped to some 60 groups," she said.

Yu said purchasing carp from the fishermen, hiring staff and transporting the products account for a large share of her costs.

Yet, the forward-looking entrepreneur is quite bullish about the prospects as she believes in the potential of a robust fish processing chain along the Mississippi River due to its abundant aquatic resources.

This April, Yu, together with multiple Chinese investors, launched the International Fisheries Industrial Park in the county area.

The 72-acre industrial park dedicated to Asian carp harvesting and processing has attracted about 10 Chinese companies to land by far, said Yu.

The new industrial park, designed for vertical processing integration, aims to produce value-added products with the Asian carp.

Yu wishes the park to be a success in exploring new opportunities while mitigating the "carp crisis."

Todd Cooper, judge-executive of Ballard County, praised Chinese wisdom as well as business acumen in developing the project.

He is also hopeful that the new business cluster would help bring in more Chinese companies to establish their presence as economic development and job creation are crucial to the local community, which had experienced years of business slack. "We had lost jobs for 12 straight years at one point," said Cooper, adding the county has started to reverse that trend since 2018, "and I will say it's because of the Chinese investment."

The International Fisheries Industrial Park is expected to create at least 150 full-time jobs and plenty of indirect and part-time work for fishermen and construction companies, according to estimates by the Kentucky Cabinet for Economic Development.

Statistics from local economic authorities showed that Chinese-owned companies operating in Kentucky currently employ nearly 9,000 people.

Xinhua

Eclipsing lackluster spending tides in sectors like food and beverages, makeup sales revenue from imported lipsticks to eyeliners this year rose 28 percent year-on-year, outstripping the nearly 10 percent growth rate of the overall fast-moving consumer goods sector, according to latest figures by consultancies Bain and Kantar Worldpanel.

Charles Kao, 58, China president of South Korean cosmetics group Amorepacific, will likely welcome the trend: the company recorded staggering sales during the Nov 11 online shopping carnival.

Ten of its brands participating in the gala saw sales surge 62 percent from a year ago, with its Sulwhasoo, Laneige and Innisfree brands each netting over 100 million yuan on that day.

But in the eyes of Kao, who has worked with major international beauty brands for over 20 years, the 11-11 extravaganza represents more than product discounts－it is a unique opportunity to tap into the vast Chinese consumer market that has seen increasing sophistication in the past few years.

"It is an occasion where brands find their positions and enhance customer engagement," he said, referring to the 2.6 million new customers the company enlisted, thanks to the 24-hour e-shopping festival.

China accounted for about one-fifth of Amorepacific's 6.78 trillion won ($5.84 billion) revenue last year, and a lion's share of its overseas sales outside of home turf. The shifting needs and preferences of local digital-savvy consumers found reflection in their product research and purchases done online.

Kao, embraced China's burgeoning e-commerce back in 2013 when he took the helm of Amorepacific's China business. He oversaw the opening of the official online stores of its multiple brands at a time when digital shops were not perceived as a prerequisite to success but seen as potentially eroding the premium image of established brands.

"Digitalization has been an ongoing area of investment for us in the past several years," said Kao. "E-commerce is an avenue we value a lot and will be our business focus from now on."

Today, Amorepacific's digital push isn't confined to registering record sales－it aims to implement the "In China for China" ethos through customized product co-creation powered by consumer insights.

This is best exemplified by the recent setup of a dedicated office with Chinese internet giant Alibaba in Hangzhou. The aim is to incubate new products tailored to the Chinese market, facilitate online-to-offline sales, gain precise consumer insights and explore opportunities in overseas markets.

"For new product launches in China, we are moving from 'intuition-driven readiness' to the employment of data that depicts the clear preferences of customers," said Kao, under whose leadership the group has seen nearly 30 percent of revenue generated through online channels.

Ideally, the Amorepacific-Alibaba office is designed to shorten the average length for new product introduction to six to nine months, from the typical 24 months taken by many Japanese and South Korean cosmetic companies, said Hu Weixiong, general manager of fast-moving consumer goods practice at Alibaba's Tmall site.

"In the early stage, the office can enhance coordination between Alibaba and Amorepacific's headquarters and hopefully speed up the decision-making process for the introduction of new products in China," said Hu.

Under such an initiative, the first batch of two co-created skin care products, banking on data feeds that track people's favored formula and packaging, is scheduled to debut in China early next year, Kao noted.

Navigating the world's second-largest consumer market has never been easy. The CEO highlighted the dual focal points for the next phase of growth: deployment of both high-end and mass market products.

A divergence of customer preference is clearly emerging. Young Chinese consumers are willing to pay more for high-quality items and services. "Therefore, we are investing heavily on enhancing immersive experience in the premium product line, such as the spa services in our Sulwhasoo storefronts," he said.

At the same time, small-town youngsters form a new growth point for the industry with 7.8 percent year-on-year growth in spending in 2018, according to consultancy Kantar Worldpanel.

Online sales of beauty products, including cosmetics and personal care, in small towns soared 38 percent in 2018, double the growth rates in big cities.

To harness such a trend, Amorepacific has enhanced its mass market offerings both online and offline. It is also looking to leverage a wide array of social media apps from Douyin, Kuaishou to Bilibili, to tap into the emerging consumer group who generally have more spare time watching content streamed online.

"Emerging beauty trends normally debut online. In the foreseeable future, companies in other sectors are likely to follow suit and invest in the marriage of digitalization and customization," said Jason Yu, general manager of consultancy Kantar Worldpanel China.

Kao doesn't feel like being shackled to his brightly-lit office in downtown Shanghai, making decisions purely based on data and research reports. Rather, he embarks on trips to the country's inland cities and talks to beauty assistants and local shoppers for first-hand feedback and insights.

That's his guiding principle for not only business operations but philanthropic endeavors. Under a project dubbed "Make Up Your Life", Kao led his team to seven impoverished townships across five provinces, overseeing free cervical and breast cancer screening examinations for more than 70,000 women.

Joining hands with the China Women's Development Foundation, the company, since 2016, has spent 38 million yuan so far not just conducting checkups and health-related lectures, but hosting regular charity sales, fund-raisers, and classes teaching skin care and makeup skills to those who had undergone surgeries.

Kao said he is mulling introduction of more diverse corporate social responsibility programs in China, such as a women empowerment project aiming to equip those with relatively low income with professional capabilities in training, career path, and even financing.

Asked about the secret of staying refreshed in light of his packed schedules, Kao said: "It's the magic of the beauty industry."

Such expansion is necessary to maintain robust growth over the next three years, said a senior executive of Fung Group.

With its business covering trading, logistics, distribution and retail sectors, the company will adopt more digital solutions to upgrade the entire supply chain management system and establish a global smart supply chain to shorten the response cycle.

"Over the past few decades, Asian countries exported consumer goods to the Western markets, but not the other way around. However, twoway trade has deepened of late because Chinese consumers started looking for high-quality products or services from outside the national market," said Stephen Fung, the group's president for the Chinese mainland market.

He said the retail growth rate driven by the Asian market is twice that of others, and the Chinese market has gradually grown into the largest in Asia. The purchasing power of Chinese consumer has also contributed to the global inclusive economic growth and sustainable development.

Since the establishment of Fung Group in Guangzhou of South China's Guangdong province back in 1906, the Chinese mainland market has always been a valuable asset to the group's business strategy and development, he said.

Nearly half of Fung Group's global sourcing currently comes from the Chinese mainland. With its plan of expanding the consumer market, the firm predicted that its revenue and profit from the Chinese mainland will keep growing notably over the next three years.

Supported by over 42,000 employees in more than 40 countries and regions, the company also believes that the Guangdong-Hong Kong-Macao Greater Bay Area will serve as the basis for economic development that "provides ample space for the company to grow".

Fung, who previously studied and worked in the United States and Japan, stressed that the emerging digital technologies are driving innovation and creating new opportunities, which companies in supply chain management cannot fully optimize if they work alone.

So, Fung Group and JD Group signed an agreement to boost mutual cooperation in March. The company launched the first AI-enabled checkout system for retailers in Hong Kong. It uses image recognition technology and advanced AI algorithms. The checkout counter can identify up to five products in one second with over 97 percent accuracy, which can reduce the overall checkout time by 30 percent.

It also formed a partnership with Alibaba Group Holding Ltd in 2018. The two parties started to leverage their online and offline channels to initiate new opportunities that can help more lifestyle brands enter the Chinese mainland market.

With the support of its partners, the company has digitalized all key fields in supply chain, including product development, material costing, design, sampling, production and delivery to further compete with other established competitors in the market, Fung said.

"Take 3D design. It shortens the time from sampling to application (from hours to weeks) as well as cuts unnecessary sampling and traffic, which will increase the overall speed, improve the supply chain efficiency, and help its partners gain additional profits," he said.

Apart from investing more on digitalization, the company established the group's head office for the Chinese mainland in Shanghai this year, to forge a closer bond with local exchanges, as well as create a better connection with local business partners, in order to integrate resources and diversify sales channels.

Fung said the group will further exploit potential in markets participating in the Belt and Road Initiative and build platforms for many Chinese companies seeking to go global. This should help them to boost exports, and support small and medium-sized enterprises to grow in global markets.

Fung Group plans to bring a variety of products to Belt and Road economies, and introduce the right products to meet the growing needs of local consumers.

Yu Jianlong, secretary-general of the Beijing-based China Chamber of International Commerce, said the tangible development brought about by the BRI will offer Chinese companies more opportunities to enhance their earning ability in global markets, given the massive population base, growing demand for infrastructure, and movement of resources in the BRI footprint.

"From a long-term perspective, population determines economic growth. Even though it will take a certain amount of time, the number of consumers will determine the potential of economic development in both developed and developing economies," he said.

Yu said China's consumption upgrade is not only creating new demand in China but facilitating rapid development of e-commerce, transportation and logistics sectors in many BRI markets. This has also led to profound restructuring of supply chains of daily necessities, industrial goods, foods and beverages.

"The fiscal policy should strengthen countercyclical adjustments and meet the fiscal balance requirements next year," Liu said in a work report, which was issued on the ministry's website on Friday, after the two-day annual meeting in Beijing.

Tax and fee reduction will be the key measures for a proactive fiscal policy, through which more resources can be transferred from the government to market entities, and is another way of increasing fiscal expenditure, said Liu. "We will reduce the taxes and fees that need to be reduced."

Experts said no new tax and fee cuts will be announced in the near term and the government will instead focus on implementing existing policies.

Full-year tax and fee reductions for this year is expected to be more than 2 trillion yuan ($286 billion), and the manufacturing industry, as well as the small and micro enterprises will benefit the most. For instance, about 70 percent of the value-added tax cuts happened in the manufacturing sector, according to finance ministry data.

Fiscal and taxation system reform will continue next year, along with the accelerated tax legislation process and strengthening fiscal expenditure management, the minister said in his speech.

Maintaining a balance between fiscal income and expenditure will be more difficult next year, the minister said, predicting a slower increase in revenue growth for central and local governments. That may limit the space for implementing an expansionary fiscal policy, said experts.

"How much the government can spend is determined by how much the income is", which is a key principle for setting next year's fiscal budget.

Government spending will focus on reducing poverty, environment protection, improving education and supporting small-and medium-sized enterprises, according to the work report.

The government will encourage local governments to expand the scale of financing guarantee business of small and micro enterprises in the real economy to reduce the financing guarantee rate. Local governments will be urged to repay the debt borrowed from private and small companies. A pilot program to deepen financial services reforms for private, small and micro enterprises will be launched, the report said.

In terms of fiscal and tax reforms, the legislation on value-added tax law, consumption tax law and tariff law is in the pipeline, and the finance ministry plans to expand the water resources tax pilot.

At the two-day annual meeting, the Ministry of Finance asked local officials to carry out the debt dissolving plans in a practical and detailed way, accelerate the market-oriented reform of local government financing platforms－most of which are indebted State-owned companies guaranteed by the local governments, and strengthen supervision to curb the growth of implicit debt.

The Finance Minister suggested to "make good use of the local government special bonds" in 2020, a debt instrument that collects funds for infrastructure construction, which usually has relatively lower financing costs compared with corporate bonds. "The scale of projects using special bonds should be expanded, and a mechanism for reserving, assessing and selecting special bond investment projects is needed," said Liu.

The local government special bonds will be an important fiscal tool next year to expand investment and stabilize economic growth, Li Yang, director of the National Institution for Finance and Development under the Chinese Academy of Social Sciences, said at the 2019 China Bond Market Forum on Friday.

This year, some local governments have already taken measures to reduce the implicit debt, but further efforts should be taken to prevent debt risks, which calls for tighter supervision of local governments' budget performance, he said.

Another task is to step up reforms for managing State-owned funds and enterprises, to push for the establishment of a company, which is in charge of investing and operating the State-owned capital, as delegated by the State Council. The introduction of regular rules for capital owned by State-owned financial institutions will help accelerate, streamline and centralize the fund management, said Liu.

China's banking and insurance regulator issued draft rules on banks' cash-related wealth management products on Friday, part of ongoing regulatory efforts to further strengthen regulation of commercial banks' wealth management business to resolve financial risks. The draft rules clarified the definition and regulatory requirement of cash-related wealth management products sold by the country's commercial banks and their wealth management subsidiaries. Friday's rules are a supplementary regulation after the regulator released rules to strengthen regulation of banks' wealth management business in July to prevent shadow banking risks.

Sixth C919 prototype completes test flight

The sixth and last prototype of the C919, China's first home-built narrow-body passenger jet, completed a successful test flight in Shanghai on Friday, marking a milestone in the model's development as it moves to gain airworthiness certification before entering the market. The jet took off at 10:15 am on Friday from Shanghai Pudong International Airport, and flew for two hours and 5 minutes, before returning to the airport. So far, all of the static tests of the C919 have been completed, and its manufacturer Commercial Aircraft Corp of China said it has started manufacturing the first batch of aircraft that are set to be delivered to customers.

Tarim oilfield output increases in 2019

The Tarim oilfield branch of PetroChina, China's largest oil and gas producer, said it has produced more than 28 million tons of oil equivalent of crude oil and natural gas in 2019. The output, which was about 1.76 million tons more than that of 2018, included about 5.67 million tons of crude oil and about 28.05 billion cubic meters of natural gas. The oilfield's output is expected to reach 30 million tons of oil equivalent by 2020 and 36 million tons by 2025, the company said. Located in the Xinjiang Uygur autonomous region, Tarim Basin is one of the most difficult to explore due to its harsh ground environment and complicated underground conditions.

]]> 2019-12-28 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/28/content_37530666.htm China's financial authorities released a notice on the disposal of corporate bond defaults on Friday in an effort to resolve financial risks and step up punishment for debt evasion and other illegal activities in the country's bond market.

The notice underscored the authorities' intent to steadily push the disposal of corporate bond defaults through market and rules-based approach and to effectively contain financial risks amid slower economic growth.

Financial authorities have pledged to raise the efficiency of bond default disposal by introducing more market-oriented mechanisms and vowed to strengthen regulation on intermediary agencies including bond underwriting and credit ratings agencies and ordered them to effectively carry out due diligence, according to a statement jointly issued by the People's Bank of China, the National Development and Reform Commission and the China Securities Regulatory Commission.

The regulators also ordered bond issuers to strictly fulfill their obligations including information disclosure and to actively pay off their debts.

The rules also highlighted the necessity to improve the regulatory coordination and step up law enforcement and punishment of illegal activities including debt evasion.

The issuance of the notice came as China's economy is facing growing headwinds from domestic and external uncertainties. The financial regulators have been paying close attention to the development of the country's corporate bond market to fend off financial risks as there are chances of a rise in corporate debt defaults next year.

Liu Guoqiang, vice-governor of the PBOC, said at a recently held meeting that regulators will push market liquidation, maintain order in the bond market and work to ensure that the bond market plays a better role in providing funding for companies.

Zou Lan, head of the financial market department at the PBOC, said at the meeting that default cases may continue to rise next year and the risks are higher in low-quality private firms, property developers that are highly reliant on unconventional financing channels and local government financing platforms.

Zou said that China's overall debt default rate is not high but it is growing at a faster pace, and it is necessary to raise the efficiency of default disposal as the low efficiency has hurt investors' confidence and weakened their investment enthusiasm in the bond market.

China has the world's second largest bond market with its total value reaching nearly 100 trillion yuan ($14.3 trillion). The value of the Chinese corporate bond market has exceeded 20 trillion yuan, according to regulators.

Yi Huiman, chairman of the China Securities Regulatory Commission, the country's securities watchdog, said earlier that the regulator will strengthen the regulation on corporate bond issuance, prevent excessive financing and strictly control risks.

]]> 2019-12-28 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/27/content_37530546.htm The contracts signed between SBM Offshore, a Netherlands-based company engaged in the offshore energy industry, and its Chinese partners on two more floating production storage and offloading (FPSO) hulls will further enhance their ties and thus help the company to expand its presence in China, said company's top official.

SBM Offshore signed contracts with Shanghai Waigaoqiao Shipbuilding and China Merchants Industry Holdings earlier this month on building the two new multipurpose hulls, also the company's fourth and fifth hulls, bringing its building tally to five in the country.

An FPSO vessel is generally used by the offshore oil and gas industry for the production and processing of hydrocarbons, and for the storage of oil.

Short for floating, production, storage and offloading, an FPSO vessel is designed to receive hydrocarbons produced by itself or from nearby platforms such as a subsea template, process and store the oil until it can be offloaded onto a tanker or, less frequently, transported through a pipeline.

The two hulls built for SBM Offshore will also be using the company's Fast4Ward standardization program, same as the previous three hulls the shipyards are building for them, a senior executive of the company said.

SBM Offshore's new build hulls will have a storage of up to 2.3 million barrels, as well as a daily production capability of up to 250,000 barrels of oil.

Srdjan Cenic, SBM Offshore's China general manager, said the multipurpose floaters have a large volume of work in steel and welding.

SBM Offshore has been helping its partners in developing supply chains, financing and improving quality and efficiency, as the company has been focused on expanding presence in China since its entrance in China in 1973, he said.

The company is expected to have about 80 vendors in China by the end of this year, and is targeting 250 by 2021, according to the company's plan.

"We see China and its partners as important enablers in our strategy for potential growth and expansion in deepwater projects," said Bernard van Leggelo, managing director of strategic growth of SBM Offshore.

The demand for FPSO projects is on an upturn given the fact that the oil price hovered around $62.8 per barrel in 2019, which is 11.5 percent below the 2018 average of $71 per barrel.

FPSO industry revenue is expected to hit $117 billion by 2024, growing at a rate of 19 percent over the period of 2016-2024, according to Global Market Insights Inc.

Poised to reach over $77 billion by the year 2025, FPSO will bring in healthy gains as it adds significant momentum to global growth, said a report by ResearchAndMarkets.

The report suggested that China, as the world's second largest economy and the new game changer in global markets, has shown the potential to grow at 19.1 percent in this sector over the next couple of years.

"The FPSO market is full of opportunities where Chinese industrial players should exhibit their strengths to vie for orders. It is worth noting that demand for construction of large, deepwater and complex FPSO projects has been increasing in recent years, but as an emerging sector, there exist many challenges which require concerted efforts of the domestic FPSO operators, shipyards, offshore engineering companies, financial institutions and equipment producers," Yu Hua, a general manager from a subsidiary of CNOOC Energy Technology & Services Ltd was quoted as saying by China Energy News.

 

Most of the US-listed Chinese companies are technology titans and much younger than some of their US peers. Most of these companies are in potential maturation stage for initial public offerings (IPO) and pursuing their next steps.

According to BNY Mellon, the New York-based custodian bank and asset servicing company, about 15 to 20 Chinese companies listed their shares on US bourses this year to raise $3 billion, compared to 20 companies that collected $7 billion to $9 billion in funding last year. The IPO pipeline outlook for 2020 looks robust, it said.

Although there were media reports in September that the US government is considering delisting Chinese stocks in the US and limiting US government pension funds' investments in Chinese companies, US bourses are still a favorite listing destination for Chinese technology companies.

"The US market has significant potential peers, seasoned investors and sheer size of assets under management. At the same time, US investors are seeking exposure to what is unique in Asia-Pacific－the demographics that you cannot replicate in other parts of the world," said Francis Giglio, head of Asia-Pacific Depository Receipts at BNY Mellon.

"Chinese companies listing in the US can have unparalleled access to knowledge capital in the US market, a market where investors are aware of the intrinsic value. Enterprises will continue to evaluate each market based on its unique characteristics to find the best fit for them," Giglio said.

For example, OneConnect Financial Technology Co－the online financial services platform of insurance giant Ping An Insurance Group Co of China－in December raised $312 billion after slashing its IPO target price by half.

Giglio reiterated that it is possible that some Chinese companies which have issued ADRs in the US could seek another listing on the Hong Kong stock exchange. "It is a viable option for companies based in Asia to access both the capital markets of the US and Hong Kong to fund their strategies."

In November, technology giant Alibaba Group's IPO in Hong Kong created a record for the largest IPO of this year by raising about $11.2 billion in a float that was larger than Uber Technologies Inc's $8.1 billion IPO in April, and about twice the size of Budweiser Brewing Company APAC's $5.76 billion deal in September.

The global e-commerce behemoth listed its shares in New York five years ago in the world's largest public offering, raising $25 billion in 2014 after the Hong Kong stock exchange refused Alibaba's IPO application since it did not allow dual class share sales at that time.

Chinese enterprises usually list their shares in the form of American Depositary Receipts (ADR) in US stock exchanges, representing a feasible and liquid way for US investors to invest in overseas companies. Foreign firms also benefit from issuing ADRs as they come without the hassle and expenses involved in listing on US bourses.

As at February this year, 156 Chinese companies were listed on US bourses and had a total market capitalization of $1.2 trillion, according to the US-China Economic and Security Review Commission.

Latest data from the Ministry of Industry and Information Technology showed China's crude steel output reached 904 million metric tons over the January-November period, increasing 7 percent year-on-year－nearly 3 percentage points lower than the year-on-year crude steel output growth rate for the first half of 2019, which stood at 9.9 percent.

The China Metallurgical Industry Planning and Research Institute predicted in a recent report that both China's crude steel output and demand will fall in 2020 from 2019.

Crude steel output in 2019 and 2020 is expected to reach 988 million tons and 981 million tons, respectively, said the report released earlier this month.

Steel consumption is estimated to hit 886 million tons this year, while demand forecast for 2020 is expected to be 881 million tons, down 0.6 percent from the level in 2019.

Chen Kexin, chief analyst of industry information provider Lange Steel Research Center, estimated that increasing crude steel output growth over the past few years is likely to come to an end soon.

"Capacity is the foundation of output growth. As most of the advanced steel capacity built in the past years has already come into use, there will be little new capacity coming into operation in the future, which means less steel output," Chen said.

Li Xinchuang, president of the institute, came to a similar conclusion, although from a different perspective.

"As the Chinese economy is transitioning from high-speed growth to high-quality development, consumption is to play a bigger role in driving economic growth, while the economy will no longer excessively depend on investments," Li said.

"That is to say, investment in fixed assets will remain at a relatively low level and steel demand will no longer be as high as in the past."

He estimated steel demand is likely to decline slightly over the 14th Five-Year Plan (2021-25) period, although the total amount will still be considerable.

Qu Xiuli, deputy head of the China Iron and Steel Association, said at an industry forum in November that the industry will continue to rein in unwanted steel capacity, and pursue green development with less energy consumption but higher product quality.

Also, the industry will make efforts to increase market shares of leading companies through industrial upgrade and mergers and acquisitions, so that the steel market will become more orderly, she said.

Over the Jan-Oct period, the top 10 steel companies only accounted for 34.6 percent of the total crude steel output, a 0.7 percentage point decline compared with last year, which was the opposite of the industry's expectations, according to her.

Li said mergers and acquisitions are becoming key for quality industry players to have more market influence so that the industry can better avoid disorderly competition, amid the industry's pursuit of high-quality development, since remarkable progress has been made in overcapacity removal and environmental protection.

As the largest steel producer in the world, China's top 10 steel companies account for less than 40 percent of domestic capacity, far off the goal of 60 percent if the industry wants to avoid disorderly competition, while the top four mines in the world control about 80 percent of global iron core output, he said.

However, as there is consensus in the industry for increasing concentration－or the market share and influence of the top companies－efforts have been made with some achievements, experts said.

A recent example is China Baowu Steel Group's stock acquisition of Maanshan Iron and Steel Co Ltd, which took the former one step closer to becoming the global leader.

Li predicted there will be more market-oriented, cross-region and cross-ownership mergers and acquisitions among Chinese steel companies.

Hopefully, there will soon be a fleet of national and regional steel giants, and a slew of small-scale but specialty steel companies, including three to four steel companies with capacity above 80 million tons, and six to eight steel companies with capacity above 40 million tons, he said.

The new product relies on the cloud and is dubbed Tencent Meeting. It offers a way to maintain strong communication with coworkers, clients, partners or anyone who uses the system, which will help enterprises save costs and improve efficiency.

Wu Zurong, vice-president of Tencent Cloud, said Tencent aims to be a co-builder of the video conferencing ecology.

"Entering the video conferencing sector, we will not offer any hardware products. Instead, we will focus on providing the platform and standard software as a services, dedicated to connecting people, devices, conference rooms and maintaining strong communications," Wu said during the launch event on Wednesday in Beijing.

"Tencent hopes to work with both software and hardware partners to expand the smart office market, helping Chinese companies reduce costs, increase efficiency and accelerate the digital transformation," Wu added.

Given the blossoming mobile internet, cloud computing and other new technologies as well as the rise of millennials in the workforce, the smart offices sector is booming globally, along with the rise of video conferencing businesses.

A recent report released by consulting firm Frost & Sullivan said 32.8 million video conferencing related devices, infrastructure and cloud services seat licenses were shipped, generating a total revenue of $7.8 billion in 2018. The market is on a high growth trajectory and is estimated to expand at a compound annual growth rate of 12.1 percent to hit $13.82 billion by 2023.

"User demand for video communications has been booming," said Roopam Jain, an industry director within Frost & Sullivan's information and communications technologies business unit. "The proliferation of mobile devices combined with an unending appetite to consume video in all its forms has been a major factor in breaking traditional barriers to adoption."

Jain added the consumerization of video has also led to a growing need for hassle-free video conferencing that empowers users to connect from any device with a simple click of a button.

Seeing the growing demand for an easy-to-use option, Tencent's new product can be deployed on mobile phones and personal computers. Users also can access the service via Tencent's WeChat mini programs and the Enterprise WeChat that targets corporate clients. Users can sync the notes across multiple devices.

To cater especially to the growing young generation and provide a service that can be used anywhere, Tencent Meeting offers functions that include blurring the background and putting in beauty effects.

With more than 20 years of experience of audio and video technologies and over one million servers, Tencent is getting serious about carving out a stake in the burgeoning video conferencing market.

So far, Tencent has gained 1.1 billion WeChat users, 800 million QQ service users and 2.5 million corporate clients on its Enterprise WeChat platform.

 

 

 

The comments came as a new report forecast that China will have more than 700 million 5G users by 2024, accounting for more than half of the global 5G population by then.

Wang Zhiqin, deputy director of the China Academy of Information and Communications Technology, a government think tank, said in 2020, China's telecom carriers will build 5G networks on a large scale, laying down a sound infrastructure for widening the use of cutting-edge technology.

By the end of this year, there will be more than 3 million 5G users in China, Wang said. The numbers will mark a significant rise from the data in late November when the country had only 870,000 5G mobile subscribers.

China kicked off the commercialization of 5G on October 31, with the country's telecom carriers rolling out their 5G data package plans. China Mobile, the world's largest telecom carrier by mobile subscribers, plans to have more than 50,000 base stations by the end of this year.

China Telecom and China Unicom, two smaller players, have also announced plans to work together to build a nationwide 5G network as the country's second-and third-largest telecom operators join hands to reduce construction costs. As of December, the two companies have already shared 27,000 5G base stations, Wang said.

The comments came after the government think tank published a report which forecast that the commercialization of 5G in China is expected to generate a direct economic output of 10.6 trillion yuan ($1.5 trillion) from 2020 to 2025, and an indirect economic output of about 24.8 trillion yuan.

Yang Jie, chairman of China Mobile, said that: "The 5G butterfly has already fanned its wings and will have a broader economic and social impact."

The company plans to attract 70 million 5G subscribers, and sell 100 million self-brand and third-party 5G smartphones next year.

Yang also said the State-owned company will invest 20 billion yuan ($2.8 billion) next year to build a robust ecosystem for the commercialization of 5G technologies.

Xu Zhijun, rotating chairman of Huawei Technologies Co, said earlier that China has the right conditions to build the world's best 5G network and the global telecom industrial chain can benefit from the country's development.

"China has the best resources in frequency spectrum and base stations. Local consumers and enterprises have some of the highest enthusiasm and willingness to embrace 5G. And the governments have rolled out favorable policies," Xu said.

Xu said that China is likely to have more than 200 million 5G mobile subscribers by 2020, and the fast deployment of 5G tech in the country will benefit global telecom and semiconductor industries.

The Shanghai Composite Index gained 0.85 percent for the session to close at 3007.35 points on Thursday, while the Shenzhen Component Index also climbed 0.72 percent to end at 10303.72 points. Year-to-date, the Shanghai Index is on track to post a gain of more than 21 percent.

Securities firms were the major drivers for the Thursday advance. According to Shanghai-based market tracker Wind Info, A-share listed securities firms reported an average daily price increase of 3.3 percent. Other public financial service providers also saw their prices rise 2.34 percent on average on Thursday.

Yang Delong, chief economist of First Seafront Fund, said that securities firms that are seen as market indicators have shown robust growth over the past few weeks. As the Chinese financial market is further opened up to foreign security firms, domestic companies are seen improving their competitiveness.

Looking forward to the new year, Yang said that the Shanghai Composite Index will likely stand firm around the 3000-point area, while pointing to the possibility of a 20 percent increase, he said.

The State Council announced on Wednesday the removal of the household registration limits for cities with a population under 3 million people and relaxation of the limits for those between 3-5 million, in the hope of facilitating the free flow of the labor force.

Boosted by this latest policy, the property developers who are heavyweights of the A-share market reported a 1.9 percent average price increase on Thursday, which could provide a push to the market's upward momentum.

Analysts from Jufeng Investment wrote in a note that financial service providers, companies sensitive to economic cycles, and technology companies have become the major drivers for the A-share market since November.

Fluctuations seen last week were largely due to an expansion in the trading volume registered on Dec 17 as investors adjusted their positions with the end of the year in sight.

But as the adjustments ended and the market started to rebound again, the follow-through buying is expected to spill over into the new year, the market analysts said.

Zhang Yanpeng, head of the mutual funds investment department at Rosefinch Investment, said that investing in the A-share market will be more profitable than investing in commodities and bonds in 2020 as there will be four major reasons for the A-share market to climb.

Overseas capital inflows are expected to increase given a rise in the allocation to equity assets. Another source of attraction for investors would be the increased return on equity rate in public companies since the third quarter of this year.

Free cash flow of industry leaders will be largely improved in 2020. More importantly, the A-share market is still undervalued based on historic numbers, Zhang said.

Gao Yuncheng, general manager of Shanghai Greenwoods Asset Management, said that companies specializing in the new sectors of consumption, services and manufacturing will show strong growth in 2020. Mobile internet and medicine will continue to show room for solid gains, he said.

Han Zirong, secretary-general of the Beijing Organizing Committee for the 2022 Olympic and Paralympic Winter Games, said the association with Qi An Xin will help reduce the cybersecurity risks for the event.

"The events offer enterprises a giant opportunity to accelerate their brand building and enhance their competitive advantage," Han said during a media briefing in Beijing.

Due to the advent of technologies like mobile internet and internet of things, new cybersecurity risks are emerging due to the new era of pervasive connectivity.

Compared with the 1G to 4G era, the next-generation superfast 5G tech will serve various industries and foster a wide range of applications, thereby allowing people, devices and organizations to better connect with each other.

Qi Xiangdong, chairman of Qi An Xin Group, said cybersecurity has become not just an important but a necessary step for the Olympic Games.

"Hacking attacks will pose great threats to the safety of the event," Qi said. "We are committed to investing time and resources, as many as 3,000 people, to avoid such risks during the upcoming Winter Olympics."

Qi said due to the complicated Olympic system, the company does not have the right to transform its working system or screen the network services providers, thereby posing greater challenges to the company's security capabilities.

"We will work closely with previous information and network providers to keep a safe and sound cyber environment," Qi added.

To better serve the global sporting event, Qi An Xin has established the Beijing Winter Olympics network security operation center. It will continue to collect information on competition venues and accelerate the push for the safe design of the overall network services.

In May this year, Qi An Xin Group announced a strategic partnership with the State-owned China Electronics Corp, marking a key step for the company to join the national network security sector. With nearly 8,000 employees, the company claimed its technologies have been adopted in 90 percent of the government departments, State-owned companies and large banks.

As of now, the Beijing Winter Olympic Committee has signed on 10 official partners, eight official sponsors and five official suppliers.

The revision of the measures, issued by the China Banking and Insurance Regulatory Commission on Dec 18, became effective since the day it was released.

The main focus of the revised measures of implementation, according to experts, is to ensure that the revised regulations on the administration of foreign banks, which was issued in October, will be implemented effectively.

The CBIRC has allowed foreign banks to establish subsidiaries and branches simultaneously in the country and set requirements for the relevant banks.

It removed the $10 billion asset threshold necessary for foreign banks to set up locally incorporated banks and the $20 billion asset cap for branches.

After gauging public opinion for a draft of the implementation measures earlier this year, the regulator lifted the restriction that limited the scope of business of foreign bank branches to wholesale banking, which refers to the provision of services by banks to larger customers or organizations such as corporates and institutional clients, if the foreign banks choose to set up branches and subsidiaries in China simultaneously.

The revised implementation measures, on the other hand, allow foreign bank branches to choose their business direction based on a clear functional positioning, said the CBIRC in a note posted on its website on Wednesday.

Zeng Gang, deputy director-general of the National Institution for Finance and Development, said the abolishment of rules that limited foreign ownership of Chinese commercial banks was the most noticeable change of the revised regulations for foreign banks.

Previously, the caps on foreign holdings in domestic banks were 20 percent for a single foreign-invested bank and 25 percent for group investors.

"Taking both efficiency and steadiness into account, China will further open up its banking sector in an orderly way and ensure stability of the financial system at the same time.

"China should control the overall pace and order of the opening-up of its financial sector, comprehensively assess the likely impact of foreign banks' access to the China market, and make differentiated regulations according to the different types of banks and their modes of entering the China market," Zeng said.

He advised Chinese regulators to tighten regulations on cross-border funding operations by foreign-invested financial institutions to prevent financial risks, strengthen the isolation of risk associated with a foreign-invested parent bank and its subsidiary bank in China, and actively explore the construction of regulatory institutions for foreign financial institutions that adopt a mixed operation model in the country.

Dong Ximiao, chief analyst at Zhongguancun Internet Finance Institute, said: "Further opening-up will enhance the business philosophy and management approaches of China's financial sector, increase market efficiency, boost market vitality, and further improve financial institutions' competitiveness."

The removal of restrictions on market access and foreign ownership and the introduction of a larger number of foreign-invested financial institutions will largely enrich financial products and services provided to Chinese consumers, Dong said.

By relaxing requirements for foreign-invested financial institutions on setting up branches and subsidiaries in the country and expanding their scope of business, China will encourage healthy competition between foreign and domestic financial institutions, improve consumer experiences and better protect consumer interest.

Besides, compared with their Chinese counterparts, foreign-invested financial institutions are more globalized and have richer experience in wealth management and private banking. They will help China's middle class and high net worth individuals improve their global asset allocation, he said.

"I don't just stay in London or go to San Francisco" because "if you care about speed and you need quality, then Shenzhen has the supply chain and the network and experience already," said Salter, a vice-president with hardware startup Carv.

Once a small fishing town, Shenzhen, after four decades of reform and opening-up, has gradually become a global hardware center and hub for scientific and technological advances, where skyscrapers appear commonplace and the population has surged past 13 million.

Like Salter, every foreign resident living in Shenzhen has their reason for staying.

When the young British entrepreneur came to Shenzhen for the first time, he was blown away by the heightened differences compared to home.

"Crazy new technology is moving around and there are loads of people, and it's always busy," he said.

His destination upon arrival was HAX, an American company investing in hardware startups based in the city and San Francisco.

The workshop is divided up into open-plan offices where young entrepreneurs like Salter are hard at work developing their first prototypes, using components from the electronic market just downstairs.

Nikita Iliushkin, another HAX protege from Canada, who is currently working on a new type of drone, pointed out the advantages of Shenzhen for fledgling companies.

"Here all the various suppliers work much, much faster," Iliushkin said. "We are able to iterate so much faster being here."

"One week in Shenzhen is like one month everywhere else," he said.

Today, Shenzhen is known for its hardware expertise, thanks to its huge number of factories and resellers. It also has one of the world's most developed hardware industry chains and abundant intellectual capital.

"As a hardware startup, you don't have much money, and partly because of that, you do not have much time, you need to get to market quickly," Salter said. "So the best place to do that is, without a doubt, Shenzhen."

His company now has devised a digital sports coach that analyzes skiing techniques in real-time providing feedback on the slopes.

With China's successful bidding for the 2022 Winter Olympic Games and the country's plans to encourage"300 million people to join in ice and snow sports", Salter dreams bigger in China.

"Chinese skiing would offer real potential for us," he said.

Wolfgang Egger, a world-famous German car designer, is also building his dreams with BYD, a Shenzhen-headquartered electric vehicle maker.

Sitting in the BYD global design center, Egger, who proposed building the center, said that as a designer with experience in different companies and brands, "to have this opportunity to create something like this from nothing is a big challenge that I need."

That is the main reason why he joined the Chinese car manufacturer three years ago.

At that time, the "electric car trend in the rest of the world was not so strong" while China was a leader, Egger said.

"I was looking to really do a project on the identity and on the electrical future," he said. "BYD is the best option I could have."

At the Shanghai International Automobile Industry Exhibition in April, BYD debuted its E-SEED GT electric concept car with a "Dragon Face" design.

Such details as "dragon-scales" feature on the car's door panels, headlights resembling "dragon whiskers," and a "dragon ridge" on its roof and tail, were inspired by a symbol of dragons in China's Hongshan culture that dates back thousands of years.

Behind the eye-catching design is Egger and his team's desire to "look for inspiration for the brand's identity in Chinese culture".

A voracious reader of Chinese traditional tales, BYD named several of its car lines after dynasties in Chinese history.

Shenzhen was also designated as a United Nations Educational, Scientific and Cultural Organization City of Design in 2008, the first of its kind in China.

"The concept of modern Chinese design was gradually created in Shenzhen and has increasingly become a part of the city residents' lives," UNESCO said on its website.

"From my point of view, Shenzhen could be, (and) should be the design capital in China," Egger said, adding all the elements are present, including technology, young people and emerging trends.

In August, Shenzhen, the trailblazer in China's reform and opening-up, received a new mission: to create a pilot demonstration area of socialism with Chinese characteristics.

The southern Chinese city, one of China's first special economic zones set up in 1980, has since been widely dubbed the "Miracle of Shenzhen".

Official data showed that Shenzhen's GDP was only 196 million yuan ($28 million) in 1979, one year after China initiated reform and opening-up. In 2018, it soared to over 2.4 trillion yuan.

Shenzhen's embrace with the world has helped the city grab the tail of globalization.

The first Walmart-owned Sam's Club store on the Chinese mainland, which was opened in Shenzhen in 1996, has become the top Sam's Club store globally since 2008.

Globalization also enables international talent to work and live in such fast-developing cities like Shenzhen.

At least five Nobel laureates have set up their research institutes in Shenzhen. Among them, Arieh Warshel, a Nobel laureate in chemistry in 2013, said, "Shenzhen has a lot of high technologies which allow you in principle to innovate and collaborate, (and) a lot of resources which help innovation."

James Corner, a landscape architect and urban designer who once participated in planning the city, said Shenzhen is moving to "create a modern 21st-century city, a city that combines new technologies and dense forms of buildings and programs with human-scale streets and blocks, integrated with green natural systems, parks and open spaces."

Shenzhen is attracting more capital and talent, becoming a model of development for other Chinese cities and even the world.

In the first three quarters of 2019, Shenzhen's foreign investment increased by nearly 90 percent year-on-year.

This year, multinational companies including European aerospace giant Airbus, global management firm Boston Consulting Group, and tech-minded professional services firm Accenture, have set up shop in Shenzhen.

Shenzhen is also expected to play a global role in creating standards for institutional design, particularly in Qianhai, a Shenzhen-Hong Kong pilot cooperation zone in Shenzhen. Qianhai in September launched a pilot program to reduce the approval time for setting up businesses from one day to less than a minute.

With such fundamental innovations, Shenzhen could set global standards for years to come.

PBOC skips reverse repos as liquidity improves

The People's Bank of China, the country's central bank, skipped reverse repos on Thursday. "Rising fiscal expenditure near the end of the year keeps the banking system liquidity at a high level," the PBOC said on its website. With 30 billion yuan ($4.3 billion) of reverse repos maturing Thursday, that led to a net withdrawal of 30 billion yuan from the market. A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

China makes steady progress in fiscal fixes

China has almost addressed all the fiscal irregularities from 2018 identified in an audit report, according to the country's top auditor. Such rectifications involved about 310 billion yuan ($44.33 billion), said Hu Zejun, head of the National Audit Office. Many local governments have rolled out measures to push forward related rectifications, and different departments have enhanced coordination to improve rectification efficiency, Hu said. The NAO would continue to follow up on the rectification progress, Hu said.

Local government bond issuances drop in Nov

China's local governments issued fewer bonds in November, official data showed. The value of local government bonds issued in November totaled 45.789 billion yuan ($6.55 billion), down from 96.46 billion yuan in October, according to the Ministry of Finance. In the first 11 months, local governments issued bonds valued at 4.32 trillion yuan, including 2.55 trillion yuan worth of special-purpose local government bonds aimed at providing financial support for public-interest projects. MOF data also showed outstanding local government debts amounted to 21.33 trillion yuan at the end of November, below the official ceiling of 24.08 trillion yuan set for the year.

Freight train service to Poland commences

A new freight train service has opened linking northwest China's transport hub of Xi'an with Slawkow, Poland, in the hinterland of Europe by way of the Alataw Pass in the Xinjiang Uygur autonomous region. The first train left the station in Xi'an, capital of Shaanxi province, on Tuesday for the 9,478-km trip, which is expected to take about 10 days. After crossing China's border through the Alataw Pass, the train will pass through Kazakhstan, Russia and Ukraine to reach Poland. Compared with the traditional shipping route, the rail service takes less time and involves fewer changes in trains during the long journey.

COMPANIES AND MARKETS

Central SOEs report strong profit growth

China's centrally administered State-owned enterprises saw strong profit and revenue growth in the first 11 months of the year, according to the State-owned Assets Supervision and Administration Commission. Despite downward pressure on the economy, the net profits of central SOEs expanded 9 percent year-on-year and their combined operating revenue rose 5 percent during the January-November period, SASAC data showed. The supply-side structural reform of central SOEs has deepened, with a total of 14,000 legal persons removed and the overcapacity-cutting of steel and coal completed, Hao Peng, chief of the SASAC, said at a meeting. During the period, central SOEs' spending on research and development jumped 24.6 percent from a year earlier, with firms in petroleum, steel and automobiles industries notching a year-on-year growth of over 30 percent.

New intercity trains start services in Hunan

A new model of high-speed trains designed for intercity transportation was put into operation on Tuesday in Central China's Hunan province. With a design speed of 160 kph, the CJ6 trains were jointly developed by an intercity railway company in Hunan and CRRC Zhuzhou Locomotive Co Ltd. The new trains are versatile, as they can run in four-car formations during non-rush hours and eight or 16-car formations during rush hours, said Zhou Qinghe, chairman of CRRC Zhuzhou Locomotive. Using lightweight materials and equipped with a braking system powered by recycled energy, the new model is also energy-conserving and environmentally friendly, according to Zhou.

AROUND THE WORLD

Budget balance rises to 1% of GDP in Portugal

Portugal's budget balance reached 1 percent of gross domestic product in the first three quarters of 2019, better than the forecast of a government deficit of 0.1 percent for the whole year of 2019, according to the latest data from Portuguese National Institute of Statistics (INE). "In the first three quarters of 2019, the balance of General Government (GG) was positive, corresponding to 1.0 percent of GDP," compared with 0.4 percent in the same period of the previous year, said the INE. The INE pointed out that the GG balance was nil in the year ending in the third quarter.

Belarus cuts oil product shipments by 14.5%

Belarus reduced the export of oil products by 14.5 percent in the period from January to October this year, local media reported. In the first 10 months of 2019, Belarus exported 8.79 million metric tons of oil products, which is 14.5 percent less compared with the same period last year, the country's statistical committee was quoted as saying. Exports of oil products amounted to $4.44 billion, which is 19.7 percent less compared with the first period of 2018, the committee said. In October 2019, oil product exports totaled 750 thousand tons against 950 thousand tons in September and August, 900 thousand tons in July and 680 thousand tons in June.

Saffron output soars to record in Afghanistan

Saffron production in Afghanistan has soared to record levels in 2019, with a 22 percent increase compared to last year, Afghan Ministry of Agriculture, Irrigation and Livestock said on Wednesday. "The latest statistics showed that saffron or so-called 'red gold' production increased 22 percent, reaching 19,469 kg this year, which is about 20 metric tons," the ministry said in a statement. The statement added that more than 7,557 hectares of land were for cultivated saffron across the country this year. The country produced 16 tons of saffron last year, according to the statement. Nearly 90 percent of saffron production is exported abroad.

Albania GDP up 3.81% on quarterly basis

In the third quarter of 2019, Albania's gross domestic product increased by 3.81 percent year-on-year, Finance and Economy Minister Anila Denaj said at a news conference. Denaj referred to the latest data published by the National Institute of Statistics. Denaj said that the sector of trade, transport, accommodation and food services was the main contributors to the economic growth. "This sector registered a growth of 6.69 percent and gave a contribution of 1.3 percentage points to the GDP in the third quarter," she said.

After receiving the IPO approval from China Securities Regulatory Commission on Friday, Beijing-Shanghai High-Speed Railway Co Ltd, a unit of the State-owned China Railway Corp, plans to sell 6.3 billion new shares on Shanghai Stock Exchange, or 12.8 percent of its enlarged capital, according to its prospectus.

The company submitted its application on Oct 22. Industry experts estimated that the financing of the Beijing-Shanghai high-speed rail line operator will exceed 35 billion yuan ($5 billion), making it one of the largest IPOs in years.

The company's prospectus said it plans to acquire a majority 65.08 percent stake in the Anhui branch of the Beijing-Fuzhou High-speed Railway. It will also proceed with the mergers and acquisitions of companies in the same industry to better connect the other key lines between Beijing and Shanghai.

Sun Zhang, a professor at the Institute of Rail Transit of Tongji University, said the listing of the Beijing-Shanghai high-speed rail line operator will help to introduce private capital and advance the mixed-ownership reform of SOEs.

Upon its successful debut on the stock market, the company can adopt methods such as a debt-equity swap to lower the liability rate of China Railway Corp, he said.

As the most profitable rail line in China, the Beijing-Shanghai High-Speed Railway reported a sales revenue of 25 billion yuan for the first three quarters of this year, with the net profit amounting to 9.52 billion yuan. On that basis, the daily net profit of the rail operator is expected to be as high as 34.87 million yuan.

The profitability of the line operator is even more impressive when it comes to the fact that the company has only 67 employees. Considering its net profit of 10.25 billion yuan in 2018, the net profit generated by each employee may top as much as 153 million yuan. The asset managed per capita amounted to over 2.79 billion yuan by the end of September.

But that small head count and large asset size raised concerns from the CSRC.

In feedback provided on Nov 4, the CSRC questioned its prime operation and asked for an explanation to define the issuer as an asset management company or a high-speed train passenger transport service provider.

In a reply provided a week later, the company explained that the prime operation of Beijing-Shanghai High-Speed Railway Co is providing high-speed train transportation services.

"It does not have any asset management businesses, nor income from asset management activities," the reply said.

Professional service provider E&Y predicted in its latest report that up to 200 companies will have completed their IPO at the A-share market by the end of this year, up 90 percent from a year ago. The total financing is expected to reach 252.8 billion yuan, up 82 percent year-on-year.

Statistics from Wind Info showed that the total IPO financing recorded at the A-share market had reached over 248.3 billion yuan by Dec 21, having hit a record high and the loftiest since 2012.

Deloitte forecasts in its latest survey that between 140 and 170 companies will be listed on the main board, SME board and ChiNext board in 2020. The total financing will range between 180 billion yuan and 220 billion yuan. The STAR Market in Shanghai can attract up to 150 IPOs, with the financing raised likely reaching 160 billion yuan.

 

 

 

 

 

A research conducted with 2,000 executives found that only 20 percent of them were getting adequate returns on the data analytics they did.

The executives gave four reasons for the surprising outcome of the research, which was jointly conducted by Mastercard and Harvard Business Review earlier this year.

"First of all, they said today's analytics is happening in silos, meaning various parts of the company are running their own analytics, and tend to produce conflicting results sometimes," said Dimitrios Dosis, president of Mastercard Advisors, during a recent interview in Beijing.

"Second, there is a big time lag between the moment you need the data and the moment you get them. Sometimes it can take weeks. Third, data analytics is not really embedded in the workflow. When people need it to make decisions, they are not getting it. And fourth, they said sometimes you need a PhD degree to understand the software and the results, which means it is not really intuitive."

The fact that data analytics is not embedded in the day-to-day workflow is one of the primary concerns of Dosis who heads Mastercard Advisors.

Offering information, consulting and implementation services to merchants and financial institutions worldwide, this unit of Mastercard helps customers cleanse and understand the data they have, including anonymized and aggregated transaction data from Mastercard, to derive recommendations for customers based on data insights and advanced analytics.

Before fully rolling out the recommendations and executing them, consulting teams from Mastercard Advisors test the recommendations through the application of a test-and-learn technology.

"What we do is identifying a concrete opportunity based on our data, specifying the targeted segments where this opportunity primarily exists and then identifying the offer, and testing and executing it. This is a classical end-to-end service we provide for many banks, including Chinese banks," Dosis said.

Right now the company is developing a technology for this end-to-end service so that data analytics will become an effective part of the day-to-day work process. That means people do not need to do specific analytics while it is happening in the background.

"Imagine that for a cards manager of a bank, when she comes in the morning, instead of her logging in and running analytics, she gets a message on her device that says, 'Looking at the data from last week, we believe you have an untapped opportunity in the mass affluent segment.'

"Automated recommendation engine provides her the right offers for the right audience and asks, 'Would you like to test it?' She says yes. Six weeks later, she gets the results, chooses the best campaign and rolls it out. The analytics is happening in the background, and she is just there to make decisions. This is the technology that is going to come next," Dosis said.

So far, deriving recommendations has been a manual process, with consultants looking at the data regularly.

Companies have a lot of data and customers would like to interact with them, but the data are not cleansed. As data cleansing takes a lot of time, artificial intelligence could be applied in the process, Dosis said.

"Normally, it took us 80 hours to analyze the data and come up with recommendations. By applying artificial intelligence and having a more automated recommendation engine, we have been able to reduce this to 10 hours," he said.

Earlier in December, German conglomerate Merck signed a strategic collaboration with China's Ping An Good Doctor, a one-stop healthcare online platform, to jointly explore integrated solutions to advance intelligent healthcare in the country.

The tie-up will leverage Ping An's extensive experience in artificial intelligence medical technology, insurance provision and online and offline healthcare resources and Merck's medical expertise, high-quality medicines and innovative solutions to develop an integrated one-stop healthcare solution.

According to a joint news release, the duo also pledged to tear down the barriers between online and offline healthcare through innovative retail models that connect pharmacies, hospitals and primary healthcare institutions in rural areas.

"As part of our digitalization strategy, we are seeking out innovative solutions that will offer the highest possible benefits to patients, with the mission of transforming the lives of 40 million patients in China by 2025," said Rogier Janssens, managing director and general manager of Merck's Biopharma Business in China.

The tie-up is not a water-testing endeavor for either party, though: Merck entered into an agreement with Chinese internet giant Tencent in developing intelligent digital healthcare services by populating public knowledge of diseases, whereas Ping An built an internet healthcare platform for the government of Guangxi Zhuang autonomous region.

China's online healthcare market exploded from an insignificant 1.5 billion yuan ($214 million) in 2012 to a projected 23.5 billion yuan next year, according to data from Statista Research Development.

China has unveiled a multilayered grand plan called "Healthy China 2030" to boost people's livelihoods and longevity. Given the imminent struggle to contain rising healthcare costs, much focus will be placed on delivery of primary care and health promotion to empower both patients and physicians.

Digital solutions can address the critical issue of how the industry uses data analytics to drive efficiencies and deploy resources in a smart way, according to Kings Wang, senior director for strategic planning and head of marketing at IQVIA China, a US company serving the combined industries of health information technology and clinical research.

"Internet, AI, and other suites of personalized services will allow premium health resources to revolve around users and actively facilitates the precise implementation of the Healthy China 2030 initiative," said Wang.

Making medical products and services accessible to patients is a top priority. Guided by a so-called omni-protection concept, French vaccine maker Sanofi Pasteur unveiled in December a string of smart and standardized vaccination procedures in China to help users access immunization information, track vaccine data, and manage the vaccination process through the internet and big data technologies.

During the second China International Import Expo in November, Sanofi Pasteur inked a pact to establish cooperation with Chinese internet giant Alibaba Group's healthcare arm to build a vaccination cloud platform, offer related information online and location-based vaccine search services.

"The common thread running through the entire vaccination cycle is data, the sharing and smart deployment of which will assist authorities to keep track of disease prevention and data accumulation nationwide," said Mike Zhang, general manager of Sanofi Pasteur China.

What digital technology can do is to "create that closed loop so that people can be reminded about their second or third vaccine, and using other digital formats for them to be informed about their health," said Joseph Romanelli, senior vice-president of MSD and president of MSD in China.

The US-based company has joined hands with Ali Health to create a preventive health management system combining healthcare knowledge and technologies so that users can get to understand the burden of diseases and where they can get vaccinated.

"The digital platform that we have in China is probably second to none. What's great about China is that all of our customers, whether they are physicians or patients or potential patients, are online," he said.

Li Jinhui, general manager of the oncology and rare disease business of Pfizer China, said internet plus healthcare, which enables top-notch doctors with diverse expertise to be accessible to patients from all over the country, will bring significant benefits to patients prompting them to seek diagnosis and medical treatment instead of staying undiagnosed.

"Such accessibility provides patients with another choice to access high-quality medical services, other than lining up at the country's best hospitals, and helps them save travel costs. It will obviously accelerate medical service development in smaller cities and remote areas," said Li.

Physicians also stand to benefit from the digitalization wave.

Li pointed to big-data analysis, which will also play an important role in elevating diagnosis and treatment standards in the areas of oncology and rare diseases in smaller cities and rural regions.

A tumor patient database can be established and the most standardized models of diagnosis and treatment of certain types of cancer will be formed, Li said, thus establishing a system to guide every step in a doctor's decision-making process when making a diagnosis.

"Such a system will definitely empower medical institutions at a grassroots level and gradually help achieve equal availability of high-quality medical care," she said.

Others are rolling out medical devices backed by technological leaps. Siemens Healthineers, the healthcare unit of German conglomerate Siemens, unveiled in November its latest 5G-powered ultrasound solutions. The locally developed gadget is expected to help physicians in remote areas and county-level clinics better diagnose people with the real-time aid of seasoned doctors thousands of miles away.

"Currently, China lacks physicians especially in entry-level healthcare institutes, primary hospitals and rural healthcare institutes. Also, it is difficult for ultrasound physicians to improve their skills," said Jerry Wang, general manager of Siemens Healthineers China.

"Most 5G applications are in place to help higher-level hospitals to connect with lower-level hospitals. So limited physician resources will be utilized in a much better way," he said.

The company has also rolled out a one-stop stroke solution center, which has fast CT scanning and an angiography system in one room.

Despite all the perks, experts have called for prudence in the marriage of technology and medical care.

Zhang Meng, vice-president of Tencent Medical, said that the internet focuses on speed and pushing forward novel ideas, but the medical care industry is where safety is prioritized.

"Therefore it's difficult to totally change the industry using the internet and attempts may come step by step and slowly," he said.

Five of the seven hospitals benefiting from social capital investment totaling more than 12 billion yuan ($1.7 billion) in the phase-one project of the New Hongqiao International Medical Center are scheduled to open by the end of next year. All patients visiting the hospitals specializing in different areas, including tumors, plastic surgery, pediatrics, obstetrics and gynecology, will be able to access a shared facility center with cutting-edge technologies for medical examinations.

The Shanghai Concord Medical Diagnostic Imaging Center, part of the shared facility center, will offer access to internationally leading PET-MRI equipment used for the physical examination of patients suffering from tumors in their livers, breasts and heads, experts said.

"A patient needs to be injected with only one-third of the amount of a certain drug before taking the PET-MRI examination compared with that required by a PET-CT checkup, which makes it safe even for pregnant women and young children," said Zhang Xiaojian, a doctor from the imaging center.

There are only three such devices in Shanghai and no more than 20 nationwide, he added.

There is also an advanced digital radiography system, which can eliminate the effect of overlapping tissue information and thus enhance the ability to detect a lesion, at the center.

"It can also strengthen the display of the spine as well as tissue behind the heart and the diaphragm, which is important for patients suffering from congestive heart failure," Zhang said.

The shared facility center comprises medical technologies and supportive services, including labs, an imaging center, and a pharmacy.

The Hongqiao branch of Huashan Hospital affiliated with Fudan University, which boasts strong medical strength and facilities in neurosurgery and trauma treatment, was put into use in the Hongqiao area, which is located in the western part of Shanghai bordering the municipality's neighboring Zhejiang and Jiangsu provinces, in June last year.

More than 50 percent of the 12,000 inpatients in the past year and a half came from areas of the delta region outside Shanghai, according to the hospital.

A development plan regarding the Yangtze River Delta region unveiled in December by the country's central government announced that the overall layout of first-class medical and healthcare resources in large cities would be promoted to expand the coverage of high-quality medical institutions.

The plan aims to boost vitality in the region, which is about the same size as Germany and encompasses Jiangsu, Zhejiang and Anhui provinces as well as Shanghai and contributes roughly a quarter of the country's GDP and one-third of foreign trade and investment.

A McKinsey report showed that 300 million people from 15 nodal cities, 55 medium-sized cities and more than 1,000 towns can reach the New Hongqiao International Medical Center, which is a 10-minute drive from the Hongqiao transportation hub, within three hours.

As an eWTP institution, the secretariat is responsible for the daily operations, international cooperation, training and exchange programs, achievement displays and the release of rules and models, according to company officials.

The secretariat, located in the Xixi National Wetland Park close to Alibaba's headquarters, is slated to be operational from October next year.

"As the initiator of eWTP, Alibaba is a pioneer in combining business services with technology capabilities," said Eric Jing, a partner of Alibaba and chairman of Ant Financial Services Group, its payment arm. He said that the secretariat is on course to establishing similar platforms with other eWTP hubs in Malaysia and Belgium.

The secretariat is likely to play a pivotal role in constructing eWTP, which is aimed at lowering trade barriers through technological empowerment, and pushing ahead with some of the world's best digital economy practices in Hangzhou, according to the city's vice-mayor Hu Wei.

"We hope the secretariat will … enhance our connections with international organizations and institutions like the World Economic Forum and United Nations Conference on Trade and Development, organize high-level training with relevant government agencies and companies, and promote the sharing of 'Chinese experience' on digital economy with the rest of the world," he said during the launch ceremony.

In a parallel development, a public service platform under the auspices of eWTP will also debut in Hangzhou, allowing small-and medium-sized enterprises engaged in cross-border business to access a unified electronic "operating system", the company said.

SMEs thus stand to benefit from a one-stop solution for online customs clearance, settlement exchange, tax refunds, as well as logistics and financial services.

Hangzhou Customs completed in September tests on a cross-border e-commerce bonded area, paving the way for SMEs to realize the "Buy from the Globe and Sell to the Globe" vision, said Zhang Yi, vice-director of Hangzhou Customs.

Since it was first proposed by Alibaba founder Jack Ma in 2016, the eWTP has been recognized by the G20, and adopted by cities in China, Malaysia, Rwanda, Ethiopia and Belgium.

In the latest attempt, Ethiopia joined the eWTP last month to develop a multifunction digital trade hub to serve as a gateway for Ethiopian products to China, a center for cross-border e-commerce and trade within Africa, and a training center.

The drive also included implementing the capacity building and training, which consists of a number of programs, including specialized programs for Ethiopian entrepreneurs, business leaders and university lecturers.

At home, Yiwu, a city in Zhejiang province known for manufacturing and exporting small commodities, agreed to join eWTP on digitizing trade infrastructure and developing additional trade flows for the city. The venture also plans to work on innovations in trade finance and establish a smart logistics hub there.

Enthusiasm for savings up on quarterly basis

China's urban residents are more enthusiastic about depositing more savings in the fourth quarter (Q4) of this year, said a central bank survey. Among the 20,000 urban bank depositors surveyed in 50 cities across China, 45.7 percent responded with a willingness toward more savings in Q4, 1.2 percentage points up from the previous quarter, according to a survey conducted by the People's Bank of China. Meanwhile, their willingness toward investment shrank, with 26.3 percent of the respondents planning for more investment in Q4, down by 1.5 percentage points from a quarter ago. Respondents who are willing to increase consumption in Q4 accounted for 28 percent, up 0.3 percentage points from Q3.

Alcohol firms see stable growth in first 10 months

China's alcohol enterprises above designated size saw a total revenue of 681.98 billion yuan ($97.4 billion) in the first 10 months, according to the Ministry of Industry and Information Technology. The reading was up 8.7 percent compared with the same period last year, the ministry said. During the period, the profits of 2,126 alcohol makers with an annual revenue of over 20 million yuan grew 17.9 percent year-on-year to reach 130.88 billion yuan, the ministry said.

COMPANIES AND MARKETS

Smart sensor industrial park starts in Jiading

Shanghai on Tuesday launched a smart sensor industrial park in Jiading district, which has been striving to develop intelligent internet of things (IoT). The industrial park contains a core industry cluster exploring IoT-oriented applications of smart sensors, as well as two others that focus on intelligent manufacturing and automotive electronics. A total of 32 enterprises signed to settle in the park, investing 24.8 billion yuan ($3.5 billion) on projects ranging from the design, testing, packaging and massive production of sensor chips.

Cargo throughput increases in Qinzhou

The port of Qinzhou, a major link between southern China and Southeast Asia, saw its cargo throughput rise 17.9 percent year-on-year in the first 11 months of the year thanks to increased traffic on a new land-sea trade route. The port handled 108.6 million metric tons of cargo in the January-November period, according to the publicity department of the city of Qinzhou in the Guangxi Zhuang autonomous region. Meanwhile, the port handled 2.69 million standard containers, an annual increase of 33.2 percent. Since a new land-sea freight route was launched in 2017, an increasing number of trains have carried goods to and from the Qinzhou port, connecting many western Chinese regions with Southeast Asia.

Crowdfunding used to promote more brands

Chinese tech giant Xiaomi's premium e-commerce platform Youpin has teamed up with global crowdfunding platform Indiegogo to promote Chinese products and brands overseas in its latest move to expand globalization. The two platforms announced a strategic cooperation on Monday, leveraging their crowdfunding services and other resources to cooperate on the introduction and promotion of products and market development, among others. The two sides also plan to establish a project dedicated to promoting Chinese brands via crowdfunding. The two parties have made several successful attempts before the official announcement. Youpin has introduced Pamu Slide, a popular wireless earbuds product on Indiegogo, to China, while launching Walking-Pad, a foldable treadmill, and an electric toothbrush on Indiegogo.

Kweichow Moutai eyes high-quality progress

China's top liquor brand Kweichow Moutai on Tuesday launched 12 new projects with a total investment of 15.8 billion yuan ($2.25 billion) for high-quality development. The projects include a packing plant with a capacity of 80,000 metric tons of Moutai liquor, a warehouse that can store up to 30,000 tons of alcohol, and an organic sorghum planting base in Guizhou province. "We aim to build a batch of infrastructure projects with long-term benefits, boost the growth of Moutai and achieve high-quality development," said Li Jingren, general manager of Kweichow Moutai Group.

Alibaba pilots nonprofit elderly care service

Alibaba Group is testing a new model of elderly care through its "time bank," which makes every hour people spend advancing public welfare exchangeable for services for seniors, the company said on Tuesday. According to a memorandum of understanding on cooperation signed between Alibaba Foundation and the bureau of civil affairs of Binjiang district in Hangzhou, capital of Zhejiang province, online Alibaba users will have a unified quantitative standard to evaluate their public welfare acts. Alibaba also unveiled a set of criteria, the first in China to measure the value of voluntary service hours and philanthropic behaviors, with its basic unit named "public welfare hours."

Spanish firm to invest in Australian company

Spanish energy giant Iberdrola has announced that it will invest hundreds of millions of dollars in renewable energy in South Australia. Xabier Viteri, Iberdrola's head of renewables, said that the company will invest A$500 million ($344.9 million) in the Port Augusta Renewable Energy Park (PAREP), a proposed wind and solar farm, according to Guardian Australia. He said that Australia was an ideal renewable investment opportunity because of its high consumption and stable energy market. "It's a place where renewables are going to play a much more relevant position in the coming years, clearly," he said.

Kalanick severs ties with ride-hailing giant

Travis Kalanick, who built Uber into a ride-hailing giant, is cashing out. Kalanick disclosed on Tuesday that he has sold off all his Uber stock－estimated at more than $2.5 billion－and is resigning from the board of directors, severing ties to the company he co-founded a decade ago. "Uber has been a part of my life for the past 10 years. At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits," the 43-year-old entrepreneur said in a statement.

AROUND THE WORLD

South Korea's retail shipments rise in Nov

Retail sales in South Korea grew last month as a year-end shopping festival buoyed both online and offline sales, a government report said on Wednesday. The combined sales of 26 major online and offline retailers increased 7.5 percent in November from a year earlier, according to the Ministry of Trade, Industry and Energy. It came as the Korea Sale FESTA, a South Korean version of Black Friday, ran for three weeks from Nov 1. Consumers raised the purchase of discount products during the country's biggest shopping season. Offline sales rose 2.4 percent in the month, marking the first increase in three months. Online sales advanced 14.8 percent, keeping a double-digit expansion for four straight months.

Supermarket sales in Japan fall by 1.4%

Japan's supermarket sales in November decreased 1.4 percent from a year earlier on a same-store basis, down for the second straight month, continuing to be affected by a consumption tax increase on Oct 1, the Japan Chain Stores Association said on Tuesday. According to the association's figures, sales at 10,538 supermarkets operated by 55 companies totaled 996.8 billion yen ($9.1 billion). The industry body's figures also showed that sales of food items, which were generally exempted from the 2-percentage-point tax hike from 8 percent, dipped 0.2 percent, with demand for alcohol subject to a 10-percent tax not recovering after being pushed up in September on last-minute demand.

For Chinese AI startup firm Shukun Technology, the participation confirmed that its footprint in AI-backed medical imaging and diagnosis is on the right track and has huge market potential.

Together with bigger international medical names, Shukun is showcasing two of its products: CTAs for coronary arteries and the head and neck.

"We use software, database and machine learning algorithms to make diagnosis more accurate," said Anne Ma, Shukun's co-founder and CEO. "We hope the products will help doctors make better diagnoses and plan surgery faster than they can now."

According to the 2017 Report on Cardiovascular Diseases in China by the National Center for Cardiovascular Diseases, the country had more than 290 million cardiovascular disease patients, and 3 million die each year.

Founded two years ago in Beijing, Shukun's specialty is in the diagnosis of cardiovascular-related disease. It uses data, along with software and algorithms, to model human hearts and diagnose heart disease.

Shukun has accelerated the commercialization of its technologies to assist cardiovascular diseases diagnosis in more than 42 cities in China, and claimed to have the largest market share in the number of products installed in Chinese hospitals－particularly in 200 top-tier hospitals－among medical AI companies in the cardiovascular disease sector.

But Ma admitted that cardiovascular disease diagnosis requires a much more sophisticated technological process, together with a complex data collection process, due to the lack of data access from open sources. This will inevitably retard the machine learning process.

The key to Shukun's work, and what Ma said sets it apart from others in the field, is its world leading original medical AI neural network with more than 1 billion neurons.

A recent study conducted by University Hospitals Birmingham NHS Foundation Trust in the United Kingdom found that AI is on a par with human experts when it comes to making medical diagnoses based on images. The biggest benefit comes from the potential easing of strain on resources, freeing up time for doctor-patient interactions and even aiding in the development of tailored treatment.

Also joining RSNA's dedicated AI Showcase exhibition session was Japan's Fujifilm. The company displayed its latest solution bringing diagnostic radiology, mammography and cardiology together on the server-side, enabling immediate interaction with these modality imaging data sets through a single AI-enabled platform.

"We are showing our commitment to progressing AI technology to empower physicians to make more efficient and impactful care decisions," said Bill Lacy, vice-president, medical informatics, Fujifilm.

Belgium pharmaceutical company UCB, which has mature therapies in epilepsy and osteoporosis, is considering designing such products for screening osteoporosis and forecasting possible epileptic seizures for use in hospitals or as smart phone apps for patients.

"The diagnosis rate of some diseases is low or it may take years before a correct diagnosis. We feel the responsibility to help patients and doctors achieve a better and earlier diagnosis," said Taco van Tiel, vice-president and head of international markets at UCB.

Zhou Wenting contributed to this story.

Data from market consultancy All View Cloud or AVC showed that TV sales reached 36.33 million units nationwide from January to October this year, down 3.1 percent compared with the same period last year.

However, the accumulative sales of OLED TVs rose 21.8 percent to 154,000 units in the January-October period, with Skyworth topping the list in OLED TV shipments in the domestic market, according to AVC.

Market research firm IHS Markit said the shipment of OLED TVs is expected to reach 455,000 units next year and 693,000 units in 2021.

OLED is a relatively new technology and part of the recent innovations in display. It has a fast response rate, wide viewing angles, super high-contrast images and richer colors. It is much thinner and can be made flexible, compared with traditional LCD display panels.

Tang Xiaoliang, chief brand officer of Shenzhen Skyworth-RGB Electronic Co Ltd, which is a subsidiary of the Skyworth Group, said the company plans to invest 200 million yuan ($28.5 million) in a marketing campaign during the spring's peak season as part of a broader drive to bolster the transformation and upgrading of the whole TV industry.

Skyworth is transforming itself into a high-tech and innovation-driven company, having invested heavily in OLED technology, self-developed chips that are used to improve the quality of the image, and the big-screen AIoT ecosystem, Tang said.

AIoT, which means artificial intelligence of things, is the combination of AI technologies with the internet of things infrastructure to improve human-machine interactions and enhance data management and analytics.

The company has been producing OLED TVs in partnership with South Korea's largest panel maker, LG Display, since 2013.

Statistics from AVC showed sales of Skyworth OLED TVs accounted for 46 percent of total OLED sales in the Chinese market in 2017, followed by LG with 16 percent and Sony at 14.9 percent.

LG Display is the only company capable of mass producing large-sized OLED screens globally. In August, the company's production plant began operations in Guangzhou, the capital of Guangdong province.

With an investment of 46 billion yuan, the plant will be able to manufacture 60,000 glass substrates per month at the preliminary stage. That will be used for 4K ultra-high-definition large-sized OLED TVs in sizes of 55 inches, 65 inches and 77 inches.

Another home appliance giant, Hisense Group, has jumped on the bandwagon and launched its own 55-inch and 65-inch A8 series OLED TVs in March.

Yu Zhitao, general manager of the group's listed arm in Qingdao Hisense Electric Co Ltd, said the company will adhere to presenting a high-quality picture and large-sized screens this year, as well as promoting continuous innovation in graphics chips, laser displays and artificial intelligence technologies.

"The traditional TV market is almost saturated and companies need to seek new growth points," said Dong Min, an independent researcher in the home appliances sector, adding new display technologies such as OLED TVs, curved screen TVs and laser TVs are all good choices and in line with ongoing consumption upgrades.

The OLED TVs will be the future development direction of the TV industry and present an opportunity for TV manufacturers to expand their profit margins, said AVC President Wen Jianping.

Li Yaqin, general manager of Sigmaintell, said the 65-inch TV will become the mainstream screen in people's living rooms in the future, but that OLED TV will not be able to immediately trigger customer purchases at this time although most current consumers are technophiles and high-end users.

Developing brand recognition among Chinese consumers is a "topic that interests us very much," said Federico Stanham, head of the National Meats Institute (Inac).

"Countries that have positioned their brand, such as Australia, achieve 25 percent higher sales in meats than we do," he explained. "Led by Inac, Uruguay has since April of this year launched a strong promotional campaign in China on social networks, at points of sale, and at food distributors and producers."

The campaign is designed to make the "Uruguay brand" better known in China, a destination for about 60 percent of Uruguay's beef exports. The campaign should "continue for several years to make us recognizable," said Stanham.

The campaign "has been seen more than 100 million times on social networks. That's very significant," the industry official said.

In China, "people shop online and also navigate shopping sites, and Uruguay having a presence there helps to make us more recognizable," he added.

For producers and exporters, "China as a market has several advantages: it has so many different regional cuisines and Chinese consumers find ways to prepare all of the parts an animal can supply," said Stanham.

When it comes to beef, for example, the Asian market "demands all of the various cuts. That's very beneficial because all of the production can be placed in China," he said.

To satisfy China's growing appetite for beef, Uruguay "has diverted its trade flow from traditional markets such as Europe, Chile, the United States, Israel and Russia," said Stanham.

"Today, it's more convenient to place your production in China rather than those markets. In several countries, the volume (of product) placed has decreased, but in China it has increased significantly," he said.

The Asian market is seeing "a rise in beef consumption," while the traditional markets are either holding steady or seeing a decline, he added.

So far this year, Uruguay has exported 446,000 metric tons of beef, generating revenue of $1.724 million. Of that total, China purchased 294,000 tons worth $1.012 million.

Uruguay's meat industry is eagerly anticipating a free-trade agreement with China to gain a competitive edge over rivals from Australia and New Zealand, both of which enjoy benefits from tariff reduction programs.

Xinhua

Admitting that the deal was a big relief, Jay Foreman, president and chief executive officer of Basic Fun, a Florida-based toy business, said the threat of tariff hikes was akin to a "sword" over his head and had cast a shadow on business operations, planning and development.

"Of course I will feel great that I don't have impending disaster raining down on me," Foreman told Xinhua News Agency in a recent interview. "I would have really felt a lot better if I never had it in the first place."

For months, Foreman and his colleagues had been concerned that the toys his company imports from China would be slapped with additional 15-percent tariffs, previously scheduled to take effect on Dec 15.

"It's a direct tax on our merchandise and profits," Foreman said of the tariffs. "If somebody is trying to take and reduce our profits, it becomes a nightmare."

Facing the threat, Basic Fun, most of whose products are manufactured in China, has closely followed the trade negotiations between the world's top two economies and constantly held meetings to discuss the situation.

"Are the tariffs on? We have a meeting. What do we do? Are the tariffs off? We have a meeting. What do we do? So it really becomes difficult to plan," Foreman said.

The anxiety kept growing until two days before the deadline when China and the United States announced the "phase-one" agreement, followed by the White House's decision not to proceed with the planned tariffs targeting Chinese imports, including phones, computers, holiday ornaments, clothing and toys.

Steve Pasierb, president and chief executive of the New York City-based US Toy Association, said he welcomes the deal.

"With the uncertainty removed, toy companies can move forward and focus on planning, product development and providing joy for kids through the toys and games they make," Pasierb said in a statement.

Foreman said he understands that the deal will not fix all the trade issues between the two nations, but "it's a goodwill gesture to show the market and the world that the US and China can work together."

Since trade friction between the two sides began over a year ago, US businesses relying on China's manufacturing prowess were frequently asked why they did not relocate their production to other countries or regions.

Most said they could not or would not, including Basic Fun, which lists safety as its primary concern. Over the past few decades, Basic Fun and many other US toy companies have worked closely with their Chinese partners. Together they have developed the best supply chain and the highest safety standards in the toy industry.

"It's a really efficient, fantastic and most importantly, safe production and supply chain … It's really important for toys to be made safely," said Foreman. "You hardly ever hear an issue of a toy being unsafe anymore that's made in China."

The entrepreneur also weighed in on China's strength in manufacturing. "We really rely on the Chinese productivity a lot because the factories and the workforce are extremely efficient."

"They really know how to set up production lines," he said. "They are motivated. They are hardworking. They are diligent. And they have been a really important part of the growth of the US toy industry."

As for Basic Fun, moving production out of China would take 12 to 24 months and cost millions of dollars, not to mention posing certain risks.

"I can say that I have no interest in moving out of China … There is no good option for our industry," Foreman said.

The past two years for the US toy industry have been tough. Toys "R" Us, once the country's leading toy retailer and Basic Fun's biggest customer, filed for bankruptcy in 2017, resulting in the closure of hundreds of stores and the elimination of tens of thousands of jobs.

Partly because of Toys "R" Us' downfall, the US toy industry is expected to be hit with a decline of 3 to 5 percent in sales in 2019, Foreman said.

The waning of brick-and-mortar retail in the United States comes amid a rise of online sales and shopping, which has brought both challenges and opportunities for Basic Fun and other toy brands. "All of us in the toy industry are slowly, with many challenges, learning the best way to sell and market our products online," Foreman said.

In addition to competing against each other, US toy makers also face fierce competition from console games, mobile gaming and social media. Clearly, no one wants more tariffs or the threat of them.

"We work in a business that has a long development cycle. We are selling and we are showing our customers products now for next Christmas," he said. "When there is uncertainty about the price you are going to charge your customers, you really can't plan effectively."

But the US toy industry might consider itself lucky, given how plenty of imports from China still remain subject to extra tariffs by Washington, which are taking a toll on the national economy, company profits and the public.

Pasierb said he wants to see an end to the trade friction, urging the administration to "seize this opportune point in time to also eliminate tariffs that remain in effect".

Xinhua

"Work on publishing of the draft tariff law is likely to be pushed in the near term. And we expect a breakthrough in tariff legislation next year," said Li Xuhong, a senior researcher with the Beijing National Accounting Institute and a consultant to the State Taxation Administration, which is tasked with drafting tax laws.

The tariff law is a significant legislative work for China next year as it is closely related to the international trade and economic opening-up, Li told China Daily.

Shi Zhengwen, director of the Center for Research in Fiscal and Tax Law at China University of Political Science and Law, said earlier that the tariff legislation process will be accelerated, as the country is planning to complete the entire process by the end of next year.

In the upcoming tariff law, experts said, the existing tax framework and overall tax burden level will remain unchanged so as to stabilize market expectations, amid a complex and uncertain external environment.

During the first 11 months of this year, total tariffs reached 263.8 trillion yuan ($37.7 trillion), down by 2.2 percent from a year earlier, according to data from the Ministry of Finance.

The government decided on Monday to lower tariffs on a broad range of imported goods, including frozen pork and high-tech products, to satisfy domestic consumption and reduce production costs, starting Jan 1.

Temporary tariff rates, which are set for a specified period, will be applied to 859 items. Designated items will enjoy import tariffs that are lower than the existing most-favored-nation rates in 2020.

The tax legislation process in China started in 2013, targeting to transform all existing tax regulations into laws. By the end of November, nine tax laws had been formulated across 18 tax categories. The 13th Five-Year Plan (2016-20) plans to finish the entire legislation process by the end of next year.

The tax legislation process needs to be in coordination with the overall tax and fee reduction plan so as to improve the efficiency of the macroeconomic policies to support economic growth and guarantee tax levy increases, said Li.

China's largest tax contributor－the value-added tax (VAT), is currently ready for the legislation process. A draft VAT law was released by the Ministry of Finance for public opinion on Nov 27.

PwC China National Indirect Tax Leader Robert Li said: "Considering the tax reduction trend in the last couple of years and the guidance of the State Council on simplifying the VAT rate brackets from three to two, it is important to monitor closely whether adjustment and simplification of VAT rate brackets will be included in the final draft VAT Law to be submitted to the National People's Congress for review and discussions."

The finance ministry also released the draft of the consumption tax law last month for public opinion, which seeks to reduce the frequency of tax payments for the convenience of taxpayers.

Finance Minister Liu Kun submitted the drafts of the two tax laws to the ongoing bimonthly session of the Standing Committee of the NPC for review on Monday.

In the draft laws for deed tax and urban maintenance and construction tax, the existing tax rates will remain unchanged, and their current tax administration framework and overall tax burden level will remain stable, said Liu.

Cao Yin contributed to this story.

For foreign currency debt without hedging arrangements (including natural hedging and financial hedging), the banks may need to reserve more capital as a cushion to prevent defaults, in accordance with the Basel III requirements.

"Risks from overseas debt issuance of property companies without any foreign exchange income, and local government financial vehicles, should be monitored and notified, to avoid a currency mismatch," said Sun Tianqi, chief accountant of SAFE, at the recent annual meeting of the China Financial Forum.

Measures are also being studied to discourage companies from investing in sophisticated foreign exchange derivative products that are beyond their professional capabilities, according to Sun.

Meanwhile, the government's implicit guarantee on companies' cross-border debt should be controlled, to reduce moral hazards, he said. "We should pay more attention to the foreign exchange and foreign currency interest rate risks of companies that are related to their overseas bond issuances."

Some international organizations, including the International Monetary Fund, have warned about the risks due to a currency mismatch, which exists when a borrower funds its operations in one currency while the earnings derived from these operations accrue in another currency.

Developing the local currency-denominated bond market can help China reduce its reliance on foreign-currency financing, said experts. They said the country should consider further opening up to foreign direct investment as it is a more stable mechanism for foreign capital inflows than debt.

Improving the exchange rate mechanism and increasing its flexibility are other measures that the country can adopt to reduce the risk of currency mismatch, said Sun.

To prevent exchange rate risks, the SAFE official suggested that in case of companies that rely on raw material and equipment imports but have no foreign exchange income to repay their foreign exchange loans, banks should take account of the foreign exchange rate and commodity price fluctuations, foreign currency interest rate risks and the companies' hedging arrangements.

Government departments, including the central bank and other financial regulators, should build a mechanism under which they can share data related to international balance of payments, foreign investment in domestic bonds, stocks and derivative markets, as well as information about commercial banks' foreign exchange risk regulation and monitoring indicators (such as cumulative foreign exchange exposure and foreign exchange liquidity), Sun said.

Zhu Min, head of Tsinghua University's National Institute of Financial Research and former IMF deputy managing director, said that the yuan exchange rate is likely to remain stable in 2020, while large capital inflows will continue and a strong monetary policy will continue to boost high-quality, steady economic growth.

China's foreign exchange market maintained a basic equilibrium in October, according to SAFE data, indicating a balanced supply and demand relationship. Cross-border capital flows also remained stable, including an equilibrium of foreign exchange settlement and sales by banks－a deficit of $4.4 billion in October, lower than the average of the first nine months.

Foreign-related receipts and payments by banks for their customers represented a surplus, official data showed. The non-banking sector, including companies and individuals, registered a surplus of $10.9 billion in foreign-related receipts and payments, versus a slight deficit in the March-to-September period.

Foreign exchange supply through major channels of inflows rose steadily, and cross-border capital inflows from foreign direct investment and securities investment continued growing on a yearly basis, said Wang Chunying, spokeswoman of SAFE.

"Despite the complex and challenging external environment, China's economy has shown great resilience, potential and vibrancy. The economic performance remains within a reasonable range and the high-level opening up is advanced, laying a solid foundation for the stability of the foreign exchange market," said Wang.

PBOC skips reverse repos as liquidity improves

China's central bank skipped reverse repos on Tuesday, citing sufficient liquidity in the banking system. The banking system reports a sufficient level of liquidity at present, the People's Bank of China said in a statement. A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

Curbs on deboned Japanese beef lifted

Chinese authorities recently announced that the country would remove a ban on imports of Japan's deboned beef under 30 months old starting Dec 19. The ban was imposed amid outbreaks of mad cow disease in 2001, according to a statement jointly released by the General Administration of Customs and the Ministry of Agriculture and Rural Affairs. Inspection and quarantine requirements would be made separately, said the statement. The authorities also unveiled another statement to lift import restrictions imposed on cloven-hoofed animals and products, removing a ban placed in 2010.

Trademark applications swell to 7.12m in China

From January to November, 7.12 million trademark registration applications were filed in China, according to the trademark office of the National Intellectual Property Administration. China's total number of effective registered trademarks has reached 24.78 million, with every 4.9 market entities owning one registered trademark on average. The public services related to trademarks have become more efficient and convenient. The period needed to review trademark registration in China has been shortened to five months on average.

Foreign trade volume rises by 12.7% in Hebei

The foreign trade volume of North China's Hebei province rose 12.7 percent year-on-year to 364.23 billion yuan ($52 billion) in the first 11 months of the year, local authorities said on Tuesday. The province's exports totaled 214.71 billion yuan during the period, up 6.4 percent, while its imports rose 23.1 percent to 149.52 billion yuan, said the customs in the capital city of Shijiazhuang. The province's trade with economies along the Belt and Road rose 18.9 percent to 116.78 billion yuan, and its trade with the Association of Southeast Asian Nations grew 33.7 percent to 39.54 billion yuan. Its trade with Australia and Brazil saw double-digit growth from January to November, up 61.9 percent and 24.6 percent, respectively.

COMPANIES AND MARKETS

Business climate sees steady improvement

Chinese firms reported an improving business climate in the fourth quarter of this year, a central bank survey showed. The business climate index stood at 55.5 percent in the fourth quarter, 2.2 percentage points higher than in the third quarter, according to a report from the People's Bank of China, whose results are based on surveys of over 5,000 industrial firms. Respondents also reported improving profitability, with the index rising 2 percentage points from the previous quarter to 57.3 percent. About 60.5 percent of surveyed entrepreneurs said the macroeconomy was running smoothly. Sentiment for product selling prices and raw material purchasing prices both improved quarter on quarter, edging up 1.9 percentage points and 0.8 percentage point, respectively.

Ito-Yokado sustains momentum in Sichuan

Japanese retailer Ito-Yokado has shared benefits from consumption upgrade in west China, said Tomihiro Saegusa, president of Japanese retailer Ito-Yokado. Saegusa arrived on Sunday in Chengdu, capital of Southwest China's Sichuan province. Nine of 10 Ito-Yokado stores in China are situated in Chengdu's downtown and surrounding area. Ito-Yokado entered the Chinese market in 1996.

Cambodian carriers expand flights to China

Two Cambodia-registered airlines have announced new routes connecting Phnom Penh, capital of Cambodia, to destinations in China, an English-language daily newspaper reported on Monday. Carrier Cambodia Airways will launch a regular nonstop flight between Phnom Penh and Shenzhen in southern China on Dec 27, the Khmer Times reported, citing an airline's statement. The same company will begin flying to Chengdu, the capital of Southwest China's Sichuan province, from Phnom Penh on Jan 2. Shenzen and Chengdu are important transportation hubs.

AROUND THE WORLD

Thailand central bank expects 2.8% growth

In a seminar held in Bangkok on Monday, the Bank of Thailand (BoT) governor said he predicts the Thai economy to expand by 2.8 percent next year as a result of government budget disbursement and investment in mega infrastructure projects. "The economic growth rate would be higher at 2.8 percent, comparing to 2019's GDP at 2.5 percent," said BoT Governor Veerathai Santiprabhob, "The 2020 budget bill would pass the parliament, megaprojects are already making progress so as many investment projects; also 5G communication networks will begin and projects related to financial institutions will emerge." The governor said Thailand could do better than a 2.8 percent growth projection.

S. Korea plans more treasury bond sales

The South Korean government's treasury bond sale would rise in double digits next year, the country's finance ministry said on Monday. The Ministry of Economy and Finance said that 130.2 trillion won ($111.8 billion) worth of government bonds planned to be issued in 2020. It was up 28.0 percent, or 28.5 trillion won, from this year, marking the fastest yearly growth since 2009 when the global financial crisis rattled the economy.

Iran boosts commodity exports to Uzbekistan

Iran exported $152 million worth of commodities to Uzbekistan during the first eight months of the current Iranian year (March 21-Nov 21), Eghtesadonline news website reported on Monday. The figure registered a 60 percent rise compared with last year's corresponding period, the Chairman of Trade Promotion Organization of Iran Hamid Zadboum was quoted as saying. Stone-cutting machines, cement, propane, glass sheets, construction stones and furniture were Iran's main exports during the period under review. Iran mainly imports cotton, yarn, potassium chloride, phosphate fertilizer and pinto beans from Uzbekistan.

Singapore's CPI-All Items inflation surges

Singapore's Consumer Price Index for all items (CPI-All Items) grew 0.6 percent year-on-year in November, compared to a 0.4-percent growth in October, according to a joint statement issued by two government authorities. The Ministry of Trade and Industry (MTI) and Monetary Authority of Singapore (MAS) said in the joint statement that the CPIAll Items inflation increased in the month because of an increase in private road transport inflation and smaller declines in the costs of retail goods and accommodation, even as services inflation eased. In November, the MAS core inflation, which excludes the costs of accommodation and private road transport, was unchanged at 0.6 percent from October as lower services inflation was offset by a smaller decline in the cost of retail goods.

China Daily - Agencies

Only 20.7 percent of the survey respondents were willing to make fresh home purchases during the next three months, the lowest level since 2017. It also came against the 21.5 percent demand seen during the third quarter of this year, said the report published by the People's Bank of China, the central bank, which tracks housing demand on a quarterly basis.

The survey covers 50 cities and 20,000 residents and most of the questions are about the participants' income level, employment situation, inflation expectations and willingness for consumption, deposits and investments.

The latest results showed that residents are now less interested in buying new houses. About 11 percent of the participants expect new home prices to decline in the first quarter of 2020, higher than the 9.8 percent seen in the third quarter of this year, the report said.

Policy makers have repeatedly stressed that, "housing is for living in and not for speculation". A similar stance was seen at the annual Central Economic Work Conference held earlier this month, when it was decided to keep the tone unchanged for next year. It also highlighted the need for "keeping property prices stable and rationalizing expectations".

Song Yu, chief economist of Beijing Gao Hua Securities Co Ltd, said the idea of "keeping property prices stable" can be interpreted as a measure to prevent abnormal price swings.

According to data released by the National Bureau of Statistics, property investment growth weakened to 8.4 percent year-on-year in November, down from 8.8 percent in October. Growth in land sales by volume fell to negative 0.8 percent in November from 12.8 percent in October.

A report from Nomura Securities said that growth in land sales by volume is expected to tumble further in the coming months, given the headwinds including the recent tightening in financing for property developers.

From an entrepreneurial perspective, indicated by a separate PBOC report released on Monday, 37.9 percent of the managers from 5,000 companies were of the view that China's macroeconomy remained "cool" in the fourth quarter, compared with 36.3 percent in the July-to-September period.

Policy makers have recognized that downside pressures on economic growth are increasing in China, influenced by the expected global economic slowdown next year and existing trade friction between China and the United States. Economists said this will lead to more rational and cautious consumption, investment behavior from Chinese people next year.

Instead of putting more money into property or other types of financial assets, a larger number of people are keen on increasing deposits, said the PBOC survey. About 45.7 percent of the respondents were keen to put more money in banks, up from 44.5 percent in the third quarter survey, the PBOC said.

According to the survey, about 27.5 percent of the participants planned to increase spending on healthcare in the first quarter of 2020, up from 25.8 percent a quarter ago. About 28.3 percent of the respondents plan to spend more on travel, down from 30.6 percent in the third quarter.

In face of the economic challenges, analysts expect the main policy objectives for next year to be on maintaining growth and stability. At the same time, economic rebalancing is making steady progress, with private consumption and services playing a much bigger role in the overall growth.

"China's policy focus continues to shift between three－at times competing－policy objectives of ensuring sustainable growth, maintaining financial stability and implementing reforms to rebalance the economy, with the current focus primarily on growth and stability in the face of slowing GDP growth," said Michael Taylor, managing director of the Asia-Pacific region at global credit ratings agency Moody's.

1. Alibaba makes Hong Kong debut

Alibaba Group Holding Ltd debuted on the Hong Kong stock exchange on Nov 26, five years after the Chinese internet giant first went public in New York in 2014. Alibaba's Hong Kong-listed shares jumped 6.25 percent above its issue price of HK$176 ($22.60) per share in the morning before hitting an early intraday high of HK$189.5. They closed 6.59 percent up at HK$187.60. The company said it raised HK$101.2 billion by selling 575 million new shares to investors.

2. Telecom majors roll out 5G data plans

China's three major telecom operators on Oct 31 launched their long-awaited 5G service plans. China Mobile, China Unicom and China Telecom, in simultaneous moves, unveiled their monthly 5G plans with prices ranging from 128 yuan ($18.26) to 599 yuan. The move means consumers can now pay to access superfast 5G speeds as more than 86,000 5G base stations have already entered service in China, covering 50 cities nationwide, including Beijing, Shanghai, Guangzhou and Shenzhen.

3. Alibaba chairman Jack Ma steps down

Jack Ma, founder of e-commerce giant Alibaba, retired as Alibaba's executive chairman on Sept 10, one year after he announced his resignation plan. Ma, a former English language teacher, co-founded Alibaba with 17 partners in an apartment in Hangzhou. This year marks the 20th anniversary of the company's founding. Alibaba said Ma would remain on the board of directors until 2020. Daniel Zhang, 47, who had been acting as chief executive officer since 2015, took the helm.

4. Costco opens first store on Chinese mainland

The world's second-largest retailer, Costco Wholesale Corp, opened its first brick-and-mortar store on the Chinese mainland in Shanghai on Aug 27. The 14,000-square-meter store was inundated on its first day, with customers spending up to two hours queuing at checkouts or waiting three hours to find a spot in the 1,200-bay parking lot. Costco membership costs 299 yuan a year.

5. Huawei unveils its own operating system

Huawei Technologies Co unveiled its much-anticipated in-house operating system Harmony OS on Aug 9. Harmony will be able to support a wide range of application scenarios, including smart TVs, automobiles and wearables, said Yu Chengdong, CEO of Huawei's consumer business group. The senior executive said Harmony can be used in its smartphones. But Android is still Huawei's preferred choice for handsets if the company is allowed to use it. "But when Android is not available, Harmony can be applied immediately to smartphones. Harmony is ready," Yu added.

6. China State Railway Group inaugurated

China Railway Corporation has been renamed China State Railway Group Co Ltd, a wholly State-owned enterprise with registered capital of more than 1.73 trillion yuan, according to a statement from the company on June 18. The company is run by the central government, and the Ministry of Finance performs investor duties on behalf of the State Council. The company will be responsible for the national railway system's operation, construction and safety, as well as nonprofit transport jobs.

7. Tesla breaks ground on Gigafactory in Shanghai

Tesla's 50-billion-yuan Shanghai Gigafactory broke ground in the Lingang Special Area on Jan 7.

The plant is the company's first factory outside the United States and the first automobile production project wholly owned by foreign capital in China. With an initial weekly production of about 3,000 Model 3 electric vehicles, the factory is designed with an annual capacity of 500,000 electric cars.

8. World's largest shipbuilder sets sail

China Shipbuilding Corp was officially unveiled on Nov 26 in Beijing as the world's largest shipbuilder. The giant corporation was created through the merger of China State Shipbuilding Corp and China Shipbuilding Industry Corp, the country's two biggest shipbuilders by production capacity. The new company has about 310,000 employees, 147 subsidiaries, including manufacturing complexes nationwide and 35 institutes as well as total assets worth 790 billion yuan.

9. Websites suspended for multiple violations

The websites of Visual China Group and IC Photo, which provide visual content, were required to suspend services for rectification on Dec 10 due to multiple violations.

The websites were engaged in internet news information services without obtaining authorized licenses, according to the Cyberspace Administration of China. They also carried out cooperation involving internet news and information services with overseas enterprises without security assessment.

10. National oil, gas pipeline firm unveiled

China officially launched its long-planned national oil and gas pipeline network company on Dec 9, as part of the country's ongoing oil and gas reforms to help meet the nation's increasing energy needs.

Combining the pipeline assets of the country's big three State-owned energy giants－PetroChina, Sinopec and CNOOC－the creation of the new company will help foster a more competitive environment for all players in the sector.

By September this year, the tourism industry provided employment opportunities for 986,400 people in the province, which in turn helped 897,000 of them to come out of the shadow of poverty, according to data provided by the provincial authorities.

Guizhou has developed 19,495 tourism spots in 66 poverty-stricken counties, with 4,490 of them in 16 counties that are suffering from deep poverty. During the first three quarters of this year, Guizhou's rural tourism attracted 423 million visitors, up 21.7 percent on a yearly basis. Total rural tourism revenue surged 30.6 percent year-on-year to 256.2 billion yuan ($36.5 billion).

During the same period, total tourism revenue in Guizhou reached 1 trillion yuan, up 28.3 percent year-on-year, according to the Guizhou Provincial Department of Culture and Tourism.

"In recent years, Guizhou has attracted tens of thousands of tourists with its unique landscape and rich culture. Promoting the development of the tourism industry is an important approach for targeted poverty alleviation. Through tourism, we hope to bring more people out of poverty," said Wang Wenxue, deputy head of the Guizhou Provincial Department of Culture and Tourism.

Xijiu, a northern town in Guizhou, is an ideal example of tourism-driven poverty alleviation in the province. As a town famous for producing baijiu, the town attracts tens of thousands of baijiu lovers every year. Guizhou Xijiu, the largest baijiu producer in the town, regularly organizes baijiu discovery tours. The tours include learning brewing techniques at the factory, visiting liquor collection museums, as well as baijiu tasting parties guided by liquor professionals.

According to the company, in November, over 900 batches of tourists, or 13,400 visitors, experienced its liquor tourism.

Lou Bihua, Party secretary of Xijiu town, said that in 2014, there were 4,628 villagers facing poverty. Through the active poverty alleviation efforts, the town managed to reduce the incidence from 13.86 percent in 2014 to 1.02 percent in 2018. This year, Xijiu town has managed to eliminate poverty, said officials.

Xiang Chengqiang, Party secretary of Xishui county, which Xijiu town belongs to, said: "Xishui county has beautiful natural scenery, a pleasant climate, and rich history and culture. More tourists are now coming to Xishui. We will continue to give full play to the role of the tourism industry in poverty alleviation, and realize high-quality development."

According to Xiang, during the first six months of 2018, Xishui attracted 3.02 million tourist visits, up 51 percent year-on-year. Its total tourism revenue surged 53.8 percent on a yearly basis to 3.48 billion yuan.

Tongzi county, in northern Guizhou, is another example of tourism-driven poverty alleviation. With the support of the government, the county transformed from a poverty-stricken area to a national 4A-level scenic spot.

The income from the scenic spot is mainly through tourism entrance tickets, parking fees, village-level labor service income, village-level housing rental and village-level land transfer.

According to the local government, currently, there are 1,822 village guesthouses in Tongzi. In 2018, the scenic spot attracted 19.39 million visits, lifting nearly 4,000 poor villagers out of poverty.

The annual Central Economic Work Conference held in Beijing from Dec 10 to 12 has called for resolute efforts in targeted poverty alleviation, as one of the "three tough battles". It also underscored the importance of using industry development for poverty alleviation.

Li Jinzao, vice-minister of culture and tourism, said tourism-driven poverty alleviation work can bring positive results to both the economic and civil enhancement sectors. Rural tourism has become the strongest force to lift villagers out of poverty, he said.

With both its past and present dependence on labor-intensive industries such as apparel and toys, the city in recent years quickened its pace to move up the industrial chain and by 2021, it aims to increase the value added of high-end manufacturing to more than 300 billion yuan ($42.9 billion).

The plan also called for the creation of two world-class manufacturing clusters in automobiles and ultra-high definition videos, as well as four other national clusters in industries that include new materials and high-end equipment.

The city's manufacturing shift is emblematic of the broader trend in China as the "world's workshop" built upon low labor and production costs will be taking on new forms.

Apart from the traditional "Made in China" tags found on store shelves, high-speed trains and semiconductors are becoming the new symbols of Chinese manufacturing.

Across the nation, provinces such as Sichuan, Shandong, Zhejiang and Jiangsu have invested huge amounts to push high-quality development in their manufacturing industries.

Over the past year, as overall manufacturing investment was losing steam, investment in high-tech manufacturing showed resilience.

Data from the National Bureau of Statistics showed investment in high-tech manufacturing surged 14.8 percent year-on-year in the first 11 months of the year, far outpacing the sector's average growth of 2.5 percent.

At the Central Economic Work Conference earlier this month, top policymakers promised to step up the upgrading of equipment to optimize traditional manufacturing